UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
(Mark One)
 
 
x

 
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 
 
For the Quarterly Period Ended March 31, 2019
or

o

 
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period from                    to                    .
Commission file number 001-37427
HORIZON GLOBAL CORPORATION
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
(State or other jurisdiction of
incorporation or organization)
 
47-3574483
(IRS Employer
Identification No.)
2600 W. Big Beaver Road, Suite 555
Troy, Michigan 48084
(Address of principal executive offices, including zip code)
(248) 593-8820
(Registrant’s telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x     No  o .
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  x     No  o .
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  o
 
Accelerated filer  x
 
Non-accelerated filer  o
 
Smaller reporting company  o
 
Emerging growth company  x
 
 
 
 
 
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Yes  x No  o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o     No  x
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, $0.01 par value
 
HZN
 
New York Stock Exchange
As of May 3, 2019 , the number of outstanding shares of the Registrant’s common stock, was 25,263,212 shares.


HORIZON GLOBAL CORPORATION
Index
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


1

Forward-Looking Statements
This Quarterly Report on Form 10-Q may contain “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made and give our current expectations or forecasts of future events. These forward-looking statements can be identified by the use of forward-looking words, such as “may,” “could,” “should,” “estimate,” “project,” “forecast,” “intend,” “expect,” “anticipate,” “believe,” “target,” “plan” or other comparable words, or by discussions of strategy that may involve risks and uncertainties.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties which could materially affect our business, financial condition or future results including, but not limited to, risks and uncertainties with respect to: the Company’s leverage; liabilities imposed by the Company’s debt instruments; market demand; competitive factors; supply constraints; material and energy costs; technology factors; litigation; government and regulatory actions including the impact of any tariffs, quotas or surcharges; the Company’s accounting policies; future trends; general economic and currency conditions; various conditions specific to the Company’s business and industry; the Company’s ability to regain compliance with the New York Stock Exchange’s continued listing standards and maintain such compliance; the success of our action plan, including the actual amount of savings and timing thereof; the success of our business improvement initiatives in Europe-Africa, including the amount of savings and timing thereof; the Company’s exposure to product liability claims from customers and end users, and the costs associated therewith; the Company’s ability to meet its covenants in the agreements governing its debt, including the contractually obligated prepayment on its first lien term loan, or obtain any amendments or waivers thereto; and other risks that are discussed in Item 1A, “ Risk Factors ” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . The risks described in our Annual Report and elsewhere in this report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deemed to be immaterial also may materially adversely affect our business, financial position and results of operations or cash flows.
The cautionary statements set forth above should be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. We caution readers not to place undue reliance on the statements, which speak only as of the date of this report. We do not undertake any obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statement to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as otherwise required by law.
We disclose important factors that could cause our actual results to differ materially from our expectations implied by our forward-looking statements under Item 2, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations, ” and elsewhere in this report. These cautionary statements qualify all forward-looking statements attributed to us or persons acting on our behalf. When we indicate that an event, condition or circumstance could or would have an adverse effect on us, we mean to include effects upon our business, financial and other conditions, results of operations, prospects and ability to service our debt.



2

PART I. FINANCIAL INFORMATION

Item 1 .  Condensed Consolidated Financial Statements

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)


 
March 31,
2019

December 31,
2018
 
 
(unaudited)
 
 
Assets
 

 

Current assets:
 

 

Cash and cash equivalents
 
$
24,960


$
27,650

Receivables, net of allowance for doubtful accounts of approximately $5.1 million at March 31, 2019 and December 31, 2018
 
129,490


108,340

Inventories
 
174,360


173,690

Prepaid expenses and other current assets
 
10,850


9,690

Total current assets
 
339,660

 
319,370

Property and equipment, net
 
97,660


102,280

Operating lease right-of-use assets
 
68,560

 
—

Goodwill
 
12,720


12,660

Other intangibles, net
 
72,750


78,050

Deferred income taxes
 
2,160

 
2,690

Other assets
 
6,640


6,300

Total assets
 
$
600,150

 
$
521,350

Liabilities, Temporary and Shareholders' Equity
 

 

Current liabilities:
 

 

Short-term borrowings and current maturities, long-term debt
 
$
15,460


$
13,860

Accounts payable
 
116,010


123,130

Short-term operating lease liabilities
 
15,980

 
—

Accrued liabilities
 
68,770


65,820

Total current liabilities
 
216,220

 
202,810

Long-term debt
 
377,700


350,650

Deferred income taxes
 
14,230


14,150

Long-term operating lease liabilities
 
52,580

 
—

Other long-term liabilities
 
20,060


19,960

Total liabilities
 
680,790

 
587,570

Contingencies (See Note 12)
 


 


Temporary equity
 
 
 
 
Series A preferred stock, $0.01 par: Authorized 100,000,000 shares; Issued and outstanding: 90,667 at March 31, 2019; none at December 31, 2018
 
5,340

 
—

Total temporary equity
 
5,340

 
—

Shareholders' equity (deficit):
 
 
 
 
Common stock, $0.01 par: Authorized 400,000,000 shares; 25,892,114 shares issued and 25,205,608 outstanding at March 31, 2019, and 25,866,747 shares issued and 25,180,241 outstanding at December 31, 2018
 
250

 
250

Common stock warrants exercisable for 3,601,902 shares issued and outstanding at March 31, 2019; none issued and outstanding at December 31, 2018
 
5,380

 
—

Paid-in capital
 
161,330

 
160,990

Treasury stock, at cost: 686,506 shares at March 31, 2019 and December 31, 2018
 
(10,000
)
 
(10,000
)
Accumulated deficit
 
(247,820
)
 
(222,720
)
Accumulated other comprehensive income
 
7,900

 
7,760

Total Horizon Global shareholders' deficit
 
(82,960
)
 
(63,720
)
Noncontrolling interest
 
(3,020
)
 
(2,500
)
Total shareholders' deficit
 
(85,980
)
 
(66,220
)
Total liabilities, temporary and shareholders' equity
 
$
600,150

 
$
521,350

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited—dollars in thousands, except share and per share data)

 
 
Three months ended
March 31,
 
 
2019
 
2018
Net sales
 
$
209,660

 
$
216,810

Cost of sales
 
(177,580
)
 
(178,360
)
Gross profit
 
32,080

 
38,450

Selling, general and administrative expenses
 
(41,530
)
 
(48,180
)
Impairment of goodwill
 
—

 
(43,430
)
Net gain (loss) on dispositions of property and equipment
 
1,460

 
(110
)
Operating loss
 
(7,990
)
 
(53,270
)
Other expense, net
 
(5,610
)
 
(1,120
)
Interest expense
 
(10,940
)
 
(5,950
)
Loss before income tax
 
(24,540
)
 
(60,340
)
Income tax benefit (expense)
 
(1,080
)
 
2,580

Net loss
 
(25,620
)
 
(57,760
)
Less: Net loss attributable to noncontrolling interest
 
(520
)
 
(250
)
Net loss attributable to Horizon Global
 
$
(25,100
)
 
$
(57,510
)
Net loss per share attributable to Horizon Global:
 
 
 
 
Basic
 
$
(1.00
)
 
$
(2.30
)
Diluted
 
$
(1.00
)
 
$
(2.30
)
Weighted average common shares outstanding:
 
 
 
 
Basic
 
25,188,094

 
24,963,120

Diluted
 
25,188,094

 
24,963,120



The accompanying notes are an integral part of these condensed consolidated financial statements.

4

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited—dollars in thousands)

 
 
Three months ended
March 31,
 
 
2019
 
2018
Net loss
 
$
(25,620
)
 
$
(57,760
)
Other comprehensive income (loss), net of tax:
 
 
 
 
Foreign currency translation and other
 
1,210

 
3,160

Derivative instruments
 
(1,070
)
 
1,530

Total other comprehensive income, net of tax
 
140

 
4,690

Total comprehensive loss
 
(25,480
)
 
(53,070
)
Less: Comprehensive loss attributable to noncontrolling interest
 
(520
)
 
(240
)
Comprehensive loss attributable to Horizon Global
 
$
(24,960
)
 
$
(52,830
)


The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited—dollars in thousands)
 
 
Three months ended
March 31,
 
 
2019
 
2018
Cash Flows from Operating Activities:
 
 
 
 
Net loss
 
$
(25,620
)
 
$
(57,760
)
Adjustments to reconcile net loss to net cash used for operating activities:
 
 
 
 
Net (gain) loss on dispositions of property and equipment
 
(1,460
)
 
110

Depreciation
 
4,270

 
4,130

Amortization of intangible assets
 
2,070

 
2,230

Impairment of goodwill
 
—

 
43,430

Amortization of original issuance discount and debt issuance costs
 
5,470

 
1,940

Deferred income taxes
 
1,710

 
(800
)
Non-cash compensation expense
 
350

 
720

Increase in receivables
 
(25,000
)
 
(20,220
)
Increase in inventories
 
(7,800
)
 
(5,400
)
(Increase) decrease in prepaid expenses and other assets
 
(2,540
)
 
250

Increase in accounts payable and accrued liabilities
 
4,750

 
2,040

Other, net
 
3,360

 
(890
)
Net cash used for operating activities
 
(40,440
)
 
(30,220
)
Cash Flows from Investing Activities:
 
 
 
 
Capital expenditures
 
(1,990
)
 
(4,190
)
Net proceeds from sale of business
 
4,970

 
—

Net proceeds from disposition of property and equipment
 
1,390

 
90

Net cash provided by (used for) investing activities
 
4,370

 
(4,100
)
Cash Flows from Financing Activities:
 
 
 
 
Proceeds from borrowings on credit facilities
 
13,230

 
2,840

Repayments of borrowings on credit facilities
 
(830
)
 
(400
)
Proceeds from Second Lien Term Loan, net of issuance costs
 
35,520

 
—

Repayments of borrowings on First Lien Term Loan, inclusive of transaction costs
 
(7,480
)
 
(1,950
)
Proceeds from ABL Revolving Debt, net of issuance costs
 
27,340

 
41,280

Repayments of borrowings on ABL Revolving Debt
 
(45,260
)
 
(11,280
)
Proceeds from issuance of Series A Preferred Stock
 
5,340

 
—

Proceeds from issuance of Warrants
 
5,380

 
—

Other, net
 
(10
)
 
(200
)
Net cash provided by financing activities
 
33,230

 
30,290

Effect of exchange rate changes on cash
 
150

 
700

Cash and Cash Equivalents:
 
 
 
 
Decrease for the period
 
(2,690
)
 
(3,330
)
At beginning of period
 
27,650

 
29,570

At end of period
 
$
24,960

 
$
26,240

Supplemental disclosure of cash flow information:
 
 
 
 
Cash paid for interest
 
$
6,620

 
$
4,420

Cash paid for taxes
 
$
2,100

 
$
1,350

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

HORIZON GLOBAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
Three Months Ended March 31, 2019 and 2018
(unaudited—dollars in thousands)

 
 
Common
Stock
 
Common Stock Warrants
 
Paid-in
Capital
 
Treasury Stock
 
Accumulated Deficit
 
Accumulated
Other
Comprehensive
Income
 
Total Horizon Global Shareholders’ Deficit
 
Noncontrolling Interest
 
Total Shareholders’ Deficit
Balance at January 1, 2019
 
$
250

 
$
—

 
$
160,990

 
$
(10,000
)
 
$
(222,720
)
 
$
7,760

 
$
(63,720
)
 
$
(2,500
)
 
$
(66,220
)
Net loss
 
—

 
—

 
—

 
—

 
(25,100
)
 
—

 
(25,100
)
 
(520
)
 
(25,620
)
Other comprehensive income, net of tax
 
—

 
—

 
—

 
—

 
—

 
140

 
140

 
—

 
140

Shares surrendered upon vesting of employees; share based payment awards to cover tax obligations
 
—

 
—

 
(10
)
 
—

 
—

 
—

 
(10
)
 
—

 
(10
)
Non-cash compensation expense
 
—

 
—

 
350

 
—

 
—

 
—

 
350

 
—

 
350

Issuance of Warrants
 
 
 
5,380

 
 
 
 
 
 
 
 
 
5,380

 
 
 
5,380

Balance at March 31, 2019
 
$
250

 
$
5,380

 
$
161,330

 
$
(10,000
)
 
$
(247,820
)
 
$
7,900

 
$
(82,960
)
 
$
(3,020
)
 
$
(85,980
)
 
 
Common
Stock
 
Common Stock Warrants
 
Paid-in
Capital
 
Treasury Stock
 
Accumulated Deficit
 
Accumulated
Other
Comprehensive
Income
 
Total Horizon Global Shareholders’ Equity
 
Noncontrolling Interest
 
Total Shareholders’ Equity
Balance at January 1, 2018
 
$
250

 
$
—

 
$
159,490

 
$
(10,000
)
 
$
(17,860
)
 
$
10,010

 
$
141,890

 
$
(1,490
)
 
$
140,400

Net loss
 
—

 
—

 
—

 
—

 
(57,510
)
 
—

 
(57,510
)
 
(250
)
 
(57,760
)
Other comprehensive income, net of tax
 
—

 
—

 
—

 
—

 
—

 
4,680

 
4,680

 
10

 
4,690

Shares surrendered upon vesting of employees' share based payment awards to cover tax obligations
 
—

 
—

 
(200
)
 
—

 
—

 
—

 
(200
)
 
—

 
(200
)
Non-cash compensation expense
 
—

 
—

 
720

 
—

 
—

 
—

 
720

 
—

 
720

Balance at March 31, 2018
 
$
250

 
$
—

 
$
160,010

 
$
(10,000
)
 
$
(75,370
)
 
$
14,690

 
$
89,580

 
$
(1,730
)
 
$
87,850


The accompanying notes are an integral part of these condensed consolidated financial statements.


7

HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)


1 . General
Nature of operations and basis of presentation. Horizon Global Corporation (“Horizon,” “Horizon Global,” “we,” or the “Company”) is a global designer, manufacturer and distributor of a wide variety of high quality, custom-engineered towing, trailering, cargo management and other related accessories. These products are designed to support original equipment manufacturers (“OEMs”) and original equipment servicers (“OESs”) (collectively, “OEs”), aftermarket and retail customers within the agricultural, automotive, construction, horse/livestock, industrial, marine, military, recreational, trailer and utility markets. The Company groups its business into operating segments by the region in which sales and manufacturing efforts are focused. The Company’s operating segments are Horizon Americas , Horizon Europe-Africa , and Horizon Asia-Pacific . See Note  16 , “ Segment Information ,” for further information on each of the Company’s operating segments.
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 . Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. It is management’s opinion that these financial statements contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of financial position and results of operations. Results of operations for interim periods are not necessarily indicative of results for the full year.
Corporate history . On June 30, 2015, Horizon became an independent company as a result of the distribution by TriMas Corporation (“TriMas” or “former parent”) of 100 percent of the outstanding common shares of Horizon Global to TriMas shareholders (the “Spin-off”). Each TriMas shareholder of record as of the close of business on June 25, 2015 (the “Record Date”) received two Horizon Global common shares for every five TriMas common shares held as of the Record Date. The Spin-off was completed on June 30, 2015 and was structured to be tax-free to both TriMas and Horizon Global shareholders. On July 1, 2015, Horizon Global common shares began regular trading on the New York Stock Exchange under the ticker symbol “HZN”.
2 . New Accounting Pronouncements
Accounting pronouncements recently adopted
In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-07, “Compensation - Stock Compensation (Topic 718)” (“ASU 2018-07”). ASU 2018-07 expands the scope of Accounting Standard Codification (“ASC”) 718 to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. ASU 2018-07 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018 with early adoption permitted. The Company adopted ASU 2018-07 on January 1, 2019, and there was no impact on the Company’s condensed consolidated financial statements.
In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities” (“ASU 2017-12”). ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires, for qualifying hedges, the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also modifies the accounting for components excluded from the assessment of hedge effectiveness, eases documentation and assessment requirements and modifies certain disclosure requirements. ASU 2017-12 is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted and should be applied on a modified retrospective basis. The Company adopted ASU 2017-12 on January 1, 2019, and there was no impact on the Company’s condensed consolidated financial statements.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” (“ASU 2016-02”), which supersedes the lease requirements in “Leases (Topic 840).” The objective of this update is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Under this guidance, lessees are required to recognize on the balance sheet a lease liability and a right-of-use (“ROU”) asset for all leases, with the exception of short-term leases with terms of twelve months or less. The lease liability represents the lessee’s obligation to make lease payments arising from a lease and will be measured as the present value of the lease payments. The ROU asset represents the lessee’s right to use a specified asset for the lease term, and will be measured at the lease liability amount, adjusted for lease prepayment, lease incentives received and the lessee’s initial direct costs.

8


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

The Company has elected the package of practical expedients, excluding the lease term hindsight, as permitted by the transition guidance. The Company has made an accounting policy election to exempt leases with an initial term of twelve months or less from balance sheet recognition. Instead, short-term leases will be expensed over the lease term.
The Company adopted the standard on January 1, 2019, by applying the modified retrospective method without restatement of comparative periods' financial information, as permitted by the transition guidance. The standard had a material impact on the Company’s condensed consolidated balance sheets, but did not have an impact on its condensed consolidated statements of operations and cash flows. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while the Company’s accounting for finance leases remained substantially unchanged.
See Note 11 “ Leases, ” for the impact of the adoption which resulted in the recognition of ROU assets and corresponding lease liabilities.
3 . Revenues
Revenue Recognition
The following tables present the Company’s net sales disaggregated by major sales channel as follows:
 
 
Three Months Ended March 31, 2019
 
 
Horizon Americas
 
Horizon Europe-Africa
 
Horizon
Asia-Pacific
 
Total
 
 
(dollars in thousands)
Net Sales
 
 
 
 
 
 
 
 
Automotive OEM
 
$
20,240

 
$
48,920

 
$
6,760

 
$
75,920

Automotive OES
 
1,610

 
13,290

 
13,220

 
28,120

Aftermarket
 
24,150

 
16,290

 
5,750

 
46,190

Retail
 
28,430

 
—

 
2,720

 
31,150

Industrial
 
9,280

 
700

 
3,540

 
13,520

E-commerce
 
11,790

 
530

 
—

 
12,320

Other
 
—

 
2,440

 
—

 
2,440

Total
 
$
95,500

 
$
82,170

 
$
31,990

 
$
209,660

 
 
Three Months Ended March 31, 2018
 
 
Horizon Americas
 
Horizon Europe-Africa
 
Horizon
Asia-Pacific
 
Total
 
 
(dollars in thousands)
Net Sales
 
 
 
 
 
 
 
 
Automotive OEM
 
$
20,050

 
$
46,920

 
$
6,630

 
$
73,600

Automotive OES
 
870

 
14,490

 
13,420

 
28,780

Aftermarket
 
26,520

 
20,790

 
6,880

 
54,190

Retail
 
32,150

 
—

 
3,010

 
35,160

Industrial
 
10,220

 
—

 
3,580

 
13,800

E-commerce
 
6,020

 
1,320

 
—

 
7,340

Other
 
390

 
3,540

 
10

 
3,940

Total
 
$
96,220

 
$
87,060

 
$
33,530

 
$
216,810

During the three months ended March 31, 2019 , adjustments to estimates of variable consideration for previously recognized revenue were insignificant. At March 31, 2019 , total opening and closing balances of contract assets and deferred revenue were not material.

9


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

4 . Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill for the three months ended March 31, 2019 are summarized as follows:
 
 
Horizon Americas
 
Horizon
Asia-Pacific
 
Total
 
 
(dollars in thousands)
Balance at December 31, 2018
 
$
4,500

 
$
8,160

 
$
12,660

Foreign currency translation and other
 
(50
)
 
110

 
60

Balance at March 31, 2019
 
$
4,450

 
$
8,270

 
$
12,720

The gross carrying amounts and accumulated amortization of the Company’s other intangibles are summarized below.
 
 
March 31, 2019
 
December 31, 2018
Intangible Category by Useful Life
 
Gross Carrying Amount
 
Accumulated Amortization
 
Gross Carrying Amount
 
Accumulated Amortization
 
 
(dollars in thousands)
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
Customer relationships, 2 – 20 years
 
$
173,910

 
$
(129,080
)
 
$
177,910

 
$
(127,740
)
Technology and other, 3 – 15 years
 
21,080

 
(16,180
)
 
21,000

 
(15,910
)
Trademark/Trade names, 1 – 8 years
 
730

 
(260
)
 
730

 
(250
)
Total finite-lived intangible assets
 
195,720

 
(145,520
)
 
199,640

 
(143,900
)
Trademark/Trade names, indefinite-lived
 
22,550

 
—

 
22,310

 
—

Total other intangible assets
 
$
218,270

 
$
(145,520
)
 
$
221,950

 
$
(143,900
)
On March 1, 2019, the Company entered into an agreement of sale of certain business assets in its Europe-Africa operating segment, via a share and asset sale (the “Sale”). Under the terms of the Sale, effective March 1, 2019, the Company disposed of certain non-automotive business assets that operated using the Terwa brand for $5.5 million , which included a $0.5 million note receivable. The Sale resulted in a $3.6 million loss recorded in Other expense, net in the condensed consolidated statements of operations, including a $3.0 million reduction of net intangibles related to customer relationships.
Amortization expense related to intangible assets as included in the accompanying condensed consolidated statements of operations is summarized as follows:
 
 
Three months ended
March 31,
 
 
2019
 
2018
 
 
(dollars in thousands)
Technology and other, included in cost of sales
 
$
450

 
$
270

Customer relationships and Trademark/Trade names, included in selling, general and administrative expenses
 
1,620

 
1,960

Total amortization expense
 
$
2,070

 
$
2,230


10


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

5 . Inventories
Inventories consist of the following components:
 
 
March 31,
2019
 
December 31,
2018
 
 
(dollars in thousands)
Finished goods
 
$
104,440

 
$
103,090

Work in process
 
18,490

 
19,660

Raw materials
 
51,430

 
50,940

Total inventories
 
$
174,360

 
$
173,690

6 . Property and Equipment, Net
Property and equipment, net consists of the following components:
 
 
March 31,
2019
 
December 31,
2018
 
 
(dollars in thousands)
Land and land improvements
 
$
460

 
$
460

Buildings
 
23,840

 
21,440

Machinery and equipment
 
157,480

 
161,750

 
 
181,780

 
183,650

Less: Accumulated depreciation
 
84,120

 
81,370

Property and equipment, net
 
$
97,660

 
$
102,280

Depreciation expense included in the accompanying condensed consolidated statements of operations is as follows:
 
 
Three months ended
March 31,
 
 
2019
 
2018
 
 
(dollars in thousands)
Depreciation expense, included in cost of sales
 
$
3,920

 
$
3,790

Depreciation expense, included in selling, general and administrative expense
 
350

 
340

Total depreciation expense
 
$
4,270

 
$
4,130


11


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

7 . Accrued and Other Long-term Liabilities

Accrued liabilities consist of the following components:
 
 
March 31,
2019
 
December 31,
2018
 
 
(dollars in thousands)
Customer claims
 
$
16,970

 
$
14,160

Accrued compensation
 
11,880

 
10,230

Customer incentives
 
11,130

 
10,100

Restructuring
 
5,900

 
7,530

Accrued professional services
 
5,010

 
4,770

Deferred purchase price
 
3,200

 
3,400

Short-term tax liabilities
 
1,030

 
1,930

Cross currency swap
 
—

 
1,610

Other
 
13,650

 
12,090

Total accrued liabilities
 
$
68,770

 
$
65,820


Other long-term liabilities consist of the following components:
 
 
March 31,
2019
 
December 31,
2018
 
 
(dollars in thousands)
Long-term tax liabilities
 
$
7,320

 
$
6,270

Restructuring
 
2,180

 
2,580

Deferred purchase price
 
270

 
30

Other
 
10,290

 
11,080

Total other long-term liabilities
 
$
20,060

 
$
19,960



12


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

8 . Long-term Debt
The Company’s long-term debt consists of the following:
 
 
March 31,
2019
 
December 31,
2018
 
 
(dollars in thousands)
ABL Facility
 
$
44,970

 
$
61,570

First Lien Term Loan
 
187,920

 
190,520

Second Lien Term Loan
 
51,020

 
—

Convertible Notes
 
125,000

 
125,000

Bank facilities, capital leases and other long-term debt
 
30,890

 
18,990

 
 
439,800

 
396,080

Less:
 
 
 
 
Unamortized debt issuance costs and original issuance discount on First Lien Term Loan
 
8,460

 
7,380

Unamortized debt issuance costs and discount on Second Lien Term Loan
 
15,520

 
—

Unamortized debt issuance costs and discount on Convertible Notes
 
22,660

 
24,190

Current maturities, long-term debt
 
15,460

 
13,860

Long-term debt
 
$
377,700

 
$
350,650

ABL Facility
In February 2019, the Company amended its existing revolving credit facility (the “ABL Facility”) to permit the Company to enter into the Senior Term Loan Agreement (as defined below) and make certain indebtedness, asset sale, investment and restricted payment baskets covenants more restrictive.
In March 2019, the Company amended the ABL facility to permit the Company to enter into the Second Lien Term Loan Agreement and provide for certain other modifications of the ABL Facility. In particular, the ABL facility was modified to (a) increase the interest rate by 1.0% , (b) reduce the total facility size to $90.0 million and (c) limit the ability to add debt in the future.
The ABL Facility consists of (i) a U.S. sub-facility, in an aggregate principal amount of up to $85.0 million (subject to availability under a U.S.-specific borrowing base) (the “U.S. Facility”), (ii) a Canadian sub-facility, in an aggregate principal amount of up to $2.0 million (subject to availability under a Canadian-specific borrowing base) (the “Canadian Facility”), and (iii) a U.K. sub-facility in an aggregate principal amount of up to $3.0 million (subject to availability under a U.K.-specific borrowing base) (the “U.K. Facility”). The ABL Facility also includes a $20.0 million U.S. letter of credit sub-facility. All facilities under the ABL Facility mature on June 30, 2020.
The Company incurred debt issuance costs of approximately $1.4 million in connection with the March 2019 amendment of the ABL Facility. These debt issuance costs will be amortized into interest expense over the contractual term of the loan. The Company recognized $0.1 million of amortization of debt issuance costs for the three months ended March 31, 2019 , and 2018 , respectively, which are included in the accompanying condensed consolidated statements of operations. There were $1.9 million and $0.8 million of unamortized debt issuance costs included in other assets in the accompanying condensed consolidated balance sheets as of March 31, 2019 and December 31, 2018 , respectively.
There were $45.0 million and $61.6 million outstanding under the ABL Facility as of March 31, 2019 and December 31, 2018 , respectively, with a weighted average interest rate of 6.3% and 4.4% , respectively. Total letters of credit issued under the ABL Facility at March 31, 2019 and December 31, 2018 were $5.0 million and $3.4 million , respectively. The Company had $29.0 million and $10.3 million in availability under the ABL Facility as of March 31, 2019 and December 31, 2018 , respectively.



13


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

First Lien Term Loan (formerly “Term Loan”)
In February 2019, the Company amended and restated the existing Term Loan Agreement to permit the Company to enter into the Senior Term Loan Agreement and tightened certain indebtedness, asset sale, investment and restricted payment baskets.
In March 2019, the Company amended the existing Term Loan Agreement (“Sixth Term Amendment”) (the “First Lien Term Loan Agreement”) to permit the Company to enter into the Second Lien Term Loan Agreement; amend certain financial covenants to provide for relief based on the Company’s 2018 and 2019 budget, and make certain other affirmative and negative covenants more restrictive.
Pursuant to the Sixth Term Amendment, the prior net leverage covenant ratio was eliminated and replaced with a first lien leverage covenant starting with the 12-month period ending September 2019 as follows:
September 30, 2019: 8.25 :1.00
December 31, 2019: 6.25 :1.00
March 31, 2020: 5.50 :1.00
June 30, 2020: 5.00 :1.00
September 30, 2020 and each fiscal quarter ending thereafter: 4.75 :1.00
The Sixth Term Amendment also added a fixed charge coverage covenant starting with fiscal quarter ending March 31, 2020, a minimum liquidity covenant of $15.0 million starting March 31, 2019, and a maximum capital expenditure covenant of $15.0 million for 2019 and $25.0 million annually thereafter. The interest rate on the First Lien Term Loan Agreement is also amended to add 3.0% paid-in-kind interest in addition to the existing cash pay interest.
Debt issuance costs of approximately $5.6 million were incurred in connection with the Sixth Term Amendment. In accordance with ASC 470-50, “Modifications and Extinguishments,” the Company recorded approximately $0.7 million of issuance costs in selling, general and administrative expense in the accompanying condensed consolidated statements of operations during the three months ended March 31, 2019 and capitalized approximately $4.9 million of debt issuance costs that will be amortized into interest expense over the contractual term of the loan using the effective interest method. The Company also recorded approximately $3.0 million of unamortized debt issuance costs to interest expense for three months ended March 31, 2019 , due to the extinguishment of debt for certain lenders in the loan syndicate.
The Company recognized approximately $0.8 million and $0.4 million of amortization of debt issuance and discount cost for the three months ended March 31, 2019 and 2018 , respectively, which is included in the accompanying condensed consolidated statements of operations. The Company had an aggregate principal amount outstanding of $187.9 million and $190.5 million as of March 31, 2019 and December 31, 2018 , respectively, under the First Lien Term Loan bearing interest at 8.5% and 8.8% , respectively.
All of the indebtedness under the First Lien Term Loan is and will be guaranteed by the Company’s existing and future material domestic subsidiaries and is and will be secured by substantially all of the assets of the Company and such guarantors.
Senior Term Loan Agreement
In February 2019, the Company entered into a Credit Agreement (the “Senior Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and the lenders party thereto. The Senior Term Loan Agreement provided for a short-term loan facility in the aggregate principal amount of $10.0 million , all of which was borrowed by the Company. Certain of the lenders under the Company’s First Lien Term Loan Agreement were the lenders under the Senior Term Loan Agreement.
The Senior Term Loan Agreement required the Company to obtain additional financing in amounts and on terms acceptable to the lenders. The Senior Term Loan Agreement was repaid on March 15, 2019, in conjunction with the additional financing further detailed below. The Company incurred debt issuance costs of approximately $0.5 million in connection with the Senior Term Loan Agreement, which were recorded to selling, general and administrative expense within the accompanying condensed consolidated statements of operations.

14


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

Second Lien Term Loan Agreement
In March 2019, the Company entered into a Credit Agreement (the “Second Lien Term Loan Agreement”) with Cortland Capital Markets Services LLC, as administrative agent and collateral agent, and Corre Partners Management L.L.C., as representative of the lenders, and the lenders party thereto. The Second Lien Term Loan Agreement provides for a term loan facility in the aggregate principal amount of $51.0 million and matures on September 30, 2021. The interest on the Second Lien Term Loan may be paid, at the Company’s election, in cash, at the customary eurocurrency rate plus a margin of 10.50% per annum, or in-kind, at the customary eurocurrency rate plus a margin of 11.50% . The Second Lien Term Loan Agreement is secured by a second lien on substantially the same collateral as the First Lien Term Loan and is subject to various affirmative and negative covenants including a secured net leverage ratio tested quarterly, commencing with the fiscal quarter ending on December 31, 2019, which shall not exceed (x) 6.75 to 1.00 as of the last day of any fiscal quarter ending on or prior to June 30, 2020 and (y) 5.25 to 1.00 as of the last day of any fiscal quarter ending on or after September 30, 2020.
The proceeds, net of applicable fees, of the Second Lien Term Loan Agreement were used to repay all amounts outstanding under the Senior Term Loan Agreement and to provide additional liquidity and working capital for the Company.
Pursuant to the Second Lien Term Loan Agreement, the Company is required to issue 6.25 million detachable warrants to purchase common stock of the Company, which can be exercised on a cashless basis over a five -year term with an exercise price of $1.50 per share. 2.65 million warrants will not be issued unless approved by a shareholder vote; therefore, 90,667 shares of Series A Preferred Stock with a cumulative dividend rate of 18.0% were issued in the interim and will be canceled and converted into warrants upon receipt of shareholder approval, which is expected to occur at the Company’s 2019 Annual Meeting of Stockholders currently planned for June 25, 2019.
In accordance with guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”), the (i) Second Lien Term Loan; (ii) the Series A Preferred Stock; and (iii) warrants are all freestanding instruments and proceeds were allocated to each instrument on a relative fair value basis: (i) $40.3 million ; (ii) $5.3 million and (iii) $5.4 million , respectively.
The Series A Preferred Stock is not within the scope of ASC 480-10 and does not meet the criteria for liability classification. The Series A Preferred Stock will be classified as temporary equity as the Series A Preferred Stock will be entitled to receive two times its liquidation value in cash upon occurrence of a liquidation or deemed liquidation event, which is outside the control of the Company. The warrants also do not meet the criteria for liability classification under ASC 480. The warrants meet the definition of a derivative under ASC 815, however, are determined to be indexed to the Company’s own stock and meet the requirements for equity classification pursuant to ASC 815-40.
The Company determined the fair value of the Second Lien Term Loan using a discount rate build up approach. The fair values of the Series A Preferred Stock and warrants were determined using an option pricing method. The debt discount of $10.7 million created by the relative fair value allocation of the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the loan.
Debt issuance costs of approximately $3.8 million , and original issuance discount of approximately $1.0 million were incurred in connection with entry into the Second Lien Term Loan Agreement. The debt issuance and original issuance discount costs will be amortized into interest expense over the contractual term of the loan using the effective interest method. The Company had total unamortized debt issuance and discount costs of $15.5 million , all of which are recorded as a reduction of the debt balance on the Company’s accompanying condensed consolidated balance sheets.
Convertible Notes
In February 2017, the Company completed a public offering of 2.75% Convertible Senior Notes (the “Convertible Notes”) in an aggregate principal amount of $125.0 million . Interest is payable on January 1 and July 1 of each year, beginning on July 1, 2017. The Convertible Notes are convertible into 5,005,000 shares of the Company’s common stock, based on an initial conversion price of $24.98 per share. The Convertible Notes will mature on July 1, 2022 unless earlier converted.
Upon conversion by the holders, the Company may elect to settle such conversion in shares of its common stock, cash, or a combination thereof. Because the Company may elect to settle conversion in cash, the Company separated the Convertible Notes into their liability and equity components by allocating the issuance proceeds to each of those components in accordance with ASC 470-20, “Debt-Debt with Conversion and Other Options.” The Company first determined the fair value of the liability

15


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

component by estimating the value of a similar liability that does not have an associated equity component. The Company then deducted that amount from the issuance proceeds to arrive at a residual amount, which represents the equity component. The Company accounted for the equity component as a debt discount (with an offset to paid-in capital in excess of par value). The debt discount created by the equity component is being amortized as additional non-cash interest expense using the effective interest method over the contractual term of the Convertible Notes ending on July 1, 2022.
In connection with the issuance of the Convertible Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”) in privately negotiated transactions with certain of the underwriters or their affiliates (in this capacity, the “option counterparties”). The Convertible Note Hedges provide the Company with the option to acquire, on a net settlement basis, 5,005,000  shares of its common stock, which is equal to the number of shares of common stock that notionally underlie the Convertible Notes, at a strike price of  $24.98 , which corresponds to the conversion price of the Convertible Notes. The Convertible Note Hedges have an expiration date that is the same as the maturity date of the Convertible Notes, subject to earlier exercise. The Convertible Note Hedges have customary anti-dilution provisions similar to the Convertible Notes. The Convertible Note Hedges have a default settlement method of net-share settlement but may be settled in cash or shares, depending on the Company’s method of settlement for conversion of the corresponding Convertible Notes. If the Company exercises the Convertible Note Hedges, the shares of common stock it will receive from the option counterparties to the Convertible Note Hedges will cover the shares of common stock that it would be required to deliver to the holders of the converted Convertible Notes in excess of the principal amount thereof. The aggregate cost of the Convertible Note Hedges was $29.0 million (or $7.5 million net of the total proceeds from the Warrants sold, as discussed below), before the allocation of issuance costs of approximately $0.7 million . The Convertible Note Hedges are accounted for as equity transactions in accordance with ASC 815-40 , “Derivatives and Hedging-Contracts in Entity’s own Equity.”
In connection with the issuance of the Convertible Notes, the Company also sold net-share-settled warrants (the “Warrants”) in privately negotiated transactions with the option counterparties for the purchase of up to 5,005,000 shares of its common stock at a strike price of $29.60 per share, for total proceeds of  $21.5 million , before the allocation of $0.6 million of issuance costs. The Company also recorded the Warrants within shareholders’ equity in accordance with ASC 815-40. The Warrants have customary anti-dilution provisions similar to the Convertible Notes. As a result of the issuance of the Warrants, the Company will experience dilution to its diluted earnings per share if its average closing stock price exceeds $29.60  for any fiscal quarter. The Warrants expire on various dates from October 2022 through February 2023 and must be net-settled in shares of the Company’s common stock. Therefore, upon exercise of the Warrants, the Company will issue shares of its common stock to the purchasers of the Warrants that represent the value by which the price of the common stock exceeds the strike price stipulated within the particular warrant agreement.
Covenant and Liquidity Matters
On May 7, 2019, the Company entered into the Seventh Amendment to Credit Agreement (the “Seventh Term Amendment”) to amend the First Lien Term Loan Agreement, which extended its $100.0 million prepayment requirement from on or before March 31, 2020, to on or before May 15, 2020.
As a result of the modifications of the ABL Facility and the First Lien Term Loan, the additional liquidity from the Second Lien Term Loan, as well as the current forecast through June 2020, the Company believes it has sufficient liquidity to operate its business. In addition to meeting its working capital needs, the Sixth Term Amendment requires the Company to raise a minimum of $100.0 million through a combination of asset sales, junior debt or equity to make a contractually obligated prepayment of the First Lien Term Loan on or before May 15, 2020. We are currently evaluating all strategic alternatives related to the options to raise the funds necessary to comply with this contractual prepayment obligation. In conjunction with evaluating all strategic alternatives, the Company has created a board of directors’ subcommittee to oversee the fund-raising process and engaged an investment banker to assess management’s fund-raising alternatives. If we cannot generate the required cash, we may not be able to make the necessary payments required under our debt as of May 15, 2020, which would result in an event of default. Such a default, if not cured, would allow the lenders to accelerate the maturity of the debt, making it due and payable at that time.
The Company is in compliance with all of its financial covenants as of March 31, 2019.
Bank facilities
There were $15.2 million and $2.9 million outstanding under the Company’s Australian loan agreement as of March 31, 2019 and December 31, 2018 , respectively.

16


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

9 . Derivative Instruments
Foreign Currency Exchange Rate Risk
As of March 31, 2019 , the Company was party to forward contracts to hedge changes in foreign currency exchange rates with notional amounts of approximately $21.9 million . The Company uses foreign currency forward contracts to mitigate the risk associated with fluctuations in currency rates impacting cash flows related to certain payments for contract manufacturing in its lower-cost manufacturing facilities. The foreign currency forward contracts hedge currency exposure between the Mexican peso and the U.S. dollar and between the Australian dollar and the U.S. dollar and mature at specified monthly settlement dates through December 2019. At inception, the Company designated the foreign currency forward contracts as cash flow hedges. Upon the performance of contract manufacturing or purchase of certain inventories the Company de-designates the foreign currency forward contract.
On August 16, 2017, the Company’s Australian subsidiary entered into a cross currency swap arrangement to hedge changes in foreign currency exchange rates. As of March 31, 2019 , the notional amount of the cross currency swap was approximately $2.8 million . The Australian subsidiary uses the cross currency swap to mitigate the risk associated with fluctuations in currency rates related to a non-U.S. functional currency intercompany loan of NZ $10.0 million . The floating-to-floating cross currency swap hedges currency exposure between the New Zealand dollar and the Australian dollar and matures on June 30, 2020. The Australian subsidiary makes quarterly principal payments of NZ $0.8 million , plus interest at the 3-month Bank Bill Benchmark Rate in New Zealand plus a margin of 0.3% per annum, in exchange for A $0.8 million , plus interest at the three-month BBSY in Australia per annum. At inception, the cross currency swap was not designated as a hedging instrument.
Financial Statement Presentation
The fair value carrying amount of the Company’s derivative instruments were recorded as follows:
 
 
 
 
Asset / (Liability) Derivatives
 
 
Balance Sheet Caption
 
March 31,
2019
 
December 31,
2018
 
 
 
 
(dollars in thousands)
Derivatives designated as hedging instruments
 
 
 
 
 
 
Foreign currency forward contracts
 
Prepaid expenses and other current assets
 
$
900

 
$
1,910

Foreign currency forward contracts
 
Accrued liabilities
 
(20
)
 
—

Cross currency swap
 
Accrued liabilities
 
—

 
(2,480
)
Total derivatives designated as hedging instruments
 
 
 
880

 
(570
)
Derivatives not designated as hedging instruments
 
 
 
 
 
 
Foreign currency forward contracts
 
Prepaid expenses and other current assets
 
190

 
290

Cross currency swap
 
Accrued liabilities
 
(100
)
 
(90
)
Total derivatives de-designated as hedging instruments
 
 
 
90

 
200

Total derivatives
 
 
 
$
970

 
$
(370
)

17


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

The following table summarizes the gain or loss recognized in AOCI and the amounts reclassified from AOCI into earnings and the amounts recognized directly into earnings:
 
Amount of Gain (Loss) Recognized in
AOCI on Derivatives
(net of tax)
 
Location of Gain (Loss) Reclassified from AOCI into Earnings
 
Total Amounts of Expense Line Items Presented in the Statement of Operations in Which the Effects of Cash Flow Hedges are Recorded
 
Amount of Gain (Loss) Reclassified
from AOCI into Earnings
 
As of March 31,
 
As of December 31,
 
 
 
Three months ended
March 31,
 
2019
 
2018
 
 
 
2019
 
2018
 
(dollars in thousands)
 
 
 
 
 
(dollars in thousands)
Derivatives classified as cash flow hedges
Foreign currency forward contracts
$
890

 
$
1,870

 
Cost of sales
 
$
(177,580
)
 
$
780

 
$
130

Cross currency swap
$
—

 
$
90

 
Interest expense
 
$
(10,940
)
 
$
900

 
$
(3,070
)
The following table summarizes the gain or loss recognized in earnings for derivatives not designated as hedging instruments:
 
 
Gain (Loss) Recognized in Earnings
 
Location of Gain (Loss) Recognized in Earnings
 
Total Amounts of Expense Line Items Presented in the Statement of Operations in Which the Effects of Derivatives are Recorded
 
 
Three months ended March 31,
 
 
 
 
2019
 
2018
 
 
 
 
(dollars in thousands)
 
 
 
 
Derivatives not designated as hedging instruments
Foreign currency forward contracts
 
$
(220
)
 
$
70

 
Cost of sales
 
$
(177,580
)
Cross currency swap
 
$
(10
)
 
$
(170
)
 
Other expense, net
 
$
(5,610
)
Over the next 12 months , the Company expects to reclassify approximately $0.9 million of pre-tax deferred gains, related to the foreign currency forward contracts, from AOCI to cost of sales as contract manufacturing and inventory purchases are settled.

18


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

Fair Value Measurements
The fair value of the Company’s derivatives are estimated using an income approach based on valuation techniques to convert future amounts to a single, discounted amount. The Company’s derivatives are recorded at fair value in its condensed consolidated balance sheets and are valued using pricing models that are primarily based on market observable external inputs, including spot and forward currency exchange rates, benchmark interest rates, and discount rates consistent with the instrument’s tenor, and consider the impact of the Company’s own credit risk, if any. Changes in counterparty credit risk are also considered in the valuation of derivative financial instruments. Fair value measurements and the fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 are shown below:
 
 
Frequency
 
Asset / (Liability)
 
Quoted Prices in Active Markets for Identical Assets
(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
 
 
 
(dollars in thousands)
March 31, 2019
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
Recurring
 
$
1,070

 
$
—

 
$
1,070

 
$
—

Cross currency swaps
 
Recurring
 
$
(100
)
 
$
—

 
$
(100
)
 
$
—

December 31, 2018
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contracts
 
Recurring
 
$
2,200

 
$
—

 
$
2,200

 
$
—

Cross currency swaps
 
Recurring
 
$
(2,570
)
 
$
—

 
$
(2,570
)
 
$
—

10 . Restructuring
The Company’s restructuring activities are undertaken as necessary to execute management’s strategy and streamline operations, consolidate and take advantage of available capacity and resources, and ultimately achieve productivity improvements and net cost reductions. The Company's restructuring charges consist primarily of employee costs (principally severance and/or termination benefits) and facility closure and other costs.
To the extent these programs involve voluntary separations, no liabilities are generally recorded until offers to employees are accepted. If employees are involuntarily terminated, a liability is generally recorded at the communication date. Estimates of restructuring charges are based on information available at the time such charges are recorded. Related charges are recorded in cost of sales and selling, general and administrative expenses.
The following table provides a summary of the Company’s consolidated restructuring liabilities and related activity for each type of exit cost as of and for the three months ended March 31, 2019 :

 
 
Employee Costs
 
Facility Closure and Other Costs
 
Total
 
 
(dollars in thousands)
Balance at January 1, 2019
 
$
4,990

 
$
5,120

 
$
10,110

Payments and other (1)
 
(1,570
)
 
(410
)
 
(1,980
)
Balance at March 31, 2019
 
$
3,420

 
$
4,710

 
$
8,130

(1) Other consists of changes in the liability balance due to foreign currency translation.
The $8.1 million restructuring liability at March 31, 2019 includes $5.9 million of accrued liabilities and $2.2 million of other long-term liabilities.



19


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

11 . Leases

The Company leases certain facilities, automobiles and equipment under non-cancellable operating leases. Our leases have remaining lease terms of one year to thirteen years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year. Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheets; the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Most leases include one or more options to renew. The exercise of lease renewal options is typically at the Company’s sole discretion; therefore, the majority of renewals to extend the lease terms are not included in the Company’s ROU assets and lease liabilities as they are not reasonably certain of exercise. The Company regularly evaluates the renewal options and when they are reasonably certain of exercise, the Company includes the renewal period in the lease term. The Company combines lease and non-lease components which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases.

As most of the Company’s leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company has a centrally managed treasury function; therefore, based on the applicable lease terms and the current economic environment, the Company applies a portfolio approach by reporting segment for determining the incremental borrowing rate.

Operating lease cost for the three months ended March 31, 2019 was $ 5.3 million . Operating cash flows from operating leases and ROU assets obtained in exchange for operating lease obligations for the three months ended March 31, 2019 were $5.3 million and $1.1 million , respectively. The weighted average remaining term of these leases was approximately 6.1 years and the weighted average discount rate used to measure lease liabilities was approximately 7.6% .

Maturities of lease liabilities were as follows as of March 31, 2019 :

Years ending December 31,
 
Operating Leases
 
 
(dollars in thousands)
2019
 
$
17,550

2020
 
16,720

2021
 
14,150

2022
 
10,080

2023
 
7,500

2024 and thereafter
 
23,160

Total lease payments
 
89,160

Less imputed interest
 
(20,600
)
Present value of lease liabilities
 
$
68,560



20


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

Minimum payments for operating leases having initial or remaining non-cancellable lease terms in excess of one year at December 31, 2018 are summarized below:

December 31,
 
Minimum Payments
 
 
(dollars in thousands)
2019
 
$
15,820

2020
 
14,790

2021
 
12,590

2022
 
7,900

2023
 
4,830

Thereafter
 
13,090

Total
 
$
69,020



12 . Contingencies
During the fourth quarter of 2018, the Company was notified by two OEM customers of potential claims related to product sold by Horizon Europe-Africa arising from potentially faulty components provided by a supplier. The claims resulted from the failure of products not functioning to specifications, but the claims do not allege any damage and only seek replacement of the product. One of the claims has since resulted in a recall campaign while the manner in which the other claim will be resolved is pending. The Company performed an assessment of the facts and circumstances for all asserted and unasserted claims and considered all factors including the Company’s recall insurance. Based on this assessment, the Company determined the probable range of the liability to be between $16.8 million and $20.0 million , with no amount within that range a better estimate than any other amount. As a result, the Company recorded a liability of $16.8 million and an asset of $11.1 million as of March 31, 2019 , which resulted in a $4.3 million charge during the three months ended March 31, 2019. The asset recorded represents the amount the Company believes is probable of recovery and has appropriate legal basis for recovery in accordance with its recall insurance policy. The Company cannot give any assurances that the final resolution of the claims, if adverse to the Company, will not have a material adverse effect to our financial position, results of operations or cash flows.
13 . Loss per Share
Basic loss per share is computed using net loss attributable to Horizon Global and the number of weighted average shares outstanding. Diluted loss per share is computed using net loss attributable to Horizon Global and the number of weighted average shares outstanding, adjusted to give effect to the assumed exercise of outstanding stock options and warrants, vesting of restricted shares outstanding, and conversion of the Convertible Notes.

21


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

The following table sets forth the reconciliation of the numerator and the denominator of basic loss per share attributable to Horizon Global and diluted loss per share attributable to Horizon Global:
 
 
Three months ended
March 31,
 
 
2019
 
2018
 
 
(dollars in thousands, except share and per share data)
Numerator:
 
 
 
 
Net loss attributable to Horizon Global
 
$
(25,100
)
 
$
(57,510
)
Denominator:
 
 
 
 
Weighted average shares outstanding, basic
 
25,188,094

 
24,963,120

Dilutive effect of stock-based awards
 
—

 
—

Weighted average shares outstanding, diluted
 
25,188,094

 
24,963,120

 
 
 
 
 
Basic loss per share attributable to Horizon Global
 
$
(1.00
)
 
$
(2.30
)
Diluted loss per share attributable to Horizon Global
 
$
(1.00
)
 
$
(2.30
)
Due to net losses for the three months ended March 31, 2019 and 2018 , the effect of certain dilutive securities were excluded from the computation of weighted average diluted shares outstanding as inclusion would have resulted in anti-dilution. A summary of these anti-dilutive common stock equivalents is provided in the table below:
 
 
Three months ended
March 31,
 
 
2019
 
2018
Number of options
 
82,987

 
335,358

Exercise price of options
 
$9.20 - $11.29

 
$9.20 - $11.29

Restricted stock units
 
472,627

 
647,717

Convertible Notes
 
5,005,000

 
5,005,000

Convertible Notes warrants
 
5,005,000

 
5,005,000

Second Lien Term Loan warrants
 
3,601,902

 
—

For purposes of determining diluted loss per share, the Company has elected a policy to assume that the principal portion of the Convertible Notes, as described in Note 8 , “ Long-term Debt ,” is settled in cash and the conversion premium is settled in shares. Therefore, the Company has adopted a policy of calculating the diluted loss per share effect of the Convertible Notes using the treasury stock method. As a result, the dilutive effect of the Convertible Notes is limited to the conversion premium, which is reflected in the calculation of diluted loss per share as if it were a freestanding written call option on the Company’s shares. Using the treasury stock method, the Warrants issued in connection with the issuance of the Convertible Notes are considered to be dilutive when they are in the money relative to the Company’s average common stock price during the period. The Convertible Note Hedges purchased in connection with the issuance of the Convertible Notes are always considered to be anti-dilutive and therefore do not impact the Company’s calculation of diluted loss per share.

14 . Equity Awards
Description of the Plan
Horizon employees and non-employee directors participate in the Horizon Global Corporation 2015 Equity and Incentive Compensation Plan (as amended and restated, the “Horizon 2015 Plan”). The Horizon 2015 Plan authorizes the Compensation Committee of the Horizon Board of Directors to grant stock options (including “incentive stock options” as defined in Section 422 of the U.S. Internal Revenue Code), restricted shares, restricted stock units, performance shares, performance stock units, cash

22


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

incentive awards, and certain other awards based on or related to our common stock to Horizon employees and non-employee directors. No more than 4.4 million Horizon common shares may be delivered under the Horizon 2015 Plan.
Stock Options

The following table summarizes Horizon stock option activity from December 31, 2018 to March 31, 2019 :

 
 
Number of Stock Options
 
Weighted Average Exercise Price
 
Average  Remaining Contractual Life (Years)
 
Aggregate Intrinsic Value
Outstanding at December 31, 2018
 
92,967

 
$
10.40

 

 
 
Granted
 
—

 
—

 

 
 
Exercised
 
—

 
—

 
 
 
 
Canceled, forfeited
 
(28,973
)
 
10.24

 
 
 
 
Expired
 
—

 
—

 
 
 
 
Outstanding at March 31, 2019
 
63,994

 
$
10.47

 
6.3
 
$
—

As of March 31, 2019 , the unrecognized compensation cost related to stock options is immaterial. For the three months ended March 31, 2019 and 2018 , the stock-based compensation expense recognized by the Company related to stock options was immaterial. There was no aggregate intrinsic value of the outstanding options at March 31, 2019 . Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.
Restricted Shares
During the first three months of 2019 , the Company granted an aggregate of 822,746 restricted stock units and performance stock units to certain key employees. The total grants consisted of: (i) 411,373 time-based restricted stock units that vest on March 19, 2022, and (ii) 411,373 market-based performance stock units that vest on March 19, 2022 (the “2019 PSUs”).
During 2018, the Company granted an aggregate of 477,963 restricted stock units and performance stock units to certain key employees and non-employee directors. The total grants consisted of: (i) 5,680 time-based restricted stock units that vested on July 1, 2018; (ii) 43,799 time-based restricted stock units that vest ratably on (1) March 1, 2019, (2) March 1, 2020 and (3) March 1, 2021; (iii) 101,204 time-based restricted stock units that vest ratably on (1) March 1, 2019, (2) March 1, 2020, (3) March 1, 2021 and (4) March 1, 2022; (iv) 145,003 market-based performance stock units that vest on March 1, 2021 (the “2018 PSUs”); (v) 43,416 time-based restricted stock units that vest on March 1, 2021; (vi) 17,575 time-based restricted stock units that vest on May 8, 2019; (vii) 84,210 time-based restricted stock units that vested on May 15, 2018; (viii) 11,404 time-based restricted stock units that vest on May 15, 2020; (ix) 14,472 time-based restricted stock units that vest on August 1, 2020; (x) 8,400 time-based restricted stock units that vest on October 1, 2020, and (xi) 2,800 time-based restricted stock units that vest on December 3, 2020.
The performance criteria for the market-based performance stock units is based on the Company’s total shareholder return (“TSR”) relative to the TSR of the common stock of a pre-defined industry peer group. For the 2019 PSUs, TSR is measured over a period beginning January 1, 2019 and ending December 31, 2021. For the 2018 PSUs, TSR is measured over a period beginning January 1, 2018 and ending December 31, 2020. TSR is calculated as the Company’s average closing stock price for the 20 -trading days at the end of the performance period plus Company dividends, divided by the Company’s average closing stock price for the 20 -trading days prior to the start of the performance period. Depending on the performance achieved, the amount of shares earned can vary from  0%  of the target award to a maximum of  200%  of the target award. The Company estimated the grant-date fair value of the awards subject to a market condition using a Monte Carlo simulation model, using the following weighted-average assumptions: risk-free interest rate of  2.43% and 2.34%  for the 2019 PSUs and 2018 PSUs, respectively, and annualized volatility of  84.1% and 37.4% for the 2019 PSUs and 2018 PSUs, respectively. Due to the lack of adequate stock price history of Horizon common stock as of March 31, 2018, the volatility was based on the median of the peer group. In 2019, the Company had sufficient historical data that was used to calculate the volatility. The grant date fair value of the p erformance stock units wer e $3.69 and $7.08 for the 2019 PSUs and 2018 PSUs, respectively.

23


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

The grant date fair value of r estricted stock units is expensed over the vesting period. Restricted stock unit fair values are based on the closing trading price of the Company’s common stock on the date of grant. Changes in the number of restricted shares outstanding for the period ended March 31, 2019 were as follows:
 
 
Number of Restricted Shares
 
Weighted Average Grant Date Fair Value
Outstanding at December 31, 2018
 
419,928

 
$
9.75

Granted
 
822,746

 
3.35

Vested
 
(29,293
)
 
11.02

Canceled, forfeited
 
(67,159
)
 
7.57

Outstanding at March 31, 2019
 
1,146,222

 
$
4.88

As of March 31, 2019 , there was $3.8 million in unrecognized compensation costs related to unvested restricted stock units that is expected to be recognized over a weighted-average period of 2.6 years.
The Company recognized approximately $0.4 million of stock-based compensation expense related to restricted shares during the three months ended March 31, 2019 , and approximately $0.7 million during the three months ended March 31, 2018 . Stock-based compensation expense is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.
15 . Temporary and Shareholders’ Equity
Temporary equity
Series A Preferred Stock
The Company is authorized to issue 100,000,000 shares of preferred stock, par value of $0.01 per share. There were 90,667 preferred shares outstanding at March 31, 2019 (consisting of the Series A Preferred Stock), and no ne at December 31, 2018 . The Series A Preferred Stock was issued in connection with the Second Lien Term Loan the Company entered into in March 2019. See Note 8 , “ Long-term Debt ,” for additional information. The Series A Preferred Stock has an 18% cumulative dividend rate per annum and will be canceled and converted into warrants upon receipt of shareholder approval, which is expected to occur at the Company 2019 Annual Meeting of Stockholders currently planned for June 25, 2019. The Series A Preferred Stock is classified as temporary equity until shareholder approval is received.
Shareholders’ Equity
Common Stock
The Company is authorized to issue 400,000,000 shares of common stock, par value of $0.01 per share. At March 31, 2019 , there were 25,892,114 shares of common stock issued and 25,205,608 shares of common stock outstanding. At December 31, 2018 , there were 25,866,747 shares of common stock issued and 25,180,241 shares of common stock outstanding.
Common Stock Warrants
In connection with the Second Lien Term Loan the Company entered into in March 2019, the Company became obligated to issue 6.25 million detachable warrants to purchase common stock of the Company, which can be exercised on a cashless basis over a five years term with an exercise price of $1.50 per share. 2.65 million warrants will not be issued unless approved by a shareholder vote; therefore, 90,667 shares of Series A Preferred Stock were issued in the interim. See Note 8 , “ Long-term Debt ,” for additional information. In March 2019, warrants to purchase 3,601,902 shares of common stock were issued and remain outstanding as of March 31, 2019.

24


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

Accumulated Other Comprehensive Income (“AOCI”)
Changes in AOCI by component, net of tax, for the three months ended March 31, 2019 are summarized as follows:
 
 
Derivative Instruments
 
Foreign Currency Translation
 
Total
 
 
(dollars in thousands)
Balance at January 1, 2019
 
$
1,960

 
$
5,800

 
$
7,760

Net unrealized gains arising during the period (a)
 
570

 
1,210

 
1,780

Less: Net realized gains reclassified to net loss (b)
 
1,640

 
—

 
1,640

Net current-period change
 
(1,070
)
 
1,210

 
140

Balance at March 31, 2019
 
$
890

 
$
7,010

 
$
7,900

__________________________
(a) Derivative instruments, net of income tax expense of $0.0 million . See Note 9 , “ Derivative Instruments ,” for further details.
(b) Derivative instruments, net of income tax expense of $0.0 million . See Note 9 , “ Derivative Instruments ,” for further details.
Changes in AOCI by component, net of tax, for the three months ended March 31, 2018 are summarized as follows:
 
 
Derivative Instruments
 
Foreign Currency Translation
 
Total
 
 
(dollars in thousands)
Balance at January 1, 2018
 
$
(390
)
 
$
10,400

 
$
10,010

Net unrealized gains (losses) arising during the period (a)
 
(760
)
 
3,150

 
2,390

Less: Net realized losses reclassified to net loss (b)
 
(2,290
)
 
—

 
(2,290
)
Net current-period change
 
1,530

 
3,150

 
4,680

Balance at March 31, 2018
 
$
1,140

 
$
13,550

 
$
14,690

__________________________
(a) Derivative instruments, net of income tax benefit of $0.6 million . See Note 9 , “ Derivative Instruments ,” for further details.
(b) Derivative instruments, net of income tax benefit of $0.7 million . See Note 9 , “ Derivative Instruments ,” for further details.
16 . Segment Information
The Company groups its business into operating segments by the region in which sales and manufacturing efforts are focused, which are grouped on the basis of similar product, market and operating factors. Each operating segment has discrete financial information evaluated regularly by the Company’s chief operating decision maker in determining resource allocation and assessing performance. The Company reports the results of its business in three operating segments: Horizon Americas , Horizon Europe-Africa , and Horizon Asia-Pacific . Horizon Americas is comprised of the Company’s North American and South American operations. Horizon Europe-Africa is comprised of the European and South African operations, while Horizon Asia-Pacific is comprised of the Australia, Thailand, and New Zealand operations. See below for further information regarding the types of products and services provided within each operating segment.
Horizon Americas - A market leader in the design, manufacture and distribution of a wide variety of high-quality, custom engineered towing, trailering and cargo management products and related accessories. These products are designed to support OEMs, OESs, aftermarket and retail customers in the agricultural, automotive, construction, industrial, marine, military, recreational vehicle, trailer and utility end markets. Products include brake controllers, cargo management, heavy-duty towing products, jacks and couplers, protection/securing systems, trailer structural and electrical components, tow bars, vehicle roof racks, vehicle trailer hitches and additional accessories.
Horizon Europe‑Africa - With a product offering similar to Horizon Americas , Horizon Europe-Africa focuses its sales and manufacturing efforts in the Europe and Africa regions of the world.

25


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

Horizon Asia‑Pacific - With a product offering similar to Horizon Americas , Horizon Asia-Pacific focuses its sales and manufacturing efforts in the Asia-Pacific region of the world.
Segment activity is as follows:
 
 
Three months ended
March 31,
 
 
2019
 
2018
 
 
(dollars in thousands)
Net Sales
 
 
 
 
Horizon Americas
 
$
95,500

 
$
96,220

Horizon Europe-Africa
 
82,170

 
87,060

Horizon Asia-Pacific
 
31,990

 
33,530

Total
 
$
209,660

 
$
216,810

Operating Profit (Loss)
 
 
 
 
Horizon Americas
 
$
(1,500
)
 
$
(5,110
)
Horizon Europe-Africa
 
(3,190
)
 
(45,090
)
Horizon Asia-Pacific
 
5,380

 
4,390

Corporate
 
(8,680
)
 
(7,460
)
Total
 
$
(7,990
)
 
$
(53,270
)
17 . Income Taxes
At the end of each interim reporting period, the Company makes an estimate of the annual effective income tax rate. Tax items included in the annual effective income tax rate are pro-rated for the full year and tax items discrete to a specific quarter are included in the effective income tax rate for that quarter. Effective tax rates vary from period to period as separate calculations are performed for those countries where the Company's operations are profitable and whose results continue to be tax-effected and for those countries where full deferred tax valuation allowances exist and are maintained. In determining the estimated annual effective tax rate, the Company analyzes various factors, including but not limited to, forecasts of projected annual earnings, taxing jurisdictions in which the pretax income and/or pretax losses will be generated, available tax planning strategies and estimated domestic tax impacts attributable to the 2017 Tax Cuts and Jobs Act (the “Tax Act”).
For the three months ended March 31, 2019 and 2018 , the effective income tax rate was (4.4)% and 4.3% , respectively. The lower 2019 effective tax rate is attributable to the valuation allowance recorded in the U.S. at year end 2018 , which resulted in no income tax benefit recognized for jurisdictional pretax losses.
The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine whether, based on the weight of the evidence, a valuation allowance is necessary. Full valuation allowances against deferred tax assets in the U.S. and applicable foreign countries will be maintained until sufficient positive evidence exists to reduce or eliminate them. The factors considered by management in its determination of the probability of the realization of the deferred tax assets include, but are not limited to, recent historical financial results, historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences, tax planning strategies and projected future impacts attributable to the Tax Act. If, based upon the weight of available evidence, it is more likely than not the deferred tax assets will not be realized, a valuation allowance is recorded. As of March 31, 2019 , the Company believes that it is more likely than not that the recorded deferred tax assets will be realized. The Company has recently experienced pre-tax losses. If the Company continues to experience losses, management may determine a valuation allowance against certain of its deferred tax assets is necessary.

26


HORIZON GLOBAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)

18 . Other Expense, Net

Other expense, net consists of the following components:
 
 
Three months ended March 31,
 
 
2019
 
2018
 
 
(dollars in thousands)
Loss on sale of business
 
$
3,630

 
$
—

Foreign currency (gain) / loss
 
1,330

 
(680
)
Customer pay discounts
 
510

 
280

Accretion arising from lease recovery
 
40

 
70

Brazil acquisition indemnification asset
 
—

 
800

Brink acquisition ticking fee
 
—

 
630

Other
 
100

 
20

Total
 
$
5,610

 
$
1,120


Item 2 .    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition contains forward-looking statements regarding industry outlook and our expectations regarding the performance of our business. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under the heading “Forward-Looking Statements,” at the beginning of this report. Our actual results may differ materially from those contained in or implied by any forward-looking statements. You should read the following discussion together with the Company’s reports on file with the Securities and Exchange Commission, as well as our Annual Report on Form 10-K for the year ended December 31, 2018 (See Item 1A. Risk Factors).
Overview
Horizon Global Corporation (“Horizon,” “Horizon Global,” “we,” or the “Company”), headquartered in Troy, Michigan, is a leading designer, manufacturer and distributor of a wide variety of high-quality, custom-engineered towing, trailering, cargo management and other related accessory products on a global basis, primarily serving the automotive aftermarket, retail and original equipment manufacturers (“OEMs”) and original equipment servicers (“OESs”) (collectively, “OEs”) channels. The Company supports its customers within the agricultural, automotive, construction, horse/livestock, industrial, marine, military, recreational, trailer and utility markets primarily through a regional service model.
Horizon Global reports its business in three operating segments: Horizon Americas, Horizon Europe-Africa and Horizon Asia-Pacific. See Note 16 , Segment Information included in Part I, Item 1, “ Notes to Condensed Consolidated Financial Statements ,” within this quarterly report on Form 10-Q for further description of the Company’s operating segments.
Critical factors affecting our ability to succeed include: our ability to realize the expected economic benefits of the changes made to our manufacturing and distribution footprint and management team during 2018 and 2019; our ability to quickly and cost-effectively introduce new products; our ability to continue to integrate acquired companies or products that have historically supplemented existing product lines, add new distribution channels and expand our geographic coverage and realize desired operating efficiencies; and our ability to manage our cost structure more efficiently via supply base management, internal sourcing and/or purchasing of materials, selective outsourcing and/or purchasing of support functions, working capital management, and leverage of our administrative functions. If we are unable to do any of the foregoing successfully, our financial condition and results of operations could be materially and adversely impacted.
We report shipping and handling expenses associated with Horizon Americas ’ distribution network as an element of selling, general and administrative expenses in our consolidated statements of operations. As such, gross margins for Horizon Americas may not be comparable to those of Horizon Europe-Africa and Horizon Asia-Pacific , which primarily rely on third-party distributors, for which all costs are included in cost of sales.


27

Segment Information and Supplemental Analysis
The following table summarizes financial information for our operating segments for the three months ended March 31, 2019 (“Q1 2019”) and 2018 (“Q1 2018”):
 
 
Three months ended March 31,
 
Change
 
 
2019
 
As a Percentage of Net Sales
 
2018
 
As a Percentage of Net Sales
 
$
 
%
 
 
(dollars in thousands)
Net Sales
 
 
 
 
 
 
 
 
 
 
 
 
Horizon Americas
 
$
95,500

 
45.5
 %
 
$
96,220

 
44.4
 %
 
$
(720
)
 
(0.7
%)
Horizon Europe-Africa
 
82,170

 
39.2
 %
 
87,060

 
40.2
 %
 
(4,890
)
 
(5.6
%)
Horizon Asia-Pacific
 
31,990

 
15.3
 %
 
33,530

 
15.5
 %
 
(1,540
)
 
(4.6
%)
Total
 
$
209,660

 
100.0
 %
 
$
216,810

 
100.0
 %
 
$
(7,150
)
 
(3.3
%)
Gross Profit
 
 
 
 
 
 
 
 
 
 
 
 
Horizon Americas
 
$
17,910

 
18.8
 %
 
$
19,050

 
19.8
 %
 
$
(1,140
)
 
(6.0
%)
Horizon Europe-Africa
 
5,650

 
6.9
 %
 
11,430

 
13.1
 %
 
(5,780
)
 
(50.6
%)
Horizon Asia-Pacific
 
8,520

 
26.6
 %
 
7,970

 
23.8
 %
 
550

 
6.9
%
Total
 
$
32,080

 
15.3
 %
 
$
38,450

 
17.7
 %
 
$
(6,370
)
 
(16.6
%)
Selling, General and Administrative Expenses
 
 
 
 
 
 
 
 
 
 
 
 
Horizon Americas
 
$
19,410

 
20.3
 %
 
$
24,160

 
25.1
 %
 
$
(4,750
)
 
(19.7
%)
Horizon Europe-Africa
 
10,280

 
12.5
 %
 
13,090

 
15.0
 %
 
(2,810
)
 
(21.5
%)
Horizon Asia-Pacific
 
3,160

 
9.9
 %
 
3,580

 
10.7
 %
 
(420
)
 
(11.7
%)
Corporate (1)
 
8,680

 
4.1
 %
 
7,460

 
3.4
 %
 
1,220

 
16.4
%
Total
 
$
41,530

 
19.8
 %
 
$
48,290

 
22.3
 %
 
$
(6,760
)
 
(14.0
%)
Operating Profit (Loss)
 
 
 
 
 
 
 
 
 
 
 
 
Horizon Americas
 
$
(1,500
)
 
(1.6
)%
 
$
(5,110
)
 
(5.3
)%
 
$
3,610

 
(70.6
%)
Horizon Europe-Africa
 
(3,190
)
 
(3.9
)%
 
(45,090
)
 
(51.8
)%
 
41,900

 
(92.9
%)
Horizon Asia-Pacific
 
5,380

 
16.8
 %
 
4,390

 
13.1
 %
 
990

 
22.6
%
Corporate (1)
 
(8,680
)
 
(4.1
)%
 
(7,460
)
 
(3.4
)%
 
(1,220
)
 
16.4
%
Total
 
$
(7,990
)
 
(3.8
)%
 
$
(53,270
)
 
(24.6
)%
 
$
45,280

 
(85.0
%)
(1) Corporate calculated as a percentage of total net sales.



28

Results of Operations Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018
Consolidated net sales decreased $7.2 million , or 3.3% , to $209.7 million in Q1 2019 , as compared with $216.8 million in Q1 2018 . As noted in the following segment results discussions, revenue decreased in all operating segments compared to the prior-year period. The decrease in net sales of $4.9 million in Horizon Europe-Africa and $1.5 million in Horizon Asia-Pacific were attributable to $7.2 million and $2.4 million of unfavorable currency translation in Horizon Europe-Africa and Horizon Asia-Pacific, respectively, reflecting the strengthening of the U.S. dollar against several currencies, primarily the Euro and Australian dollar. After adjusting for currency translation impacts, Horizon Americas sales were down primarily attributable to lower volumes in the retail and aftermarket sales channels, offset by higher OEM volumes in Horizon Europe-Africa and Horizon Asia-Pacific.
Gross profit margin (gross profit as a percentage of net sales) was 15.3% and 17.7% for Q1 2019 and Q1 2018 , respectively. As noted in the following segment results discussions, negatively impacting gross profit margin were lower gross profit in Horizon Americas and Horizon Europe-Africa, primarily related to unfavorable input costs, driven by increased commodity and freight costs, as well as a shift in revenue mix from higher margin retail and aftermarket sales to lower margin OEM sales. Partially offsetting the margin decreases were increases in gross profit margin in Horizon Asia-Pacific primarily related to manufacturing efficiencies and operational cost savings.
Operating margin (operating profit (loss) as a percentage of net sales) was (3.8)% and (24.6)% in Q1 2019 and Q1 2018 , respectively. Operating loss improved by $45.3 million to an operating loss of $8.0 million in Q1 2019 , from an operating loss of $53.3 million in Q1 2018 , primarily attributable to a prior-year period goodwill impairment charge of approximately $43.4 million in Horizon Europe-Africa, partially offset by a $4.3 million product warranty charge. In addition, selling, general and administrative (“SG&A”) expenses decreased $6.7 million lower due to realized savings from prior-year restructuring and business rationalization projects.
Other expense, net increased $4.5 million to $5.6 million in Q1 2019 , as compared to $1.1 million in 2018 , primarily attributable to a $3.6 million loss on sale related to the Company’s sale of certain non-automotive business assets in Europe-Africa, as well as a $1.3 million unfavorable change in net foreign currency (gain) loss.
Interest expense increased $4.9 million to $10.9 million in Q1 2019 , compared to $6.0 million in Q1 2018 . As a result of its Q1 2019 debt amendments and new financing, the Company recorded a $3.0 million charge to interest expense related to the expensing of prior capitalized debt fees. In addition, interest expense increased because of $50.0 million of additional borrowings on our term loan in July 2018, $51.0 million of additional borrowings on a second term loan in March 2019, as well as an increase in LIBOR, which impacts the Company’s floating rate indebtedness.
The effective income tax rate for Q1 2019 and 2018 was (4.4)% and 4.3% , respectively. The lower effective income tax rate in Q1 2019 is driven by a decrease in tax benefits related to the year-end 2018 recognition of certain jurisdictional valuation allowances including the U.S., offset by certain aspects of U.S. tax reform, resulting in estimated 2019 tax expense.
Net loss attributable to Horizon Global was $25.1 million in Q1 2019 , an improvement of $32.4 million , from a net loss of $57.5 million in Q1 2018 . The decrease in net loss was the result of a $45.3 million decrease in operating loss, partially offset by the higher other expense, net and interest expense.
See below for a discussion of operating results by segment.

29

Horizon Americas .      
Net sales by sales channel, in thousands, for Horizon Americas during the three months ended March 31, 2019 and 2018 are as follows:
 
 
Three months ended March 31,
 
Change
 
 
2019
 
2018
 
$
 
%
Net Sales
 
 
 
 
 
 
 
 
Automotive OEM
 
$
20,240

 
$
20,050

 
$
190

 
0.9
 %
Automotive OES
 
1,610

 
870

 
740

 
85.1
 %
Aftermarket
 
24,150

 
26,520

 
(2,370
)
 
(8.9
)%
Retail
 
28,430

 
32,150

 
(3,720
)
 
(11.6
)%
Industrial
 
9,280

 
10,220

 
(940
)
 
(9.2
)%
E-commerce
 
11,790

 
6,020

 
5,770

 
95.8
 %
Other
 
—

 
390

 
(390
)
 
N/A

Total
 
$
95,500

 
$
96,220

 
$
(720
)
 
(0.7
)%
Net sales decreased 0.7% in Q1 2019 , compared to Q1 2018 . Net sales in the retail and aftermarket channels decreased 11.6% and 8.9% , respectively, due to lower shipping volumes attributable to a weather related slow start to the U.S. selling season, which was offset by a 95.8% increase in E-commerce sales as a result of large bulk replenishment orders from a few significant customers within the channel. In total, net sales decreased as a result of $1.3 million of lower sales volumes and $1.2 million of increased sales returns and allowances, partially offset by $1.9 million of current year pricing increases. The price increases were implemented to offset increased steel and other material costs and higher import tariffs, which took effect during 2018.
Horizon Americas ’ gross profit decreased $1.1 million to $17.9 million , or 18.8% of net sales, in Q1 2019 , from $19.1 million , or 19.8% of net sales, in Q1 2018 . The decrease in gross profit margin reflects the changes in sales detailed above. In addition, gross profit was impacted by the following:
–
$3.0 million unfavorable manufacturing variances and absorption; and
–
$2.6 million unfavorable input costs primarily related to higher commodity and freight costs; partially offset by
–
$1.8 million of additional costs incurred in the prior year related to restructuring and footprint rationalization projects primarily related to the distribution center move to Kansas City; and
–
$1.0 million cost savings from business reorganization projects.
SG&A expenses decreased $4.8 million to $19.4 million , or 20.3% of net sales, in Q1 2019 , as compared to $24.2 million , or 25.1% of net sales, in Q1 2018 . The decrease in SG&A expenses was attributable to the following:
–
$2.5 million benefit related to the synergies and cost savings from prior year organizational restructuring efforts;
–
$1.4 million of additional costs incurred in the prior year related to restructuring and footprint rationalization projects primarily relate to the distribution center move to Kansas City;
–
$1.1 million reduction in professional fees; and
–
$0.5 million reduction in advertising and marketing expenses.
Horizon Americas ’ operating loss decreased $3.6 million to $1.5 million , or (1.6)% of net sales, in Q1 2019 , compared to an operating loss of $5.1 million , or (5.3)% of net sales, in Q1 2018 . Operating loss decreased and operating profit margin increased primarily due to the cost savings realized from the impacts of prior year business reorganization projects and ongoing operational improvement projects, partially offset by the decrease in gross profit previously discussed.

30

Horizon Europe-Africa .     
Net sales by sales channel, in thousands, for Horizon Europe-Africa during the three months ended March 31, 2019 and 2018 are as follows:
 
 
Three months ended March 31,
 
Change
 
 
2019
 
2018
 
$
 
%
Net Sales
 
 
 
 
 
 
 
 
Automotive OEM
 
$
48,920

 
$
46,920

 
$
2,000

 
4.3
 %
Automotive OES
 
13,290

 
14,490

 
(1,200
)
 
(8.3
)%
Aftermarket
 
16,290

 
20,790

 
(4,500
)
 
(21.6
)%
Industrial
 
700

 
—

 
700

 
N/A

E-commerce
 
530

 
1,320

 
(790
)
 
(59.8
)%
Other
 
2,440

 
3,540

 
(1,100
)
 
(31.1
)%
Total
 
$
82,170

 
$
87,060

 
$
(4,890
)
 
(5.6
)%
Net sales decreased by $4.9 million , or 5.6% , to $82.2 million in Q1 2019 , compared to $87.1 million in Q1 2018 . Net sales were impacted by $7.2 million of unfavorable foreign currency translation, primarily driven by the weakening of the euro in relation to the U.S. dollar. After adjusting for currency translation impacts, Horizon Europe-Africa net sales were up $2.3 million primarily related to a $6.3 million increase in the OEM channel because of higher volumes from existing programs. The increase was partially offset by a $3.0 million decrease in aftermarket channel sales due to lower demand for our European brands in the marketplace coupled with a $1.0 million decrease related to the Company’s divestiture of a non-automotive business during Q1 2019.
Horizon Europe-Africa ’s gross profit decreased by $5.8 million to $5.7 million , or 6.9% of net sales, in Q1 2019 , from $11.4 million , or 13.1% of net sales, in Q1 2018 . The decrease in gross profit margin reflects the changes in sales detailed above. In addition, gross profit was impacted by the following:
–
$4.3 million charge related to potential claims from product sold by Horizon Europe-Africa arising from potentially faulty components provided by a supplier;
–
$0.6 million unfavorable input costs primarily related to higher commodity and freight costs;
–
$0.5 million unfavorable currency exchange due to the weakening of the euro in relation to the U.S. dollar; and
–
Unfavorable product mix favoring the lower margin percentage yielding OEM channel.
SG&A expenses decreased by $2.8 million to $10.3 million , or 12.5% of net sales, in Q1 2019 , as compared to $13.1 million , or 15.0% of net sales, in Q1 2018 . The decrease in SG&A expenses was attributable to the following:
–
$1.2 million of additional costs incurred in the prior-year period related to restructuring and footprint rationalization projects primarily related to the shift in production to our Braşov, Romania production facility;
–
$1.0 million reduction in personnel costs; and
–
$0.9 million favorable currency exchange due to the weakening of the euro in relation to the U.S. dollar; partially offset by
–
$0.5 million increase in legal and other professional fees year over year.
Horizon Europe-Africa ’s operating loss decreased by $41.9 million to an operating loss of $3.2 million , or ( 3.9% ) of net sales, in Q1 2019 , as compared to an operating loss of $45.1 million , or (51.8)% of net sales, in Q1 2018 , as a result of the operating performance discussed above. In addition, operating loss was impacted by the following:
–
$43.4 million goodwill impairment charge recorded in Q1 2018;
–
$1.4 million gain on the sale of the former Witter production facility in the United Kingdom; and
–
$0.3 million unfavorable currency exchange due to the weakening of the euro in relation to the U.S. dollar.

31

Horizon Asia-Pacific .     
Net sales by sales channel, in thousands, for Horizon Asia-Pacific during the three months ended March 31, 2019 and 2018 are as follows:
 
 
Three months ended March 31,
 
Change
 
 
2019
 
2018
 
$
 
%
Net Sales
 
 
 
 
 
 
 
 
Automotive OEM
 
$
6,760

 
$
6,630

 
$
130

 
2.0
 %
Automotive OES
 
13,220

 
13,420

 
(200
)
 
(1.5
)%
Aftermarket
 
5,750

 
6,880

 
(1,130
)
 
(16.4
)%
Retail
 
2,720

 
3,010

 
(290
)
 
(9.6
)%
Industrial
 
3,540

 
3,580

 
(40
)
 
(1.1
)%
Other
 
—

 
10

 
(10
)
 
N/A

Total
 
$
31,990

 
$
33,530

 
$
(1,540
)
 
(4.6
)%
Net sales decreased by $1.5 million , or 4.6% , to $32.0 million in Q1 2019 , compared to $33.5 million in Q1 2018 . The decrease is primarily due to unfavorable foreign currency translation of $2.4 million primarily related to the weakening of the Australian dollar in relation to the U.S. dollar, partially offset by $0.8 million from OEM volume increases from higher demand on existing programs.
Horizon Asia-Pacific ’s gross profit increased by $0.6 million to $8.5 million , or 26.6% of net sales, in Q1 2019 , from $8.0 million , or 23.8% of net sales, in Q1 2018 . The increase in gross profit margin reflects a $0.4 million increase from sales volume detailed above. In addition, gross profit was impacted by the following:
–
$0.5 million favorable manufacturing cost savings from implemented operational efficiency projects; and
–
$0.3 million favorable pricing and cost savings; partially offset by
–
$0.6 million unfavorable currency exchange due to the weakening of the Australian dollar in relation to the U.S. dollar.
SG&A expenses decreased by $0.4 million to $3.2 million , or 9.9% of net sales, in Q1 2019 , as compared to $3.6 million , or 10.7% of net sales, in Q1 2018 . The decrease in SG&A expenses was primarily attributable to $0.3 million favorable currency exchange due to the weakening of the Australian dollar in relation to the U.S. dollar.
Horizon Asia-Pacific ’s operating profit increased by $1.0 million to $5.4 million , or 16.8% of net sales, in Q1 2019 , as compared to $4.4 million , or 13.1% of net sales in Q1 2018 . The increase is related to the gross profit volumes and operational efficiencies and SG&A decrease detailed above, partially offset by $0.3 million of unfavorable foreign currency translation.
Corporate Expenses.    Corporate expenses included in operating loss increased $1.2 million to $8.7 million in Q1 2019 , as compared to $7.5 million in Q1 2018 , primarily attributable to additional professional services expense of $1.2 million related to the Company new debt issuance and amendments entered into during Q1 2019 .

32


Liquidity and Capital Resources
Our capital and working capital requirements are funded through a combination of cash flows from operations, cash on hand and various borrowings and factoring arrangements described below, including our asset-based revolving credit facility (“ABL Facility”). We utilize intercompany loans and equity contributions to fund our worldwide operations. See Note 8 , “ Long-term Debt ” included in Part I, Item 1, “ Notes to Condensed Consolidated Financial Statements, ” within this quarterly report on Form 10-Q. As of March 31, 2019 and December 31, 2018 , there was $19.1 million and $26.1 million , respectively, of cash held at foreign subsidiaries. There may be country specific regulations that may restrict or result in increased costs in the repatriation of these funds.
Based on our current and anticipated levels of operations and the condition in our markets and industry, we believe that our cash on hand, cash flow from operations and availability under our ABL Facility will enable us to meet our working capital, capital expenditures, debt service and other funding requirements. Our ability to fund our working capital needs, debt payments and other obligations, and to comply with financial covenants, including borrowing base limitations under our ABL Facility, depends on our future operating performance and cash flow and many factors outside of our control, including the costs of raw materials, the state of the automotive accessories market and financial and economic conditions and other factors. Any future acquisitions, joint ventures or other similar transactions will likely require additional capital and there can be no assurance that any such capital will be available to us on acceptable terms, if at all.
In 2018, the Company experienced a combination of increased distribution costs and constrained shipments from the Americas distribution network primarily resulting from the start-up of its new Kansas City, Kansas aftermarket and retail distribution center. Due to these factors, as well as costs associated with remediating these factors, during Q1 2019, the Company entered into a Senior Term Loan Agreement (“Bridge Loan”) of $10.0 million and a Second Lien Term Loan (“Second Lien Term Loan”) of $51.0 million to repay the Bridge Loan, and amended the First Lien Term Loan (“Sixth Term Amendment”) to amend certain financial covenants to provide for relief based on the Company’s 2018 and 2019 budget and make certain other affirmative and negative covenants more restrictive. Because of the Sixth Term Amendment, the Company is in compliance with all of its financial covenants as of March 31, 2019. Refer to Item 1, “ Condensed Consolidated Financial Statements ,” included within this Quarterly Report on Form 10-Q for additional information
Cash Flows - Operating Activities
Net cash used for operating activities during Q1 2019 and Q1 2018 was approximately  $40.4 million , and  $30.2 million , respectively. During Q1 2019, the Company used  $9.9 million  in cash flows, based on the reported net loss of $25.6 million  and after considering the effects of non-cash items related to gains and losses on dispositions of property and equipment, depreciation, amortization of intangible assets, stock compensation, changes in deferred income taxes, amortization of original issuance discount and debt issuance costs, and other, net. During Q1 2018, the Company generated  $6.9 million  based on the reported net loss of  $57.8 million  and after considering the effects of similar non-cash items and goodwill impairment.
Changes in operating assets and liabilities used approximately $30.6 million and $23.3 million of cash during Q1 2019 and 2018 , respectively. Increases in accounts receivable resulted in a net use of cash of $25.0 million and $20.2 million during Q1 2019 and 2018 , respectively. The increase in accounts receivable for both periods is a result of the higher sales activity during the first quarter compared to the fourth quarter due to the seasonality of the business.
Changes in inventory resulted in a use of cash of approximately $7.8 million and $5.4 million during Q1 2019 and 2018 . The increase in inventory during Q1 2019 and 2018 was due to seasonal activity as we build inventory moving into the typically strong second quarter selling season.
Changes in accounts payable and accrued liabilities resulted in a source of cash of approximately $4.8 million and $2.0 million during Q1 2019 and 2018 . The source of cash for Q1 2019 and 2018 is primarily related to the timing of purchases within the quarter.
Cash Flows - Investing Activities
Net cash provided by investing activities during Q1 2019 was approximately $4.4 million and a use of cash of approximately $4.1 million during Q1 2018. During the Q1 2019, net proceeds from the sale of certain non-automotive business assets, including the trade name, that operated using the Terwa brand were approximately $5.0 million. During Q1, 2018, we incurred approximately $4.2 million in capital expenditures on growth, capacity and productivity-related projects, primarily within the Westfalia Group.

33

Cash Flows - Financing Activities
Net cash provided by financing activities was approximately $33.2 million and $30.3 million during the Q1 2019 and 2018 , respectively. During Q1 2019, net proceeds from borrowings on our Second Lien Term Loan were $35.5 million , net of issuance costs; net borrowings from our ABL Facility totaled $17.9 million , while we used cash of $7.5 million for repayments and debt issuance costs to amend our First Lien Term Loan. During Q1 2018 , net borrowings from our ABL Facility totaled $30.0 million . During Q1 2018 , we used cash of approximately $2.0 million repayments on our First Lien Term Loan.
Factoring Arrangements
We have factoring arrangements with financial institutions to sell certain accounts receivable under non-recourse agreements. Total receivables sold during the year under the factoring arrangements were approximately $65.0 million and $66.2 million as of March 31, 2019 and 2018 , respectively. We utilize factoring arrangements as part of our financing for working capital. The costs of participating in these arrangements are immaterial to our results.
Our Debt and Other Commitments
In March 2019, the Company entered into the Sixth Term Amendment to permit the Company to enter into the Second Lien Term Loan Agreement, amend certain financial covenants to provide for relief based on the Company’s 2018 and 2019 budget, and make certain other affirmative and negative covenants more restrictive.

In March 2019, the Company entered into the Second Lien Term Loan Agreement that provides for a term loan facility in the aggregate principal amount of $51.0 million and matures on September 30, 2021. The interest on the Second Lien Term Loan may be paid, at the Company’s election, in cash, at the customary eurocurrency rate plus a margin of 10.50% per annum, or in-kind, at the customary eurocurrency rate plus a margin of 11.50%. The Second Lien Term Loan Agreement is subject to various affirmative and negative covenants including a secured net leverage ratio tested quarterly, commencing with the fiscal quarter ending on December 31, 2019, which shall not exceed (x) 6.75 to 1.00 as of the last day of any fiscal quarter ending on or prior to June 30, 2020 and (y) 5.25 to 1.00 as of the last day of any fiscal quarter ending on or after September 30, 2020.
We and certain of our subsidiaries are party to the ABL Facility, an asset-based revolving credit facility, that provides for $90.0 million of funding on a revolving basis, subject to borrowing base availability. The ABL Facility matures in June 2020 and bears interest on outstanding balances at variable rates as outlined in the agreement.
As of March 31, 2019 , approximately $45.0 million was outstanding on the ABL Facility bearing interest at a weighted average rate of 6.3% and $187.9 million was outstanding on the First Lien Term Loan bearing interest at 8.50% . The Company had $29.0 million in availability under the ABL Facility as of March 31, 2019 .
The agreements governing the ABL Facility contain various negative and affirmative covenants and other requirements affecting us and our subsidiaries, including restrictions on incurrence of debt, liens, mergers, investments, loans, advances, guarantee obligations, acquisitions, asset dispositions, sale-leaseback transactions, hedging agreements, dividends and other restricted payments, transactions with affiliates, restrictive agreements and amendments to charters, bylaws, and other material documents. The ABL Facility does not include any financial maintenance covenants other than a springing minimum fixed charge coverage ratio of at least 1.00 to 1.00 on a trailing twelve-month basis, which will be tested only upon the occurrence of an event of default or certain other conditions as specified in the agreement.
The Sixth Term Amendment eliminated the prior net leverage covenant ratio in the First Lien Term Loan and replaced it with a first lien leverage covenant starting with the 12-month period ending September 2019 as follows:
September 30, 2019: 8.25:1.00
December 31, 2019: 6.25:1.00
March 31, 2020: 5.50:1.00
June 30, 2020: 5.00:1.00
September 30, 2020 and each fiscal quarter ending thereafter: 4.75:1.00
The Sixth Term Amendment also added a fixed charge coverage covenant starting with fiscal quarter ending March 31, 2020, a minimum liquidity covenant of $15.0 million starting March 31, 2019, and a maximum capital expenditure covenant of $15.0

34

million for 2019 and $25.0 million annually thereafter. The interest rate on the First Lien Term Loan Agreement is also amended to add 3.0% paid in kind interest in addition to the existing cash pay interest.
We are subject to variable interest rates on our First Lien Term Loan and ABL Facility. At March 31, 2019 , one-Month LIBOR and three-Month LIBOR approximated 2.49% and 2.60%, respectively.
In addition to our long-term debt, we have other cash commitments related to leases. We account for these lease transactions as operating leases and rent expense related thereto for Q1 2019 approximated $5.3 million. We expect to continue to utilize leasing as a financing strategy in the future to meet capital expenditure needs and to reduce debt levels.
On May 7, 2019, the Company entered into the Seventh Amendment to Credit Agreement (the “Seventh Term Amendment”) to amend the First Lien Term Loan Agreement, which extended its $100.0 million prepayment requirement from on or before March 31, 2020, to on or before May 15, 2020.
As a result of the modifications of the ABL Facility and the First Lien Term Loan, the additional liquidity from the Second Lien Term Loan, as well as the current forecast through June 2020, the Company believes it has sufficient liquidity to operate its business. In addition to meeting its working capital needs, the Sixth Term Amendment requires the Company to raise a minimum of $100.0 million through a combination of asset sales, junior debt, or equity raise to make a contractually obligated prepayment of the First Lien Term Loan on or before May 15, 2020. We are currently evaluating all strategic alternatives related to the options to raise the funds necessary to comply with this contractual prepayment obligation. In conjunction with evaluating all strategic alternatives, the Company has created a board of directors’ subcommittee to oversee the fund raising process and engaged an investment banker to assess management’s fund raising alternatives. If we cannot generate the required cash, we may not be able to make the necessary payments required under our debt as of May 15, 2020, which would result in an event of default. Such a default, if not cured, would allow the lenders to accelerate the maturity of the debt, making it due and payable at that time.
The Company is in compliance with all of its financial covenants for the period ending March 31, 2019.
Refer to Note 8 , “Long-term Debt,” in Part I, Item 1 , “Notes to Condensed Consolidated Financial Statements,” included within this quarterly report on Form 10-Q for additional information.
Credit Rating
We and certain of our outstanding debt obligations are rated by Standard & Poor’s and Moody’s. On March 26, 2019 , Moody’s issued a rating of Caa2 for our $210 million senior secured term loan and a rating of Caa3 for our corporate family rating. Moody’s also assigned the Company a negative outlook. On March 21, 2019 , Standard & Poor’s issued a rating of CCC for our $210 million senior secured term loan, a rating of CCC for our corporate credit rating and a rating of CCC- for our Convertible Notes. Standard & Poor’s also assigned the Company a negative outlook.
If our credit ratings were to decline, our ability to access certain financial markets may become limited, our cost of borrowings may increase, the perception of us in the view of our customers, suppliers and security holders may worsen and as a result, we may be adversely affected.
Market Risk
We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies. The functional currencies of our foreign subsidiaries are primarily the local currency in the country of domicile. We manage these operating activities at the local level and revenues and costs are generally denominated in local currencies; however, results of operations and assets and liabilities reported in U.S. dollars will fluctuate with changes in exchange rates between such local currencies and the U.S. dollar.
We use derivative financial instruments to manage currency risks associated with our procurement activities denominated in currencies other than the functional currency of our subsidiaries and the impact of currency rate volatility on our earnings. As of March 31, 2019 , we were party to forward contracts and cross currency swaps, to hedge changes in foreign currency exchange rates, with notional amounts of approximately $21.9 million and $2.8 million , respectively. See Note 9 , “ Derivative Instruments ,” included in Part I, Item 1, “ Notes to Condensed Consolidated Financial Statements ,” within this quarterly report on Form 10-Q.
We are also subject to interest risk as it relates to our long-term debt. We may in the future use interest rate swap agreements to fix the variable portion of our debt to manage this risk.
Outlook
Our global business remains susceptible to economic conditions that could adversely affect our results. In the near-term, the economies that most significantly affect our demand, including the United States, European Union, and Australia, are expected to continue to grow. We have been impacted by recently enacted tariffs on imports from China that continued in Q1 2019, but

35

have generally been able to recover these incremental costs through pricing actions. The impact of potential increases in these tariffs during 2019 is uncertain. If geopolitical tensions, particularly in East Asia, escalate, it may affect global consumer sentiment affecting the expected economic growth in the near term. We face some slowing of the U.K. aftermarket due to the uncertainty surrounding Brexit.
Due to its historical performance and liquidity needs, during Q1 2019, the Company entered into the Bridge Loan of $10.0 million and the Second Lien Term Loan of $51.0 million to repay the Bridge Loan and entered into the Sixth Term Amendment to amend certain financial covenants to provide for relief based on the Company’s 2018 and 2019 budget and make certain other affirmative and negative covenants more restrictive. In spite of this new financing and amendments to our existing agreements, we remain focused on maintaining liquidity to fund our operations during the year.
The Company is in compliance with all of its financial covenants as of March 31, 2019. Refer to Item 1, “ Condensed Consolidated Financial Statements ,” included within this Quarterly Report on Form 10-Q for additional information.
Over the past year, the Company has undergone significant effort to advance its turnaround via the action plan and other restructuring and business rationalization projects, primarily in the Americas and Europe-Africa. We generated higher operating profitability across all operating segments, despite experiencing a somewhat slower start to the selling season. The management changes and business rationalization has allowed us to begin to operate more efficiently. We believe the turnaround is substantially complete with respect to the Americas segment, have the right set of products and are poised to effectively meet demand during the 2019 peak summer season.
While we expect the new leadership in Europe-Africa to enhance the focus on operational improvements, progress is expected to take longer to realize in this segment. We will continue to move forward other initiatives to further improve operating efficiency and increase profitability. In the short-term, the costs associated with executing these initiatives, including severance, unrecoverable lease obligations, professional service fees and other incurred costs, may continue to affect our results and cash flows.
We believe the unique global footprint we enjoy in our market space will benefit us as our OE customers continue to demonstrate a preference for stronger relationships with few suppliers. We believe that our strong brand positions, portfolio of product offerings, and existing customer relationships present a long-term opportunity for us and provide leverage to see balanced growth in OE and aftermarket business.
While a strong global economy offers opportunities for growth and cost leverage, we are committed to delivering on our internal projects to drive margin improvement. We believe our internal projects, if executed well, will have a positive impact on our margins in future periods.
Our strategic priorities are to stabilize the operations in the near term and improve margins, reduce our leverage, and drive top line growth. We believe those strategic priorities can be realized during 2019.
Impact of New Accounting Standards
See Note  2 , “ New Accounting Pronouncements ,” included in Part I, Item 1, “ Notes to Condensed Consolidated Financial Statements ,” within this quarterly report on Form 10-Q.
Critical Accounting Policies
Our financial statements are prepared in accordance with accounting principles generally accepted within the United States of Americas (“U.S. GAAP”). Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates that affect both the amounts and timing of the recording of assets, liabilities, net sales and expenses. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, our evaluation of business and macroeconomic trends, and information from other outside sources, as appropriate.
During the first quarter of 2019 , the Company adopted the U.S. GAAP provisions of Accounting Standards Codification (“ASC”) 842, “Leases” (“ASC 842”). Refer to Note 2 , “New Accounting Pronouncements” and Note 11 , “Leases” in Part I, Item 1, “Notes to the Condensed Consolidated Financial Statements,” included within this quarterly report on Form 10-Q, related to the impact of the adoption on the Company’s financial statements and accounting policies.
Except for accounting policies related to our adoption of ASC 842 in 2019 , there were no material changes to the items that we disclosed as our critical accounting policies in Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ,” in our Annual Report on Form 10-K for the year ended December 31, 2018 .
Emerging Growth Company
The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, establishes a class of company called an “emerging growth company,” which generally is a company whose initial public offering was completed after December 8, 2011 and had total annual

36

gross revenues of less than $1.07 billion during its most recently completed fiscal year. We currently qualify as an emerging growth company.
As an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting requirements that are not available to public reporting companies that do not qualify for this classification, including without limitation the following:
▪
An emerging growth company is exempt from any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and financial statements, commonly known as an “auditor discussion and analysis.”
▪
An emerging growth company is not required to hold a nonbinding advisory stockholder vote on executive compensation or any golden parachute payments not previously approved by stockholders.
▪
An emerging growth company is not required to comply with the requirement of auditor attestation of management’s assessment of internal control over financial reporting, which is required for other public reporting companies by Section 404 of the Sarbanes-Oxley Act.
▪
An emerging growth company is eligible for reduced disclosure obligations regarding executive compensation in its periodic and annual reports, including without limitation exemption from the requirement to provide a compensation discussion and analysis describing compensation practices and procedures.
▪
A company that is an emerging growth company is eligible for reduced financial statement disclosure in registration statements, which must include two years of audited financial statements rather than the three years of audited financial statements that are required for other public reporting companies.
For as long as we continue to be an emerging growth company, we expect that we will take advantage of the reduced disclosure obligations available to us as a result of this classification. We will remain an emerging growth company until the earlier of (i) December 31, 2020, the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act; (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion (subject to further adjustment for inflation) or more; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under applicable SEC rules. We expect that we will remain an emerging growth company for the foreseeable future, but cannot retain our emerging growth company status indefinitely and will no longer qualify as an emerging growth company on or before December 31, 2020.
Emerging growth companies may elect to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to “opt out” of such extended transition period, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.
Item 3.    Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, we are exposed to market risk associated with fluctuations in interest rates, commodity prices, insurable risks due to property damage, employee and liability claims, and other uncertainties in the financial and credit markets, which may impact demand for our products.
We conduct business in various locations throughout the world and are subject to market risk due to changes in the value of foreign currencies. The functional currencies of our foreign subsidiaries are primarily the local currency in the country of domicile. We manage these operating activities at the local level and revenues and costs are generally denominated in local currencies; however, results of operations and assets and liabilities reported in U.S. dollars will fluctuate with changes in exchange rates between the local currencies and the U.S. dollar. A 10% change in average exchange rates versus the U.S. dollar would have resulted in an approximate $11.6 million and $12.3 million change to our net sales for the three months ended March 31, 2019 and 2018 , respectively.
We are exposed to market risk from changes in the interest rates on a significant portion of our outstanding debt. Outstanding balances under our First Lien Term Loan, at the Company’s election, bear interest at variable rates based on a margin over defined LIBOR. Based on the amount outstanding on the First Lien Term Loan as of March 31, 2019 and 2018 , a 100 basis point change in LIBOR would result in an approximate $1.9 million and $1.5 million, respectively, to our annual interest expense.

37

We use derivative financial instruments to manage our currency risks. We are also subject to interest risk as it relates to long-term debt. See Part I, Item 2, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations, ” for details about our primary market risks, and the objectives and strategies used to manage these risks. Also see Note  8 , “ Long-term Debt ,” and Note 9 , “ Derivative Instruments ,” in Part I, Item 1, “ Notes to Condensed Consolidated Financial Statements ,” included within this quarterly report on Form 10-Q for additional information.
Item 4.    Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Evaluation of disclosure controls and procedures
As of March 31, 2019 , an evaluation was carried out by management, with the participation of the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act) pursuant to Rule 13a-15 of the Exchange Act. The Company’s disclosure controls and procedures are designed only to provide reasonable assurance that they will meet their objectives. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2019 , the Company’s disclosure controls and procedures are effective to provide reasonable assurance that they would meet their objectives.
Changes in internal control over financial reporting
Beginning January 1, 2019, the Company implemented Accounting Standards Update 2016-02, “ Leases (Topic 842)”. Topic 842 had a material impact on the right-of-use assets and corresponding lease liabilities recognized on the Company’s condensed consolidated balance sheets. The Company did modify and add new controls designed to address risks associated with recognizing leases under the new standard. The Company has therefore augmented internal control over financial reporting as follows:
▪
enhanced the risk assessment process to take into account risks associated with the new lease standard; and
▪
added controls that address risks associated with the evaluation of all leases for balance sheet recognition, including the revision of the Company’s lease contract review controls.
There were no other changes in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended March 31, 2019 , that has materially affected, or is reasonably likely to materially affect, its internal control over financial reporting.

38

PART II. OTHER INFORMATION
Item 1.    Legal Proceedings
We are subject to claims and litigation in the ordinary course of business, but we do not believe that any such claim or litigation is likely to have a material adverse effect on our financial position, results of operations, or cash flows. For additional information regarding legal proceedings, refer to Note 12 , “ Contingencies, ” included in Item 8, “ Financial Statements and Supplementary Data, ” within this quarterly report on Form 10-Q.
Item 1A.    Risk Factors
A discussion of our risk factors can be found in the section entitled “ Risk Factors ,” in our Annual Report on Form 10-K for the year ended December 31, 2018 , which could materially affect our business, financial condition or future results. There have been no significant changes in our risk factors as disclosed in our 2018 Form 10-K.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
The Company’s purchases of its shares of common stock during the first quarter of 2019 were as follows:
Period
 
Total Number of Shares Purchased
 
Average Price Paid per Share
 
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
 
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (a)
Jan 1 - 31, 2019
 
—

 
 
 
—

 
813,494

February 1 - 28, 2019
 
—

 
 
 
—

 
813,494

March 1 - 31, 2019
 
—

 
 
 
—

 
813,494

Total
 
—

 

 
—

 
 
__________________________
(a) The Company has a share repurchase program that was announced in May 2017 to purchase up to 1.5 million shares of the Company’s common stock. At the end of the first quarter of 2019 , 813,494 shares of common stock remains to be purchased under this program. The share repurchase program expires on May 5, 2020.
Item 3.    Defaults Upon Senior Securities
Not applicable.
Item 4.    Mine Safety Disclosures
Not applicable.
Item 5.    Other Information
On May 7, 2019, the Company entered into the Seventh Term Amendment to amend the First Lien Term Loan Agreement, which extended its $100.0 million prepayment requirement from on or before March 31, 2020, to on or before May 15, 2020.
 

39

Item 6.    Exhibits.
Exhibits Index:
3.1(a)
3.2(b)
3.3(c)
4.1(c)
4.2(c)
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
31.1
31.2
32.1
32.2

40

101.INS
XBRL Instance Document.
101.SCH
XBRL Taxonomy Extension Schema Document.
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.

(a)
 
Incorporated by reference to the Exhibit filed with our Quarterly Report on Form 10-Q filed on August 7, 2018 (File No. 001-37427).
(b)
 
Incorporated by reference to the Exhibit filed with our Current Report on Form 8-K filed on February 20, 2019 (File No. 001-37427).
(c)
 
Incorporated by reference to the Exhibit filed with our Current Report on Form 8-K filed on March 18, 2019 (File No. 001-37427).

41

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 thereunto duly authorized.
 
 
HORIZON GLOBAL CORPORATION (Registrant)
 
 
 
 
 
 
 
 
 
/s/ BARRY STEELE
 
 
 
 
 
Date:
May 9, 2019
By:
 
Barry Steele
Chief Financial Officer


42

1

 

Exhibit 10.1

Execution Version

FIFTH AMENDMENT TO CREDIT AGREEMENT

FIFTH AMENDMENT (this “ Amendment ”), dated as of February 20, 2019, to the Term Loan Credit Agreement dated as of June 30, 2015 (as amended, supplemented, amended and restated or otherwise modified from time to time, including by this Amendment, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time party thereto (the “ Lenders ”), and JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, the parties hereto are parties to the Credit Agreement;

WHEREAS, the Borrower and the Required Lenders wish to make certain other amendments to the Credit Agreement as described herein and to instruct the Administrative Agent to enter into certain agreements as specified herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, which include all Loan Parties as of the date hereof, agree as follows:

SECTION 1.     DEFINITIONS . Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as therein defined.

SECTION 2.     AMENDMENTS . (a) With effect as of the Effective Date, the Credit Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Credit Agreement attached as Exhibit A-1 hereto.

(b) With effect as of the Effective Date, the Credit Agreement is hereby further amended to add each of the below described new Schedules to the Credit Agreement in proper numeric order in the forms attached as Exhibit A-2 hereto:

Schedule 6.01A        –       Existing Indebtedness as of Fifth Amendment Date

Schedule 6.02A        –       Existing Liens as of Fifth Amendment Date

Schedule 6.04A        –       Existing Investments as of Fifth Amendment Date

Schedule 6.05A        –       Asset Sales as of Fifth Amendment Date

SECTION 3.     AUTHORIZATIONS AND INSTRUCTIONS . The Lenders party thereto, which collectively constitute the Required Lenders, hereby instruct and authorize the Administrative Agent, solely in its capacity as the Administrative Agent, to execute and deliver on the Effective Date (i) the new Term Intercreditor Agreement in the form of Exhibit B hereto, (ii) the amendment to the existing ABL/Term Loan Intercreditor Agreement in the form of Exhibit C hereto and (iii) the amendment to the Guarantee and Collateral Agreement in the form of Exhibit D hereto.

2

 

SECTION 4.         CONDITIONS PRECEDENT . This Amendment shall become effective as of the date (the “ Effective Date ”) of the satisfaction or waiver of each of the conditions precedent set forth in this Section 4.

(a)         Execution and Delivery . The Administrative Agent shall have received counterparts of this Amendment duly executed by (i) each Loan Party, (ii) the Required Lenders, and (iii) the Administrative Agent.

(b)         No Default . Both prior to and after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the Effective Date.

(c)         Representations and Warranties . As of the Effective Date (both prior to and after giving effect to this Amendment) all representations and warranties contained in Section 5 (other than the representations and warranties contained in Section 3.15) shall be true and correct in all material respects (and, with respect to any representations and warranties that are qualified by materiality or reference to a “Material Adverse Effect” or contain a similar materiality qualification, in all respects).

(d)         Fees and Expenses . The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder or under any Loan Document.

For the purpose of determining compliance with the conditions specified in this Section 4, each Lender that has signed this Amendment shall be deemed to have accepted, and to be satisfied with, each document or other matter required under this Section 4.

SECTION 5.         REPRESENTATIONS AND WARRANTIES . In order to induce the Required Lenders and the Administrative Agent to enter into this Amendment, the Borrower hereby represents and warrants to the Required Lenders and the Administrative Agent that (a) this Amendment has been duly authorized by all necessary organizational actions and, if required, actions by equity holders of the Borrower, (b) this Amendment has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law and (c) this Amendment will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries.

SECTION 6.         CONTINUING EFFECT . Except as expressly amended, waived or modified hereby, the Loan Documents shall continue to be and shall remain in full force and effect in accordance with their respective terms. This Amendment shall not constitute an amendment, waiver or modification of any provision of any Loan Document not expressly referred to herein and shall not be construed as an amendment, waiver or modification of any action on the part of the Borrower or the other Loan Parties that would require an amendment, waiver or consent of the Administrative Agent or the Lenders except as expressly stated herein, or be construed to indicate the willingness of the Administrative Agent or the Lenders to further amend, waive or modify any provision of any Loan Document amended, waived or modified hereby for any other period, circumstance or event. Except as expressly modified by this Amendment, the Credit Agreement and the other Loan Documents are ratified and confirmed and are, and shall continue to be, in full force and effect in accordance with their respective terms. Except as expressly

3

 

set forth herein, each Lender and the Administrative Agent reserves all of its rights, remedies, powers and privileges under the Credit Agreement, the other Loan Documents, applicable law and/or equity. Any reference to the “Credit Agreement” in any Loan Document or any related documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment and the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include this Amendment.

SECTION 7.         GOVERNING LAW . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 8.         SUCCESSORS AND ASSIGNS . This Amendment shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, the Administrative Agent, the other Agents and the Lenders, and each of their respective successors and assigns, and shall not inure to the benefit of any third parties. The execution and delivery of this Amendment by any Lender prior to the Effective Date shall be binding upon its successors and assigns and shall be effective as to any Loans or Commitments assigned to it after such execution and delivery.

SECTION 9.         ENTIRE AGREEMENT . This Amendment, the Credit Agreement and the other Loan Documents represent the entire agreement of the Loan Parties, the Administrative Agent, the Agents, the Lenders and the Lenders, as applicable, with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any other Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Credit Agreement or the other Loan Documents.

SECTION 10.       RELEASE . Each of the Loan Parties (on behalf of itself and its Subsidiaries) for itself and for its successors in title and assignees and, to the extent the same is claimed by right of, through or under any of the Loan Parties, for its past, present and future employees, agents, representatives (other than legal representatives), officers, directors, shareholders, and trustees (each, a “ Releasing Party ” and collectively, the “ Releasing Parties ”), does hereby remise, release and discharge, and shall be deemed to have forever remised, released and discharged, the Administrative Agent, each of the Lenders and each of the other Secured Parties in their respective capacities as such under the Loan Documents, and the Agent’s, each Lender’s and each other Secured Party’s respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and entities to whom the Agent, each of the Lenders and each of the other Secured Parties or any of their respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals would be liable if such persons or entities were found to be liable to any Releasing Party or any of them (collectively, hereinafter the “ Releasees ”), from any and all manner of action and actions, cause and causes of action, claims, charges, demands, counterclaims, crossclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, rights of setoff and recoupment, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature, whether in law, equity or otherwise (including, without limitation, any claims relating to (i) the making or administration of the Loans, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability” theories, (ii) any covenants, agreements, duties or obligations set forth in the Loan Documents, (iii) increased financing costs, interest or other carrying costs, (iv) penalties, (v) lost profits or loss of business opportunity, (vi) legal, accounting and other administrative or professional fees and expenses and incidental, consequential and punitive damages payable to third parties, (vii) damages to business reputation, or (viii) any claims arising under 11 U.S.C. §§ 541-550 or any claims for avoidance or recovery under any other federal, state or foreign

4

 

law equivalent), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing, heretofore existing or which may heretofore accrue against any of the Releasees, and which are, in each case, based on any act, fact, event or omission or other matter, cause or thing occurring at any time prior to or on the date hereof, directly or indirectly arising out of, connected with or relating to this Amendment, the Credit Agreement or any other Loan Document and the transactions contemplated hereby or thereby, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing (each, a “ Claim ” and collectively, the “ Claims ”); provided, that, no Releasing Party shall have any obligation with respect to Claims to the extent such Claims are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or bad faith of any Releasee. Each Releasing Party further stipulates and agrees with respect to all Claims, that it hereby waives, to the fullest extent permitted by applicable law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this Section 5.7. The Borrower and the other Loan Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by the Borrower or any other Loan Parties pursuant to this Section 10. If the Borrower, any other Loan Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, the Borrower and other Loan Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all reasonable and documented attorneys’ fees and costs incurred by any Releasee as a result of such violation. Each of the Releasing Parties hereby acknowledges that this release constitutes a material inducement to enter into this Amendment, that each Releasee has already relied on this release in entering into this Amendment, and that each Releasee will continue to rely on this release in its related future dealings. Each of the Releasing Parties hereby further warrants and represents that it has reviewed the terms of this Section 10 with its legal counsel and that it knowingly and voluntarily enters into the release contained in this Section 10 following consultation with legal counsel. This release is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this Section 10 and executed by each of the parties hereto).

SECTION 11.     LOAN DOCUMENT . This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

SECTION 12.     COUNTERPARTS . This Amendment may be executed by the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Amendment may be delivered by facsimile transmission or electronic PDF of the relevant signature page hereof.

SECTION 13.     HEADINGS . Section headings used in this Amendment are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

SECTION 14.     LOAN PARTY ACKNOWLEDGMENTS

14.1        Each Loan Party hereby (i) expressly acknowledges the terms of the Credit Agreement as amended by the Amendment, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and security agreements) to which it is a party, (iii) acknowledges,

5

 

renews and extends its continued liability under all such Loan Documents and agrees such Loan Documents remain in full force and effect, (iv) agrees that each Security Document secures all Obligations of the Loan Parties in accordance with the terms thereof and (v) further confirms that each Loan Document to which it is a party is and shall continue to be in full force and effect and the same are hereby ratified and confirmed in all respects.

14.2    Each Loan Party hereby reaffirms, as of the Effective Date, (i) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Agreement and the transactions contemplated thereby, and (ii) its guarantee of payment of the Obligations pursuant to the Guarantee and Collateral Agreement and its grant of Liens on the Collateral to secure the Obligations.

[ remainder of page intentionally left blank ]

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

 

HORIZON GLOBAL CORPORATION,

as the Borrower

By:  

/s/ Brian Whittman

  Name: Brian Whittman
  Title: Vice President, Finance

 

[Signature Page to Fifth Amendment]

HORIZON GLOBAL COMPANY LLC
        By:  

/s/ Brian Whittman

  Name:  Brian Whittman
  Title:    Vice President, Finance
HORIZON GLOBAL AMERICAS INC.
By:  

/s/ Brian Whittman

  Name:  Brian Whittman
  Title:    Vice President, Finance

HORIZON INTERNATIONAL HOLDINGS
LLC

By:  

/s/ Brian Whittman

  Name:  Brian Whittman
  Title:    Vice President, Finance

 

[Signature Page to Fifth Amendment]

JPMORGAN CHASE BANK, N.A. , as
Administrative Agent
By:  

/s/ Sabir Hashmy

  Name: Sabir Hashmy
  Title: Managing Director

 

[Signature Page to Fifth Amendment]

BTC Holdings Fund I, LLC ,
By: Blue Torch Credit Opportunities Fund I LP, its sole member

By: Blue Torch Credit Opportunities GP LLC, its general partner,

as a Lender

By: /s/ Kevin Genda                    
Kevin Genda
Authorized Signer

 

[Signature Page to Fifth Amendment]

  

ATRIUM VIII

ATRIUM IX

ATRIUM XII

ATRIUM XIV

MADISON PARK FUNDING X, LTD.

MADISON PARK FUNDING XI, LTD.

MADISON PARK FUNDING XII, LTD.

MADISON PARK FUNDING XIII, LTD.

MADISON PARK FUNDING XIV, LTD.

MADISON PARK FUNDING XV, LTD.

MADISON PARK FUNDING XVI, LTD.

MADISON PARK FUNDING XVII, LTD.

MADISON PARK FUNDING XVIII, LTD.

MADISON PARK FUNDING XX, LTD.

MADISON PARK FUNDING XXI, LTD.

MADISON PARK FUNDING XXII, LTD.

ONE ELEVEN FUNDING I, LTD.

ONE ELEVEN FUNDING II, LTD.

By: Credit Suisse Asset Management, LLC, as portfolio manager

 

BENTHAM HIGH YIELD FUND

By: Credit Suisse Asset Management, LLC, as agent (sub-advisor) for Challenger Investment Services Limited, the Responsible Entity for Bentham High Yield Fund

 

CREDIT SUISSE FLOATING RATE HIGH INCOME FUND

CREDIT SUISSE STRATEGIC INCOME FUND

By: Credit Suisse Asset Management, LLC, as investment advisor

 

THE CITY OF NEW YORK GROUP TRUST

By: Credit Suisse Asset Management, LLC, as its manager

 

CREDIT SUISSE NOVA (LUX)

By: Credit Suisse Asset Management, LLC or Credit Suisse Asset Management Limited, each as a Co- Investment Adviser to Credit Suisse Fund Management S.A., management company for Credit Suisse Nova (Lux)

 

MADISON PARK FUNDING XIX, LTD.

MADISON PARK FUNDING XXIII, LTD.

MADISON PARK FUNDING XXIV, LTD.

MADISON PARK FUNDING XXV, LTD.

By: Credit Suisse Asset Management, LLC, as collateral manager

 

DOLLAR SENIOR LOAN FUND, LTD.

DOLLAR SENIOR LOAN FUND II, LTD.

RENAISSANCE INVESTMENT HOLDINGS LTD.

By Credit Suisse Asset Management, LLC, as investment manager

 

DAVINCI REINSURANCE LTD.

By: Credit Suisse Asset Management, LLC, as investment manager for DaVinci

Reinsurance Holdings, Ltd., the owner of DaVinci Reinsurance Ltd.

 

SENIOR SECURED FLOATING RATE LOAN FUND

By: Credit Suisse Asset Management, LLC, the Portfolio Manager for Propel Capital Corporation, the manager for Senior Secured Floating Rate Loan Fund

 

as Lenders

 

   By:    /s/ Thomas Flannery                                                 
      Name: Thomas Flannery
      Title: Authorized Signatory

[Signature Page to Fifth Amendment]

AGF FLOATING RATE INCOME FUND
BY: EATON VANCE MANAGEMENT

AS PORTFOLIO MANAGER

 

as a Lender

By: /s/ Michael B. Botthof                            
              Name: Michael B. Botthof
              Title: Vice President

 

[Signature Page to Fifth Amendment]

Brighthouse Funds Trust I –
Brighthouse/Eaton Vance Floating Rate Portfolio

By: Eaton Vance Management as Investment Sub-Advisor

 

as a Lender

By: /s/ Michael B. Botthof                    
              Name: Michael B. Botthof
              Title: Vice President

 

[Signature Page to Fifth Amendment]

Eaton Vance CLO 2014-1R, Ltd.

By: Eaton Vance Management, as Investment Advisor

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

[Signature Page to Fifth Amendment]

Eaton Vance CLO 2015-1 Ltd.
By: Eaton Vance Management

Portfolio Manager

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

[Signature Page to Fifth Amendment]

Eaton Vance Loan Holding Limited

By: Eaton Vance Management

as Investment Manager

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

[Signature Page to Fifth Amendment]

Eaton Vance Floating-Rate
Income Plus Fund

By: Eaton Vance Management

as Investment Advisor

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

[Signature Page to Fifth Amendment]

EATON VANCE SENIOR
FLOATING-RATE TRUST

BY: EATON VANCE MANAGEMENT

AS INVESTMENT ADVISOR

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

EATON VANCE FLOATING-RATE
INCOME TRUST

BY: EATON VANCE MANAGEMENT

AS INVESTMENT ADVISOR

 

as a Lender

By: /s/ Michael B. Botthof                    
              Name: Michael B. Botthof
              Title: Vice President

[Signature Page to Fifth Amendment]

Eaton Vance International
(Cayman Islands) Floating-Rate
Income Portfolio

By: Eaton Vance Management

as Investment Advisor

 

as a Lender

 

By: /s/ Michael B. Botthof                    
              Name: Michael B. Botthof
              Title: Vice President

 

[Signature Page to Fifth Amendment]

 

EATON VANCE SENIOR INCOME TRUST

BY: EATON VANCE MANAGEMENT

AS INVESTMENT ADVISOR

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

[Signature Page to Fifth Amendment]

Eaton Vance Short Duration
Diversified Income Fund
By: Eaton Vance Management

As Investment Advisor

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

EATON VANCE INSTITUTIONAL SENIOR LOAN FUND
By: EATON VANCE MANAGEMENT

AS INVESTMENT ADVISOR

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

EATON VANCE
LIMITED DURATION INCOME FUND
By: EATON VANCE MANAGEMENT

AS INVESTMENT ADVISOR

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

Eaton Vance Floating Rate Portfolio

By: Boston Management and Research

as Investment Advisor

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

Eaton Vance Loan Holding II Limited

By: Eaton Vance Management

as Investment Manager

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

PACIFIC SELECT FUND
FLOATING RATE LOAN PORTFOLIO

By: EATON VANCE MANAGEMENT

AS INVESTMENT SUB-ADVISOR

 

as a lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

SENIOR DEBT PORTFOLIO

By: Boston Management and Research

as Investment Advisor

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

Eaton Vance VT Floating-Rate Incoming Fund

By: Eaton Vance Management

as Investment Advisor

 

as a Lender

By: /s/ Michael B. Botthof                        
              Name: Michael B. Botthof
              Title: Vice President

 

 

[Signature Page to Fifth Amendment]

KCOF Management VIII, L.L.C.,

as a Lender

By: /s/ Daniel Gewanter                        
              Name: Daniel Gewanter
              Title: Assistant Secretary

 

 

[Signature Page to Fifth Amendment]

EXHIBIT A-1

Amendments to Credit Agreement

See attached.

 

 

[Signature Page to Fifth Amendment]

Exhibit A A-1 to

the Fourth Fifth Amendment

[Conformed Credit Agreement Reflecting the First Amendment, dated as of September 19, 2016, Second Amendment, dated as of January 11, 2017 and 2017 Replacement Term Loan Amendment (Third Amendment), dated as of March 31, 2017 and , the Fourth Amendment, dated as of July 31, 2018 , and the Fifth Amendment, dated as of February 20, 2019 ]

TERM LOAN CREDIT AGREEMENT

dated as of June 30, 2015,

among

HORIZON GLOBAL CORPORATION,

The Lenders Party Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Collateral Agent,

BMO CAPITAL MARKETS CORP.,

and

WELLS FARGO SECURITIES, LLC,

as Syndication Agents,

KEYBANC CAPITAL MARKETS INC.,

SIDOTI & COMPANY, LLC

and

ROTH CAPITAL PARTNERS, LLC

as Documentation Agents

 

 

J.P. MORGAN SECURITIES LLC,

BMO CAPITAL MARKETS CORP.,

WELLS FARGO SECURITIES, LLC,

as Joint Lead Arrangers and Joint Bookrunners 1

 

 

 

 

 

 

1 With respect to the Fourth Amendment, JPMorgan Chase Bank, N.A. was the sole Lead Arranger and JPMorgan Chase Bank, N.A. was the sole Bookrunner.

TABLE OF CONTENTS

       Page  
ARTICLE I

 

DEFINITIONS

SECTION 1.01           Defined Terms      1
SECTION 1.02           Classification of Loans and Borrowings      34
SECTION 1.03           Terms Generally      34
SECTION 1.04           Accounting Terms; GAAP      34
ARTICLE II

 

THE CREDITS

SECTION 2.01           Commitments      35
SECTION 2.02           Loans and Borrowings      35
SECTION 2.03           Requests for Borrowings      35
SECTION 2.04           [Reserved]      36
SECTION 2.05           [Reserved]      36
SECTION 2.06           Funding of Borrowings      36
SECTION 2.07           Interest Elections      36
SECTION 2.08           Termination and Reduction of Commitments      37
SECTION 2.09           Repayment of Loans; Evidence of Debt      38
SECTION 2.10           Amortization of Term Loans      38
SECTION 2.11           Prepayment of Loans      39
SECTION 2.12           Fees      41
SECTION 2.13           Interest      41
SECTION 2.14           Alternate Rate of Interest      42
SECTION 2.15           Increased Costs      42
SECTION 2.16           Break Funding Payments      43
SECTION 2.17           Taxes      44
SECTION 2.18           Payments Generally; Pro Rata Treatment; Sharing of Set-offs      46
SECTION 2.19           Mitigation Obligations; Replacement of Lenders      47
SECTION 2.20           [Reserved].      48
SECTION 2.21           Incremental Facilities      48
SECTION 2.22           [Reserved]      50
SECTION 2.23           Extensions      50
ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

SECTION 3.01           Organization; Powers      52
SECTION 3.02           Authorization; Enforceability      52
SECTION 3.03           Governmental Approvals; No Conflicts      52
SECTION 3.04           Financial Condition; No Material Adverse Change      53
SECTION 3.05           Properties      53

 

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       Page  
SECTION 3.06           Litigation and Environmental Matters      53  
SECTION 3.07           Compliance with Laws and Agreements      54  
SECTION 3.08           Investment Company Status     
54
 
SECTION 3.09           Taxes     
54
 
SECTION 3.10           ERISA     
54
 
SECTION 3.11           Disclosure     
54
 
SECTION 3.12           Subsidiaries     
54
 
SECTION 3.13           Insurance      55  
SECTION 3.14           Labor Matters     
55
 
SECTION 3.15           Solvency     
55
 
SECTION 3.16           Senior Indebtedness     
55
 
SECTION 3.17           Security Documents     
55
 
SECTION 3.18           Federal Reserve Regulations      56  
SECTION 3.19           Anti-Corruption Laws and Sanctions     
56
 
SECTION 3.20           Material Contracts     
56
 
SECTION 3.21           EEA Financial Institutions     
56
 
ARTICLE IV

 

CONDITIONS

 

SECTION 4.01           Closing Date      56  
ARTICLE V

 

AFFIRMATIVE COVENANTS

 

SECTION 5.01           Financial Statements and Other Information      59  
SECTION 5.02           Notices of Material Events      61  
SECTION 5.03           Information Regarding Collateral      62  
SECTION 5.04           Existence; Conduct of Business      62  
SECTION 5.05           Payment of Obligations      62  
SECTION 5.06           Maintenance of Properties      63  
SECTION 5.07           Insurance     
63
 
SECTION 5.08           Casualty and Condemnation     
63
 
SECTION 5.09           Books and Records; Inspection and Audit Rights     
63
 
SECTION 5.10           Compliance with Laws     
63
 
SECTION 5.11           Use of Proceeds     
63
 
SECTION 5.12           Additional Subsidiaries     
63
 
SECTION 5.13           Further Assurances      64  
SECTION 5.14           Ratings     
64
 
ARTICLE VI

 

NEGATIVE COVENANTS

SECTION 6.01           Indebtedness; Certain Equity Securities      65  
SECTION 6.02           Liens      67  
SECTION 6.03           Fundamental Changes      69  
SECTION 6.04           Investments, Loans, Advances, Guarantees and Acquisitions      70  

 

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       Page  
SECTION 6.05           Asset Sales      71
SECTION 6.06           Sale and Leaseback Transactions      72
SECTION 6.07           Hedging Agreements      72
SECTION 6.08           Restricted Payments; Certain Payments of Indebtedness      73
SECTION 6.09           Transactions with Affiliates      75
SECTION 6.10           Restrictive Agreements      76
SECTION 6.11           Amendment of Material Documents      76
SECTION 6.12           [Reserved]      77
SECTION 6.13           Net Leverage Ratio      77
SECTION 6.14           Use of Proceeds      77
ARTICLE VII

 

EVENTS OF DEFAULT

ARTICLE VIII

 

THE AGENTS

ARTICLE IX

 

[RESERVED]

ARTICLE X

 

MISCELLANEOUS

SECTION 10.01           Notices      82
SECTION 10.02           Waivers; Amendments      82
SECTION 10.03           Expenses; Indemnity; Damage Waiver      84
SECTION 10.04           Successors and Assigns      86
SECTION 10.05           Survival      88
SECTION 10.06           Counterparts; Integration; Effectiveness      88
SECTION 10.07           Severability      89
SECTION 10.08           Right of Setoff      89
SECTION 10.09           Governing Law; Jurisdiction; Consent to Service of Process      89
SECTION 10.10           WAIVER OF JURY TRIAL      89
SECTION 10.11           Headings      90
SECTION 10.12           Confidentiality      90
SECTION 10.13           Interest Rate Limitation      90
SECTION 10.14           Intercreditor Agreements      91
SECTION 10.15           Release of Liens and Guarantees      91
SECTION 10.16           PATRIOT Act      92
SECTION 10.17           No Fiduciary Duty      92
SECTION 10.18           Acknowledgement and Consent to Bail-In of EEA Financial Institutions      92

 

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SCHEDULES :       
Schedule 2.01   –      Commitments
Schedule 3.03   –      Governmental Approvals; No Conflicts
Schedule 3.05   –      Real Property
Schedule 3.06   –      Disclosed Matters
Schedule 3.12   –      Subsidiaries
Schedule 3.13   –      Insurance
Schedule 3.20   –      Material Contracts
Schedule 6.01   –      Existing Indebtedness
Schedule 6.01A   –      Existing Indebtedness as of Fifth Amendment Date
Schedule 6.02   –      Existing Liens
Schedule 6.02 A   –      Existing Liens as of Fifth Amendment Date
Schedule 6.04   –      Existing Investments
Schedule 6.04A   –      Existing Investments as of Fifth Amendment Date
Schedule 6.05   –      Asset Sales
Schedule 6.05 A   –      Asset Sales as of Fifth Amendment Date
Schedule 6.09   –      Existing Affiliate Transactions
Schedule 6.10   –      Existing Restrictions
EXHIBITS :       
Exhibit A   –      Form of Assignment and Assumption
Exhibit B   –      Form of Borrowing Request
Exhibit C   –      Form of Intercreditor Agreement
Exhibit D   –      Form of Guarantee and Collateral Agreement
Exhibit E   –      Form of U.S. Tax Certificate
Exhibit F   –      Form of Perfection Certificate

 

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TERM LOAN CREDIT AGREEMENT dated as of June 30, 2015 (this “ Agreement ”), among HORIZON GLOBAL CORPORATION, the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent.

RECITALS:

In consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01     Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

“ 2017 Replacement Term Loan Amendment ” shall mean the 2017 Replacement Term Loan Amendment (Third Amendment to Credit Agreement), dated as of March 31, 2017, among the Borrower, the Lenders party thereto and the Administrative Agent.

“ 2017 Replacement Term Loan Commitment ” shall have the meaning set forth in the 2017 Replacement Term Loan Amendment. The aggregate amount of the Lenders’ 2017 Replacement Term Commitments on the 2017 Replacement Term Loan Facility Effective Date is $160,000,000.

“ 2017 Replacement Term Loan Facility ” shall have the meaning set forth in the 2017 Replacement Term Loan Amendment.

“ 2017 Replacement Term Loan Facility Effective Date ” shall have the meaning set forth in the 2017 Replacement Term Loan Amendment.

“ 2017 Replacement Term Loan Lender ” means a Lender with a 2017 Replacement Term Loan Commitment or an outstanding 2017 Replacement Term Loan. On and after the 2017 Replacement Term Loan Facility Effective Date, each reference to a “Term B Lender” in this Agreement shall be deemed to refer to a 2017 Replacement Term Loan Lender.

“ 2017 Replacement Term Loans ” shall have the meaning set forth in the 2017 Replacement Term Loan Amendment.

“ 2018 Incremental Term Loan Commitments ” has the meaning set forth in the Fourth Amendment.

“ 2018 Incremental Term Loan Lender ” means a Lender with a 2018 Incremental Term Loan Commitment or an outstanding 2018 Incremental Term Loan. On and after the Fourth Amendment Effective Date, each reference to a “Term B Lender” in this Agreement shall be deemed to refer to a 2018 Incremental Term Loan Lender.

“ 2018 Incremental Term Loans ” has the meaning set forth in the Fourth Amendment.

“ 2018 Term Loans ” means the 2017 Replacement Term Loans and the 2018 Incremental Term Loans. On and after the Fourth Amendment Effective Date, each reference to a “Term B Loan” in

this Agreement shall be deemed to refer to a 2018 Term Loan, except for such references in Section 4.01(g) and (m).

“ 2018 Term Loan Commitment ” means the 2017 Replacement Term Loan Commitment and the 2018 Incremental Term Loan Commitment.

“ ABL Agent ” means Bank of America, N.A., as administrative agent and/or collateral agent, as applicable, under the ABL Credit Agreement, and its successors and assigns.

“ ABL Credit Agreement ” means the ABL Credit Agreement to be dated as of the Closing Date, among the Borrower, the Subsidiaries party thereto as borrowers, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, as such document or the credit facility thereunder may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL Guarantee and Collateral Agreement ” means the Guarantee and Collateral Agreement as defined in the ABL Credit Agreement.

“ ABL Foreign Loan Party ” means any Foreign Subsidiary that is a party to the ABL Loan Documents as a borrower thereunder and/or is a party to any ABL Security Document as a grantor or guarantor thereunder.

“ ABL Loan ” means a loan made pursuant to the ABL Credit Agreement.

“ ABL Loan Documents ” means collectively (a) the ABL Credit Agreement, (b) the ABL Security Documents, (c) any promissory note evidencing loans under the ABL Credit Agreement and (d) any amendment, waiver, supplement or other modification to any of the documents described in clauses (a) through (c), in each case as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL Priority Collateral ” has the meaning assigned to such term in the Intercreditor Agreement.

“ ABL Security Documents ” means the collective reference to the ABL Guarantee and Collateral Agreement, the Mortgages (as defined in the ABL Credit Agreement) and all other security documents delivered to the ABL Administrative Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Loan Party under the ABL Credit Agreement or the ABL Guarantee and Collateral Agreement, as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ABL/Term Loan Intercreditor Agreement” means the Intercreditor Agreement, dated as of June 30, 2015 (as amended on the date hereof), among the Borrower, the other Loan Parties, the Collateral Agent, the Senior Agent and the ABL Agent.

“ ABR ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

 

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“ Acquisition Lease Financing ” means any sale or transfer by the Borrower or any Subsidiary of any property, real or personal, that is acquired pursuant to a Permitted Acquisition, in an aggregate amount not to exceed $20,000,000 at any time after the Closing Date, which property is rented or leased by the Borrower or such Subsidiary from the purchaser or transferee of such property, so long as the proceeds from such transaction consist solely of cash.

“ Adjusted LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate; provided that the Adjusted LIBO Rate shall not be less than 1.00% per annum.

“ Administrative Agent ” means JPMCB, in its capacity as administrative agent for the Lenders hereunder.

“ 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.

“ Agents ” means, collectively, the Administrative Agent, the Collateral Agent, the Syndication Agents and the Documentation Agents.

“ Agreement ” has the meaning assigned to such term in the preamble hereto.

“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in dollars with a maturity of one month plus 1%; provided that the Alternate Base Rate shall not be less than 2.00% per annum. For purposes of clause (c) above, the Adjusted LIBO Rate on any day shall be the LIBO Rate, two Business Days prior to such day for deposits in dollars with a maturity of one month. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof, then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above.

“ Alternative Incremental Debt ” means any Indebtedness incurred by a Loan Party in the form of one or more series of secured or unsecured bonds, debentures, notes or similar instruments or in the form of loans; provided that:

(a)      if such Indebtedness is secured, (i) such Indebtedness shall be secured by Liens on the Collateral on a pari passu or junior basis to the Liens on the Collateral securing the Obligations (but, in each case, without regard to the control of remedies) and shall not be secured by any property or assets of the Borrower or any of the Subsidiaries other than the Collateral ( provided that if such Indebtedness is in the form of loans, it may be secured by Liens on the Collateral only on a junior basis to the Liens on the Collateral securing the Obligations), (ii) the security agreements relating to such Indebtedness shall be substantially similar to the Security Documents (with such differences as are reasonably satisfactory to the Administrative Agent and

 

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other than, in the case of Indebtedness secured on a junior basis, with respect to priority) and (iii) such Indebtedness shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent,

(b)      such Indebtedness does not mature earlier than the date that is 91 days after the Latest Maturity Date in effect hereunder at the time of incurrence thereof and has a weighted average life to maturity no shorter than the Latest Maturing Term Loans in effect at the time of incurrence of such Indebtedness,

(c)      the definitive documentation in respect of such Indebtedness (i) contains covenants, events of default and other terms that are customary for similar Indebtedness in light of then-prevailing market conditions and (ii) shall not contain additional covenants or events of default not otherwise applicable to the Loans or covenants more restrictive than the covenants applicable to the Loans; provided that the foregoing clause (ii) shall not apply to covenants or events of default applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such Indebtedness; provided further that any such Indebtedness may include additional covenants or events of default not otherwise applicable to the Loans or covenants more restrictive than the covenants applicable to the Loans in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such Indebtedness so long as this Agreement is amended to provide all of the Lenders with the benefits of such additional covenants, events of default or more restrictive covenants,

(d)      such Indebtedness does not provide for any mandatory prepayment, redemption or repurchase (other than upon a change of control, fundamental change, conversion or exchange in the case of convertible or exchangeable Indebtedness, customary asset sale or event of loss mandatory offers to purchase, and customary acceleration rights after an event of default) prior to the date that is 91 days after the Latest Maturity Date in effect hereunder at the time of incurrence of such Indebtedness; provided that any such Indebtedness secured by Liens on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations (any such Indebtedness, “ Pari Passu Alternative Incremental Debt ”) may be subject to a mandatory prepayment offer from the Net Proceeds of any Prepayment Event so long as the holders of such Indebtedness receive no more than their ratable share of such prepayment (such ratable share to be calculated by reference to the outstanding amount of such Indebtedness, the outstanding amount of the Loans hereunder and the outstanding amount of Pari Passu Permitted Term Loan Refinancing Indebtedness, in each case immediately prior to such prepayment),

(e)      other than with respect to Alternative Incremental Debt the proceeds of which shall be used to finance a Limited Conditionality Acquisition, at the time of incurrence of such Alternative Incremental Debt, (i) no Default or Event of Default shall have occurred and be continuing, both immediately prior to and immediately after giving effect to the incurrence of such Alternative Incremental Debt and (ii) the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date; provided that with respect to Alternative Incremental Debt the proceeds of which shall be used to finance a Limited Conditionality Acquisition, as of the date of entry into the applicable Limited Conditionality Acquisition Agreement (i) no Default or Event of Default shall have occurred and be continuing and (ii) the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date, and

(f)      such Indebtedness is not guaranteed by any Person other than Loan Parties.

 

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Alternative Incremental Debt will include any Registered Equivalent Notes issued in exchange therefor.

“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.

“ Applicable Law ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Applicable Rate ” means, for any day, (a) with respect to (i) any ABR 2018 Term Loan, 5.00% per annum and (ii) any Eurocurrency 2018 Term Loan, 6.00% per annum and (b) with respect to any Incremental Term Loan of any Series, the rate per annum specified in the Incremental Facility Agreement establishing the Incremental Term Commitments of such Series.

“ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered 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.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any Person whose consent is required by Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“ Assumed Preferred Stock ” means any preferred stock or preferred equity interests of any Person that becomes a Subsidiary after the Closing Date; provided that (a) such preferred stock or preferred equity interests exist at the time such Person becomes a Subsidiary and are not created in contemplation of or in connection with such Person becoming a Subsidiary and (b) the aggregate liquidation value of all such outstanding preferred stock and preferred equity interests shall not exceed $10,000,000 at any time outstanding, less the aggregate principal amount of Indebtedness incurred and outstanding pursuant to Section 6.01(a)(x).

“ Available Amount ” means, as of any date of determination on or after the Fourth Amendment Effective Date, an amount equal to:

(a)      the sum of (without duplication):

   (i)      if positive, the Cumulative Retained Excess Cash Flow Amount; and

  (ii)      the Net Proceeds received by the Borrower from (A) cash contributions (other than from a Subsidiary) to the Borrower or (B) the issuance and sale of its Equity Interests (other than a sale to a Subsidiary);

minus

(b)      the amount of any investments made in reliance on Section 6.04(s) prior to such date and any prepayments of Indebtedness made in reliance on Section 6.08(b)(vii) prior to such date;

Minus

 

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(c)      the portion of Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d) that is used pursuant to Section 6.08(a)(v) or Section 6.08(a)(vii).

For the avoidance of doubt, the Available Amount shall be deemed $0 (zero dollars) on the Fourth Amendment Effective Date irrespective of any amounts which may be attributed to the foregoing clause (a) prior to such date.

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

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

“ Base Incremental Amount ” means, as of any date, an amount equal to (a) $75,000,000 less (b) the aggregate principal amount of Incremental Term Commitments established prior to such date in reliance on the Base Incremental Amount less (c) the aggregate principal amount of Alternative Incremental Debt established prior to such date in reliance on the Base Incremental Amount.

“ Beneficial Ownership Certification ” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“ Beneficial Ownership Regulation ” means 31 C.F.R. § 1010.230.

“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrower ” means Horizon Global Corporation, a Delaware corporation.

“ Borrower Registration Statement ” means the registration statement on Form S-1 filed by the Borrower with the Commission on March 31, 2015, including all exhibits and schedules thereto, in each case, as amended, supplemented or otherwise modified prior to the Closing Date.

“ Borrowing ” means Loans of the same Class and Type, made, converted or continued on the same date and as to which a single Interest Period is in effect.

“ Borrowing Base ” shall have the meaning ascribed to such term in the ABL Credit Agreement (as defined in the ABL Credit Agreement on the Closing Date).

“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03, which shall be, in the case of any such written request, in the form of Exhibit B or any other form approved by the Administrative Agent.

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that when used in connection with any Eurocurrency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

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“ Capital Expenditures ” means, for any period, without duplication, (a) the additions to property, plant and equipment and other capital expenditures of the Borrower and its consolidated Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Borrower for such period prepared in accordance with GAAP other than (x) such additions and expenditures classified as Permitted Acquisitions and (y) such additions and expenditures made with Net Proceeds from any casualty or other insured damage or condemnation or similar awards and (b) Capital Lease Obligations incurred by the Borrower and its consolidated Subsidiaries during such period.

“ 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; provided that any change in GAAP after the Closing Date that would require lease obligations that would have been characterized and accounted for as operating leases in accordance with GAAP as in effect on the Closing Date to be characterized and accounted for as Capital Lease Obligations shall be disregarded for purposes hereof.

“ CFC ” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ CFC Holdco ” means any Domestic Subsidiary substantially all the assets of which consist of Equity Interests of one or more CFCs.

“ Change in Control ” means (a) the acquisition of beneficial ownership, directly or indirectly, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder), of Equity Interests representing more than 35% of either the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in the Borrower or (b) the occurrence of any change in control (or similar event, however denominated) with respect to the Borrower under (i) any indenture or other agreement in respect of Material Indebtedness to which the Borrower or any Subsidiary is a party or (ii) any instrument governing any preferred stock of the Borrower or any Subsidiary having a liquidation value or redemption value in excess of $5,000,000.

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the date hereof, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date hereof or (c) compliance by any Lender (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date hereof; 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, promulgated or issued.

“ Class ,” when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Term B Loans or Incremental Term Loans of any Series, (b) any Commitment, refers to whether such Commitment is a 2017 Replacement Term Loan Commitment, a 2018 Incremental Term Loan Commitment or any other Incremental Term Commitment of any Series and (c) any Lender, refers to whether such Lender has a Loan or Commitment of a particular Class.

 

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“ Closing Date ” means the date on which the conditions specified in Section 4.01 have been satisfied.

“ Closing Date Dividend ” has the meaning assigned to such term in the definition of “Transactions”.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” means any and all “ Collateral ,” as defined in any applicable Security Document.

“ Collateral Agent ” means JPMCB, in its capacity as collateral agent for the Lenders under the Security Documents.

“ Collateral and Guarantee Requirement ” means the requirement that:

(a)      the Collateral Agent shall have received from each party thereto (other than the Collateral Agent) either (i) a counterpart of the Guarantee and Collateral Agreement duly executed and delivered on behalf of such Loan Party, or (ii) in the case of any Person that becomes a Subsidiary Loan Party after the Closing Date, a supplement to each of the Guarantee and Collateral Agreement and the Intercreditor Agreement, in each case in the form specified therein, duly executed and delivered on behalf of such Subsidiary Loan Party;

(b)      all outstanding Equity Interests of the Borrower and each Subsidiary owned by or on behalf of any Loan Party shall have been pledged pursuant to the Guarantee and Collateral Agreement (except that the Loan Parties shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary, any CFC or any CFC Holdco (other than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands) ) and the Collateral Agent shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c)      all Indebtedness of the Borrower and each Subsidiary in an aggregate principal amount that exceeds $500,000 that is owing to any Loan Party shall be evidenced by a promissory note and shall have been pledged pursuant to the Guarantee and Collateral Agreement and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(d)      all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Guarantee and Collateral Agreement and perfect such Liens to the extent required by, and with the priority required by, the Guarantee and Collateral Agreement (in each case subject to the Intercreditor Agreement), shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;

(e)      the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to any Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by

 

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Section 6.02, together with such endorsements, coinsurance and reinsurance as the Administrative Agent or the Required Lenders may reasonably request, but only to the extent such endorsements are (A) available in the relevant jurisdiction ( provided in no event shall the Collateral Agent request a creditors’ rights endorsement) and (B) available at commercially reasonable rates, (iii) if any Mortgaged Property is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, evidence of such flood insurance as may be required under Applicable Law, including Regulation H of the Board of Governors, and an acknowledged notice to the Borrower, (iv) if reasonably requested by the Administrative Agent, a current appraisal of any Mortgaged Property, prepared by an appraiser acceptable to the Administrative Agent, and in form and substance satisfactory to the Required Lenders (it being understood that if such appraisal is required in order to comply with the Administrative Agent’s internal policies, such request shall be deemed to be reasonable), (v) if reasonably requested by the Administrative Agent, an environmental assessment with respect to any Mortgaged Property, prepared by environmental engineers reasonably acceptable to the Administrative Agent, and such other reports, certificates, studies or data with respect to such Mortgaged Property as the Administrative Agent may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with the Administrative Agent’s internal policies, such request shall be deemed to be reasonable), and (vi) such abstracts, legal opinions and other documents as the Administrative Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; provided , however , in no event shall surveys be required to be obtained with respect to any Mortgaged Property; and

(f)      each Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder . ;

provided, that, (i) with respect to any Subsidiary Loan Party that is a Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), or the Netherlands, the Collateral and Guarantee Requirement shall require the provision of the documents and satisfaction of the requirements set forth in Schedule E to the Fifth Amendment and (ii) with respect to any Subsidiary Loan Party that is a Foreign Subsidiary organized under the laws of any other jurisdiction, the Collateral and Guarantee Requirement shall be modified as reasonably requested by the Required Lenders to reflect the requirements and limitations of the jurisdiction in which such Foreign Subsidiary is organized.

“ Commission ” means the Securities and Exchange Commission or any Governmental Authority succeeding to any or all of the functions of said Commission.

“ Commitment ” means a 2017 Replacement Term Loan Commitment, a 2018 Incremental Term Loan Commitment or any other Incremental Term Commitment of any Series or any combination thereof (as the context requires).

“ Consolidated EBITDA ” means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period, (ii) consolidated income tax expense for such period (including all single business tax expenses imposed by state law), (iii) all amounts attributable to depreciation and amortization for such period, (iv) any extraordinary charges for such period, (v) interest-equivalent costs associated with any Specified Vendor Receivables Financing for such period, whether accounted for as interest expense or loss on the sale of receivables, and all Preferred

 

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Dividends, (vi) all losses during such period that relate to the retirement of Indebtedness, (vii) noncash expenses during such period resulting from the grant of Equity Interests to management and employees of the Borrower or any of the Subsidiaries, (viii) the aggregate amount of deferred financing expenses for such period, (ix) all other noncash expenses or losses of the Borrower or any of the Subsidiaries for such period (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), (x) any nonrecurring fees, expenses or charges realized by the Borrower or any of the Subsidiaries for such period related to any offering of Equity Interests or incurrence of Indebtedness, whether or not consummated, (xi) fees and expenses in connection with the Transactions, (xii) any unusual or nonrecurring costs and expenses arising from the integration of any business acquired pursuant to any Permitted Acquisition consummated after the Closing Date not to exceed $7,500,000 in any fiscal year and $20,000,000 in the aggregate, (xiii) any unusual or nonrecurring costs and expenses arising from the integration of the Westfalia Group not to exceed $10,000,000 in any fiscal year and $30,000,000 in the aggregate, (xiv) the amount of reasonably identifiable and factually supportable “run rate” cost savings, operating expense reductions, and other synergies not to exceed $12,500,000 resulting from the Westfalia Acquisition that are projected by Borrower in good faith and certified by a Financial Officer of the Borrower in writing to the Administrative Agent to result from actions either taken or expected to be taken within eighteen (18) months of the Westfalia Acquisition Closing Date to take such action, net of the amount of actual benefits realized prior to or during such period from such actions (which cost savings, operating expense reductions, and synergies shall be calculated on a pro forma basis as though such cost savings, operating expense reductions, or synergies had been realized on the first day of such period), (xv) any unusual or nonrecurring expenses or similar costs relating to cost savings projects, including restructuring and severance expenses, not to exceed $25,000,000 in the aggregate from and after January 1, 2015; provided that no more than $7,500,000 may be counted in any fiscal year commencing on or after January 1, 2015, (xvi) net losses from discontinued operations, not to exceed in any fiscal year $7,500,000, (xvii) losses associated with the prepayment of leases (whether operating leases or capital leases) outstanding on January 1, 2015 from discontinued operations, and (xviii) losses or charges associated with asset sales otherwise permitted hereunder and any unusual or nonrecurring charges, so long as the amount added back pursuant to this clause (xviii) does not exceed in the aggregate $5,000,000, minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) any non-cash income, profits or gains for such period and (iii) any gains realized from the retirement of Indebtedness after the Closing Date, all determined on a consolidated basis in accordance with GAAP; provided, however, that the amounts added to Consolidated Net Income pursuant to clauses (xii) through (xviii) above for any period shall not exceed 45% of Consolidated EBITDA for such period; provided further that such percentage shall decrease to (A) 35% of Consolidated EBITDA on September 30, 2019 and (B) 25% of Consolidated EBITDA on December 31, 2019 and thereafter (determined without including amounts added to Consolidated Net Income pursuant to clauses (xii) through (xviii) above for such period). If the Borrower or any Subsidiary has made any Permitted Acquisition or Significant Investment or any sale, transfer, lease or other disposition of assets outside of the ordinary course of business permitted by Section 6.05 during the relevant period for determining any leverage ratio hereunder, Consolidated EBITDA for the relevant period shall be calculated only for purposes of determining such leverage ratio after giving pro forma effect thereto, as if such Permitted Acquisition or Significant Investment or sale, transfer, lease or other disposition of assets had occurred on the first day of the relevant period for determining Consolidated EBITDA; provided that with respect to any Significant Investment, (x) any pro forma adjustment made to Consolidated EBITDA shall be in proportion to the percentage ownership of the Borrower or such Subsidiary, as applicable, in the Subject Person (e.g. if the Borrower acquires 70% of the Equity Interests of the Subject Person, a pro forma adjustment to Consolidated EBITDA shall be made with respect to no more than 70% of the EBITDA of the Subject Person) and (y) pro forma effect shall only be given to such Significant Investment if the Indebtedness of the Subject Person is included in Total Indebtedness for purposes of calculating the applicable leverage ratio in proportion to the percentage ownership of the

 

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Borrower or such Subsidiary, as applicable, in such Subject Person. Any such pro forma calculations may include operating and other expense reductions and other adjustments for such period resulting from any Permitted Acquisition, or sale, transfer, lease or other disposition of assets that is being given pro forma effect to the extent that such operating and other expense reductions and other adjustments (a) would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933 (“ Regulation S-X ”) or (b) are reasonably consistent with the purpose of Regulation S-X as determined in good faith by the Borrower in consultation with the Administrative Agent. “ Consolidated Net Income ” means, for any period, the net income or loss of the Borrower and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Person (other than the Borrower or a Significant Investment) in which any other Person (other than the Borrower or any Subsidiary or any director holding qualifying shares in compliance with Applicable Law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of the Subsidiaries during such period, (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary or the date that such Person’s assets are acquired by the Borrower or any Subsidiary and (c) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income.

“ 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.

“Convertible Notes” means the 2.75% Convertible Senior Notes of the Borrower due 2022 issued pursuant to the Convertible Notes Indenture.

“Convertible Notes Indenture” means the First Supplemental Indenture between the Borrower and Wells Fargo Bank, National Association, dated as of February 1, 2017.

“ Credit Facility ” means a category of Commitments and extensions of credit thereunder.

“ Cumulative Retained Excess Cash Flow Amount ” means, at any date of determination, an amount equal to the aggregate cumulative sum of the Retained Percentage of Excess Cash Flow for the Excess Cash Flow Periods ended on or prior to such date.

“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Discharge of Senior Obligations” shall have the meaning as defined in the Term Intercreditor Agreement.

“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06.

“ Documentation Agents ” means KeyBanc Capital Markets Inc., Sidoti & Company, LLC and Roth Capital Partners, LLC.

“ dollars ” or “ $ ” refers to lawful money of the United States of America.

“ Domestic Subsidiary ” means any Subsidiary, other than the Foreign Subsidiaries.

 

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“ ECF Percentage ” means 75%; provided , that, with respect to any fiscal year of the Borrower commencing with the fiscal year ending December 31, 2017, the ECF Percentage shall be reduced to (a) 50% if the Net Leverage Ratio as of the last day of such fiscal year is no greater than 4.00 to 1.00 but greater than 3.00 to 1.00, (b) 25% if the Net Leverage Ratio of the last day of such fiscal year is no greater than 3.00 to 1.00 but greater than 2.50 to 1.00 and (c) 0% if the Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 2.50 to 1.00.

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

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

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

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“ Environmental Liability ” means any liabilities, obligations, damages, losses, claims, actions, suits, judgments, or orders, contingent or otherwise (including any liability for damages, costs of environmental remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), directly or indirectly resulting from or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Environmental Notice ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person or any warrants, options or other rights to acquire such interests, but excluding any debt securities convertible into or referencing any of the foregoing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

 

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“ ERISA Event ” means (a) any “ reportable event ,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) a failure by any Plan to satisfy the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such Plan in each instance, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) a determination that any Plan is, or is expected to be, in “ at risk ” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA; (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (h) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA or in “ endangered ” or “ critical ” status (within the meaning of Section 432 of the Code or Section 305 of ERISA).

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

“ Eurocurrency ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“ Event of Default ” has the meaning assigned to such term in Article VII.

“ Excess Cash Flow ” means, for any fiscal year, the sum (without duplication) of:

(a)      Consolidated Net Income for such fiscal year, adjusted to exclude any gains or losses attributable to Prepayment Events; plus

(b)      the excess, if any, of the Net Proceeds received during such fiscal year by the Borrower and its consolidated Subsidiaries in respect of any Prepayment Events over (x) amounts permitted to be reinvested pursuant to Section 2.11(c) and (y) the aggregate principal amount of Term Loans prepaid pursuant to Section 2.11(c) in respect of such Net Proceeds; plus

(c)      depreciation, amortization and other noncash charges or losses deducted in determining such consolidated net income (or loss) for such fiscal year; plus

(d)      the sum of (i) the amount, if any, by which Net Working Capital (adjusted to exclude changes arising from Permitted Acquisitions and Significant Investments) decreased during such fiscal year plus (ii) the net amount, if any, by which the consolidated deferred revenues and other consolidated accrued long-term liability accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year plus (iii) the net amount, if any, by which the consolidated accrued long-term asset accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) decreased during such fiscal year; minus

 

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(e)      the sum of (i) any noncash gains included in determining such consolidated net income (or loss) for such fiscal year plus (ii) the amount, if any, by which Net Working Capital (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year plus (iii) the net amount, if any, by which the consolidated deferred revenues and other consolidated accrued long-term liability accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) decreased during such fiscal year plus (iv) the net amount, if any, by which the consolidated accrued long-term asset accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year; minus

(f)      the sum of (i) Capital Expenditures for such fiscal year and Capital Expenditures to be made within 90 days following the end of such fiscal year pursuant to binding agreements entered into by the Borrower or any of its consolidated Subsidiaries prior to the end of such fiscal year; provided that to the extent any such Capital Expenditure is not made (or if the amount of any such Capital Expenditures less than the amount deducted with respect hereto) within 90 days after such fiscal year, the amount (or such portion of the amount) thereof shall be added back to Excess Cash Flow for the subsequent period (except to the extent attributable to the incurrence of Capital Lease Obligations or otherwise financed by incurring Long-Term Indebtedness) plus (ii) cash consideration paid during such fiscal year to make acquisitions or other capital investments (except to the extent financed by incurring Long-Term Indebtedness or through the use of the Available Amount); minus

(g)      the aggregate principal amount of Long-Term Indebtedness repaid or prepaid by the Borrower and its consolidated Subsidiaries during such fiscal year, excluding (i) Indebtedness in respect of ABL Loans and other revolving Indebtedness (in each case except to the extent the revolving credit commitments in respect thereof are permanently reduced in the amount of and at the time of any such payment) and letters of credit, (ii) Term Loans prepaid pursuant to Section 2.11(c) or (d), (iii) optional prepayments of Term Loans (including purchases of Term Loans pursuant to Section 10.04(h)), (iv) repayments or prepayments of Long-Term Indebtedness financed by incurring other Long-Term Indebtedness or through the use of the Available Amount, (v) optional prepayments of Pari Passu Alternative Incremental Debt in the form of loans or Pari Passu Permitted Term Loan Refinancing Indebtedness in the form of loans and (vi) any prepayments of Pari Passu Alternative Incremental Debt or Pari Passu Permitted Term Loan Refinancing Indebtedness in lieu of mandatory prepayments of Term Loans in accordance with Section 2.11(c); minus

(h)      the noncash impact of currency translations and other adjustments to the equity account, including adjustments to the carrying value of marketable securities and to pension liabilities, in each case to the extent such items would otherwise constitute Excess Cash Flow.

“ Excess Cash Flow Period ” means each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2017.

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder or under any other Loan Document, (a) income or franchise taxes imposed on (or measured by) its net or overall gross income (or net worth or similar Taxes imposed in lieu thereof) by the United States of America, or by any other jurisdiction as a result of such recipient being organized in or having its principal office in or applicable lending office in such jurisdiction, or as a result of any other present or former connection (other than a connection arising solely from this Agreement or any other Loan Document) between such recipient and such jurisdiction, (b) any branch profits Taxes imposed by the

 

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United States of America or any similar Tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Non-U.S. Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any United States withholding Taxes resulting from any law in effect (x) at the time such Non-U.S. Lender becomes a party to this Agreement or, with respect to any additional position in any Loan acquired after such Non-U.S. Lender becomes a party hereto, at the time such additional position is acquired by such Non-U.S. Lender or (y) at the time such Non-U.S. Lender designates a new lending office, except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, immediately prior to designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such United States withholding Tax pursuant to Section 2.17(a), (d) any United States withholding Tax imposed pursuant to FATCA and (e) any withholding Tax that is attributable to a recipient’s failure to comply with Section 2.17(g).

“ Extended Term Loans ” has the meaning assigned to such term in Section 2.23(a).

“ Extension ” has the meaning assigned to such term in Section 2.23(a).

“ Extension Offer ” has the meaning assigned to such term in Section 2.23(a).

“ FATCA ” means (i) Sections 1471 through 1474 of the Code as of the date of this Agreement or any amended or successor provision that is substantively comparable and not materially more onerous to comply with, and, in each case, any regulations or official interpretations thereof, (ii) any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the date of this Agreement or any amended or successor provision as described in clause (i) above and (iii) any law, regulation, rule, promulgation or official agreement implementing an official government agreement with respect to the foregoing.

“ Federal Funds Effective Rate ” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate; provided that if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“Fifth Amendment” means that certain Fifth Amendment to this Credit Agreement, dated as of February 20, 2019, among the Borrower, the other Loan Parties, the Administrative Agent and the Lenders party thereto.

“Fifth Amendment Effective Date” means the “Effective Date” as set forth in the Fifth Amendment.

“ First Amendment ” means that certain First Amendment to Credit Agreement, dated as of September 19, 2016, among the Borrower, the Administrative Agent and the Lenders party thereto.

“ First Amendment Effective Date ” means the “Effective Date” as set forth in the First Amendment.

“ First Lien Secured Indebtedness ” means Total Indebtedness that is secured by a first priority Lien on any asset of the Borrower or any of its Subsidiaries (it being understood that any

 

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Indebtedness outstanding under this Agreement and any Indebtedness outstanding under the ABL Credit Agreement is First Lien Secured Indebtedness).

“ First Lien Net Leverage Ratio ” means, on any date, the ratio of (a) First Lien Secured Indebtedness as of such date less the aggregate amount (not to exceed $65,000,000) of the sum of Unrestricted Domestic Cash plus Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

“ FLSA ” means the Fair Labor Standards Act of 1938, as amended from time to time.

“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

“ Fourth Amendment ” means that certain Fourth Amendment to Credit Agreement, dated as of July 31, 2018, among the Borrower, the other Loan Parties, the Administrative Agent and the Lenders party thereto.

“ Fourth Amendment Effective Date ” means the “Effective Date” as set forth in the Fourth Amendment.

“ GAAP ” means generally accepted accounting principles in the United States of America.

“ Governmental Authority ” means the government of the United States of America, any other nation or 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 body exercising such powers or functions, 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 or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term “ Guarantee ” shall not include endorsements for collection or deposit in the ordinary course of business.

“ Guarantee and Collateral Agreement ” means the Term Loan Guarantee and Collateral Agreement, substantially in the form of Exhibit D, made by the Borrower and the Subsidiary Loan Parties party thereto in favor of the Collateral Agent for the benefit of the Secured Parties.

“ Hazardous Materials ” means all explosive, radioactive, hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing

 

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materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedging Agreement ” means any (i) interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement, (ii) Permitted Bond Hedge Transaction or (iii) Permitted Warrant Transaction.

“ Immaterial Subsidiary ” means, at any date, any Subsidiary of the Borrower that, together with its consolidated Subsidiaries (i) does not, as of the last day of the fiscal quarter of the Borrower most recently ended on or prior to such date for which financial statements are available, have assets with a value in excess of 2.5% of the consolidated total assets of the Borrower and its consolidated Subsidiaries and (ii) did not, during the period of four consecutive fiscal quarters of the Borrower most recently ended on or prior to such date for which financial statements are available, have revenues exceeding 2.5% of the total revenues of the Borrower and its consolidated Subsidiaries; provided that, the aggregate assets or revenues of all Immaterial Subsidiaries, determined in accordance with GAAP, may not exceed 5.0% of consolidated assets or consolidated revenues, respectively, of the Borrower and its consolidated Subsidiaries, collectively, at any time (and the Borrower will promptly designate in writing to the Administrative Agent the Subsidiaries which will cease to be treated as “Immaterial Subsidiaries” in order to comply with the foregoing limitation).

“ Impacted Interest Period ” has the meaning assigned to such term in the definition of “LIBO Rate.”

“ Incremental Facility Agreement ” means an Incremental Facility Agreement, in form and substance reasonably satisfactory to the Administrative Agent, among the Borrower, the Administrative Agent and one or more Incremental Term Lenders, establishing Incremental Term Commitments of any Series and effecting such other amendments hereto and to the other Loan Documents as are contemplated by Section 2.21.

“ Incremental Term Commitment ” means, with respect to any Lender, the commitment, if any, of such Lender, established pursuant an Incremental Facility Agreement and Section 2.21, to make Incremental Term Loans of any Series hereunder, expressed as an amount representing the maximum principal amount of the Incremental Term Loans of such Series to be made by such Lender.

“ Incremental Term Lender ” means a Lender with an Incremental Term Commitment or an outstanding Incremental Term Loan.

“ Incremental Term Loans ” means any term loans made pursuant to Section 2.21(a).

“ Incremental Term Maturity Date ” means, with respect to Incremental Term Loans of any Series, the scheduled date on which such Incremental Term Loans shall become due and payable in full hereunder, as specified in the applicable Incremental Facility Agreement.

“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for

 

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which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) solely for purposes of Section 6.01 hereof, any and all payment obligations of such Person under or Guarantee by such Person with respect to any Hedging Agreement. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term “ Indebtedness ” shall not include (a) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or capital stock and (b) trade payables and accrued expenses in each case arising in the ordinary course of business.

“ Indemnified Taxes ” means (a) any Taxes, other than Excluded Taxes, and (b) Other Taxes.

“ Intercreditor Agreement ” means the Intercreditor Agreement, substantially in the form of Exhibit C, among the Borrower, the other Loan Parties, the Collateral Agent and the ABL Agent.

“ Information Memorandum ” means the Confidential Information Memorandum dated May 1, 2015, relating to the Borrower and the Transactions, and the Confidential Information Memorandum dated September 5, 2016, relating to the Borrower and the Westfalia Transactions.

“ Intellectual Property Claim ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“Intercreditor Agreements” means the ABL/Term Loan Intercreditor Agreement and the Term Intercreditor Agreement.

“ Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07.

“ Interest Payment Date ” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

“ Interest Period ” means, with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter (or twelve months thereafter if, at the time of the relevant Borrowing, all Lenders participating therein agree to make an interest period of such duration available), as the Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically

 

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corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“ Interpolated Rate ” means, at any time, the rate per annum (rounded to the same number of decimal places as the Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate (for the longest period for which that Screen Rate is available for dollars) that is shorter than the Impacted Interest Period and (b) the Screen Rate (for the shortest period for which that Screen Rate is available for dollars) that exceeds the Impacted Interest Period, in each case, as of the Specified Time on the Quotation Day for such Interest Period. When determining the rate for a period which is less than the shortest period for which the Screen Rate is available, the Screen Rate for purposes of clause (a) above shall be deemed to be the overnight rate for dollars determined by the Administrative Agent from such service as the Administrative Agent may select.

“ IRS ” means the United States Internal Revenue Service.

“ JPMCB ” means JPMorgan Chase Bank, N.A.

“ Latest Maturing Term Loans ” has the meaning assigned to such term in the definition of “Latest Maturity Date”.

“ Latest Maturity Date ” means, as of any date of determination, the latest Maturity Date applicable to any Loans outstanding or Commitments in effect hereunder (such latest maturing Loans or Commitments, the “ Latest Maturing Term Loans ”).

“ Lender Affiliate ” means, (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund that invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ Lenders ” means each 2017 Replacement Term Loan Lender, each 2018 Incremental Term Loan Lender and any other Person that shall have become a party hereto after the Fourth Amendment Effective Date pursuant to an Assignment and Assumption or an Incremental Facility Agreement, as the case may be, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

“ LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, a rate per annum equal to the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for dollars for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on either of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case the “ Screen Rate ”) as of the Specified Time on the Quotation Day for such Interest Period; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the

 

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Screen Rate shall not be available at such time for such Interest Period (an “ Impacted Interest Period ”) with respect to dollars, then the LIBO Rate shall be the Interpolated Rate at such time ( provided that if the Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement).

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“ Limited Conditionality Acquisition ” has the meaning assigned to such term in Section 2.21(c).

“ Limited Conditionality Acquisition Agreement ” has the meaning assigned to such term in Section 2.21(c).

“ Loan Documents ” means this Agreement, any Incremental Facility Agreement, the Security Documents, the Intercreditor Agreement and the promissory notes, if any, executed and delivered pursuant to Section 2.09(e).

“ Loan Parties ” means the Borrower and the Subsidiary Loan Parties.

“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“ Long-Term Indebtedness ” means any Indebtedness that, in accordance with GAAP, constitutes (or, when incurred, constituted) a long-term liability, including the current portion of any Long-Term Indebtedness.

“ Margin Stock ” shall have the meaning assigned to such term in Regulation U.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, properties, assets, financial condition, or material agreements of the Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Loan Party in any material respect to perform any of its obligations under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document.

“ Material Agreements ” means any agreements or instruments relating to Material Indebtedness.

“ Material Indebtedness ” means (a) obligations in respect of the ABL Credit Agreement and (b) any other Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material Indebtedness, the “ principal amount ” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. For the avoidance of doubt, the term “Material Indebtedness” shall not include any obligations under any Permitted Warrant Transaction.

 

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“ Maturity Date ” means the Term Loan Maturity Date, the Incremental Term Maturity Date with respect to Incremental Term Loans of any Series or the scheduled maturity date in respect of any Extended Term Loans, as the context requires.

“ Maximum Alternative Incremental Debt Amount ” means an aggregate principal amount of Alternative Incremental Debt that would not, immediately after giving effect to the establishment thereof and any other Indebtedness incurred substantially simultaneously therewith (and any related repayment of Indebtedness), cause (a) with respect to any Pari Passu Alternative Incremental Debt, the First Lien Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Indebtedness (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), to exceed 3.25 to 1.00, (b) with respect to any Alternative Incremental Debt secured by Liens on the Collateral that are junior to the Liens on the Collateral securing the Obligations, the Secured Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Indebtedness (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), to exceed 3.50 to 1.00 and (c) with respect to any unsecured Alternative Incremental Debt, the Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Indebtedness (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), to exceed 4.00 to 1.00.

“ Maximum Incremental Amount ” means an amount represented by Incremental Term Commitments to be established pursuant to Section 2.21 that would not, immediately after giving effect to the establishment thereof (and assuming such Incremental Term Commitments are fully drawn), the establishment of any other Indebtedness incurred substantially simultaneously therewith and any related repayment of Indebtedness, cause the First Lien Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Indebtedness (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), to exceed 3.50 to 1.00.

“ Minimum Extension Condition ” has the meaning assigned to such term in Section 2.23(b).

“ Minimum Tranche Amount ” has the meaning assigned to such term in Section 2.23(b).

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

“ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be in form and substance reasonably satisfactory to the Administrative Agent.

“ Mortgaged Property ” means each parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“ Net Leverage Ratio ” means, on any date, the ratio of (a) Total Indebtedness as of such date less the aggregate amount (not to exceed $65,000,000) of the sum of Unrestricted Domestic Cash plus Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

 

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“ Net Proceeds ” means, with respect to any event (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any noncash proceeds, but only as and when received, (ii) in the case of a casualty, insurance proceeds in excess of $1,000,000 and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and the Subsidiaries to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by the Borrower and the Subsidiaries as a result of such event to repay Indebtedness (other than Loans, Pari Passu Alternative Incremental Debt or any Permitted Term Loan Refinancing Indebtedness) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all Taxes paid (or reasonably estimated to be payable) by the Borrower and the Subsidiaries, and the amount of any reserves established by the Borrower and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the 24-month period immediately following such event and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Borrower) to the extent such liabilities are actually paid within such applicable time periods.

“ Net Working Capital ” means, at any date, (a) the consolidated current assets of the Borrower and its consolidated Subsidiaries as of such date (excluding cash and Permitted Investments) minus (b) the consolidated current liabilities of the Borrower and its consolidated Subsidiaries as of such date (excluding current liabilities in respect of Indebtedness). Net Working Capital at any date may be a positive or negative number. Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.

“ Non-Consenting Lender ” has the meaning assigned to such term in Section 10.02(c).

“ Non-U.S. Lender ” means a Lender that is not a U.S. Person.

“ NYFRB ” means the Federal Reserve Bank of New York.

“ NYFRB Rate ” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Banking Day, for the immediately preceding Banking Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received to the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided , further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“ Obligations ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

“ OSHA ” means the Occupational Safety and Hazard Act of 1970.

“ Other Taxes ” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes imposed with respect to an assignment (other than an assignment under Section 2.19(b)).

“ Overnight Bank Funding Rate ” means, for any day, the rate comprised of both over-night federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository

 

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institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

“ Pari Passu Alternative Incremental Debt ” has the meaning assigned to such term in the definition of “Alternative Incremental Debt”.

“ Pari Passu Permitted Term Loan Refinancing Indebtedness ” means Term Loan Refinancing Indebtedness that is secured by Liens on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations.

“ Participant ” has the meaning assigned to such term in Section 10.04(e).

“ Participant Register ” has the meaning assigned to such term in Section 10.04(e).

“ PATRIOT Act ” has the meaning assigned to such term in Section 10.16.

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Perfection Certificate ” means a certificate in the form of Exhibit F hereto or any other form approved by the Collateral Agent.

“ Permitted Acquisition ” means any acquisition, whether by purchase, merger, consolidation or otherwise, by the Borrower or a Subsidiary of all or substantially all the assets of, or all of the Equity Interests in, a Person or a division, line of business or other business unit of a Person so long as (a) such acquisition shall not have been preceded by a tender offer that has not been approved or otherwise recommended by the board of directors of such Person, (b) such assets are to be used in, or such Person so acquired is engaged in, as the case may be, a business of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement or in a business reasonably related thereto and (c) immediately after giving effect thereto, (i) (other than with respect to Limited Conditionality Acquisitions) no Default has occurred and is continuing or would result therefrom, (ii) all transactions related thereto are consummated in all material respects in accordance with Applicable Laws, (iii) all of the Equity Interests (other than Assumed Preferred Stock) of each Subsidiary formed for the purpose of or resulting from such acquisition shall be owned directly by the Borrower or a Subsidiary and all actions required to be taken under Sections 5.12 and 5.13 have been taken, (iv) (other than with respect to Limited Conditionality Acquisitions) the Secured Net Leverage Ratio, on a pro forma basis after giving effect to such acquisition and recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available, as if such acquisition (and any related incurrence or repayment of Indebtedness) had occurred on the first day of the relevant period (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash) is no greater than 3.50 to 1.00, (v) any Indebtedness or any preferred stock that is incurred, acquired or assumed in connection with such acquisition shall be in compliance with Section 6.01 and (vi) the Borrower has delivered to the Administrative Agent an officers’ certificate to the effect set forth in clauses (a), (b) and (c)(i) through (v) above, together with all relevant financial information for the Person or assets to be acquired; provided further that no Limited Conditionality Acquisition shall become effective unless (i) no Default or Event of Default shall have occurred and be continuing as of the date of entry into the Limited Conditionality Acquisition Agreement, (ii) on the date of effectiveness of the Limited Conditionality Acquisition Agreement, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified

 

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by materiality) on and as of such date and (iii) on the date of effectiveness of the Limited Conditionality Agreement and assuming any Indebtedness to be incurred or repaid in connection with such acquisition was incurred or repaid on such date, the Secured Net Leverage Ratio of the Borrower, on a pro forma basis after giving effect to such acquisition (and any related incurrence or repayment of Indebtedness, but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), is no greater than 3.50 to 1.00. Notwithstanding anything to the contrary herein, no acquisition or other transaction shall be deemed to be a Permitted Acquisition during the Senior Period.

“ Permitted Bond Hedge Transaction ” means any call or capped call option (or substantively equivalent derivative transaction) relating to the Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) purchased by the Borrower in connection with the issuance of any Permitted Convertible Indebtedness; provided, that the purchase price for such Permitted Bond Hedge Transaction, less the proceeds received by the Borrower from the sale of any related Permitted Warrant Transaction, does not exceed the net proceeds received by the Borrower from the sale of such Permitted Convertible Indebtedness issued in connection with such Permitted Bond Hedge Transaction.

“ Permitted Convertible Indebtedness ” means senior, unsecured Indebtedness of the Borrower that is convertible into shares of common stock of the Borrower (or other securities or property following a merger event or other change of the common stock of the Borrower) (and cash in lieu of fractional shares) and/or cash (in an amount determined by reference to the price of such common stock or such other securities). under the Convertible Notes outstanding on the Closing Date.

“ Permitted Encumbrances ” means:

(a)        Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05;

(b)        carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.05;

(c)        pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)        deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)        judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f)        easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

(g)        ground leases in respect of real property on which facilities owned or leased by the Borrower or any of the Subsidiaries are located, other than any Mortgaged Property;

 

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

(i)        leases or subleases granted to other Persons and not interfering in any material respect with the business of the Borrower and the Subsidiaries, taken as a whole;

(j)        banker’s liens, rights of set-off or similar rights, in each case arising by operation of law; and

(k)       Liens in favor of a landlord on leasehold improvements in leased premises;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“ Permitted Investments ” means:

(a)       direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)       investments in commercial paper maturing within one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)       investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)       fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

(e)       securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(f)       securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(g)       investments of the quality as those identified on Schedule 6.04 as “ Qualified Foreign Investments ” made in the ordinary course of business;

(h)       cash; and

 

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(i)        investments in funds that invest solely in one or more types of securities described in clauses (a), (e) and (f) above.

“ Permitted Joint Venture and Foreign Subsidiary Investments ” means investments by the Borrower or any Subsidiary in the Equity Interests of (a) any Person that is not a Subsidiary or (b) any Person that is a Foreign Subsidiary, in an aggregate amount not to exceed $75,000,000 ( provided that such amount shall be increased to $100,000,000 so long as the Net Leverage Ratio (calculated on a pro forma basis after giving effect to such investment and any related incurrence or repayment of Indebtedness) is less than 3.25 to 1.00).

“ Permitted Term Loan Refinancing Indebtedness ” means any Indebtedness incurred to refinance all or any portion of the outstanding Term Loans; provided that, (i) such refinancing Indebtedness, if secured, is secured only by Liens on the Collateral on a pari passu or junior basis with the Liens on the Collateral securing the Obligations ( provided that the Permitted Term Loan Refinancing Indebtedness shall not consist of bank loans that are secured by the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations) and is not secured by any property or assets of the Borrower or any of the Subsidiaries other than the Collateral, (ii) no Subsidiary that is not originally obligated with respect to repayment of the Indebtedness being refinanced is obligated with respect to the refinancing Indebtedness, (iii) the weighted average life to maturity of the refinancing Indebtedness shall be no shorter than the remaining weighted average life to maturity of the Terms Loans being refinanced, (iv) the maturity date in respect of the refinancing Indebtedness shall not be earlier than the maturity date in respect of the Indebtedness being refinanced, (v) the principal amount of such refinancing Indebtedness does not exceed the principal amount of the Indebtedness so refinanced except by an amount (such amount, the “ Additional Permitted Amount ”) equal to unpaid accrued interest and premium thereon at such time plus reasonable fees and expenses incurred in connection with such refinancing, (vi) the Indebtedness being so refinanced is paid down on a dollar-for-dollar basis by such refinancing Indebtedness (other than by the Additional Permitted Amount), (vii) the terms of any such refinancing Indebtedness (1) (excluding pricing, fees and rate floors and optional prepayment or redemption terms and subject to clause (2) below) reflect, in the Borrower’s reasonable judgment, then-existing market terms and conditions and (2) (excluding pricing, fees and rate floors) are no more favorable to the lenders providing such refinancing Indebtedness than those applicable to the Indebtedness being refinanced (in each case, including with respect to mandatory and optional prepayments); provided that the foregoing shall not apply to covenants or other provisions applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such refinancing Indebtedness; provided further that any such refinancing Indebtedness may contain, without any Lender’s consent, additional covenants or events of default not otherwise applicable to the Indebtedness being refinanced or covenants more restrictive than the covenants applicable to the Indebtedness being refinanced, in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such refinancing Indebtedness, so long as this Agreement is amended to provide all of the Lenders with the benefits of such additional covenants, events of default or more restrictive covenants and (viii) such refinancing Indebtedness, if secured, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent.

“ Permitted Unsecured Debt ” means any unsecured notes or bonds or other unsecured debt securities; provided that (a) such Indebtedness shall not mature prior to the date that is 91 days after the Latest Maturity Date in effect at the time of the issuance of such Indebtedness and shall not have any principal payments due prior to such date, except upon the occurrence of a change of control or similar event (including asset sales), in each case so long as the provisions relating to change of control or similar events (including asset sales) included in the governing instrument of such Indebtedness provide that the provisions of this Agreement must be satisfied prior to the satisfaction of such provisions of such

 

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Indebtedness, (b) such Indebtedness is not Guaranteed by any Subsidiary of the Borrower other than the Loan Parties (which Guarantees shall be unsecured and shall be permitted only to the extent permitted by Section 6.01(a)(vi)), (c) such Indebtedness shall not have any financial maintenance covenants, (d) such Indebtedness shall not have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the definition of Change in Control set forth herein and (e) such Indebtedness, if subordinated in right of payment to the Obligations, shall be subject to subordination and intercreditor provisions that are, in the Administrative Agent’s reasonable judgment, customary under then-existing market convention.

“ Permitted Warrant Transaction ” means any call option, warrant or right to purchase (or substantively equivalent derivative transaction) relating to the Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) and/or cash (in an amount determined by reference to the price of such common stock) sold by the Borrower substantially concurrently with any purchase by the Borrower of a Permitted Bond Hedge Transaction.

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

“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “ employer ” as defined in Section 3(5) of ERISA.

“ Preferred Dividends ” means any cash dividends of the Borrower permitted hereunder to be paid with respect to preferred stock of the Borrower.

“ Prepayment Event ” means:

(a)        any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of the Borrower or any Subsidiary, other than dispositions described in clauses (a), (b), (c), (d), (f), (g) and (j) (but only to the extent the sales, transfers or other dispositions under clause (j) do not exceed $15,000,000) of Section 6.05 and Section 6.06(a); provided that an Acquisition Lease Financing shall not constitute a Prepayment Event; or

(b)        any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary having a book value or fair market value in excess of $ 1,000,000 500,000 , but only to the extent that the Net Proceeds therefrom have not been applied to repair, restore or replace such property or asset within 365 days after such event; or

(c)          the receipt of any cash by the Borrower or any Subsidiary not in the ordinary course of business in an amount in excess of $500,000 from (a) tax refunds, (b) pension plan reversions, (c) proceeds of insurance (including key man life insurance, but excluding Net Proceeds described in clause (b) above and Net Proceeds from product liability insurance), (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (e) indemnity payments and (f) any purchase price adjustment received in connection with any purchase agreement to the extent not needed to reimburse the Borrower or applicable Subsidiary for any reasonable and customary out-of-pockets costs and expenses previously incurred by the Borrower or applicable Subsidiary with respect to which such purchase price adjustment was received;

 

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(d)          the receipt of cash from any issuance of Equity Interests of the Borrower or any contribution of equity capital to the Borrower; or

( c e )        the incurrence by the Borrower or any Subsidiary of any Indebtedness, other than Indebtedness permitted by Section 6.01(a).

“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMCB as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“ Public-Sider ” means a Lender whose representatives may trade in securities of the Borrower or any of its Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement.

“ Qualified Borrower Preferred Stock ” means any preferred capital stock or preferred equity interest of the Borrower (a)(i) that does not provide for any cash dividend payments or other cash distributions in respect thereof prior to the Latest Maturity Date in effect as of the date of issuance of such Indebtedness and (ii) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event does not (A)(x) mature or become mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (y) become convertible or exchangeable at the option of the holder thereof for Indebtedness or preferred stock that is not Qualified Borrower Preferred Stock or (z) become redeemable at the option of the holder thereof (other than as a result of a change of control event), in whole or in part, in each case on or prior to the date that is 365 days after the Latest Maturity Date in effect at the time of the issuance thereof and (B) provide holders thereunder with any rights upon the occurrence of a “ change of control ” event prior to the repayment of the Obligations and termination of the Commitments under the Loan Documents, (b) with respect to which the Borrower has delivered a notice to the Administrative Agent that it has issued preferred stock or preferred equity interests in lieu of incurring Indebtedness permitted by clause (xii) under Section 6.01(a), with such notice specifying to which of such Indebtedness such preferred stock or preferred equity interest applies; provided that (i) the aggregate liquidation value of all such preferred stock or preferred equity interest issued pursuant to this clause (b) shall not exceed at any time the dollar limitation related to the applicable Indebtedness hereunder, less the aggregate principal amount of such Indebtedness then outstanding and (ii) the terms of such preferred stock or preferred equity interests (x) shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of the Borrower and (y) shall otherwise be no less favorable to the Lenders, in the aggregate, than the terms of the applicable Indebtedness or (c) having an aggregate initial liquidation value not to exceed $10,000,000; provided that the terms of such preferred stock or preferred equity interests shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of the Borrower.

“ Quotation Day ” means, with respect to any Eurocurrency Loan for any Interest Period, two Business Days prior to the commencement of such Interest Period.

“ Real Estate ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Register ” has the meaning assigned to such term in Section 10.04(c).

“ Registered Equivalent Notes ” means, with respect to any bonds, notes, debentures or similar instruments originally issued in a Rule 144A or other private placement transaction under the

 

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Securities Act, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the Commission.

“ Regulation U ” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Regulation X ” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

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

“ Release ” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“ Replacement Term Loans ” has the meaning assigned to such term in Section 10.02(d).

“ Repricing Transaction ” means (a) any prepayment of Term B Loans with the proceeds of a substantially concurrent incurrence of term loan Indebtedness by the Borrower or any Subsidiary in respect of which the all-in yield is, on the date of such prepayment, lower than the all-in yield on such Term B Loans (with the all-in yield calculated by the Administrative Agent in accordance with standard market practice, taking into account, in each case, any interest rate floors, the Applicable Rate hereunder and the interest rate spreads under such Indebtedness, and any original issue discount and upfront fees applicable to or payable in respect of such Term B Loans and such Indebtedness with the original issue discount and upfront fees being equated to interest rate assuming a four-year life to maturity of such Indebtedness (but excluding arrangement, structuring, underwriting, commitment, amendment or other fees regardless of whether paid in whole or in part to any or all lenders of such Indebtedness and any other fees that are not paid generally to all lenders of such Indebtedness)) and (b) any amendment, amendment and restatement or other modification to this Agreement that reduces the all-in yield (calculated as set forth in clause (a) above) of the Term B Loans.

“ Required Lenders ” means, at any time, Lenders having outstanding Term Loans representing more than 50% of the outstanding Term Loans at such time.

“ Restricted Indebtedness ” means Indebtedness of the Borrower or any Subsidiary, the payment, prepayment, redemption, repurchase or defeasance of which is restricted under Section 6.08(b).

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any partial or full cash settlement of Convertible Notes, sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or termination of any Equity Interests in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary.

“ Retained Percentage ” means, with respect to any Excess Cash Flow Period, (a) 100% minus (b) the ECF Percentage with respect to such Excess Cash Flow Period.

“ S&P ” means Standard & Poor’s Financial Services LLC, or any successor thereto.

 

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“ Sanctioned Country ” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).

“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“ Sanctions ” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

“ Screen Rate ” has the meaning assigned to such term in the definition of “LIBO Rate”.

“ Secured Indebtedness ” means Total Indebtedness that is secured by a Lien on any asset of the Borrower or any of its Subsidiaries.

“ Secured Net Leverage Ratio ” means, on any date, the ratio of (a) Secured Indebtedness as of such date less the aggregate amount (not to exceed $65,000,000) of the sum of Unrestricted Domestic Cash plus Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

“ Secured Parties ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Security Documents ” means the Guarantee and Collateral Agreement, the Intercreditor Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

“Senior Agent” means the Administrative Agent under the Senior Credit Agreement.

“Senior Credit Agreement” means the Credit Agreement, dated as of the Fifth Amendment Effective Date, by and among Horizon Global Corporation, the several banks and other financial institutions or entities from time to time party thereto and Cortland Capital Market Services LLC, as Administrative Agent.

“Senior Loan Documents” means the “Loan Documents” as defined in the Senior Credit Agreement.

“Senior Period” means the period beginning on the Fifth Amendment Date and ending at the time of the Discharge of Senior Obligations.

 

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“ Series ” has the meaning assigned to such term in Section 2.21(b).

“ Significant Investment ” means any acquisition by the Borrower or a Subsidiary of more than 50% (but less than 100%) of the Equity Interests in a Person (such Person, the “ Subject Person ”), so long as such acquisition is permitted by Section 6.04.

“ Specified Time ” means 11:00 a.m., London time.

“ Specified Vendor Payables Financing ” means the sale by one or more vendors of the Borrower and certain Subsidiaries of accounts receivable (which such accounts receivable are accounts payable of the Borrower and such Subsidiaries) to one or more financial institutions pursuant to third-party financing agreements, to which the Borrower and such Subsidiaries are party, in transactions constituting “true sales”; provided that the aggregate amount of all such vendor payables financings shall not exceed $30,000,000 at any time outstanding.

“ Specified Vendor Payables Financing Documents ” means all documents and agreements relating to the Specified Vendor Payables Financing.

“ Specified Vendor Receivables Financing ” means the sale by the Borrower and certain Subsidiaries of accounts receivable to one or more financial institutions pursuant to third-party financing agreements in transactions constituting “true sales”; provided that the aggregate amount of all such receivables financings shall not exceed $50,000,000 at any time outstanding.

“ Specified Vendor Receivables Financing Documents ” means all documents and agreements relating to the Specified Vendor Receivables Financing.

“ Spin-Off ” means a “spin-off” transaction with respect to the Borrower such that all of the Equity Interests in the Borrower are “spun-off” from TriMas ratably to the holders of all the Equity Interests in TriMas and the Borrower ceases to be a Subsidiary of TriMas and becomes a public company.

“ Spin-Off Agreement ” means a Separation and Distribution Agreement, dated as of or prior to the Closing Date, by and between the Borrower and TriMas.

“ Spin-Off Documentation ” means, collectively, the Spin-Off Agreement and all schedules, exhibits and annexes thereto and all side letters and agreements affecting the terms thereof or entered into in connection therewith, including, without limitation, (i) an employee matters agreement by and between the Borrower and TriMas, (ii) a tax sharing agreement by and between the Borrower and TriMas and (iii) a transition services agreement by and between the Borrower and TriMas.

“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “ Eurocurrency Liabilities ” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under any Applicable Law. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

 

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“ Subject Person ” has the meaning assigned to such term in the definition of “Significant Investment.”

“ Subordinated Debt ” means any subordinated Indebtedness of the Borrower or any Subsidiary.

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“ Subsidiary ” means any subsidiary of the Borrower.

“ Subsidiary Loan Party ” means any Subsidiary that is not (i) a Foreign Subsidiary , (ii) a CFC (other than any Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (ii) a CFC (other than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands) , (iii) a CFC Holdco, (iv) a U.S. Holdco or ( v iv ) an Immaterial Subsidiary . ; provided, that the Required Lenders, in their sole discretion, may at any time request any Foreign Subsidiary, CFC or U.S. Holdco to become a Subsidiary Loan Party if such Foreign Subsidiary, CFC or U.S. Holdco has become a “Loan Party” under the Senior Loan Documents.

“ Syndication Agents ” means BMO Capital Markets Corp. and Wells Fargo Securities, LLC.

“ Synthetic Purchase Agreement ” means any swap, derivative or other agreement or combination of agreements pursuant to which the Borrower or a Subsidiary is or may become obligated to make (i) any payment (other than in the form of Equity Interests in the Borrower) in connection with a purchase by a third party from a Person other than the Borrower or a Subsidiary of any Equity Interest or Restricted Indebtedness or (ii) any payment (other than on account of a permitted purchase by it of any Equity Interest or any Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that phantom stock or similar plans providing for payments only to current or former directors, officers, consultants, advisors or employees of the Borrower or the Subsidiaries (or to their heirs or estates) shall not be deemed to be Synthetic Purchase Agreements. For the avoidance of doubt, the term “Synthetic Purchase Agreement” shall not include any agreement, indenture or other document governing any Permitted Bond Hedge Transaction, Permitted Convertible Indebtedness or Permitted Warrant Transaction.

“ Taxes ” means any and all present or future taxes (of any nature whatsoever), levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Term Collateral Proceeds Account ” means a deposit account identified to the ABL Agent in writing from time to time and in the name of the Company and for which JPMCB is the depositary bank which contains (or was established to contain) only those proceeds with respect to Term Priority Collateral.

 

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“Term Intercreditor Agreement” means that Term Intercreditor Agreement, dated as of the Fifth Amendment Effective Date, among the Borrower, the other Loan Parties, the Collateral Agent and the Senior Agent.

“ Term Lender ” means a Lender with outstanding Term Loans or a Commitment.

“ Term Loan ” means a 2018 Term Loan or an Incremental Term Loan of any Series.

“ Term Loan Maturity Date ” means the date that is the sixth anniversary of the Closing Date (or if such date is not a Business Day, the immediately preceding Business Day).

“ Term Priority Collateral ” has the meaning assigned to such term in the Intercreditor Agreement.

“ Total Indebtedness ” means, as of any date, the aggregate principal amount of Indebtedness for borrowed money (including, without limitation, Capital Lease Obligations) of the Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP.

“ Transactions ” means, collectively, (a) the consummation of the Spin-Off in accordance with the terms of the Spin-Off Agreement, (b) the payment of a dividend on the Closing Date from the Borrower to TriMas in accordance with the Spin-Off Agreement (the “ Closing Date Dividend ”), (c) the execution, delivery and performance by each Loan Party of the ABL Loan Documents to which it is to be a party, the borrowing (if any) of the ABL Loans on the Closing Date and issuance (if any) of letters of credit thereunder on the Closing Date and the use of the proceeds of the foregoing, (d) the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the borrowing of the Loans on the Closing Date and the use of proceeds thereof and (e) the payment of the fees and expenses payable in connection with the foregoing.

“ TriMas ” means TriMas Company LLC, a Delaware limited liability company.

“ Type ,” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“ Unrestricted Domestic Cash ” means, as of any date, domestic unrestricted cash and domestic unrestricted Permitted Investments of the Borrower and its Domestic Subsidiaries as of such date.

“ Unrestricted Foreign Cash ” means, as of any date, unrestricted cash and unrestricted Permitted Investments of the Foreign Subsidiaries as of such date.

“ U.S. Holdco ” means any existing or future Domestic Subsidiary the Equity Interests of which are held solely by Foreign Subsidiaries; provided that such existing or newly formed Subsidiary shall not engage in any business or own any assets other than the ownership of Equity Interests in Foreign Subsidiaries and intercompany obligations that are otherwise permitted hereunder.

“ U.S. Person ” means a “ United States person ” within the meaning of Section 7701(a)(30) of the Code.

“ U.S. Tax Certificate ” has the meaning assigned to such term in Section 2.17(f)(i)(D)(2).

 

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“ Westfalia Acquisition ” has the meaning set forth in the First Amendment.

“ Westfalia Acquisition Closing Date ” has the meaning set forth in the First Amendment.

“ Westfalia Purchase Agreement ” has the meaning set forth in the First Amendment.

“ Westfalia Transactions ” has the meaning set forth in the First Amendment.

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

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

SECTION 1.02     Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class (e.g . , a “Term B Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a “Eurocurrency Term B Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Term B Loan Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency Term B Loan Borrowing”).

SECTION 1.03     Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) 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, (d) 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; and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04     Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to

 

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value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value,” as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments or any other Indebtedness under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

ARTICLE II

The Credits

SECTION 2.01     Commitments .

(a)      Subject to the terms and conditions set forth herein, each 2017 Replacement Term Lender agrees to make a 2017 Replacement Term Loan to the Borrower on the 2017 Replacement Term Loan Facility Effective Date in a principal amount not exceeding its 2017 Replacement Term Loan Commitment.

(b)      Amounts repaid or prepaid in respect of Term Loans may not be reborrowed.

SECTION 2.02     Loans and Borrowings .

(a)      Each Loan shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b)      [Reserved]

(c)      Subject to Section 2.14, each Loan shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(d)      At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of 12 Eurocurrency Borrowings outstanding.

(e)      Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date applicable thereto.

SECTION 2.03     Requests for Borrowings . To request a Borrowing of Term Loans, the Borrower shall notify the Administrative Agent of such request by telephone (i) in the case of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i)      whether the requested Borrowing is to be a Borrowing of Term B Loans or an Incremental Term

 

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Loan Borrowing of a particular Series;

 (ii)      the aggregate amount of such Borrowing;

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

(iv)      whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;

 (v)      in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “ Interest Period ”; and

(vi)      the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04    [ Reserved ].

SECTION 2.05    [ Reserved ].

SECTION 2.06     Funding of Borrowings .

(a)      Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City, and designated by the Borrower in the applicable Borrowing Request.

(b)      Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 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 (i) in the case of such Lender, the greater of (x) the Federal Funds Effective Rate and (y) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, the applicable rate shall be determined as specified in clause (y) above, or (ii) in the case of the Borrower, the interest rate applicable to ABR Term B Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.07     Interest Elections .

(a)      Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such Borrowing Request or as otherwise provided in Section 2.03. Thereafter, the Borrower may elect to (i) convert any ABR Borrowing or any Eurocurrency Borrowing to

 

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a Borrowing of a different Type, (ii) continue any Borrowing and (iii) in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.

(b)      To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election, by telephone, by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of Term B Loans of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request, and all such written Interest Election Requests shall be in a form approved by the Administrative Agent and signed by the Borrower.

(c)      Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

  (i)      the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

 (ii)      the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii)      whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

(iv)      if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “ Interest Period .”

If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d)      Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)      If an Interest Election Request with respect to a Eurocurrency Borrowing is not timely delivered prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.08     Termination and Reduction of Commitments .

(a)      Unless previously terminated, the 2017 Replacement Term Loan Commitments shall terminate and be automatically and

 

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permanently reduced to $0 upon the earlier of (i) funding of the 2017 Replacement Term Loans on the 2017 Replacement Term Loan Facility Effective Date and (ii) 5:00 p.m., New York City time, on April 19, 2017. The proceeds of the 2017 Replacement Term Loans will be applied on the 2017 Replacement Term Loan Facility Effective Date to the principal amount of the Existing Term Loans (as defined in the 2017 Replacement Term Loan Amendment) outstanding at such time in order to prepay such principal amount in full. Upon the funding of the 2017 Replacement Term Loans on the 2017 Replacement Term Loan Facility Effective Date, the 2017 Replacement Term Loans shall constitute, on the terms provided in the 2017 Replacement Term Loan Amendment, Term Loans hereunder.

(b)      The Borrower may at any time terminate, or from time to time reduce, the Commitments of any Class; provided that each reduction of the Commitments of any Class shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000.

(c)      The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments of any Class under Section 2.08(b) at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable. Any reduction of the Commitments shall be permanent.

SECTION 2.09     Repayment of Loans; Evidence of Debt .

(a)      The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan of such Lender as provided in Section 2.10.

(b)      Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c)      The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d)      The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(e)      Any Lender may request that Loans of any Class made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.04) be represented by one or more promissory notes in such form payable to the order of the payee and its registered assigns.

SECTION 2.10     Amortization of Term Loans .

(a)      Subject to adjustment pursuant to paragraph (d) of this Section, the Borrower shall repay the 2018 Term Loans on the last day of each

 

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March, June, September and December, beginning on September 30, 2018, in an aggregate principal amount for each such date equal to 1.33% of the aggregate principal amount of the 2018 Term Loans outstanding on the Fourth Amendment Effective Date.

(b)      The Borrower shall repay Incremental Term Loans of any Series in such amounts and on such date or dates as shall be specified therefor in the Incremental Facility Agreement establishing the Incremental Term Commitments of such Series (as such amounts may be adjusted pursuant to paragraph (d) of this Section or pursuant to such Incremental Facility Agreement).

(c)      To the extent not previously paid, (i) all Term B Loans shall be due and payable on the Term Loan Maturity Date and (ii) all Incremental Term Loans of any Series shall be due and payable on the Incremental Term Maturity Date applicable thereto.

(d)      Any mandatory prepayment of a Borrowing of Term Loans of any Class shall be applied to reduce the subsequent scheduled repayments of the Borrowings of such Class to be made pursuant to this Section to the next eight scheduled repayments in direct order and thereafter ratably. Any optional prepayment of a Borrowing of Term Loans of any Class shall be applied to the scheduled repayments of the Borrowings of such Class as directed by the Borrower.

(e)      Prior to any repayment of any Term Loan Borrowings of any Class hereunder, the Borrower shall select the Borrowing or Borrowings of the applicable Class to be repaid and shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not later than 11:00 a.m., New York City time, three Business Days before the scheduled date of such repayment. Each repayment of a Borrowing shall be applied ratably to the Loans included in the repaid Borrowing. Repayments of Term Loan Borrowings shall be accompanied by accrued interest on the amount repaid.

SECTION 2.11     Prepayment of Loans .

(a)      The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section.

(b)      All (i) optional prepayments of 2018 Term Loans pursuant to Section 2.11(a) or prepayments pursuant to Section 2.11(c) as a result of an event described in clause (c) of the definition of the term Prepayment Event, in each case effected on or prior to the date that is the two-year anniversary of the Fourth Amendment Effective Date with the proceeds of a Repricing Transaction and (ii) amendments, amendments and restatements or other modifications of this Agreement on or prior to the date that is the two-year anniversary of the Fourth Amendment Effective Date constituting Repricing Transactions shall, in each case, be accompanied by a fee payable to the Lenders in an amount equal to 1.00% of the aggregate principal amount of 2018 Term Loans so prepaid, in the case of a transaction described in clause (i) of this paragraph, or 1.00% of the aggregate principal amount of 2018 Term Loans affected by such amendment, amendment and restatement or other modification (including any such Loans assigned in connection with the replacement of a Lender not consenting thereto), in the case of a transaction described in clause (ii) of this paragraph. Such fee shall be paid by the Borrower to the Administrative Agent, for the account of the Lenders in respect of the 2018 Term Loans, on the date of such prepayment.

(c)      In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower shall, within three Business Days after such Net Proceeds are received , (and, in the case of any event described in clause (e) of the definition of the term Prepayment Event, on the date on which such Net Proceeds are received) prepay Borrowings of Term B Loans in an aggregate amount equal to such Net Proceeds; provided that in the case of any event described in clause (a) of the definition of the term Prepayment

 

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Event (other than sales, transfers or other dispositions pursuant to Section 6.05(j) in excess of $15,000,000) , if the Borrower shall deliver, within such three Business Days, to the Administrative Agent a certificate of a Financial Officer to the effect that the Borrower and the Subsidiaries, intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 365 180 days (or, during a Senior Period, 45 days) after receipt of such Net Proceeds, to acquire , during the Senior Period, substantially similar replacement assets and during any other period, real property, equipment or other tangible assets to be used in the business of the Borrower and the Subsidiaries, and certifying that no Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds in respect of such event (or the portion of such Net Proceeds specified in such certificate, if applicable) except to the extent of any such Net Proceeds therefrom that have not been so applied by the end of such 365 180 -day (or, during a Senior Period, 45-day) period, at which time a prepayment shall be required in an amount equal to such Net Proceeds that have not been so applied ; provided further that a portion of the Net Proceeds required to prepay Borrowings of Term B Loans (but in no event more than a ratable portion thereof (such ratable share to be calculated by reference to the outstanding amount of Pari Passu Alternative Incremental Debt, Pari Passu Permitted Term Loan Refinancing Indebtedness and Loans, in each case immediately prior to such prepayment)) may, in lieu of prepaying Term B Loans hereunder, be applied to redeem or prepay any Pari Passu Alternative Incremental Debt or any Pari Passu Permitted Term Loan Refinancing Indebtedness, in each case if required under the terms of the applicable documents governing such Pari Passu Alternative Incremental Debt or such Pari Passu Permitted Term Loan Refinancing Indebtedness. .

(d)      Following the end of each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2017, the Borrower shall prepay Borrowings of Term B Loans in an aggregate amount equal to the excess of (i) the ECF Percentage of Excess Cash Flow for such fiscal year over (ii) the sum of (x) aggregate amount of optional prepayments of Term Loans and purchases of Term Loans pursuant to Section 10.04(h) (other than optional prepayments or purchases made with the proceeds of Long-Term Indebtedness) made by the Borrower during such fiscal year ( provided that the aggregate amount of any such prepayment or purchase shall be the amount of the Borrower’s cash payment in respect of such purchase) and (y) the aggregate amount of optional prepayments of Pari Passu Alternative Incremental Debt in the form of loans and Pari Passu Permitted Term Loan Refinancing Indebtedness in the form of loans made by the Borrower during such fiscal year. Each prepayment pursuant to this paragraph shall be made within 95 days after the end of such fiscal year.

(e)      Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (f) of this Section.

(f)      The Borrower shall notify the Administrative Agent by (x) in the case of prepayment of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment and (y) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify (i) whether the prepayment is of Eurocurrency Loans or ABR Loans, (ii) the prepayment date, (iii) the principal amount of each Borrowing or portion thereof to be prepaid and (iv) in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

 

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(g)      In the event of any mandatory prepayment of Term Loans made at a time when Term Loans of more than one Class remain outstanding, the Borrower shall select Term Loans to be prepaid so that the aggregate amount of such prepayment is allocated among each Class of the Term Loans pro rata based on the aggregate principal amounts of outstanding Borrowings of each such Class; provided that (x) the amounts so allocable to Incremental Term Loans of any Series may be applied to other Term Loan Borrowings if so provided in the applicable Incremental Facility Agreement and (y) the amounts so allocable to any tranche of Extended Term Loans may be applied to other Term Loan Borrowings if so provided in the applicable Extension Offer. In the event of any optional prepayment of Term Loans made at a time when Term Loans of more than one Class remain, the Borrower shall select the Term Loans to be prepaid so that the aggregate amount of such prepayment is allocated among the Term Loans and each Series of Incremental Term Loans then outstanding based on the aggregate principal amount of outstanding Borrowings of each such Class; provided that (x) the amounts so allocable to Incremental Term Loans of any Series may be applied to other Borrowings of Term Loans if so provided in the applicable Incremental Facility Agreement and (y) the amounts so allocable to any tranche of Extended Term Loans may be applied to other Borrowings of Term Loans if so provided in the applicable Extension Offer.

(h)        Notwithstanding anything in this Section 2.11 to the contrary, during the Senior Period, (i) no mandatory prepayments of Term Loans that would otherwise be required to be made under Section 2.11(c) shall be required to be made, except with respect to the portion (if any) of any Net Proceeds exceeding the amount required to effect the Discharge of Senior Obligations.

SECTION 2.12     Fees .

(a)      The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(b)      All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent. Fees paid shall not be refundable under any circumstances.

SECTION 2.13     Interest .

(a)      The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b)      The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c)      Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other overdue amount payable, 2% plus the rate applicable to ABR Term B Loans.

(d)      Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e)      All interest hereunder shall be computed on the basis of a year of 360 days,

 

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except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of an Adjusted LIBO Rate.

SECTION 2.14     Alternate Rate of Interest .

(a)      If prior to the commencement of any Interest Period for a Eurocurrency Borrowing of any Class:

 (i)      the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means (including by means of an Interpolated Rate or because the Screen Rate is not available or published on a current basis) do not exist for ascertaining the LIBO Rate or the Adjusted LIBO Rate for such Interest Period; or

(ii)      the Administrative Agent is advised by a majority in interest of the Lenders of the applicable Class that the Adjusted LIBO Rate or LIBO Rate, as applicbable applicable for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loans) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders of the applicable Class by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and such Lenders that the circumstances giving rise to such notice no longer exist, then (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective, (ii) any Eurocurrency Borrowing that is requested to be continued, shall be converted to an ABR Borrowing on the last day of the then current Interest Period applicable thereto and (iii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

(b)      If any Lender determines that any Applicable Law has made it unlawful, or if any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurocurrency Loans or to convert ABR Borrowings to Eurodollar Borrowings will be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower will upon demand from such Lender (with a copy to the Administrative Agent), either convert or prepay all Eurodollar Borrowings of such Lender to ABR Borrowings, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans. Upon any such conversion or prepayment, the Borrower will also pay accrued interest on the amount so converted or prepaid.

SECTION 2.15     Increased Costs .

(a)      If any Change in Law shall:

  (i)      impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);

 

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 (ii)      impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurocurrency Loans made by such Lender; or

(iii)      subject any Lender to any Taxes on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other than (A) Indemnified Taxes otherwise indemnifiable under Section 2.17 and (B) Excluded Taxes);

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)      If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)      A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)      Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16     Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Term Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurocurrency Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that

 

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would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the applicable currency of a comparable amount and period from other banks in the Eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.17 Taxes .

(a)      Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrower or the Administrative Agent shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or the Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or the Administrative Agent shall make such deductions and (iii) the Borrower or the Administrative Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(b)      In addition, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

(c)      The Borrower shall indemnify the Administrative Agent and each Lender, within 10 Business Days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower, hereunder or under any other Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) 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 Lender or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)      As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower 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.

(e)      Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting or expanding the obligation of the Borrower to do so) attributable to such Lender that are paid or payable 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. The indemnity under this Section shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f)      Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law, such properly completed and executed documentation prescribed by Applicable Law or reasonably requested

 

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by the Borrower or the Administrative Agent as will permit such payments to be made without withholding, or at a reduced rate of, withholding. If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 Business Days after such expiration, obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

 (i)      Without limiting the generality of the foregoing, any Lender shall, to the extent it is legally eligible to do so, deliver to the Borrower and the Administrative Agent (in such number of copies reasonably requested by the Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable:

(A)      in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B)      in the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN-E or W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN-E or W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(C)      in the case of a Non-U.S. Lender for whom payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

(D)      in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN-E or W-8BEN and (2) a certificate substantially in the form of Exhibit E (a “ U.S. Tax Certificate ”) to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code (c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;

(E)      in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (g)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided , however , that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or

(F)      any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld.

 

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(ii)      Each Lender shall deliver to 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 or the Administrative Agent, to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(f)(ii), “ FATCA ” shall include any amendments made to FATCA after the date of this Agreement.

(g)      If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes (including additional amounts paid pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section 2.17 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided , however , that such indemnifying party, upon the request of such indemnified party, agrees to repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Nothing contained in this Section 2.17(g) shall require any indemnified party to make available its Tax returns or any other information relating to its Taxes which it deems confidential to the indemnifying party or any other Person.

(h)      For purposes of determining withholding Taxes imposed under FATCA, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Loan Documents as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

SECTION 2.18     Payments Generally; Pro Rata Treatment; Sharing of Set-offs .

(a)      The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest or fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise), on or before the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 12:00 noon, New York City time), on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 383 Madison Avenue, New York, New York, except that payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments (including prepayments) to be made by the Borrower hereunder and under each other Loan Document, whether on account of principal, interest, fees or otherwise shall be made in dollars.

(b)      If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such

 

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funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c)    If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Term B Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Term B Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Term B Loans of other Lenders to the extent necessary 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 Term B Loans; 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 any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(d)    Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment hereunder is due to the Administrative Agent for the account of the Lenders 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 amount due. In such event, if the Borrower has not in fact made such payment due to the Administrative Agent, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e)    If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.06(b), 2.18(d) or 10.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.19     Mitigation Obligations; Replacement of Lenders .

(a)      If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, 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

 

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incurred by any Lender in connection with any such designation or assignment.

(b)      If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender defaults in its obligation to fund Loans hereunder, 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 Section 10.04), all its interests, rights and obligations under this Agreement to an assignee selected by the Borrower that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent , which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, 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) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a material reduction in such compensation or payments. A Lender shall not be required to make any such assignment and 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. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee, and that the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective.

SECTION 2.20     [Reserved].

SECTION 2.21     Incremental Facilities .

(a)      The Borrower may on one or more occasions, by written notice to the Administrative Agent, request the establishment of Incremental Term Commitments; provided that the aggregate amount of all Incremental Term Loan Commitments established on any date shall not exceed (i) (together with the amount of Alternative Incremental Debt established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount on such date and (ii) an additional amount subject to the Maximum Incremental Amount as of such date. Each such notice shall specify (A) the date on which the Borrower proposes that the Incremental Term Commitments shall be effective, which shall be a date not less than 10 Business Days (or such shorter period as may be agreed to by the Administrative Agent) after the date on which such notice is delivered to the Administrative Agent, and (B) the amount of the Incremental Term Commitments being requested (it being agreed that (x) any Lender approached to provide any Incremental Term Commitment may elect or decline, in its sole discretion, to provide such Incremental Term Commitment and (y) any Person that the Borrower proposes to become an Incremental Term Lender, if such Person is not then a Lender, must be reasonably acceptable to the Administrative Agent). Notwithstanding anything to the contrary herein, no Incremental Term Commitments may be established during the Senior Period.

(b)      The terms and conditions of any Incremental Term Commitments and the Incremental Term Loans to be made thereunder shall be, except as otherwise set forth herein or in the applicable Incremental Facility Agreement, identical to those of the 2018 Term Loan Commitments and the Term B Loans; provided that (i) the interest rate margins with respect to any Incremental Term Loans shall be as agreed by the Borrower and the lenders in respect thereof; provided , that if the total yield (calculated, for both the Incremental Term Loans and the Term B Loans, to include upfront fees, any interest rate floors and any original issue discount (with original issue discount being equated to interest rate in a manner determined by the Administrative Agent based on an assumed four-year life to maturity)

 

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but to exclude any arrangement, underwriting or similar fee paid by the Borrower) in respect of any Incremental Term Loans exceeds the total yield for the existing Term B Loans by more than 0.50%, the Applicable Rate for the Term B Loans shall be increased so that the total yield in respect of such Incremental Term Loans is no higher than the total yield for the existing Term B Loans plus 0.50% ( provided that if the Incremental Term Loans include an interest rate floor greater than the interest rate floor applicable to the Term B Loans, such increased amount shall be equated to the applicable interest rate margin for purposes of determining whether an increase to the Applicable Rate for the Term B Loans shall be required, to the extent an increase in the interest rate floor for the Term B Loans would cause an increase in the interest rate then in effect thereunder, and in such case the interest rate floor (but not the Applicable Rate) applicable to the Term B Loans shall be increased by such amount), (ii) any Incremental Term Loan shall have terms, in the Borrower’s reasonable judgment, customary for a term loan under then-existing market convention, (iii) the amortization schedule with respect to any Incremental Term Loans shall be as agreed by the Borrower and the lenders in respect thereof, provided that the weighted average life to maturity of any Incremental Term Loans shall be no shorter than the remaining weighted average life to maturity of the Latest Maturing Term Loans outstanding immediately prior to the establishment of such Incremental Term Loans (other than as necessary to make any such Incremental Term Loans fungible with such Latest Maturing Term Loans), (iv) no Incremental Term Maturity Date with respect to Incremental Term Loans shall be earlier than the Latest Maturity Date in effect immediately prior to the establishment of such Incremental Term Loans, (v) except as permitted by clause (i), the Incremental Term Loans shall be treated no more favorably than the Term B Loans (in each case, including with respect to mandatory and voluntary prepayments); provided that the foregoing shall not apply to covenants or other provisions applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such Incremental Term Loans; provided further that any Incremental Term Loans may add additional covenants or events of default not otherwise applicable to the Term B Loans or covenants more restrictive than the covenants applicable to the Term B Loans in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such Incremental Facility so long as this Agreement is amended to provide all of the Lenders with the benefits of such additional covenants, events of default or more restrictive covenants, (vi) to the extent the terms applicable to any Incremental Term Loans are inconsistent with the terms applicable to the Term B Loans (except, in each case, as otherwise permitted pursuant to this paragraph (b)), such terms shall be reasonably satisfactory to the Administrative Agent, and (vii) any Incremental Term Loans shall have the same Guarantees as, and shall rank pari passu with respect to the Liens on the Collateral and in right of payment with, the Term B Loans. Any Incremental Term Commitments established pursuant to an Incremental Facility Agreement that have identical terms and conditions, and any Incremental Term Loans made thereunder, shall be designated as a separate series (each a “ Series ”) of Incremental Term Commitments and Incremental Term Loans for all purposes of this Agreement. Notwithstanding the foregoing, in no event shall there be more than six maturity dates in respect of the Credit Facilities (including any Extended Term Loans or Replacement Term Loans).

(c)      The Incremental Term Commitments shall be effected pursuant to one or more Incremental Facility Agreements executed and delivered by the Borrower, each Incremental Term Lender providing such Incremental Term Commitments and the Administrative Agent; provided that (other than with respect to the incurrence of Incremental Term Loans the proceeds of which shall be used to consummate an acquisition permitted by this Agreement for which the Borrower has determined, in good faith, that limited conditionality is reasonably necessary (any such acquisition, a “ Limited Conditionality Acquisition ”) as to which conditions (i) through (iii) below shall not apply) no Incremental Term Commitments shall become effective unless (i) no Default or Event of Default shall have occurred and be continuing on the date of effectiveness thereof, both immediately prior to and immediately after giving effect to such Incremental Term Commitments and the making of Loans thereunder to be made on such date, (ii) on the date of effectiveness thereof, the representations and warranties of each Loan Party set

 

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forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date, (iii) the Borrower shall make any payments required to be made pursuant to Section 2.16 in connection with such Incremental Term Commitments and the related transactions under this Section, and (iv) the other conditions, if any, set forth in the applicable Incremental Facility Agreement are satisfied; provided further that no Incremental Term Loans in respect of a Limited Conditionality Acquisition shall become effective unless (i) no Default or Event of Default shall have occurred and be continuing as of the date of entry into the definitive acquisition documentation in respect of such Limited Conditionality Acquisition (the “ Limited Conditionality Acquisition Agreement ”) and (ii) on the date of effectiveness of the Limited Conditionality Acquisition Agreement, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date. Each Incremental Facility Agreement may, without the consent of any Lender, 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 give effect to the provisions of this Section.

(d)      Upon the effectiveness of an Incremental Term Commitment of any Incremental Term Lender, such Incremental Term Lender shall be deemed to be a “ Lender ” (and a Lender in respect of Commitments and Loans of the applicable Class) hereunder, and henceforth shall be entitled to all the rights of, and benefits accruing to, Lenders (or Lenders in respect of Commitments and Loans of the applicable Class) hereunder and shall be bound by all agreements, acknowledgements and other obligations of Lenders (or Lenders in respect of Commitments and Loans of the applicable Class) hereunder and under the other Loan Documents.

(e)      Subject to the terms and conditions set forth herein and in the applicable Incremental Facility Agreement, each Lender holding an Incremental Term Commitment of any Series shall make a loan to the Borrower in an amount equal to such Incremental Term Commitment on the date specified in such Incremental Facility Agreement.

(f)      The Administrative Agent shall notify the Lenders promptly upon receipt by the Administrative Agent of any notice from the Borrower referred to in paragraph (a) above and of the effectiveness of any Incremental Term Commitments, in each case advising the Lenders of the details thereof.

SECTION 2.22     [Reserved] .

SECTION 2.23     Extensions .

(a)      Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “ Extension Offer ”) made from time to time by the Borrower to all Lenders of Term B Loans with a like maturity date, in each case on a pro rata basis (based on the aggregate outstanding principal amount of the respective Term B Loans with a like maturity date) and on the same terms to each such Lender, the Borrower is hereby permitted to consummate from time to time transactions with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date of each such Lender’s Term B Loans and otherwise modify the terms of such Term B Loans pursuant to the terms of the relevant Extension Offer (including by increasing the interest rate or fees payable in respect of such Term B Loans and/or modifying the amortization schedule in respect of such Lender’s Term B Loans) (each, an “ Extension ,” and each group of Term B Loans as so extended, as well as the original Term B Loans (not so extended), being a “ tranche ”; any Extended Term Loans shall constitute a separate tranche of Term Loans from the tranche of Term Loans from which they were converted), so long as the following terms are satisfied: (i) no Default or Event of Default shall have occurred and be continuing at the time the offering document in respect of an Extension Offer is delivered to the Lenders, (ii) [reserved], (iii) except as to interest rates, fees, amortization, final maturity date, premium, required prepayment dates and participation in prepayments (which shall, subject to immediately succeeding clauses (iv), (v), and (vi), be determined between the Borrower and set forth in the relevant Extension Offer), the Term B Loans of any Term B Lender that agrees to an extension with

 

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respect to such Term B Loans extended pursuant to any Extension (the “ Extended Term Loans ”) shall have the same terms as the tranche of Term B Loans subject to such Extension Offer, (iv) the final maturity date of any Extended Term Loans shall be no earlier than the maturity date of the Term B Loans from which they were converted and the amortization schedule applicable to Term B Loans pursuant to Section 2.10(a) for periods prior to the Term Loan Maturity Date may not be increased, (v) the weighted average life of any Extended Term Loans shall be no shorter than the remaining weighted average life of the Term B Loans extended thereby, (vi) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments of Term B Loans hereunder (except for repayments required upon the scheduled maturity date of the non-Extended Term Loans), in each case as specified in the respective Extension Offer, (vii) if the aggregate principal amount of Term B Loans (calculated on the face amount thereof) in respect of which Term B Lenders shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of Term B Loans offered to be extended by the Borrower pursuant to such Extension Offer, then the Term B Loans of such Term B Lenders shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Term B Lenders have accepted such Extension Offer, (viii) [reserved], (ix) all documentation in respect of such Extension shall be consistent with the foregoing, (x) any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrower and (xi) the Minimum Tranche Amount shall be satisfied unless waived by the Administrative Agent. Notwithstanding the foregoing, in no event shall there be more than six maturity dates in respect of the Credit Facilities (including any Extended Term Loans or Replacement Term Loans). Notwithstanding anything to the contrary herein, no Extension Offers may be made, no Extensions may occur and no Extended Term Loans may be established during the Senior Period.

(b)      With respect to all Extensions consummated by the Borrower pursuant to this Section, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Section 2.11 and (ii) no Extension Offer is required to be in any minimum amount or any minimum increment, provided that (x) the Borrower may at its election specify as a condition (a “ Minimum Extension Condition ”) to consummating any such Extension that a minimum amount (to be determined and specified in the relevant Extension Offer in the Borrower’s sole discretion and may be waived by the Borrower) of Term B Loans of any or all applicable tranches be tendered and (y) no tranche of Extended Term Loans shall be in an amount of less than $50,000,000 (the “ Minimum Tranche Amount ”), unless such Minimum Tranche Amount is waived by the Administrative Agent. The Administrative Agent and the Lenders hereby consent to the transactions contemplated by this Section (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Term Loans on such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including Sections 2.11 and 2.18) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section.

(c)      No consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than the consent of each Lender agreeing to such Extension with respect to one or more of its Term Loans. All Extended Term Loans and all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents with the Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new tranches or sub-tranches, in each case

 

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on terms consistent with this Section. Without limiting the foregoing, in connection with any Extensions the respective Loan Parties shall (at their expense) amend (and the Administrative Agent is hereby directed to amend) any Mortgage that has a maturity date prior to the then latest maturity date so that such maturity date is extended to the then latest maturity date (or such later date as may be advised by local counsel to the Administrative Agent).

(d)      In connection with any Extension, the Borrower shall provide the Administrative Agent at least five Business Days’ (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures (including regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01     Organization; Powers . Each of the Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02     Authorization; Enforceability . The Transactions to be entered into by each Loan Party are within such Loan Party’s powers and have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of the Borrower or such Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03     Governmental Approvals; No Conflicts . The Transactions and the other transactions contemplated hereby (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except Liens created under the Loan Documents and Liens permitted by Section 6.02, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect. Schedule 3.03 sets forth for the Borrower and each Subsidiary Loan Party a description of each license from a Governmental Authority which is

 

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material to the conduct of the business of such Loan Party as of the Closing Date.

SECTION 3.04     Financial Condition; No Material Adverse Change .

(a)      The Borrower has heretofore furnished to the Administrative Agent its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal years ended December 31, 2013 and December 31, 2014, reported on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and for each fiscal quarter ended subsequent to December 31, 2014 and at least 45 days prior to the Closing Date, in each case certified by its chief financial officer (it being understood that the Borrower has furnished the foregoing referenced in clause (i) to the Administrative Agent by the filing with the Commission of the Borrower Registration Statement in connection with the Spin-Off). Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)      The Borrower has heretofore furnished to the Administrative Agent a pro forma consolidated balance sheet and related pro forma consolidated statement of income of the Borrower as of and for the 12-month period ending on the last day of the most recently completed four-fiscal quarter period for which financial statements were delivered under Section 3.04(a), prepared after giving effect to the Transactions and the other transactions contemplated hereby to be consummated on the Closing Date as if the Transactions and such other transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such income statements).

(c)      Except as disclosed in the financial statements referred to above or the notes thereto or in the Information Memorandum, except for the Disclosed Matters and except for liabilities arising as a result of the Transactions, after giving effect to the Transactions, none of the Borrower or the Subsidiaries has, as of the Closing Date, any contingent liabilities that would be material to the Borrower and the Subsidiaries, taken as a whole.

(d)      Since December 31, 2014, there has been no event, change or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.05     Properties .

(a)      Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business (including its Mortgaged Properties), except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b)      Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c)      Schedule 3.05 sets forth the address of each real property that is owned or leased by the Borrower or any of its Subsidiaries as of the Closing Date after giving effect to the Transactions.

SECTION 3.06     Litigation and Environmental Matters .

(a)      There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than

 

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the Disclosed Matters) or (ii) that involve any of the Loan Documents or the Transactions.

(b)      Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of the Borrower or any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c)      Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

(d)      No Borrower or Subsidiary Loan Party is in default with respect to any order, injunction or judgment of any Governmental Authority, except for such defaults which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07     Compliance with Laws and Agreements . Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

SECTION 3.08     Investment Company Status . None of the Borrower or any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09     Taxes . Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, there is no pending audit of the Borrower or any Subsidiary Loan Party with any federal, state, local or foreign tax authority, except as could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10     ERISA . No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of the Financial Accounting Standards Board Accounting Standards Codification Topic No. 715-30) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $10,000,000 the fair market value of the assets of all such underfunded Plans.

SECTION 3.11     Disclosure . The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which the Borrower or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the Information Memorandum nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of 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, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time such projections were prepared.

SECTION 3.12     Subsidiaries . Schedule 3.12 sets forth the name of, and the ownership interest of the Borrower

 

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in each Subsidiary of the Borrower and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing Date.

SECTION 3.13     Insurance . Schedule 3.13 sets forth a description of all material insurance policies maintained by or on behalf of the Borrower and the Subsidiaries as of the Closing Date. As of the Closing Date, all premiums due in respect of such insurance have been paid.

SECTION 3.14     Labor Matters . As of the Closing Date, there are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower, threatened that could reasonably be expected to have a Material Adverse Effect. All payments due from the Borrower or any Subsidiary, or for which any claim may be made against the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Borrower or such Subsidiary except for those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary is bound.

SECTION 3.15     Solvency . Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of each Loan made on the Closing Date and after giving effect to the application of the proceeds of such Loans, (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured and (d) the Loan Parties, on a consolidated basis, will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

SECTION 3.16     Senior Indebtedness . The Obligations constitute “Senior Debt”, however defined, under the terms of any Indebtedness that is subordinated in right of payment to the Obligations.

SECTION 3.17     Security Documents .

(a)      The Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Guarantee and Collateral Agreement) and, when (i) in respect of Collateral in which a security interest can be perfected by control, such Collateral is delivered to the Collateral Agent and for so long as the Collateral Agent remains in possession of such Collateral, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected first priority security interest in all right, title and interest of the pledgor thereunder in such Collateral, in each case prior and superior in right to any other Person and (ii) in respect of Collateral in which a security interest can be perfected by the filing of UCC financing statements, financing statements in appropriate form are filed in the offices specified on Schedule 1.04 to the Perfection Certificate most recently delivered to the Collateral Agent, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest in all right, title and interest of the grantors thereunder in such Collateral (other than the Intellectual Property (as defined in the Guarantee and Collateral Agreement)), in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreement.

(b)      [Reserved]

(c)      When the Guarantee and Collateral Agreement (or a summary thereof) is filed in the United States Patent and Trademark Office and the United States Copyright Office and the financing statements referred to in Section 3.17(a) above are appropriately filed, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest in all right, title and interest of the grantors thereunder in the Intellectual Property (as defined in the Guarantee and Collateral Agreement) in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the United States Patent and Trademark Office

 

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or the United States Copyright Office, as applicable, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office and subsequent UCC filings may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Loan Parties after the Closing Date), other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreement.

(d)      Each Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Mortgaged Properties thereunder and the proceeds thereof, and when the Mortgages are filed in the appropriate offices, the Lien created by each Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Mortgaged Properties and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section 6.02 and subject to the Intercreditor Agreement.

SECTION 3.18     Federal Reserve Regulations .

(a)      None of the Borrower or any of the Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

(b)      No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the Regulations of the Board, including Regulation U or X.

SECTION 3.19     Anti-Corruption Laws and Sanctions . The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective officers and employees and, to the knowledge of the Borrower, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Borrower, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing, use of proceeds or other transaction contemplated by this Agreement will violate Anti-Corruption Laws or applicable Sanctions.

SECTION 3.20     Material Contracts . Schedule 3.20 hereto sets forth for the Borrower and each Subsidiary Loan Party, as of the Closing Date, a list of all of the material contracts and agreements to which such Loan Party is a party, including all Specified Vendor Receivables Financing Documents (other than agreements disclosed to the Administrative Agent pursuant to Section 5.01(f), agreements relating to Indebtedness described on Schedule 6.01, real property leases identified on Schedule 2.03 to the Perfection Certificate delivered to the Administrative Agent on the Closing Date, and Licenses identified on Schedule 4.04 to the Perfection Certificate delivered to the Administrative Agent on the Closing Date).

SECTION 3.21     EEA Financial Institutions . No Loan Party is an EEA Financial Institution.

SECTION 3.22     Disclosure . As of the Fourth Fifth Amendment Effective Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Fourth Fifth Amendment Effective Date to any Lender in connection with this Agreement is true and correct in all respects.

ARTICLE IV

Conditions

SECTION 4.01     Closing Date . The obligations of the Lenders to make Loans hereunder is subject to the satisfaction of the following conditions:

(a)      The Agents shall have received

 

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a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Closing Date) of (i) Cahill Gordon & Reindel LLP and (ii) Jones Day LLP, in each case in form and substance reasonably satisfactory to the Administrative Agent. The Borrower hereby requests such counsel to deliver such opinions.

(b)      The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of the Transactions and any other legal matters relating to the Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.

(c)      The Administrative Agent (or its counsel) shall have received the Intercreditor Agreement, executed and delivered by the Borrower, the other Loan Parties as of the Closing Date, the Collateral Agent and the ABL Agent.

(d)      The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder or under any Loan Document.

(e)      The Collateral and Guarantee Requirement shall have been satisfied and the Administrative Agent shall have received a completed Perfection Certificate dated the Closing Date and signed by an executive officer or Financial Officer of the Borrower, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code (or equivalent) filings made with respect to the Loan Parties in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Administrative Agent that the Liens indicated by such financing statements (or similar documents) are permitted by Section 6.02 or have been released or will be released pursuant to UCC-3 financing statements or other release documentation delivered to the Collateral Agent.

(f)      The Administrative Agent shall have received evidence that the insurance required by Section 5.07 and the Security Documents is in effect, together with endorsements naming the Collateral Agent, for the benefit of the Secured Parties, as additional insured and loss payee thereunder, to the extent required by Section 5.07.

(g)      The terms of the Spin-Off Documentation shall be reasonably satisfactory to the Arrangers and the Spin-Off shall have been consummated (or shall be consummated substantially simultaneously with the initial funding of the Term B Loans on the Closing Date) in accordance with Applicable Law and the Spin-Off Agreement (without giving effect to any modification or waiver of any provision of, or any consent given in respect of, the Spin-Off Agreement not approved by the Administrative Agent).

(h)      After giving effect to the Transactions as of the Closing Date, none of the Borrower or any of its Subsidiaries shall have outstanding Indebtedness for borrowed money other than (i) Indebtedness incurred under this Agreement, (ii) Indebtedness incurred and outstanding under the ABL Credit Agreement and (iii) Indebtedness incurred and outstanding in compliance with Section 6.01 of this Agreement.

(i)      The Lenders shall have received the financial statements referred to in Section 3.04(a) and (b).

 

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(j)      The Administrative Agent shall have received a certificate, in form and substance reasonably satisfactory to the Administrative Agent, dated the Closing Date and signed by the chief financial officer of each of the Borrower, certifying that its Subsidiaries, on a consolidated basis after giving effect to the Transactions, are solvent.

(k)      The Administrative Agent and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act.

(l)      Since December 31, 2014, there has been no event, change or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.

(m)      The ABL Credit Agreement, and the commitments thereunder, shall be (or shall be substantially simultaneously with the initial funding of the Term B Loan on the Closing Date) effective.

(n)      The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified as to materiality) on and as of the Closing Date.

(o)      No Default or Event of Default shall have occurred and be continuing on the Closing Date or after giving effect to the Loans requested to be made on such date.

(p)      The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(q)      The Administrative Agent shall have received a supplement to Schedule 3.13 setting forth a description of all material insurance policies maintained by or on behalf of the Borrower and its Subsidiaries as of the Closing Date, and to the extent deemed appropriate by the Borrower, supplements to Schedules 3.05, 3.12 and 6.01 reflecting any and all changes in the names of the Subsidiaries of the Borrower referred to therein made in connection with the Spin-Off to the extent necessary to make such schedules true, correct and complete on the Closing Date, in each case in form and substance reasonably acceptable to the Administrative Agent. Unless the Administrative Agent shall advise the Borrower in writing that any such proposed supplements are not reasonably acceptable to the Administrative Agent, Schedules 3.05, 3.12, 3.13, and/or 6.01 shall be deemed to be automatically amended on the Closing Date to reflect any applicable supplement to such Schedules delivered pursuant to this clause without the necessity of any further action.

The Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 5:00 p.m., New York City time, on June 30, 2015 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

 

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ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01     Financial Statements and Other Information . The Borrower will furnish to the Administrative Agent and each Lender:(a) within 90 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “ going concern ” or like qualification or exception (except for any such qualification or exception resulting from any current maturity of Loans hereunder) and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied in respect of any fiscal year of the Borrower by the filing of the Borrower’s annual report on Form 10-K for such fiscal year with the Commission to the extent the foregoing are included therein);

(b)      within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied in respect of any fiscal quarter of the Borrower by the filing of the Borrower’s quarterly report on Form 10-Q for such fiscal quarter with the Commission to the extent the foregoing are included therein);

(c)      within 90 days after the end of each fiscal year of the Borrower (but in any event no later than two Business Days after any delivery of financial statements under clause (a) above), or within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (but in any event no later than two Business Days after any delivery of financial statements under clause (b) above), a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) stating whether any change in GAAP or in the application thereof has occurred since the date of the Borrower’s audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (iii) identifying all Subsidiaries existing on the date of such certificate and indicating, for each such Subsidiary, whether such Subsidiary is a Subsidiary Loan Party, a Foreign Subsidiary and/or an Immaterial Subsidiary and whether such Subsidiary was formed or acquired since the end of the previous fiscal quarter;

 

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(d)      within 90 days after the end of each fiscal year of the Borrower, (i) a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines) and (ii) a certificate of a Financial Officer of the Borrower (A) identifying any parcels of real property or improvements thereto with a value exceeding $2,000,000 that have been acquired by any Loan Party since the end of the previous fiscal year, (B) identifying any changes of the type described in Section 5.03(a) that have not been previously reported by the Borrower, (C) identifying any Permitted Acquisitions that have been consummated since the end of the previous fiscal year, including the date on which each such Permitted Acquisition was consummated and the consideration therefor, (D) identifying any Intellectual Property (as defined in the Guarantee and Collateral Agreement) with respect to which a notice is required to be delivered under the Guarantee and Collateral Agreement and has not been previously delivered, (E) identifying any Prepayment Events that have occurred since the end of the previous fiscal year and setting forth a reasonably detailed calculation of the Net Proceeds received from Prepayment Events since the end of such previous fiscal year and (F) if applicable, calculating Excess Cash Flow for the applicable Excess Cash Flow Period;

(e)      no later than February 15 of each fiscal year of the Borrower (commencing with the fiscal year ending December 31, 2015), a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flow as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any material revisions of such budget that have been approved by senior management of the Borrower;

(f)      promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the Commission or with any national securities exchange, as the case may be (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied to the extent the foregoing are filed with the Commission);

(g)      promptly upon the Borrower’s receipt thereof, (A) copies of all material compliance reports filed and material correspondence regarding any active or pending investigation or enforcement action concerning the Borrower or any Subsidiary Loan Party with any state, federal, local or foreign regulatory agency and (B) all material correspondence, if any, alleging violation of or requesting compliance by the Borrower or any Subsidiary Loan Party with laws, regulations, etc. or requests for information pursuant to interstate commerce laws, antitrust laws, securities laws, worker safety laws (OSHA), etc.;

(h)      except to the extent already provided for in this Section 5.01, promptly after the sending thereof, copies of any proposed waiver, consent, or amendment concerning any of the ABL Loan Documents;

(i)      promptly upon the effectiveness thereof, (A) a description of each license from a Governmental Authority which becomes effective after the Closing Date and is material to the conduct of the business of the Borrower and its Subsidiaries, taken as a whole, and (B) a description of each material contract or agreement to which the Borrower or any Subsidiary Loan Party is a party, including each Specified Vendor Receivables Financing Document (other than contracts and agreements disclosed to the Administrative Agent pursuant to Section 5.01(f), agreements described on Schedule 3.20 or Schedule 6.01, and without duplication of real property leases identified on Schedule 2.03 to the Perfection Certificate most recently delivered to the

 

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Administrative Agent and Licenses identified on Schedule 4.04 to the Perfection Certificate most recently delivered to the Administrative Agent); and

(j)      promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.

The Borrower represents and warrants that it and any of its Subsidiaries either (i) has no registered or publicly traded securities outstanding or (ii) files its financial statements with the Commission and/or makes its financial statements available to potential holders of its 144A securities, and, accordingly, the Borrower hereby (x) authorizes the Administrative Agent to make the financial statements to be provided under Section 5.01(a) and (b) above, along with the Loan Documents, available to all Lenders and (y) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Borrower will not request that any other material be posted to all Lenders without expressly representing and warranting to the Administrative Agent in writing that (A) such materials do not constitute material non-public information within the meaning of the federal securities laws (“ MNPI ”) or (B) (i) the Borrower and its Subsidiaries have no outstanding publicly traded securities, including 144A securities, and (ii) if at any time the Borrower or any of its Subsidiaries issues publicly traded securities, including 144A securities, then the Borrower will, upon the issuance of such securities, make such materials that do constitute MNPI at the time of issuance of such securities publicly available by press release or public filing with the Commission. In no event will the Administrative Agent post compliance certificates or budgets to Public-Siders.

SECTION 5.02     Notices of Material Events . The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:

(a)      the occurrence of any Default;

(b)      the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Subsidiary thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

(c)      the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $10,000,000;

(d)      any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract;

(e)    any default under or termination of a Material Agreement;

(f)      any judgment for the payment of money in an aggregate amount exceeding $2,500,000 that remains undischarged for a period of 30 consecutive days, during which execution is not effectively stayed, or the occurrence of any action legally taken by a judgment creditor to attach or levy upon assets in order to enforce any such judgment;

(g)      the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect;

 

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(h)      any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have a Material Adverse Effect;

(i)      any Release by a Loan Party or with respect to any Real Estate owned, leased or occupied by a Loan Party; or receipt of any Environmental Notice, in each case where the expected remedial costs or liability is reasonably expected to exceed $2,500,000;

(j)      the discharge of or any withdrawal or resignation by the Borrower’s independent accountants; and

(k)      any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03     Information Regarding Collateral .

(a)      The Borrower will furnish to the Administrative Agent prompt written notice of any change (i) in any Loan Party’s legal name, (ii) in the location of any Loan Party’s chief executive office or (iii) in any Loan Party’s jurisdiction of organization. The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless written notice has been delivered to the Collateral Agent, together with all applicable information to enable the Administrative Agent to make all filings under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent (on behalf of the Secured Parties) to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.

(b)      Each year, within 90 days after the end of each fiscal year of the Borrower, the Borrower (on behalf of itself and the other Loan Parties) shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower (i) setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section and (ii) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period).

SECTION 5.04     Existence; Conduct of Business . The Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names the loss of which would have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or disposition permitted under Section 6.05.

SECTION 5.05.     Payment of Obligations . The Borrower will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except (a) those being contested in good faith by appropriate proceedings and for which the Borrower has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (b) to the extent the failure to make payment could not

 

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reasonably be expected to result in a Material Adverse Effect.

SECTION 5.06     Maintenance of Properties . The Borrower will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of their business, taken as a whole, in good working order and condition, ordinary wear and tear excepted; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or disposition permitted under Section 6.05.

SECTION 5.07     Insurance . The Borrower will, and will cause each of the Subsidiaries to, maintain insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. Such insurance shall be maintained with financially sound and reputable insurance companies, except that a portion of such insurance program (not to exceed that which is customary in the case of companies engaged in the same or similar business or having similar properties similarly situated) may be effected through self-insurance; provided adequate reserves therefor, in accordance with GAAP, are maintained. In addition, the Borrower will, and will cause each of its Subsidiaries to, maintain all insurance required to be maintained pursuant to the Security Documents. With respect to each Mortgaged Property that is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, the applicable Loan Party will maintain, with financially sound and reputable insurance companies, such flood insurance as is required under Applicable Law, including Regulation H of the Board of Governors. The Borrower will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained. All insurance policies or certificates (or certified copies thereof) with respect to such insurance shall be endorsed to the Collateral Agent’s reasonable satisfaction for the benefit of the Lenders (including by naming the Collateral Agent as lender loss payee or additional insured, as appropriate).

SECTION 5.08     Casualty and Condemnation . The Borrower (a) will furnish to the Administrative Agent and the Lenders prompt written notice of casualty or other insured damage to any material portion of any Collateral having a book value or fair market value of $1,000,000 or more or the commencement of any action or proceeding for the taking of any Collateral having a book value or fair market value of $1,000,000 or more or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Security Documents.

SECTION 5.09     Books and Records; Inspection and Audit Rights . The Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.

SECTION 5.10     Compliance with Laws . The Borrower will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

SECTION 5.11     Use of Proceeds . The Borrower will use the proceeds of the Term Loans on the Closing Date solely (i) to consummate the Transactions, (ii) to pay the fees and expenses in connection with the Transactions and (iii) for general corporate purposes. The Borrower will use the proceeds of the 2018 Incremental Term Loans solely (i) to pay the fees and expenses in connection with the Fourth Amendment, (ii) to repay the ABL Loans under the ABL Credit Agreement and (iii) for general corporate purposes. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 5.12     Additional Subsidiaries . If any additional Subsidiary is formed or

 

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acquired after the Closing Date (or any existing Subsidiary becomes a Subsidiary Loan Party after the Closing Date), the Borrower will, within five Business Days after such Subsidiary is formed or acquired (or becomes a Subsidiary Loan Party), notify the Administrative Agent and the Lenders thereof and, within 30 days (or such longer period as may be agreed to by the Administrative Agent) after such Subsidiary is formed or acquired (or becomes a Subsidiary Loan Party), cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary, including with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.

SECTION 5.13     Further Assurances .

(a)      The Borrower will, and will cause each Subsidiary Loan Party 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, fixture filings, mortgages, deeds of trust, landlord waivers and other documents), which may be required under any Applicable Law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

(b)      If any assets (including any real property or improvements thereto or any interest therein) having a book value or fair market value of $5,000,000 or more in the aggregate are acquired by the Borrower or any Subsidiary Loan Party after the Closing Date or through the acquisition of a Subsidiary Loan Party under Section 5.12 or through the conversion of a Subsidiary into a Subsidiary Loan Party under Section 5.12 (other than, in each case, assets constituting Collateral under the Guarantee and Collateral Agreement that become subject to the Lien of the Guarantee and Collateral Agreement upon acquisition thereof), the Borrower or, if applicable, the relevant Subsidiary Loan Party will notify the Administrative Agent and the Lenders thereof, and, if reasonably requested by the Administrative Agent or the Required Lenders, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Loan Parties.

(c)      The Borrower will, and will cause each Subsidiary Loan Party to, deposit the proceeds of any Term Priority Collateral in a Term Collateral Proceeds Account at any time (i) after the occurrence and during the continuance of an Event of Default under clauses (a), (h) or (i) of Article VII and (ii) after the occurrence and during the continuance of any other Event of Default after the Administrative Agent provides written notice to the Borrower to so deposit such proceeds.

(d)        The Borrower will, and will cause each Subsidiary Loan Party to, satisfy the post-closing conditions described in Exhibit E to the Fifth Amendment within the timelines set forth therein.

SECTION 5.14     Ratings . The Borrower will use commercially reasonable efforts to maintain (a) a long-term public corporate family and/or credit, as applicable, rating of the Borrower and (b) a credit rating for the Credit Facilities, in each case from each of Moody’s and S&P. It is understood and agreed that the foregoing is not an agreement to maintain any specific rating.

ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, the Borrower covenants and agrees with the Lenders that:

 

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SECTION 6.01     Indebtedness; Certain Equity Securities. (a) The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except : (and provided, however, that during the Senior Period no Indebtedness described in clauses (i)(B), (ii), (iii)(B), (iv), (vii), (viii), (ix), (x), (xii), (xiii), (xx) (in excess of $99,000,000), (xxi) or (xxii) below may be incurred by the Borrower or any Subsidiary (other than Indebtedness existing on the Fifth Amendment Date and set forth in Schedule 6.01A and (B) extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount as specified on such Schedule 6.01A or result in an earlier maturity date or decreased weighted average life thereof)):

(i)          (A) Indebtedness created under the Loan Documents and , (B) any Permitted Term Loan Refinancing Indebtedness , and (C) Indebtedness under the Senior Loan Documents ;

(ii)        (A) financings in respect of sales of accounts receivable by a Foreign Subsidiary permitted by Section 6.05(c), (B) the Specified Vendor Receivables Financing and (C) the Specified Vendor Payables Financing;

(iii)        (A) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and (B)  extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount as specified on such Schedule 6.01 or result in an earlier maturity date or decreased weighted average life thereof;

(iv)       Permitted Unsecured Debt of the Borrower; provided that the Net Leverage Ratio (disregarding the proceeds of such Permitted Unsecured Debt in calculating Unrestricted Domestic Cash), on a pro forma basis after giving effect to the incurrence of such Permitted Unsecured Debt (and any related repayment of Indebtedness) and recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available, as if such incurrence (and any related repayment of Indebtedness) had occurred on the first day of the relevant period is no greater than 4.00 to 1.00;

(v)        Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that Indebtedness of any Subsidiary that is not a Loan Party to the Borrower or any Subsidiary Loan Party shall be subject to Section 6.04;

(vi)       Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided that Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04;

(vii)      Guarantees by the Borrower or any Subsidiary, as the case may be, in respect of (A) any Permitted Term Loan Refinancing Indebtedness, (B) any Alternative Incremental Debt or (C) any Permitted Unsecured Debt; provided that none of the Borrower or any Subsidiary, as the case may be, shall Guarantee such Indebtedness unless it also has Guaranteed the Obligations pursuant to the Guarantee and Collateral Agreement;

(viii)     Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life thereof; provided that (A) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of

 

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Indebtedness permitted by this clause (viii) shall not exceed $20,000,000 at any time outstanding;

(ix)       Indebtedness arising as a result of an Acquisition Lease Financing or any other sale and leaseback transaction permitted under Section 6.06;

(x)        Indebtedness of any Person that becomes a Subsidiary after the Closing Date; provided that (A) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Indebtedness permitted by this clause (x) shall not exceed $25,000,000 at any time outstanding, less the liquidation value of any outstanding Assumed Preferred Stock;

(xi)       Indebtedness of the Borrower or any Subsidiary in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety appeal or similar bonds and completion guarantees provided by the Borrower and the Subsidiaries in the ordinary course of their business;

(xii)      other unsecured Indebtedness of the Borrower or any Subsidiary in an aggregate principal amount not exceeding $15,000,000 at any time outstanding, less the liquidation value of any applicable Qualified Borrower Preferred Stock issued and outstanding pursuant to clause (b) of the definition of Qualified Borrower Preferred Stock;

(xiii)     secured Indebtedness in an aggregate amount not exceeding $50,000,000 at any time outstanding, in each case in respect of Indebtedness of Foreign Subsidiaries;

(xiv)     Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided , however , that such Indebtedness is extinguished within 10 days of incurrence;

(xv)      Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(xvi)     Indebtedness incurred in connection with the financing of insurance premiums in an aggregate amount at any time outstanding not to exceed the premiums owed under such policy, if applicable;

(xvii)    contingent obligations to financial institutions, in each case to the extent in the ordinary course of business and on terms and conditions which are within the general parameters customary in the banking industry, entered into to obtain cash management services or deposit account overdraft protection services (in an amount similar to those offered for comparable services in the financial industry) or other services in connection with the management or opening of deposit accounts or incurred as a result of endorsement of negotiable instruments for deposit or collection purposes and other customary, contingent obligations, including obligations under Bank Products (as defined in the ABL Credit Agreement as in effect on the date hereof) other than Hedging Agreements, of the Borrower and its Subsidiaries incurred in the ordinary course of business;

(xviii)    unsecured guarantees by the Borrower or any Subsidiary Loan Party of facility leases of any Loan Party;

 

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(xix)          payment obligations of or Guarantees by the Borrower or any Subsidiary Loan Party with respect to any Hedging Agreement permitted under Section 6.07 hereof; provided that if such Hedging Agreement is related to interest rates, (A) such Hedging Agreement shall relate to payment obligations on Indebtedness otherwise permitted to be incurred by the Loan Documents and (B) the notional amount of such Hedging Agreement shall not exceed the principal amount of the Indebtedness to which such Hedging Agreement relates;

(xx)           Indebtedness of the Borrower, any Subsidiary Loan Party or any ABL Foreign Loan Party under the ABL Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed the greater of (i) $150,000,000 and (ii) the Borrowing Base as of the date of such incurrence;

(xxi)          Alternative Incremental Debt; provided that the aggregate principal amount of any Alternative Incremental Debt established on any date shall not exceed (i) (together with the aggregate amount of all Incremental Term Commitments established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount on such date and (ii) an additional amount subject to the Maximum Alternative Incremental Debt Amount as of such date;

(xxii)         any Capital Lease Obligations of a Person that becomes a Subsidiary pursuant to the Westfalia Acquisition; provided that (A) such Capital Lease Obligation exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Indebtedness permitted by this clause (xxii) shall not exceed $15,000,000 at any time outstanding; and

(xxiii)         any Permitted Convertible Indebtedness and replacements or refinancings thereof in an aggregate principal amount not to exceed $125 million at the time of issuance; provided that (i) no Default or Event of Default has occurred and is continuing at the time of issuance of such Indebtedness and (ii) at the time of issuance of such Indebtedness, after giving effect to the incurrence of such Indebtedness (as if such Indebtedness had been incurred on the last day of the most recently completed fiscal quarter of the Borrower ending prior to such date), the Borrower is in pro forma compliance with the covenant set forth in Section 6.13. of the Borrower under the Convertible Notes outstanding on the Fifth Amendment Date.

(b)        The Borrower will not, nor will it permit any Subsidiary to, issue any preferred stock or other preferred Equity Interests, except (i) Qualified Borrower Preferred Stock, (ii) Assumed Preferred Stock and (iii) preferred stock or preferred Equity Interests held by the Borrower or any Subsidiary and; provided, however, that during the Senior Period no Qualified Borrower Preferred Stock or Assumed Preferred Stock may be issued by the Borrower or any Subsidiary .

SECTION 6.02     Liens . The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except : (and provided, however, that during the Senior Period no Liens described in clauses (a)(ii), (c), (e), (f), (h), (i), (j), (n) or (r) below may be created, assumed or incurred by the Borrower or any Subsidiary (other than any Lien on any property or asset of the Borrower or any Subsidiary existing on the Fifth Amendment Date and set forth in Schedule 6.02A; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof)):

(a)     (i) Liens created under the Loan Documents and , (ii)  Liens in respect of any Permitted Term Loan Refinancing

 

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Indebtedness , and (iii) Liens created by the Senior Loan Documents ;

(b)        Permitted Encumbrances;

(c)        Liens in respect of the Specified Vendor Receivables Financing;

(d)        any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e)        any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Closing Date prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be;

(f)        Liens on fixed or capital assets acquired, constructed or improved by, or in respect of Capital Lease Obligations of, the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (viii) of Section 6.01(a), (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Borrower or any Subsidiary;

(g)        Liens, with respect to any Mortgaged Property, described in the applicable schedule of the title policy covering such Mortgaged Property;

(h)        Liens in respect of sales of accounts receivable by Foreign Subsidiaries permitted by Section 6.05(c);

(i)        other Liens securing liabilities permitted hereunder in an aggregate amount not exceeding (i) in respect of consensual Liens, $5,000,000 and (ii) in respect of all such Liens, $10,000,000, in each case at any time outstanding;

(j)        Liens in respect of Indebtedness permitted by Section 6.01(a)(xiii), provided that the assets subject to such Liens are not located in the United States;

(k)        Liens, rights of setoff and other similar Liens existing solely with respect to cash and Permitted Investments on deposit in one or more accounts maintained by any Lender, in each case granted in the ordinary course of business in favor of such Lender with which such accounts are maintained, securing amounts owing to such Lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness for borrowed money;

 

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(l)        licenses or sublicenses of Intellectual Property (as defined in the Guarantee and Collateral Agreement) granted by any Company in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business of the Borrower;

(m)      the filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

(n)       Liens for the benefit of a seller deemed to attach solely to cash earnest money deposits in connection with a letter of intent or acquisition agreement with respect to a Permitted Acquisition;

(o)       Liens deemed to exist in connection with investments permitted under Section 6.04 that constitute repurchase obligations and in connection with related set-off rights;

(p)       Liens of a collection bank arising in the ordinary course of business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(q)       Liens of sellers of goods to the Borrower or any of its Subsidiaries arising under Article 2 of the UCC in effect in the relevant jurisdiction in the ordinary course of business, covering only the goods sold and covering only the unpaid purchase price for such goods and related expenses;

(r)        Liens on Collateral securing Alternative Incremental Debt, provided that such Alternative Incremental Debt shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent; and

(s)        Liens (i) on cash granted in favor of any Secured Party (as defined in the ABL Credit Agreement) created as a result of any requirement to provide cash collateral pursuant to the ABL Credit Agreement and (ii) subject to the Intercreditor Agreement and created under the ABL Security Documents (or any ABL Security Documents (as defined in the Intercreditor Agreement)).

SECTION 6.03     Fundamental Changes .

(a)       The Borrower will not, nor will it permit any other Person to merge into or consolidate with any of them, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (if any party to such merger is a Subsidiary Loan Party) is a Subsidiary Loan Party for which the Collateral and Guarantee Requirement has been satisfied and (iii) any Subsidiary (other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04. Notwithstanding the foregoing, this Section 6.03 shall not prohibit any Permitted Acquisition.

(b)       The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.

 

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SECTION 6.04     Investments, Loans, Advances, Guarantees and Acquisitions . The Borrower will not, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except : (and provided, however, that during the Senior Period the Borrower or any Subsidiary may not make a purchase, acquisition, advance, or investment pursuant to any of the clauses (c), (d) (unless consistent with prior practice and in the ordinary course of business), (f), (g), (p), (q), (r), (s) or (t) below (other than investments existing on the Fifth Amendment Date and set forth on Schedule 6.04A)):

(a)       Permitted Investments;

(b)       investments existing on the date hereof and set forth on Schedule 6.04;

(c)       Permitted Acquisitions;

(d)       investments by the Borrower and the Subsidiaries in their respective Subsidiaries that exist immediately prior to any applicable transaction; provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee and Collateral Agreement to the extent required by this Agreement and (ii) the aggregate amount of investments (excluding any such investments, loans, advances and Guarantees to such Subsidiaries that are assumed and exist on the date any Permitted Acquisition is consummated and that are not made, incurred or created in contemplation of or in connection with such Permitted Acquisition) by Loan Parties in, and loans and advances by Loan Parties to, and Guarantees by Loan Parties of Indebtedness of, Subsidiaries that are not Loan Parties made after the Closing Date shall not at any time exceed $40,000,000;

(e)       loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary; provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Guarantee and Collateral Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (d) above;

(f)        Guarantees permitted by Section 6.01(a)(vii);

(g)       Guarantees in respect of any Specified Vendor Payables Financing;

(h)       investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(i)        any investments in or loans to any other Person received as noncash consideration for sales, transfers, leases and other dispositions permitted by Section 6.05;

(j)        Guarantees by the Borrower and the Subsidiaries of leases entered into by any Subsidiary as lessee; provided that the amount of such Guarantees made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (d) above;

 

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(k)       extensions of credit in the nature of accounts receivable or notes receivable in the ordinary course of business;

(l)        loans or advances to employees made in the ordinary course of business consistent with prudent business practice and not exceeding $2,500,000 in the aggregate outstanding at any one time;

(m)      investments in the form of Hedging Agreements permitted under Section 6.07;

(n)       [reserved];

(o)       payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(p)       Permitted Joint Venture and Foreign Subsidiary Investments;

(q)       investments, loans or advances in addition to those permitted by the other clauses of this Section 6.04 not exceeding in the aggregate $40,000,000 at any time outstanding, provided that no Default exists at the time that such investment, loan or advance is made or is caused thereby;

(r)        investments made (i) in an amount not to exceed the Net Proceeds of any issuance of Equity Interests in the Borrower issued on or after the Closing Date or (ii) with Equity Interests in the Borrower;

(s)        investments by the Borrower or any Subsidiary in an aggregate amount not to exceed the Available Amount; and

(t)        other investments by the Borrower or any Subsidiary so long as the Net Leverage Ratio (calculated on a pro forma basis after giving effect to such investment and any related incurrence or repayment of Indebtedness) is less than 2.50 to 1.00.

SECTION 6.05     Asset Sales . The Borrower will not, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will it permit any Subsidiary to issue any additional Equity Interest in such Subsidiary, except : (and provided, however, that during the Senior Period the Borrower or any Subsidiary may not, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will the Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary pursuant to any of the clauses (c), (e), (f) or (j) below (other than sales, transfers and other dispositions of property identified on Schedule 6.05A)):

(a)        sales, transfers, leases and other dispositions of inventory, used or surplus equipment or other obsolete assets, Permitted Investments and investments referred to in Section 6.04(h) in the ordinary course of business;

(b)        sales, transfers and dispositions to the Borrower or a Subsidiary; provided that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09;

(c)        (i) sales of accounts receivable and related assets by a Foreign Subsidiary pursuant to customary terms whereby recourse and exposure in respect thereof to any Foreign

 

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Subsidiary does not exceed at any time $35,000,000 and (ii) sales of accounts receivables and related assets pursuant to the Specified Vendor Receivables Financing;

(d)       the creation of Liens permitted by Section 6.02 and dispositions as a result thereof;

(e)       sales or transfers that are permitted sale and leaseback transactions pursuant to Section 6.06;

(f)        sales and transfers that constitute part of an Acquisition Lease Financing;

(g)       Restricted Payments permitted by Section 6.08;

(h)       transfers and dispositions constituting investments permitted under Section 6.04;

(i)        sales, transfers and other dispositions of property identified on Schedule 6.05; and

(j)        so long as no Event of Default shall have occurred and then be continuing, sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary) that are not permitted by any other clause of this Section; provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this clause (j) shall not exceed (i) 15% of the aggregate fair market value of all assets of the Borrower (determined as of the end of its most recent fiscal year), including any Equity Interests owned by it, during any fiscal year of the Borrower; provided that such amount shall be increased, in respect of the fiscal year ending on December 31, 2016, and each fiscal year thereafter by an amount equal to the total unused amount of such permitted sales, transfers and other dispositions for the immediately preceding fiscal year (without giving effect to the amount of any unused permitted sales, transfers and other dispositions that were carried forward to such preceding fiscal year) and (ii) 35% of the aggregate fair market value of all assets of the Borrower as of the Closing Date, including any Equity Interests owned by it, during the term of this Agreement subsequent to the Closing Date;

provided that (x) all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by clauses (b) or (h) above) shall be made for fair value and (y) all sales, transfers, leases and other dispositions permitted by clauses (i), (j) and (k) above shall be for at least 75% cash consideration.

SECTION 6.06     Sale and Leaseback Transactions . The Borrower will not, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except , in each case, during the Senior Period, for (a) any such sale of any fixed or capital assets (other than any such transaction to which (b) or (c) below is applicable) that is made for cash consideration in an amount not less than the cost of such fixed or capital asset in an aggregate amount less than or equal to $10,000,000, so long as the Capital Lease Obligations associated therewith are permitted by Section 6.01(a)(viii), (b) in the case of property owned as of or after the Closing Date, any such sale of any fixed or capital assets that is made for cash consideration in an aggregate amount not less than the fair market value of such fixed or capital assets not to exceed $20,000,000 in the aggregate, in each case, so long as the Capital Lease Obligations (if any) associated therewith are permitted by Section 6.01(a)(viii) and (c) any Acquisition Lease Financing.

SECTION 6.07     Hedging Agreements . The Borrower will not, nor will it permit any Subsidiary to, enter into any Hedging Agreement, other than (a) Hedging Agreements entered into in the ordinary course of

 

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business and which are not speculative in nature to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its assets or liabilities (including Hedging Agreements that effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)) (it being understood that the Borrower and its Foreign Subsidiaries may enter into Hedging Agreements consisting of cross-currency swaps related to intercompany loans between the Borrower and/or its Foreign Subsidiaries), (b) except during the Senior Period, Permitted Bond Hedge Transactions and (c)  except during the Senior Period, Permitted Warrant Transactions.

SECTION 6.08     Restricted Payments; Certain Payments of Indebtedness .

(a)      The Borrower will not, nor will it permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except : (and provided, however, that the Borrower or any Subsidiary may not during the Senior Period declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment or incur any obligation (contingent or otherwise) to do so pursuant to any of the clauses (iii), (iv), (v), (vii), (viii), (ix) or (xi) below):

    (i)      the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional Equity Interests in the Borrower;

   (ii)      Subsidiaries may declare and pay dividends ratably with respect to their capital stock;

  (iii)      the Borrower may make Restricted Payments, not exceeding $5,000,000 from and after the date hereof, pursuant to and in accordance with stock option plans, equity purchase programs or agreements or other benefit plans, in each case for management or employees or former employees of the Borrower and the Subsidiaries;

  (iv)      the Borrower may pay the Closing Date Dividend;

   (v)      the Borrower may pay cash dividends in respect of Qualified Borrower Preferred Stock issued pursuant to clauses (b) and (c) of the definition thereof; provided that such dividends in respect of Qualified Borrower Preferred Stock issued pursuant to clause (c) of the definition thereof may only be made after the fiscal year ending December 31, 2016 and only with Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d)) (without duplication of amounts used pursuant to Section 6.08(a)(vii) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii));

  (vi)      [reserved];

 (vii)      the Borrower may make payments in respect of the repurchase, retirement or other acquisition of Equity Interests of the Borrower or any Subsidiary using the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(d) (without duplication of amounts used pursuant to Section 6.08(a)(v) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii));

(viii)      the Borrower may make Restricted Payments; provided that if after giving effect to such Restricted Payments (and any Indebtedness incurred in connection therewith (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash) and any related repayment of Indebtedness), the Net Leverage Ratio at the time of the making such payments (the date of the making of such payments, the “ RP Date ”) would be (1) less than or equal to 2.25 to 1.00, but greater than 2.00 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $40,000,000, (2)

 

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less than or equal to 2.75 to 1.00, but greater than 2.25 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $25,000,000, (3) less than or equal to 3.25 to 1.00 but greater than 2.75 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $15,000,000, (4) less than or equal to 4.00 to 1.00 but greater than 3.25 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $10,000,000 and (5) greater than 4.00 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $5,000,000; provided further that at the time of any payment pursuant to this clause (viii), no Default or Event of Default shall have occurred and be continuing;

  (ix)      the Borrower may make payments in respect of any purchase price adjustment required to be made under the Westfalia Purchase Agreement;

   (x)      the Borrower may make any Restricted Payments and/or payments or deliveries in shares of common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) (and cash in lieu of fractional shares) and/or cash required by the terms of, and otherwise perform its obligations under, any Permitted Convertible Indebtedness (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments and deliveries due upon conversion thereof);

  (xi)      the Borrower may pay the premium in respect of, and otherwise perform its obligations under, any Permitted Bond Hedge Transaction; and

 (xii)      the Borrower may make any Restricted Payments and/or payments or deliveries in shares of common stock and cash in lieu of fractional shares required by the terms of, and otherwise perform its obligations under, any Permitted Warrant Transaction the Convertible Notes Indenture (including, without limitation, making payments of interest and principal thereon and/or making deliveries (other than in cash) due upon exercise and settlement or termination conversion thereof).

(b)      The Borrower will not, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except : (and provided, however, that the Borrower or any Subsidiary may not during the Senior Period make, or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness pursuant to any of the clauses (vi), (vii) or (ix) (other than as required to comply with its obligations as in effect on the Fifth Amendment Effective Date) below):

 (i)      payment of Indebtedness created under the Loan Documents;

(ii)      payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of subordinated Indebtedness prohibited by the subordination provisions thereof;

 

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  (iii)      refinancings of Indebtedness to the extent permitted by Section 6.01;

  (iv)      payment of secured Indebtedness out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness;

   (v)      payment of or in respect of (A) Indebtedness created under the ABL Loan Documents and (B) Indebtedness or obligations secured by the ABL Security Documents;

  (vi)      payments of Indebtedness with the Net Proceeds of an issuance of Equity Interests in the Borrower;

 (vii)      payments of Indebtedness in an amount equal to the Available Amount; provided that at the time of such payment and after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing and (ii) at the time of such payment and after giving effect thereto and to the incurrence of any Indebtedness in connection therewith (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), the Net Leverage Ratio is not greater than 2.00 to 1.00;

(viii)      the Borrower may make any payments or deliveries in shares of common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) ( and cash in lieu of fractional shares ) and/or cash required by the terms of, and otherwise perform its obligations under, any Permitted the Convertible Indebtedness Notes Indenture (including, without limitation, making payments of interest and principal there-on, making payments due upon required repurchase thereof thereon and/or making payments and deliveries (other than in cash) due upon conversion thereof); and

  (ix)      the purchase of any Permitted Bond Hedge Transaction by the Borrower and the performance of its obligations thereunder.

  (c)      The Borrower will not, nor will it permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless , in each case except during the Senior Period, (i) in the case of any Synthetic Purchase Agreement related to any Equity Interests of the Borrower, the payments required to be made by the Borrower are limited to amounts permitted to be paid under Section 6.08(a), (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by the Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of the Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders.

  SECTION 6.09     Transactions with Affiliates . The Borrower will not, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except: (a) transactions that are at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties;

  (b)      transactions between or among the Borrower and the Subsidiaries not involving any other Affiliate (to the extent not otherwise prohibited by other provisions of this Agreement);

  (c)      any Restricted Payment permitted by Section 6.08; and

 

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  (d)        transactions pursuant to agreements in effect on the Closing Date and listed on Schedule 6.09 ( provided that this clause (d) shall not apply to any extension, or renewal of, or any amendment or modification of such agreements that is less favorable to the Borrower or the applicable Subsidiaries, as the case may be).

  SECTION 6.10     Restrictive Agreements . The Borrower will not, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, Specified Vendor Receivables Financing Document, Specified Vendor Payables Financing Document or any ABL Loan Document or that are customary, in the reasonable judgment of the board of directors thereof, for the market in which such Indebtedness is issued so long as such restrictions do not prevent, impede or impair (x) the creation of Liens and Guarantees in favor of the Lenders under the Loan Documents or (y) the satisfaction of the obligations of the Loan Parties under the Loan Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale; provided , further , that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder and (iv) clause (a) of the foregoing shall not apply to (A) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (B) customary provisions in leases and other agreements restricting the assignment thereof.

  SECTION 6.11     Amendment of Material Documents . The Borrower will not, nor will it permit any Subsidiary to, amend, restate, modify or waive any of its rights under (a) its certificate of incorporation, by-laws or other organizational documents, and (b) (i) any Material Agreement (other than any ABL Loan Document), Spin-Off Documentation or other agreements (including joint venture agreements), in each case to the extent such amendment, restatement, modification or waiver is adverse to the Lenders in any material respect (it being agreed that the addition or removal of the Borrower or any Subsidiary from participation in a Specified Vendor Receivables Financing or Specified Vendor Payables Financing shall not constitute an amendment, modification or waiver of any Specified Vendor Receivables Financing Document or Specified Vendor Payables Financing Document, as applicable, that is adverse to the Lenders), (ii) any ABL Loan Document that (w) expands or adds to the obligations secured under any ABL Security Documents (other than any obligations constituting Indebtedness created under the ABL Credit Agreement), (x) adds any mandatory prepayment provisions (only to the extent resulting in a corresponding permanent commitment reduction or requiring prepayment from the net cash proceeds of the sale, transfer or other disposition of Term Priority Collateral or any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any Term Priority Collateral) or changes any mandatory prepayment provisions in a manner that would increase the amount of any mandatory prepayment of the ABL Loans (only to the extent resulting in a corresponding permanent commitment reduction), (y) increases the “Applicable Margin” or similar component of interest thereunder by more than 3.0% (other than as a result of accrual of interest at the default rate) or (z) adds an additional covenant or event of default or makes any covenant or event of default in the ABL Loan Documents materially more restrictive or burdensome prior to the Latest Maturity Date then in effect (unless this Agreement is amended to provide all of the Lenders with the benefits of such covenants or events of default), in each case under this clause (z), other than covenants and events of default solely relating to

 

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the Borrowing Base (as defined in the ABL Credit Agreement), the ABL Priority Collateral or similar matters relating primarily to the asset based revolving nature of the ABL Credit Agreement or in respect of any Offshore Facilities Refinancing (as defined in the Intercreditor Agreement).

  SECTION 6.12     [Reserved] .

  SECTION 6.13     Net Leverage Ratio . The Borrower will not permit the maximum Net Leverage Ratio as of the last day of any fiscal quarter ending after the Fourth Amendment Effective Date to exceed the ratio set forth below opposite such fiscal quarter:

 

Fiscal Quarter    Net
Leverage Ratio
June 30, 2018    7.00:1.00
September 30, 2018    7.00:1.00
December 31, 2018    7.00:1.00
March 31, 2019    6.50:1.00
June 30, 2019    5.00:1.00
September 30, 2019    4.75:1.00

December 31, 2019 and each

fiscal quarter ending thereafter

   4.50:1.00

SECTION 6.14     Use of Proceeds . The Borrower will not request any Borrowing, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a Person organized in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

ARTICLE VII

Events of Default

If any of the following events (“ Events of Default ”) shall occur:

(a)        the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)        the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

(c)        any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)        the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.04 or 5.11 or in Article VI;

 

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(e)        any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender);

(f)        the Borrower or any Subsidiary shall fail to make any payment (whether of principal, interest or other payment obligations) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable grace period with respect thereto;

(g)       any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; provided further that this clause (g) shall not apply to any Indebtedness outstanding under the ABL Credit Agreement unless (i) such default shall continue unremedied for a period of 30 days (during which period such default is not waived or cured), (ii) the ABL Agent or the lenders under the ABL Credit Agreement cause the ABL Loans to become due prior to their stated maturity and/or the Commitments (as defined in the ABL Credit Agreement) to terminate prior to their stated termination date or (iii) the ABL Agent and/or the lenders under the ABL Credit Agreement exercise secured creditor remedies as a result of such default); provided further that this clause (g) shall not apply to any Permitted Convertible Indebtedness to the extent such event or condition occurs as a result of (x) the satisfaction of a conversion contingency, (y) the exercise by a holder of Permitted Convertible Indebtedness of a conversion right resulting from the satisfaction of a conversion contingency or (z) a required repurchase under such Permitted Convertible Indebtedness;

(h)       an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)        the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)        the Borrower or any Subsidiary shall become unable, admit in writing in a court proceeding its inability or fail generally to pay its debts as they become due;

 

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(k)       one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;

(l)        an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m)      any Lien covering property having a book value or fair market value of $5,000,000 or more purported to be created under any Security Document shall cease to be, or shall be asserted in writing by any Loan Party not to be, a valid and perfected Lien on any Collateral, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of the Administrative Agent’s failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Guarantee and Collateral Agreement;

(n)       the Guarantee contained in Article II of the Guarantee and Collateral Agreement shall cease to be, or shall have been asserted in writing by a Loan Party not to be, in full force and effect;

(o)       the Borrower or any Subsidiary shall challenge the subordination provisions of the Subordinated Debt or assert that such provisions are invalid or unenforceable or that the Obligations of the Borrower, or the Obligations of any Subsidiary under the Guarantee and Collateral Agreement, are not senior Indebtedness under the subordination provisions of the Subordinated Debt, or any court, tribunal or government authority of competent jurisdiction shall judge the subordination provisions of the Subordinated Debt to be invalid or unenforceable or such Obligations to be not senior Indebtedness under such subordination provisions or otherwise cease to be, or shall be asserted not to be, legal, valid and binding obligations of the parties thereto, enforceable in accordance with their terms;

(p)       a Change in Control shall occur;

(q)       a Loan Party denies or contests the validity or enforceability of any Loan Documents (including the Intercreditor Agreement) or Obligations, or any Loan Document (including the Intercreditor Agreement) ceases to be in full force or effect for any reason (other than a waiver or release by the Administrative Agent and Lenders);

(r)        a loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $5,000,000; or

(s)        any event occurs or condition exists that has a Material Adverse Effect;

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable

 

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may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower, accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE VIII

The Agents

Each of the Lenders hereby irrevocably appoints the Administrative Agent (it being understood that references in this Article VIII to the Administrative Agent shall be deemed to include the Collateral Agent) as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02) and the Administrative Agent shall not be liable for any action taken or not taken by it in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

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The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor from among the Lenders. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. . Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Administrative 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 it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

 

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ARTICLE IX

[Reserved]

ARTICLE X

Miscellaneous

SECTION 10.01     Notices . Except in the case of notices and other communications expressly permitted to be given by telephone, 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 telecopy, as follows:

(a)        if to the Borrower, to Horizon Global Corporation at 39400 Woodward Avenue, Suite 100, Bloomfield Hills, MI 48304, Attention of Jay Goldbaum, Legal Director (Telephone No. (248) 593-8838, Telecopy No. (248) 203-6434);

(b)        if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 10 South Dearborn, Floor 7, Chicago, Illinois 60603 Attention of Joyce King (Telecopy: 888-292-9533, Telephone: 312-385-7025); and

(c)        if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 10.02     Waivers; Amendments .

(a)      No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

(b)        Except as provided in Section 2.21 and Section 2.23, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, in each case with the written consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the maturity of any Loan, or any scheduled date of payment of the principal amount of any Term Loan

 

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under Section 2.10, or any date for the payment of any interest or fees payable hereunder, or reduce or forgive the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.18(a), (b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change the percentage set forth in the definition of “ Required Lenders ” or any other provision of any Loan Document (including this Section) specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (or each Lender of such Class, as the case may be), (vi) release all or substantially all of the Subsidiary Loan Parties from their Guarantees under the Guarantee and Collateral Agreement (except as expressly provided in the Guarantee and Collateral Agreement), without the written consent of each Lender, (vii) release all or substantially all of the Collateral from the Liens of the Security Documents, without the written consent of each Lender (except as expressly provided in the Security Documents) or (viii) change the order of priority of payments set forth in Section 2.4 of the Guarantee and Collateral Agreement without the written consent of each Lender; provided , further , that (A) no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Collateral Agent, without the prior written consent of the Administrative Agent or the Collateral Agent, as applicable, and (B) any waiver, amendment or modification of this Agreement that by its terms affects the rights or duties under this Agreement of the Lenders of a particular Class (but not the Lenders of any other Class) may be effected by an agreement or agreements in writing entered into by the Borrower and requisite percentage in interest of the affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time. Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by the Borrower, the Required Lenders and the Administrative Agent if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement.

(c)        In connection with any proposed amendment, modification, waiver or termination (a “ Proposed Change ”) requiring the consent of all Lenders or all affected Lenders, if the consent of the Required Lenders (and, to the extent any Proposed Change requires the consent of Lenders holding Loans of any Class pursuant to clause (v) or (viii) of paragraph (b) of this Section, the consent of at least 50% in interest of the outstanding Loans and unused Commitments of such Class) to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in paragraph (b) of this Section being referred to as a “ Non-Consenting Lender ”), then, so long as the Lender that is acting as Administrative Agent is not a Non-Consenting Lender, the Borrower may, at its sole expense and effort, upon notice to such Non-Consenting Lender and the Administrative Agent, require such Non-Consenting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (a) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, (b) such Non-Consenting Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder 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), (c) the Borrower or such assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 10.04(b), (d) such assignee shall consent to such Proposed

 

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Change and (e) if such Non-Consenting Lender is acting as the Administrative Agent, it will not be required to assign and delegate its interests, rights and obligations as Administrative Agent under this Agreement. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee, and that the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective.

(d)        Notwithstanding the foregoing, (i) the Administrative Agent and the Borrower may amend, modify or supplement any Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document, (ii) the Administrative Agent and the Borrower may amend this Agreement without the consent of any Lender or Required Lenders in order to provide the Lenders with the benefits of any additional covenants, more restrictive covenants or events of default that are included in any Alternative Incremental Debt or Permitted Term Loan Refinancing Indebtedness or that are added to the ABL Loan Documents and (iii) this except during the Senior Period, this Agreement may be amended with the written consent of the Administrative Agent, the Borrower and the Lenders providing the relevant Replacement Term Loans (as defined below) to permit the refinancing, replacement or modification of all or any portion of the outstanding Term Loans or Incremental Term Loans (such Loans, the “ Replaced Term Loans ”) with a replacement term loan hereunder (“ Replacement Term Loans ”); provided , that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of such Replaced Term Loans ( plus unpaid accrued interest and premium thereon at such time plus reasonable fees and expenses incurred in connection with such replacement), (b) the terms of the Replacement Term Loans (1) (excluding pricing, fees and rate floors and optional prepayment or redemption terms and subject to clause (2) below) reflect, in the Borrower’s reasonable judgment, then-existing market terms and conditions and (2) (excluding pricing, fees and rate floors) are no more favorable to the lenders providing such Replacement Term Loans than those applicable to the Replaced Term Loans (in each case, including with respect to mandatory and optional prepayments); provided that the foregoing shall not apply to covenants or other provisions applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such Replacement Term Loans; provided further that any Replacement Term Loans may add additional covenants or events of default not otherwise applicable to the Replaced Term Loans or covenants more restrictive than the covenants applicable to the Replaced Term Loans, in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such Replacement Term Loans so long as all Lenders receive the benefits of such additional covenants, events of default or more restrictive covenants, (c) the weighted average life to maturity of any Replacement Term Loans shall be no shorter than the remaining weighted average life to maturity of the Replaced Terms Loans, (d) the maturity date with respect to any Replacement Term Loans shall be no earlier than the maturity date with respect to the Replaced Term Loans, (e) no Subsidiary that is not originally obligated with respect to repayment of the Replaced Term Loans is obligated with respect to the Replacement Term Loans and (f) any Person that the Borrower proposes to become a lender in respect of the Replacement Term Loans, if such Person is not then a Lender, must be reasonably acceptable to the Administrative Agent. Notwithstanding the foregoing, in no event shall there be more than six maturity dates in respect of the Credit Facilities (including any Extended Term Loans or Replacement Term Loans).

SECTION 10.03     Expenses; Indemnity; Damage Waiver .

(a)      The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents and their Affiliates, including the reasonable fees, charges and disbursements of one counsel in each applicable jurisdiction for each of the Agents, in connection with the syndication of the credit facilities provided for herein, due diligence investigation, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be

 

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consummated) and (ii) all out-of-pocket expenses incurred by the Agents or any Lender, including the fees, charges and disbursements of any counsel for the Agents or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b)        The Borrower hereby indemnifies the Agents, the Arrangers and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any Mortgaged Property or any other property currently or formerly owned or operated by the Borrower or any Subsidiary, or any Environmental Liability related in any way to the Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, and whether or not the same are brought by the Borrower, its equity holders, affiliates or creditors or any other Person and regardless of whether any Indemnitee is a party thereto; 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, bad faith or willful misconduct of such Indemnitee or (B) are determined by a court of competent jurisdiction by final and non-appealable judgment to have arisen out of a material breach in bad faith by such Indemnitee of its obligations under the Loan Documents or (C) result from a dispute solely among Indemnitees, other than any claims against an Indemnitee in its capacity or in fulfilling its role as an agent or arranger under the Loan Documents and other than any claims arising out of any act or omission of the Borrower or any of its Affiliates. This Section 10.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(c)        To the extent that any of the Borrower fails to pay any amount required to be paid by it to the Administrative Agent under paragraph (a) or (b) of this Section 10.03 (and without limiting such party’s obligation to do so), each Lender severally agrees to pay to the Administrative Agent such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided 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 in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the outstanding Term Loans and unused Commitments at the time.

(d)        To the extent permitted by Applicable Law, the Borrower 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 or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.

(e)        All amounts due under this Section 10.03 shall be payable promptly after written demand therefor.

(f)        No director, officer, employee, stockholder or member, as such, of any Loan

 

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Party shall have any liability for the Obligations or for any claim based on, in respect of or by reason of the Obligations or their creation; provided that the foregoing shall not be construed to relieve any Loan Party of its Obligations under any Loan Document.

(g)        For the avoidance of doubt, this Section 10.03 shall not apply to any Taxes, except to the extent any Taxes that represent losses, claims, damages or liabilities arising from any non-Tax claim.

SECTION 10.04     Successors and Assigns .

(a)      The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent 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 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)        Any Lender may assign to one or more assignees (other than a natural person) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund, each of the Borrower and the Administrative Agent must give their prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed) ( provided that the Borrower shall be deemed to have consented to any assignment of Loans or Commitments unless it shall object thereto by written notice to the Administrative Agent within 10 Business Days after having received notice thereof), (ii) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, (iii) 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, except that this clause (iii) shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans, (iv) 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 and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire; and provided , further , that any consent of the Borrower otherwise required under this paragraph shall not be required if an Event of Default under clauses (a), (h) or (i) of Article VII has occurred and is continuing. Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto 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 2.15, 2.16, 2.17 and 10.03). 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 (e) of this Section.

 

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(c)        The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of 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, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d)        Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(e)        Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans); 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 and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents; 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 described in the first proviso to Section 10.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the limitations and requirements therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) 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 agrees to be subject to the provisions of Section 2.19 as if it were an assignee under paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. With respect to any Loan made to the Borrower, each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or in connection with any income tax audit or other income tax proceeding of the Borrower. 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

 

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owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.

(f)        A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with the prior written consent of the Borrower. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower to comply with Section 2.17(f) as though it were a Lender.

(g)        Any Lender may, without the consent of the Borrower or the Administrative Agent, 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 any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(h)        Notwithstanding anything to the contrary set forth in this Agreement or any other Loan Document, except during the Senior Period, any Lender may assign all or a portion of its Term Loans (or Incremental Term Loans) to the Borrower or any of its Subsidiaries at a price below the par value thereof; provided that any such assignment shall be subject to the following additional conditions: (1) no Default or Event of Default shall have occurred and be continuing immediately before and after giving effect to such assignment, (2) any such offer to purchase shall be offered to all Term Lenders of a particular Class on a pro rata basis, with mechanics to be agreed by the Administrative Agent and the Borrower, (3) any Loans so purchased shall be immediately cancelled and retired ( provided that any non-cash gain in respect of “cancellation of indebtedness” resulting from the cancellation of any Loans so purchased shall not increase Consolidated EBITDA), (4) the Borrower shall provide, as of the date of its offer to purchase and as of the date of the effectiveness of such purchase and assignment, a customary representation and warranty that neither it nor any of its affiliates is in possession of any material non-public information with respect to the Borrower, its Subsidiaries or their respective securities and (5) the Borrower and the applicable purchaser shall waive any right to bring any action against the Administrative Agent in connection with such purchase or the Term Loans so purchased. For the avoidance of doubt, in no event shall the Borrower or any of its Subsidiaries be deemed to be a Lender under this Agreement or any of the other Loan Documents as a result of an assignment made under this clause (h).

SECTION 10.05     Survival . All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

SECTION 10.06     Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together

 

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shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent 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 4.01, this Agreement shall become effective when it shall have been executed by the 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, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 10.07     Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 10.08     Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 10.09     Governing Law; Jurisdiction; Consent to Service of Process .

(a)      This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)        The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court 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, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c)        The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)        Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 10.10     WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT

 

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MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)  CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)  ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 10.11     Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 10.12     Confidentiality . Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Lender Affiliates and to its and its Lender Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (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 pursuant to the terms hereof), (b) to the extent requested by any regulatory or quasi-regulatory authority, (c) to the extent required by Applicable Laws or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document 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 or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower, (h) to the extent such Information (i) is publicly available at the time of disclosure or becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower or any Subsidiary or (i) to data service providers, including league table providers, that serve the lending industry, so long as such information consists of information customarily provided to such data service providers. For the purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary; provided that, in the case of information received from the Borrower or any Subsidiary after the Closing Date, 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 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 10.13     Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under Applicable Law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 10.14     Intercreditor

 

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Agreements . Each Lender hereby authorizes and directs the Administrative Agent and/or the Collateral Agent (a) to enter into the Intercreditor Agreements on its behalf, perform the Intercreditor Agreements on its behalf and take any actions thereunder as determined by the Administrative Agent or the Collateral Agent to be necessary or advisable to protect the interest of the Lenders, and each Lender agrees to be bound by the terms of the Intercreditor Agreements and (b) to enter into any other intercreditor agreement reasonably satisfactory to the Administrative Agent on its behalf, perform such intercreditor agreement on its behalf and take any actions thereunder as determined by the Administrative Agent or the Collateral Agent to be necessary or advisable to protect the interests of the Lenders, and each Lender agrees to be bound by the terms of such intercreditor agreement. Each Lender acknowledges that (i)  the ABL/Term Loan Intercreditor Agreement governs, among other things, Lien priorities and rights of the Lenders and the ABL Secured Parties (as defined in the ABL/Term Loan Intercreditor Agreement) with respect to the Collateral, including the ABL Priority Collateral . and (ii) the Term Intercreditor Agreement governs, among other things, Lien priorities and rights of the Lenders and the Senior Secured Parties (as defined in the Term Intercreditor Agreement) with respect to the Collateral, including the Term Priority Collateral. In the event of any inconsistency between any Loan Document and any Intercreditor Agreement, the provision of the applicable Intercreditor Agreement shall prevail.

SECTION 10.15     Release of Liens and Guarantees . (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Collateral Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 10.02) to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 10.02 or (ii) under the circumstances described in paragraph (b) below.

(b)        (i) At such time as the Loans and the other obligations under the Loan Documents shall have been paid in full and the Commitments have been terminated, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person and (ii) upon any sale or other transfer by any Loan Party of any Collateral in a transaction permitted under Section 6.05(c)(ii) of this Agreement, the security interests in such Collateral created by the Security Documents shall be automatically released without delivery of any instrument or performance of any act by any Person; provided that the Borrower shall, at any time upon request from the Administrative Agent, provide a certificate, in form and substance reasonably satisfactory to the Administrative Agent and signed by a Financial Officer of the Borrower, confirming that (x) such sale or transfer (i) is a “Specified Vendor Receivables Financing” transaction as defined herein, (ii) constitutes permitted Indebtedness under Section 6.01(a)(ii)(B), (iii) constitutes permitted Liens under Section 6.02(c) and (iv) such sale or transfer is a permitted sale or transfer of Collateral under Section 6.05(c)(ii) and (y) no Default or Event of Default has occurred or will occur, as applicable, after giving effect to such sale or transfer. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, such certificate, believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.

(c)        In connection with any termination or release pursuant to this Section, the Administrative Agent and the Collateral Agent shall execute and deliver to any Loan Party all documents that such Loan Party shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent or the Collateral Agent.

(d)        The Lenders irrevocably authorize the Administrative Agent and the Collateral Agent to release or subordinate any Lien on any property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document to the holder of any Lien on such property that is

 

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permitted by Section 6.02(c), 6.02(e) or 6.02(f) to the extent required by the terms of the obligations secured by such Liens pursuant to documents reasonably acceptable to the Administrative Agent.

SECTION 10.16     PATRIOT Act . Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ PATRIOT Act ”), it is required, or will be required in the future, to obtain, verify and record information that identifies the Borrower and the other Loan Parties, which information includes the name and address of the Borrower and the other Loan Parties and other information that will allow such Lender to identify the Borrower and the other Loan Parties in accordance with the PATRIOT Act.

SECTION 10.17     No Fiduciary Duty . Each Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “ Lenders ”), may have economic interests that conflict with those of the Borrower, its stockholders and/or its affiliates. The Borrower agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and the Borrower, its stockholders or its affiliates, on the other. The Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and there under) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise the Borrower, its stockholders or its Affiliates on other matters) or any other obligation to the Borrower except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower, its management, stockholders, creditors or any other Person. The Borrower acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to such borrower, in connection with such transaction or the process leading thereto.

SECTION 10.18     Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)        the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b)        the effects of any Bail-In Action on any such liability, including, if applicable:

(i)         a reduction in full or in part or cancellation of any such liability;

(ii)        a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)       the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

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[ Signature Pages Follow ]

 

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

 

HORIZON GLOBAL CORPORATION,
By:  

 

  Name:
  Title:

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent,
By:  

 

  Name:
  Title:

LENDER SIGNATURE PAGE TO

THE CREDIT AGREEMENT

 

Name of Lender,
By:  

 

        Name:
        Title:
For any Lender requiring a second signature line:
By:  

 

  Name:
  Title:

EXHIBIT A-2

New Schedules to Credit Agreement

Schedule 6.01A        –      Existing Indebtedness as of Fifth Amendment Date

Schedule 6.02A        –      Existing Liens as of Fifth Amendment Date

Schedule 6.04A        –      Existing Investments as of Fifth Amendment Date

Schedule 6.05A        –      Asset Sales as of Fifth Amendment Date

See attached.

SCHEDULE 6.01A

EXISTING INDEBTEDNESS AS OF THE FIFTH AMENDMENT DATE

 

Company    Bank   

Facility

Details

  

 

Outstanding
Amount as of
1/27/2019

  

Secured/Unsecured

 

Westfalia-Automotive GmbH    N/A    Capital Lease with Portikus    $10,213,3508    Secured
Cequent Industria E Comerico Ltda., Westfalia-Automotive GmBH, Terwa Romania Srl Unit 1, Teljs Automotive Srl Unit 2, Terwa B.V., Terwa Construction Systems Srl, Horizon Americas, Inc.    N/A    Capital Leases    $2,788,967    Secured
Horizon Global Corporation Pty Ltd.   

National Australia

Bank Ltd.,

Australia

   Multi Facility Agreement    $11,728,530    Secured
Terwa Romania Srl Unit 1    ING    Overdraft Credit Facility    $1,258,548    Secured
Terwa Romania Srl Unit 1    N/A    Other    $982,857    Secured

Terwa B.V.

 

  

N/A

 

  

Other

 

  

$85,598

 

  

Secured

 

Note: the above schedule is subject to year-end audit adjustments

Intercompany Debt as listed below:

 

Borrower   Lender    Amount
Horizon Global Holdings Australia Pty. Ltd.   Horizon International Holding LLC    $44,789,896.27
Horizon Global Corporation   Horizon International Holding LLC    $12,502,710.00
HG Germany Holdings GmbH   Horizon Global Corporation    $45,993,583.97

Cequent Nederland Holdings B.V.   Horizon Global Company LLC    $117,280,750.00
Westfalia – Automotive GmbH   Horizon Global Company LLC    $1,147,000,00

SCHEDULE 6.02A

EXISTING LIENS AS OF THE FIFTH AMENDMENT DATE

Liens existing on the Closing Date in respect of:

1.          Indebtedness set forth on Schedule 6.01 encumbering the assets described on Schedule 6.01, to the extent that such Indebtedness is described as secured Indebtedness on such Schedule 6.01.

2.          Lien evidenced by Initial Filing Number OH00161477063, filed on September 25, 2012, by Raymond Leasing Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

3.          Lien evidenced by Initial Filing Number 2009 0236023, filed on January 23, 2009, by Air Liquide Industrial U.S. LP against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

4.          Lien evidenced by Initial Filing Number 2012 0866626, filed on March 6, 2012, by Wells Fargo Bank, N.A. against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

5.          Lien evidenced by Initial Filing Number 2013 2487248, filed on June 27, 2013, by Wells Fargo Financial Leasing, Inc. against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

6.          Lien evidenced by Initial Filing Number 2013 3798981, filed on September 19, 2013, by LCA Bank Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

7.          Lien evidenced by Initial Filing Number 2013 4703188, filed on November 29, 2013, by Well Fargo Financial Leasing, Inc. against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

8.          Lien evidenced by Initial Filing Number 2015 5309983, filed on November 12, 2015, by LCA Bank Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

9.          Lien evidenced by Initial Filing Number 2016 7591637, filed on December 7, 2016, by Well Fargo Bank, N.A. against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

10.        Lien evidenced by Initial Filing Number 2017 0850658, filed on February 7, 2017, by LCA Bank Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

11.        Lien evidenced by Initial Filing Number 2016 1548856, filed on March 15,2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Corporation.

12.        Lien evidenced by Initial Filing Number 2016 1812344, filed on March 28, 2016, by Leaf Capital Funding, LLC and/or its assigns against Horizon Global Corporation.

13.        Lien evidenced by Initial Filing Number 2016 3880422, filed on June 28, 2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Company LLC.

14.        Lien evidenced by Initial Filing Number 2017 3151500, filed on May 12, 2017, by Mitsubishi UFJ Lease & Finance (U.S.A.) Inc., against Horizon Global Company LLC and Horizon Global Americas Inc.

15.        Lien evidenced by Initial Filing Number 2017 3151542, filed on May 12, 2017, by Corporation Service Company, as representative,. against Horizon Global Company LLC.

16.        Lien evidenced by Initial Filing Number 2017 5703415, filed on August 28, 2017, by Summit Funding Group, Inc. against Horizon Global Company LLC.

17.        Lien evidenced by Initial Filing Number 2017 5906034, filed on September 6, 2017, by CT Corporation System, as representative,. against Horizon Global Company LLC and Horizon Global Americas Inc.

18.        Lien evidenced by Initial Filing Number 2017 8278089, filed on December 14, 2017, by CT Corporation System, as representative,. against Horizon Global Company LLC.

19.        Lien evidenced by Initial Filing Number 201 2274419, filed on April 3, 2018, by CT Corporation System, as representative,. against Horizon Global Company LLC.

20.        Lien evidenced by Initial Filing Number 2018 3737521, filed on June 1, 2018, by CT Corporation System, as representative,. against Horizon Global Company LLC.

SCHEDULE 6.04A

EXISTING INVESTMENTS AS OF THE FIFTH AMENDMENT DATE

A. Qualified Foreign Investments

 

  1.

Investments by Cequent Electrical Products de Mexico, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

 

  2.

Investments by Cequent Trailer Products, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

B. Other Investments

 

  1.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Juarez, Mexico facility; the aggregate amount of loans described in this clause (B)(1) and clause (B)(2) below do not exceed $5.0 million.

 

  2.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Reynosa, Mexico facility; the aggregate amount of loans described in this clause (B)(2) and clause (B)(1) above do not exceed $5.0 million.

 

  3.

Horizon Global Corporation’s investment in the Hong Kong Sourcing Office legal entity to provide legal restrucaturing and operational funding in an aggregate amount not exceeding $2.5 million.

 

  4.

Investments by Horizon Global Corporation in one or more wholly-owned foreign subsidiaries for the purpose of purchasing one or more foreign manufacturing facilities, including capital equipment and working capital, in an aggregate amount not exceeding $3.0 million.

 

  5.

Horizon Global Digital Limited’s investment in 20% of the issued share capital of Reckless Digital Group Holdings Limited in a total consideration of GBP 360,000 paid to Ellie Warriner (GBP 45,000) and Lindsay Reckless (GBP 315,000)

 

  6.

Horizon Global Digital Limited’s loan to Reckless Digital Group Holdings Limited to be used for growth initiatives and general working capital purposes, in an amount equal to GBP 300,000.

  7.

Cequent Industria e Comercio’s Ltda’s (fka Cequent Brazil Participacoes) purchase of Engetran Engenharia, Industria, Comercio de Pecas e Acessorios Veiculares Ltda from Jorge Correia Karan of which there remains about $100,000 outstanding.

 

  8.

Cequent Industria e Comercio Ltda’s purchase of Dhelfos Industria E Comercio De Acessorios Ltda from Ernani Mariano and Maria Luiza Gome De Goes, of which there remains about $2.5M outstanding.

 

  9.

Westfalia-Automotive GmbH owns 20% of EWV Management Consultancy Pty.

Intercompany Debt as listed below:

 

Borrower    Lender    Amount
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holding LLC    $44,789,896.27
Horizon Global Corporation    Horizon International Holding LLC    $12,502,710.00
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97
Cequent Nederland Holdings B.V.    Horizon Global Company LLC    $117,280,750.00
Westfalia – Automotive GmbH    Horizon Global Company LLC    $1,147,000,00

SCHEDULE 6.05A

ASSET SALES AS OF THE FIFTH AMENDMENT DATE

Item 1 below is an ongoing transactions with respect to the Company’s maquila structure and generally allow the Company to transact under the normal course of business under this structure.

 

1.

Intercompany sale for cash of machinery, equipment and/or inventory by Cequent Performance Products, Inc. to Cequent UK Limited, which such machinery, equipment and/or inventory will be located in Cequent UK Limited’s Reynosa, Mexico facility

 

2.

Terwa Holding B.V.’s pending divestiture of (i) all shares in Terwa B.V. to SISS Holding B.V; and (ii) construction-related assets of Terwa Romania Srl Unit 1 to Terwa Construction Systems Srl for a purchase price of $5.5M USD on cash-free, debt-free basis, inclusive of $450K vendor loan (see item 3 below)

 

3.

Terwa Holding B.V.’s pending receipt of vendor note from SISS Holding B.V. in connection with pending divestiture of (i) all shares in Terwa B.V. to SISS Holding B.V; and (ii) construction-related assets of Terwa Romania Srl Unit 1 to Terwa Construction Systems Srl

EXHIBIT B

Term Intercreditor Agreement

See attached.

EXECUTION VERSION

CONDIFDENTIAL AND PRIVILEGED ATTORNEY WORK PRODUCT

 

TERM INTERCREDITOR AGREEMENT

Among

HORIZON GLOBAL CORPORATION,

as the Borrower,

the other Grantors from time to time party hereto,

CORTLAND CAPITAL MARKET SERVICES LLC,

as the Senior Collateral Agent for the Senior Secured Parties,

JPMORGAN CHASE BANK, N.A.,

as Junior Collateral Agent for the Junior Secured Parties,

and

each Additional Senior Agent and Additional Junior Agent from time to time party hereto

dated as of February 20, 2019

TERM INTERCREDITOR AGREEMENT dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”), among Horizon Global Corporation, a Delaware limited liability company (the “ Borrower ”); the other Grantors (as defined below) party hereto; Cortland Capital Market Services LLC, as collateral agent for the Senior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Senior Collateral Agent ”); JPMorgan Chase Bank, N.A., as collateral agent for the Junior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Junior Collateral Agent ”); and each Additional Senior Agent (as defined below) and each Additional Junior Agent (as defined below) that from time to time becomes a party hereto pursuant to Section 8.09.

In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Senior Collateral Agent (for itself and on behalf of the Senior Credit Agreement Secured Parties), the Junior Collateral Agent (for itself and on behalf of the Junior Secured Parties), each Additional Senior Agent (for itself and on behalf of the Additional Senior Secured Parties under the applicable Additional Senior Debt Facility) and each Additional Junior Agent (for itself and on behalf of the Additional Junior Secured Parties under the applicable Additional Junior Debt Facility) agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Certain Defined Terms . Capitalized terms used but not otherwise defined herein have the meanings set forth in the Senior Credit Agreement as in effect on the date hereof or, if defined in the New York UCC, the meanings specified therein. As used in this Agreement, the following terms have the meanings specified below:

“ ABL Priority Collateral ” means the “ABL Priority Collateral” (as defined in the ABL/Term Loan Intercreditor Agreement).

“ ABL/Term Loan Intercreditor Agreement ” means the “ABL/Term Loan Intercreditor Agreement” (as defined in the Senior Credit Agreement).

“ Additional Junior Agent ” means the collateral agent, administrative agent and/or trustee (as applicable) or any other similar agent or Person under any Additional Junior Debt Documents, in each case, together with its successors in such capacity.

“ Additional Junior Debt ” means any Indebtedness of the Borrower or any other Grantor (other than Indebtedness constituting Junior Credit Agreement Obligations), which Indebtedness and any related Guarantees are secured by the Junior Collateral (or a portion thereof) on a junior basis to the Liens securing the Senior Credit Agreement Obligations; provided , however , that (i) such Indebtedness is permitted to be incurred, secured and guaranteed on such basis by each then extant Senior Debt Document and Junior Debt Document and (ii) the Representative for the holders of such Indebtedness shall have become party to this Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.09 hereof. Additional Junior Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Grantors issued in exchange therefor.

“ Additional Junior Debt Documents ” means, with respect to any Series of Additional Junior Debt Obligations, the notes, credit agreements, indentures, security documents and other operative

agreements evidencing or governing such Additional Junior Debt Obligations and each other agreement entered into for the purpose of securing such Additional Junior Debt Obligations.

“ Additional Junior Debt Facility ” means each debt facility, credit agreement, indenture or other governing agreement with respect to any Additional Junior Debt.

“ Additional Junior Debt Obligations ” means, with respect to any Series of Additional Junior Debt, (a) all principal, interest, fees and expenses (including, without limitation, any interest, fees and expenses which accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to such Additional Junior Debt, (b) all other amounts payable to the related Additional Junior Secured Parties under the related Additional Junior Debt Documents (including, without limitation, any other amounts which accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable as a claim in any such proceeding) and (c) any renewals or extensions of the foregoing.

“ Additional Junior Secured Parties ” means, with respect to any Series of Additional Junior Debt Obligations, the holders of such Additional Junior Debt Obligations, the Representative with respect thereto, any trustee or agent therefor under any related Additional Junior Debt Documents and the beneficiaries of each indemnification obligation undertaken by the Borrower or any Grantor under any related Additional Junior Debt Documents.

“ Additional Senior Agent ” means the collateral agent, administrative agent and/or trustee (as applicable) under any Additional Senior Debt Documents, in each case, together with its successors in such capacity.

“ Additional Senior Debt ” means any Indebtedness of the Borrower or any other Grantor (other than Indebtedness constituting Senior Credit Agreement Obligations), which Indebtedness and any related Guarantees are secured by the Senior Collateral (or a portion thereof) on a senior basis to the Liens securing Junior Credit Agreement Obligations; provided , however , that (i) such Indebtedness is permitted to be incurred, secured and guaranteed on such basis by each other then extant Senior Debt Document, (ii) the principal amount of such Indebtedness shall not exceed $0 plus any additional amounts resulting from the payment of “in-kind” interest, and (iii) the Representative for the holders of such Indebtedness shall have become party to (A) this Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.09 hereof and (B) an applicable Intercreditor Agreement. Additional Senior Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Grantors issued in exchange therefor; provided further that, if such Indebtedness will be the initial Additional Senior Debt incurred by the Borrower after the date hereof, then the Grantors, the Senior Collateral Agent and the Representative for such Indebtedness shall have executed and delivered an applicable Intercreditor Agreement.

“ Additional Senior Debt Documents ” means, with respect to any Series of Additional Senior Debt, the notes, credit agreements, indentures, security documents and other operative agreements evidencing or governing such Additional Senior Debt and each other agreement entered into for the purpose of securing such Additional Senior Debt Obligations.

“ Additional Senior Debt Facility ” means each debt facility, credit agreement, indenture or other governing agreement with respect to any Additional Senior Debt.

“ Additional Senior Debt Obligations ” means, with respect to any Series of Additional Senior Debt, (a) all principal, interest, fees and expenses (including, without limitation, any interest, fees and expenses which accrue after the commencement of any Insolvency or Liquidation Proceeding,

 

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whether or not allowed or allowable as a claim in any such proceeding) payable with respect to such Additional Senior Debt, (b) all other amounts payable to the related Additional Senior Secured Parties under the related Additional Senior Debt Documents (including, without limitation, any other amounts which accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable as a claim in any such proceeding) and (c) any renewals or extensions of the foregoing.

“ Additional Senior Secured Parties ” means, with respect to any Series of Additional Senior Debt Obligations, the holders of such Additional Senior Debt Obligations, the Representative with respect thereto, any trustee or agent therefor under any related Additional Senior Debt Documents and the beneficiaries of each indemnification obligation undertaken by the Borrower or any Grantor under any related Additional Senior Debt Documents.

“ Agreement ” has the meaning assigned to such term in the preamble hereto.

“ Bankruptcy Code ” means Title 11 of the United States Code, as amended or any successor statute.

“ Bankruptcy Law ” means the Bankruptcy Code and any other federal, state, or foreign law for the relief of debtors, or any arrangement, reorganization, insolvency, moratorium, assignment for the benefit of creditors, any other marshalling of the assets or liabilities of the Borrower or any of its Subsidiaries, or similar law affecting creditors’ rights generally.

“ Borrower ” has the meaning assigned to such term in the introductory paragraph of this Agreement.

“ Class  Debt ” has the meaning assigned to such term in Section 8.09.

“ Class  Debt Parties ” has the meaning assigned to such term in Section 8.09.

“ Class  Debt Representatives ” has the meaning assigned to such term in Section 8.09.

“ Collateral ” means the Senior Collateral and the Junior Collateral.

“ Collateral Documents ” means the Senior Collateral Documents and the Junior Collateral Documents.

“ Debt Facility ” means any Senior Debt Facility and any Junior Debt Facility.

“ Designated Junior Representative ” means (i) the Junior Collateral Agent until such time as the Discharge of Junior Credit Agreement Obligations has occurred and (ii) thereafter, the Junior Representative designated by all then-existing Junior Representatives in a notice to the Designated Senior Representative and the Borrower.

“ Designated Senior Representative ” means (i) the “Controlling Collateral Agent” (or equivalent term) as defined in an applicable Intercreditor Agreement or any comparable designated entity under any successor agreement to such Intercreditor Agreement or (ii) in the case that no such Intercreditor Agreement or any successor thereto is then in effect, the remaining Senior Representative.

“ DIP Financing ” has the meaning assigned to such term in Section 6.01.

 

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“ Discharge of Junior Credit Agreement Obligations ” means notwithstanding any discharge of the Senior Obligations under any Debtor Relief Laws or in connection with any Insolvency or Liquidation Proceeding:

(a)        payment in full in cash of all Junior Credit Agreement Obligations (other than any indemnification obligations for which no claim or demand for payment, whether oral or written, has been made at such time); and

(b)        termination or expiration of all commitments, if any, to extend credit that would constitute Junior Credit Agreement Obligations.

provided that the Discharge of Junior Credit Agreement Obligations shall not be deemed to have occurred in connection with a Refinancing of such Junior Credit Agreement Obligations with an Additional Junior Debt Facility secured by the Shared Collateral which has been designated in writing by the Representative (under the Junior Debt Document so Refinanced) or by the Borrower, in each case, to each other Representative as the “Junior Credit Agreement” for purposes of this Agreement.

“ Discharge of Senior Obligations ” means notwithstanding any discharge of the Senior Obligations under any Debtor Relief Laws or in connection with any Insolvency or Liquidation Proceeding, except to the extent otherwise expressly provided in Section  5.6 :

(a)        payment in full in cash of all Senior Obligations (other than any indemnification for which no claim or demand for payment, whether oral or written, has been made at such time: provided that the Senior Secured Parties may, in their reasonable discretion, request the posting of cash collateral for any possible future indemnification obligations); and

(b)        termination or expiration of all commitments, if any, to extend credit that would constitute Senior Obligations.

provided that the Discharge of any Series of Senior Obligations shall not be deemed to have occurred in connection with a Refinancing of such Series of Senior Obligations with an Additional Senior Debt Facility secured by the Shared Collateral which has been designated in writing by the Representative (under the Senior Debt Document so Refinanced) or by the Borrower, in each case, to each other Representative as “Senior Obligations” for purposes of this Agreement.

“ Grantors ” means the Borrower and each other Subsidiary of the Borrower which has granted a security interest pursuant to any Collateral Document to secure any Secured Obligations. The Grantors existing on the date hereof are set forth in Annex I hereto.

“ Insolvency or Liquidation Proceeding ” means:

(1)        any case commenced by or against the Borrower or any other Grantor under any Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Borrower or any other Grantor, any receivership or assignment for the benefit of creditors relating to the Borrower or any other Grantor or any similar case or proceeding relative to the Borrower or any other Grantor or its creditors, as such, in each case whether or not voluntary;

(2)        any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Borrower or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

 

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(3)        any other proceeding of any type or nature in which substantially all claims of creditors of the Borrower or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.

“ Joinder Agreement ” means a supplement to this Agreement in the form of Annex III or Annex IV hereof required to be delivered by a Representative to the Designated Senior Representative and the Designated Junior Representative pursuant to Section 8.09 hereof in order to include an additional Debt Facility hereunder and to become the Representative hereunder for the Senior Secured Parties or Junior Secured Parties, as the case may be, under such Debt Facility.

“ Junior Class  Debt ” has the meaning assigned to such term in Section 8.09.

“ Junior Class  Debt Parties ” has the meaning assigned to such term in Section 8.09.

“ Junior Class  Debt Representative” has the meaning assigned to such term in Section 8.09.

“ Junior Collateral ” means any “Collateral” as defined in any Junior Debt Document or any other assets of the Borrower or any other Grantor or Subsidiary of any Grantor with respect to which a Lien is granted or purported or required to be granted pursuant to a Junior Collateral Document as security for any Junior Obligation.

“ Junior Collateral Agent ” has the meaning assigned to such term in the preamble hereto.

“ Junior Collateral Documents ” means the Junior Credit Agreement Security Agreement and the other “Security Documents” as defined in the Junior Credit Agreement, this Agreement and each of the security agreements and other instruments and documents executed and delivered by the Borrower or any Grantor for purposes of providing collateral security for any Junior Obligation.

“ Junior Credit Agreement ” means that certain Term Loan Credit Agreement dated as of June 30, 2015, as amended, restated, amended and restated, supplemented, increased or otherwise modified, refinanced or replaced from time to time, the Borrower, the lenders party thereto, and JPMorgan Chase, N.A., as administrative agent and as collateral agent.

“ Junior Credit Agreement Loan Documents ” means the Junior Credit Agreement and the other “Loan Documents” as defined in the Junior Credit Agreement.

“ Junior Credit Agreement Obligations ” means “Obligations” as defined in the Junior Credit Agreement (or any equivalent term in any Refinancing thereof).

“ Junior Credit Agreement Secured Parties ” means the “Secured Parties” as defined in the Junior Credit Agreement (or any equivalent term in any Refinancing thereof).

“ Junior Credit Agreement Security Agreement ” means the “Guarantee and Collateral Agreement” as defined in the Junior Credit Agreement (or any equivalent term in any Refinancing thereof).

“ Junior Debt Documents ” means (a) the Junior Credit Agreement Loan Documents and (b) any Additional Junior Debt Documents.

 

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“ Junior Debt Facility ” means the Junior Credit Agreement and any Additional Junior Debt Facilities.

“ Junior Obligations ” means (a) the Junior Credit Agreement Obligations and (b) any Additional Junior Debt Obligations.

“ Junior Representative ” means (i) in the case of the Junior Credit Agreement or the Junior Credit Agreement Secured Parties, the Junior Collateral Agent and (ii) in the case of any Additional Junior Debt Facility and the Additional Junior Secured Parties thereunder, each Additional Junior Agent in respect of such Additional Junior Debt Facility that is named as such in the applicable Joinder Agreement.

“ Junior Secured Parties ” means the Junior Credit Agreement Secured Parties and any Additional Junior Secured Parties.

“ Lien ” means with respect to any asset, any mortgage, lien, pledge, hypothecation, charge, security interest, preference, priority, or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease or a license of Intellectual Property be deemed to constitute a Lien.

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

“ Officer’s Certificate ” has the meaning assigned to such term in Section 8.08.

“ Person ” means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust, or other enterprise or any Governmental Authority.

“ Plan of Reorganization ” means any plan of reorganization, plan of liquidation, plan of arrangement, agreement for composition, or other type of dispositive restructuring plan proposed in or in connection with any Insolvency or Liquidation Proceeding.

“ Pledged or Controlled Collateral ” has the meaning assigned to such term in Section 5.05(a).

“ Proceeds ” means the proceeds of any sale, collection or other liquidation of Shared Collateral, any payment or distribution made in respect of Shared Collateral in an Insolvency or Liquidation Proceeding and any amounts received by any Senior Representative or any Senior Secured Party from a Junior Secured Party in respect of Shared Collateral pursuant to this Agreement or any other intercreditor agreement.

“ Purchase Event ” has the meaning assigned to such term in Section 5.07(a).

“ Recovery ” has the meaning assigned to such term in Section 6.04.

“ Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other Indebtedness or enter alternative financing arrangements, in exchange or replacement for such indebtedness (in whole

 

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or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such Indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement. “ Refinanced ” and “ Refinancing ” have correlative meanings.

“ Registered Equivalent Notes ” means, with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act of 1933, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the SEC.

“ Representatives ” means the Senior Representatives and the Junior Representatives.

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

“ Secured Obligations ” means the Senior Obligations and the Junior Obligations.

“ Secured Parties ” means the Senior Secured Parties and the Junior Secured Parties.

“ Senior Class  Debt ” has the meaning assigned to such term in Section 8.09.

“ Senior Class  Debt Parties ” has the meaning assigned to such term in Section 8.09.

“ Senior Class  Debt Representative ” has the meaning assigned to such term in Section 8.09.

“ Senior Collateral ” means any “Collateral” as defined in any Senior Credit Agreement Loan Document or any other Senior Debt Document or any other assets of the Borrower or any other Grantor or Subsidiary of any Grantor with respect to which a Lien is granted or purported or required to be granted pursuant to a Senior Collateral Document as security for any Senior Obligation.

“ Senior Collateral Agent ” has the meaning assigned to such term in the preamble hereto.

“ Senior Collateral Documents ” means the Senior Credit Agreement Security Agreement and the other “Security Documents” as defined in the Senior Credit Agreement, any applicable Intercreditor Agreement and each of the security agreements and other instruments and documents executed and delivered by the Borrower or any Grantor for purposes of providing collateral security for any Senior Obligation.

“ Senior Credit Agreement ” means that certain Credit Agreement dated as of February 20, 2019, as amended, restated, amended and restated, supplemented, increased or otherwise modified, refinanced or replaced from time to time, among the Borrower, the lenders party thereto, and Cortland Capital Market Services LLC, as administrative agent and as collateral agent.

“ Senior Credit Agreement Loan Documents ” means the Senior Credit Agreement and the other “Loan Documents” as defined in the Senior Credit Agreement.

“ Senior Credit Agreement Obligations ” means the “Obligations” as defined in the Senior Credit Agreement.

 

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“ Senior Credit Agreement Secured Parties ” means the “Secured Parties” as defined in the Senior Credit Agreement.

“ Senior Credit Agreement Security Agreement ” means the “Guarantee and Collateral Agreement” as defined in the Senior Credit Agreement.

“ Senior Debt Documents ” means (a) the Senior Credit Agreement Loan Documents and (b) any Additional Senior Debt Documents.

“ Senior Debt Facilities ” means the Senior Credit Agreement and any Additional Senior Debt Facilities.

“ Senior Lien ” means the Liens on the Senior Collateral in favor of the Senior Secured Parties under the Senior Collateral Documents.

“ Senior Obligations ” means the Senior Credit Agreement Obligations and any Additional Senior Debt Obligations. For the avoidance of doubt, “Senior Obligations” shall include any post-petition interest (including at the applicable default rate), whether or not such post-petition interest is permissible under applicable Bankruptcy Law.

“ Senior Representative ” means (i) in the case of any Senior Credit Agreement Obligations or the Senior Credit Agreement Secured Parties, the Senior Collateral Agent and (ii) in the case of any Additional Senior Debt Facility and the Additional Senior Secured Parties thereunder, each Additional Senior Agent in respect of such Additional Senior Debt Facility that is named as such in the applicable Joinder Agreement.

“ Senior Secured Parties ” means the Senior Credit Agreement Secured Parties and any Additional Senior Secured Parties.

“ Series ” means (a) (x) with respect to the Senior Secured Parties, each of (i) the Senior Credit Agreement Secured Parties (in their capacities as such) and (ii) the Additional Senior Secured Parties that become subject to this Agreement after the date hereof that are represented by a common Representative (in its capacity as such for such Additional Senior Secured Parties) and (y) with respect to the Junior Secured Parties, each of (i) the Junior Credit Agreement Secured Parties (in their capacity as such) and (ii) the Additional Junior Secured Parties that become subject to this Agreement after the date hereof that are represented by a common Representative (in its capacity as such for such Additional Junior Secured Parties) and (b) (x) with respect to any Senior Obligations, each of (i) the Senior Credit Agreement Obligations and (ii) the Additional Senior Debt Obligations incurred pursuant to any Additional Senior Debt Facility and or any Additional Senior Debt Documents, which pursuant to any Joinder Agreement, are to be represented hereunder by a common Representative (in its capacity as such for such Additional Senior Debt Obligations) and (y) with respect to any Junior Obligations, each of (i) the Junior Credit Agreement Obligations and (ii) the Additional Junior Debt Obligations incurred pursuant to any Additional Junior Debt Facility and the related Additional Junior Debt Documents, which pursuant to any Joinder Agreement, are to be represented hereunder by a common Representative (in its capacity as such for such Additional Junior Debt Obligations).

“ Shared Collateral ” means, at any time, Collateral which (i) constitutes Senior Collateral (or, in the case of the Senior Debt Facilities, the holders of such Senior Debt Facilities are deemed to hold a security interest pursuant to Section 2.04 hereof) and in which the holders of Junior Obligations (or their Representatives) hold a security interest at such time or (ii) constitutes Junior Collateral. If, at any time, any portion of the Senior Collateral under one or more Senior Debt Facilities

 

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does not constitute Junior Collateral under one or more Junior Debt Facilities, then such portion of such Senior Collateral shall constitute Shared Collateral only with respect to the Junior Debt Facilities for which it constitutes Junior Collateral and shall not constitute Shared Collateral for any Junior Debt Facility which does not have a security interest in such Collateral at such time.

“ Subsidiary ” with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

“ Uniform Commercial Code ” or “ UCC ” means the New York UCC, or the Uniform Commercial Code (or any similar or comparable legislation) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.

SECTION 1.02. Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, restated, amended and restated, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (v) unless otherwise expressly qualified herein, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (vi) the term “or” is not exclusive.

ARTICLE II

Priorities and Agreements with Respect to Shared Collateral

SECTION 2.01. Subordination . Notwithstanding the date, time, manner or order of filing or recordation of any document or instrument or grant, attachment or perfection of any Liens granted to any Junior Representative or any Junior Secured Parties on the Shared Collateral or of any Liens granted to any Senior Representative or the Senior Secured Parties on the Shared Collateral (or any actual or alleged defect in any of the foregoing) and notwithstanding any provision of the UCC, any applicable law, any Junior Debt Document or any Senior Debt Document or any other circumstance whatsoever, each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, hereby agrees that (a) any Lien on the Shared Collateral securing any Senior Obligations now or hereafter

 

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held (or purported to be held) by or on behalf of any Senior Secured Parties or any Senior Representative or other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall have priority over and be senior in all respects and prior to any Lien on the Shared Collateral securing any Junior Obligations; and (b) any Lien on the Shared Collateral securing any Junior Obligations now or hereafter held (or purported to be held) by or on behalf of any Junior Secured Parties or any Junior Representative or other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Shared Collateral securing any Senior Obligations. All Liens on the Shared Collateral securing any Senior Obligations shall be and remain senior in all respects and prior to all Liens on the Shared Collateral securing any Junior Obligations for all purposes, whether or not such Liens securing any Senior Obligations are subordinated to any Lien securing any other obligation of the Borrower, any Grantor or any other Person or otherwise subordinated, voided, avoided, invalidated or lapsed.

SECTION 2.02. Nature of Senior Lender Claims . Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, acknowledges that (a) the terms of the Senior Debt Documents and the Senior Obligations may be amended, restated, amended and restated, supplemented or otherwise modified, and the Senior Obligations, or a portion thereof, may be Refinanced from time to time and (b) the aggregate amount of the Senior Obligations may be increased in the manner permitted under the then extant Senior Debt Documents and the Junior Debt Documents, in each case without notice to or consent by the Junior Representatives or the Junior Secured Parties and without affecting the provisions hereof. The Lien priorities provided for in Section 2.01 shall not be altered or otherwise affected by any amendment, restatement, amendment and restatement, supplement or other modification, or any Refinancing, of either the Senior Obligations or the Junior Obligations, or any portion thereof. As between the Borrower and the other Grantors and the Junior Secured Parties, the foregoing provisions will not limit or otherwise affect the obligations of the Borrower and the Grantors contained in any Junior Debt Document with respect to the incurrence of additional Senior Obligations.

SECTION 2.03. Prohibition on Contesting Liens . Each of the Junior Representatives, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, allowability, priority or enforceability of any Lien securing, or claim asserted with respect to, any Senior Obligations held (or purported to be held) by or on behalf of any of the Senior Secured Parties or any Senior Representative or other agent or trustee therefor in any Senior Collateral and the Designated Senior Representative and each other Senior Representative, for itself and on behalf of each Senior Secured Party under its Senior Debt Facility, agrees that it shall not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, allowability, priority or enforceability of any Lien securing any Junior Obligations held (or purported to be held) by or on behalf of any Junior Representative or any of the Junior Secured Parties in the Junior Collateral. Notwithstanding the foregoing, no provision in this Agreement shall be construed to prevent or impair the rights of the Designated Senior Representative or any other Senior Representative to enforce this Agreement (including the priority of the Liens securing the Senior Obligations as provided in Section 2.01) or any of the Senior Debt Documents.

SECTION 2.04. No New Junior Liens . The parties hereto agree that, so long as the Discharge of Senior Obligations has not occurred (a) none of the Grantors shall grant or permit any additional Liens on any asset or property of any Grantor or any of its Subsidiaries to secure any Junior Obligation unless it has also granted, or concurrently therewith grants, a Lien on such asset or property of such Grantor to secure the Senior Obligations, (b) none of the Grantors shall grant or permit any additional guarantees by any Grantor or any of its Subsidiaries for any Junior Obligation unless a

 

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guarantee is given by the same Grantor or Subsidiary for the Senior Obligations, and (c) if any Junior Representative or any Junior Secured Party shall hold any Lien on any assets or property of any Grantor securing any Junior Obligations that are not also subject to the senior-priority Liens securing Senior Obligations under the Senior Collateral Documents, such Junior Representative or Junior Secured Party (i) shall notify the Designated Senior Representative promptly upon becoming aware thereof and, unless such Grantor shall promptly grant a similar Lien on such assets or property to the Senior Representatives as security for the Senior Obligations, shall assign such Lien to the Senior Representatives as security for the Senior Obligations (but may retain a junior lien on such assets or property subject to the terms hereof) and (ii) until such assignment or such grant of a similar Lien to the Senior Representatives, shall be deemed to hold and have held such Lien for the benefit of the Senior Representatives as security for the Senior Obligations. If any Junior Representative or any Junior Secured Party shall, at any time, receive any proceeds or payment from or as a result of any Liens granted in contravention of this Section 2.04, it shall pay such proceeds or payments over to the Designated Senior Representative in accordance with the terms of Section 4.02.

SECTION 2.05. Perfection of Liens . Except for the agreements of the Designated Senior Representative pursuant to Section 5.05 hereof, none of the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties shall be responsible for perfecting and maintaining the perfection of Liens with respect to the Shared Collateral for the benefit of the Junior Representatives or the Junior Secured Parties. The provisions of this Agreement are intended solely to govern the respective Lien priorities as between the Senior Secured Parties and the Junior Secured Parties and shall not impose on the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives, the Junior Secured Parties or any agent or trustee therefor any obligations in respect of the disposition of Proceeds of any Shared Collateral which would conflict with prior perfected claims therein in favor of any other Person or any order or decree of any court or governmental authority or any applicable law.

ARTICLE III

Enforcement

SECTION 3.01. Exercise of Remedies .

(a)        So long as the Discharge of Senior Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Borrower or any other Grantor, (i) neither any Junior Representative nor any Junior Secured Party will (v) exercise any rights or remedies against the Borrower, any Subsidiary of the Borrower or any of their respective property that it has or would have as an unsecured creditor, (w) exercise or seek to exercise any rights or remedies (including setoff or recoupment) with respect to any Shared Collateral in respect of any Junior Obligations, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure), (x) contest, protest or object to any foreclosure proceeding or action brought with respect to the Shared Collateral or any other Senior Collateral by the Designated Senior Representative, any other Senior Representative or any Senior Secured Party in respect of the Senior Obligations, the exercise of any right by the Designated Senior Representative, any other Senior Representative or any Senior Secured Party (or any agent or sub-agent on their behalf) in respect of the Senior Obligations under any lockbox agreement, control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which the Designated Senior Representative, any other Senior Representative or any Senior Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party of any rights and remedies relating to the Shared Collateral under the Senior Debt Documents or otherwise in respect of the Senior Collateral or the Senior Obligations, (y) object to the forbearance by the Senior Secured Parties from bringing or pursuing any foreclosure proceeding or action

 

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or any other exercise of any rights or remedies relating to the Shared Collateral in respect of Senior Obligations, or (z) assert any marshaling, appraisal, valuation or other similar right that may otherwise be available to junior secured creditors, (ii) except as otherwise provided herein, the Designated Senior Representative, the other Senior Representatives and the Senior Secured Parties shall have the exclusive right to enforce rights, exercise remedies (including setoff, recoupment, and the right to credit bid their debt) and make determinations regarding the release, disposition or restrictions with respect to the Shared Collateral without any consultation with or the consent of any Junior Representative or any Junior Secured Party, and (iii) notwithstanding anything contained in Section 8.01 or in the ABL/Term Loan Intercreditor Agreement, the Designated Senior Representative, the other Senior Representatives and the Senior Secured Parties shall have the exclusive right to exercise, in their sole discretion, all rights, powers and remedies of the “Term Lenders” under the ABL/Term Loan Intercreditor Agreement without the consent of or consultation with any Junior Secured Parties and the Designated Senior Representative shall at all act as the “Designated Term Agent” under the ABL/Term Loan Intercreditor Agreement; provided , however , that (A) in any Insolvency or Liquidation Proceeding commenced by or against the Borrower or any other Grantor, any Junior Representative may file a claim, proof of claim, or statement of interest with respect to the Junior Obligations under its Junior Debt Facility in a manner consistent with this Agreement, (B) any Junior Representative may take any action (not adverse to the prior Liens on the Shared Collateral securing the Senior Obligations or the rights of the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties to exercise remedies in respect thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its rights in, and perfection and priority of its Lien on, the Shared Collateral, (C) any Junior Representative may exercise the rights and remedies provided for in Section 6.03 and may vote on a proposed Plan of Reorganization in any Insolvency or Liquidation Proceeding of the Borrower or any other Grantor in accordance with the terms of this Agreement (including Section 6.12), and (D) any Junior Representative and the Junior Secured Parties may file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance or, to the extent not inconsistent with this Agreement, subordination of the claims or Liens of the Junior Secured Parties, including any claims secured by the Junior Collateral, in each case in accordance with the terms of this Agreement. In exercising rights and remedies with respect to the Shared Collateral, the Designated Senior Representative, the other Senior Representatives and the Senior Secured Parties may enforce the provisions of the Senior Debt Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion in compliance with any applicable law. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Shared Collateral upon foreclosure, to incur expenses in connection with such sale or disposition and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

(b)        So long as the Discharge of Senior Obligations has not occurred, each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees that any Shared Collateral or any Proceeds of Shared Collateral or of any property of any Grantor or any Subsidiary of any Grantor that it receives in connection with the exercise of any right or remedy (including setoff or recoupment) with respect to any Shared Collateral in respect of Junior Obligations shall be delivered to the Designated Senior Representative for application to the Senior Obligations. Without limiting the generality of the foregoing, unless and until the Discharge of Senior Obligations has occurred, except as expressly provided in the proviso in Section 3.01(a) and in Article VI, the sole right of the Junior Representatives and the Junior Secured Parties with respect to any Shared Collateral is to hold a Lien on such Shared Collateral in respect of Junior Obligations pursuant to the Junior Debt Documents for the period and to the extent granted therein and to receive a share of the Proceeds thereof, if any, after the Discharge of Senior Obligations has occurred.

 

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(c)        Subject to the proviso in Section 3.01(a) and Section 6.03, (i) each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that neither such Junior Representative nor any such Junior Secured Party will take any action that would hinder, delay or interfere with any exercise of remedies undertaken by the Designated Senior Representative, any other Senior Representative or any Senior Secured Party with respect to the Shared Collateral under the Senior Debt Documents, including any sale, lease, exchange, transfer or other disposition of the Shared Collateral, whether by foreclosure or otherwise, and (ii) each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby waives any and all rights it or any such Junior Secured Party may have as a junior lien creditor to object to the manner in which the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties seek to enforce or collect the Senior Obligations or the Liens granted on any of the Senior Collateral, regardless of whether any action or failure to act by or on behalf of the Designated Senior Representative, any other Senior Representative or any other Senior Secured Party is adverse to the interests of the Junior Secured Parties.

(d)        Each Junior Representative hereby acknowledges and agrees that no covenant, agreement or restriction contained in any Junior Debt Document shall be deemed to restrict in any way the rights and remedies of the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties with respect to the Senior Collateral as set forth in this Agreement and the Senior Debt Documents.

(e)        Subject to the proviso in Section 3.01(a), until the Discharge of Senior Obligations, the Designated Senior Representative or any Person authorized by it shall have the exclusive right to exercise any right or remedy with respect to the Shared Collateral and shall have the exclusive right to determine and direct the time, method and place for exercising such right or remedy or conducting any proceeding with respect thereto. Following the Discharge of Senior Obligations, the Designated Junior Representative or any Person authorized by it shall have the exclusive right to exercise any right or remedy with respect to the Shared Collateral and shall have the exclusive right to direct the time, method and place of exercising or conducting any proceeding for the exercise of any right or remedy available to the Junior Secured Parties with respect to the Shared Collateral, or of exercising or directing the exercise of any trust or power conferred on the Junior Representatives, or for the taking of any other action authorized by the Junior Collateral Documents; provided , however , that nothing in this Section shall impair the right of any Junior Representative or other agent or trustee acting on behalf of the Junior Secured Parties to take such actions with respect to the Shared Collateral after the Discharge of Senior Obligations as may be otherwise required or authorized pursuant to any intercreditor agreement governing the Junior Secured Parties or the Junior Obligations.

SECTION 3.02. Cooperation . Subject to the proviso in Section 3.01(a), each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees that, unless and until the Discharge of Senior Obligations has occurred, it will not commence, or join with any Person (other than with the consent of the Senior Secured Parties and the Designated Senior Representative) in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Shared Collateral under any of the Junior Debt Documents or otherwise in respect of the Junior Obligations.

SECTION 3.03. Actions upon Breach . Should any Junior Representative or any Junior Secured Party, contrary to this Agreement, in any way take, attempt to take or threaten to take any action with respect to the Shared Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement) or fail to take any action required by this Agreement, the Designated Senior Representative or any other Senior Representative or other Senior Secured Party may obtain relief against such Junior Representative or such Junior Secured Party by injunction, specific performance or other

 

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appropriate equitable relief. Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, hereby (i) agrees that the Senior Secured Parties’ damages from the actions of the Junior Representatives or any Junior Secured Party may at that time be difficult to ascertain and may be irreparable and waives any defense that the Borrower, any other Grantor or the Senior Secured Parties cannot demonstrate damage or be made whole by the awarding of damages and (ii) irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by the Designated Senior Representative, any other Senior Representative or any Senior Secured Party.

ARTICLE IV

Payments

SECTION 4.01. Application of Proceeds . Subject to the ABL/Term Loan Intercreditor Agreement with respect to ABL Priority Collateral, so long as the Discharge of Senior Obligations has not occurred, the Shared Collateral or any property of any Grantor or any Subsidiary of any Grantor or Proceeds thereof received in connection with the sale or other disposition of, or collection on, such Shared Collateral or of any property of any Grantor or any Subsidiary of any Grantor upon the exercise of remedies shall be applied by the Designated Senior Representative to the Senior Obligations in such order as specified in the relevant Senior Debt Documents (including any relevant Intercreditor Agreement) until the Discharge of Senior Obligations has occurred. Upon the Discharge of Senior Obligations, the Designated Senior Representative shall deliver promptly to the Designated Junior Representative any Shared Collateral or any property of any Grantor or any Subsidiary of any Grantor or Proceeds thereof held by it in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, to be applied by the Designated Junior Representative to the Junior Obligations in such order as specified in the relevant Junior Debt Documents.

SECTION 4.02. Payments Over . Subject to the ABL/Term Loan Intercreditor Agreement with respect to ABL Collateral, prior to the Discharge of Senior Obligations, any Shared Collateral, any other property of any Grantor or any Subsidiary of any Grantor or Proceeds of any of the foregoing received by any Junior Representative or any Junior Secured Party in connection with the exercise of any right or remedy (including setoff or recoupment) or otherwise relating to the Shared Collateral or such property in contravention of this Agreement shall be segregated and held in trust for the benefit of and forthwith paid over to the Designated Senior Representative for the benefit of the Senior Secured Parties in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct. The Designated Senior Representative is hereby authorized to make any such endorsements as agent for each of the Junior Representatives or any such Junior Secured Party. This authorization is coupled with an interest and is irrevocable.

ARTICLE V

Other Agreements

SECTION 5.01. Releases .

(a)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that, in the event of a sale, transfer or other disposition of any specified item of Shared Collateral (including all or substantially all of the equity interests of any Subsidiary of the Borrower) or the release of any Guarantee for any Secured Obligation that is either (x) in connection with any foreclosure or other exercise of remedies (or a disposition effected in lieu of such a foreclosure or exercise of remedies) with respect to Shared Collateral by the Designated Senior

 

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Representative or (y) consented to by the Designated Senior Representative, the Guarantees and the Liens granted to the Junior Representatives and the Junior Secured Parties upon such Shared Collateral to secure Junior Obligations (but not on the Proceeds thereof) (and any Guarantees provided by any Grantors in respect thereof) shall, in each case, terminate and be released, automatically and without any further action, concurrently with the termination and release of all Liens granted upon such Shared Collateral and Guarantees of the Grantors in respect thereof to secure Senior Obligations and to the same extent as such Liens granted upon such Shared Collateral and such Guarantees to secured Senior Obligations are released. Upon delivery to a Junior Representative of an Officer’s Certificate stating that any such termination and release of Liens securing the Senior Obligations has become effective (or shall become effective concurrently with such termination and release of the Liens granted to the Junior Secured Parties and the Junior Representatives) and any necessary or proper instruments of termination or release prepared by the Borrower or any other Grantor, such Junior Representative will promptly execute, deliver or acknowledge, at the Borrower’s or the other Grantor’s sole cost and expense, such instruments to evidence such termination and release of the Liens and Guarantees. Nothing in this Section 5.01(a) will be deemed to affect any agreement of a Junior Representative, for itself and on behalf of the Junior Secured Parties under its Junior Debt Facility, to release the Liens on the Junior Collateral as set forth in the relevant Junior Debt Documents.

(b)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby irrevocably constitutes and appoints each Senior Representative and any officer or agent of each Senior Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Junior Representative or such Junior Secured Party or in such Senior Representative’s own name, from time to time in such Senior Representative’s discretion, for the purpose of carrying out the terms of Section 5.01(a), to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of Section 5.01(a), including any termination statements, endorsements or other instruments of transfer or release.

(c)        Unless and until the Discharge of Senior Obligations has occurred, each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby consents to the application, whether prior to or after an event of default under any Senior Debt Document of Proceeds of Shared Collateral to the repayment of Senior Obligations pursuant to the Senior Debt Documents, provided that nothing in this Section 5.01(c) shall be construed to prevent or impair the rights of the Junior Representatives or the Junior Secured Parties to enforce this Agreement or to receive payments in connection with the Junior Obligations not otherwise in contravention of this Agreement.

(d)        Notwithstanding anything to the contrary in any Junior Collateral Document, in the event the terms of a Senior Collateral Document and a Junior Collateral Document each require any Grantor (i) to make payment in respect of any item of Shared Collateral, (ii) to deliver or afford control over any item of Shared Collateral to, or deposit any item of Shared Collateral with, (iii) to register ownership of any item of Shared Collateral in the name of or make an assignment of ownership of any Shared Collateral or the rights thereunder, (iv) to cause any securities intermediary, commodity intermediary or other Person acting in a similar capacity to agree to comply, in respect of any item of Shared Collateral, with instructions or orders from, or to treat, in respect of any item of Shared Collateral, as the entitlement holder, (v) to hold any item of Shared Collateral in trust for (to the extent such item of Shared Collateral cannot be held in trust for multiple parties under applicable law), (vi) to obtain the agreement of a bailee or other third party to hold any item of Shared Collateral for the benefit of or subject to the control of or, in respect of any item of Shared Collateral, to follow the instructions of or (vii) to obtain the agreement of a landlord with respect to access to leased premises where any item of Shared Collateral is located or waivers or subordination of rights with respect to any item of Shared Collateral in favor of, in any case, both any Designated Senior Representative and any Junior

 

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Representative or Junior Secured Party, such Grantor may, to the extent such action cannot be taken with respect to both the Designated Senior Representative and the Designated Junior Representative after use of commercially reasonable efforts to do so, until the applicable Discharge of Senior Obligations has occurred, comply with such requirement under the Junior Collateral Document as it relates to such Shared Collateral by taking any of the actions set forth above only with respect to, or in favor of, the Designated Senior Representative. To the extent any such actions have been taken in favor of the Designated Junior Representative prior to the date of this Agreement, the applicable arrangements resulting therefrom shall continue to be in effect and be subject to Section 5.05.

SECTION 5.02. Insurance and Condemnation Awards . Unless and until the Discharge of Senior Obligations has occurred, the Designated Senior Representative and the Senior Secured Parties shall have the sole and exclusive right, subject to the rights of the Grantors under the Senior Debt Documents, (a) to adjust settlement for any insurance policy covering the Shared Collateral in the event of any loss thereunder and (b) to approve any award granted in any condemnation or similar proceeding affecting the Shared Collateral. Unless and until the Discharge of Senior Obligations has occurred, all Proceeds, all proceeds of any such policy and any such award, if in respect of the Shared Collateral, shall be paid (i) first, prior to the occurrence of the Discharge of Senior Obligations, to the Designated Senior Representative for the benefit of Senior Secured Parties pursuant to the terms of the Senior Debt Documents, (ii) second, after the occurrence of the Discharge of Senior Obligations, to the Designated Junior Representative for the benefit of the Junior Secured Parties pursuant to the terms of the applicable Junior Debt Documents and (iii) third, if no Senior Obligations or Junior Obligations are outstanding, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If any Junior Representative or any Junior Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of this Agreement, it shall pay such proceeds over to the Designated Senior Representative in accordance with the terms of Section 4.02.

SECTION 5.03. Amendments to Senior Debt Documents and Junior Debt Documents .

(a)        Without the prior written consent of the Designated Senior Representative, no Junior Debt Document or Junior Collateral Document may be amended, restated, supplemented or otherwise modified or entered into to the extent such amendment, restatement, supplement or modification, or the terms of any new Junior Debt Document or Junior Collateral Document, would:

(i)        be prohibited by or inconsistent with any of the terms of this Agreement;

(ii)       increase (A) the principal amount outstanding thereunder or (B) any “Applicable Rate”, margin, LIBOR or base rate “floor”, or similar component of the interest rate (whether in cash or in kind);

(iii)      add or increase any other fees or monetary obligations of the Borrower or any Grantor;

(iv)      increase the amount of any required principal or interest payment or modify any related amortization schedule in a manner which would have the effect of increasing the amount of any required principal or interest payment;

(v)       change to an earlier date (A) the scheduled final maturity date or (B) the date of any regularly scheduled amortization or redemption payments of principal or interest;

(vi)      add or increase any prepayment or redemption premium; or

 

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(vii)      add or change any other provision, including any negative covenant, financial maintenance covenant, or event of default in the Junior Loan Documents (as in effect on the date hereof) in a manner that is more restrictive to, or would increase the obligations or create additional obligations of, the Borrower or any of its Subsidiaries.

(b)        The Borrower agrees to deliver to the Designated Senior Representative copies of (i) any amendments, supplements or other modifications to the Junior Collateral Documents and (ii) any new Junior Collateral Documents, in each case promptly after effectiveness thereof. Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that each Junior Collateral Document under its Junior Debt Facility shall include the following language (or language to similar effect reasonably approved by the Designated Senior Representative):

“Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Junior Representative pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted in favor of the Senior Secured Parties (as defined in the Intercreditor Agreement referred to below), including liens and security interests granted to (A) Cortland Capital Market Services LLC, as collateral agent, pursuant to or in connection with the Credit Agreement dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), among the Borrower, the lenders party thereto, and Cortland Capital Market Services LLC, as administrative agent and collateral agent and (B) [INSERT NAME], as [INSERT CAPACITY], pursuant to or in connection with the [Additional Senior Debt Document] (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), among [                ] and the other parties thereto, and (ii) the exercise of any right or remedy by the Junior Representative hereunder is subject to the limitations and provisions of the Term Intercreditor Agreement dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among the Borrower, the lenders party thereto and Cortland Capital Market Services LLC, as administrative agent and collateral agent. In the event of any conflict between the terms of the Term Intercreditor Agreement and the terms of this Agreement, the terms of the Term Intercreditor Agreement shall govern.”

(c)        In the event that any Senior Representative enters into any amendment, waiver or consent in respect of any of the Senior Collateral Documents for the purpose of adding to or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Collateral Document or changing in any manner the rights of the Designated Senior Representative, the Senior Secured Parties, the Borrower or any other Grantor thereunder (including the release of any Liens in Senior Collateral), then such amendment, waiver or consent shall apply automatically to any comparable provision of the comparable Junior Collateral Documents without the consent of any Junior Representative or any Junior Secured Party and without any action by any Junior Representative, the Borrower or any other Grantor; provided , however , no such amendment, waiver or consent shall have the effect of (i) removing assets subject to the Lien of the Junior Collateral Documents (or Guarantees thereunder), except to the extent that a release of such Lien (or Guarantee) is permitted by Section 5.01 of this Agreement and provided that there is a corresponding release of the Lien securing the Senior Obligations, (ii) imposing duties that are adverse on any Junior Representative without its consent, (iii) altering the terms of the Junior Debt Documents to permit other Liens on the Collateral not permitted under the terms of the Junior Debt Documents or (iv) being prejudicial to the interests of the Junior Secured Parties to a greater extent than the Senior Secured Parties (other than by virtue of their relative priority and the rights and obligations

 

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hereunder). To the extent practicable, the Borrower will give the Junior Representatives written notice of any such amendment, waiver or consent in advance of the effectiveness thereof, provided that the failure to give such advance notice shall not cause any such amendment, waiver or consent to be invalid.

(d)        The Senior Debt Documents may be amended, amended and restated, restated, supplemented or otherwise modified in accordance with their terms without the consent of any Junior Secured Party.

SECTION 5.04.        [Reserved]

SECTION 5.05.         Gratuitous Bailee for Perfection .

(a)        Each Representative acknowledges and agrees that if it shall at any time hold a Lien securing any Secured Obligations on any Shared Collateral that can be perfected by the possession or control of such Shared Collateral or of any account in which such Shared Collateral is held, and if such Shared Collateral or any such account is in fact in the possession or under the control of such Representative, or of agents or bailees of such Representative (such Shared Collateral being referred to herein as the “Pledged or Controlled Collateral” ), or if it shall at any time obtain any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, such Representative shall also hold such Pledged or Controlled Collateral, or take such actions with respect to such landlord waiver, bailee’s letter or similar agreement or arrangement, as sub-agent or gratuitous bailee for the benefit of the relevant other Representatives, in each case solely for the purpose of perfecting the Liens granted under the relevant Collateral Documents and subject to the terms and conditions of this Section 5.05.

(b)        Except as otherwise specifically provided herein, until the Discharge of Senior Obligations has occurred, each Senior Representative shall be entitled to deal with the Pledged or Controlled Collateral in accordance with the terms of the Senior Debt Documents as if the Liens under the Junior Collateral Documents did not exist. The rights of the Junior Representatives and the Junior Secured Parties with respect to the Pledged or Controlled Collateral shall at all times be subject to the terms of this Agreement.

(c)        No Senior Representative shall have any obligation whatsoever to the Junior Representatives or any Junior Secured Party to assure that any of the Pledged or Controlled Collateral is genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the Shared Collateral, except as expressly set forth in this Section 5.05. The duties or responsibilities of any Representative under this Section 5.05 shall be limited solely to holding or controlling the Shared Collateral and the related Liens referred to in paragraph (a) of this Section 5.05 as sub-agent and gratuitous bailee for the relevant Representatives for purposes of perfecting the Lien held by such Representative.

(d)        No Senior Representative shall have by reason of the Junior Collateral Documents or this Agreement, or any other document, a fiduciary relationship in respect of any Junior Representative or any Junior Secured Party, and each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby waives and releases each Senior Representative from all claims and liabilities arising pursuant to such Senior Representative’s role under this Section 5.05 as sub-agent and gratuitous bailee with respect to the Shared Collateral. No Junior Representative shall have by reason of the Senior Collateral Documents or this Agreement, or any other document, a fiduciary relationship in respect of any Senior Representative or any Senior Secured Party, and each Senior Representative, for itself and on behalf of each Senior Secured Party under its Senior Debt Facility, hereby waives and releases each Junior Representative from all claims and liabilities

 

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arising pursuant to such Junior Representative’s role under this Section 5.05 as sub-agent and gratuitous bailee with respect to the Shared Collateral.

(e)        Upon the Discharge of Senior Obligations, each Senior Representative shall, at the Grantors’ sole cost and expense, (i) (A) deliver to the Designated Junior Representative, to the extent that it is legally permitted to do so, all Shared Collateral, including all proceeds thereof, held or controlled by such Senior Representative or any of its agents or bailees, including the transfer of possession and control, as applicable, of the Pledged or Controlled Collateral, together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and assign its rights under any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, or (B) direct and deliver such Shared Collateral as a court of competent jurisdiction may otherwise direct, (ii) notify any applicable insurance carrier that it is no longer entitled to be a loss payee or additional insured under the insurance policies of any Grantor issued by such insurance carrier and (iii) notify any governmental authority involved in any condemnation or similar proceeding involving any Grantor that the Designated Junior Representative is entitled to approve any awards granted in such proceeding. The Borrower and the other Grantors shall take such further action as is required to effectuate the transfer contemplated hereby and shall indemnify each Senior Representative for loss or damage suffered by such Senior Representative as a result of such transfer, except for loss or damage suffered by such Senior Representative as a result of its own willful misconduct, gross negligence or bad faith. No Senior Representative has any obligation to follow instructions from the Designated Junior Representative in contravention of this Agreement.

(f)        Neither the Designated Senior Representative nor any of the other Senior Representatives or Senior Secured Parties shall be required to marshal any present or future collateral security for any obligations of the Borrower or any other Grantor to the Designated Senior Representative, any other Senior Representative or any Senior Secured Party under the Senior Debt Documents or any assurance of payment in respect thereof, or to resort to such collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall be cumulative and in addition to all other rights, however existing or arising.

SECTION 5.06. When Discharge of Senior Obligations Deemed to Not Have Occurred . If, at any time substantially concurrently with or after the Discharge of Senior Obligations has occurred, the Borrower or any other Grantor incurs any Senior Obligations (other than in respect of the payment of indemnities surviving the Discharge of Senior Obligations), then the Discharge of Senior Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Discharge of Senior Obligations) and the applicable agreement governing such Senior Obligations shall automatically be treated as a Senior Debt Document for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Shared Collateral set forth herein and the granting by the Designated Senior Representative of amendments, waivers and consents hereunder, subject to Section 5.03, and the agent, representative or trustee for the holders of such Senior Obligations shall be a Senior Representative for all purposes of this Agreement. Upon receipt of notice of such incurrence (including the identity of the new Designated Senior Representative), each Junior Representative (including the Designated Junior Representative) shall promptly (a) enter into such documents and agreements (at the expense of the Borrower), including amendments or supplements to this Agreement, as the Borrower or such new Senior Representative shall reasonably request in writing in order to provide the new Senior Representative the rights of a Senior Representative contemplated hereby, (b) deliver to the Designated Senior Representative, to the extent that it is legally permitted to do so, all Shared Collateral, including all proceeds thereof, held or controlled by such Junior Representative or any of its agents or bailees, including the transfer of possession and control, as applicable, of the Pledged or

 

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Controlled Collateral, together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and assign its rights under any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, (c) notify any applicable insurance carrier that it is no longer entitled to be a loss payee or additional insured under the insurance policies of any Grantor issued by such insurance carrier and (d) notify any governmental authority involved in any condemnation or similar proceeding involving a Grantor that the new Designated Senior Representative is entitled to approve any awards granted in such proceeding.

SECTION 5.07. Purchase Right . Without prejudice to the enforcement of the Senior Secured Parties’ remedies, the Senior Secured Parties agree that following (a) the acceleration of the Senior Obligations in accordance with the terms of the Senior Debt Documents or (b) the commencement of an Insolvency or Liquidation Proceeding (each, a “ Purchase Event ”), within ten (10) Business Days of the Purchase Event, one or more of the Junior Secured Parties may request, and the Senior Secured Parties hereby offer the Junior Secured Parties the option, to purchase all, but not less than all, of the aggregate amount of Senior Obligations outstanding at the time of purchase at par, plus any cash collateral for any potential indemnification or other contingent obligations as may be reasonably requested by the Required Lenders (as defined in the Senior Credit Agreement) or the Senior Representative plus any premium that would be applicable upon prepayment of the Senior Obligations and accrued and unpaid interest, fees, and expenses without warranty or representation or recourse (except for representations and warranties required to be made by assigning lenders pursuant to the Assignment and Assumption (as such term is defined in the Senior Credit Agreement)). If such right is exercised, the parties shall endeavor to close promptly thereafter but in any event within ten (10) Business Days of the request. If one or more of the Junior Secured Parties exercises such purchase right, it shall be exercised pursuant to documentation mutually acceptable to each of the Designated Senior Representative and the Junior Representatives. If none of the Junior Secured Parties timely exercises such purchase right, the Senior Secured Parties shall have no further obligations pursuant to this Section 5.07 for such Purchase Event and may take any further actions in their sole discretion in accordance with the Senior Debt Documents and this Agreement.

ARTICLE VI

Insolvency or Liquidation Proceedings .

SECTION 6.01. Financing and Sale Issues .

(a)        Until the Discharge of Senior Obligations has occurred, if the Borrower or any other Grantor or any of their Subsidiaries shall be subject to any Insolvency or Liquidation Proceeding and the Designated Senior Representative shall desire to consent (or not object) to, as applicable, the sale, use or lease of cash or other collateral or to consent (or not object) to the Borrower’s or any other Grantor’s or applicable Subsidiary’s obtaining financing under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law to be secured by the Senior Collateral (“ DIP Financing ”), then each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that it will (as applicable) raise no objection to and will not otherwise contest (or support any person in objecting or otherwise contesting) such use of such cash or other collateral or such DIP Financing and, except to the extent permitted by the proviso in clause (ii) of Section 3.01(a) and Section 6.03, will not request adequate protection or any other relief in connection therewith and, to the extent the Liens securing the Senior Obligations under the Senior Credit Agreement or, if no Senior Credit Agreement then exists, under the other Senior Debt Documents are subordinated to or pari passu with such DIP Financing, will subordinate (and will be deemed hereunder to have subordinated) its Liens in the Shared Collateral to (x) the Liens securing such DIP Financing (and all obligations relating thereto) on the same basis as the Liens securing the Junior Obligations are so

 

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subordinated to Liens securing Senior Obligations under this Agreement, (y) any adequate protection Liens provided to the Senior Secured Parties and (z) any “carve-out” for professional and United States Trustee fees agreed to by the Designated Senior Representative, and the Designated Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that notice received two (2) Business Days prior to the entry of an order approving such usage of cash or other collateral or approving such DIP Financing shall be adequate notice. Without the prior written consent of the Designated Senior Representative, no Junior Secured Party may, directly or indirectly, provide or propose DIP Financing to the Borrower, any Grantor or any of their Subsidiaries.

(b)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, further agrees that it will not object to, contest, or support any other Person in objecting to or contesting (i) any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of Senior Obligations with respect to the Senior Collateral made by the Designated Senior Representative, any other Senior Representative or any other Senior Secured Party, (ii) any lawful exercise by any Senior Secured Party of the right to credit bid Senior Obligations at any sale in foreclosure of Senior Collateral (including, without limitation, pursuant to Section 363(k) of the Bankruptcy Code or any similar provision under any other applicable Bankruptcy Law) or to exercise any rights under Section 1111(b) of the Bankruptcy Code or any similar provision under any other applicable Bankruptcy Law with respect to the Senior Collateral, (iii) any other request for judicial relief made in any court by any Senior Secured Party relating to the lawful enforcement of any Lien on Senior Collateral or (iv) any order relating to a sale or other disposition of any or all of the Senior Collateral for which the Designated Senior Representative has consented that provides, to the extent such sale or other disposition is to be free and clear of Liens, that the Liens securing the Senior Obligations and the Junior Obligations will attach to the proceeds of the sale on the same basis of priority as the Liens on the Shared Collateral securing the Senior Obligations rank to the Liens on the Shared Collateral securing the Junior Obligations pursuant to this Agreement.

SECTION 6.02. Relief from the Automatic Stay . Until the Discharge of Senior Obligations has occurred, each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that none of them shall seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding or take any action in derogation thereof, in each case in respect of any Shared Collateral, without the prior written consent of the Designated Senior Representative.

SECTION 6.03. Adequate Protection .

(a)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that none of them shall object, contest or support any other Person objecting to or contesting (a) any request by the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties for adequate protection in any form, (b) any objection by the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties to any motion, relief, action or proceeding based on the Designated Senior Representative’s or any other Senior Representative’s or Senior Secured Party’s claiming a lack of adequate protection or (c) the allowance and payment of interest, fees, expenses or other amounts of the Designated Senior Representative, any other Senior Representative or any other Senior Secured Party as adequate protection or otherwise under Section 506(b) or 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law.

(b)        Notwithstanding anything contained in this Section 6.03 or in Section 6.01, in any Insolvency or Liquidation Proceeding, (i) if the Senior Secured Parties (or any subset thereof) are granted adequate protection in the form of a Lien on additional or replacement collateral and/or a

 

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superpriority administrative expense claim in connection with any DIP Financing or use of cash collateral under Section 363 or 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, then each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, may seek or request adequate protection in the form of (as applicable) a Lien on such additional or replacement collateral and/or a superpriority administrative expense claim, which Lien and/or superpriority administrative expense claim (as applicable) is subordinated to the Liens securing and providing adequate protection for, and claims with respect to, the Senior Obligations and such DIP Financing (and all obligations relating thereto), in the case of any such Lien, on the same basis as the Liens securing the Junior Obligations are so subordinated to the Liens securing the Senior Obligations under this Agreement and (ii) in the event any Junior Representatives, for themselves and on behalf of the Junior Secured Parties under their Junior Debt Facilities, seek or request adequate protection and such adequate protection is granted in the form of (as applicable) a Lien on additional or replacement collateral and/or a superpriority administrative expense claim, then such Junior Representatives, for themselves and on behalf of each Junior Secured Party under their Junior Debt Facilities, agree that the Senior Representatives shall also be granted (as applicable) a senior Lien on such additional or replacement collateral as security and adequate protection for the Senior Obligations and/or a senior superpriority administrative expense claim, and that any Lien on such additional or replacement collateral securing or providing adequate protection for the Junior Obligations and/or superpriority administrative expense claim shall be subordinated to the Liens on such collateral securing and claims with respect to the Senior Obligations and any such DIP Financing (and all obligations relating thereto) and any other Liens and claims granted to the Senior Secured Parties as adequate protection, in the case of any such Lien, on the same basis as the other Liens securing the Junior Obligations are so subordinated to such Liens securing Senior Obligations under this Agreement.

(c)        Without limiting the generality of the foregoing, to the extent that the Senior Secured Parties are granted adequate protection in the form of payments in the amount of current post-petition fees and expenses, and/or other cash payments, then the Junior Representatives, for themselves and on behalf of the Junior Secured Parties under their Junior Debt Facilities, shall not be prohibited from seeking adequate protection in the form of payments in the amount of current post-petition incurred fees and expenses, and/or other cash payments (as applicable), subject to the right of the Senior Secured Parties to object to the reasonableness of the amounts of fees and expenses or other cash payments so sought by the Junior Secured Parties; provided , however, that until the Discharge of Senior Obligations, if any Junior Representative or any Junior Secured Party shall, at any time, receive any post-petition fees and expenses and/or other cash payments, it shall pay such post-petition fees and expenses and/or other cash payments over to the Designated Senior Representative in accordance with the terms of Section 4.02.

SECTION 6.04. Preference Issues . If any Senior Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to disgorge, turn over or otherwise pay any amount to the estate of the Borrower or any other Grantor (or any trustee, receiver or similar Person therefor), because the payment of such amount was declared to be fraudulent or preferential in any respect or for any other reason, any amount (a “ Recovery ”), whether received as proceeds of security, enforcement of any right of setoff, recoupment or otherwise, then for all purposes of this Agreement, the Senior Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby agrees that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable

 

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to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.

SECTION 6.05. Separate Grants of Security and Separate Classifications . Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, acknowledges and agrees that (a) the grants of Liens pursuant to the Senior Collateral Documents and the Junior Collateral Documents constitute separate and distinct grants of Liens, (b) the Junior Secured Parties’ claims against the Grantors in respect of their Liens on the Shared Collateral constitute junior claims separate and apart (and of a different class) from the senior claims of the Senior Secured Parties against the Grantors in respect of the Shared Collateral, and (c) because of, among other things, their differing rights in the Shared Collateral, the Junior Obligations are fundamentally different from the Senior Obligations and must be separately classified in any Plan of Reorganization proposed, confirmed, or adopted in an Insolvency or Liquidation Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Senior Secured Parties and the Junior Secured Parties in respect of the Shared Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby acknowledges and agrees that all distributions from the Shared Collateral shall be made as if there were separate classes of senior and junior secured claims against the Grantors in respect of the Shared Collateral (with the effect being that, to the extent that the aggregate value of the Shared Collateral is sufficient (for this purpose ignoring all claims held by the Junior Secured Parties), the Senior Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest, fees, and expenses (whether or not allowed or allowable in such Insolvency or Liquidation Proceeding) before any distribution is made from the Shared Collateral in respect of the Junior Obligations, with each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby acknowledging and agreeing to turn over to the Designated Senior Representative amounts otherwise received or receivable by them from the Shared Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Junior Secured Parties. This Section 6.05 is intended to govern the relationship between the classes of claims held by the Junior Secured Parties, on the one hand, and a collective class of claims comprised of the Senior Credit Agreement Secured Parties and any Additional Senior Secured Parties (as opposed to separate classes of each such series of claims), on the other hand, and, for the avoidance of doubt, nothing set forth herein shall in any way alter or modify the relationship of each series of such separate claims held by the Senior Secured Parties or otherwise cause such different claims to be combined into one or more classes or otherwise classified in a manner that violates any relevant Intercreditor Agreement.

SECTION 6.06. No Waivers of Rights of Senior Secured Parties . Nothing contained herein shall, except as expressly provided herein, prohibit or in any way limit the Designated Senior Representative, any other Senior Representative or any other Senior Secured Party from objecting in any Insolvency or Liquidation Proceeding or otherwise to any action taken by any Junior Secured Party, including the seeking by any Junior Secured Party of adequate protection or the asserting by any Junior Secured Party of any of its rights and remedies under the Junior Debt Documents or otherwise.

SECTION 6.07. Application . This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under Section 510(a) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, shall be effective before, during and after the commencement of any Insolvency or Liquidation Proceeding. The relative rights as to the Shared Collateral and proceeds thereof shall continue after the commencement of any Insolvency or Liquidation Proceeding on the same basis as prior to the date of the petition therefor, subject to any court order approving the financing of, or

 

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use of cash collateral by, any Grantor. All references herein to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor.

SECTION 6.08. Other Matters . To the extent that any Junior Representative or any Junior Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law with respect to any of the Shared Collateral, such Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees not to assert any such rights without the prior written consent of the Designated Senior Representative, provided that if requested by the Designated Senior Representative, such Junior Representative shall timely exercise such rights in the manner requested by the Designated Senior Representative, including any rights to payments in respect of such rights.

SECTION 6.09. 506(c) Claims . Until the Discharge of Senior Obligations has occurred, each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees that it will not assert or enforce any claim under Section 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law senior to or on a parity with the Liens securing the Senior Obligations for costs or expenses of preserving or disposing of any Shared Collateral.

SECTION 6.10. Reorganization Securities . If, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed, pursuant to a Plan of Reorganization on account of both the Senior Obligations and the Junior Obligations, then, to the extent the debt obligations distributed on account of the Senior Obligations and on account of the Junior Obligations are secured by Liens upon the same assets or property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

SECTION 6.11. Post-Petition Interest . None of the Junior Representatives or any other Junior Secured Party shall oppose or seek to challenge any claim by any Senior Representative or any Senior Secured Party for allowance in any Insolvency or Liquidation Proceeding of Senior Obligations consisting of claims for post-petition interest, fees, costs, expenses, and/or other charges, under Section 506(b) of the Bankruptcy Code or otherwise (for this purpose ignoring all claims and Liens held by the Junior Secured Parties on the Shared Collateral).

SECTION 6.12. Voting . No Junior Secured Party shall, without the consent of the Designated Senior Representative, propose, vote in favor of, or otherwise directly or indirectly support any Plan of Reorganization that does not provide for the Discharge of Senior Obligations in full in cash (including any amounts owing in respect of post-petition interest, fees, and expenses) and each Junior Secured Party will vote on any Plan of Reorganization as directed by the Designated Senior Representative.

ARTICLE VII

Reliance; etc .

SECTION 7.01. Reliance . The consent by the Senior Secured Parties to the execution and delivery of the Junior Debt Documents to which the Senior Secured Parties have consented and all loans and other extensions of credit made or deemed made on and after the date hereof by the Senior Secured Parties to the Borrower or any Subsidiary have been given and made in reliance upon this Agreement. Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, acknowledges that it and such Junior Secured Parties have, independently and without reliance on the Designated Senior Representative or any other Senior Representative or other Senior

 

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Secured Party, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the Junior Debt Documents to which they are party or by which they are bound, this Agreement and the transactions contemplated hereby and thereby, and they will continue to make their own credit decision in taking or not taking any action under the Junior Debt Documents or this Agreement.

SECTION 7.02. No Warranties or Liability . Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, acknowledges and agrees that neither the Designated Senior Representative nor any other Senior Representative or other Secured Party has made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Senior Debt Documents, the ownership of any Shared Collateral or the perfection or priority of any Liens thereon. The Senior Secured Parties will be entitled to manage and supervise their respective loans and extensions of credit under the Senior Debt Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and the Senior Secured Parties may manage their loans and extensions of credit without regard to any rights or interests that the Junior Representatives and the Junior Secured Parties have in the Shared Collateral or otherwise, except as otherwise provided in this Agreement. Neither the Designated Senior Representative nor any other Senior Representative or other Senior Secured Party shall have any duty to any Junior Representative or Junior Secured Party to act in a manner that will prevent, or refrain from acting in a manner that allows or results in, the occurrence or continuance of an event of default or default under any agreement with the Borrower or any Subsidiary of the Borrower (including the Junior Debt Documents), regardless of any knowledge thereof that they may have or be charged with. Except as expressly set forth in this Agreement, the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties have not otherwise made to each other, nor do they hereby make to each other, any warranties, express or implied, nor do they assume any liability to each other with respect to (a) the enforceability, validity, value or collectability of any of the Senior Obligations, the Junior Obligations or any guarantee or security which may have been granted to any of them in connection therewith, (b) any Grantor’s title to or right to transfer any of the Shared Collateral or (c) any other matter except as expressly set forth in this Agreement.

SECTION 7.03. Obligations Unconditional . All rights, interests, agreements and obligations of the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties hereunder shall remain in full force and effect irrespective of:

(a)        any lack of validity or enforceability of any Senior Debt Document or any Junior Debt Document;

(b)        any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations or Junior Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Senior Debt Document or of the terms of any Junior Debt Document;

(c)        any exchange of any security interest in any Shared Collateral or any other collateral or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Obligations or Junior Obligations or any guarantee thereof;

(d)        the commencement of any Insolvency or Liquidation Proceeding in respect of the Borrower or any other Grantor; or

 

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(e)        any other circumstances that otherwise might constitute a defense available to, or a discharge of, (i) the Borrower or any other Grantor in respect of the Senior Obligations (other than the Discharge of Senior Obligations subject to Sections 5.06 and 6.04) or (ii) any Junior Representative or Junior Secured Party in respect of this Agreement.

ARTICLE VIII

Miscellaneous

SECTION 8.01. Conflicts; ABL/Term Loan Intercreditor Agreement . In the event of any conflict or inconsistency between (x) the provisions of this Agreement and the provisions of any Senior Debt Document or any Junior Debt Document, the provisions of this Agreement shall govern and (y) the provisions of this Agreement and the provisions of the ABL/Term Loan Intercreditor Agreement with respect to the ABL Priority Collateral, the ABL/Term Loan Intercreditor Agreement shall govern. Notwithstanding anything herein to the contrary, the exercise of any right or remedy by any Representative or Secured Party hereunder with respect to ABL Priority Collateral is subject to the terms of the ABL/Term Loan Intercreditor Agreement.

SECTION 8.02. Continuing Nature of this Agreement; Severability . Subject to Section 6.04, this Agreement shall continue to be effective until the Discharge of Senior Obligations shall have occurred. This is a continuing agreement of Lien subordination, and the Senior Secured Parties may continue, at any time and without notice to the Junior Representatives or any Junior Secured Party, to extend credit and other financial accommodations and lend monies to or for the benefit of the Borrower or any other Grantor constituting Senior Obligations in reliance hereon. The terms of this Agreement shall survive and continue in full force and effect in any Insolvency or Liquidation Proceeding. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 8.03. Amendments; Waivers .

(a)        No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.

(b)        Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified (other than pursuant to any Joinder Agreement) except pursuant to an agreement or agreements in writing entered into by each Representative (and with respect to any such termination, waiver, amendment or modification which by the terms of this Agreement requires the Borrower’s consent or which affects the Borrower or any other Grantor, with the consent of the Borrower).

 

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(c)        Notwithstanding the foregoing, without the consent of any Secured Party, any Representative may become a party hereto by execution and delivery of a Joinder Agreement in accordance with Section 8.09 of this Agreement and upon such execution and delivery, such Representative and the Secured Parties and Senior Obligations or Junior Obligations of the Debt Facility for which such Representative is acting shall be subject to the terms hereof.

(d)        Notwithstanding the foregoing, without the consent of any other Representative or Secured Party, the Designated Senior Representative may effect amendments and modifications to this Agreement to the extent necessary to reflect any incurrence of any Additional Junior Debt Obligations or Additional Senior Debt Obligations in compliance with the Senior Credit Agreement, the Junior Credit Agreement, any Additional Senior Debt Documents and any Additional Junior Debt Documents.

SECTION 8.04. Information Concerning Financial Condition of the Borrower and the other Grantors . The Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties shall each be responsible for keeping themselves informed of (a) the financial condition of the Borrower and the other Grantors and all endorsers or guarantors of the Senior Obligations or the Junior Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Senior Obligations or the Junior Obligations. The Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties shall have no duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that the Designated Senior Representative, any other Senior Representative, any Senior Secured Party, any Junior Representative or any Junior Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it shall be under no obligation to (i) make, and the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties shall not make or be deemed to have made, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (ii) provide any additional information or to provide any such information on any subsequent occasion, (iii) undertake any investigation or (iv) disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

SECTION 8.05. Subrogation . Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, hereby agrees not to assert any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Senior Obligations has occurred.

SECTION 8.06. Application of Payments . Except as otherwise provided herein, all payments received by the Senior Secured Parties may be applied, reversed and reapplied, in whole or in part, to such part of the Senior Obligations as the Senior Secured Parties, in their sole discretion, deem appropriate, consistent with the terms of the Senior Debt Documents. Except as otherwise provided herein, each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, assents to any such extension or postponement of the time of payment of the Senior Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the Senior Obligations and to the addition or release of any other Person primarily or secondarily liable therefor.

SECTION 8.07. Additional Grantors . The Borrower agrees that, if any Subsidiary of the Borrower shall become a Grantor after the date hereof, it will promptly cause such Subsidiary to become party hereto by executing and delivering an instrument in the form of Annex II. Upon such execution and delivery, such Subsidiary will become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of such instrument shall not require the consent of

 

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any other party hereunder, and will be acknowledged by the Designated Senior Representative. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

SECTION 8.08. Dealings with Grantors . Upon any application or demand by the Borrower or any other Grantor to the Designated Senior Representative or the Designated Junior Representative to take or permit any action under any of the provisions of this Agreement or under any Collateral Document (if such action is subject to the provisions hereof), at the request of such Representative, such Borrower or such Grantor, as appropriate, shall furnish to the Designated Junior Representative or the Designated Senior Representative a certificate of an appropriate officer ( an “ Officer’s Certificate ”) stating that all conditions precedent, if any, provided for in this Agreement or such Collateral Document, as the case may be, relating to the proposed action have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Agreement or any Collateral Document relating to such particular application or demand, no additional certificate or opinion need be furnished.

SECTION 8.09. Additional Debt Facilities . To the extent, but only to the extent, (x) permitted by the provisions of the then extant Senior Debt Documents and the Junior Debt Documents and this Agreement and (y) consented to by the Designated Senior Representative, the Borrower may incur or issue and sell one or more series or classes of Additional Junior Debt and one or more series or classes of Additional Senior Debt. Any such additional class or series of Additional Junior Debt (the “ Junior Class  Debt ”) may be secured by a junior priority, subordinated Lien on Shared Collateral, in each case under and pursuant to the Junior Collateral Documents for such Junior Class Debt, if and subject to the condition that the Representative of any such Junior Class Debt (each, a “ Junior Class  Debt Representative ”), acting on behalf of the holders of such Junior Class Debt (such Representative and holders in respect of any such Junior Class Debt being referred to as the “ Junior Class  Debt Parties ”), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (v), as applicable, of the immediately succeeding paragraph. Any such additional class or series of Additional Senior Debt (the “ Senior Class  Debt ”; and the Senior Class Debt and Junior Class Debt, collectively, the “ Class  Debt ”) may be secured by a senior Lien on Shared Collateral, in each case under and pursuant to the Senior Collateral Documents, if and subject to the condition that the Representative of any such Senior Class Debt (each, a “ Senior Class  Debt Representative ”; and the Senior Class Debt Representatives and Junior Class Debt Representatives, collectively, the “ Class  Debt Representatives ”), acting on behalf of the holders of such Senior Class Debt (such Representative and holders in respect of any such Senior Class Debt being referred to as the “ Senior Class  Debt Parties ”; and the Senior Class Debt Parties and Junior Class Debt Parties, collectively, the “ Class  Debt Parties ”), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (v), as applicable, of the immediately succeeding paragraph. In order for a Class Debt Representative to become a party to this Agreement:

(i)        such Class Debt Representative shall have executed and delivered a Joinder Agreement to the Designated Senior Representative and the Designated Junior Representative substantially in the form of Annex III (if such Representative is a Junior Class Debt Representative) or Annex IV (if such Representative is a Senior Class Debt Representative) (with such changes as may be reasonably approved by the Designated Senior Representative and such Class Debt Representative) pursuant to which it becomes a Representative hereunder, and the Class Debt in respect of which such Class Debt Representative is the Representative and the related Class Debt Parties become subject hereto and bound hereby;

(ii)        the Borrower shall have delivered to the Designated Senior Representative and the Designated Junior Representative true and complete copies of each of the

 

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Junior Debt Documents or Senior Debt Documents, as applicable, relating to such Class Debt, certified as being true and correct by a Responsible Officer of the Borrower;

(iii)        in the case of any Junior Class Debt, all filings, recordations and/or amendments or supplements to the Junior Collateral Documents necessary to confirm and perfect the junior priority Liens securing the relevant Junior Obligations relating to such Class Debt shall have been made, executed and/or delivered (or, with respect to any such filings or recordations, acceptable provisions to perform such filings or recordings have been taken in the reasonable judgment of the Designated Junior Representative), and all fees and taxes in connection therewith shall have been paid (or acceptable provisions to make such payments have been taken in the reasonable judgment of the Designated Senior Representative);

(iv)        the Borrower shall have delivered to the Designated Senior Representative and the Designated Junior Representative an Officer’s Certificate stating that such Additional Senior Debt Obligations or Additional Junior Debt Obligations are permitted by each applicable Senior Debt Document and Junior Debt Document to be incurred, or to the extent a consent is otherwise required to permit the incurrence of such Additional Senior Debt Obligations or Additional Junior Debt Obligations under any applicable Senior Debt Document and Junior Debt Document, each Grantor has obtained the requisite consent; and

(v)        the Junior Debt Documents or Senior Debt Documents, as applicable, relating to such Class Debt shall provide, in a manner reasonably satisfactory to the Designated Senior Representative, that each Class Debt Party with respect to such Class Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Class Debt.

SECTION 8.10. Consent to Jurisdiction; Waivers . The Designated Senior Representative and each other Representative, on behalf of itself and the Secured Parties of the Debt Facility for which it is acting, irrevocably and unconditionally:

(a)        submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York sitting in New York County, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

(b)        consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c)        agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person (or its Representative) at the address referred to in Section 8.11;

(d)        agrees that nothing herein shall affect the right of any other party hereto (or any Secured Party) to effect service of process in any other manner permitted by law or shall limit the right of any party hereto (or any Secured Party) to enforce any judgment obtained in a court referred to in the preceding clause (a) in any other jurisdiction; and

(e)        waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 8.10 any special, exemplary, punitive or consequential damages.

 

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SECTION 8.11. Notices . All notices, requests, demands and other communications provided for or permitted hereunder shall be in writing and shall be sent:

(i)        if to the Borrower or any other Grantor, to Horizon Global Corporation at 2600 West Big Beaver Rd., Suite 555, Troy, MI 48084, Attention of Jay Goldbaum, Legal Director (Telephone No. (248) 593-8838, Telecopy No. (248) 203-6434);

(ii)        if to the Senior Collateral Agent, to Cortland Capital Market Services LLC at 225 W. Washington St., 9th Floor, Chicago, Illi-nois 60606, Attention: Frances Real and Legal Department, Email: cpcagen-cy@cortlandglobal.com and legal@cortlandglobal.com, with a copy to Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, Attention: Monica Holland, Email: monica.holland@davispolk.com; andCortland Capital Market Services LLC;

(iii)        if to the Junior Collateral Agent, to JPMorgan Chase Bank, N.A., 10 South Dearborn, Floor 7, Chicago, Illinois 60603, Attention: Joyce King, Telecopy: 888-292-9533, with a copy to Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, NY 10017, Attention: Jessica Tchinsky; and Email: jtuchinsky@stblaw.com .

(iv)        if to any other Representative, to it at the address specified by it in the Joinder Agreement delivered by it pursuant to Section 8.09.

Any party hereto may change its address, fax number or email address for notices and other communications hereunder by notice to the other parties hereto. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing, may be personally served, telecopied or sent by courier service or U.S. mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or upon receipt via U.S. mail (registered or certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as set forth above or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties. If and to the extent agreed to in writing among the Designated Senior Representative any other Representative from time to time, notices and other communications may also be delivered to any person so agreeing by e-mail to the e-mail address provided from time to time by such person.

SECTION 8.12. Further Assurances . Each Senior Representative, on behalf of itself and each Senior Secured Party under its Senior Debt Facility, and each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees that it will take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the other parties hereto may reasonably request to effectuate the terms of, and the Lien priorities contemplated by, this Agreement.

SECTION 8.13. GOVERNING LAW; WAIVER OF JURY TRIAL .

(a)        THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW.

(b)        EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

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SECTION 8.14. Parties in Interest . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, as well as the other Secured Parties, all of whom are intended to be bound by, and to be third party beneficiaries of, this Agreement. No other Person shall have or be entitled to assert rights or benefits hereunder.

SECTION 8.15. Headings . Article, Section and Annex headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 8.16. Counterparts . This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 8.17. Authorization . By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement. The Senior Collateral Agent represents and warrants that this Agreement is binding upon the Senior Credit Agreement Secured Parties. The Junior Collateral Agent represents and warrants that this Agreement is binding upon the Junior Credit Agreement Secured Parties. Each Additional Senior Agent and Additional Junior Agent represents and warrants that this Agreement is binding upon the Additional Senior Secured Parties or Additional Junior Secured Parties for which it is acting as an agent.

SECTION 8.18. Provisions Solely to Define Relative Rights . The lien priorities set forth in this Agreement and the rights and benefits hereunder in respect of such lien priorities shall inure solely to the benefit of the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties, and their respective permitted successors and assigns, and no other Person (including the Grantors, or any trustee, receiver, debtor in possession or bankruptcy estate in a bankruptcy or like proceeding) shall have or be entitled to assert such rights. Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional, to pay the Secured Obligations as and when the same shall become due and payable in accordance with their terms.

SECTION 8.19. Effectiveness . This Agreement shall become effective when executed and delivered by the parties hereto.

SECTION 8.20. Senior Collateral Agent and Junior Collateral Agent . It is understood and agreed that (a) the Senior Collateral Agent is entering into this Agreement in (i) its capacities as administrative agent and collateral agent under the Senior Credit Agreement and the provisions of Article VIII of the Senior Credit Agreement applicable to it as administrative agent and collateral agent thereunder shall also apply to it as Designated Senior Representative hereunder and (ii) its capacity as Senior Collateral Agent under any relevant Intercreditor Agreement (if applicable) and (b) the Junior Collateral Agent is entering in this Agreement in its capacity as administrative agent and collateral agent under the Junior Credit Agreement Loan Documents and the provisions of Article VIII of the Junior Credit Agreement applicable to the administrative agent and collateral agent thereunder shall also apply to the Junior Collateral Agent hereunder.

For the avoidance of doubt, the parties hereto acknowledge that in no event shall the Senior Collateral Agent or the Junior Collateral Agent be responsible or liable for special, indirect, or consequential damages of any kind whatsoever (including, but not limited to, damages for loss of profit)

 

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irrespective of whether any such party has been advised of the likelihood of such damages and regardless of the form of action.

SECTION 8.21. Relative Rights . Except to the extent expressly contemplated herein, nothing in this Agreement is intended to or will (a) amend, waive or otherwise modify the provisions of any Senior Debt Documents or any Junior Debt Documents, or permit the Borrower or any other Grantor to take any action, or fail to take any action, to the extent such action or failure would otherwise constitute a breach of, or default under, any Senior Debt Documents or any Junior Debt Documents, (b) change the relative priorities of the Senior Obligations or the Liens granted under the Senior Collateral Documents on the Shared Collateral (or any other assets) as among the Senior Secured Parties, (c) otherwise change the relative rights of the Senior Secured Parties in respect of the Shared Collateral as among such Senior Secured Parties or (d) obligate the Borrower or any other Grantor to take any action, or fail to take any action, that would otherwise constitute a breach of, or default under, any Senior Debt Document or any Junior Debt Document.

SECTION 8.22. Survival of Agreement . All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.

SECTION 8.23. Integration . This Agreement together with the other Senior Debt Documents and Junior Debt Documents represents the entire agreement of each of the Grantors and the Senior Secured Parties with respect to the subject matter hereof and there are no promises, undertakings, representations or warranties by any Grantor, any Representative or any other Secured Party relative to the subject matter hereof not expressly set forth or referred to herein or in the other Senior Debt Documents or Junior Debt Documents.

[ Remainder of page intentionally left blank ]

 

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

 

CORTLAND CAPITAL MARKET SERVICES LLC, as Senior Collateral Agent and Designated Senior Representative

By:    

/s/ Jessica J. Mead

  Name: Jessica J. Mead
  Title: General Counsel

 

[Signature Page to Term Intercreditor Agreement]

JPMORGAN CHASE BANK, N.A., as Junior Collateral Agent and Designated Junior Representative,
By:    

/s/ Sabir Hashmy

  Name: Sabir Hashmy
  Title: Managing Director

 

[Signature Page to Term Intercreditor Agreement]

HORIZON GLOBAL CORPORATION , as Borrower
By:   

/s/ Brian Whittman

  Name: Brian Whittman
  Title: Vice President, Finance

 

[Signature Page to Term Intercreditor Agreement]

HORIZON GLOBAL COMPANY LLC , as a Guarantor
By:   

/s/ Brian Whittman

  Name: Brian Whittman
  Title: Vice President, Finance
HORIZON GLOBAL AMERICAS INC. , as a Guarantor
By:  

/s/ Brian Whittman

  Name: Brian Whittman
  Title: Vice President, Finance
HORIZON INTERNATIONAL HOLDINGS LLC , as a Guarantor
By:  

/s/ Brian Whittman

  Name: Brian Whittman
  Title: Vice President, Finance

 

[Signature Page to Term Intercreditor Agreement]

ANNEX I

Grantors

 

   

Name

 

  

Jurisdiction of Organization

 

   
Horizon Global Corporation    Delaware
   
Horizon Global Company LLC    Delaware
   
Horizon Global Americas Inc.    Delaware

 

I-1

ANNEX II

SUPPLEMENT NO. [    ] dated as of [            ], 20[    ], to the TERM INTERCREDITOR AGREEMENT dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”), among Horizon Global Corporation, a Delaware limited liability company (the “ Borrower ”); the other Grantors (as defined below) party hereto; Cortland Capital Market Services LLC, as collateral agent for the Senior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Senior Collateral Agent ”); JPMorgan Chase Bank, N.A., as collateral agent for the Junior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Junior Collateral Agent ”); and each Additional Senior Agent (as defined below) and each Additional Junior Agent (as defined below) that from time to time becomes a party thereto.

Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Term Intercreditor Agreement.

The Grantors have entered into the Term Intercreditor Agreement. Pursuant to certain Senior Debt Documents and certain Junior Debt Documents, certain newly acquired or organized Restricted Subsidiaries of Holdings are required to enter into the Term Intercreditor Agreement. Section 8.07 of the Term Intercreditor Agreement provides that such Restricted Subsidiaries may become parties to the Term Intercreditor Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Restricted Subsidiary (the “ New Grantor ”) is executing this Supplement in accordance with the requirements of the Senior Credit Agreement, the Junior Credit Agreement, the Additional Junior Debt Documents and the Additional Senior Debt Documents.

Accordingly, the Designated Senior Representative and the New Grantor agree as follows:

SECTION 1.    In accordance with Section 8.07 of the Term Intercreditor Agreement, the New Grantor by its signature below becomes a Grantor under the Term Intercreditor Agreement with the same force and effect as if originally named therein as a Grantor, and the New Grantor hereby agrees to all the terms and provisions of the Term Intercreditor Agreement applicable to it as a Grantor thereunder. Each reference to a “Grantor” in the Term Intercreditor Agreement shall be deemed to include the New Grantor. The Term Intercreditor Agreement is hereby incorporated herein by reference.

SECTION 2.    The New Grantor represents and warrants to the Designated Senior Representative and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by Bankruptcy Laws and by general principles of equity.

SECTION 3.    This Supplement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Designated Senior Representative shall have received a counterpart of this Supplement that bears the signature of the New Grantor. Delivery of an executed signature page to this Supplement by facsimile transmission or other electronic method shall be as effective as delivery of a manually signed counterpart of this Supplement.

SECTION 4.    Except as expressly supplemented hereby, the Term Intercreditor Agreement shall remain in full force and effect.

 

II-1

SECTION 5.    THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6.    In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Term Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 8.11 of the Term Intercreditor Agreement. All communications and notices hereunder to the New Grantor shall be given to it in care of the Borrower as specified in the Term Intercreditor Agreement.

SECTION 8.    The Borrower agrees to reimburse the Designated Senior Representative for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Designated Senior Representative as required by the applicable Senior Debt Documents.

 

II-2

IN WITNESS WHEREOF, the New Grantor, and the Designated Senior Representative have duly executed this Supplement to the Term Intercreditor Agreement as of the day and year first above written.

 

[NAME OF NEW GRANTOR],
By:  

 

  Name:
  Title:

Acknowledged by:

[                      ], as Designated Senior Representative,

 

By:  

 

  Name:
  Title:

 

II-3

ANNEX III

[FORM OF] JOINDER NO. [    ] dated as of [                ], 20[    ] to the TERM INTERCREDITOR AGREEMENT dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”), among Horizon Global Corporation, a Delaware limited liability company (the “ Borrower ”); the other Grantors (as defined below) party hereto; Cortland Capital Market Services LLC, as collateral agent for the Senior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Senior Collateral Agent ”); JPMorgan Chase Bank, N.A., as collateral agent for the Junior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Junior Collateral Agent ”); and each Additional Senior Agent (as defined below) and each Additional Junior Agent (as defined below) that from time to time becomes a party thereto.

Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Term Intercreditor Agreement.

As a condition to the ability of the Borrower to incur Junior Class Debt after the date of the First Lien/Secured Lien Intercreditor Agreement and to secure such Junior Class Debt with a Lien pari passu with the Lien securing the existing Junior Debt Facilities and to have such Junior Class Debt guaranteed by the Grantors, in each case under and pursuant to the Junior Collateral Documents, the Junior Class Representative in respect of such Junior Class Debt is required to become a Representative under, and such Junior Class Debt and the Junior Class Debt Parties in respect thereof are required to become subject to and bound by, the Term Intercreditor Agreement. Section 8.09 of the Term Intercreditor Agreement provides that such Junior Class Debt Representative may become a Representative under, and such Junior Class Debt and such Junior Class Debt Parties may become subject to and bound by, the Term Intercreditor Agreement pursuant to the execution and delivery by the Junior Class Debt Representative of an instrument in the form of this Joinder and the satisfaction of the other conditions set forth in Section 8.09 of the Term Intercreditor Agreement. The undersigned Junior Class Debt Representative (the “ New Representative ”) is executing this Joinder in accordance with the requirements of the Senior Debt Documents and the Junior Debt Documents.

Accordingly, the Designated Senior Representative and the New Representative agree as follows:

SECTION 1.    In accordance with Section 8.09 of the Term Intercreditor Agreement, the New Representative by its signature below becomes a Representative under, and the related Junior Class Debt and Junior Class Debt Parties become subject to and bound by, the Term Intercreditor Agreement with the same force and effect as if the New Representative had originally been named therein as a Representative, and the New Representative, on behalf of itself and such Junior Class Debt Parties, hereby agrees to all the terms and provisions of the Term Intercreditor Agreement applicable to it as a Junior Representative and to the Junior Class Debt Parties that it represents as Junior Secured Parties. Each reference to a “ Representative ,” “ Junior Representative ” or “ Additional Junior Agent ” in the Term Intercreditor Agreement shall be deemed to include the New Representative. The Term Intercreditor Agreement is hereby incorporated herein by reference.

SECTION 2.    The New Representative represents and warrants to the Designated Senior Representative and the other Secured Parties that (i) it has full power and authority to enter into this Joinder, in its capacity as [agent] [trustee] under [describe new Junior Debt Facility], (ii) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding

 

III-1

obligation, enforceable against it in accordance with the terms of such Agreement and (iii) the Junior Debt Documents relating to such Junior Class Debt provide that, upon the New Representative’s entry into this Agreement, the Junior Class Debt Parties in respect of such Junior Class Debt will be subject to and bound by the provisions of the Term Intercreditor Agreement as Junior Secured Parties.

SECTION 3.    This Joinder may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when the Designated Senior Representative shall have received a counterpart of this Joinder that bears the signature of the New Representative. Delivery of an executed signature page to this Joinder by facsimile transmission (or other electronic method) shall be effective as delivery of a manually signed counterpart of this Joinder.

SECTION 4.    Except as expressly supplemented hereby, the Term Intercreditor Agreement shall remain in full force and effect.

SECTION 5.    THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6.    In case any one or more of the provisions contained in this Joinder should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Term Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 8.11 of the Term Intercreditor Agreement. All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.

SECTION 8.    The Borrower agrees to reimburse the Designated Senior Representative for its reasonable out-of-pocket expenses in connection with this Joinder, including the reasonable fees, other charges and disbursements of counsel for the Designated Senior Representative as required by the applicable Senior Debt Documents.

 

III-2

IN WITNESS WHEREOF, the New Representative and the Designated Senior Representative have duly executed this Joinder to the Term Intercreditor Agreement as of the day and year first above written.

 

[NAME OF NEW REPRESENTATIVE], as
[                        ] for the holders of
[                                 ],
By:  

 

  Name:
  Title:

 

Address for notices:

    

    

 

attention of:

 

 

Telecopy:

 

 

 

[                                ],
as Designated Senior Representative,
By:  

 

  Name:
  Title:

 

III-3

Acknowledged by:

 

HORIZON GLOBAL CORPORATION, as Borrower
By:  

 

  Name:
  Title:

 

HORIZON GLOBAL COMPANY LLC, as a
Guarantor
By:  

 

  Name:
  Title:

 

HORIZON GLOBAL AMERICAS INC., as a
Guarantor
By:  

 

  Name:
  Title:

 

HORIZON INTERNATIONAL HOLDINGS LLC,
as a Guarantor
By:  

 

  Name:
  Title:

 

III-4

Schedule I to the

Joinder to the

Term Intercreditor Agreement

Grantors

[                    ]

 

III-5

ANNEX IV

[FORM OF] JOINDER NO. [    ] dated as of [                ], 20[    ] to the TERM INTERCREDITOR AGREEMENT dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”), among Horizon Global Corporation, a Delaware limited liability company (the “ Borrower ”); the other Grantors (as defined below) party hereto; Cortland Capital Market Services LLC, as collateral agent for the Senior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Senior Collateral Agent ”); JPMorgan Chase Bank, N.A., as collateral agent for the Junior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Junior Collateral Agent ”); and each Additional Senior Agent (as defined below) and each Additional Junior Agent (as defined below) that from time to time becomes a party thereto.

Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Term Intercreditor Agreement.

As a condition to the ability of the Borrower to incur Senior Class Debt after the date of the Second Lien Intercreditor Agreement and to secure such Senior Class Debt with the Senior Lien and to have such Senior Class Debt guaranteed by the Grantors, in each case under and pursuant to the Senior Collateral Documents, the Senior Class Debt Representative in respect of such Senior Class Debt is required to become a Representative under, and such Senior Class Debt and the Senior Class Debt Parties in respect thereof are required to become subject to and bound by, the Term Intercreditor Agreement. Section 8.09 of the Term Intercreditor Agreement provides that such Senior Class Debt Representative may become a Representative under, and such Senior Class Debt and such Senior Class Debt Parties may become subject to and bound by, the Term Intercreditor Agreement, pursuant to the execution and delivery by the Senior Class Debt Representative of an instrument in the form of this Joinder and the satisfaction of the other conditions set forth in Section 8.09 of the Term Intercreditor Agreement. The undersigned Senior Class Debt Representative (the “ New Representative ”) is executing this Supplement in accordance with the requirements of the Senior Debt Documents and the Junior Debt Documents.

Accordingly, the Designated Senior Representative and the New Representative agree as follows:

SECTION 1.    In accordance with Section 8.09 of the Term Intercreditor Agreement, the New Representative by its signature below becomes a Representative under, and the related Senior Class Debt and Senior Class Debt Parties become subject to and bound by, the Term Intercreditor Agreement with the same force and effect as if the New Representative had originally been named therein as a Representative, and the New Representative, on behalf of itself and such Senior Class Debt Parties, hereby agrees to all the terms and provisions of the Term Intercreditor Agreement applicable to it as a Senior Representative and to the Senior Class Debt Parties that it represents as Senior Debt Parties. Each reference to a “ Representative ,” “ Senior Representative ” or “ Additional Senior Agent ” in the Term Intercreditor Agreement shall be deemed to include the New Representative. The Term Intercreditor Agreement is hereby incorporated herein by reference.

SECTION 2.    The New Representative represents and warrants to the Designated Senior Representative and the other Secured Parties that (i) it has full power and authority to enter into this Joinder, in its capacity as [agent] [trustee] under [describe new Senior Debt Facility], (ii) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of such Agreement and (iii) the Senior Debt Documents relating to such Senior Class Debt provide that, upon the New Representative’s entry into this Agreement, the Senior

Class Debt Parties in respect of such Senior Class Debt will be subject to and bound by the provisions of the Term Intercreditor Agreement as Senior Secured Parties.

SECTION 3.    This Joinder may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when the Designated Senior Representative shall have received a counterpart of this Joinder that bears the signature of the New Representative. Delivery of an executed signature page to this Joinder by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Joinder.

SECTION 4.    Except as expressly supplemented hereby, the Term Intercreditor Agreement shall remain in full force and effect.

SECTION 5.    THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6.    In case any one or more of the provisions contained in this Joinder should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Term Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 8.11 of the Term Intercreditor Agreement. All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.

SECTION 8.    The Borrower agrees to reimburse the Designated Senior Representative for its reasonable out-of-pocket expenses in connection with this Joinder, including the reasonable fees, other charges and disbursements of counsel for the Designated Senior Representative.

IN WITNESS WHEREOF, the New Representative and the Designated Senior Representative have duly executed this Joinder to the Term Intercreditor Agreement as of the day and year first above written.

 

[NAME OF NEW REPRESENTATIVE], as
[                        ] for the holders of
[                                 ],
By:  

 

  Name:
  Title:

 

Address for notices:

    

    

 

attention of:

 

 

Telecopy:

 

 

 

[                                ],
as Designated Senior Representative,
By:  

 

  Name:
  Title:

Acknowledged by:

 

[    ],
By:  

 

  Name:
  Title:
[    ],
By:  

 

  Name:
  Title:
THE GRANTORS
LISTED ON SCHEDULE I HERETO,
By:  

 

  Name:
  Title:

Schedule I to the

Joinder to the

Term Intercreditor Agreement

Grantors

[                    ]

EXHIBIT C

Amendment to ABL/Term Loan Intercreditor Agreement

See attached.

SECOND

AMENDMENT TO

INTERCREDITOR AGREEMENT

This Second Amendment to the Intercreditor Agreement (this “ Amendment ”) is dated as of February 20, 2019, and is by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (the “ Borrower ”), certain of its subsidiaries signatory hereto (the Borrower and each such Subsidiary a “ Grantor ”, and collectively, the “ Grantors ”), BANK OF AMERICA, N.A. in its capacity as administrative agent and collateral agent for the ABL Lenders and the ABL Secured Parties (the “ ABL Agent ”), JPMORGAN CHASE BANK, N.A. in its capacity as administrative agent and collateral agent for the Term Lenders and the Term Secured Parties party to the Term Loan Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time, and CORTLAND CAPITAL MARKET SERVICES LLC in its capacity as administrative agent and collateral agent for the Term Lenders and Term Secured Parties party to that certain bridge credit agreement, as amended, restated, supplemented or otherwise modified, dated as of February 20, 2019 by and among the Borrower, the Grantors, the administrative agent and collateral agent and the lenders party thereto from time to time (each a “ Term Agent ”, and collectively, the “ Term Agents ”).

RECITALS:

WHEREAS, the Borrower, Grantors, ABL Agent and Term Agents are party to an Intercreditor Agreement dated as of June 30, 2015 (as amended, restated, supplemented, or otherwise modified before the date of this Amendment, the “ Intercreditor Agreement ”).

WHEREAS, the parties desire to modify the Intercreditor Agreement in certain respects.

NOW, THEREFORE, in consideration of the premises, the parties agree as follows:

1.          Definitions . Defined terms used but not defined in this Amendment are as defined in the Intercreditor Agreement.

2.          Amendments to Intercreditor Agreement . With effect as of the effective date, the Intercreditor Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Intercreditor Agreement attached as Exhibit A hereto.

3.          Conditions . The effectiveness of this Amendment is subject to satisfaction of the condition that the ABL Agent and Term Agents have each received this Amendment executed by the ABL Agent, Term Agents and the Grantors.

4.        Miscellaneous.

 

(a)

This Amendment is governed by, and is to be construed in accordance with laws of the State of New York, without giving effect to any conflict of law principles except federal laws relating to national banks. Each provision of this Amendment is severable from every other provision of this

 

Amendment for the purpose of determining the legal enforceability of any specific provision.

 

(b)

By executing and delivering this Agreement, Horizon International Holdings LLC, a Delaware limited liability company hereby becomes a party to the Acknowledgement to the Intercreditor Agreement as an ABL Guarantor and Term Guarantor thereunder with the same force and effect as if originally named therein as an ABL Guarantor and Term Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations of an ABL Guarantor and Term Guarantor thereunder.

 

(c)

This Amendment binds the ABL Agent, the Term Agents and each Grantor and their respective successors and assigns, and will inure to the benefit of the ABL Agent, the Term Agents, the Lenders, and each Grantor and the successors and assigns of the ABL Agent, each Term Agent and each Lender.

 

(d)

Except as specifically modified or amended by the terms of this Amendment, all other terms and provisions of the Intercreditor Agreement are incorporated by reference in this Amendment and in all respects continue in full force and effect. Each Grantor, by execution of this Amendment, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions that are contained in the Intercreditor Agreement.

 

(e)

Each reference in the Intercreditor Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import, and each reference to the Intercreditor Agreement in any and all instruments or documents delivered in connection therewith, will be deemed to refer to the Intercreditor Agreement, as amended by this Amendment.

 

(f)

The parties may sign this Amendment in several counterparts, each of which will be deemed to be an original but all of which together will constitute one instrument.

[Signature pages to follow]

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

 

HORIZON GLOBAL CORPORATION,

as the Borrower

By:  

/s/ Brian Whittman

  Name: Brian Whittman
  Title: Vice President, Finance

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

HORIZON GLOBAL COMPANY LLC,

as a Grantor

          By:  

/s/ Brian Whittman

  Name: Brian Whittman
  Title:   Vice President, Finance

HORIZON GLOBAL AMERICAS INC.,

as a Grantor

          By:  

/s/ Brian Whittman

  Name: Brian Whittman
  Title:   Vice President, Finance

HORIZON INTERNATIONAL HOLDINGS LLC, as a Grantor

          By:  

/s/ Brian Whittman

   Name: Brian Whittman
   Title:   Vice President, Finance

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

BANK OF AMERICA, N.A. ,

as the ABL Agent

By:  

/s/ Kindra Mullarky

  Name:  Kindra Mullarky
  Title:  SVP

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

JPMORGAN CHASE BANK, N.A. , as a Term Agent
By:  

/s/ Sabir Hashmy

  Name:  Sabir Hashmy
  Title:  Managing Director

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

CORTLAND CAPITAL MARKET SERVICES LLC , as a Term Agent
By:  

/s/ Jessica J. Mead

      Name: Jessica J. Mead
      Title: General Counsel

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

EXHIBIT A

Amendments to Intercreditor Agreement

See attached.

“ Additional Term Collateral Documents ” means, with respect to any series, issue or class of Additional Term Debt, each of the collateral agreements, security agreements and other instruments and documents executed and delivered by any Term Loan Party for purposes of providing collateral security for any Additional Term Obligations (including any Amendment or Refinancing thereof).

“ Additional Term Debt ” means any Indebtedness secured by Liens on the Collateral; provided , that (i) at the time of incurrence thereof, such Indebtedness is permitted by the ABL Documents and the Term Documents to be (x) incurred, (y) guaranteed on a senior, pari passu or junior basis with respect to the Term Obligations outstanding under the Term Loan Credit Agreement and (z) secured by Liens on the Collateral on a senior, pari passu or junior basis with the Liens on the Collateral securing the Term Obligations outstanding under the Term Loan Credit Agreement and (ii) the conditions set forth in Section 7.20 shall have been satisfied with respect to such Indebtedness and, unless the agent, trustee or other representative for the holders of such Indebtedness is already a party to this Agreement, such agent, trustee or other representative shall have become a party to this Agreement pursuant to Section 7.20.

“ Additional Term Debt Facility ” means each credit facility, indenture or other governing agreement (other than the Term Loan Credit Agreement) with respect to any Additional Term Debt.

“ Additional Term Documents ” means, with respect to any series, issue or class of Additional Term Debt, (a) the Additional Term Debt Facility, (b) the Additional Term Collateral Documents and (c) the other operative agreements evidencing or governing such Indebtedness.

“ Additional Term Joinder ” means a Joinder Agreement substantially in the form of Exhibit I hereto or such other form as agreed by the ABL Agent and each Term Agent.

“ Additional Term Obligations ” means, with respect to any series, issue or class of Additional Term Debt, all obligations of every nature of each Term Loan Party from time to time owed to the Additional Term Secured Parties, or any of them, under any Additional Term Document, including, without limitation, all “Obligations” of each Term Loan Party or similar term as defined in any Additional Term Document, whether for principal, interest, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Additional Term Documents (including interest, fees, indemnification payments, expense reimbursements and other amounts which, but for the commencement of an Insolvency Proceeding with respect to such Term Loan Party, would have accrued on or been payable with respect to any Additional Term Obligation, whether or not a claim is allowed or allowable against such Term Loan Party for such interest, fees, indemnification payments, expense reimbursements and other amounts in the related Insolvency Proceeding), as the same may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Additional Term Secured Parties ” means, with respect to any series, issue or class of Additional Term Obligations, the holders of such obligations, the agent, trustee or other representative with respect thereto, and the beneficiaries of each indemnification obligation undertaken by any Term Loan Party under any related Additional Term Documents.

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

“ Agent(s) ” means individually the ABL Agent or any Term Agent and collectively means both the ABL Agent and each Term Agent.

permitted to be incurred and secured under each of the then extant ABL Documents and Term Documents and, if requested, true and complete copies of each of the material Additional Term Documents relating to such Additional Term Debt; and

(c)      (c) the Additional Term Documents relating to such Additional Term Debt shall provide that each Additional Term Secured Party with respect to such Additional Term Debt will be subject to, and bound by, the provisions of this Agreement in its capacity as a holder of such Additional Term Debt. ; and

(d)                  the parties hereto acknowledge that Cortland Capital Market Services LLC , in its capacity as Administrative Agent (the “Bridge Agent”) under the Credit Agreement, dated as of February 20, 2019, with the Term Loan Parties and the lenders party thereto (the “Bridge Credit Agreement”), has become a party as a Term Agent and Additional Term Secured Party to this agreement by executing an Additional Term Joinder on February 20, 2019 and that, as between the Term Agents and the Term Secured Parties on the one side and the ABL Agent and the ABL Secured Parties on the other side, the Bridge Agent and its successors in such capacity shall (i) be deemed to be the Designated Term Agent until Discharge of Term Obligations owing in respect of the Bridge Credit Agreement and (ii) have the exclusive right and power to exercise all rights and remedies of each of the Term Agents under this Agreement on behalf of each of the Term Agents and the Term Secured Parties and the ABL Agent and the ABL Secured Parties are hereby authorized and directed by each of the Term Agents to recognize and interact with Bridge Agent in accordance with the foregoing on behalf of the Term Agents and Term Secured Parties.

Section  7.21 Additional Intercreditor Agreements . Notwithstanding anything to the contrary contained in this Agreement, each party hereto agrees that the Term Secured Parties (as among themselves) may enter into intercreditor agreements (or similar arrangements) with the relevant Term Agents governing the rights, benefits and privileges of Term Secured Parties with respect to the Term Obligations or a portion thereof (as among themselves), in respect of any or all of the Collateral and the applicable Term Documents, including as to the application of Proceeds of any Collateral, voting rights, control of any Collateral and waivers with respect to any Collateral, in each case so long as the terms thereof do not violate or conflict with the provisions of this Agreement.

[SIGNATURE PAGES FOLLOW]

EXHIBIT D

Amendment to Guarantee and Collateral Agreement

See attached.

SECOND

AMENDMENT TO

TERM LOAN GUARANTEE AND COLLATERAL

AGREEMENT

This Second Amendment to Term Loan Guarantee and Collateral Agreement (this “ Amendment ”) is dated as of February 20, 2019, and is by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (the “ Borrower ”), certain of its Subsidiaries signatory hereto (the Borrower and each such Subsidiary a “ Grantor ”, and collectively, the “ Grantors ”) and JPMORGAN CHASE BANK, N.A. (the “ Collateral Agent ”), as collateral agent for the Secured Parties.

RECITALS:

WHEREAS, the Collateral Agent and the Grantors are party to a Term Loan Guarantee and Collateral Agreement dated as of June 30, 2015 (as amended, restated, supplemented, or otherwise modified before the date of this Amendment, the “ Guarantee and Collateral Agreement ”).

WHEREAS, the parties desire to modify the Guarantee and Collateral Agreement in certain respects.

NOW, THEREFORE, in consideration of the premises, the parties agree as follows:

1.          Definitions . Defined terms used but not defined in this Amendment are as defined in the Guarantee and Collateral Agreement or the Credit Agreement referenced therein, as applicable.

2.          Amendments to Guarantee and Collateral Agreement . With effect as of the Effective Date, the Guarantee and Collateral Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Guarantee and Collateral Agreement attached as Exhibit A hereto.

3.          Representations. To induce the Collateral Agent to enter into this Amendment, each Grantor hereby represents to the Collateral Agent and the Lenders as follows:

 

(1)

that such Grantor (A) is duly authorized to execute and deliver this Amendment; and (B) is and will continue to be duly authorized to perform its obligations under the Guarantee and Collateral Agreement, as amended by this Amendment;

 

(2)

that the execution and delivery of this Amendment and the performance by such Grantor of its obligations under the Guarantee and Collateral Agreement, as amended by this Amendment, will not (A) violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of such Grantor or any order of any Governmental Authority or (B) violate or result in a default under any indenture, agreement or other instrument binding upon such Grantor or its assets, or give rise to a right thereunder to require any payment to be made by such Grantor,

 

except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect;

 

(3)

that each of this Amendment and the Guarantee and Collateral Agreement, as amended by this Amendment, is a legal, valid, and binding obligation of such Grantor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

 

(4)

that the representations and warranties set forth in Article IV of the Guarantee and Collateral Agreement, as amended by this Amendment, are true and correct in all material respects (but if any such representation or warranty is by its terms qualified or modified by materiality in the text thereof, that representation or warranty is true and correct in all respects), on and as of the date of this Amendment, as though made on and as of such date (except to the extent that any such representation or warranty relates solely to an earlier date, in which case that representation or warranty is true and correct in all material respects as of such earlier date (but if any such representation or warranty is by its terms qualified or modified by materiality in the text thereof, that representation or warranty is true and correct in all respects as of such earlier date));

 

(5)

that such Grantor has complied with and is in compliance with all of the covenants set forth in the Guarantee and Collateral Agreement, as amended by this Amendment, in all material respects, including those set forth in Article V of the Guarantee and Collateral Agreement; and

 

(6)

that as of the date of this Amendment, no Default or Event of Default has occurred and is continuing.

4.          Conditions . The effectiveness of this Amendment is subject to satisfaction of the following conditions:

 

(1)

that the Collateral Agent has received this Amendment executed by the Collateral Agent and the Grantors; and

 

(2)

that the Collateral Agent has received a fully executed copy of a second amendment to ABL Guarantee and Collateral Agreement having terms and conditions substantially similar to those contained in this Amendment.

5.        Miscellaneous .

 

(1)

This Amendment is governed by, and is to be construed in accordance with laws of the State of New York, without giving effect to any conflict of law principles except federal laws relating to national banks. Each provision of this Amendment is severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

 

(2)

This Amendment binds the Collateral Agent and each Grantor and their respective successors and assigns, and will inure to the benefit of the Collateral Agent, the Lenders, and each Grantor and the successors and assigns of the Collateral Agent and each Lender.

 

(3)

Except as specifically modified or amended by the terms of this Amendment, all other terms and

 

provisions of the Guarantee and Collateral Agreement are incorporated by reference in this Amendment and in all respects continue in full force and effect. Each Grantor, by execution of this Amendment, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions that are contained in the Guarantee and Collateral Agreement.

 

(4)

Each reference in the Guarantee and Collateral Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import, and each reference to the Guarantee and Collateral Agreement in any and all instruments or documents delivered in connection therewith, will be deemed to refer to the Guarantee and Collateral Agreement, as amended by this Amendment.

 

(5)

This Amendment is a Loan Document. Each Grantor hereby acknowledges that the Collateral Agent’s reasonable costs and expenses (including reasonable documented attorneys’ fees and expenses) incurred in drafting this Amendment and in amending the Guarantee and Collateral Agreement as provided in this Amendment constitute Obligations owing pursuant to Section 10.03(a) of the Credit Agreement.

 

(6)

The parties may sign this Amendment in several counterparts, each of which will be deemed to be an original but all of which together will constitute one instrument.

[Signature pages to

follow]

IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this Amendment as of the date first above written.

 

GRANTORS:

HORIZON GLOBAL CORPORATION, as the Borrower

By:   /s/ Brian Whittman
Name:       Brian Whittman
Title:   Vice President, Finance
HORIZON GLOBAL AMERICAS, INC., as a Guarantor
By:   /s/ Brian Whittman
Name:   Brian Whittman
Title:   Vice President, Finance
HORIZON INTERNATIONAL HOLDINGS LLC, as a Guarantor
By:   /s/ Brian Whittman
Name:   Brian Whittman
Title:   Vice President, Finance
HORIZON GLOBAL COMPANY LLC, as a Guarantor
By:   /s/ Brian Whittman
Name:   Brian Whittman
Title:   Vice President, Finance

 

[Signature Page to Second Amendment]

JPMORGAN CHASE BANK, N.A., as Collateral Agent
By:   /s/ Sabir Hashmy
Name:       Sabir Hashmy
Title:   Managing Director

 

[Signature Page to Second Amendment]

EXHIBIT A

Amendments to Guarantee and Collateral Agreement

See attached.

“ ABL Priority Collateral ” has the meaning set forth in the ABL/Term Loan Intercreditor Agreement.

“ Account Debtor ” shall mean any person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.

“ Article ” means a numbered article of this Agreement, unless another document is specifically referenced.

“ Collateral ” has the meaning set forth in Article III.

“ Collateral Deposit Account ” means each Deposit Account of a Grantor other than an Excluded Account.

“ Collection Account ” has the meaning set forth in Section 8.1(b).

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Excluded Accounts ” means (a) Excluded Trust Accounts, (b) Deposit Accounts and Securities Accounts of the Loan Parties containing not more than $50,000 individually or $250,000 in the aggregate at any time, and (c) zero-balance accounts that sweep on a daily basis to an account maintained with the ABL Collateral Agent or subject to a Deposit Account control agreement for the benefit of the ABL Collateral Agent pursuant to the terms of the ABL Loan Documents.

“ Excluded Contract ” means any contract or agreement to which a Grantor is a party or any governmental permit held by a Grantor to the extent that (a) the terms of such contract, agreement or permit prohibit or restrict the creation, incurrence or existence of the security interest granted hereunder therein or the assignment thereof without the consent of any party thereto other than the Borrower or any Subsidiary and (b) such prohibition or restriction is permitted under Section 6.10 of the Credit Agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or principlesof equity); provided that (i) the term “Excluded Contract” shall not include any rights for any amounts due or to become due pursuant to any Excluded Contract and (ii) the Liens in favor of the Secured Parties shall attach immediately at such time as the condition causing such unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such contract or agreement in which the creation, incurrence or existence of the security interest granted hereunder, or the assignment thereof, as the case may be, is not so prohibited or restricted; provided , further , that such Grantor shall use commercially reasonable efforts to obtain all consents or waivers necessary to permit the grant of Liens in favor of the Secured Parties in such Excluded Contract.

“ Excluded Property ” means (a) any asset, including, without limitation, Accounts and proceeds of Inventory, of any kind, to the extent that (i) such asset is sold pursuant to any Specified Vendor Receivables Financing and in accordance with the applicable Specified Vendor Receivables Financing Documents and (ii) such sale or intended sale is permitted by Section 6.05(c)(ii) of the Credit Agreement, (b) any asset acquired, constructed or improved pursuant to a capital lease or purchase money

indebtedness permitted by Section 6.01(a)(viii) of the Credit Agreement, (c) Excluded Contracts, (d) any Trademark applications filed in the United States Patent and Trademark Office on the basis of such Grantor’s “intent-to-use” such trademark solely to the extent that, and solely during the period in which, granting a security interest in such Trademark application prior to such filing would adversely affect the enforceability or validity or result in the voiding thereof, unless and until acceptable evidence of use of the Trademark has been filed with and accepted by the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), whereupon such trademark application will, without any further action taken on the part of such Grantor or the Collateral Agent, be deemed to constitute Collateral, (e) any shares of Voting Stock of any Foreign Subsidiary , CFC or CFC Holdco in excess of 65% of the issued and outstanding shares of Voting Stock of such Foreign Subsidiary , CFC or CFC Holdco, (other than any CFC or Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (f) any property or assets for which the creation or perfection of pledges of, or security interests in, pursuant to the Security Documents would result in material adverse tax consequences to the Loan Parties, as reasonably determined by the Borrower in consultation with the Collateral Agent, (g) assets in circumstances where the cost of obtaining a security interest in such assets, including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary) would be excessive in light of the practical benefit to the Secured Parties afforded thereby as reasonably determined by the Borrower and the Collateral Agent, (h) any asset subject to a purchase money security interest, capital lease obligations or similar arrangement, in each case, to the extent the grant of a security interest therein would violate or invalidate such purchase money or similar arrangement or create a right of termination in favor of any other party thereto after giving effect to the applicable anti-assignment provisions of the New York UCC or other applicable law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the New York UCC or other applicable law notwithstanding such prohibition, (i) any property of a person existing at the time such person is acquired or merged with or into or consolidated with any Loan Party that is subject to a Lien permitted by Section 6.02(e) of the Credit Agreement to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of any other Lien on such property, (j) any Excluded Trust Accounts and (k) Equity Interests in any non-wholly owned Subsidiaries, but only to the extent that (x) the organizational documents or other agreements with equity holders of such non-wholly owned Subsidiaries do not permit or restrict the pledge of such Equity Interests, or (y) the pledge of such Equity Interests (including any exercise of remedies) would result in a change of control, repurchase obligation or other adverse consequence to any of the Loan Parties or such Subsidiary.

“ Excluded Trust Accounts ” means Deposit Accounts or Securities Accounts used exclusively (a) for payroll, taxes or employee benefits, (b) to receive proceeds of Accounts sold to third parties pursuant to Specified Vendor Receivables Financings permitted under the Loan Documents, (c) to hold cash and/or cash equivalents pledged to secure other obligations of the Borrower or any Subsidiary thereof pursuant to Liens permitted under the Loan Documents, (d) as escrow accounts, (e) as fiduciary or trust accounts, and accounts otherwise held exclusively for the benefit of third parties, other than a Grantor and (f) that contain solely deposits permitted by clauses (c) and (d) of the definition of “Permitted Encumbrances” in the Credit Agreement, including in connection with any letters of credit issued pursuant to such clauses, if the documents governing such deposits prohibit the granting of a Lien on such deposits.

“ Exhibit ” refers to a specific exhibit to this Agreement, unless another document is specifically referenced.

“ Guarantor Obligations ” means with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including, without limitation, Article II), whether on account of guarantee obligations, reimbursement obligations, fees,

than this Agreement), whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent, the Collateral Agent or to any other Secured Party that are required to be paid by such Loan Party pursuant to the terms of any of the foregoing agreements) or otherwise.

“ Proceeds ” means all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall include, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

“ Receivables ” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

“ Section ” means a numbered section of this Agreement, unless another document is specifically referenced.

“ Secured Parties ” means the collective reference to the Administrative Agent, the Collateral Agent and the Lenders.

“ Specified Permitted Liens ” means the Liens permitted under Sections 6.02(a) and 6.02(r) of the Credit Agreement, provided that such Liens on the Collateral securing the obligations of the Loan Parties under the ABL Loan Documents remain subject to the ABL/Term Loan Intercreditor Agreement.

“ Stock Rights ” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interests constituting Collateral, any right to receive Equity Interests and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interests.

“ Trademarks ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (d) all rights to sue for past, present, and future infringements of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ UCC ” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Collateral Agent’s or any Lender’s Lien on any Collateral.

“ Voting Stock ” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even where the right so to vote has been suspended by the happening of such a contingency.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

(a)      all Accounts;

 

(b)      all Chattel Paper;

(c)      all Deposit Accounts;

(d)      all Documents (other than title documents with respect to Vehicles);

(e)      all Equipment;

(f)      all Fixtures;

(g)      all General Intangibles;

(h)      all Goods;

(i)       all Instruments;

(j)       all Intellectual Property;

(k)      all Inventory;

(l)       all Investment Property;

(m)     all cash or cash equivalents;

(n)      all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(o)      all Commercial Tort Claims;

(p)      all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing;

(q)      all other property not otherwise described above (except for any property specifically excluded from any clause in this section above, and any property specifically excluded from any defined term used in any clause of this section above);

(r)      all books and records pertaining to the Collateral; and

(s)      to the extent not otherwise included in the foregoing, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

provided , however , that notwithstanding any of the other provisions set forth in this Agreement or the other Loan Documents, no Excluded Property shall constitute Collateral under this Agreement. In addition, in no event shall perfection by control or similar arrangements be required with respect to any Deposit Account (other than the Term Collateral Proceeds Account) or Securities Account; provided that, to the extent any Deposit Accounts and Securities Accounts are under the control of the ABL Collateral Agent at any time pursuant to the terms of the ABL/Term Loan Intercreditor Agreement,

the ABL Collateral Agent shall act as agent and gratuitous bailee for the Collateral Agent for the purpose of perfecting the Collateral Agent’s Liens in such Deposit Account and Securities Account.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby represents and warrants to the Collateral Agent and each Lender that:

4.1       Title, Perfection and Priority . Such Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a security interest hereunder and has full power and authority to grant to the Collateral Agent the security interest in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained. When financing statements naming such Grantor as debtor and the Collateral Agent as secured party and providing a description of the Collateral with respect to which such Grantor has purported to grant a security interest hereunder have been filed in the appropriate offices against such Grantor in the locations listed on Schedule 1.04 to the Perfection Certificate delivered on the Closing Date (or specified by notice from the Borrower to the Collateral Agent after the Closing Date in the case of filings, recordings or registrations required by Section 5.12 or 5.13 of the Credit Agreement), the Collateral Agent will have a fully perfected first priority security interest, subject only to Liens permitted under Section 5.1(e), in that Collateral of the Grantor in which a security interest may be perfected by filing of an initial financing statement in the appropriate office against such Grantor; provided that the filing of this Agreement (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent) with the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof is necessary to perfect the security interest of the Collateral Agent in respect of any United States issued and applied for Patents, United States federally registered and applied for Trademarks and United States registered and applied for Copyrights acquired by such Grantor after the date hereof. When the Collateral Agent takes possession or Control of all Collateral with respect to which a security interest may only be perfected by possession or Control, the Collateral Agent will have a fully perfected first priority (or such other priority required by any of the Intercreditor Agreement Agreements ) security interest, subject only to Liens permitted under Section 5.1(e), in such Collateral.

Such Grantor represents and warrants that fully executed security agreements in the form hereof (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent) and containing a description of all Collateral consisting of Intellectual Property with respect to United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights have been delivered to the Collateral Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights in which a security interest may be perfected by filing or recording in the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof. When such security agreements or short-form agreements have been filed in the United States Patent and Trademark Office and the United States Copyright Office against such Grantor, the

Collateral Agent will have a fully perfected first priority security interest, subject only to Liens permitted under Section 5.1(e), in respect of all Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights in which a security interest may be perfected by filing or recording in such offices, and no further or subsequent filing or recording will be necessary (other than the financing statements referred to in the paragraph above and such actions as are necessary to perfect the security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) with respect to any Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights acquired by such Grantor after the date hereof). None of the Grantors shall be required, nor is Within the time period set forth in Exhibit E to the Fifth Amendment (or such later date as the Collateral Agent authorized, to perfect the security interests granted by this Agreement with respect to Intellectual Property arising out of or located outside of the United States. may agree in its sole discretion), each Grantor party to this Agreement as of the Fifth Amendment Effective Date shall provide a perfected security interest over substantially all material intellectual property owned by such Grantor but registered or licensed in a foreign country other than the U.S. where such a perfected security interest can readily be provided, omitting only that material intellectual property the pledge and/or perfection of which would, in such Grantor’s good faith reasonable judgement, impose upon the Grantor or applicable Subsidiary material costs or material operational issues, or which the cost of doing so would, as reasonably agreed between such Grantor and the Administrative Agent, exceed the benefit thereof.

4.2       Jurisdiction of Organization . The state of organization of such Grantor as of the Closing Date is set forth on Exhibit A.

4.3       Principal Location . The address of such Grantor’s chief executive office as of the Closing Date and each other location where such Grantor maintains its books and records relating to any material portion of the Collateral, including accounts receivable and General Intangibles, are disclosed in Exhibit B.

4.4       Absence of Other Liens . The Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such Grantor has not filed or consented to the filing of (a) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Collateral, (b) any assignment in which such Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (c) any assignment in which such Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such Grantor does not hold any commercial tort claim with a value in excess of $500,000 as of the Closing Date except as indicated on the Perfection Certificate.

4.5       Deposit Accounts . All of such Grantor’s Deposit Accounts and Securities Accounts in existence on the Closing Date are listed on Exhibit E.

4.6       [Reserved] .

4.7       Chattel Paper . Such Grantor’s Pledged Chattel Paper is maintained at its chief executive office set forth in Exhibit B. None of the Pledged Chattel Paper has any marks or notations indicating

that it has been pledged, assigned or otherwise conveyed to any Person, other than those that have been terminated. The names of the obligors, amounts owing, due dates and other information with respect to its Pledged Chattel Paper are and will be correctly stated in all material respects in all records of such Grantor relating thereto.

4.8       [Reserved] .

4.9       Intellectual Property . Exhibit C sets forth a true and complete list of (i) each registered or applied for United States Patent, Trademark or Copyright owned by each Grantor as of the Closing Date (other than expired, abandoned or lapsed properties) and (ii) all Licenses under which a Grantor is an exclusive licensee of a registered or applied for Patent, Trademark or Copyright as of the Closing Date . All Intellectual Property listed on Exhibit C is subsisting and unexpired, and to the knowledge of such Grantor, valid and enforceable.

4.10      [Reserved] .

4.11      Pledged Collateral . (a) Exhibit D sets forth a complete and accurate list of all Pledged Securities (provided that, with respect to Pledged Securities constituting promissory notes and debt securities, Exhibit D only sets forth such Pledged Securities evidencing Indebtedness having an aggregate principal amount in excess of $500,000, payable or due to such Grantor by or from any other Person (including any other Grantor)) owned by such Grantor as of the Closing Date. As of the Closing Date, such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Securities listed on Exhibit D as being owned by it, free and clear of any Liens, except for the security interest granted to the Collateral Agent for the benefit of the Lenders hereunder, Permitted Encumbrances and Specified Permitted Liens. Such Grantor further represents and warrants that (i) all Pledged Collateral (solely with respect to Pledged Collateral issued by a Person other than a wholly owned Subsidiary of a Grantor, to the best of the Grantors’ knowledge) owned by it constituting Equity Interests has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized and validly issued and are fully paid and non-assessable; (ii) with respect to any certificates delivered to the Collateral Agent representing Equity Interests, either such certificates are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Collateral Agent so that the Collateral Agent may take steps to perfect its security interest therein as a General Intangible; (iii) all such Pledged Collateral held by a securities intermediary (other than in an Excluded Account) is covered by a control agreement among such Grantor, the securities intermediary and the ABL Collateral Agent pursuant to which the ABL Collateral Agent has Control; provided that no such control agreements shall be required prior to the date that is 60 days after the Closing Date (or such later date as may be agreed by the ABL Collateral Agent in its reasonable discretion) and (iv) all Pledged Collateral which represents Indebtedness owed to such Grantor (solely with respect to Pledged Collateral issued by a Person other than a wholly owned Subsidiary of a Grantor, to the best of the Grantors’ knowledge) has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

(b)      In addition, (i) the pledge of the Pledged Collateral pursuant to this Agreement does not violate Regulation T, U or X of the Federal Reserve Board or any successor thereto, (ii) to the best of Grantor’s knowledge, none of the Pledged Collateral owned by it has been issued or transferred in material violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (iii) as of the Closing Date there are existing no options, warrants, calls or commitments of any character whatsoever (A) relating to such Pledged Collateral or (B) which obligate the issuer of any Equity Interests included in the Pledged Collateral that is a direct or indirect subsidiary of any Borrower to issue additional Equity Interests, and (iv) no consent, approval,

authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Agreement or for the execution, delivery and performance of this Agreement by such Grantor, or for the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement in accordance with the Intercreditor Agreement Agreements or for the remedies in respect of the Pledged Collateral pursuant to this Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally or where the absence of which could not reasonably be expected to have a Material Adverse Effect.

ARTICLE V

COVENANTS

From the date of this Agreement, and thereafter until this Agreement is terminated, each Grantor agrees that:

5.1      General.

(a)      Collateral Records. Such Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the Collateral Agent a duly certified schedule or schedules in form and detail satisfactory to the Collateral Agent showing the identity, amount and location of any and all Collateral.

(b)       Authorization to File Financing Statements; Ratification . Such Grantor hereby authorizes the Collateral Agent to file, and if requested will deliver to the Collateral Agent, all financing statements and other documents and take such other actions as may from time to time be reasonably requested by the Collateral Agent in order to maintain a first priority perfected security interest (subject to the Intercreditor Agreement Agreements ) in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Collateral Agent may be filed in any filing office in any applicable UCC jurisdiction and may (i) indicate such Grantor’s Collateral (1) as “all assets of the Grantor” or words of similar effect, regardless of whether any particular asset included in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including whether such Grantor is an organization, the type of organization and any organization identification number issued to such Grantor. Such Grantor also agrees to furnish any such information described in the foregoing sentence to the Collateral Agent promptly upon request.

(c)       Further Assurances . Such Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve,

protect and perfect the security interest of the Secured Parties in the Collateral and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Liens hereunder and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith.

Agent, and have recorded with the United States Patent and Trademark Office or the United States Copyright Office or any successor office thereof, one or more security agreements or short-form agreements, as applicable, as described in Section 4.1 of this Agreement and any and all other agreements, instruments, documents, and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s and the Secured Parties’ first priority security interest in any Copyright, Patent or Trademark and the goodwill of such Grantor relating thereto or represented thereby.

(c)      Such Grantor shall take all actions necessary to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, unless such Grantor (in its reasonable business judgment) or the Collateral Agent shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of such Grantor’s business.

(d)      Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Collateral Agent shall reasonably deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 5.8.

(e)      Notwithstanding the foregoing provisions of this Section 5.7 or elsewhere in this Agreement, nothing in this Agreement shall prevent any Grantor from abandoning or discontinuing the use or maintenance of any Intellectual Property that is immaterial to the conduct of its business, or from failing to take action to enforce license agreements or pursue actions against infringers or take any other actions with respect to such Intellectual Property, if such Grantor determines in its reasonable business judgment that such abandonment, discontinuance, or failure to take action is desirable in the conduct of its business.

5.8       Commercial Tort Claims . If such Grantor shall at any time hold or acquire a Commercial Tort Claim having a value in excess of $500,000, the Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor, including a summary description of such claim, and enter into an amendment to this Agreement, in the form of Exhibit F hereto, granting to the Collateral Agent a first priority (or such other priority required by any of the Intercreditor Agreement Agreements ) security interest therein and in the proceeds thereof.

5.9       Letter-of-Credit Rights . If such Grantor is at any time a beneficiary under a letter of credit now or hereafter issued in favor of such Grantor with a value in excess of $500,000, such Grantor shall promptly notify the Collateral Agent thereof and, at the request and option of the Collateral Agent, such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under the letter of credit or

(ii) arrange for the Collateral Agent to become the transferee beneficiary of the letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred or is continuing.

5.10     [Reserved] .

5.11     [Reserved] .

5.12     No Interference . Such Grantor agrees that it will not interfere with any right, power and remedy of the Collateral Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Collateral Agent of any one or more of such rights, powers or remedies.

5.13     Insurance . Such Grantor, at its own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto, in each case, upon prior notice from the Collateral Agent to the Grantors of its intention to exercise such rights. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 5.13, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby.

5.14     Change of Name; Location of Collateral; Place of Business . Such Grantor agrees promptly to notify the Collateral Agent in writing of any change (i) in its corporate name, (ii) in the location of its chief executive office, or (iii) in its jurisdiction of organization. Such Grantor agrees not to effect or permit any change referred to in the preceding sentence unless written notice has been delivered to the Collateral Agent and all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority (or such other priority required by the Intercreditor Agreement Agreements ) Lien upon all the Collateral. Such Grantor agrees promptly to notify the Collateral Agent if any material portion of the Collateral owned or held by such Grantor is damaged or destroyed.

5.15     Credit Agreement Covenants . Such Grantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Grantor or any of its Subsidiaries.

5.16     Delivery of the Pledged Equity .

(a)      Each Grantor agrees promptly to deliver or cause to be delivered to the

Collateral Agent, for the benefit of the Secured Parties, any and all Pledged Securities; provided that the Grantors shall only be required to deliver Pledged Securities evidencing Indebtedness to the extent the principal amount thereof exceeds $500,000.

(b)      Each Grantor will cause any Indebtedness for borrowed money having an

aggregate principal amount in excess of $500,000 owed to such Grantor by any Person to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the terms hereof.

(c)      Upon delivery to the Collateral Agent, any Pledged Securities shall be accompanied by stock or security powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request (subject to the Collateral and Guarantee Requirement). Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be deemed to supplement Exhibit D and made a part thereof; provided that failure to supplement Exhibit D shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

(d)        Notwithstanding anything to the contrary in this Section 5.16, if the actions described in this Section 5.16 have been taken in favor of the Senior Agent or the ABL Agent and, pursuant to the Term Intercreditor Agreement or the ABL/Term Intercreditor Agreement, as applicable, the Senior Agent or the ABL Agent, as applicable, acts as agent and gratuitous bailee for the Collateral Agent for the purpose of perfecting the Collateral Agent’s Liens hereunder, the requirement to take any such action shall be deemed to be satisfied.

ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES

6.1       Remedies . (a) Upon Subject to the terms of the Term Intercreditor Agreement, upon the occurrence and during the occurrence and continuance of an Event of Default, the Collateral Agent may exercise any or all of the following rights and remedies:

  (i)      those rights and remedies provided in this Agreement, the Credit Agreement, or any other Loan Document; provided that this Section 6.1(a) shall not be understood to limit any rights or remedies available to the Collateral Agent and the Secured Parties prior to an Event of Default;

 (ii)      those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

(iii)      without notice (except as specifically provided in Section 9.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any

Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Collateral Agent may deem commercially reasonable; and

(iv)      concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral,

security for all the Obligations and shall not constitute payment thereof until applied as provided in the Intercreditor Agreement Agreements .

ARTICLE VII

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

7.1       Account Verification . The Collateral Agent may at any time after the occurrence and during the occurrence and continuance of an Event of Default, in the Collateral Agent’s own name, in the name of a nominee of the Collateral Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.

7.2       Authorization for Collateral Agent to Take Certain Action . (a) Each Grantor

irrevocably authorizes the Collateral Agent at any time and from time to time in the sole discretion of the Collateral Agent and appoints the Collateral Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Collateral Agent’s sole discretion to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement in such offices as the Collateral Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Collateral Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Collateral Agent to the Obligations as provided in the Credit Agreement, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are permitted by the Credit Agreement), (vii) to contact Account Debtors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Collateral Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Collateral, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Collateral Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Agreement; and such Grantor agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent in connection with any of the foregoing; provided that (a) this authorization shall not relieve such Grantor of any of its obligations under this Agreement or under the Credit Agreement and (b) the Collateral Agent shall exercise the foregoing rights in accordance with the Intercreditor Agreement Agreements , if effective and only after the occurrence and during the continuation of an Event of Default. All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Collateral Agent, for the benefit of the Collateral Agent and

of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Agreement or by law afforded shall be cumulative and all shall be available to the Collateral Agent and the Secured Parties until the Obligations have been paid in full.

9.8       Limitation by Law; Severability of Provisions . All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law or the Intercreditor Agreement Agreements (if effective), and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law and the Intercreditor Agreement Agreements (if effective) that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in any this Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable.

9.9       Reinstatement . This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

9.10     Benefit of Agreement . The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the Grantors, the Collateral Agent and the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Agreement or any interest herein, without the prior written consent of the Collateral Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Collateral Agent, for the benefit of the Collateral Agent and the Secured Parties, hereunder or under any of the other Security Documents.

9.11     Survival of Representations . All representations and warranties of the Grantors contained in this Agreement shall survive the execution and delivery of this Agreement.

9.12     [Reserved] .

9.13     Headings . All headings used herein are for the purpose of reference only, are not part of this Agreement and are not to affect the construction of, or be taken into consideration in interpreting, this Agreement.

9.14     Security Interest Absolute . All rights of the Collateral Agent hereunder, the security interest granted hereunder and all obligations of the Grantors hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Obligations or any other agreement or

RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

9.18     Indemnity . Each Grantor jointly and severally agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Collateral Agent may incur in connection with (i) the administration of this Agreement (including the customary fees and charges of the Collateral Agent for any monitoring or audits conducted by it or on its behalf with respect to the Accounts or Inventory), (ii) the custody or preservation of, or the sale of, collection from or other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform or observe any of the provisions hereof.

Without limitation of its indemnification obligations under the other Loan Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related 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 Indemnitee or any of its Affiliates.

Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 9.18 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any Lender. All amounts due under this Section 9.18 shall be payable on written demand therefor.

9.19     Counterparts . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

9.20     Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

9.21     Intercreditor Agreement Agreements.

(a)       The terms of this Agreement, any Lien granted to the Collateral Agent (for the benefit of the Secured Parties) pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreement Agreements (if

effective). In the event of any inconsistency between the provisions of this Agreement and the Intercreditor Agreement Agreements (if effective), the provisions of the Intercreditor Agreement Agreements shall supersede the provisions of this Agreement.

(b)       Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, all rights and remedies of the Collateral Agent (and the Secured Parties) shall be subject to the terms of the ABL/Term Loan Intercreditor Agreement (if effective), and until the Discharge of ABL Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), (i) no Grantor shall be required hereunder or under any other Loan Document to take any action with respect to ABL Priority Collateral that is inconsistent with such Grantor’s obligations under the applicable ABL Loan Documents and (ii) any obligation of any Grantor hereunder or under any other Loan Document with respect to the delivery or control of any ABL Priority Collateral, bill of lading or other document, the giving of any notice to any bailee or other Person, the provision of voting rights or the obtaining of any consent of any Person shall be deemed to be satisfied if such Grantor complies with the requirements of the similar provision of the applicable ABL Loan Document. Until the Discharge of ABL Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), the Collateral Agent may not require any Grantor to take any action with respect to the creation, perfection or priority of its security interest in the ABL Priority Collateral, whether pursuant to the express terms hereof or of any other Loan Document or pursuant to the further assurances provisions hereof or any other Loan Document, unless the ABL Collateral Agent (as defined in the ABL/Term Loan Intercreditor Agreement) shall have required such Grantor to take similar action pursuant to the terms of the applicable Loan Documents, and delivery of any ABL Priority Collateral to the ABL Collateral Agent (as defined in the ABL/Term Loan Intercreditor Agreement) pursuant to the applicable ABL Loan Documents and the ABL/Term Loan Intercreditor Agreement shall satisfy any delivery requirement hereunder or under any other Loan Document.

(c)        Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Collateral Agent pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted in favor of the Senior Secured Parties (as defined in the Term Intercreditor Agreement referred to below), including liens and security interests granted to Cortland Capital Market Services LLC, as collateral agent, pursuant to or in connection with the Credit Agreement dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), among the Borrower, the lenders party thereto, and Cortland Capital Market Services LLC, as administrative agent and collateral agent and (ii) the exercise of any right or remedy by the Junior Representative hereunder is subject to the limitations and provisions of the Term Intercreditor Agreement dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Term Intercreditor Agreement”), among the Borrower, the lenders party thereto and Cortland Capital Market Services LLC, as administrative agent and collateral agent. In the event of any conflict between the terms of the Term Intercreditor Agreement and the terms of this Agreement, the terms of the Term Intercreditor Agreement shall govern.

9.22     Additional Grantors . Each Subsidiary of a Borrower that is required to become a party to this Agreement pursuant to Section 5.12 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption

Agreement in the form of Annex 1 hereto. Each Grantor expressly agrees that its obligations arising hereunder shall not be discharged, diminished or otherwise affected (a) by the addition or release of any other Grantor hereunder, (b) by any failure by the Borrower or any Grantor to cause any Subsidiary of the Borrower to become a Grantor hereunder or (c) by reason of the Collateral Agent’s or any of the other Secured Party’s actions in effecting, or failure to effect, any such joinder, or in releasing any Grantor hereunder, in each case, whether or not notice is given or consent is obtained from any Grantor.

EXHIBIT E

Post-Closing Collateral Actions

 

1.

As soon as practicable following the Effective Date (and in any event, no later than the second Business Day following the Effective Date (with extensions to be granted by the Administrative Agent in its sole discretion)), the Borrower shall provide evidence in the form of an intercompany note executed by the Borrower and all applicable Subsidiaries that Indebtedness owed by any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Obligations on subordination terms reasonably satisfactory to the Administrative Agent (it being understood that during the Senior Period, if such form is satisfactory to the Senior Agent, then it shall be deemed satisfactory to the Administrative Agent);

2

The Loan Parties shall take all necessary actions (subject to the Agreed Security Principles set out in paragraph 2 below) to satisfy the items described below within thirty (30) days after the Effective Date (or, in each case, such longer periods as the Administrative Agent may agree in its reasonable discretion (it being understood that during the Senior Period, if an analogous extension pursuant to Schedule 5.13 of the Senior Credit Agreement shall have been granted by the Senior Agent, then an extension hereunder shall be deemed to have been granted by the Administrative Agent)):

  (a)

For each English guarantor, an English law guarantee and debenture over substantially all of its assets and undertaking and such other documents as may be necessary to document the intent of the parties with respect to the Collateral located in the United Kingdom.

 

  (b)

For each German guarantor:

 

  (i)

a guarantee;

 

  (ii)

a share pledge agreement entered into by its shareholder relating to the pledge over its shares; and

 

  (iii)

security over substantially all of its assets located in Germany including but not limited to the following security documents, if applicable:

 

  (A)

an account pledge agreement relating to all accounts held by it with banks in Germany;

 

  (B)

a global assignment agreement relating to the assignment of accounts receivable from the selling of goods and the provision of services as well as other accounts receivable agreed to be assigned by it (including, but not limited to, insurance claims and intercompany loan receivables);

 

  (C)

a security transfer agreement relating to the security transfer of all moveable (including stock and inventory) and fixed assets over which security shall be granted;

  (D)

if it has any such rights, an IP pledge agreement relating to the pledge of its intellectual property rights (including, but not limited to, patents, designs, utility models, trademarks, know-how and other IP rights);

 

  (E)

if it owns any real estate, a land charge over the real estate held by it;

 

  (F)

if it owns any real estate, a security purpose agreement relating to the land charge granted by it; and

 

  (G)

if it is party to any relevant intercompany agreements, a subordination agreement in relation to any shareholder and intercompany loans and any other applicable, if any, intercompany claims.; and

 

  (iv)

such other documents as may be necessary to document the intent of the parties with respect to the Collateral located in Germany.

 

  (c)

For each Dutch guarantor:

 

  (i)

a guarantee; and

 

  (ii)

an Omnibus Pledger; and

 

  (iii)

such other documents as may be necessary to document the intent of the parties over the Collateral located in the Netherlands.

 

32

The guarantees and security obligations to be provided pursuant to this Schedule will be given in accordance with customary “agreed security principles” to be agreed in good faith as soon as practicable following the Effective Date (and in any event, no later than the fifth Business Day following the Effective Date) (the “ Agreed Security Principles ”) which will embody a recognition by all parties that there may be certain legal and practical difficulties in obtaining effective or commercially reasonable guarantees and/or security from all relevant entities in each jurisdiction in which it has been agreed that guarantees and security will be granted. In particular:

 

  (a)

Guarantees and/or security shall not be created or perfected, or shall be subject to customary limitations, to the extent that it would result in (i) any breach of corporate benefit, financial assistance, fraudulent preference or thin capitalization laws or regulations (or analogous restrictions) of any applicable jurisdiction, (ii) a significant risk to the officers of the relevant grantor of security of contravention of their fiduciary duties and/or of civil or criminal liability, (iii) costs, burdens, difficulties or consequences that are disproportionate or excessive to the benefit obtained by such guarantees and/or security (as agreed by the Borrower and the Administrative Agent) or (iv) a material adverse effect on the ability of the relevant person to conduct its operations and business in the ordinary course as otherwise permitted by the Loan Documents. For the purposes of this paragraph 2, “cost” includes, but is not limited to, income tax cost, registration taxes payable on the creation, the perfection or for the continuance of any guarantee or security, stamp duties, out-of-pocket expenses, and

 

other fees and expenses directly incurred by the relevant grantor or any of its direct or indirect owners, subsidiaries or affiliates.

 

  (b)

As required in the relevant jurisdiction, the security documents should only operate to create security rather than to impose new commercial obligations or a repeat of clauses in other Loan Documents. Accordingly, the Agreed Security Principles will reflect that (i) such security documents should not contain additional representations, undertakings or indemnities (including, without limitation, in respect of insurance, information, maintenance or protection of assets or the payment of costs) unless these are the same as or consistent with those contained in the Credit Agreement or are required by law or necessary in the applicable jurisdiction for the provision of a guarantee or the creation or perfection of security interest; and (ii) nothing in any security document shall (or be construed to) prohibit any transaction, matter or other step (or a grantor taking or entering the same or dealing in any manner whatsoever in relation to any asset (including all rights, claims benefits, proceeds and documentation, and contractual counterparties in relation thereto) the subject of (or expressed to be the subject of) the security agreement) if not prohibited by the terms of the other Loan Documents or necessary in the applicable jurisdiction for the provision of a guarantee or the creation or perfection of security interest.

 

  (c)

Each security document should contain a clause which records that if there is a conflict between the security document and the Credit Agreement, then (to the extent permitted by applicable law) the provisions of the Credit Agreement will take priority over the provisions of the applicable security document.

Exhibit 10.2

FOURTH AMENDMENT TO

AMENDED AND RESTATED LOAN AGREEMENT

AND OMNIBUS AMENDMENT

This FOURTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND OMNIBUS AMENDMENT (this “ Amendment ”) is dated as of February 20, 2019, and is entered into by and among HORIZON GLOBAL CORPORATION, a Delaware corporation (“ Parent Borrower ”), HORIZON GLOBAL AMERICAS INC., a Delaware corporation (“ Horizon Americas ”) (f/k/a Cequent Performance Products, Inc., a Delaware corporation and successor by merger with Cequent Consumer Products, Inc., an Ohio corporation), CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Horizon Americas and Cequent UK, collectively, “ Borrowers ”), HORIZON GLOBAL COMPANY LLC, a Delaware limited liability company (“ Horizon Global ”), the other Persons party to this Amendment as Obligors, the financial institutions party to this Amendment as Lenders, and BANK OF AMERICA, N.A., a national banking association, in its capacity as agent for itself and the other Secured Parties (“ Agent ”).

WHEREAS, the Borrowers, the other Obligors party hereto, the Agent and the Lenders have entered into that certain Amended and Restated Loan Agreement dated as of December 22, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”);

WHEREAS, Parent Borrower, the other Obligors party thereto and Agent entered into that certain ABL Guarantee and Collateral Agreement dated as of June 30, 2015 (the “ ABL Guarantee ”) in order to secure the Obligations;

WHEREAS, certain Borrowers, Horizon International Holdings LLC, a Delaware limited liability company, Cequent UK, Cequent Canada, Cequent Nederland Holdings B.V., a company formed under the laws of the Netherlands, Cequent Mexico Holdings B.V., a company formed under the laws of the Netherlands, Cequent Sales Company de Mexico, S. de R.L. de C.V., a limited liability company formed under the laws of Mexico, Cequent Electrical Products de Mexico, S. de R.L. de C.V., a limited liability company formed under the laws of Mexico, and Agent entered into that certain Foreign Facility Guarantee and Collateral Agreement dated as of December 22, 2015 in order to secure the Foreign Facility Obligations; and

WHEREAS, the Borrowers and the other Obligors have requested that the Agent and the Required Lenders agree to enter into certain amendments to the Loan Agreement and ABL Guarantee described below.

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Loan Documents and this Amendment, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Initially capitalized terms used but not otherwise defined in this Amendment have the respective meanings set forth in the Loan Agreement, as amended hereby.

 

1

ARTICLE II

AMENDMENTS TO LOAN AGREEMENT AND GUARANTEE AND COLLATERAL

AGREEMENT

2.01         Loan Agreement Amendments . On the Amendment Effective Date (as defined below), the Loan Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Credit Agreement attached as Exhibit A hereto.

2.02         Guarantee and Collateral Agreement Amendments . On the Amendment Effective Date, the definition of “Excluded Property” in Section 1.4 of the Guarantee and Collateral Agreement is hereby amended and restated in its entirety to read as follows:

““ Excluded Property ” means (a) any asset, including, without limitation, Accounts and proceeds of Inventory, of any kind, to the extent that (i) such asset is sold pursuant to any Specified Vendor Receivables Financing and in accordance with the applicable Specified Vendor Receivables Financing Documents and (ii) such sale or intended sale is permitted by Section 10.2.5(c)(ii) of the Credit Agreement, (b) any asset acquired, constructed or improved pursuant to a capital lease or purchase money indebtedness permitted by Section 10.2.1(a)(viii) of the Credit Agreement, (c) Excluded Contracts, (d) any Trademark applications filed in the United States Patent and Trademark Office on the basis of such Grantor’s “intent-to-use” such trademark solely to the extent that, and solely during the period in which, granting a security interest in such Trademark application prior to such filing would adversely affect the enforceability or validity or result in the voiding thereof, unless and until acceptable evidence of use of the Trademark has been filed with and accepted by the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), whereupon such trademark application will, without any further action taken on the part of such Grantor or the Agent, be deemed to constitute Collateral, (e) any shares of Voting Stock of any Foreign Subsidiary or CFC in excess of 65% of the issued and outstanding shares of Voting Stock of such Foreign Subsidiary or CFC (other than any CFC or Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (f) any property or assets for which the creation or perfection of pledges of, or security interests in, pursuant to the Security Documents would result in material adverse tax consequences to the Obligors, as reasonably determined by the Borrowers in consultation with the Agent, (g) assets in circumstances where the cost of obtaining a security interest in such assets, including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary) would be excessive in light of the practical benefit to the Secured Parties afforded thereby as reasonably determined by the Borrowers and the Agent, (h) any asset subject to a purchase money security interest, capital lease obligations or similar arrangement, in each case, to the extent the grant of a security interest therein would violate or invalidate such purchase money or similar arrangement or create a right of termination in favor of any other party thereto after giving effect to the applicable anti-assignment provisions of the New York UCC or other Applicable Law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the New York UCC or other applicable law notwithstanding such prohibition, (i) any property of a Person existing at the time such Person is acquired or merged with or into or consolidated with any Obligor that is subject to a Lien permitted by Section 10.2.2(e) of the Credit Agreement to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of any other Lien on such property, (j) any Excluded Trust Accounts and (k) Equity Interests in any non-wholly owned Subsidiaries, but only to the extent that (i) the organizational documents or other agreements with equity holders of such non-wholly owned Subsidiaries do not permit or restrict the pledge of such Equity Interests, or (ii)

 

2

the pledge of such Equity Interests (including any exercise of remedies) would result in a change of control, repurchase obligation or other adverse consequence to any of the Obligors or such Subsidiary.”

ARTICLE III

JOINDER OF OBLIGOR

3.01         Joinder to Loan Agreement . By executing and delivering this Amendment, Horizon International Holdings LLC, a Delaware limited liability company (the “Additional Obligor”), as provided in Section 10.1.9 of the Loan Agreement, hereby becomes a party to the Loan Agreement as a U.S. Subsidiary Obligor and U.S. Facility Obligor thereunder with the same force and effect as if originally named therein as a U.S. Subsidiary Obligor and U.S. Facility Obligor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a U.S. Subsidiary Obligor and U.S. Facility Obligor thereunder. The Additional Obligor hereby represents and warrants that each of the representations and warranties contained in Section 9 of the Loan Agreement are true and correct in all material respects with respect to the Additional Obligor (other than in the case of representations and warranties qualified by materiality, in which case the Additional Obligor hereby represents and warrants that such representations and warranties are true and correct with respect to the Additional Obligor in all respects) on and as the date hereof (after giving effect to this Amendment) as if made on and as of such date.

3.02          Joinder to Master Intercompany Note . By executing and delivering this Amendment, the Additional Obligor, becomes a “Payor” under that certain Master Intercompany Note dated December 22, 2015 (the “Master Intercompany Note”) and related Note Power (the “Note Power”) and a “Payee” and “Holder” under the Note Power thereto with the same force and effect as if originally named therein as a “Payor”, “Payee” and/or “Holder” as applicable, and the Additional Obligor hereby (a) agrees to all of the terms and provisions of the Master Intercompany Note and the Note Power thereto applicable to it as a “Payor”, “Payee” and/or “Holder” thereunder and (b) represents and warrants that the representations and warranties made by it as a “Payor”, “Payee” and/or “Holder” 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. Each reference to a “Payor,” “Payee” and/or “Holder” in the Master Intercompany Note or the Note Power thereto shall be deemed to include the Additional Obligor. The Master Intercompany Note and Note Power are incorporated herein by reference

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

Each Obligor hereby represents and warrants to each Lender and the Agent, as of the date hereof, as of the Amendment Effective Date, and at each time that the following representations and warranties are made or deemed to be made thereafter, as follows:

4.01         Authority . The execution, delivery and performance by such Obligor of each Loan Document described in Section 6.01 hereof, and the transactions contemplated hereby or thereby, have been duly authorized by all necessary action, and this Amendment is a legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

4.02         Representations and Warranties . Each representation and warranty of such Obligor in the Loan Documents is true and correct as of the date hereof, after giving effect to this Amendment (except for

 

3

representations and warranties that expressly relate to an earlier date and except for the representations and warranties set forth in Section 9.1.4(d) {No Material Adverse Change} and Section 9.1.15(d) {Solvency} of the Loan Agreement).

4.03       Governmental Approvals; No Conflicts . The execution, delivery, and performance by such Obligor of the Loan Documents described in Section 6.01 hereof (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of any Obligor or any Subsidiary of any Obligor or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, or give rise to a right thereunder to require any payment to be made by any Obligor or any Subsidiary of any Obligor, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of any Obligor or any Subsidiary of any Obligor, except Liens created under the Loan Documents and Liens permitted by Section 10.2.2 of the Loan Agreement, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect.

4.04       No Defaults . No Default or Event of Default has occurred and is continuing.

4.05       Beneficial Ownership Certification . As of the Amendment Effective Date, the information included in the Beneficial Ownership Certification (as defined in the Loan Agreement after giving effect to this Amendment), if applicable, is true and correct in all respects.

 

4

ARTICLE V

CERTIFICATIONS

The Obligors hereby certify to Agent and Lenders that (a) the Fifth Amendment to Credit Agreement, dated on or about the date hereof, by and among Parent Borrower, the Term Loan Lenders party thereto, and the Term Loan Agent (the “ Term Loan Agreement Amendment ”) is not prohibited by Section 10.2.11 of the Loan Agreement, as amended by this Amendment, and (b) neither the execution or performance of this Amendment nor the incurrence of any Obligations by Obligors pursuant to the Loan Documents violates the Term Loan Documents or the Senior Term Loan Documents (as defined in the Loan Agreement after giving effect to this Amendment).

ARTICLE VI

CONDITIONS PRECEDENT AND FURTHER ACTIONS

6.01         Conditions Precedent . This Amendment shall be deemed effective as of the date first set forth above when each of the following conditions precedent have been satisfied in form and substance satisfactory to the Agent and its counsel (such date, the “Amendment Effective Date”):

(a)        The Agent shall have received duly executed counterparts of this Amendment which, when taken together, bear the authorized signatures of the Obligors, the Agent and the Required Lenders;

(b)        The Agent shall have received fully executed copies of Term Loan Agreement Amendment, which shall be on terms and conditions satisfactory to Agent and in full force and effect, and all conditions precedent set forth in Section 4 of the Term Loan Agreement Amendment shall have been met or waived by the Term Loan Agent and/or the Term Loan Lenders in accordance with the terms of the Term Loan Documents.

(c)        (i) The Agent shall have received fully executed copies (certified by an officer of Parent Borrower) of the Senior Term Credit Agreement (as defined in the Loan Agreement after giving effect to this Amendment) and other the Senior Term Loan Documents delivered on or about the Amendment Effective Date, which shall be on terms and conditions satisfactory to Agent and in full force and effect, and all conditions precedent set forth in Section 4.01 of the Senior Term Credit Agreement shall have been met or waived by the Senior Term Loan Agent and/or the applicable lenders thereunder in accordance with the terms of the Senior Term Loan Documents; and (ii) the Parent Borrower shall have received (or will receive concurrently with the effectiveness of the Amendment) the net proceeds of a borrowing of not less than $10,000,000 of Senior Term Loans (as defined in the Loan Agreement after giving effect to this Amendment).

(d)        The Agent shall have received a fully executed copy of the Second Amendment to Intercreditor Agreement in the form of Exhibit B hereto, which shall be on terms and conditions satisfactory to Agent and in full force and effect.

(e)        Upon the reasonable request of any Lender made at least five days prior to the Amendment Effective Date, the Obligors shall have provided to such Lender, and such Lender shall be reasonably satisfied with, the documentation and other information so requested in connection with the AML Legislation, including, without limitation, the PATRIOT Act, in each case at least five days prior to the Amendment Effective Date;

 

5

(f)        At least five days prior to the Amendment Effective Date, any Obligor that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall deliver, to each Lender that so requests, a Beneficial Ownership Certification in relation to such Obligor; and

(g)        The Borrowers shall have paid to the Agent, for the ratable benefit of the Lenders providing their written consent to this Amendment, an amendment fee equal to $30,000, which shall be shared by each consenting Lender in accordance with such consenting Lender’s ratable share of the outstanding Obligations owing to all consenting Lenders.

(h)        The Borrowers shall have paid all fees and expenses (provided that legal fees required to be paid as a condition precedent to the occurrence of the Amendment Effective Date shall be limited to such legal fees as to which Borrowers have received a summary invoice) owed to and/or incurred by the Agent in connection with this Amendment.

6.02         Further Actions . Each of the parties to this Amendment agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Amendment.

ARTICLE VII

REAFFIRMATION

Each Obligor hereby (i) acknowledges and consents to this Amendment; (ii) reaffirms its obligations under the Guaranties, the Security Documents and the other Loan Documents; (iii) reaffirms the Liens granted by it pursuant to the Security Documents; and (iv) confirms that the Guaranties, the Security Documents and the other Loan Documents remain in full force and effect, without defense, offset or counterclaim. Although each Guarantor has been informed of the terms of the Amendment, such Guarantor hereby confirms that it understands and agrees that the Agent and the Lenders have no duty to so notify such Guarantor or any other guarantor or to seek this or any future acknowledgment, consent or reaffirmation, and nothing contained herein shall create or imply any such duty as to any transaction, past or future.

ARTICLE VIII

MISCELLANEOUS

8.01         Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective successors and assigns. The successors and assigns of the Obligors include, without limitation, their respective receivers, trustees, and debtors-in-possession.

8.02         Further Assurances . Each Obligor party hereto hereby agrees from time to time, as and when requested by the Agent or any Lender, to execute and deliver or cause to be executed and delivered all such documents, instruments and agreements and to take or cause to be taken such further or other action as the Agent or such Lender may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Amendment and the other Loan Documents.

8.03         Loan Document . This Amendment shall be deemed to be a “Loan Document” for all purposes under the Loan Agreement.

8.04         Governing Law . THIS AMENDMENT AND, UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF

 

6

NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

8.05         Consent to Forum .

(a)         Forum . EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 OF THE LOAN AGREEMENT. A FINAL JUDGMENT IN ANY PROCEEDING OF ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR ANY OTHER MANNER PROVIDED BY APPLICABLE LAW.

(b)         Other Jurisdictions . Nothing herein shall limit the right of Agent, any Security Trustee or any Lender to bring proceedings against any Obligor (other than a Mexican Domiciled Obligor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Obligors). Nothing in this Amendment shall be deemed to preclude enforcement by Agent or any Security Trustee of any judgment or order obtained in any forum or jurisdiction. Final judgment against an Obligor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Obligor is domiciled, by suit on the judgment.

(c)        Each Mexican Domiciled Obligor waives any right to any jurisdiction (other than as provided under Section 8.04 above and this Section 8.05) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Obligors, and waives any objection to those courts on the ground of venue or forum non conveniens .

8.06         Severability . Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Amendment shall remain in full force and effect.

8.07         Entire Agreement . Time is of the essence of this Amendment. This Amendment constitutes 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.

8.08         Execution in Counterparts . This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment shall become effective on the Amendment Effective Date. Delivery of a signature page of this

 

7

Amendment by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement.

8.09         Costs and Expenses . The Borrowers agree to reimburse Agent for all fees, costs and expenses, including the reasonable fees, costs and expenses of counsel or other advisors for advice, assistance, or other representation in connection with this Amendment.

8.10         Reference to and Effect upon the Loan Documents . The amendments and modifications described in this Amendment shall apply and be effective only with respect to the provisions of the Loan Agreement, Master Intercompany Note, Note Power and ABL Guarantee specifically identified in this Amendment. Except as expressly amended herein, the Loan Agreement and the other Loan Documents shall continue in full force and effect in accordance with the provisions thereof, and are hereby ratified and confirmed. In each case except as expressly provided in this Amendment, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver or amendment of any provision of any of the Loan Documents. Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Loan Agreement as amended hereby.

8.11         Authorizations and Instructions . Effective immediately upon their execution of this Amendment, the Lenders party thereto, which collectively constitute the Required Lenders, hereby authorize the Agent, in its discretion, to defer issuing directions to implement the sweeping of ledger balances in the Dominion Accounts of the Borrowers to a date not later than February 22, 2019 if a Dominion Trigger Period occurs prior to such date and the Amendment Effective Date has not yet occurred. The Lenders party thereto, which collectively constitute the Required Lenders, hereby instruct and authorize the Agent, solely in its capacity as the Administrative Agent, to execute and deliver on the Amendment Effective Date the Second Amendment to Intercreditor Agreement in the form of Exhibit B hereto.

8.12         Section Headings . The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

Balance of Page Intentionally Left Blank

Signature Pages Follow

 

8

IN WITNESS WHEREOF, duly authorized representatives of the parties have executed this Amendment and the parties have delivered this Amendment, each as of the day and year first written above.

 

OBLIGORS :

 

HORIZON GLOBAL CORPORATION,

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor and the Borrower Agent

 

By: /s/ Brian Whittman                                             

Name: Brian Whittman

Title: Vice President, Finance

 

HORIZON GLOBAL AMERICAS INC.,

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By:  /s/ Brian Whittman                                             

Name: Brian Whittman

Title: Vice President, Finance

 

CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641, as UK Borrower, a UK Facility Obligor, a Canadian Facility Guarantor and a Canadian Facility Obligor

 

By: /s/ Jay Goldbaum                                             

Name: Jay Goldbaum

Title: Director

 

CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario, as Canadian Borrower, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: / s/ Jay Goldbaum                                             

Name: Jay Goldbaum

Title: Vice President and Secretary

 

[Signatures continue on next page.]

HORIZON GLOBAL COMPANY LLC,

a Delaware limited liability company, as a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Brian Whittman                                    

Name: Brian Whittman

Title: Vice President, Finance

 

HORIZON INTERNATIONAL HOLDINGS LLC,

a Delaware limited liability company, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor, a U.S. Facility Guarantor and a U.S. Facility Obligor

 

By: /s/ Brian Whittman                                    
Name: Brian Whittman
Title: Vice President, Finance

CEQUENT NEDERLAND HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By:  /s/ Jay Goldbaum                                     
Name: Jay Goldbaum
Title: Director

CEQUENT MEXICO HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

By: /s/ Jay Goldbaum                                    
Name: Jay Goldbaum

Title: Director

 

[Signatures continue on next page.]

CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V.,

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Jay Goldbaum                                        

Name: Jay Goldbaum

Title: Vice President and Director

 

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V.,

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Jay Goldbaum                                        

Name: Jay Goldbaum

Title: Vice President and Director

 

 

[Signatures continue on next page.]

AGENT AND REQUIRED LENDERS:

 

BANK OF AMERICA, N.A.,

as Agent, a U.S. Lender, a UK Lender and UK Swingline Lender

 

By:  /s/ Kindra M. Mullarky                                                              

Name: Kindra M. Mullarky

Title: SVP

 

BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender and Canadian Swingline Lender

 

By: /s/ Sylwia Durkiewicz                                                             

Name: Sylwia Durkiewicz

Title: Vice President

 

BANK OF AMERICA, N.A. (acting through its London branch), as UK Security Trustee

 

By: /s/ Kindra M. Mullarky                                                             

Name: Kindra M. Mullarky

Title: SVP

 

 

[Signatures continue on next page.]

WELLS FARGO BANK, NATIONAL

ASSOCIATION, as a U.S. Lender

 

By:  /s/ Nykole Hanna                                             

Name: Nykole Hanna

Title: Authorized Signatory

 

WELLS FARGO CAPITAL FINANCE

CORPORATION CANADA, as a Canadian Lender

 

By:  /s/ David G. Phillips                                         

Name: David G. Phillips

Title: Senior Vice President

 

WELLS FARGO BANK, NATIONAL

ASSOCIATION, (London branch), as a UK Lender

 

By: /s/ N B Hogg                                                     

Name: N B Hogg

Title: Authorized Signatory

 

[Signatures continue on next page.]

EXHIBIT A

Amendments to Loan Agreement

{see attached}

Exhibit A

Conformed to Fourth Amendment dated as of February 20, 2019

 

 

AMENDED AND RESTATED LOAN AGREEMENT

Dated as of December 22, 2015

 

 

HORIZON GLOBAL CORPORATION,

CEQUENT PERFORMANCE PRODUCTS, INC., and

CEQUENT CONSUMER PRODUCTS, INC.,

as the U.S. Borrowers,

CEQUENT UK LIMITED,

as the UK Borrower,

CEQUENT TOWING PRODUCTS OF CANADA LTD.,

as the Canadian Borrower,

and the other Obligors party hereto from time to time

 

 

BANK OF AMERICA, N.A.,

as Agent

 

 

BANK OF AMERICA, N.A.,

as Sole Lead Arranger and Sole Bookrunner

 

 

 

SECTION 1     

DEFINITIONS; RULES OF CONSTRUCTION

     5  
1.1       

Definitions

     5  
1.2       

Accounting Terms

     73  
1.3       

Uniform Commercial Code/PPSA

     74  
1.4       

Certain Matters of Construction

     74  
1.5       

Currency Equivalents

     74  
1.6       

Interpretation (Québec)

     75  
SECTION 2     

CREDIT FACILITIES

     76  
2.1       

Revolver Commitment

     76  
2.2       

Canadian Letter of Credit Facility

     81  
2.3       

UK Letter of Credit Facility

     84  
2.4       

U.S. Letter of Credit Facility

     87  
2.5       

Resignation of Issuing Banks

     89  
2.6       

Effect of Amendment and Restatement

     89  
SECTION 3     

INTEREST, FEES AND CHARGES

     90  
3.1       

Interest

     90  
3.2       

Fees

     92  
3.3       

Computation of Interest, Fees, Yield Protection

     93  
3.4       

Reimbursement Obligations

     94  
3.5       

Illegality

     94  
3.6       

Inability to Determine Rates

     95  
3.7       

Increased Costs; Capital Adequacy

     95  
3.8       

Mitigation

     96  
3.9       

Funding Losses

     96  
3.10     

Maximum Interest

     97  
SECTION 4     

LOAN ADMINISTRATION

     98  
4.1       

Manner of Borrowing and Funding Revolver Loans

     98  
4.2       

Defaulting Lender

     100  
4.3       

Number and Amount of Interest Period Loans; Determination of Rate

     101  
4.4       

Borrower Agent

     101  
4.5       

One Obligation

     101  
4.6       

Effect of Termination

     102  
4.7       

Limitation on Borrowings

     102  
SECTION 5     

PAYMENTS

     103  
5.1       

General Payment Provisions

    
103
 
5.2       

Repayment of Revolver Loans

    
103
 
5.3       

Payment of Other Obligations

    
103
 
5.4       

Marshaling; Payments Set Aside

    
103
 
5.5       

Application and Allocation of Payments

     104  
5.6       

Dominion Account

     108  
5.7       

Account Stated

     108  
5.8       

Taxes

     108  
5.9       

Lender Tax Information

     117  
5.10     

Nature and Extent of Each Borrower’s Liability

     119  

5.11     

Currency Matters

     124  
SECTION 6     

CONDITIONS PRECEDENT

     125  
6.1        

Conditions Precedent to Closing Date

     125  
6.2        

Conditions Precedent to All Credit Extensions

     127  
SECTION 7     

COLLATERAL

     127  
7.1        

Grant of Security Interest

     127  
7.2        

Cash Collateral

     128  
7.3        

Collateral Assignment of Leases

     128  
7.4        

Limitations

     128  
SECTION 8     

COLLATERAL ADMINISTRATION

     128  
8.1        

Borrowing Base Reports; Reallocation of U.S. Availability

     128  
8.2        

Accounts

     129  
8.3        

Inventory

     130  
8.4        

[Reserved.]

    
130
 
8.5        

Deposit Accounts

    
130
 
8.6        

General Provisions

    
130
 
SECTION 9     

REPRESENTATIONS AND WARRANTIES

     131  
9.1        

General Representations and Warranties

     131  
SECTION 10     

COVENANTS AND CONTINUING AGREEMENTS

     141  
10.1       

Affirmative Covenants

     141  
10.2       

Negative Covenants

     153  
10.3       

Financial Covenant

     165  
SECTION 11     

EVENTS OF DEFAULT; REMEDIES ON DEFAULT

     165  
11.1       

Events of Default

     165  
11.2       

Remedies upon Default

     168  
11.3       

License

     169  
11.4       

Setoff

     169  
11.5       

Remedies Cumulative; No Waiver

     170  
SECTION 12     

AGENT

     170  
12.1       

Appointment, Authority and Duties of Agent

     170  
12.2       

Security Trustees

     172  
12.3       

Agreements Regarding Collateral and Borrower Materials

     175  
12.4       

Reliance By Agent

     177  
12.5       

Action Upon Default

     178  
12.6       

Ratable Sharing

     178  
12.7       

Indemnification

     178  
12.8       

Successor Agent and Co-Agents

     178  
12.9       

Limitation on Responsibilities of Agent

     179  
12.10     

Due Diligence and Non-Reliance

     179  
12.11     

Remittance of Payments and Collections

     180  

 

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12.12     

Individual Capacities

     180  
12.13     

Titles

     180  
12.14     

Bank Product Providers

     180  
12.15     

No Third Party Beneficiaries

     181  
12.16     

Authorization Regarding Intercreditor Agreement

     181  
12.17     

Withholding Taxes

     181  
SECTION 13     

BENEFIT OF AGREEMENT; ASSIGNMENTS

     183  
13.1       

Successors and Assigns

     183  
13.2       

Participations

     183  
13.3       

Assignments

     184  
13.4       

Replacement of Certain Lenders

     185  
SECTION 14     

MISCELLANEOUS

     185  
14.1       

Consents, Amendments and Waivers

     185  
14.2       

Indemnity

     187  
14.3       

Notices and Communications

     187  
14.4       

Performance of Obligors’ Obligations

     188  
14.5       

Credit Inquiries

     188  
14.6       

Severability

     188  
14.7       

Cumulative Effect; Conflict of Terms

     188  
14.8       

Counterparts; Execution

     189  
14.9       

Entire Agreement

     189  
14.10     

Relationship with Lenders

     189  
14.11     

No Advisory or Fiduciary Responsibility

     189  
14.12     

Confidentiality

     189  
14.13     

Certifications Regarding Senior Term Loan Documents and Term Loan Documents

     190  
14.14     

GOVERNING LAW

     190  
14.15     

Consent to Forum

     190  
14.16     

Waivers by Obligors

     191  
14.17     

Patriot Act Notice and “Know Your Client/Customer” Checks

     191  
14.18     

Canadian Anti-Money Laundering Legislation

     192  
14.19     

NO ORAL AGREEMENT

     192  
14.20     

Process Agent

     192  

LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A

 

Assignment

Exhibit B

 

Assignment Notice

Exhibit C-1

 

Form of In-Transit Inventory Lien Waiver

Exhibit C-2

 

Form of Vendor Lien Waiver

Exhibit D

 

Form of Perfection Certificate

Exhibit E

 

Form of Special Irrevocable Power of Attorney

Exhibit F

 

Form of Notice of Borrowing

 

Schedule 1.1(A)

    

Existing Letters of Credit

Schedule 1.1(B)

    

Commitments of Lenders

 

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Schedule 9.1.3

    

Governmental Licenses

Schedule 9.1.5

    

Real Property

Schedule 9.1.6

    

Disclosed Matters

Schedule 9.1.12

    

Subsidiaries

Schedule 9.1.13

    

Insurance

Schedule 9.1.23

    

Material Contracts

Schedule 10.2.1

    

Existing Debt

Schedule 10.2.2

    

Existing Liens

Schedule 10.2.4

    

Existing Investments

Schedule 10.2.5

    

Permitted Asset Dispositions

Schedule 10.2.9

    

Existing Affiliate Transactions

Schedule 10.2.10

    

Existing Restrictive Agreements

AMENDED AND RESTATED LOAN AGREEMENT

THIS AMENDED AND RESTATED LOAN AGREEMENT is dated as of December 22, 2015 (as amended, restated, supplemented or otherwise modified from time to time, this “ Agreement ”), and is by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (“ Parent Borrower ”), CEQUENT PERFORMANCE PRODUCTS, INC. , a Delaware corporation (“ Cequent Performance ”), CEQUENT CONSUMER PRODUCTS, INC. , an Ohio corporation (“ Cequent Consumer ”), CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Cequent Performance, Cequent Consumer, and Cequent UK, collectively, “ Borrowers ”), the other Persons from time to time party to this Agreement as Obligors (as defined herein), the financial institutions party to this Agreement from time to time as Lenders, and BANK OF AMERICA, N.A . , a national banking association, in its capacity as agent for itself and the other Secured Parties (“ Agent ”).

R E C I T A L S :

Parent Borrower, Cequent Performance, Cequent Consumer, certain Lenders, and Agent are party to that certain Loan Agreement dated as of June 30, 2015 (as amended, restated or otherwise modified prior to the date hereof, the “ Original Loan Agreement ”), pursuant to which Agent and such Lenders made certain loans and other financial accommodations to such Borrowers;

Borrowers have elected to exercise their rights under Section 2.1.7 of the Original Loan Agreement to seek an increase in the Commitments up to an aggregate principal amount of $99,000,000 and, subject to the terms and conditions set forth in this Agreement, the Lenders party hereto have agreed to modify their respective Commitments to the levels described on Schedule 1.1(B) hereto;

Borrowers, Lenders and Agent desire to amend in certain respects and restate in its entirety the Original Loan Agreement as set forth herein; and

Borrowers have requested that Lenders provide credit facilities to Borrowers to finance their mutual and collective business enterprise. Lenders are willing to provide the credit facilities on the terms and conditions set forth in this Agreement.

 

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NOW, THEREFORE , for valuable consideration hereby acknowledged, the parties agree that the Original Loan Agreement shall be amended and restated to read in its entirety as set forth herein, and the parties further agree as follows:

SECTION 1

DEFINITIONS; RULES OF CONSTRUCTION

1.1          Definitions . As used herein, the following terms have the meanings set forth below:

“ Account ” as defined in the UCC or the PPSA, as applicable, and in any event shall include all rights to payment for goods sold or leased, or for services rendered, whether or not they have been earned by performance.

“ Account Debtor ” a Person obligated under an Account, Chattel Paper or General Intangible.

“ Accounts Formula Amount ” the Canadian Accounts Formula Amount or the U.S. Accounts Formula Amount, as the context requires.

“ Acquisition ” a transaction or series of transactions resulting in (a) acquisition of a business, division or substantially all assets of a Person; (b) record or beneficial ownership of 50% or more of the Equity Interests of a Person; or (c) merger, consolidation or combination of a Borrower or Subsidiary with another Person.

“ Acquisition Lease Financing ” any sale or transfer by the Parent Borrower or any Subsidiary of any property, real or personal, that is acquired pursuant to a Permitted Acquisition, in an aggregate amount not to exceed $20,000,000 at any time after the Original Closing Date, which property is rented or leased by the Parent Borrower or such Subsidiary from the purchaser or transferee of such property, so long as the proceeds from such transaction consist solely of cash.

“ Affiliate ” 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.

“ Agent Indemnitees ” Agent and its officers, directors, employees, Affiliates, branches, agents and attorneys, including, without limitation, the Security Trustees.

“ Agent Professionals ” attorneys, accountants, appraisers, auditors, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals and experts retained by Agent.

“ Agreed Security Principles ” shall mean, with respect to only the Foreign Facility Obligations and the Foreign Obligors that are not U.S. Obligors, principles in recognition of certain legal and practical difficulties in obtaining effective guarantees and security from such Foreign Obligors in jurisdictions in which it has been agreed that a Lien on Collateral will be granted in order to secure the Foreign Facility Obligations, and the agreement that in such jurisdictions or with respect to the Foreign Facility Obligations of such Foreign Obligors:

(a)        general statutory limitations, financial assistance, capital maintenance, corporate benefit, corporate interest( vennootschappelijk belang ), fraudulent preference, “thin capitalization” rules, tax restrictions or costs, retention of title claims, liquidity maintenance and

 

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similar principles may limit the ability of any such Foreign Obligor to provide a guarantee or security or may require that the guarantee or security be limited by an amount or otherwise;

(b)        the consent of certain supervisory boards, works councils or other external bodies or persons may be required under Applicable Law in such jurisdiction to enable any such Foreign Obligor to provide a guarantee or security, and such Foreign Obligor shall use best efforts to obtain such consent, but such guarantee and/or security shall not be required unless such consent has been received;

(c)        any such Foreign Obligor will not be required to give guarantees or enter into Security Documents if it would conflict with the fiduciary duties of the directors, officers, managers (or equivalent) of such Foreign Obligor or contravene any legal prohibition or would result in (or in a material risk of) personal or criminal liability on the part of any directors, officers, managers (or equivalent) of any such Foreign Obligor;

(d)        the Liens (including, for the avoidance of doubt, the maximum amount secured thereunder to the extent required by any Applicable Law) securing the Foreign Facility Obligations and the extent of their perfection will be agreed by Agent and the Borrower Agent, taking into account the cost (including material adverse tax consequences or material adverse effects on interest deductibility and stamp duty, notarization and registration fees) to such Foreign Obligors of providing such Liens so as to ensure that it is not excessive in light of the benefit accruing to the Foreign Facility Secured Parties;

(e)        in certain jurisdictions it may be either legally impossible or impractical (such impossibility or impracticality to be agreed by Agent and the Borrower Agent) to grant guarantees or create Liens over certain categories of assets in which event such guarantees will not be granted and Liens will not be taken over such assets; provided that, to the extent a change in law makes it possible or practical to grant a Lien where it was previously considered impossible or impractical, such Foreign Obligors will provide such guarantees and/or Liens subject to these Agreed Security Principles as soon as reasonably practicable;

(f)        no such Foreign Obligor shall be required to guarantee or grant Liens to secure the Foreign Facility Obligations to the extent that providing such guarantee or Liens would result in material adverse tax consequences (including creation of any investment in United States property under Section 956 of the Code) to an Obligor or a Subsidiary of an Obligor, as reasonably determined by Borrower Agent in consultation with Agent; and

(g)        perfection of Liens, when required, and other legal formalities will be completed as soon as reasonably practicable and, in any event, within the time periods specified in the relevant Security Documents or this Agreement (as such times may be extended by Agent in its reasonable discretion if the relevant provision so allows).

As of the Closing Date, the Obligors agree that no condition of any of the types described in the foregoing clauses (a) through (g) exists, and that the Agreed Security Principles shall not, as of the Closing Date, limit the guarantees provided and Liens granted by the Foreign Obligors on the Closing Date.

“ Agreement Currency ” as defined in Section 1.5 .

“ Allocable Amount ” as defined in Section 5.10.3 .

“ Alternative Incremental Debt ” any Debt incurred by a U.S. Obligor in the form of one or more series of secured or unsecured bonds, debentures, notes or similar instruments or in the form of loans; provided that

 

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(a)        if such Debt is secured, (i) such Debt shall be secured only by a Lien on the Collateral securing the Term Loan Debt having the same priorities in the Term Priority Collateral and the Revolver Priority Collateral as the Term Loan Debt (or on a junior basis) and shall not be secured by any properties or assets of any Obligor other than the Collateral securing the Term Loan Debt ( provided that if such Debt is in the form of loans, it may be secured by Liens on the Collateral only on a junior basis to the Liens on the Collateral securing the Obligations), (ii) the security agreements relating to such Debt shall be substantially similar to the Term Loan Security Documents (with such differences as are reasonably satisfactory to Agent and other than, in the case of Debt secured on a junior basis, with respect to priority) and (iii) such Debt shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to Agent,

(b)        such Debt does not mature earlier than the date that is 91 days after the Latest Maturity Date in effect hereunder at the time of incurrence thereof and has a weighted average life to maturity no shorter than the Term Loan Debt with the Latest Maturity Date in effect at the time of incurrence of such Debt,

(c)        the definitive documentation in respect of such Debt (i) contains covenants, events of default and other terms that are customary for similar Debt in light of then-prevailing market conditions and (ii) shall not contain additional covenants or events of default not otherwise applicable to the Term Loan Debt or the Loans or covenants more restrictive than the covenants applicable to the Term Loan Debt or the Loans; provided that the foregoing clause (ii) shall not apply to covenants or events of default applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such Debt; provided further that any such Debt may include additional covenants or events of default not otherwise applicable to the Term Loan Debt or the Loans or covenants more restrictive than the covenants applicable to the Term Loan Debt or the Loans in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such Debt so long as this Agreement is amended to provide all of the Lenders with the benefits of such additional covenants, events of default or more restrictive covenants,

(d)        such Debt does not provide for any mandatory prepayment, redemption or repurchase (other than upon a change of control, fundamental change, conversion or exchange in the case of convertible or exchangeable Debt, customary asset sale or event of loss mandatory offers to purchase, and customary acceleration rights after an event of default) prior to the date that is 91 days after the Latest Maturity Date in effect hereunder at the time of incurrence of such Debt; provided that any such Debt secured by Liens on a pari passu basis with the Liens on the Collateral securing the Term Loan Debt (any such Debt, “ Pari Passu Alternative Incremental Debt ”) may be subject to a mandatory prepayment offer from the Net Proceeds of any event that triggers a mandatory prepayment of the Term Loan Debt so long as the holders of such Debt receive no more than their ratable share of such prepayment (such ratable share to be calculated by reference to the outstanding amount of such Debt, the outstanding amount of the Term Loan Debt and the outstanding amount of Pari Passu Permitted Term Loan Refinancing Debt, in each case immediately prior to such prepayment),

(e)        at the time of incurrence of such Alternative Incremental Debt, (i) no Default shall have occurred and be continuing hereunder nor any “Default” under and as defined in the Term Loan Agreement, both immediately prior to and immediately after giving effect to the incurrence of such Alternative Incremental Debt and (ii) the representations and warranties of each Obligor set forth in the Loan Documents and the Term Loan Documents shall be true and

 

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correct in all material respects (or in all respects if qualified by materiality) on and as of such date; and

(f)        such Debt is not guaranteed by any Person other than U.S. Obligors.

Alternative Incremental Debt will include any Registered Equivalent Notes issued in exchange therefor.

“ AML Legislation ” as defined in Section 14.17 .

“ Anti-Corruption Laws ” all laws, rules, and regulations of any jurisdiction applicable to any Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.

“ Applicable Law ” all laws, rules, regulations and governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law, common law and equitable principles (including, without limitation, any banking, exchange control, financial assistance, minimum capitalization, fraudulent conveyance, mandatory labor advice or similar rules or regulations), and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.

“ Applicable Lenders ” (a) with respect to the Canadian Borrower, the Canadian Lenders, (b) with respect to the UK Borrower, the UK Lenders, and (c) with respect to the U.S. Borrowers, the U.S. Lenders.

“ Applicable Margin ” the margin set forth below, as determined by the average daily Total Availability for the last Fiscal Quarter:

 

      U.S. Base Rate   Canadian BA   Base Rate FILO   LIBOR FILO
    Average Daily   Loans, Canadian   Rate Loans,   Loans   Loans
 

Level

  Availability   Base Rate Loans   LIBOR Revolver    
      and Canadian   Loans    
      Prime Rate   (other than the    
      Loans, UK Base   FILO Loans)    
      Rate Loans      
      (other than the        
      FILO Loans)      
  I   > $75,000,000   0.25%   1.25%   1.00%   2.00%
  II   >  $50,000,000 and <   0.50%   1.50%   1.25%   2.25%
    $75,000,000        
  III   >  $25,000,000 and <   0.75%   1.75%   1.50%   2.50%
    $50,000,000        
 

IV

  < $25,000,000   1.00%   2.00%   1.75%   2.75%

Until the six-month anniversary of the Original Closing Date, margins shall be determined as if Level III were applicable. Thereafter, margins shall be subject to increase or decrease by Agent on the first day of the calendar month following each Fiscal Quarter end. If Agent is unable to calculate average daily Total Availability for a Fiscal Quarter due to Borrowers’ failure to deliver any Borrowing Base Report when required hereunder, then, at the option of Agent or Required Lenders, margins shall be determined as if Level IV were applicable until the first day of the calendar month following its receipt.

 

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“ Approved Fund ” any Person (other than a natural Person) engaged in making, purchasing, holding or otherwise investing in commercial loans in its ordinary course of activities.

“ Asset Disposition ” a sale, lease, license, consignment, transfer or other disposition of Property of an Obligor, including any disposition in connection with a sale-leaseback transaction or synthetic lease.

“ Assignment ” an assignment agreement between a Lender and an Eligible Assignee, in the form of Exhibit A or otherwise satisfactory to Agent.

“ Assumed Preferred Stock ” any preferred stock or preferred equity interests of any Person that becomes a Subsidiary after the Original Closing Date; provided that (a) such preferred stock or preferred equity interests exist at the time such Person becomes a Subsidiary and are not created in contemplation of or in connection with such Person becoming a Subsidiary and (b) the aggregate liquidation value of all such outstanding preferred stock and preferred equity interests shall not exceed $10,000,000 at any time outstanding, less the aggregate principal amount of Debt incurred and outstanding pursuant to Section 10.2.1(a)(x) .

“ Availability Reserve ” the Canadian Availability Reserve, the UK Availability Reserve and/or the U.S. Availability Reserve, as the context requires.

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

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

“ Bank of America ” Bank of America, N.A., a national banking association, and its successors and assigns.

“ Bank of America (Canada) ” Bank of America (acting through its Canada branch).

“ Bank of America (London) ” Bank of America (acting through its London branch).

“ Bank of America Indemnitees ” Bank of America, Bank of America (Canada), Bank of America (London), and their respective officers, directors, employees, Affiliates, branches, agents and attorneys.

“ Bank Product ” any of the following products, services or facilities extended to any Borrower or Affiliate of a Borrower by a Lender or any of its Affiliates or branches: (a) Cash Management Services; (b) products under Hedging Agreements; (c) commercial credit card and merchant card services; (d) Supply Chain Finance Arrangements; and (e) other banking products or services, other than Letters of Credit.

“ Bank Product Reserve ” the Canadian Bank Product Reserve, the UK Bank Product Reserve and/or the U.S. Bank Product Reserve, as the context requires.

“ Base Incremental Amount ” as of any date, an amount equal to (a) $ 75,000,000 45,000,000 less (b) the aggregate principal amount of Incremental Term Commitments established prior to such date under the Term Loan Agreement in reliance on the Base Incremental Amount less (c) the aggregate

 

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principal amount of Alternative Incremental Debt established prior to such date in reliance on the Base Incremental Amount.

“ Base Rate ” Canadian Base Rate and/or U.S. Base Rate, as the context requires.

“ Base Rate Loan ” a Canadian Base Rate Loan, UK Base Rate Loan and/or U.S. Base Rate Loan, as the context requires.

1 “ Beneficial Ownership Certification ” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

“ Beneficial Ownership Regulation ” means 31 C.F.R. § 1010.230.

“ Benefit Plan ” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“ Board ” the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrowed Money ” with respect to any Obligor, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such Obligor, (ii) is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments or (iii) accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business); (b) Capital Lease Obligations and (c) reimbursement obligations with respect to letters of credit.

“ Borrower Agent ” as defined in Section 4.4 .

“ Borrower Group ” a group consisting of (a) the Canadian Borrower, (b) the UK Borrower, or (c) the U.S. Borrowers, as the context requires.

“ Borrower Group Commitment ” with respect to the commitment of (a) a Canadian Lender, its Canadian Revolver Commitment, (b) a UK Lender, its UK Revolver Commitment and (c) a U.S. Lender, its U.S. Revolver Commitment. The term “ Borrower Group Commitments ” means (i) the Borrower Group Commitment of all Canadian Lenders, (ii) the Borrower Group Commitment of all UK Lenders, or (iii) the Borrower Group Commitment of all U.S. Lenders, as the context requires. To the extent any Lender has more than one Borrower Group Commitment, each such Commitment shall be considered as a separate Commitment for purposes of this definition.

“ Borrower Materials ” Borrowing Base Reports, Compliance Certificates and other information, reports, financial statements and other materials delivered by Borrowers hereunder, as well as other Reports and information provided by Agent to Lenders.

“ Borrowing ” a group of Loans that are made or converted together on the same day and have the same interest option and, if applicable, Interest Period.

 

1 Added per Third Amendment.

 

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“ Borrowing Base ” (a) the Canadian Borrowing Base, (b) the UK Borrowing Base, and/or (c) the U.S. Borrowing Base, as the context requires.

“ Borrowing Base Report ” a report of each Borrowing Base and the Total Borrowing Base by Borrower Agent, on behalf of Borrowers, together with information regarding any retention of title from vendors to UK Borrower, all in form and substance satisfactory to Agent.

“ Borrowing Base Trigger Period ” the period (a) commencing on the day that an Event of Default occurs or U.S. Adjusted Availability is less than or equal to, for 2 consecutive Business Days, the lesser of (i) 15% of the U.S. Borrowing Base or (ii) 15% of the aggregate amount of all U.S. Revolver Commitments; and (b) continuing until no Event of Default exists and, during each of the preceding 30 consecutive days, U.S. Adjusted Availability has been greater than the lesser of (i) 15% of the U.S. Borrowing Base or (ii) 15% of the aggregate amount of all U.S. Revolver Commitments.

“ Business Day ” any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, New York City, North Carolina or Illinois, and when used in reference to (a) a LIBOR Loan, the term shall also exclude any day on which dealings in Dollar deposits are not conducted in the London interbank market, (b) a UK Revolver Loan, the term shall also exclude any day (i) on which banks are not open for the transaction of banking business in London, England and (ii) in respect of any such UK Revolver Loan denominated in Euros, any day that is not a TARGET Day, and (c) a Canadian Revolver Loan, the term shall also exclude a day on which banks in Toronto, Ontario, Canada are not open for the transaction of banking business.

“ Canadian Accounts Formula Amount ” 85% of the Value of Canadian Eligible Accounts; provided , however, that such percentage shall be reduced by 1.0% for each percentage point (or portion thereof) that the Dilution Percent of the Canadian Borrower exceeds 5%.

“ Canadian Allocated U.S. Availability ” U.S. Availability designated by the Borrower Agent for application to the Canadian Borrowing Base.

“ Canadian Availability ” the Canadian Borrowing Base minus the Canadian Revolver Usage.

“ Canadian Availability Reserve ” the sum (without duplication) of (a) the Canadian Inventory Reserve; (b) the Canadian Rent and Charges Reserve; (c) the Canadian Bank Product Reserve; (d) the aggregate amount of liabilities secured by Liens upon Canadian Facility Collateral that are (or, in the opinion of Agent in the exercise of its Permitted Discretion, may be) senior to Agent’s Liens or that Agent in its Permitted Discretion determines may be required to be paid to permit or facilitate exercise of rights or remedies with respect to Canadian Facility Collateral (but imposition of any such reserve shall not waive an Event of Default arising therefrom), including, without limitation, any such amounts due and not paid for wages or vacation pay (including amounts protected by the Wage Earner Protection Program Act (Canada) ), amounts due and not paid under any legislation relating to workers’ compensation or to employment insurance, all amounts deducted or withheld and not paid and remitted when due under the Income Tax Act (Canada) , amounts currently or past due and not paid for realty, municipal or similar Taxes (to the extent impacting any Canadian Facility Collateral), all amounts currently or past due and not contributed, remitted or paid to any Canadian Pension Plan or under the Canada Pension Plan or the PBA, and any amounts representing any unfunded liability, solvency deficiency or wind up deficiency with respect to any Canadian Pension Plan or Canadian Multi-Employer Plan and (e) such additional reserves, in such amounts and with respect to such matters, as Agent in its Permitted Discretion may elect to impose from time to time; provided the imposition of any such reserves or change in a reserve after the Closing Date shall not be effective until two (2) Business Days after notice thereof (which may be oral notice, promptly confirmed in writing) to the Borrower Agent unless (i)

 

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a Default has occurred and is then continuing, (ii) the reserve or change in reserve is the result of a Lien, senior in priority to Agent’s or the applicable Security Trustee’s Lien, attached to any Canadian Facility Collateral included in the Canadian Borrowing Base and/or (iii) the changes to any such reserve results solely from mathematical calculations of the amount of such reserve in accordance with the methodology of calculation previously utilized (in the case of each of which such reserve or change in reserve shall be effective immediately); and provided further that during any such two (2) Business Day notice period, Lenders shall have no obligations to fund any Canadian Revolver Loan or cause to be issued any Canadian Letter of Credit to the extent that, after giving pro forma effect to the making of such Canadian Revolver Loan or issuance of such Canadian Letter of Credit and to the establishment of any such new reserve or change in such reserve, a Canadian Overadvance would exist.

“ Canadian BA Rate ” with respect to each Interest Period for a Canadian BA Rate Loan, the rate of interest per annum equal to the average rate applicable to Canadian Dollar bankers’ acceptances having an identical or comparable term as the proposed Canadian BA Rate Loan displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuter Monitor Money Rates Service as at approximately 10:00 a.m. Toronto time on such day (or, if such day is not a Business Day, as of 10:00 a.m. Toronto time on the immediately preceding Business Day), provided that if such rate does not appear on the CDOR Page at such time on such date, the rate for such date will be the annual discount rate (rounded upward to the nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. Local Time on such day at which a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) as selected by Agent is then offering to purchase Canadian Dollar bankers’ acceptances accepted by it having such specified term (or a term as closely as possible comparable to such specified term). In no event shall the Canadian BA Rate be less than zero.

“ Canadian BA Rate Loan ” a Canadian Revolver Loan, or portion thereof, funded in Canadian Dollars and bearing interest calculated by reference to the Canadian BA Rate.

“ Canadian Bank Product Reserve ” the aggregate amount of reserves established by Agent from time to time in its Permitted Discretion in respect of Secured Bank Product Obligations for the account of the Canadian Domiciled Obligors and any Affiliate thereof domiciled in Canada.

“ Canadian Base Rate ” on any date, the highest of (a) a fluctuating rate of interest per annum equal to the rate of interest in effect for such day as publicly announced from time to time by Bank of America (Canada) as its “Base Rate”, (b) the sum of 0.50% plus the Federal Funds Rate for such day, and (c) the sum of 1.00% plus the LIBOR rate for a thirty (30) day Interest Period as of such day. The “Base Rate” is a rate set by Bank of America (Canada) based upon various factors including Bank of America (Canada)’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans made in Dollars in Canada, which may be priced at, above, or below such announced rate. Any change in such rate shall take effect at the opening of business on the day of such change. In the event Bank of America (Canada) (including any successor or assignee) does not at any time announce a “Base Rate”, clause (a) of Canadian Base Rate shall mean the “Base Rate” (being the rate for loans made in Dollars in Canada) publicly announced by a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) selected by Agent. In no event shall the Canadian Base Rate be less than zero.

“ Canadian Base Rate Loan ” a Canadian Revolver Loan, or portion thereof, funded in Dollars and bearing interest calculated by reference to the Canadian Base Rate.

“ Canadian Borrower ” Cequent Canada (as defined in the preamble to this Agreement).

 

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“ Canadian Borrowing Base ” on any date of determination, an amount (expressed in Dollars, based on the Dollar Equivalent thereof) equal to the lesser of (a) the aggregate Canadian Revolver Commitments and (b) the sum of the Canadian Accounts Formula Amount, plus the Canadian Inventory Formula Amount, plus Canadian Allocated U.S. Availability, minus the Canadian Availability Reserve; provided, however, that no Accounts, Inventory or other Property acquired in a Permitted Acquisition or otherwise outside the Ordinary Course of Business shall be included in the calculation of the Canadian Borrowing Base until completion of a customary due diligence investigation by Agent, which may in Agent’s sole discretion include applicable field examinations and appraisals (which shall not be included in the limits on the number of field examinations or appraisals provided in Section 10.1.1 ) satisfactory to Agent.

“ Canadian Commitment Termination Date ” the earliest to occur of (a) the Revolver Termination Date; (b) the date on which U.S. Borrowers terminate the U.S. Revolver Commitments pursuant to Section 2.1.4 ; (c) the date on which the U.S. Revolver Commitments are terminated pursuant to Section 11.2 ; (d) the date on which Canadian Borrower terminates the Canadian Revolver Commitments pursuant to Section 2.1.4 ; and (e) the date on which the Canadian Revolver Commitments are terminated pursuant to Section 11.2 .

“ Canadian Deposit Account Control Agreement ” a control agreement (whether in the form of an agreement, notice and acknowledgement or like instrument) satisfactory to Agent executed by an institution maintaining a Deposit Account for an Obligor in favor of Agent or Security Trustee as security for the Canadian Facility Obligations of such Obligor.

“ Canadian Dollars or Cdn$ ” the lawful currency of Canada.

“ Canadian Domiciled Obligor ” Canadian Borrower and each Canadian Subsidiary that is or is required to be liable for payment of any Foreign Facility Obligations or that has granted a Lien on its assets in favor of Agent to secure any Foreign Facility Obligations, and “ Canadian Domiciled Obligors ” means all such Persons, collectively.

“ Canadian Dominion Account(s) ” one or more special accounts established by the Canadian Borrower at Bank of America (Canada) or another bank reasonably acceptable to Agent, and, as required under Section 8.2.4 , with respect to which Agent has the right to issue a notice of exclusive control for withdrawal purposes during a Dominion Trigger Period.

“ Canadian Eligible Account ” an Account owing to Canadian Borrower that arises in the Ordinary Course of Business from the sale of goods, is payable in Dollars or Canadian Dollars and is deemed by Agent, in its Permitted Discretion, to be a Canadian Eligible Account. Without limiting the foregoing, no Account shall be a Canadian Eligible Account if (a) it is unpaid for more than 60 days after the original due date, or more than 120 days after the original invoice date; (b) 50% or more of the Accounts owing by the Account Debtor are not Canadian Eligible Accounts under the foregoing clause; (c) when aggregated with other Accounts owing by the Account Debtor, it exceeds (but solely to the extent of such excess) 15% of the aggregate Canadian Eligible Accounts (or such higher percentage as Agent may establish for the Account Debtor from time to time); (d) it does not conform with a covenant or representation herein; (e) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); (f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or is subject to any Sanction or on any specially designated nationals list maintained by OFAC or any other Governmental

 

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Authority; or Canadian Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) from a financial institution reasonably acceptable to Agent and on terms reasonably satisfactory to Agent; (g) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) from a financial institution reasonably acceptable to Agent and on terms reasonably satisfactory to Agent; (h) it is owing by a Governmental Authority, unless (i) the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in compliance with the United States federal Assignment of Claims Act or (ii) the Account Debtor is the government of Canada or a province or territory thereof, or any department, agency or instrumentality of any such government, and the Account has been assigned to Agent in compliance with the Financial Administration Act (Canada) (or similar Applicable Law of such province or territory), and any other steps necessary to perfect or render opposable the Lien of Agent on such Account have been complied with to Agent’s satisfaction; (i) it is not subject to a duly perfected, first priority Lien in favor of Agent, or is subject to any other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section 10.2.2(a) or Section 10.2.2(r) is prior to the Lien of Agent, unless a Canadian Availability Reserve is in effect with respect thereto)); (j) the goods giving rise to it have not been delivered to the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (l) its payment has been extended or the Account Debtor has made a partial payment; (m) it arises from a sale to an Affiliate, from a sale on a cash-on-delivery, bill-and-hold, sale-or-return, sale-on-approval, consignment, or other repurchase or return basis, or from a sale for personal, family or household purposes; (n) it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued; or (o) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof. In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than 120 days old will be excluded.

“ Canadian Eligible Inventory ” Inventory owned by Canadian Borrower that Agent, in its Permitted Discretion, deems to be Canadian Eligible Inventory. Without limiting the foregoing, no Inventory shall be Canadian Eligible Inventory unless it (a) is finished goods or raw materials or work-in-process and not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, has not been acquired from a Person subject to any Sanction or on any specially designated nationals list maintained by OFAC or any other Governmental Authority, and does not constitute Hazardous Materials under any Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section 10.2.2(a) or Section 10.2.2(r) is prior to the Lien of Agent, unless a Canadian Availability Reserve is in effect with respect thereto)); (h) is within the continental United States or Canada, is not in transit except between locations of Canadian Borrower, and is not consigned to any Person; (i) is not subject to any negotiable document; (j) is not subject to any License or other arrangement that restricts Canadian Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or an appropriate Canadian Rent and Charges Reserve has been established; and (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the

 

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lessor or such Person has delivered a Lien Waiver or an appropriate Canadian Rent and Charges Reserve has been established; and (l) is reflected in the details of a current perpetual inventory report.

“ Canadian Employee Plan ” any employee benefit plan, policy, program, agreement or arrangement, including retirement, pension, profit sharing, employment, bonus or other incentive compensation, retention, stock purchase, equity or equity-based compensation, deferred compensation, change in control, severance, sick leave, vacation, loans, salary continuation, hospitalization, health, life insurance, educational assistance or other fringe benefit or perquisite plan, policy, agreement which is or was sponsored, maintained or contributed to by, or required to be contributed to by, a Canadian Domiciled Obligor, or with respect to which a Canadian Domiciled Obligor has, or could reasonably be expected to have, any obligation or liability, contingent or otherwise, but excluding the Canada Pension Plan and any provincial or federal program providing health benefits, employment insurance or workers’ compensation benefits.

“ Canadian Facility Collateral ” Collateral that now or hereafter secures (or is intended to secure) any of the Canadian Facility Obligations.

“ Canadian Facility Guarantor ” each Dutch Domiciled Obligor, each U.S. Domiciled Obligor, each UK Domiciled Obligor, each Mexican Domiciled Obligor, each Canadian Subsidiary Obligor, and each other Person that guarantees or is required to guarantee payment or performance of the Canadian Facility Obligations (including pursuant to a Foreign Cross-Guarantee) pursuant to Section 10.1.9 and/or the Collateral and Guarantee Requirement.

“ Canadian Facility Obligations ” all Obligations of the Canadian Facility Obligors owed to the Canadian Facility Secured Parties, and the other Foreign Facility Obligations that are the subject of a cross-Guarantee (including, without limitation, the Foreign Cross-Guarantee) made by the Canadian Facility Obligors.

“ Canadian Facility Obligor ” Canadian Borrower, each Canadian Facility Guarantor and each other Person that has or is required pursuant to Section 10.1.9 and/or the Collateral and Guarantee Requirement to grant a Lien on its assets in favor of Agent to secure any Canadian Facility Obligations.

“ Canadian Facility Secured Parties ” Agent, Canadian Issuing Bank, Canadian Lenders, any Security Trustee with respect to the Canadian Facility Obligations and Secured Bank Product Providers of Bank Products for the account of Canadian Domiciled Obligors and their Affiliates domiciled in Canada, and the other Foreign Facility Secured Parties that are the beneficiaries of a Foreign Cross-Guarantee made by the Canadian Facility Obligors.

“ Canadian Guaranties ” each guaranty agreement executed by a Canadian Facility Guarantor in favor of Agent in order to guaranty the payment and/or performance of the Canadian Facility Obligations (including without limitation this Agreement and the Foreign Facility Guarantee and Collateral Agreement).

“ Canadian Inventory Formula Amount ” (a) the lesser of (i) 70% of the Value of Canadian Eligible Inventory or (ii) 85% of the NOLV Percentage of the Value of Canadian Eligible Inventory; plus (b) the lesser of (i) 70% of the Value of Eligible In-Transit Inventory owned by Canadian Borrower, or (ii) 85% of the NOLV Percentage of the Value of Eligible In-Transit Inventory owned by Canadian Borrower; provided that (i) prior to the date that the conditions set forth in clause (b) of the definition of “Eligible In-Transit Inventory” are met, whether or not an Eligible In-Transit Inventory Trigger Period has occurred and is continuing, the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Borrowers shall not exceed an aggregate amount of $10,000,000 at any time and (ii) the

 

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Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Foreign Borrowers that is in transit to Mexico shall not exceed an aggregate amount of $2,000,000 at any time.

“ Canadian Inventory Reserve ” reserves established by Agent to reflect factors that may negatively impact the Value of Inventory of Canadian Borrower, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

“ Canadian IP Assignment ” a collateral assignment or security agreement pursuant to which a Canadian Facility Obligor grants a Lien on its Intellectual Property to Agent, as security for (or given with the intent to secure) the Canadian Facility Obligations.

“ Canadian Issuing Bank ” Bank of America (Canada) (including any Lending Office of Bank of America), any Affiliate thereof, or any replacement issuer appointed pursuant to Section 2.5 that agrees to issue Canadian Letters of Credit.

“ Canadian Issuing Bank Indemnitees ” Canadian Issuing Bank and its officers, directors, employees, Affiliates, branches, agents and attorneys.

“ Canadian LC Application ” an application by Borrower Agent or Canadian Borrower to Canadian Issuing Bank for issuance of a Canadian Letter of Credit, in form and substance satisfactory to Canadian Issuing Bank and Agent.

“ Canadian LC Conditions ” the following conditions necessary for issuance of a Canadian Letter of Credit: (a) each of the conditions set forth in Section 6 ; (b) after giving effect to such issuance, total Canadian LC Obligations do not exceed the Canadian Letter of Credit Subline, no Canadian Overadvance exists and Canadian Revolver Usage does not exceed the Canadian Borrowing Base; (c) the Canadian Letter of Credit and payments thereunder are denominated in Canadian Dollars, Dollars or other currency satisfactory to Agent and Canadian Issuing Bank; and (d) the purpose and form of the proposed Canadian Letter of Credit are satisfactory to Agent and Canadian Issuing Bank in their Permitted Discretion.

“ Canadian LC Documents ” all documents, instruments and agreements (including Canadian LC Requests and Canadian LC Applications) delivered by Canadian Borrower or any other Person to Canadian Issuing Bank or Agent in connection with any Canadian Letter of Credit.

“ Canadian LC Obligations ” the Dollar Equivalent of the sum of (a) all amounts owing by Canadian Borrower for drawings under Canadian Letters of Credit; and (b) the Stated Amount of all outstanding Canadian Letters of Credit.

“ Canadian LC Request ” a request for issuance of a Canadian Letter of Credit, to be provided by Borrower Agent or Canadian Borrower to Canadian Issuing Bank, in form satisfactory to Agent and Canadian Issuing Bank.

“ Canadian Lenders ” Bank of America (Canada), each other lender party to this Agreement that has issued a Canadian Revolver Commitment, the Canadian Swingline Lender, and any Person who hereafter becomes a “Lender” with a Canadian Revolver Commitment pursuant to an Assignment, including any Lending Office of the foregoing. Unless an Event of Default shall have occurred and be continuing, each Canadian Lender shall be a financial institution that is listed on Schedule I, II or III of the Bank Act (Canada), has received an approval to have a financial establishment in Canada pursuant to Section 522.21 of the Bank Act (Canada) or is not a foreign bank for purposes of the Bank Act (Canada) or is not prohibited by Applicable Law, including the Bank Act (Canada), from having a Canadian

 

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Revolver Commitment, or making any Canadian Revolver Loans or having any Canadian LC Obligations under this Agreement, and if such financial institution is not resident in Canada and is not deemed to be resident in Canada for purposes of the Income Tax Act (Canada), then such financial institution is not a “specified shareholder” of a Canadian Domiciled Obligor and deals at arm’s length with each Canadian Domiciled Obligor and each “specified shareholder” of each Canadian Domiciled Obligor for purposes of the Income Tax Act (Canada).

“ Canadian Letter of Credit ” any standby or documentary letter of credit, foreign guaranty, documentary bankers acceptance or similar instrument issued by Canadian Issuing Bank for the account or benefit of Canadian Borrower or an Affiliate of Canadian Borrower.

“ Canadian Letter of Credit Subline ” the lesser of (a) $0 and (b) the Canadian Revolver Commitments.

“ Canadian Mortgage ” a mortgage, deed of immovable hypothec, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure (or given with the intent to secure) the Canadian Facility Obligations. Each Canadian Mortgage shall be in form and substance reasonably satisfactory to Agent.

“ Canadian Multi-Employer Plan ” each multi-employer plan, within the meaning of the regulations under the Income Tax Act (Canada) .

“ Canadian Overadvance ” as defined in Section 2.1.5 .

“ Canadian Overadvance Loan ” a Canadian Base Rate Loan and/or a Canadian Prime Rate Loan made to Canadian Borrower when a Canadian Overadvance exists or is caused by the funding thereof.

“ Canadian Overadvance Loan Balance ” on any date, the Dollar Equivalent of the amount by which the aggregate Canadian Revolver Loans of Canadian Borrower exceed the amount of the Canadian Borrowing Base on such date.

“ Canadian Pension Plan ” a “registered pension plan,” as defined in the Income Tax Act (Canada) and any other pension plan maintained or contributed to by, or to which there is or may be an obligation to contribute by, any Canadian Domiciled Obligor in respect of its Canadian employees or former employees, excluding, for greater certainty, a Canadian Multi-Employer Plan.

“ Canadian Prime Rate ” on any date, the highest of (i) a fluctuating rate of interest per annum equal to the rate of interest in effect for such day as publicly announced from time to time by Bank of America (Canada) as its “Prime Rate”, (ii) the sum of 0.50% plus the Bank of Canada overnight rate, which is the rate of interest charged by the Bank of Canada on one-day loans to financial institutions, for such day, and (iii) the sum of 1.00% plus the Canadian BA Rate for a 30 day Interest Period as of such day. The “Prime Rate” is a rate set by Bank of America (Canada) based upon various factors including the costs and desired return of Bank of America (Canada), general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate shall take effect at the opening of business on the day specified in the public announcement of such change. Each interest rate based on the Canadian Prime Rate hereunder shall be adjusted simultaneously with any change in the Canadian Prime Rate. In the event Bank of America (Canada) (including any successor or assignee) does not at any time announce a “Prime Rate”, clause (i) of Canadian Prime Rate shall mean the “Prime Rate” (being the rate for loans made in Canadian Dollars in Canada) publicly announced by a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) selected by Agent. In no event shall the Canadian Prime Rate be less than zero.

 

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“ Canadian Prime Rate Loan ” a Canadian Revolver Loan, or portion thereof, funded in Canadian Dollars and bearing interest calculated by reference to the Canadian Prime Rate.

“ Canadian Protective Advances ” as defined in Section 2.1.6 .

“ Canadian Reimbursement Date ” as defined in Section 2.2.2 .

“ Canadian Rent and Charges Reserve ” the aggregate of (a) all past due rent and other amounts owing by Canadian Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Canadian Facility Collateral or could assert a Lien on any Canadian Facility Collateral; and (b) a reserve at least equal to two months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

“ Canadian Revolver Commitment ” for any Canadian Lender, its obligation to make Canadian Revolver Loans and to participate in Canadian LC Obligations up to the maximum principal amount shown on Schedule 1.1(B) , as hereafter modified pursuant to Section 2.1.4 , Section 2.1.7 or an Assignment to which it is a party. “ Canadian Revolver Commitments ” means the aggregate amount of such commitments of all Canadian Lenders.

“ Canadian Revolver Loan ” a loan made by a Canadian Lender to Canadian Borrower pursuant to Section 2.1 , which loan shall, if denominated in Canadian Dollars, be either a Canadian BA Rate Loan or a Canadian Prime Rate Loan and, if denominated in Dollars, shall be either a Canadian Base Rate Loan or a LIBOR Loan, in each case as selected by the Borrower Agent on behalf of the Canadian Borrower, and any Canadian Swingline Loan, Canadian Overadvance Loan or Canadian Protective Advance.

“ Canadian Revolver Usage ” the Dollar Equivalent of an amount equal to (a) the aggregate amount of outstanding Canadian Revolver Loans; plus (b) the aggregate Stated Amount of outstanding Canadian Letters of Credit, except to the extent Cash Collateralized by any Obligor.

“ Canadian Security Agreement ” that certain Canadian Security Agreement, dated as of the Closing Date, by and between Canadian Borrower and Agent, as amended, restated, supplemented or otherwise modified from time to time.

“ Canadian Security Documents ” the Foreign Facility Guarantee and Collateral Agreement, the Canadian Security Agreement, each Deed of Movable Hypothec, if any, among any of the Canadian Facility Obligors and Agent in order to secure any of the Canadian Facility Obligations, the Canadian Guaranties, the Canadian Mortgages, the Canadian IP Assignments, the Canadian Deposit Account Control Agreements, the Dutch Security Documents, the Mexican Security Documents, the UK Security Documents, the U.S. Security Documents and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Canadian Facility Obligations.

“ Canadian Subsidiary ” each Subsidiary that is incorporated or organized under the laws of Canada or any province or territory of Canada.

“ Canadian Subsidiary Obligor ” any Subsidiary directly owned by a Canadian Domiciled Obligor that is not an Immaterial Subsidiary, if any.

“ Canadian Swingline Lender ” Bank of America (Canada) in its capacity as provider of Canadian Swingline Loans.

 

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“ Canadian Swingline Loan ” any Borrowing of Canadian Revolver Loans funded with Canadian Swingline Lender’s funds, until such Borrowing is settled among Canadian Lenders or repaid by Canadian Borrower, which Canadian Revolver Loan shall, if denominated in Canadian Dollars, be a Canadian Prime Rate Loan and shall, if denominated in Dollars, be a Canadian Base Rate Loan, in each case as selected by the Borrower Agent on behalf of Canadian Borrower.

“ Capital Expenditures ” for any period, without duplication, (a) the additions to property, plant and equipment and other capital expenditures of the Parent Borrower and its consolidated Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Parent Borrower for such period prepared in accordance with GAAP other than (x) such additions and expenditures classified as Permitted Acquisitions and (y) such additions and expenditures made with Net Proceeds from any casualty or other insured damage or condemnation or similar awards and (b) Capital Lease Obligations incurred by the Parent Borrower and its consolidated Subsidiaries during such period.

“ 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; provided that any change in GAAP after the Original Closing Date that would require lease obligations that would have been characterized and accounted for as operating leases in accordance with GAAP as in effect on the Original Closing Date to be characterized and accounted for as Capital Lease Obligations shall be disregarded for purposes hereof.

“ Cash Collateral ” cash, and any interest or other income earned thereon, that is delivered to Agent or a Security Trustee to Cash Collateralize any Obligations.

“ Cash Collateral Account ” a Foreign Cash Collateral Account or a U.S. Cash Collateral Account, as the context requires.

“ Cash Collateralize ” the delivery of cash to Agent or a Security Trustee, as security for the payment of Obligations, in an amount equal to (a) with respect to any LC Obligations, 103% of the aggregate of such LC Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including Secured Bank Product Obligations), Agent’s good faith estimate of the amount due or to become due, including fees, expenses and indemnification hereunder. “ Cash Collateralization ” has a correlative meaning.

“ Cash Management Services ” services relating to operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.

“ CCAA ” the Companies’ Creditors Arrangement Act (Canada) (or any successor statute), as amended from time to time, and includes all regulations thereunder.

“ Cequent Mexico Holdings Share Pledge ” a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Mexico Holdings B.V., made between UK Borrower as pledgor and Agent as pledgee, as such agreement is amended, restated, supplemented or otherwise modified from time to time.

 

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“ Cequent Nederland Holdings Share Pledge ” a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Nederland Holdings B.V., made between Horizon International Holdings LLC as pledgor and Agent as pledgee, as such agreement is amended, restated, supplemented or otherwise modified from time to time.

“ CFC ” a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ CFC Holdco ” any Subsidiary, other than Foreign Subsidiaries, substantially all the assets of which consist of Equity Interests of one or more Foreign Subsidiaries.

“ Change in Control ” (a) the acquisition of beneficial ownership, directly or indirectly, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder), of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in the Parent Borrower, (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Parent Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i)  above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i)  and (ii)  above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (c) the occurrence of any change in control (or similar event, however denominated) with respect to the Parent Borrower under (i) any indenture or other agreement in respect of Material Debt to which the Parent Borrower or any Subsidiary is a party or (ii) any instrument governing any preferred stock of the Parent Borrower or any Subsidiary having a liquidation value or redemption value in excess of $5,000,000.

“ Change in Law ” the occurrence, after the Original Closing Date, of (a) the adoption, taking effect or phasing in of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof; or (c) the making, issuance or application of any request, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided , however , that “Change in Law” shall include, regardless of the date enacted, adopted or issued, all requests, rules, guidelines, requirements or directives (i) under or relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or (ii) promulgated pursuant to Basel III by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any similar authority) or any other Governmental Authority.

“ Civil Code ” the Civil Code of Québec , or any successor statute, as amended from time to time, and includes all regulations thereunder.

“ Claims ” all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations or replacement of Agent or any Lender) incurred by any Indemnitee or asserted against any Indemnitee by any Obligor or other Person, in any way relating to (a) any Loans, Letters of Credit, Loan Documents, Borrower Materials, or the use thereof or transactions relating thereto, (b) any action taken or omitted in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Obligor to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.

 

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“ Closing Date ” as defined in Section 6.1 .

“ Code ” the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” all Property described in any Security Documents as security for any Obligations and all other Property that now or hereafter secures (or is intended to secure) any Obligations.

“ Collateral and Guarantee Requirement ” the Foreign Facility Collateral and Guarantee Requirement and/or the U.S. Facility Collateral and Guarantee Requirement, as the context requires.

“ Commission ” the Securities and Exchange Commission or any Governmental Authority succeeding to any or all of the functions of said Commission.

“ Commitment ” for any Lender, the aggregate amount of such Lender’s Borrower Group Commitments. “ Commitments ” means the aggregate amount of all Borrower Group Commitments (not to exceed the Maximum Facility Amount), which on the Closing Date consist of (a) $2,000,000 in respect of the Canadian Revolver Commitments, (b) $3,000,000 in respect of the UK Revolver Commitments, and (c) $94,000,000 in respect of the U.S. Revolver Commitments.

“ Commitment Termination Date ” (a) with respect to the Canadian Revolver Commitments, the Canadian Commitment Termination Date, (b) with respect to the UK Revolver Commitments, the UK Commitment Termination Date and (c) with respect to the U.S. Revolver Commitments, the U.S. Commitment Termination Date.

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

“ Compliance Certificate ” a certificate, in form and substance satisfactory to Agent, by which Borrower Agent certifies compliance with Section 10.3 .

“ Consolidated EBITDA ” for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period, (ii) consolidated income tax expense for such period (including all single business tax expenses imposed by state law), (iii) all amounts attributable to depreciation and amortization for such period, (iv) any extraordinary noncash charges for such period, (v) interest-equivalent costs associated with any Specified Vendor Receivables Financing for such period, whether accounted for as interest expense or loss on the sale of receivables, and all Preferred Dividends, (vi) all losses during such period that relate to the retirement of Debt, (vii) noncash expenses during such period resulting from the grant of Equity Interests to management and employees of the Parent Borrower or any of the Subsidiaries, (viii) the aggregate amount of deferred financing expenses for such period, (ix) all other noncash expenses or losses of the Parent Borrower or any of the Subsidiaries for such period (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), (x) any nonrecurring fees, expenses or charges realized by the Parent Borrower or any of the Subsidiaries for such period related to any offering of Equity Interests or incurrence of Debt, whether or not consummated, (xi) fees and expenses in connection with the Original Closing Date Transactions, (xii) any nonrecurring costs and expenses arising from the integration of any business acquired pursuant to any Permitted Acquisition consummated after the Original Closing Date, (xiii) the amount of reasonably identifiable and factually supportable “run rate” cost savings, operating expense reductions, and other synergies not to exceed $12,500,000 resulting from the Westfalia Acquisition that are projected by the Parent Borrower in good faith and certified by a Financial Officer of the Parent Borrower in writing to the Agent to result from actions either taken or expected to be taken within eighteen (18) months of the

 

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Westfalia Acquisition Closing Date, net of the amount of actual benefits realized prior to or during such period from such actions (which cost savings, operating expense reductions, and synergies shall be calculated on a pro forma basis as though such cost savings, operating expense reductions, or synergies had been realized on the first day of such period), (xiv) any nonrecurring expenses or similar costs relating to cost savings projects, including restructuring and severance expenses, (xv) net losses from discontinued operations, (xvi) losses associated with the prepayment of leases (whether operating leases or capital leases) outstanding on January 1, 2015 from discontinued operations, and (xvii) losses or charges associated with asset sales otherwise permitted hereunder, minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) any non-cash income, profits or gains for such period and (iii) any gains realized from the retirement of Debt after the Original Closing Date, all determined on a consolidated basis in accordance with GAAP; provided, however that the amounts added to Consolidated Net Income pursuant to clauses (xii) through (xvii) above for any period shall not exceed twenty percent (20%) of Consolidated EBITDA for such period (determined without including amounts added to Consolidated Net Income pursuant to clauses (xii) through (xvii) above for such period). If any Borrower or any Subsidiary has made any Permitted Acquisition or Significant Investment or any sale, transfer, lease or other disposition of assets outside of the ordinary course of business permitted by Section 10.2.5 during the relevant period for determining any leverage ratio hereunder, Consolidated EBITDA for the relevant period shall be calculated only for purposes of determining such leverage ratio after giving pro forma effect thereto, as if such Permitted Acquisition or Significant Investment or sale, transfer, lease or other disposition of assets had occurred on the first day of the relevant period for determining Consolidated EBITDA; provided that with respect to any Significant Investment, (x) any pro forma adjustment made to Consolidated EBITDA shall be in proportion to the percentage ownership of such Borrower or such Subsidiary, as applicable, in the Subject Person (e.g. if such Borrower acquires 70% of the Equity Interests of the Subject Person, a pro forma adjustment to Consolidated EBITDA shall be made with respect to no more than 70% of the EBITDA of the Subject Person) and (y) pro forma effect shall only be given to such Significant Investment if the Debt of the Subject Person is included in Total Debt for purposes of calculating the applicable leverage ratio in proportion to the percentage ownership of such Borrower or such Subsidiary, as applicable, in such Subject Person. Any such pro forma calculations may include operating and other expense reductions and other adjustments for such period resulting from any Permitted Acquisition, or sale, transfer, lease or other disposition of assets that is being given pro forma effect to the extent that such operating and other expense reductions and other adjustments (a) would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933 (“Regulation S-X”) or (b) are reasonably consistent with the purpose of Regulation S-X as determined in good faith by the Borrowers in consultation with Agent.

“ Consolidated Net Income ” for any period, the net income or loss of the Parent Borrower and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Person (other than the Parent Borrower or a Significant Investment) in which any other Person (other than the Parent Borrower or any Subsidiary or any director holding qualifying shares in compliance with Applicable Law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Parent Borrower or any of the Subsidiaries during such period, (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Parent Borrower or any Subsidiary or the date that such Person’s assets are acquired by the Parent Borrower or any Subsidiary and (c) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income.

“ Contingent Obligation ” any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt, lease, dividend or other obligation (“ primary

 

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obligations ”) of another obligor (“ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless of nonperformance by any other party to an agreement; and (c) arrangement (i) to purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation, or (v) otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.

“ Control ” 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 Accounts ” each Deposit Account and Securities Account required to be subject to the Lien and control of Agent or a Security Trustee pursuant to the Loan Documents.

“Controlling Term Loan Agent” means (a) Senior Term Loan Agent until the end of the Senior Term Period and (b) Term Loan Agent at all times thereafter.

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Credit Party ” Agent, a Lender or any Issuing Bank; and “ Credit Parties ” means Agent, Lenders and Issuing Banks.

“ Creditor Representative ” under any Applicable Law, a receiver, manager, controller, interim receiver, receiver and manager, trustee (including any trustee in bankruptcy), custodian, conservator, administrator, examiner, sheriff, monitor, assignee, liquidator, provisional liquidator, sequestrator, administrative receiver, judicial manager, statutory manager or similar officer or fiduciary.

“ CTA ” the Corporation Tax Act 2009 (UK), as amended from time to time.

“ Debt ” of any Person means, without duplication, (a) all obligations of such Person for Borrowed Money or with respect to advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the Ordinary Course of Business), (f) all Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Debt secured thereby has been assumed, (g) all Guarantees by such Person of Debt of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent

 

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or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances. The Debt of any Person shall include the Debt of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Debt provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term “ Debt ” shall not include (a) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or Equity Interests and (b) trade payables and accrued expenses in each case arising in the Ordinary Course of Business.

“ Deed of Movable Hypothec ” a deed of hypothec charging the movable (personal) property of an Obligor pursuant to the Civil Code, in the event that any of the Canadian Facility Obligors own movable (personal) property in Quebec.

“ Default ” any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“ Default Rate ” for any Obligation (including, to the extent permitted by law, interest not paid when due), 2% plus the interest rate otherwise applicable thereto.

“ Defaulting Lender ” any Lender that (a) has failed to comply with its funding obligations hereunder, and such failure is not cured within two Business Days; (b) has notified Agent or any Borrower that such Lender does not intend to comply with its funding obligations hereunder or under any other credit facility, or has made a public statement to that effect; (c) has failed, within three Business Days following request by Agent or any Borrower, to confirm in a manner satisfactory to Agent and Borrowers that such Lender will comply with its funding obligations hereunder; or (d) has, or has a direct or indirect parent company that has, (i) become the subject of an Insolvency Proceeding (including reorganization, liquidation, or appointment of a receiver, custodian, administrator or similar Person by the Federal Deposit Insurance Corporation or any other regulatory authority) or (ii) become the subject of a Bail-in Action; provided, however, that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authority’s ownership of an equity interest in such Lender or parent company unless the ownership provides immunity for such Lender from jurisdiction of courts within the United States or from enforcement of judgments or writs of attachment on its assets, or permits such Lender or Governmental Authority to repudiate or otherwise to reject such Lender’s agreements; and provided further, that a Lender shall not be deemed to be a Defaulting Lender under clauses (a), (b) or (c) if it has notified Agent and Borrowers in writing that it will not make a funding because a condition to funding (specifically identified in the notice) is not or cannot be satisfied.

“ Deposit Account ” (a) any “deposit account” as such term is defined in Article 9 of the UCC and in any event shall include all accounts and sub-accounts relating to any of the foregoing and (b) with respect to any such Deposit Account located outside of the U.S., any bank account with a deposit function.

“ Deposit Account Control Agreements ” the Canadian Deposit Account Control Agreements, the UK Deposit Account Control Agreements and/or the U.S. Deposit Account Control Agreements, as the context requires.

“ Dilution Percent ” the percent, determined for each Borrower Group for the most recently ended twelve-month period, equal to (a) bad debt write-downs or write-offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to the Accounts of the Borrower(s) in the

 

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applicable Borrower Group, divided by (b) gross sales of the Borrower(s) in the applicable Borrower Group.

“Discharge of Senior Obligations” shall have the meaning as defined in the Term Intercreditor Agreement.

“ Disclosed Matters ” the actions, suits and proceedings and the environmental matters disclosed in Schedule 9.1.6.

“ Disqualified Equity Interests ” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior Full Payment of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provide for the scheduled payments of dividends in cash, 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 with respect to the Obligations.

“ Distribution ” any declaration or payment of a distribution, interest or dividend on any Equity Interest (other than payment-in-kind); distribution, advance or repayment of Debt to a holder of Equity Interests; or purchase, redemption, or other acquisition or retirement for value of any Equity Interest.

“ Document ” as defined in the UCC (and/or with respect to any Document of a Canadian Domiciled Obligor, a “document of title” as defined in the PPSA) or any other Applicable Law, as applicable.

“ Dollar Equivalent ” on any date, with respect to any amount denominated in Dollars, such amount in Dollars, and with respect to any stated amount in a currency other than Dollars, the amount of Dollars that Agent determines (which determination shall be conclusive and binding absent manifest error) would be necessary to be sold on such date at the applicable Spot Rate to obtain the stated amount of the other currency.

“ Dollars ” lawful money of the United States.

“ Domestic Subsidiary ” any Subsidiary, other than the Foreign Subsidiaries.

“ Dominion Account ” with respect to (a) the Canadian Borrower, each Canadian Dominion Account, (b) the UK Borrower, each UK Dominion Account, and (c) the U.S. Borrowers, each U.S. Dominion Account.

“ Dominion Trigger Period ” (I) prior to February 28, 2019, the period (a) commencing on the date day that an Event of Default occurs or U.S. Adjusted , or U.S. Availability is less than or equal to $6,700,000 (computed without reference to the U.S. Special Availability Block), and (b) continuing until the earlier of (x) February 28, 2019 and (y) no Event of Default having existed and U.S. Availability having been greater than $6,700,000 (computed without reference to the U.S. Special Availability Block) during each of the preceding 30 consecutive days; or (II) from and after February 28, 2019 (a) commencing on the day that an Event of Default occurs, or U.S. Availability is less than the Dominion

 

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Trigger Threshold and (b) continuing until no Event of Default exists and, during each of the previous 30 consecutive days, U.S. Adjusted Availability has been not less than the Dominion Trigger Threshold.

“ Dominion Trigger Threshold ” the greater of (a) 10% of the U.S. Revolver Commitments and (b) $10,000,000.

“ Dutch Collateral and Guarantee Requirement ” subject to any applicable limitations set forth in the Security Documents and the Agreed Security Principles, with respect to any and all Dutch Domiciled Obligors (provided that the scope of the Lien granted by the Netherland Holdcos (as defined in the Foreign Facility Guarantee and Collateral Agreement) shall exclude the Netherland Holdco Excluded Property (as defined in the Foreign Facility Guarantee and Collateral Agreement)), the requirement that:

(a) each Dutch Domiciled Obligor shall have obtained all consents and approvals required to be obtained by it in accordance with Dutch law and its articles of association in connection with the execution of all Dutch Security Documents to which it is a party, the performance of its obligations thereunder and the granting of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the terms of the Loan Documents;

(b) each Dutch Domiciled Obligor shall have validly executed the notarial power of attorney for the purpose of executing the Dutch Security Document to which it is a party;

(c) each Dutch Security Document shall have been executed before a Dutch law civil notary ( notaris );

(d) Agent shall have received certified copies of each of the Dutch Security Documents; and

(e) each Lien which is granted by means of the Dutch Security Documents shall have been registered in the relevant shareholders register.

“ Dutch Domiciled Obligors ” Cequent Nederland Holdings B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ), incorporated under the laws of the Netherlands, having its registered office ( statutaire zetel ) in Amsterdam, the Netherlands and registered with the trade register of the chamber of commerce, under number 34347776, Cequent Mexico Holdings B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ), incorporated under the laws of the Netherlands, having its registered office ( statutaire zetel ) in Amsterdam, the Netherlands and registered with the trade register of the chamber of commerce, under number 55435637, and each other Obligor organized under the laws of the Netherlands or any jurisdiction thereof.

“ Dutch Security Documents ” the Cequent Nederland Holdings Share Pledge and the Cequent Mexico Holdings Share Pledge.

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

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

 

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

“ Eligible Accounts ” the (a) Canadian Eligible Accounts and/or (b) U.S. Eligible Accounts, as the context requires.

“ Eligible Assignee ” a Person that is (a) a Lender, Affiliate or branch of a Lender or Approved Fund; (b) an assignee approved by Borrower Agent (which approval shall not be unreasonably withheld or delayed, and shall be deemed given if no objection is made within two Business Days after notice of the proposed assignment) and Agent; and (c) during an Event of Default under Section 11.1(a) , (b) , (h)  or (i) (without regard to any waiting period) or any other Event of Default that has occurred and remains continuing for a period equal to or exceeding 30 days, any Person acceptable to Agent in its Permitted Discretion.

“ Eligible Inventory ” the (a) Canadian Eligible Inventory, (b) UK Eligible Inventory, and/or (c) U.S. Eligible Inventory, as the context requires.

“ Eligible In-Transit Inventory ” Inventory owned by a Borrower that would be Eligible Inventory of such Borrower if it were not of a type subject to a Document and/or in transit from a foreign location to a location of (x) the Canadian Borrower within the United States or Canada, (y) the UK Borrower within the United States or Mexico or (z) a U.S. Borrower within the United States, and that Agent, in its Permitted Discretion, deems to be Eligible In-Transit Inventory. Without limiting the foregoing, (a) no Inventory shall be Eligible In-Transit Inventory unless (i) it is insured in an amount and manner reasonably satisfactory to Agent; (ii) it is not sold by a vendor that has asserted any right to reclaim, divert shipment of, repossess, stop delivery, claim any reservation of title or otherwise assert Lien rights against the Inventory, or with respect to whom any Borrower is in default of any obligations; (iii) it is subject to purchase orders and other sale documentation satisfactory to Agent, and title has passed to such Borrower; (iv) it is shipped by a common carrier that is not affiliated with the vendor and is not subject to any Sanction or on any specially designated nationals list maintained by OFAC or any other Governmental Authority; (v) it is being handled by a customs broker, freight-forwarder or other handler that has delivered a Lien Waiver in the form of Exhibit C-1 (with appropriate modifications to remove the references to the Senior Term Agent, the Senior Term Loan Documents, the Term Loan Agent and the Term Loan Documents if such Lien Waiver is delivered with respect to an Obligor that is not a U.S. Obligor) or on terms acceptable to Agent in its Permitted Discretion; and (vi) if purchased from any Affiliate of a Borrower (including without limitation, TriMas Sourcing B.V. and any successor thereof) or any Affiliate of TriMas Corporation, such Affiliate shall have executed a Lien Waiver in the form of Exhibit C-2 (with appropriate modifications to remove the references to the Senior Term Agent, the Senior Term Loan Documents, the Term Loan Agent and the Term Loan Documents if such Lien Waiver is delivered with respect to an Obligor that is not a U.S. Obligor) or on terms acceptable to Agent in its Permitted Discretion; and (b) no Inventory shall be Eligible In-Transit Inventory during an Eligible In-Transit Inventory Trigger Period unless it (i) satisfies all of the conditions set forth in the foregoing clause (a) and (ii) is subject to a negotiable Document showing Agent or a Security Trustee (or, with the consent of Agent, the applicable Borrower) as consignee, which Document is in the possession of Agent or such other Person as Agent shall approve.

“ Eligible In-Transit Inventory Trigger Period ” the period (a) commencing on the day that (i) an Event of Default occurs, (ii) U.S. Adjusted Availability is less than or equal to, for 3 consecutive Business Days, the lesser of (A) 30% of the U.S. Borrowing Base or (B) 30% of the aggregate amount of all U.S. Revolver Commitments, or (iii) U.S. Adjusted Availability is at any time less than or equal to the lesser of

 

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(A) 25% of the U.S. Borrowing Base or (B) 25% of the aggregate amount of all U.S. Revolver Commitments; and (b) continuing until no Event of Default exists and, during each of the preceding 30 consecutive days, U.S. Adjusted Availability has been greater than the lesser of (i) 30% of the U.S. Borrowing Base or (ii) 30% of the aggregate amount of all U.S. Revolver Commitments.

“ Enforcement Action ” any action to enforce any Obligations (other than Secured Bank Product Obligations) or Loan Documents or to exercise any rights or remedies relating to any Collateral (whether by judicial action, self-help, notification of Account Debtors, setoff or recoupment, credit bid, action in an Obligor’s Insolvency Proceeding or otherwise).

“ Environmental Laws ” all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“ Environmental Liability ” any liabilities, obligations, damages, losses, claims, actions, suits, judgments, or orders, contingent or otherwise (including any liability for damages, costs of environmental remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), directly or indirectly resulting from or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Environmental Notice ” a notice (whether written or oral) from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Release, environmental pollution or Hazardous Materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.

“ Equity Interest ” shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person or any warrants, options or other rights to acquire such interests, but excluding any debt securities convertible into or referencing any of the foregoing.

2 “ ERISA ” the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.

“ ERISA Affiliate ” any trade or business (whether or not incorporated) that, together with the Parent Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“ ERISA Event ” (a) any “ reportable event ,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a U.S. Pension Plan (other than an event for which the 30 day notice period is waived); (b) a failure by any U.S. Pension Plan to satisfy the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such U.S. Pension Plan in each instance, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with

 

 

2 Amended per Third Amendment.

 

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respect to any U.S. Pension Plan; (d) a determination that any U.S. Pension Plan is, or is expected to be, in “ at risk ” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA; (e) the incurrence by the Parent Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any U.S. Pension Plan; (f) the receipt by the Parent Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any U.S. Pension Plan or U.S. Pension Plans or to appoint a trustee to administer any U.S. Pension Plan; (g) the incurrence by the Parent Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any U.S. Pension Plan or Multiemployer Plan; or (h) the receipt by the Parent Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Parent Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA or in “ endangered ” or “ critical ” status (within the meaning of Section 432 of the Code or Section 305 of ERISA).

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

“ Euro ” the single currency of the Participating Member States.

“ Event of Default ” as defined in Section 11 .

“ Excluded Account ” (a) Excluded Trust Accounts, (b) Deposit Accounts and Securities Accounts of the Obligors located in the United States, Canada or the United Kingdom and containing not more than $50,000 individually or $250,000 in the aggregate at any time, (c) zero-balance accounts that sweep on a daily basis to an account maintained with Agent or subject to a Deposit Account Control Agreement and (d) Deposit Accounts and Securities Accounts of the Foreign Domiciled Obligors not located in the United States, Canada or the United Kingdom and containing not more than $300,000 individually or $1,000,000 in the aggregate for any period of time exceeding three (3) consecutive Business Days.

“ Excluded Swap Obligation ” with respect to any Obligor, any Swap Obligation if, and to the extent that, and only for so long as, all or a portion of the guarantee of such Obligor of, or the grant by such Obligor of a security interest to secure, as applicable, such Swap Obligation (or any 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 interpretation of any thereof) by virtue of such Obligor’s failure to constitute an “eligible contract participant,” as defined in the Commodity Exchange Act and the regulations thereunder, at the time the guarantee of (or grant of such security interest by, as applicable) such Obligor becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one Swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guarantee or security interest is or becomes illegal.

“ Excluded Taxes ” (a) Taxes imposed on or measured by a Recipient’s net or overall gross income or net worth or similar Taxes (however denominated), capital Taxes within the meaning of Section 190.1 of the Income Tax Act (Canada) (or similar Taxes imposed by Canada or any political subdivision thereof), franchise Taxes and branch profits Taxes (i) as a result of such Recipient being organized under the laws of, or having its principal office or applicable Lending Office located in, the jurisdiction imposing such Tax, or (ii) constituting Other Connection Taxes; (b) in the case of a Lender, any U.S. withholding Taxes imposed on amounts payable to or for the account of a Lender with respect to its interest in a Loan or Commitment pursuant to a law in effect when the Lender (i) acquires such interest in the Loan or Commitment (except any assignee pursuant to an assignment request by Borrower Agent under Section 13.4 ) or (ii) such Lender changes its Lending Office, except in each case to the extent that,

 

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pursuant to Section 5.8.1, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender become a party hereto or to such Lender immediately before it changed its Lending Office; (c) Taxes attributable to a Recipient’s failure to comply with Section 5.9 ; (d) U.S. withholding Taxes imposed pursuant to FATCA; and (e) any Canadian withholding Taxes resulting from (i) a Lender not dealing at arm’s length within the meaning of the Income Tax Act (Canada) with a Credit Party or (ii) a Lender being, or not dealing at arm’s length with, a “Specified Shareholder” within the meaning of Section 18(5) of the Income Tax Act (Canada) of a Credit Party.

“ Excluded Trust Accounts ” means Deposit Accounts or Securities Accounts used exclusively (a) for payroll, taxes or employee benefits, (b) to receive proceeds of Accounts sold to third parties pursuant to Specified Vendor Receivables Financings permitted under the Loan Documents, (c) to hold cash and/or cash equivalents pledged to secure other obligations of the Parent Borrower or any Subsidiary thereof pursuant to Liens permitted under the Loan Documents, (d) as escrow accounts, (e) as fiduciary or trust accounts held exclusively for the benefit of third parties, other than an Obligor and (f) that contain solely deposits permitted by clauses (c) and (d) of the definition of “Permitted Encumbrances”, including in connection with any letters of credit issued pursuant to such clauses, if the documents governing such deposits prohibit the granting of a Lien on such deposits.

“ Existing Letters of Credit ” those letters of credit existing on the Closing Date and identified on Schedule 1.1(A) .

“ Extraordinary Expenses ” all costs, expenses or advances that Agent or any Security Trustee may incur during an Event of Default, or during the pendency of an Insolvency Proceeding of an Obligor, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against Agent, any Security Trustee, any Lender, any Obligor, any representative of creditors of an Obligor or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of Agent’s and/or Security Trustee’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) the exercise of any rights or remedies of Agent and/or Security Trustee in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; and (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’ and auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Obligor or independent contractors in liquidating any Collateral, and travel expenses.

“ FATCA ” (a) Sections 1471 through 1474 of the Code as of the Original Closing Date or any amended or successor provision that is substantively comparable and not materially more onerous to comply with, and, in each case, any regulations or official interpretations thereof, (b) any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the Original Closing Date or any amended or successor provision as described in clause (a) above and (c) any law, regulation, rule, promulgation or official agreement implementing an official government agreement with respect to the foregoing.

“ Federal Funds Rate ” (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on the applicable Business Day (or on the preceding Business Day, if the applicable day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is

 

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published on the next Business Day, the average rate (rounded up, if necessary, to the nearest 1/8 of 1%) charged to Bank of America on the applicable day on such transactions, as determined by Agent.

“ FILO Amount ” from and after the FILO Commencement Date, as of any date of determination, the Dollar-equivalent result of:

(a)         the sum of (i) (a) 5% of the Value of U.S. Eligible Accounts, plus (b) 10% of the NOLV Percentage of the Value of U.S. Eligible Inventory at such time, multiplied by

(b)        (i) one (1), during the 21 month period following the FILO Commencement Date and (ii) at all times thereafter (up to the FILO Termination Date), a fraction, the numerator of which shall be the number of full fiscal quarterly periods remaining prior to FILO Termination Date and the denominator of which shall be 6; provided that from and after the FILO Termination Date, the FILO Amount shall be zero ($0). For purposes of clarity, the first “full fiscal quarterly period” shall mean a fiscal quarterly period commencing on the same calendar day that corresponds to the 21 month anniversary of the FILO Commencement Date with reductions in the FILO Amount being effective on the first day of each applicable full fiscal quarterly period.

“ FILO Commencement Date ” June 30, 2015.

“ FILO Loan ” a U.S. Revolver Loan constituting a FILO Loan that is borrowed and deemed outstanding pursuant to Section 4.1.1(a) .

“ FILO Termination Date ” June 30, 2018.

“ Financial Covenant Trigger Period ” the period (a) commencing on the day that an Event of Default occurs, or U.S. Availability (computed without reference to the U.S. Special Availability Block during the period from the Fourth Amendment Effective Date to but excluding February 28, 2019) is less than or equal to (i) if no principal amount of FILO Loans is outstanding, the lesser of (A) 10% of the U.S. Borrowing Base or (B) 10% of the aggregate amount of all U.S. Revolver Commitments, or (ii) if any portion of the principal amount of FILO Loans is outstanding, the lesser of (A) 15% of the U.S. Borrowing Base or (B) 15% of the aggregate amount of all U.S. Revolver Commitments; and (b) continuing until, during each of the preceding 30 consecutive days, no Event of Default has existed and U.S. Availability (computed without reference to the U.S. Special Availability Block during the period from the Fourth Amendment Effective Date to but excluding February 28, 2019) has been greater than (i) if no principal amount of FILO Loans is outstanding, the lesser of (A) 10% of the U.S. Borrowing Base or (B) 10% of the aggregate amount of all U.S. Revolver Commitments, or (ii) if any portion of the principal amount of FILO Loans is outstanding, the lesser of (A) 15% of the U.S. Borrowing Base or (B) 15% of the aggregate amount of all U.S. Revolver Commitments.

“ Financial Officer ” the chief financial officer, principal accounting officer, treasurer or controller of the Parent Borrower.

“ First Lien Net Leverage Ratio ” on any date, the ratio of (a) First Lien Secured Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

 

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“ First Lien Secured Debt ” Total Debt that is secured by a first priority Lien on any asset of the Parent Borrower or any of its Subsidiaries (it being understood that any Debt outstanding under this Agreement and any Debt outstanding under the Senior Term Loan Agreement and the Term Loan Agreement is First Lien Secured Debt).

“ Fiscal Quarter ” each period of three months, commencing on the first day of a Fiscal Year.

“ Fiscal Year ” the fiscal year of Borrowers and Subsidiaries for accounting and tax purposes, ending on December 31 of each year.

“ Fixed Charge Coverage Ratio ” the ratio, determined on a consolidated basis for Borrowers and Subsidiaries for the most recent 12 months, of (a) Consolidated EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Revolver Loans) and cash taxes paid, to (b) Fixed Charges. For purposes of calculating the Fixed Charge Coverage Ratio for the 12-month periods ending December 31, 2015, January 31, 2016, February 29, 2016, March 31, 2016, April 30, 2016, and May 31, 2016, cash taxes paid for each such 12-month period shall be calculated by using the amount of cash taxes paid for the period from July 1, 2015 through the last day of the applicable 12-month period and multiplying such amount by (i) 2, in the case of the 12-month period ending December 31, 2015, (ii) 12/7, in the case of the 12-month period ending January 31, 2016, (iii) 3/2, in the case of the 12-month period ending February 29, 2016, (iv) 4/3, in the case of the 12-month period ending March 31, 2016, (v) 6/5, in the case of the12-month period ending April 30, 2016, and (vi) 12/11, in the case of the 12-month period ending May 31, 2016.

“ Fixed Charges ” the sum of interest expense (other than payment-in-kind), scheduled principal payments made on Borrowed Money, and cash Distributions made by the Parent Borrower.

“ Floating Rate Loan ” a Base Rate Loan or a Canadian Prime Rate Loan.

“ FLSA ” the Fair Labor Standards Act of 1938, as amended from time to time.

“ Foreign Allocated U.S. Availability ” Canadian Allocated U.S. Availability and UK Allocated U.S. Availability.

“ Foreign Allocated U.S. Availability Reserve ” the aggregate amount of U.S. Availability allocated by Borrower Agent for inclusion in the Borrowing Bases of the Foreign Borrowers.

“ Foreign Borrowers ” the Canadian Borrower and the UK Borrower.

“ Foreign Cash Collateral Account ” a demand deposit, money market or other account established by Agent at such financial institution as Agent may select in its Permitted Discretion, which account shall be held in the United States and shall be subject to a Lien in favor of Agent for the benefit of the Foreign Facility Secured Parties.

“ Foreign Cross-Guarantee ” as defined in Section 5.10.4 .

“ Foreign Domiciled Obligor ” any Obligor that is not a U.S. Domiciled Obligor.

“ Foreign Facility Collateral and Guarantee Requirement ” subject to any applicable limitations set forth in the Security Documents and the Agreed Security Principles:

 

  (a)

with respect to any and all Canadian Facility Obligors, the requirement that:

 

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(i)         Agent shall have received from each party thereto (other than Agent) either (A) a counterpart of the Foreign Facility Guarantee and Collateral Agreement (with respect to Foreign Domiciled Obligors and, to the extent requested by Agent, U.S. Domiciled Obligors) and each of the other Canadian Security Documents to which such Person is a party, duly executed and delivered on behalf of such Canadian Facility Obligor, as applicable, or (B) in the case of any Person that becomes a Canadian Facility Obligor after the Closing Date, a joinder to this Agreement and a supplement or a counterpart to the Foreign Facility Guarantee and Collateral Agreement (with respect to Foreign Domiciled Obligors and, to the extent requested by Agent, U.S. Domiciled Obligors) and each other applicable Canadian Security Document, in each case in the form specified therein, duly executed and delivered on behalf of such Canadian Facility Obligor, as applicable;

(ii)        all outstanding Equity Interests of each Subsidiary Obligor owned by or on behalf of any Canadian Facility Obligor shall have been pledged pursuant to an appropriate Canadian Security Document and, subject to the Intercreditor Agreement, Agent or Controlling Term Loan Agent, as applicable, shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(iii)        all Debt for borrowed money having an aggregate principal amount in excess of $500,000 that is owing to any Canadian Facility Obligor shall be evidenced by a promissory note and shall have been pledged pursuant to an appropriate Canadian Security Document, and, subject to the Intercreditor Agreement, Agent and/or Controlling Term Loan Agent, as applicable, shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(iv)        all documents and instruments, including UCC and PPSA financing statements, required by Applicable Law or reasonably requested by Agent to be filed, registered or recorded to create the Liens on the assets of such Canadian Facility Obligor intended to be created by the Canadian Security Documents and perfect such Liens to the extent required by, and with the priority required by, the Canadian Security Documents (with respect to U.S. Obligors that are also Canadian Facility Obligors, in each case subject to the Intercreditor Agreement), shall have been filed, registered or recorded;

(v)         Agent shall have received, with respect to any Mortgaged Property of any Canadian Facility Obligor (A) counterparts of a Canadian Mortgage with respect to such Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (B) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Canadian Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 10.2.2 , together with such endorsements, coinsurance and reinsurance as Agent or the Required Lenders may reasonably request, but only to the extent such endorsements are (1) available in the relevant jurisdiction (provided in no event shall Agent request a creditors’ rights endorsement) and (2) available at commercially reasonable rates, (C) if reasonably requested by Agent, a current appraisal of any such Mortgaged Property, prepared by an appraiser acceptable to Agent, and in form and substance satisfactory to Required Lenders (it being understood that if such appraisal is required in order to comply with Agent’s internal policies, such request shall be deemed to be reasonable), (D) if reasonably requested by Agent, an environmental assessment with respect to any such Mortgaged Property, prepared by environmental engineers reasonably acceptable to Agent, and such other reports, certificates, studies or data with respect to such

 

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Mortgaged Property as Agent may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with Agent’s internal policies, such request shall be deemed to be reasonable), and (E) such abstracts, legal opinions and other documents as Agent or the Required Lenders may reasonably request with respect to any such Canadian Mortgage or Mortgaged Property; provided, however, in no event shall surveys be required to be obtained with respect to any such Mortgaged Property;

(vi)        each Canadian Facility Obligor shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Canadian Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the terms of the Loan Documents; and

(vii)       the U.S. Facility Collateral and Guarantee Requirement (with respect to U.S. Obligors only), the Mexican Collateral and Guarantee Requirement (with respect to Mexican Domiciled Obligors only), and the Dutch Collateral and Guarantee Requirement (with respect to Dutch Domiciled Obligors only) shall be met; and

 

  (b)

with respect to any and all UK Facility Obligors, the requirement that:

(i) Agent shall have received from each party thereto (other than Agent) either (A) a counterpart of the Foreign Facility Guarantee and Collateral Agreement (with respect to Foreign Domiciled Obligors and, to the extent requested by Agent, U.S. Domiciled Obligors) and each of the other UK Security Document to which such Person is a party, duly executed and delivered on behalf of such UK Facility Obligor, as applicable, or (B) in the case of any Person that becomes a UK Facility Obligor after the Closing Date, a joinder to this Agreement and deeds of accession or supplements to the Foreign Facility Guarantee and Collateral Agreement (with respect to Foreign Domiciled Obligors and, to the extent requested by Agent, U.S. Domiciled Obligors) and each other applicable UK Security Document, in each case in the form specified therein, duly executed and delivered on behalf of such UK Facility Obligor, as applicable;

(ii)        all outstanding Equity Interests of each Subsidiary Obligor owned by or on behalf of any UK Facility Obligor shall have been pledged pursuant to an appropriate UK Security Document (such as the Mexican Equity Pledges) and, subject to the Intercreditor Agreement, Agent or Controlling Term Loan Agent, as applicable, shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(iii)       each UK Facility Obligor shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all UK Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the terms of the Loan Documents;

(iv)       Agent shall have received all documents and instruments required by law or reasonably requested by Agent to be filed, registered or recorded to create the Liens intended to be created by the UK Security Documents and perfect such Liens to the extent required by the UK Security Documents shall have been filed, registered, recorded or delivered to Agent for filing, registration or recording (including without limitation, with respect to the UK Borrower, the ratified notarial instrument corresponding to the Mexican Asset Pledge); and

 

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(v)         the U.S. Facility Collateral and Guarantee Requirement (with respect to U.S. Obligors only), the Mexican Collateral and Guarantee Requirement (with respect to Mexican Domiciled Obligors only), and the Dutch Collateral and Guarantee Requirement (with respect to Dutch Domiciled Obligors only) shall be met.

“ Foreign Facility Guarantee and Collateral Agreement ” that certain Foreign Facility Guarantee and Collateral Agreement, dated as of the Closing Date, by and among Cequent Performance, Horizon International Holdings LLC, a Delaware limited liability company, the Canadian Domiciled Obligors, the UK Domiciled Obligors, the Mexican Domiciled Obligors, Cequent Nederland Holdings B.V., certain other Obligors and Agent, as amended, restated, supplemented or otherwise modified from time to time.

“ Foreign Facility Obligations ” the Canadian Facility Obligations and the UK Facility Obligations.

“ Foreign Facility Secured Parties ” Canadian Facility Secured Parties and/or UK Facility Secured Parties, as the context requires.

“ Foreign Lender ” (a) with respect to each Borrower that is a U.S. Person, each Lender or Issuing Bank that is not a U.S. Person, and (b) with respect to each Borrower that is not a U.S. Person, each Lender or Issuing Bank that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for Tax purposes.

“ Foreign Obligor ” each Obligor that is not a U.S. Obligor. For the avoidance of confusion, “Foreign Obligors” shall include all U.S. Domiciled Obligors that are not U.S. Facility Obligors, including, without limitation, CFC Holdcos and U.S. Holdcos.

“ Foreign Plan ” any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by Parent Borrower or any of its Subsidiaries with respect to employees employed outside of the U.S. or Canada, other than any state social security arrangements.

“ Foreign Revolver Commitments ” the Canadian Revolver Commitment and/or the UK Revolver Commitment, as the context requires.

“ Foreign Subsidiary ” any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

“Fourth Amendment” means that certain Fourth Amendment to this Agreement, dated as of February 20, 2019 among the Borrowers, the other Obligors party thereto, the Agent and the Lenders party thereto.

“Fourth Amendment Effective Date” means the “Amendment Effective Date” as set forth in the Fourth Amendment.

“ Fronting Exposure ” a Defaulting Lender’s interest in LC Obligations, Swingline Loans and Protective Advances, except to the extent Cash Collateralized by the Defaulting Lender or allocated to other Lenders hereunder.

“ FSCO ” The Financial Services Commission of Ontario or like body in Canada or in any other province or territory or jurisdiction of Canada with whom a Canadian Pension Plan is required to be registered in accordance with Applicable Law and any other Governmental Authority succeeding to the functions thereof.

 

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“ Full Payment ” with respect to any Obligations, (a) the full cash payment thereof, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding) (other than contingent indemnification obligations for which no claim has been asserted or is reasonably expected to be asserted); (b) if such Obligations are LC Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby letter of credit acceptable to Agent in its Permitted Discretion, in the amount of required Cash Collateral); and (c) the release of any and all claims of the Obligors against Agent, Lenders and their Affiliates arising on or before the payment date. “ Fully Paid ” has a correlative meaning. No Loans shall be deemed to have been paid in full unless all Commitments related to such Loans have terminated.

“ GAAP ” generally accepted accounting principles in effect in the United States from time to time.

“ General Intangibles ” as defined in the UCC (and/or with respect to any General Intangible of a Canadian Domiciled Obligor, an “intangible” as defined in the PPSA) or any other Applicable Law, as applicable.

“ Governmental Approvals ” all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.

“ Governmental Authority ” the government of the United States of America, any other nation or 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, without limitation, the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank), in each case whether it is or is not associated with Canada, the United Kingdom, the U.S. or any state, province, district or territory thereof, or any other foreign entity or government.

“ 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 Debt 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 Debt 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 Debt 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 Debt or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Debt or obligation; provided , that the term “ Guarantee ” shall not include endorsements for collection or deposit in the Ordinary Course of Business.

“ Guarantee and Collateral Agreement ” that certain ABL Guarantee and Collateral Agreement, dated as of June 30, 2015, by and among the U.S. Obligors and Agent, as amended, restated, supplemented or otherwise modified from time to time.

“ Guarantor Payment ” as defined in Section 5.10.3 .

“ Guarantors ” Canadian Facility Guarantors, UK Facility Guarantors, U.S. Facility Guarantors, and each other Person that guarantees payment or performance of Obligations, in each case as the context requires.

 

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“ Guaranties ” the Canadian Guaranties, the UK Guaranties and/or the U.S. Guaranties, as the context requires.

“ Hazardous Materials ” all explosive, radioactive, hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedging Agreement ” any (i) interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement, (ii) Permitted Bond Hedge Transactions and (iii) Permitted Warrant Transactions.

“ Immaterial Subsidiary ” at any date, any Subsidiary of the Parent Borrower that, together with its consolidated Subsidiaries (i) does not, as of the last day of the Fiscal Quarter of the Parent Borrower most recently ended on or prior to such date for which financial statements are available, have assets with a value in excess of 2.5% of the consolidated total assets of the Parent Borrower and its consolidated Subsidiaries and (ii) did not, during the period of four consecutive Fiscal Quarters of the Parent Borrower most recently ended on or prior to such date for which financial statements are available, have revenues exceeding 2.5% of the total revenues of the Parent Borrower and its consolidated Subsidiaries; provided that, the aggregate assets or revenues of all Immaterial Subsidiaries, determined in accordance with GAAP, may not exceed 5.0% of consolidated assets or consolidated revenues, respectively, of the Parent Borrower and its consolidated Subsidiaries, collectively, at any time (and the Parent Borrower will promptly designate in writing to Agent the Subsidiaries which will cease to be treated as “Immaterial Subsidiaries” in order to comply with the foregoing limitation).

“ IMPI ” the Mexican Institute of Intellectual Property (Instituto Mexicano de la Propiedad Industrial).

“ Incremental Facility Agreement ” an Incremental Facility Agreement, in form and substance reasonably satisfactory to Agent, among the Parent Borrower, the Term Loan Agent and one or more Term Loan Lenders and effecting such other amendments to the Term Loan Documents as are contemplated by Section 2.21 of the Term Loan Agreement.

“ Incremental Term Commitment ” with respect to any Term Loan Lender, the commitment, if any, of such Term Loan Lender, established pursuant to an Incremental Facility Agreement and Section 2.21 of the Term Loan Agreement, to make Incremental Term Loans of any series under the Term Loan Agreement, expressed as an amount representing the maximum principal amount of the Incremental Term Loans of such series to be made by such Term Loan Lender.

“ Incremental Term Loans ” any term loans made pursuant to Section 2.21(a) of the Term Loan Agreement.

“ Indemnified Taxes ” (a) Taxes, other than Excluded Taxes, imposed on or relating to any payment of an Obligation; and (b) to the extent not otherwise described in clause (a), Other Taxes.

“ Indemnitees ” Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America Indemnitees.

“ Insolvency Proceeding ” any case or proceeding, application, meeting convened, resolution passed, proposal, corporate action or any other proceeding commenced by or against a Person under any

 

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state, provincial, federal or foreign law for, including without limitation the Mexican Bankruptcy Law, or any agreement of such Person to, (a) the entry of an order for relief under the U.S. Bankruptcy Code, or any other insolvency, debtor relief, bankruptcy, receivership, debt adjustment law or other similar law (whether state, provincial, federal or foreign), including the Bankruptcy and Insolvency Act (Canada) and the CCAA; (b) the appointment of a Creditor Representative or other custodian for such Person or any part of its Property; (c) an assignment or trust mortgage for the benefit of creditors; (d) the winding up or strike off of the Person (other than in connection with a solvent reorganization permitted by Section 10.2.3 ); (e) the proposal or implementation of a scheme of arrangement; (f) a suspension of payment, moratorium of any debts, official assignment, composition or arrangement with a Person’s creditors; or (g) in the case of a UK Domiciled Obligor, any corporate action, legal proceedings or other procedure commenced or other step taken (including the making of an application, the presentation of a petition, the filing or service of a notice or the passing of a resolution) in relation to (i) such UK Domiciled Obligor being adjudicated or found insolvent, (ii) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise) of such UK Domiciled Obligor other than a solvent liquidation or reorganization of such UK Domiciled Obligor permitted by Section 10.2.3 , (iii) a composition, assignment or arrangement with any class of creditors of such UK Domiciled Obligor or (iv) the appointment of a liquidator, supervisor, receiver, administrator, administrative receiver, compulsory manager, trustee or other similar officer in respect of such UK Domiciled Obligor or any of its assets.

“ Intellectual Property ” the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement, misappropriation or violation thereof, including the right to receive all proceeds and damages therefrom.

“ Intellectual Property Claim ” any claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual Property.

“ Intercreditor Agreement ” the Intercreditor Agreement, dated as of June 30, 2015, between Term Loan Agent and Agent, acknowledged by the U.S. Domiciled Obligors and relating to the Term Loan Debt, as amended by that certain First Amendment to Intercreditor Agreement, dated as of October 3, 2016, and by that certain Second Amendment to Intercreditor Agreement, dated on or about the Fourth Amendment Effective Date and supplemented by that certain Joinder Agreement to Intercreditor Agreement dated on or about the Fourth Amendment Effective Date and as further amended , restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof.

“ Interest Period ” as defined in Section 3.1.4 .

“ Interest Period Loan ” a Canadian BA Rate Loan or a LIBOR Loan.

“ Inventory ” as defined in the UCC, the PPSA or any other Applicable Law, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding Equipment).

“ Inventory Formula Amount ” the Canadian Inventory Formula Amount, the UK Inventory Formula Amount and/or the U.S. Inventory Formula Amount, as the context requires.

 

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“ Inventory Reserve ” the Canadian Inventory Reserve, the UK Inventory Reserve and/or the U.S. Inventory Reserve, as the context requires.

“ IRS ” the United States Internal Revenue Service.

“ Issuing Bank Indemnitees ” the Canadian Issuing Bank Indemnitees, the UK Issuing Bank Indemnitees and the U.S. Issuing Bank Indemnitees.

“ Issuing Banks ” the Canadian Issuing Banks, the UK Issuing Banks and/or the U.S. Issuing Banks, as the context requires.

“ ITA ” the Income Tax Act 2007 (United Kingdom), as amended from time to time.

“ Judgment Currency ” as defined in Section 1.5 .

“ Latest Maturity Date ” as of any date of determination, the latest maturity date applicable to any Loans outstanding or Commitments in effect hereunder and/or any Term Loan Debt or Incremental Term Commitment.

“ LC Document ” any of the Canadian LC Documents, UK LC Documents, and/or the U.S. LC Documents, as the context requires.

“ LC Obligations ” the Canadian LC Obligations, the UK LC Obligations and/or the U.S. LC Obligations, as the context requires.

“ LC Request ” a Canadian LC Request, a UK LC Request or a U.S. LC Request, as the context requires.

“ Lender Indemnitees ” Lenders and Secured Bank Product Providers, and their officers, directors, employees, Affiliates, branches, agents and attorneys.

“ Lenders ” lenders party to this Agreement, including (a) Bank of America and its Affiliates and branches in their respective capacities as the Canadian Swingline Lender, the UK Swingline Lender and the U.S. Swingline Lender, (b) the Canadian Lenders, (c) the UK Lenders, (d) the U.S. Lenders and (e) their respective permitted successors and assigns and, where applicable, any Issuing Bank, and any other Person who hereafter becomes a “Lender” pursuant to an Assignment, including any Lending Office of the foregoing.

“ Lending Office ” the office (including any domestic or foreign Affiliate or branch) designated as such by a Lender or Issuing Bank by notice to Agent and Borrower Agent.

“ Letters of Credit ” the Canadian Letters of Credit, the UK Letters of Credit and/or the U.S. Letters of Credit, as the context requires.

“ LIBOR ” the per annum rate of interest (rounded up to the nearest 1/8th of 1% and in no event less than zero) determined by Agent at or about 11:00 a.m. (London time) two Business Days prior to an interest period, for a term equivalent to such period, equal to the London Interbank Offered Rate, or comparable or successor rate approved by Agent, as published on the applicable Reuters screen page (or other commercially available source designated by Agent from time to time); provided , that any comparable or successor rate shall be applied by Agent, if administratively feasible, in a manner consistent with market practice.

 

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“ LIBOR Loan ” each set of LIBOR Revolver Loans having a common length and commencement of Interest Period.

“ LIBOR Revolver Loan ” a Revolver Loan that bears interest based on LIBOR; provided , however , that a Canadian Base Rate Loan bearing interest as set forth in clause (c) of the definition of Canadian Base Rate, or a U.S. Base Rate Loan bearing interest as set forth in clause (c) of the definition of U.S. Base Rate, shall not constitute a LIBOR Revolver Loan.

“ License ” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“ Licensor ” any Person from whom an Obligor obtains the right to use any Intellectual Property.

“ Lien ” with respect to any asset, (a) any mortgage ( hypotheek ), deed of trust, lien and in general any right in rem ( beperkte recht ), pledge ( pandrecht ), hypothecation, encumbrance, charge, trust (deemed, constructive, statutory or otherwise) or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“ Lien Waiver ” documents in the form of Exhibits C-1 and C-2 (in each case with appropriate modifications to remove the references to the Term Loan Agent, the Term Loan Documents, the Term Loan Agent and the Term Loan Documents if such Lien Waiver is delivered with respect to an Obligor that is not a U.S. Obligor) and each other landlord waiver, bailee letter, or acknowledgement agreement of any lessor, mortgagee, warehouseman, processor, shipper, customs broker, freight forwarder, repairman, mechanic, bailee, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in any Obligor’s books and records, Equipment, or Inventory, or, with respect to any Collateral subject to a Licensor’s Intellectual Property rights, an agreement of such Licensor, in each case, in form and substance reasonably satisfactory to Agent.

“ Loan ” a Revolver Loan.

“ Loan Documents ” this Agreement, Other Agreements and Security Documents.

“ Loan Year ” each 12 month period commencing on the Original Closing Date and on each anniversary of the Original Closing Date.

“ Local Time ” with respect to (a) Canadian Revolver Loans, prevailing time in Toronto, Ontario, Canada, (b) UK Revolver Loans, prevailing time at Agent’s notice address under Section 14.3.1 and (c) U.S. Revolver Loans, prevailing time at Agent’s notice address under Section 14.3.1.

“ Margin Stock ” as defined in Regulation U of the Board.

“ Material Adverse Effect ” a material adverse effect on (a) the business, operations, properties, assets, financial condition, or material agreements of the Parent Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Obligor in any material respect to perform any of its obligations under any

 

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Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document or the validity or priority of Agent’s or any Security Trustee’s Liens on any Collateral.

“ Material Agreements ” any agreements or instruments relating to Material Debt.

“ Material Debt ” (a) the Term Loan Debt and (b , (b) the Debt outstanding in respect of the Senior Term Loan Documents and (c)  any other Debt (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements, of any one or more of the Parent Borrower and its Subsidiaries in an aggregate principal amount exceeding $25,000,000. For purposes of determining Material Debt, the “ principal amount ” of the obligations of the Parent Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Parent Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. For the avoidance of doubt, the term “Material Debt” shall not include any obligations under any Permitted Warrant Transaction.

“ Maximum Alternative Incremental Debt Amount ” an aggregate principal amount of Alternative Incremental Debt that would not, immediately after giving effect to the establishment thereof and any other Debt incurred substantially simultaneously therewith (and any related repayment of Debt), cause (a) with respect to any Pari Passu Alternative Incremental Debt, the First Lien Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Debt (but disregarding the proceeds of any such Debt in calculating Unrestricted Domestic Cash), to exceed 3.25 to 1.00, (b) with respect to any Alternative Incremental Debt secured by Liens that are junior to the Liens on the Collateral securing the Term Loan Debt, the Secured Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Debt (but disregarding the proceeds of any such Debt in calculating Unrestricted Domestic Cash), to exceed 3.50 to 1.00 and (c) with respect to any unsecured Alternative Incremental Debt, the Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Debt (but disregarding the proceeds of any such Debt in calculating Unrestricted Domestic Cash), to exceed 4.00 to 1.00.

“ Maximum Facility Amount ” $99,000,000.

“ Mexican Asset Pledges ” (i) three (3) non-possessory pledge agreements (contratos de prenda sin transmisión de posesión) dated on or about the Closing Date and satisfactory to Agent, pursuant to which the Mexican Domiciled Obligors have pledged and granted a first priority Lien in favor of Agent over all or substantially all of the present and future movable assets ( bienes muebles ) and/or equipment owned by each Mexican Domiciled Obligor located in Mexico, including but not limited to Inventory, Equipment, Intellectual Property, among others; and (ii) one (1) pledge agreement dated on or about the Closing Date and satisfactory to Agent, pursuant to which the UK Borrower has pledged and granted a first priority Lien in favor of Agent over all present and future assets and/or equipment owned by the UK Borrower located in Mexico, including but not limited to Inventory, Equipment, Intellectual Property, among others, in each case as amended, restated, supplemented or otherwise modified from time to time.

“ Mexican Bankruptcy Law ” the Mexican Ley de Concursos Mercantiles, as amended, implemented and/or supplemented from time to time.

“ Mexican Collateral and Guarantee Requirement ” subject to any applicable limitations set forth in the Security Documents and the Agreed Security Principles, with respect to all Mexican Domiciled Obligors, the requirement that Agent shall have received evidence of the following documents:

 

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(a)         a copy of the mercantile folio (folio mercantil) of each Mexican Domiciled Obligor, issued by the corresponding Public Registry of the Property and Commerce (Registro Público de la Propiedad y del Comercio) evidencing the absence of any Insolvency Proceedings;

(b)         notarized copies of the partner’s resolutions of the Mexican Domiciled Obligors: (i) authorizing the execution, delivery and performance of the Loan Documents to which such Mexican Domiciled Obligors are party; (ii) authorizing a specific person or persons to execute the Loan Documents to which each such Mexican Domiciled Obligor is a party on behalf of such Mexican Domiciled Obligor; (iii) authorizing a specific person or persons, on behalf of each Mexican Domiciled Obligor, to sign and/or dispatch all documents and notices to be signed or dispatched by such Mexican Domiciled Obligor under or in connection with the Loan Documents to which it is a party; (iv) authorizing the appointment of the Borrower Agent as each Mexican Domiciled Obligor’s agent for service of process in New York; and (v) waiving the pre-emptive rights of each Mexican Domiciled Obligor in respect of any pledged Equity Interests, authorizing the division of such Equity Interests and approving any sale of such Equity Interests conducted in the context of foreclosures under the Security Documents;

(c)         a certificate of a member of the board of managers or an authorized officer of each Mexican Domiciled Obligor as to the Solvency of such Mexican Domiciled Obligor;

(d)         a ratified notarial instrument by a Mexican notary public of the Mexican Asset Pledges and Mexican Equity Pledges;

(e)         all documents and instruments, required by law or reasonably requested by Agent to be filed, registered or recorded to create the Liens intended to be created by the Foreign Facility Guarantee and Collateral Agreement and by the Mexican Security Documents and to perfect such Liens to the extent required by, and with the priority required by, the Foreign Facility Guarantee and Collateral Agreement and by the Mexican Security Documents, shall have been filed, registered or recorded or delivered to Agent for filing, registration or recording; and

(f)         duly executed Canadian Guaranties and UK Guaranties.

“ Mexican Domiciled Obligors ” Cequent Sales Company de Mexico, S. de R.L. de C.V., a limited liability company organized under the laws of Mexico, Cequent Trailer Products, S. de R.L. de C.V., a limited liability company organized under the laws of Mexico, Cequent Electrical Products de Mexico, S. de R.L. de C.V., a limited liability company organized under the laws of Mexico, and each other Obligor organized or incorporated under the laws of Mexico or any jurisdiction thereof.

“ Mexican Equity Pledges ” three (3) non- possessory pledge agreements (contratos de prenda sin transmisión de posesión) , dated on or about the Closing Date and satisfactory to Agent, pursuant to which the interest holders of the Mexican Domiciled Obligors have pledged and granted a first priority Lien in favor of Agent over all of the Equity Interests in each of the Mexican Domiciled Obligors, in each case as amended, restated, supplemented or otherwise modified from time to time.

“ Mexican Security Documents ” the Mexican Asset Pledges, the Mexican Equity Pledges, and all other documents, instruments and agreements governed by the laws of Mexico now or hereafter securing (or given with the intent to secure) any of the Foreign Facility Obligations, in each case as amended, restated, supplemented or otherwise modified from time to time.

“ Mexico ” means the United Mexican States.

 

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“ Moody’s ” Moody’s Investors Service, Inc., and its successors.

“ Mortgages ” the Canadian Mortgages, the UK Mortgages and/or the U.S. Mortgages, as the context requires.

“ Mortgaged Property ” each parcel of real property and improvements thereto with respect to which a Mortgage is required to be granted pursuant to Section 10.1.9 .

“ Multiemployer Plan ” any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which an Obligor or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“ Net Leverage Ratio ” on any date, the ratio of (a) Total Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

“ Net Proceeds ” with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any noncash proceeds, but only as and when received, (ii) in the case of a casualty, insurance proceeds in excess of $1,000,000 and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Parent Borrower and the Subsidiaries to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by the Parent Borrower and the Subsidiaries as a result of such event to repay Debt (other than Loans, Debt in respect of the Senior Term Loans, Term Loan Debt, Pari Passu Alternative Incremental Debt or any Permitted Term Loan Refinancing Debt) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all Taxes paid (or reasonably estimated to be payable) by the Parent Borrower and the Subsidiaries, and the amount of any reserves established by the Parent Borrower and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the 24-month period immediately following such event and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Parent Borrower) to the extent such liabilities are actually paid within such applicable time periods.

“ New Borrower ” as defined in Section 10.1.9(d) .

“ New Lender ” each Lender that becomes a party to this Agreement after the Closing Date.

“ NOLV Percentage ” the net orderly liquidation value of any particular type of Inventory (whether raw materials, work-in-process or finished goods), expressed as a percentage, expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent appraisal of Borrowers’ Inventory performed by an appraiser and on terms satisfactory to Agent.

“ Notice of Borrowing ” a request by Borrower Agent of a Borrowing of Revolver Loans in the form attached as Exhibit F hereto or otherwise in form satisfactory to Agent.

 

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“ Notice of Conversion/Continuation ” a request by Borrower Agent of a conversion or continuation of any Loans as Canadian BA Rate Loans or LIBOR Loans, in form satisfactory to Agent.

“ Obligations ” all (a) principal of and premium, if any, on the Loans, (b) LC Obligations and other obligations of Obligors with respect to Letters of Credit, (c) interest, expenses, fees, indemnification obligations, Extraordinary Expenses and other amounts payable by Obligors under Loan Documents, (d) Secured Bank Product Obligations, and (e) other Debts, obligations and liabilities of any kind owing by Obligors pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several, including without limitation the Foreign Facility Obligations and the U.S. Facility Obligations; provided that Obligations of an Obligor shall not include its Excluded Swap Obligations.

“ Obligors ” the Canadian Facility Obligors, the UK Facility Obligors and the U.S. Facility Obligors, collectively, and “ Obligor ” means any of the Obligors, individually.

“ Obligor Group ” a group consisting of (a) the Canadian Facility Obligors, (b) the UK Facility Obligors or (c) the U.S. Facility Obligors, as the context requires.

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

“ Ordinary Course of Business ” the ordinary course of business of any Borrower or Subsidiary, undertaken in good faith and consistent with Applicable Law and past practices.

“ Organic Documents ” with respect to any Person, its charter, certificate or articles of incorporation, memorandum of association, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.

“ Original Closing Date ” June 30, 2015.

“ Original Closing Date Dividend ” as defined in the definition of “Original Closing Date Transactions”.

“ Original Closing Date Transactions ” collectively, (a) the consummation of the Spin-Off in accordance with the terms of the Spin-Off Agreement, (b) the payment of a dividend in an amount not to exceed $225,000,000, $200,000,000 of such dividend being funded with Term Loan Debt and the remaining amount being funded with cash on-hand, made on the Original Closing Date by the Parent Borrower to TriMas in accordance with the Spin-Off Agreement (the “ Original Closing Date Dividend ”), (c) the execution, delivery and performance on the Original Closing Date by each U.S. Obligor of the Loan Documents to which it was a party as of such date, the borrowing (if any) of the Loans on the Original Closing Date and issuance (if any) of Letters of Credit under the Original Loan Agreement on the Original Closing Date and the use of the proceeds of the foregoing, (d) the execution, delivery and performance by each U.S. Obligor of the Term Loan Documents to which it is a party, the borrowing of Term Loan Debt on the Original Closing Date and the use of the proceeds thereof and (e) the payment of the fees and expenses payable in connection with the foregoing.

“ OSHA ” the Occupational Safety and Hazard Act of 1970.

 

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“ Other Agreement ” the Intercreditor Agreement and each LC Document, fee letter, Lien Waiver, Borrowing Base Report, Compliance Certificate, Perfection Certificate, Borrower Materials, or other note, document, instrument or agreement (other than this Agreement or a Security Document) now or hereafter delivered by an Obligor or other Person to Agent, a Security Trustee or a Lender in connection with any transactions relating hereto.

“ Other Connection Taxes ” Taxes imposed on a Recipient due to a present or former connection between it and the taxing jurisdiction (other than connections arising from the Recipient having executed, delivered, become party to, performed obligations or received payments under, received or perfected a Lien or engaged in any other transaction pursuant to, enforced, or sold or assigned an interest in, any Loan or Loan Document).

“ Other Taxes ” all present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a Lien under, or otherwise with respect to, any Loan Document, except Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 13.4 ).

“ Overadvance ” a Canadian Overadvance, a UK Overadvance or a U.S. Overadvance, as the context requires.

“ Overadvance Loan ” a Canadian Overadvance Loan, a UK Overadvance Loan or a U.S. Overadvance Loan, as the context requires.

“ Parent Borrower ” as defined in the preamble to this Agreement.

“ Pari Passu Alternative Incremental Debt ” as defined in the definition of “Alternative Incremental Debt”.

“ Pari Passu Permitted Term Loan Refinancing Debt ” Permitted Term Loan Refinancing Debt that is secured by Liens on a pari passu basis with the Liens on the Collateral securing the Term Loan Debt.

“ Participant ” as defined in Section 13.2 .

“ Participating Member State ” any member state of the European Union that has the Euro as its lawful currency in accordance with the legislation of the European Union relating to the Economic and Monetary Union.

“ Patents ” with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications and any and all industrial designs and industrial design applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisionals, continuations, renewals and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Patriot Act ” the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).

 

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“ Payment Item ” each check, draft or other item of payment payable to an Obligor, including those constituting proceeds of any Collateral.

“ PBA ” the Pension Benefits Act (Ontario) , as amended from time to time, or any other Canadian federal or provincial or territorial pension benefit standards legislation pursuant to which any Canadian Pension Plan is required to be registered.

“ PBGC ” the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Perfection Certificate ” a certificate in the form of Exhibit D hereto or any other form approved by Agent.

“ Permitted Acquisition ” any Acquisition, whether by purchase, merger, consolidation or otherwise, by the Parent Borrower or a Subsidiary of all or substantially all the assets of, or all of the Equity Interests in, a Person or a division, line of business or other business unit of a Person so long as (a) such Acquisition shall not have been preceded by a tender offer that has not been approved or otherwise recommended by the board of directors of such Person, (b) such assets are to be used in, or such Person so acquired is engaged in, as the case may be, a business of the type conducted by the Parent Borrower and its Subsidiaries on the date of execution of this Agreement or in a business reasonably related thereto and (c) immediately after giving effect thereto, (i) no Default has occurred and is continuing or would result therefrom, (ii) all transactions related thereto are consummated in all material respects in accordance with Applicable Laws, (iii) all of the Equity Interests (other than Assumed Preferred Stock) of each Subsidiary formed for the purpose of or resulting from such acquisition shall be owned directly by the Parent Borrower or a Subsidiary and all actions required to be taken under Section 10.1.9 have been taken, (iv) the investment is permitted under clauses (q) , (r)  or (s)  of Section 10.2.4 , (v) any Debt or any preferred stock that is incurred, acquired or assumed in connection with such acquisition shall be in compliance with Section 10.2.1 and (vi) the Parent Borrower has delivered to Agent an officers’ certificate to the effect set forth in clauses (a), (b) and (c)(i) through (v) above, together with all relevant financial information for the Person or assets to be acquired . Notwithstanding anything to the contrary herein, no acquisition or other transaction shall be deemed to be a Permitted Acquisition during the Senior Term Period .

“ Permitted Bond Hedge Transaction ” means any call or capped call option (or substantively equivalent derivative transaction) relating to the Parent Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Parent Borrower so long as any such securities do not constitute Disqualified Equity Interests of an Obligor) purchased by the Parent Borrower in connection with the issuance of any Permitted Convertible Indebtedness; provided, that the purchase price for such Permitted Bond Hedge Transaction, less the proceeds received by the Parent Borrower from the sale of any related Permitted Warrant Transaction, does not exceed the net proceeds received by the Parent Borrower from the sale of such Permitted Convertible Indebtedness issued in connection with such Permitted Bond Hedge Transaction.

“ Permitted Convertible Indebtedness ” means senior, unsecured Debt of the Parent Borrower that (i) has no scheduled principal amortization prior to maturity, (ii) has a scheduled maturity date not earlier than 91 days following the Latest Maturity Date then in effect with respect to the Obligations and (iii) is convertible into shares of common stock of the Parent Borrower (or other securities or property following a merger event or other change of the common stock of the Parent Borrower so long as any such securities do not constitute Disqualified Equity Interests of an Obligor) (and cash in lieu of fractional

 

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shares) and/or cash (in an amount determined by reference to the price of such common stock or such other securities).

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

“ Permitted Encumbrances ”

(a)         Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 10.1.6 ;

(b)         carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the Ordinary Course of Business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 10.1.6 ;

(c)         pledges and deposits made in the Ordinary Course of Business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)         deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the Ordinary Course of Business;

(e)         judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k)  of Section 11.1 ;

(f)         easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the Ordinary Course of Business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of any Borrower or any Subsidiary and, with respect to any Real Estate located in Canada, the qualifications, limitations, reservations and provisos contained in the original grant from the Crown, as varied by statutes;

(g)        ground leases in respect of real property on which facilities owned or leased by any Borrower or any of the Subsidiaries are located, other than any Mortgaged Property;

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

(i)         leases or subleases granted to other Persons and not interfering in any material respect with the business of the Borrowers and the Subsidiaries, taken as a whole;

(j)         banker’s liens, rights of set-off or similar rights, in each case arising by operation of law;

(k)        Liens in favor of a landlord on leasehold improvements in leased premises; and

(l)         any Lien arising under the general terms and conditions ( algemene bankvoorwaarden ) of any member of the Dutch Bankers’ Association ( Nederlandse Vereniging van Banken ) or any similar term applied by a financial institution in the Netherlands pursuant to its general terms and conditions;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Debt.

 

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“ Permitted Incremental Term Loans ” any Incremental Term Commitment (and the Incremental Term Loans in respect thereof) incurred so long as the aggregate principal amount thereof, as of the date of incurrence of such Debt, did not exceed (i) (together with the amount of Alternative Incremental Debt established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount as of the date of incurrence of such Debt plus (ii) an additional amount so long as after giving effect to the establishment of such Incremental Term Commitment (and assuming such Incremental Term Commitment was fully drawn) and any other Debt incurred substantially simultaneously therewith and any related repayment of Debt, the First Lien Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Debt (but disregarding the proceeds of any such Debt in calculating Unrestricted Domestic Cash) did not exceed 3.50 to 1.00.

“ Permitted Investments ”

(a)         direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)         investments in commercial paper maturing within one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)         investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)         fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

(e)         securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(f)         securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(g)         investments of the same quality as those identified on Schedule 10.2.4 as “Qualified Foreign Investments” made in the Ordinary Course of Business;

(h)         cash; and

(i)         investments in funds that invest solely in one or more types of securities described in clauses (a), (e) and (f) above.

“ Permitted Jurisdiction ” as defined in Section 10.1.9(a) .

 

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“ Permitted Term Loan Refinancing Debt ” any Debt incurred to refinance all or any portion of the outstanding Term Loan Debt or Incremental Term Loans; provided that, (i) such refinancing Debt, if secured, is secured only by the Collateral securing the Term Loan Debt, and having lien priorities no more beneficial than those applicable to the Term Loan Debt as in effect on the Original Closing Date, (ii) no Subsidiary that is not originally obligated with respect to repayment of the Debt being refinanced is obligated with respect to the refinancing Debt, (iii) the weighted average life to maturity of the refinancing Debt shall be no shorter than the remaining weighted average life to maturity of the Term Loan Debt being refinanced, (iv) the maturity date in respect of the refinancing Debt shall not be earlier than the maturity date in respect of the Debt being refinanced, (v) the principal amount of such refinancing Debt does not exceed the principal amount of the Debt so refinanced except by an amount (such amount, the “ Additional Permitted Amount ”) equal to unpaid accrued interest and premium thereon at such time plus reasonable fees and expenses incurred in connection with such refinancing, (vi) the Debt being so refinanced is paid down on a dollar-for-dollar basis by such refinancing Debt (other than by the Additional Permitted Amount), (vii) the terms of any such refinancing Debt (1) (excluding pricing, fees and rate floors and optional prepayment or redemption terms and subject to clause (2) below) reflect, in Parent Borrower’s reasonable judgment, then-existing market terms and conditions and (2) (excluding pricing, fees and rate floors) are no more favorable to the lenders providing such refinancing Debt than those applicable to the Debt being refinanced (in each case, including with respect to mandatory and optional prepayments); provided that the foregoing shall not apply to covenants or other provisions applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such refinancing Debt; provided further that any such refinancing Debt may contain, without any Lender’s consent, additional covenants or events of default not otherwise applicable to the Debt being refinanced or covenants more restrictive than the covenants applicable to the Debt being refinanced, in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such refinancing Debt, so long as all Lenders receive the benefits of such additional covenants, events of default or more restrictive covenants and (viii) such refinancing Debt, if secured, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to Agent.

“ Permitted Unsecured Debt ” any unsecured notes or bonds or other unsecured debt securities; provided that (a) such Debt shall not mature prior to the date that is 91 days after the Latest Maturity Date in effect at the time of the issuance of such Debt and shall not have any principal payments due prior to such date, except upon the occurrence of a change of control or similar event (including asset sales), in each case so long as the provisions relating to change of control or similar events (including asset sales) included in the governing instrument of such Debt provide that the provisions of this Agreement must be satisfied prior to the satisfaction of such provisions of such Debt, (b) such Debt is not Guaranteed by any Subsidiary of Parent Borrower other than the U.S. Obligors (which Guarantees shall be unsecured and shall be permitted only to the extent permitted by Section 10.2.1(a)(vii) ), (c) such Debt shall not have any financial maintenance covenants, (d) such Debt shall not have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the definition of Change in Control set forth herein and (e) such Debt, if subordinated in right of payment to the Obligations, shall be subject to subordination and intercreditor provisions that are, in Agent’s reasonable judgment, customary under then-existing market convention.

“ Permitted Warrant Transaction ” means any call option, warrant or right to purchase (or substantively equivalent derivative transaction) relating to the Parent Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Parent Borrower so long as any such securities do not constitute Disqualified Equity Interests of an Obligor) and/or cash (in an amount determined by reference to the price of such common stock) sold by the Parent Borrower substantially concurrently with any purchase by the Parent Borrower of a Permitted Bond Hedge Transaction.

 

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“ Person ” any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, Governmental Authority or other entity.

“ Platform ” as defined in Section 14.3.3 .

“ PPSA ” the Personal Property Security Act (Ontario) , as amended from time to time, (or any successor statute) and the regulations thereunder; provided , however , if validity, perfection and effect of perfection and non-perfection and opposability of Agent’s security interest in and Lien on any Canadian Facility Collateral of any Canadian Domiciled Obligor are governed by the personal property security laws of any jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code) in such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.

“ Preferred Dividends ” any cash dividends of the Parent Borrower permitted hereunder to be paid with respect to preferred stock of the Parent Borrower in reliance on Section 10.2.8(a)(iv) .

“ Prime Rate ” the rate of interest announced by Bank of America from time to time as its prime rate. Such rate is set by Bank of America on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate publicly announced by Bank of America shall take effect at the opening of business on the day specified in the announcement.

“ Pro Rata ” with respect to any Lender and any Borrower Group, a percentage (rounded to the ninth decimal place) determined, (a) by dividing the amount of such Lender’s Borrower Group Commitment to such Borrower Group by the aggregate outstanding Borrower Group Commitments of all Lenders to such Borrower Group; or (b) following termination of the Borrower Group Commitments to such Borrower Group, by dividing the amount of such Lender’s Loans and LC Obligations with respect to such Borrower Group by the aggregate outstanding Loans and LC Obligations with respect to such Borrower Group or, if all Loans and LC Obligations with respect to such Borrower Group have been paid in full and/or Cash Collateralized, by dividing such Lender’s and its Affiliates’ remaining Obligations with respect to such Borrower Group by the aggregate remaining Obligations with respect to such Borrower Group.

“ Proceeds of Crime Act ” the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (or any successor statute), as amended from time to time, and including all regulations thereunder.

“ Property ” any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

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

“ Protective Advances ” Canadian Protective Advances, UK Protective Advances and/or U.S. Protective Advances, as the context requires.

 

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3 “ PTE ” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“ Purchase Money Debt ” (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets; (b) Debt (other than the Obligations) incurred within 10 days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof; and (c) any renewals, extensions or refinancings (but not increases) thereof.

“ Purchase Money Lien ” a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt and constituting a Capital Lease Obligation or a purchase money security interest under the UCC or PPSA.

“ Qualified ECP ” an Obligor with total assets exceeding $10,000,000, or that constitutes an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” under Section 1a(18)(A)(v)(II) of such act.

“ Qualified Equity Interests ” means and refers to any Equity Interests issued by an Obligor that are not Disqualified Equity Interests.

“ Qualified Parent Borrower Preferred Stock ” any preferred Equity Interests of Parent Borrower (a)(i) that does not provide for any cash dividend payments or other cash distributions in respect thereof prior to the Latest Maturity Date in effect as of the date of issuance of such Equity Interests and (ii) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event does not (A)(x) mature or become mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (y) become convertible or exchangeable at the option of the holder thereof for Debt or preferred stock that is not Qualified Parent Borrower Preferred Stock or (z) become redeemable at the option of the holder thereof (other than as a result of a change of control event), in whole or in part, in each case on or prior to the date that is 365 days after the Latest Maturity Date in effect at the time of the issuance thereof and (B) provide holders thereunder with any rights upon the occurrence of a “ change of control ” event prior to the repayment of the Obligations and termination of the Commitments under the Loan Documents, (b) with respect to which Parent Borrower has delivered a notice to Agent that it has issued preferred Equity Interests in lieu of incurring Debt permitted under Section 10.2.1(a)(xii) , with such notice specifying to which of such Debt such preferred stock or preferred equity interest applies; provided that (i) the aggregate liquidation value of all such preferred stock or preferred equity interest issued pursuant to this clause (b) shall not exceed at any time the dollar limitation related to the applicable Debt hereunder, less the aggregate principal amount of such Debt then outstanding and (ii) the terms of such preferred stock or preferred equity interests (x) shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of Parent Borrower and (y) shall otherwise be no less favorable to the Lenders, in the aggregate, than the terms of the applicable Debt or (c) having an aggregate initial liquidation value not to exceed $10,000,000; provided that the terms of such preferred stock or preferred equity interests shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of Parent Borrower.

“ Qualifying Lender ” as defined, in relation to United Kingdom Tax matters, in Section 5.8.4 .

“ Real Estate ” all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.

 

 

3 Added per Third Amendment.

 

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“ Reallocation ” as defined in Section 2.1.7(a) .

“ Reallocation Date ” as defined in Section 2.1.7(a) .

“ Recipient ” Agent, Issuing Bank, any Lender, any Security Trustee or any other recipient of a payment to be made by an Obligor under a Loan Document or on account of an Obligation.

“ Registered Equivalent Notes ” with respect to any bonds, notes, debentures or similar instruments originally issued in a Rule 144A or other private placement transaction under the Securities Act of 1933, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the Commission.

“ Regulation U ” Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Regulation X ” Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Release ” any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“ Relevant Borrower ” as defined, in relation to United Kingdom Tax matters, in Section 5.8.4 .

“ Rent and Charges Reserve ” the Canadian Rent and Charges Reserve, the UK Rent and Charges Reserve or the U.S. Rent and Charges Reserve, as the context requires.

“ Report ” as defined in Section 12.3.3 .

“ Reporting Trigger Period ” the period (a) commencing on the day that an Event of Default occurs, or U.S. Adjusted Availability (computed without reference to the U.S. Special Availability Block during the period from the Fourth Amendment Effective Date to but excluding February 28, 2019) is less than or equal to the greater of (i) the lesser of (A) 20% of the U.S. Borrowing Base or (B) 20% of the aggregate amount of all U.S. Revolver Commitments or (ii) $17,500,000; and (b) continuing until no Event of Default exists and, during each of the preceding 30 consecutive days, U.S. Adjusted Availability (computed without reference to the U.S. Special Availability Block during the period from the Fourth Amendment Effective Date to but excluding February 28, 2019) has been greater than the greater of (i) the lesser of (A) 20% of the U.S. Borrowing Base or (B) 20% of the aggregate amount of all U.S. Revolver Commitments or (ii) $17,500,000.

“ Required Conditions ” with respect to any event, the following conditions: no Default exists or is caused thereby and upon giving pro forma effect thereto, either (a) during each of the preceding 30 consecutive days and as of such event, U.S. Availability is greater than or equal to the greater of (i) the lesser of (A) 20% of the U.S. Borrowing Base or (B) 20% of the aggregate amount of all U.S. Revolver Commitments or (ii) $17,500,000; or (b) (i) during each of the preceding 30 consecutive days and as of such event, U.S. Availability is greater than or equal to the greater of (A) the lesser of (1) 15% of the U.S. Borrowing Base or (2) 15% of the aggregate amount of all U.S. Revolver Commitments or (B) $12,500,000 and (ii) the Fixed Charge Coverage Ratio, determined on a pro forma basis giving effect to such event, is not less than 1.0 to 1.0, whether or not a Financial Covenant Trigger Period exists.

 

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“ Required Lenders ” Secured Parties holding more than 50% of (a) the aggregate outstanding Revolver Commitments; or (b) following termination of the Revolver Commitments, the aggregate outstanding Loans and LC Obligations or, if all Loans and LC Obligations have been Fully Paid, the aggregate remaining Obligations; provided, however, (i) if there are more than one (1), but fewer than three (3) unaffiliated Secured Parties at such time, “Required Lenders” must include at least two (2) unaffiliated Secured Parties and (ii) that Commitments, Loans and other Obligations held by a Defaulting Lender and its Affiliates shall be disregarded in making such calculation, but any related Fronting Exposure shall be deemed held as a Loan or LC Obligation by the Secured Party that funded the applicable Loan or issued the applicable Letter of Credit.

“ Restricted Debt ” Debt of the Parent Borrower or any Subsidiary, the payment, prepayment, redemption, repurchase or defeasance of which is restricted under Section 10.2.8(b) .

“ Restricted Payment ” any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Parent Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or termination of any Equity Interests in the Parent Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Parent Borrower or any Subsidiary.

“ Revolver Commitments ” the Canadian Revolver Commitments, the UK Revolver Commitments and/or the U.S. Revolver Commitments, as the context requires.

“ Revolver Loan ” a Canadian Revolver Loan, a UK Revolver Loan or a U.S. Revolver Loan, as the context requires.

“ Revolver Priority Collateral ” the “ABL Priority Collateral”, as defined in the Intercreditor Agreement.

“ Revolver Termination Date ” the fifth anniversary of the Original Closing Date.

“ Revolver Usage ” the Canadian Revolver Usage, the UK Revolver Usage or the U.S. Revolver Usage, as the context requires.

“ RUG ” the Mexican Sole Registry of Liens Over Movable Assets ( Registro Único de Garantías Mobiliarias ).

“ S&P ” Standard & Poor’s Financial Services LLC, or any successor thereto.

“ Sanctioned Country ” at any time, a country, region or territory which is itself the subject or target of any Sanctions (including, without limitation, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).

“ Sanctioned Person ” at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the Government of Canada, the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

 

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“ Sanctions ” all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the Government of Canada, the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

“ Secured Bank Product Obligations ” Debt, obligations and other liabilities with respect to Bank Products owing by a Borrower or Affiliate of a Borrower to a Secured Bank Product Provider; provided , that Secured Bank Product Obligations of an Obligor shall not include its Excluded Swap Obligations; and provided, further , that the aggregate amount of Secured Bank Product Obligations attributable to Supply Chain Finance Arrangements shall not exceed $20,000,000 at any time.

“ Secured Bank Product Provider ” (a) Bank of America or any of its Affiliates or branches; and (b) any other Lender or Affiliate or branch of a Lender that is providing a Bank Product, provided such provider delivers written notice to Agent, in form and substance satisfactory to Agent, within 10 days following the later of the Closing Date or creation of the Bank Product, (i) describing the Bank Product and setting forth the maximum amount to be secured by the Collateral and the methodology to be used in calculating such amount, and (ii) agreeing to be bound by Section 12.14 .

“ Secured Debt ” Total Debt that is secured by a Lien on any asset of the Parent Borrower or any of its Subsidiaries.

“ Secured Net Leverage Ratio ” on any date, the ratio of (a) Secured Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

“ Secured Parties ” the Canadian Facility Secured Parties, the UK Facility Secured Parties and/or the U.S. Facility Secured Parties, as the context requires.

“ Securities Accounts ” all present and future “securities accounts” (as defined in Article 8 of the UCC or the STA, as applicable), including all monies, “uncertificated securities,” “securities entitlements” and other “financial assets” (as defined in Article 8 of the UCC or the STA, as applicable) contained therein.

“ Securities Account Control Agreement ” means with respect to a Securities Account established by an Obligor (or a Securities Account of an Obligor in existence as of the Closing Date), an agreement, in form and substance reasonably satisfactory to Agent, establishing Control of such Securities Account by Agent or a Security Trustee to perfect Agent’s or such Security Trustee’s Lien on such Securities Account and whereby the bank or other financial institution maintaining such Securities Account agrees to comply only with the instructions originated by Agent or such Security Trustee without the further consent of any Obligor upon the delivery of a notice of sole control by Agent or such Security Trustee. As used in this definition, “Control” has the meaning set forth in the PPSA, the STA, Article 8 or Section 9-102(b) of Article 9 or, if applicable, shall mean satisfaction of the requirements set forth in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“ Security Documents ” without duplication, the Canadian Security Documents, the Mexican Security Documents, the UK Security Documents, the Dutch Security Documents, and/or the U.S. Security Documents, as the context requires.

 

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“ Security Trustee ” the UK Security Trustee and/or any other security trustee appointed by Agent from time to time, as the context requires.

“ Senior Debt ” Total Debt less Subordinated Debt.

“ Senior Officer ” the chairman of the board, president, chief executive officer or chief financial officer, or in the case of a UK Domiciled Obligor, a director, of a Borrower or, if the context requires, an Obligor; provided, however, that the vice president of the Canadian Borrower shall be deemed to be a Senior Officer.

“Senior Term Agent” the Administrative Agent under the Senior Term Credit Agreement.

“Senior Term Credit Agreement” the Credit Agreement, dated as of the Fourth Amendment Effective Date, by and among Horizon Global Corporation, the several banks and other financial institutions or entities from time to time party thereto and Cortland Capital Market Services LLC, as Administrative Agent.

“Senior Term Loan Debt” the Debt and “Obligations” (as defined under the Senior Term Loan Agreement) evidenced by the Senior Term Loan Documents, in aggregate principal amount (in the case of loans) not to exceed $10,000,000.

“Senior Term Loans” the “Loans” as defined in the Senior Term Credit Agreement.

“Senior Term Loan Documents” the “Loan Documents” as defined in the Senior Term Credit Agreement.

“Senior Term Loan Debt” the Debt and “Obligations” (as defined under the Term Loan Agreement) evidenced by the Term Loan Documents, in aggregate principal amount (in the case of loans) not to exceed $10,000,000.

“Senior Term Period” means the period beginning on the Fourth Amendment Effective Date and ending at the time of the Discharge of Senior Obligations. “ Settlement Report ” a report summarizing Revolver Loans and participations in LC Obligations outstanding as of a given settlement date, allocated to Lenders on a Pro Rata basis in accordance with their Revolver Commitments.

“ Significant Investment ” any acquisition by a Borrower or a Subsidiary of more than 50% (but less than 100%) of the Equity Interests in a Person (such Person, the “ Subject Person ”), so long as such acquisition is permitted by Section 10.2.4 .

“ Solvent ” (a) as to any Person (other than a Person incorporated or organized under the laws of any legal jurisdiction of Canada, Mexico, the Netherlands or any legal jurisdiction of the UK, or any province or territory of Canada), such Person (i) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (ii) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (iii) is able to pay all of its debts as they mature; (iv) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (v) is not “insolvent” within the meaning of Section 101(32) of the U.S. Bankruptcy Code; and (vi) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or

 

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defraud either present or future creditors of such Person or any of its Affiliates; (b) as to any Person incorporated or organized under the laws of Canada or any province or territory of Canada, such Person is not an “insolvent person” as defined in the Bankruptcy and Insolvency Act (Canada) ; (c) as to any Person incorporated or organized under the laws of Mexico, such Person is not under an Insolvency Proceeding or a “ concurso mercantil ” as defined in the Mexican Bankruptcy Law; (d) as to any Person incorporated or organized under the laws of the Netherlands, such Person is not declared bankrupt ( in staat van faillissement verklaard ) or granted (provisional) suspension of payments ( (voorlopige) surceance van betaling verleend ); and (e) as to any Person incorporated in any legal jurisdiction of the UK, such Person is able or does not admit its inability to pay its debts as they fall due, does not suspend or threaten to suspend making payments on any of its debt, does not by reason of actual or anticipated financial difficulties, commence negotiations with its creditors with a view of rescheduling its indebtedness and no moratorium is declared in respect of its indebtedness. “ Fair salable value ” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase. “ Solvency ” has a correlative meaning.

“ Specified Obligor ” an Obligor that is not then an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section 5.10 ).

“ Specified Vendor Payables Financing ” the sale by one or more vendors of the Parent Borrower and certain Subsidiaries of accounts receivable (which such accounts receivable are accounts payable of the Parent Borrower and such Subsidiaries) to a Lender or any of its Affiliates pursuant to financing agreements to which the Parent Borrower and such Subsidiaries are party, in transactions constituting “true sales”; provided that the aggregate amount of all such vendor payables financings shall not exceed $30,000,000 at any time outstanding.

“ Specified Vendor Payables Financing Documents ” all documents and agreements relating to the Specified Vendor Payables Financing.

“ Specified Vendor Receivables Financing ” the sale by the Parent Borrower and certain Subsidiaries of accounts receivable to one or more financial institutions pursuant to third-party financing agreements in transactions constituting “true sales”; provided that the aggregate amount of all such receivables financings shall not exceed $50,000,000 at any time outstanding.

“ Specified Vendor Receivables Financing Documents ” all documents and agreements relating to Specified Vendor Receivables Financing.

“ Spin-Off ” a “spin-off” transaction that occurred on the Original Closing Date with respect to the Parent Borrower such that all of the Equity Interests in the Parent Borrower were “spun-off” from TriMas ratably to the holders of all the Equity Interests in TriMas and the Parent Borrower ceased to be a Subsidiary of TriMas and became a public company.

“ Spin-Off Agreement ” a Separation and Distribution Agreement, dated as of or prior to the Original Closing Date, by and between the Parent Borrower and TriMas.

“ Spin-Off Documentation ” collectively, the Spin-Off Agreement and all schedules, exhibits and annexes thereto and all side letters and agreements affecting the terms thereof or entered into in connection therewith, including, without limitation, (i) an employee matters agreement by and between the Parent Borrower and TriMas, (i) a tax sharing agreement by and between the Parent Borrower and TriMas, and (iii) a transition services agreement by and between the Parent Borrower and TriMas.

 

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“ Spot Rate ” the exchange rate, as determined by Agent, that is applicable to conversion of one currency into another currency, which is (a) the exchange rate reported by Bloomberg (or other commercially available source designated by Agent) as of the end of the preceding Business Day in the financial market for the first currency; or (b) if such report is unavailable for any reason, the spot rate for the purchase of the first currency with the second currency as in effect during the preceding Business Day in Agent’s principal foreign exchange trading office for the first currency.

“ STA ” the Securities Transfer Act, 2006 (Ontario) (or any successor statute), as amended from time to time, and the regulations thereunder.

“ Stated Amount ” the outstanding amount of a Letter of Credit, including any automatic increase or tolerance (whether or not then in effect) provided by the Letter of Credit or related LC Documents.

“ Sterling ” the lawful currency of the United Kingdom.

“ Subject Person ” as defined in the definition of “Significant Investment.”

“ Subordinated Debt ” Debt incurred by a Borrower that is expressly subordinate and junior in right of payment to Full Payment of all Obligations, and is on terms (including maturity, interest, fees, repayment, covenants and subordination) satisfactory to Agent.

“ Subsidiary ” any entity at least 50% of whose voting securities or Equity Interests is owned by a Borrower or combination of Borrowers (including indirect ownership through other entities in which a Borrower directly or indirectly owns 50% of the voting securities or Equity Interests).

“ Subsidiary Obligor ” a Canadian Subsidiary Obligor, a UK Subsidiary Obligor, a U.S. Subsidiary Obligor and/or any other Obligor that is a Subsidiary, as the context requires.

“ Supply Chain Finance Arrangements ” means an arrangement entered into by a Borrower or an Affiliate of a Borrower with a Secured Bank Product Provider pursuant to which such Secured Bank Product Provider finances open account payables of a Borrower or an Affiliate of Borrower owing to its vendors.

“ Swap ” any agreement, contract, or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“ Swap Obligation ” with respect to any person, any obligation to pay or perform under any Swap.

“ Swingline Loan ” a Canadian Swingline Loan, a UK Swingline Loan or a U.S. Swingline Loan, as the context requires.

“ Synthetic Purchase Agreement ” any swap, derivative or other agreement or combination of agreements pursuant to which the Parent Borrower or a Subsidiary is or may become obligated to make (i) any payment (other than in the form of Equity Interests in the Parent Borrower) in connection with a purchase by a third party from a Person other than the Parent Borrower or a Subsidiary of any Equity Interest or Restricted Debt or (ii) any payment (other than on account of a permitted purchase by it of any Equity Interest or any Restricted Debt) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Debt; provided that phantom stock or similar plans providing for payments only to current or former directors, officers, consultants, advisors or employees of the Parent Borrower or the Subsidiaries (or to their heirs or estates) shall not be deemed to be Synthetic Purchase Agreements. For the avoidance of doubt, the term “Synthetic Purchase Agreement” shall not

 

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include any agreement, indenture or other document governing any Permitted Bond Hedge Transaction, Permitted Convertible Indebtedness or Permitted Warrant Transaction.

“ TARGET Day ” any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by Agent to be a suitable replacement) is open for the settlement of payments in Euros.

“ Taxes ” 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, additions to tax or penalties applicable thereto.

“Term Intercreditor Agreement” means that Term Intercreditor Agreement, dated as of the Fourth Amendment Effective Date, among the Obligors, the Term Loan Agent and the Senior Term Agent, as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof.

“ Term Loan Agent ” JPMorgan Chase Bank, N.A. in its capacity as agent for the lenders under the Term Loan Agreement, and its successors and assigns including under any replacement or refinancing with respect thereto.

“ Term Loan Agreement ” that certain Term Loan Credit Agreement, dated as of June 30, 2015, among Term Loan Agent, the Term Loan Lenders, the Parent Borrower, and the other parties thereto.

4 “ Term Loan Agreement Fourth Amendment ” that certain Fourth Amendment to Credit Agreement, dated as of July 31, 2018, among Term Loan Agent, the Term Loan Lenders party thereto, the Parent Borrower, Horizon Global Americas Inc., a Delaware corporation, Horizon Global Company LLC, a Delaware limited liability company, and the other parties thereto.

“ Term Loan Debt ” the Debt and “Obligations” (as defined under the Term Loan Agreement) evidenced by the Term Loan Documents, in aggregate principal amount (in the case of loans) not to exceed (a) $200,000,000 plus (b) the aggregate principal amount of Permitted Incremental Term Loans less (c) the aggregate principal amount of Senior Term Loans.

“ Term Loan Documents ” collectively” (a) the Term Loan Agreement and (b) all other agreements, instruments, documents and certificates executed and delivered to, or in favor of, the Term Loan Agent or the Term Loan Lenders in connection therewith.

“ Term Loan Lenders ” the lenders party to the Term Loan Agreement.

“ Term Loan Security Documents ” collectively, the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), the Mortgages (as defined in the Term Loan Agreement) and all other security documents delivered to the Term Loan Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Obligor under the Term Loan Agreement or the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ Term Priority Collateral ” the “Term Priority Collateral”, as defined in the Intercreditor Agreement.

 

4 Added per Third Amendment.

 

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“ Termination Event ” (a) the voluntary full or partial wind up of a Canadian Pension Plan that is a registered pension plan by a Canadian Domiciled Obligor; (b) the institution of proceedings by any Governmental Authority to terminate in whole or in part or have a trustee appointed to administer such a plan; or (c) any other event or condition which might constitute grounds for the termination of, winding up or partial termination of winding up or the appointment of trustee to administer, any such plan.

“ Total Availability ” the sum of the Canadian Availability, the UK Availability and the U.S. Availability.

“ Total Borrowing Base ” the sum of the Canadian Borrowing Base, the UK Borrowing Base and the U.S. Borrowing Base.

“ Total Debt ” as of any date, the aggregate principal amount of Debt for Borrowed Money of the Parent Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP.

“ Total Revolver Usage ” the sum of the Canadian Revolver Usage, the UK Revolver Usage and the U.S. Revolver Usage.

“ Trademarks ” with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (d) all rights to sue for past, present, and future infringements of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Transactions ” collectively, (a) the Original Closing Date Transactions, (b) the execution, delivery and performance on the Closing Date by each Obligor of the Loan Documents to which it was a party as of such date, the borrowing (if any) of the Loans on the Closing Date and issuance (if any) of Letters of Credit hereunder on the Closing Date and the use of the proceeds of the foregoing, and (c) the payment of the fees and expenses payable in connection with the foregoing.

“ Transferee ” any actual or potential Eligible Assignee, Participant or other Person acquiring an interest in any Obligations.

“ Treaty ” a double taxation agreement.

“ Treaty Lender ” a Lender which:

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

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

(c)         meets all of the conditions in the Treaty for full exemption from Taxes imposed by the United Kingdom on interest, subject to the completion of any necessary procedural formalities.

“ Treaty State ” as defined, in relation to United Kingdom Tax matters, in Section 5.8.4 .

 

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“ TriMas ” TriMas Company LLC, a Delaware limited liability company.

“ UCC ” the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.

“ UK or United Kingdom ” the United Kingdom of Great Britain and Northern Ireland.

“ UK Allocated U.S. Availability ” U.S. Availability designated by the Borrower Agent for application to the UK Borrowing Base.

“ UK Availability ” the UK Borrowing Base minus the UK Revolver Usage.

“ UK Availability Reserve ” the sum (without duplication) of (a) the UK Inventory Reserve; (b) the UK Rent and Charges Reserve; (c) the UK Bank Product Reserve; (d) the aggregate amount of liabilities secured by Liens upon UK Facility Collateral that are (or, in the opinion of Agent in the exercise of its Permitted Discretion, may be) senior to Agent’s or any Security Trustee’s Liens or that Agent in its Permitted Discretion determines may be required to be paid to permit or facilitate exercise of rights or remedies with respect to UK Facility Collateral (but imposition of any such reserve shall not waive an Event of Default arising therefrom); including, without limitation, (i) amounts due to employees in respect of unpaid wages and holiday pay, (ii) the “prescribed part” of floating charge realisations held for unsecured creditors and (iii) the expenses and liabilities incurred by any administrator (or other insolvency officer) and any remuneration of such administrator (or other insolvency officer) and (e) such additional reserves, in such amounts and with respect to such matters, as Agent in its Permitted Discretion may elect to impose from time to time; provided the imposition of any such reserves or change in a reserve after the Closing Date shall not be effective until two (2) Business Days after notice thereof (which may be oral notice, promptly confirmed in writing) to the Borrower Agent unless (i) a Default has occurred and is then continuing, (ii) the reserve or change in reserve is the result of a Lien, senior in priority to Agent’s or applicable Security Trustee’s Lien, attached to any UK Facility Collateral included in the UK Borrowing Base and/or (iii) the changes to any such reserve results solely from mathematical calculations of the amount of such reserve in accordance with the methodology of calculation previously utilized (in the case of each of which such reserve or change in reserve shall be effective immediately); and provided further that during any such two (2) Business Day notice period, Lenders shall have no obligations to fund any UK Revolver Loan or cause to be issued any UK Letter of Credit to the extent that, after giving pro forma effect to the making of such UK Revolver Loan or issuance of such UK Letter of Credit and to the establishment of any such new reserve or change in such reserve, a UK Overadvance would exist.

“ UK Bank Product Reserve ” the aggregate amount of reserves established by Agent from time to time in its Permitted Discretion in respect of Secured Bank Product Obligations for the account of the UK Domiciled Obligors and any Affiliate thereof domiciled in the UK.

“ UK Base Rate Loan ” a UK Revolver Loan, or portion thereof, funded in Dollars and bearing interest calculated by reference to the U.S. Base Rate.

“ UK Borrower ” Cequent UK (as defined in the preamble to this Agreement).

“ UK Borrowing Base ” on any date of determination, an amount (expressed in Dollars, based on the Dollar Equivalent thereof) equal to the lesser of (a) the aggregate UK Revolver Commitments and (b) the sum of the UK Inventory Formula Amount, plus UK Allocated U.S. Availability, minus the UK Availability Reserve; provided, however, that no Inventory or other Property acquired in a Permitted

 

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Acquisition or otherwise outside the Ordinary Course of Business shall be included in the calculation of the UK Borrowing Base until completion of a customary due diligence investigation by Agent, which may in Agent’s sole discretion include applicable field examinations and appraisals (which shall not be included in the limits on the number of field examinations or appraisals provided in Section 10.1.1 ) satisfactory to Agent.

“ UK Commitment Termination Date ” the earliest to occur of (a) the Revolver Termination Date; (b) the date on which U.S. Borrowers terminate the U.S. Revolver Commitments pursuant to Section 2.1.4 ; (c) the date on which the U.S. Revolver Commitments are terminated pursuant to Section 11.2 ; (d) the date on which UK Borrower terminates the UK Revolver Commitments pursuant to Section 2.1.4 ; (c) the date on which the UK Revolver Commitments are terminated pursuant to Section 11.2 .

“ UK Debenture ” the debenture, governed by English law dated on or about the date of this Agreement and made between UK Borrower and UK Security Trustee, as such debenture is amended, restated, supplemented or otherwise modified from time to time.

“ UK Deposit Account Control Agreement ” a control agreement (whether in the form of an agreement, notice and acknowledgement or like instrument) satisfactory to Agent executed by an institution maintaining a Deposit Account for an Obligor in favor of Agent as security for the UK Facility Obligations of such Obligor.

“ UK Domiciled Obligor ” UK Borrower and each UK Subsidiary that is or is required to be liable for payment of any Foreign Facility Obligations or that has granted a Lien on its assets in favor of Agent or any Security Trustee to secure any Foreign Facility Obligations, and “ UK Domiciled Obligors ” means all such Persons, collectively.

“ UK Dominion Account(s) ” one or more special accounts established by the UK Borrower at Bank of America or another bank reasonably acceptable to Agent, held in the United States, and, as required under Section 8.2.4 , with respect to which Agent has the right to issue a notice of exclusive control for withdrawal purposes during a Dominion Trigger Period.

“ UK Eligible Inventory ” Inventory owned by UK Borrower that Agent, in its Permitted Discretion, deems to be UK Eligible Inventory. Without limiting the foregoing, no Inventory shall be UK Eligible Inventory unless it (a) is finished goods or raw materials or work-in-process and not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, has not been acquired from a Person subject to any Sanction or on any specially designated nationals list maintained by OFAC, and does not constitute Hazardous Materials under any Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s or a Security Trustee’s duly perfected, first priority Lien, and no other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section 10.2.2(a) or Section 10.2.2(r) is prior to the Lien of Agent or of the Security Trustee, as applicable, unless a UK Availability Reserve is in effect with respect thereto)); (h) is within the UK, U.S. or Mexico, is not in transit except between locations of UK Borrower, and is not consigned to any Person; (i) is not subject to any negotiable document; (j) is not subject to any License or other arrangement that restricts UK Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or an appropriate UK Rent and Charges Reserve has been established; and (k) is not located on

 

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leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate UK Rent and Charges Reserve has been established; and (l) is reflected in the details of a current perpetual inventory report.

“ UK Facility Collateral ” Collateral that now or hereafter secures (or is intended to secure) any of the UK Facility Obligations.

“ UK Facility Guarantor ” each Dutch Domiciled Obligor, each U.S. Domiciled Obligor, each Canadian Domiciled Obligor, each Mexican Domiciled Obligor, each UK Subsidiary Obligor, and each other Person that guarantees or is required to guarantee payment or performance of the UK Facility Obligations (including pursuant to a Foreign Cross-Guarantee) pursuant to Section 10.1.9 and/or the Collateral and Guarantee Requirement.

“ UK Facility Obligations ” all Obligations of the UK Facility Obligors owed to the UK Facility Secured Parties, and the other Foreign Facility Obligations that are the subject of a cross-Guarantee (including, without limitation, the Foreign Cross-Guarantee) made by the UK Facility Obligors.

“ UK Facility Obligor ” UK Borrower, each UK Facility Guarantor and each other Person that has or is required pursuant to Section 10.1.9 and/or the Collateral and Guarantee Requirement to grant a Lien on its assets in favor of Agent or any Security Trustee to secure any UK Facility Obligations.

“ UK Facility Secured Parties ” Agent, UK Issuing Bank, UK Lenders, UK Security Trustee, any other Security Trustee with respect to the UK Facility Obligations, and Secured Bank Product Providers of Bank Products for the account of UK Domiciled Obligors and their Affiliates domiciled in the UK, and the other Foreign Facility Secured Parties that are the beneficiaries of a Foreign Cross-Guarantee made by the UK Domiciled Obligors.

“ UK Guaranties ” each guaranty executed by a UK Facility Guarantor in favor of Agent in order to guaranty the payment and/or performance of the UK Facility Obligations (including without limitation this Agreement and the Foreign Facility Guarantee and Collateral Agreement).

“ UK Inventory Formula Amount ” (a) the lesser of (i) 70% of the Value of UK Eligible Inventory or (ii) 85% of the NOLV Percentage of the Value of UK Eligible Inventory; plus (b) the lesser of (i) 70% of the Value of Eligible In-Transit Inventory owned by UK Borrower or (ii) 85% of the NOLV Percentage of the Value of Eligible In-Transit Inventory owned by UK Borrower; provided that (i) prior to the date that the conditions set forth in clause (b) of the definition of “Eligible In-Transit Inventory” are met, whether or not an Eligible In-Transit Inventory Trigger Period has occurred and is continuing, the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Borrowers shall not exceed an aggregate amount of $10,000,000 at any time and (ii) the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Foreign Borrowers that is in transit to Mexico shall not exceed an aggregate amount of $2,000,000 at any time.

“ UK Inventory Reserve ” reserves established by Agent to reflect factors that may negatively impact the Value of Inventory of the UK Borrower, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

“ UK IP Assignment ” a Lien on the Intellectual Property of a UK Facility Obligor in favor of Agent or a Security Trustee, as security for (or given with the intent to secure) the UK Facility Obligations.

 

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“ UK Issuing Bank ” Bank of America (including any Lending Office of Bank of America), any Affiliate thereof, or any replacement issuer appointed pursuant to Section 2.5 that agrees to issue UK Letters of Credit.

“ UK Issuing Bank Indemnitees ” UK Issuing Bank and its officers, directors, employees, Affiliates, agents and attorneys.

“ UK LC Application ” an application by Borrower Agent or UK Borrower to UK Issuing Bank for issuance of a UK Letter of Credit, in form and substance satisfactory to UK Issuing Bank and Agent.

“ UK LC Conditions ” the following conditions necessary for issuance of a UK Letter of Credit: (a) each of the conditions set forth in Section 6 ; (b) after giving effect to such issuance, total UK LC Obligations do not exceed the UK Letter of Credit Subline, no UK Overadvance exists and UK Revolver Usage does not exceed the UK Borrowing Base; (c) the UK Letter of Credit and payments thereunder are denominated in Sterling, Euros, Dollars or other currency satisfactory to Agent and UK Issuing Bank; and (d) the purpose and form of the proposed UK Letter of Credit are satisfactory to Agent and UK Issuing Bank in their Permitted Discretion.

“ UK LC Documents ” all documents, instruments and agreements (including UK LC Requests and UK LC Applications) delivered by UK Borrower or any other Person to UK Issuing Bank or Agent in connection with any UK Letter of Credit.

“ UK LC Obligations ” the Dollar Equivalent of the sum of (a) all amounts owing by UK Borrower for drawings under UK Letters of Credit; and (b) the Stated Amount of all outstanding UK Letters of Credit.

“ UK LC Request ” a request for issuance of a UK Letter of Credit, to be provided by Borrower Agent or UK Borrower to UK Issuing Bank, in form satisfactory to Agent and UK Issuing Bank.

“ UK Lenders ” Bank of America, each other lender party to this Agreement that has issued a UK Revolver Commitment, the UK Swingline Lender, and any Person who hereafter becomes a “Lender” with a UK Revolver Commitment pursuant to an Assignment, including any Lending Office of the foregoing.

“ UK Letter of Credit ” any standby or documentary letter of credit, foreign guaranty, documentary bankers acceptance or similar instrument issued by UK Issuing Bank for the account or benefit of UK Borrower or an Affiliate of UK Borrower.

“ UK Letter of Credit Subline ” the lesser of (a) $0 and (b) the UK Revolver Commitments.

“ UK Mortgage ” a Lien on any Mortgaged Property to secure (or given with the intent to secure) the UK Facility Obligations. Each UK Mortgage shall be in form and substance reasonably satisfactory to Agent.

“ UK Overadvance ” as defined in Section 2.1.5 .

“ UK Overadvance Loan ” a UK Base Rate Loan made to UK Borrower when a UK Overadvance exists or is caused by the funding thereof.

 

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“ UK Overadvance Loan Balance ” on any date, the Dollar Equivalent of the amount by which the aggregate UK Revolver Loans of the UK Borrower exceed the amount of the UK Borrowing Base on such date.

“ UK Protective Advances ” as defined in Section 2.1.6 .

“ UK Reimbursement Date ” as defined in Section 2.3.2 .

“ UK Rent and Charges Reserve ” the aggregate of (a) all past due rent and other amounts owing by UK Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any UK Facility Collateral or could assert a Lien on any UK Facility Collateral; and (b) a reserve at least equal to two months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

“ UK Revolver Commitment ” for any UK Lender, its obligation to make UK Revolver Loans and to participate in UK LC Obligations up to the maximum principal amount shown on Schedule 1.1(B) , as hereafter modified pursuant to Section 2.1.4 , Section 2.1.7 or an Assignment to which it is a party. “ UK Revolver Commitments ” means the aggregate amount of such commitments of all UK Lenders.

“ UK Revolver Loan ” a loan made by a UK Lender to UK Borrower pursuant to Section 2.1 , which loan shall be either a LIBOR Loan (in which case such loan shall be denominated in Sterling, Dollars or Euros) or a UK Base Rate Loan (in which case such loan shall be denominated in Dollars), in each case as selected by the Borrower Agent on behalf of the UK Borrower, and any UK Swingline Loan, UK Overadvance Loan or UK Protective Advance.

“ UK Revolver Usage ” the Dollar Equivalent of an amount equal to (a) the aggregate amount of outstanding UK Revolver Loans; plus (b) the aggregate Stated Amount of outstanding UK Letters of Credit, except to the extent Cash Collateralized by UK Borrower.

“ UK Security Agreements ” the UK Debenture, the UK Share Mortgage and each other debenture or security agreement governed by English law among any Obligor and Agent or UK Security Trustee.

“ UK Security Documents ” the UK Security Agreements, the UK Guaranties, the UK Mortgages, the UK IP Assignments, the UK Deposit Account Control Agreements, the Foreign Facility Guarantee and Collateral Agreement, the Dutch Security Documents, the Mexican Security Documents, the Canadian Security Documents, the U.S. Security Documents and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any UK Facility Obligations.

“ UK Security Trustee ” Bank of America (London) or any successor security trustee appointed in accordance with Section 12.2 .

“ UK Share Mortgage ” the share mortgage governed by English law among Cequent Nederland Holdings B.V. and UK Security Trustee.

“ UK Subsidiary ” each Subsidiary that is incorporated or organized under the laws of any legal jurisdiction of the United Kingdom.

“ UK Subsidiary Obligor ” any Subsidiary directly owned by a UK Domiciled Obligor that is not an Immaterial Subsidiary.

 

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“ UK Swingline Lender ” Bank of America or an Affiliate of Bank of America in its capacity as provider of UK Swingline Loans.

“ UK Swingline Loan ” any Borrowing of UK Revolver Loans funded with UK Swingline Lender’s funds, until such Borrowing is settled among UK Lenders or repaid by UK Borrower, which UK Revolver Loan shall be a UK Base Rate Loan.

“ Unfunded Current Liability ” of any Canadian Pension Plan shall mean the excess of the present value of the benefit liabilities determined on a plan termination basis in accordance with actuarial assumptions over the current value of the assets, and in any event includes any unfunded liability, solvency liability or wind up deficiency in respect of any Canadian Pension Plan.

“ Unrestricted Domestic Cash ” as of any date, domestic unrestricted cash and domestic unrestricted Permitted Investments of the Parent Borrower and its Domestic Subsidiaries as of such date.

“ Unrestricted Foreign Cash ” as of any date, unrestricted cash and unrestricted Permitted Investments of the Obligors (other than Parent Borrower and its Domestic Subsidiaries) as of such date.

“ Unused Line Fee Rate ” a per annum rate equal to 0.25%.

“ U.S. or United States ” the United States of America.

“ U.S. Accounts Formula Amount ” 85% of the Value of U.S. Eligible Accounts; provided , however, that such percentage shall be reduced by 1.0% for each percentage point (or portion thereof) that the Dilution Percent exceeds 5%.

“ U.S. Adjusted Availability ” the difference of (a) the U.S. Borrowing Base, calculated as though the FILO Amount were equal to $0, minus (b) U.S. Revolver Usage.

“ U.S. Availability ” the U.S. Borrowing Base minus U.S. Revolver Usage.

“ U.S. Availability Reserve ” the sum (without duplication) of (a) the U.S. Inventory Reserve; (b) the U.S. Rent and Charges Reserve; (c) the U.S. Bank Product Reserve; (d) the aggregate amount of liabilities secured by Liens upon U.S Facility Collateral that are (or, in the opinion of Agent in the exercise of its Permitted Discretion, may be) senior to Agent’s Liens or any Security Trustee’s Liens or that Agent in its Permitted Discretion determines may be required to be paid to permit or facilitate exercise of rights or remedies with respect to U.S. Facility Collateral (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (e) the Foreign Allocated U.S. Availability Reserve , (f) the U.S. Special Availability Block and ( f g ) such additional reserves, in such amounts and with respect to such matters, as Agent in its Permitted Discretion may elect to impose from time to time; provided the imposition of any such reserves or change in a reserve after the Closing Date shall not be effective until two (2) Business Days after notice thereof (which may be oral notice, promptly confirmed in writing) to the Borrower Agent unless (i) a Default has occurred and is then continuing, (ii) the reserve or change in reserve is the result of a Lien, senior in priority to Agent’s or applicable Security Trustee’s Lien, attached to any U.S. Facility Collateral that is Revolver Priority Collateral included in the U.S. Borrowing Base and/or (iii) the changes to any such reserve results solely from mathematical calculations of the amount of such reserve in accordance with the methodology of calculation previously utilized (in the case of each of which such reserve or change in reserve shall be effective immediately); provided further that during any such two (2) Business Day notice period, Lenders shall have no obligations to fund any U.S. Revolver Loan or cause to be issued any U.S. Letter of Credit to the extent that, after giving pro forma effect to the making of such U.S. Revolver Loan or issuance of such U.S. Letter of

 

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Credit and to the establishment of any such new reserve or change in such reserve, a U.S. Overadvance would exist; and provided still further that the Foreign Allocated U.S. Availability Reserve and changes thereto will be effective immediately without necessity of notice to Borrower Agent.

“ U.S. Bank Product Reserve ” the aggregate amount of reserves established by Agent from time to time in its Permitted Discretion in respect of Secured Bank Product Obligations for the account of the U.S. Domiciled Obligors and the Affiliates thereof domiciled in the U.S.

“ U.S. Bankruptcy Code ” Title 11 of the United States Code.

“ U.S. Base Rate ” for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) LIBOR for a 30 day interest period as of such day, plus 1.0%.

“ U.S. Base Rate Loan ” any Revolver Loan that bears interest based on the U.S. Base Rate.

“ U.S. Borrowers ” Parent Borrower, Cequent Performance and Cequent Consumer (each as defined in the preamble to this Agreement).

“ U.S. Borrowing Base ” on any date of determination, an amount equal to the lesser of (a) the aggregate U.S. Revolver Commitments and (b) the sum of the U.S. Accounts Formula Amount, plus the U.S. Inventory Formula Amount, plus on and after the FILO Commencement Date, the FILO Amount, minus the U.S. Availability Reserve; provided, however, that no Accounts, Inventory or other Property acquired in a Permitted Acquisition or otherwise outside the Ordinary Course of Business shall be included in the calculation of the U.S. Borrowing Base until completion of a customary due diligence investigation by Agent, which may in Agent’s sole discretion include applicable field examinations and appraisals (which shall not be included in the limits on the number of field examinations or appraisals provided in Section 10.1.1 ) satisfactory to Agent.

“ U.S. Cash Collateral Account ” a demand deposit, money market or other account established by Agent at such financial institution as Agent may select in its Permitted Discretion, which account shall be subject to a Lien in favor of Agent for the benefit of the U.S. Facility Secured Parties.

“ U.S. Commitment Termination Date ” the earliest to occur of (a) the Revolver Termination Date; (b) the date on which U.S. Borrowers terminate the U.S. Revolver Commitments pursuant to Section 2.1.4 ; or (c) the date on which the U.S. Revolver Commitments are terminated pursuant to Section 11.2 .

“ U.S. Deposit Account Control Agreement ” a control agreement satisfactory to Agent executed by an institution maintaining a Deposit Account for an Obligor, to perfect Agent’s Lien on such account, as security for (or given with the intent to secure) the Obligations.

“ U.S. Domiciled Obligor ” each U.S. Borrower and each U.S. Subsidiary that is or is required to be liable for payment of any Obligations or that has granted a Lien on its assets in favor of Agent or any Security Trustee to secure any Obligations, and “ U.S. Domiciled Obligors ” means all such Persons, collectively.

“ U.S. Dominion Account(s) ” one or more special accounts established by one or more U.S. Borrowers at Bank of America or another bank reasonably acceptable to Agent, and, as required under Section 8.2.4 , with respect to which Agent has the right to issue a notice of exclusive control for withdrawal purposes during a Dominion Trigger Period.

 

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“ U.S. Eligible Account ” an Account owing to a U.S. Borrower that arises in the Ordinary Course of Business from the sale of goods, is payable in Dollars and is deemed by Agent, in its Permitted Discretion, to be a U.S. Eligible Account. Without limiting the foregoing, no Account shall be a U.S. Eligible Account if (a) it is unpaid for more than 60 days after the original due date, or more than 120 days after the original invoice date; (b) 50% or more of the Accounts owing by the Account Debtor are not U.S. Eligible Accounts under the foregoing clause; (c) when aggregated with other Accounts owing by the Account Debtor, it exceeds (but solely to the extent of such excess) 15% of the aggregate U.S. Eligible Accounts (or such higher percentage as Agent may establish for the Account Debtor from time to time); (d) it does not conform with a covenant or representation herein; (e) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); (f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or is subject to any Sanction or on any specially designated nationals list maintained by OFAC; or the applicable U.S. Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) from a financial institution reasonably acceptable to Agent and on terms reasonably satisfactory to Agent; (g) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) from a financial institution reasonably acceptable to Agent and on terms reasonably satisfactory to Agent; (h) it is owing by a Governmental Authority, unless the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in compliance with the federal Assignment of Claims Act; (i) it is not subject to a duly perfected, first priority Lien in favor of Agent, or is subject to any other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section 10.2.2(a) or Section 10.2.2(r) is prior to the Lien of Agent or of the Security Trustee, as applicable, unless a U.S. Availability Reserve is in effect with respect thereto)); (j) the goods giving rise to it have not been delivered to the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (l) its payment has been extended or the Account Debtor has made a partial payment; (m) it arises from a sale to an Affiliate, from a sale on a cash-on-delivery, bill-and-hold, sale-or-return, sale-on-approval, consignment, or other repurchase or return basis, or from a sale for personal, family or household purposes; (n) it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued; or (o) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof. In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than 120 days old will be excluded.

“ U.S. Eligible Inventory ” Inventory owned by a U.S. Borrower that Agent, in its Permitted Discretion, deems to be U.S. Eligible Inventory. Without limiting the foregoing, no Inventory shall be U.S. Eligible Inventory unless it (a) is finished goods or raw materials or work-in-process and not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, has not been acquired from a Person subject to any Sanction or on any specially designated nationals list maintained by OFAC, and does not constitute Hazardous Materials under any Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien

 

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(other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section 10.2.2(a) or Section 10.2.2(r) is prior to the Lien of Agent or of the Security Trustee, as applicable, unless a U.S. Availability Reserve is in effect with respect thereto)); (h) is within the continental United States or Canada, is not in transit except between locations of U.S. Borrowers, and is not consigned to any Person; (i) is not subject to any negotiable document; (j) is not subject to any License or other arrangement that restricts such U.S. Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or an appropriate U.S. Rent and Charges Reserve has been established; and (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate U.S. Rent and Charges Reserve has been established; and (l) is reflected in the details of a current perpetual inventory report.

“ U.S. Facility Collateral ” Collateral that now or hereafter secures (or is intended to secure) any of the U.S. Facility Obligations.

“ U.S. Facility Collateral and Guarantee Requirement ” with respect to any and all U.S. Facility Obligors, the requirement that, subject to any applicable limitations set forth in the Security Documents:

(a)         Agent shall have received from each party thereto (other than Agent) either (i) a counterpart of each applicable U.S. Security Document, duly executed and delivered on behalf of such U.S. Facility Obligor, or (ii) in the case of any Person that becomes a U.S. Facility Obligor after the Original Closing Date, a joinder to this Agreement and a supplement to each applicable U.S. Security Document and the Intercreditor Agreement, in each case in the form specified therein, duly executed and delivered on behalf of such U.S. Facility Obligor;

(b)         all outstanding Equity Interests of the Parent Borrower and each Subsidiary owned by or on behalf of any U.S. Facility Obligor shall have been pledged pursuant to the Guarantee and Collateral Agreement (except that the U.S. Facility Obligors shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary, any CFC ( other CFC, or any CFC Holdco than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands)) to secure the U.S. Facility Obligations; provided, however , that if one or more of the Senior Term Loan Documents and/or the Term Loan Documents would require a greater pledge, the limitation in this parenthetical shall be automatically deemed to be modified to require a pledge equivalent to that required by the Senior Term Loan Documents and/or the Term Loan Documents) and, subject to the Intercreditor Agreement, Agent or the Controlling Term Loan Agent, as applicable, shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c)         all Debt for borrowed money having an aggregate principal amount in excess of $500,000 that is owing to any U.S. Facility Obligor shall be evidenced by a promissory note and shall have been pledged pursuant to the Guarantee and Collateral Agreement and subject to the Intercreditor Agreement, Agent and/or the Controlling Term Loan Agent, as applicable, shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(d)         all documents and instruments, including UCC financing statements, required by law or reasonably requested by Agent to be filed, registered or recorded to create the Liens intended to be created by the U.S. Security Documents and perfect such Liens to the extent required by, and with the priority required by, the U.S. Security Documents (in each case subject to the Intercreditor Agreement), shall have been filed, registered or recorded or delivered to Agent for filing, registration or recording;

 

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(e)         Agent shall have received, with respect to any Mortgaged Property of any U.S. Facility Obligor, (i) counterparts of a U.S. Mortgage with respect to such Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such U.S. Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 10.2.2 , together with such endorsements, coinsurance and reinsurance as Agent or the Required Lenders may reasonably request, but only to the extent such endorsements are (A) available in the relevant jurisdiction ( provided in no event shall Agent request a creditors’ rights endorsement) and (B) available at commercially reasonable rates, (iii) if any such Mortgaged Property is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, evidence of such flood insurance as may be required under Applicable Law, including Regulation H of the Board of Governors, and an acknowledged notice to U.S. Facility Obligors, (iv) if reasonably requested by Agent, a current appraisal of any such Mortgaged Property, prepared by an appraiser acceptable to Agent, and in form and substance satisfactory to Required Lenders (it being understood that if such appraisal is required in order to comply with Agent’s internal policies, such request shall be deemed to be reasonable), (v) if reasonably requested by Agent, an environmental assessment with respect to any such Mortgaged Property, prepared by environmental engineers reasonably acceptable to Agent, and such other reports, certificates, studies or data with respect to such Mortgaged Property as Agent may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with Agent’s internal policies, such request shall be deemed to be reasonable), and (vi) such abstracts, legal opinions and other documents as Agent or the Required Lenders may reasonably request with respect to any such U.S. Mortgage or Mortgaged Property; provided , however , in no event shall surveys be required to be obtained with respect to any such Mortgaged Property; and

(f)         each U.S. Facility Obligor shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all U.S. Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the Loan Documents;

provided, that, (i) with respect to any U.S. Facility Obligor that is a Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), or the Netherlands, the U.S. Collateral and Guarantee Requirement shall require the provision of the documents and satisfaction of the requirements set forth in Schedule I to the Fourth Amendment and (ii) with respect to any U.S. Facility Obligor that is a Foreign Subsidiary organized under the laws of any other jurisdiction, the U.S. Collateral and Guarantee Requirement shall be modified as reasonably requested by the Required Lenders to reflect the requirements and limitations of the jurisdiction in which such Foreign Subsidiary is organized.

“ U.S. Facility Guarantor ” each U.S. Borrower, Horizon Global Company LLC, a Delaware limited liability company, each other U.S. Subsidiary Obligor. and each other Person that has or is required by Section 10.1.9 and/or the U.S. Facility Collateral and Guarantee Requirement to provide a guarantee in favor of Agent of any U.S. Facility Obligations.

“ U.S. Facility Obligor ” each U.S. Borrower, each U.S. Facility Guarantor and each other Person that has or is required by Section 10.1.9 and/or the U.S. Facility Collateral and Guarantee Requirement to grant a Lien on its assets in favor of Agent to secure any U.S. Facility Obligations.

 

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“ U.S. Facility Obligations ” all Obligations of the U.S. Facility Obligors owed to the U.S. Facility Secured Parties and the Obligations of the U.S. Facility Guarantors as guarantors of the Foreign Facility Obligations).

“ U.S. Facility Secured Parties ” Agent, U.S. Issuing Bank, U.S. Lenders and Secured Bank Product Providers of Bank Products for the account of U.S. Domiciled Obligors and their Affiliates domiciled in the U.S.

“ U.S. Guaranties ” the Guarantee and Collateral Agreement and each other guaranty agreement executed by a U.S. Facility Guarantor in favor of Agent in order to guarantee the payment and/or performance of the U.S. Facility Obligations (including without limitation this Agreement).

“ U.S. Holdco ” any existing or future Domestic Subsidiary the Equity Interests of which are held solely by Foreign Subsidiaries, so long as such existing or newly formed Subsidiary does not engage in any business or own any assets other than the ownership of Equity Interests in Foreign Subsidiaries and intercompany obligations that are otherwise permitted hereunder.

“ U.S. Inventory Formula Amount ” (a) the lesser of (i) 70% of the Value of U.S. Eligible Inventory or (ii) 85% of the NOLV Percentage of the Value of U.S. Eligible Inventory; plus (b) the lesser of (i) 70% of the Value of Eligible In-Transit Inventory owned by a U.S. Borrower, or (ii) 85% of the NOLV Percentage of the Value of Eligible In-Transit Inventory owned by a U.S. Borrower; provided that notwithstanding anything to the contrary contained in this Agreement, prior to the date that the conditions set forth in clause (b) of the definition of “Eligible In-Transit Inventory” are met, whether or not an Eligible In-Transit Inventory Trigger Period has occurred and is continuing, the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Borrowers shall not exceed an aggregate amount of $10,000,000 at any time.

“ U.S. Inventory Reserve ” reserves established by Agent to reflect factors that may negatively impact the Value of Inventory of the U.S. Borrowers, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

“ U.S. IP Assignment ” a collateral assignment or security agreement pursuant to which a U.S. Facility Obligor grants a Lien on its Intellectual Property to Agent, as security for (or given with the intent to secure) the U.S. Facility Obligations.

“ U.S. Issuing Bank ” Bank of America (including any Lending Office of Bank of America), any Affiliate thereof, or any replacement issuer appointed pursuant to Section 2.5 that agrees to issue U.S. Letters of Credit.

“ U.S. Issuing Bank Indemnitees ” U.S. Issuing Bank and its officers, directors, employees, Affiliates, agents and attorneys.

“ U.S. LC Application ” an application by Borrower Agent or a U.S. Borrower to U.S. Issuing Bank for issuance of a U.S. Letter of Credit, in form and substance satisfactory to U.S. Issuing Bank and Agent.

“ U.S. LC Conditions ” the following conditions necessary for issuance of a U.S. Letter of Credit: (a) each of the conditions set forth in Section 6 ; (b) after giving effect to such issuance, total U.S. LC Obligations do not exceed the U.S. Letter of Credit Subline, no U.S. Overadvance exists and U.S. Revolver Usage does not exceed the U.S. Borrowing Base; (c) the U.S. Letter of Credit and payments

 

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thereunder are denominated in Dollars or other currency satisfactory to Agent and U.S. Issuing Bank; and (d) the purpose and form of the proposed U.S. Letter of Credit are satisfactory to Agent and U.S. Issuing Bank in their Permitted Discretion.

“ U.S. LC Documents ” all documents, instruments and agreements (including U.S. LC Requests and U.S. LC Applications) delivered by Borrowers or any other Person to U.S. Issuing Bank or Agent in connection with any U.S. Letter of Credit.

“ U.S. LC Obligations ” the sum of (a) all amounts owing by U.S. Borrowers for drawings under U.S. Letters of Credit; and (b) the Stated Amount of all outstanding U.S. Letters of Credit.

“ U.S. LC Request ” a request for issuance of a U.S. Letter of Credit, to be provided by Borrower Agent or a U.S. Borrower to U.S. Issuing Bank, in form satisfactory to Agent and U.S. Issuing Bank.

“ U.S. Lenders ” Bank of America, each other lender party to this Agreement that has issued a U.S. Revolver Commitment, U.S. Swingline Lender, and any Person who hereafter becomes a “Lender” with a U.S. Revolver Commitment pursuant to an Assignment, including any Lending Office of the foregoing.

“ U.S. Letter of Credit ” any of the Existing Letters of Credit and any standby or documentary letter of credit, foreign guaranty, documentary bankers acceptance or similar instrument issued by U.S. Issuing Bank for the account or benefit of a U.S. Borrower or Affiliate of a U.S. Borrower.

“ U.S. Letter of Credit Subline ” the lesser of (a) the positive difference of (i) $20,000,000 less (ii) the sum of all Canadian LC Obligations and UK LC Obligations and (b) the U.S. Revolver Commitments.

“ U.S. Mortgage ” a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure (or given with the intent to secure) the U.S. Facility Obligations. Each U.S. Mortgage shall be in form and substance reasonably satisfactory to Agent.

“ U.S. Obligor ” any Obligor that is both a U.S. Domiciled Obligor and a U.S. Facility Obligor.

“ U.S. Overadvance ” as defined in Section 2.1.5 .

“ U.S. Overadvance Loan ” a U.S. Base Rate Loan made to the U.S. Borrowers when an U.S. Overadvance exists or is caused by the funding thereof.

“ U.S. Overadvance Loan Balance ” on any date, the amount by which the aggregate U.S. Revolver Loans of the U.S. Borrowers exceed the amount of the U.S. Borrowing Base on such date.

“ U.S. Pension Plan ” any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Parent Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “ employer ” as defined in Section 3(5) of ERISA.

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

“ U.S. Protective Advances ” as defined in Section 2.1.6 .

“ U.S. Reimbursement Date ” as defined in Section 2.4.2 .

 

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“ U.S. Rent and Charges Reserve ” the aggregate of (a) all past due rent and other amounts owing by a U.S. Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any U.S. Facility Collateral or could assert a Lien on any U.S. Facility Collateral; and (b) a reserve at least equal to two months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

“ U.S. Revolver Commitment ” for any U.S. Lender, its obligation to make U.S. Revolver Loans and to participate in U.S. LC Obligations up to the maximum principal amount shown on Schedule 1.1(B) , as hereafter modified pursuant to Section 2.1.4 , Section 2.1.7 , Section 2.1.8 or an Assignment to which it is a party. “ U.S. Revolver Commitments ” means the aggregate amount of such commitments of all Lenders.

“ U.S. Revolver Loan ” a loan made in Dollars by a U.S. Lender to a U.S. Borrower made pursuant to Section 2.1 , and any U.S. Swingline Loan, U.S. Overadvance Loan or U.S. Protective Advance.

“ U.S. Revolver Usage ” (a) the aggregate amount of outstanding U.S. Revolver Loans; plus (b) the aggregate Stated Amount of outstanding U.S. Letters of Credit, except to the extent Cash Collateralized by U.S. Borrowers.

“ U.S. Security Documents ” the U.S. Guaranties, the Guarantee and Collateral Agreement, the U.S. Mortgages, the U.S. IP Assignments, the U.S. Deposit Account Control Agreements, and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any U.S Facility Obligations.

“U.S. Special Availability Block” means $6,700,000.

“ U.S. Subsidiary ” each Subsidiary that is organized under the laws of a jurisdiction of the United States of America or any State thereof or the District of Columbia.

“ U.S. Subsidiary Obligor ” means any Subsidiary that is not (a) a Foreign Subsidiary , (b) a CFC, (c) a CFC Holdco, (other than any Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (b) a CFC (other than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (c) a U.S. Holdco or (d)  a U.S. Holdco or (e)  an Immaterial Subsidiary. ; provided, that the Required Lenders, in their sole discretion, may at any time request any Foreign Subsidiary, CFC or U.S. Holdco to become a U.S. Subsidiary Obligor if such Foreign Subsidiary, CFC or U.S. Holdco has become a “Loan Party” under the Senior Term Loan Documents .

“ U.S. Swingline Lender ” Agent in its capacity as provider of U.S. Swingline Loans.

“ U.S. Swingline Loan ” any Borrowing of U.S. Base Rate Loans funded with U.S. Swingline Lender’s funds, until such Borrowing is settled among U.S. Lenders or repaid by U.S. Borrowers.

“ U.S. Tax Compliance Certificate ” as defined in Section 5.9.2(b)(iii) .

“ Value ” (a) for any particular type of Inventory (whether raw materials, work-in-process or finished goods), its value determined on the basis of the lower of cost or market, calculated on a first-in, first-out basis, and excluding any portion of cost attributable to intercompany profit among Borrowers and their Affiliates; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person.

 

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“ VAT ”

“(a) any Tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

“(b) any other Tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such Tax referred to in paragraph (a) above, or imposed elsewhere.

“ VAT Recipient ” as defined in Section 5.8.4 .

“ VAT Relevant Party ” as defined in Section 5.8.4 .

“ VAT Supplier ” as defined in Section 5.8.4 .

“ Westfalia Acquisition ” the acquisition of all Equity Interests of Westfalia-Automotive Holding GmbH, a limited liability company organized under the laws of Germany, and TeIJs Holding B.V., a private company with limited liability organized under the laws of the Netherlands (collectively, the “ Westfalia Group ”), by Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, and the guarantee by Parent Borrower of the obligations of Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, under the Westfalia Purchase Agreement, all pursuant to the Westfalia Purchase Agreement and all in accordance with the terms of the Westfalia Purchase Agreement without giving effect to any amendment thereto.

“ Westfalia Acquisition Closing Date ” means October 4, 2016.

“ Westfalia Group ” as defined in the definition of “Westfalia Acquisition”.

“ Westfalia Purchase Agreement ” that certain Sale and Purchase Agreement, recorded in Munich on August 24, 2016, by and among Parcom Deutschland I GmbH & Co. KG, a limited partnership organized under the laws of Germany, as a seller; Co-Investment Partners Europe L.P., a limited partnership organized under the laws of the Cayman Islands, as a seller; Bayernlb Private Equity GmbH, a limited liability company organized under the laws of Germany, as a seller; Walter Gnauert, an individual resident of Cavaion, Italy, as a seller; Dr. Bernd Welzel, an individual resident of Bramsche, Germany, as a seller; Frank Klebedamz, an individual resident of Gladbeck, Germany, as a seller; Jurgen Lotter, an individual resident of Rosrath, Germany, as a seller; Westfalia Mitarbeiterbeteiligungs GmbH & Co. KG, a limited partnership organized under the laws of Germany, as a seller; Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, as purchaser; and Parent Borrower, as guarantor.

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

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

1.2        “ Accounting Terms . Under the Loan Documents (except as otherwise specified therein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the

 

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audited financial statements of Borrowers delivered to Agent with respect to the Fiscal Year ending on December 31, 2014 and using the same inventory valuation method as used in such financial statements, except for any change required or permitted by GAAP if Borrowers’ certified public accountants concur in such change, the change is disclosed to Agent, and all relevant provisions of the Loan Documents are amended in a manner satisfactory to Required Lenders to take into account the effects of the change.

1.3          Uniform Commercial Code/PPSA . As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York from time to time: “Chattel Paper,” “Commercial Tort Claim,” “Equipment,” “Goods,” “Instrument” and “Investment Property”; provided, however, that (a) as such terms relate to any such Property of any Canadian Domiciled Obligor, such terms shall refer to such Property as defined in the PPSA, to the extent applicable and (b) as such terms relate to any such Property encumbered by or to be encumbered by a Mexican Security Document, such terms shall have the meanings assigned to them in such Mexican Security Document, to the extent applicable. In addition, other terms relating to Collateral used and not otherwise defined herein that are defined in the UCC or the PPSA shall have the meanings set forth in the UCC or the PPSA, as applicable and as the context requires.

1.4          Certain Matters of Construction . The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later specified date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and “include” shall mean “including, without limitation” and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document. All references to (a) laws include all related regulations, interpretations, supplements, amendments and successor provisions; (b) any document, instrument or agreement include any amendments, waivers and other modifications, extensions or renewals (to the extent permitted by the Loan Documents); (c) any section mean, unless the context otherwise requires, a section of this Agreement; (d) any exhibits or schedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated by reference; (e) any Person include successors and assigns; or (f) time of day mean time of day at Agent’s notice address under Section 14.3.1 . All determinations (including calculations of the Total Borrowing Base, each component of the Total Borrowing Base and financial covenants) made from time to time under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to Agent (and not necessarily calculated in accordance with GAAP). Borrowers shall have the burden of establishing any alleged negligence, misconduct or lack of good faith by Agent, any Security Trustee, Issuing Bank or any Lender under any Loan Documents. No provision of any Loan Documents shall be construed against any party by reason of such party having, or being deemed to have, drafted the provision. Reference to a Borrower’s “knowledge” or similar concept means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter.

1.5          Currency Equivalents .

1.5.1     Calculations . All references in the Loan Documents to Loans, Letters of Credit, Obligations, Borrowing Base components and other amounts shall be denominated in Dollars, unless expressly provided otherwise. The Dollar Equivalent of any amounts denominated or reported under a Loan Document in a currency other than Dollars shall be determined by Agent on a daily basis, based on

 

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the current Spot Rate. Borrowers shall report Value and other Borrowing Base components to Agent in the currency invoiced by Borrowers or shown in Borrowers’ financial records, and unless expressly provided otherwise, shall deliver financial statements and calculate financial covenants in Dollars. Notwithstanding anything herein to the contrary, if any Obligation is funded and expressly denominated in a currency other than Dollars, Borrowers shall repay such Obligation in such other currency.

1.5.2         Judgments . If, for purposes of obtaining judgment in any court, it is necessary to convert a sum from the currency provided under a Loan Document (“ Agreement Currency ”) into another currency, the Spot Rate shall be used as the rate of exchange. Notwithstanding any judgment in a currency (“ Judgment Currency ”) other than the Agreement Currency, Obligors shall discharge their obligations in respect of any sum due under a Loan Document only if, on the Business Day following receipt by Secured Parties or Security Trustees of payment in the Judgment Currency, such Secured Parties or such Security Trustees, as applicable, can use the amount paid to purchase the sum originally due in the Agreement Currency. If the purchased amount is less than the sum originally due, Obligors agree, as a separate obligation and notwithstanding any such judgment, to indemnify such Secured Parties and Security Trustees against such loss. If the purchased amount is greater than the sum originally due, Secured Parties or Security Trustees, as applicable, shall return the excess amount to Obligors (or to the Person legally entitled thereto). The covenants contained in this Section 1.5.2 shall survive the Full Payment of the Obligations.

1.6          Interpretation (Québec) . For purposes of any Collateral located in the Province of Québec or charged by any Deed of Movable Hypothec (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of the Province of Québec or a court or tribunal exercising jurisdiction in the Province of Québec, (a) “personal property” shall be deemed to include “movable property”, (b) “real property” shall be deemed to include “immovable property”, (c) “tangible property” shall be deemed to include “corporeal property”, (d) “intangible property” shall be deemed to include “incorporeal property”, (e) “security interest”, “mortgage” and “lien” shall be deemed to include a “hypothec”, “prior claim” and a “resolutory clause”, (f) all references to filing, registering or recording under the UCC or the PPSA shall be deemed to include publication under the Civil Code, (g) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an “opposable” or “set up” Liens as against third parties, (h) any “right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (i) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary”, (k) “construction liens” shall be deemed to include “legal hypothecs”, (l) “joint and several” shall be deemed to include “solidary”, (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault”, (n) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”, (o) “servitude” shall be deemed to include “easement”, (p) “priority” shall be deemed to include “prior claim”, (q) “survey” shall be deemed to include “certificate of location and plan”, and (r) “fee simple title” shall be deemed to include “absolute ownership”. The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language only (except if another language is required under any Applicable Law) and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only. Les parties aux présentes confirment que c’est leur volonté que cette convention et les autres documents de crédit soient rédigés en langue anglaise seulement et que tous les documents, y compris tous avis, envisagés par cette convention et les autres documents peuvent être rédigés en la langue anglaise seulement (sauf si une autre langue est requise en vertu d’une loi applicable).

 

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SECTION 2

CREDIT FACILITIES

2.1          Revolver Commitment .

2.1.1             Revolver Loans .

(a)         Canadian Revolver Loans . Each Canadian Lender agrees, severally on a Pro Rata basis up to its Canadian Revolver Commitment, on the terms set forth herein, to make Canadian Revolver Loans to Canadian Borrower from time to time through the Canadian Commitment Termination Date. The Canadian Revolver Loans may be repaid and reborrowed as provided herein. In no event shall Canadian Lenders have any obligation to honor a request for a Canadian Revolver Loan if Canadian Revolver Usage at such time plus the requested Canadian Revolver Loan would exceed the Canadian Borrowing Base.

(b)         UK Revolver Loans . Each UK Lender agrees, severally on a Pro Rata basis up to its UK Revolver Commitment, on the terms set forth herein, to make UK Revolver Loans to UK Borrower from time to time through the UK Commitment Termination Date. The UK Revolver Loans may be repaid and reborrowed as provided herein. In no event shall UK Lenders have any obligation to honor a request for a UK Revolver Loan if UK Revolver Usage at such time plus the requested UK Revolver Loan would exceed the UK Borrowing Base.

(c)         U.S. Revolver Loans . Immediately prior to the effectiveness of this Agreement, the outstanding principal balance of the “Revolver Loans” as of the date hereof made under the Original Loan Agreement was $0.00 (the “ Outstanding Original Revolver Loan Balance ”). Immediately upon giving effect to this Agreement, the Outstanding Original Revolver Loan Balance shall be continued and shall convert automatically, for all purposes of this Agreement, to outstanding U.S. Revolver Loans hereunder owing to the U.S. Lenders as if such U.S. Revolver Loans had been made by the U.S. Lenders to U.S. Borrowers hereunder on a Pro Rata basis in accordance with their respective U.S. Revolver Commitments. Each U.S. Lender agrees, severally on a Pro Rata basis up to its U.S. Revolver Commitment, on the terms set forth herein, to make U.S. Revolver Loans to U.S. Borrowers from time to time through the U.S. Commitment Termination Date. The U.S. Revolver Loans may be repaid and reborrowed as provided herein. In no event shall U.S. Lenders have any obligation to honor a request for a U.S. Revolver Loan if U.S. Revolver Usage at such time plus the requested U.S. Revolver Loan would exceed the U.S. Borrowing Base.

(d)         Cap on Total Revolver Usage . Notwithstanding anything to the contrary contained in this Section 2.1.1 , in no event shall any Borrower be entitled to receive a Revolver Loan if at the time of the proposed funding of such Revolver Loan (and after giving effect thereto and all pending requests for Revolver Loans), the Total Revolver Usage exceeds (or would exceed) the Commitments.

2.1.2             Notes . Loans and interest accruing thereon shall be evidenced by the records of Agent and the applicable Lender. At the request of a Lender, Borrowers within the Borrower Group to which such Lender has extended a Commitment shall deliver promissory note(s) to such Lender, evidencing its Loan(s), in the amount of such Lender’s Commitment to such Borrower Group.

2.1.3             Use of Proceeds . The proceeds of Revolver Loans shall be used by Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and transaction expenses associated with the

 

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closing of this credit facility; (c) to pay Obligations in accordance with this Agreement; and (d) for lawful corporate purposes of Borrowers, including working capital.

2.1.4             Voluntary Reduction or Termination of Revolver Commitments .

(a)        The Canadian Revolver Commitments shall terminate on the Canadian Commitment Termination Date. Upon at least 90 days prior written notice to Agent from Borrower Agent at any time after the first Loan Year, Canadian Borrower may, at its option, terminate the Canadian Revolver Commitments. On the Canadian Commitment Termination Date, Canadian Borrower shall make Full Payment of all Canadian Facility Obligations.

(b)        The UK Revolver Commitments shall terminate on the UK Commitment Termination Date. Upon at least 90 days prior written notice to Agent from Borrower Agent at any time after the first Loan Year, UK Borrower may, at its option, terminate the UK Revolver Commitments. On the UK Commitment Termination Date, UK Borrower shall make Full Payment of all UK Facility Obligations.

(c)        The U.S. Revolver Commitments shall terminate on the U.S. Commitment Termination Date. Upon at least 90 days prior written notice to Agent from Borrower Agent at any time after the first Loan Year, U.S. Borrowers may, at their option, terminate the U.S. Revolver Commitments and this credit facility. If the U.S. Borrowers elect to terminate the U.S. Revolver Commitments pursuant to the previous sentence, the Foreign Revolver Commitments shall automatically terminate concurrently with the termination of the U.S. Revolver Commitments. On the U.S. Commitment Termination Date, U.S. Borrowers shall make Full Payment of all U.S. Facility Obligations.

(d)        Any notice of termination given by Borrower Agent shall be irrevocable.

(e)        Borrowers may permanently reduce the Revolver Commitments, on a ratable basis for all Lenders, upon at least 90 days prior written notice from Borrower Agent to Agent delivered at any time after the first Loan Year, which notice shall (i) specify the amount of the reduction, (ii) specify the allocation of the reduction to, and the corresponding reductions of, each Foreign Revolver Commitment and/or the U.S. Revolver Commitment (each of which shall be allocated to the Lenders among the affected Borrower Groups on a ratable basis at the time of such reduction) and (iii) be irrevocable once given. Each reduction shall be in a minimum amount of $5,000,000, or an increment of $1,000,000 in excess thereof; provided that in no event may any reduction of a Borrower Group Commitment be made pursuant to this Section 2.1.4(e) if, after giving effect thereto, the U.S. Revolver Commitments would be less than 75% of the Commitments.

2.1.5             Overadvances .

(a)         Canadian Overadvances . If Canadian Revolver Usage exceeds the Canadian Borrowing Base (a “ Canadian Overadvance ”) at any time (whether as a result of fluctuations in Spot Rates or otherwise), the excess amount shall be payable by the Canadian Borrower on demand by Agent, but all such Canadian Revolver Loans shall nevertheless constitute Canadian Facility Obligations secured by the Canadian Facility Collateral and entitled to all benefits of the Loan Documents.

(b)         UK Overadvances . If UK Revolver Usage exceeds the UK Borrowing Base (a “ UK Overadvance ”) at any time (whether as a result of fluctuations in Spot Rates or

 

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otherwise), the excess amount shall be payable by the UK Borrower on demand by Agent, but all such UK Revolver Loans shall nevertheless constitute UK Facility Obligations secured by the UK Facility Collateral and entitled to all benefits of the Loan Documents.

(c)         U.S. Overadvances . If U.S. Revolver Usage exceeds the U.S. Borrowing Base (a “ U.S. Overadvance ”) at any time, the excess amount shall be payable by the U.S. Borrowers on demand by Agent, but all such U.S. Revolver Loans shall nevertheless constitute U.S. Facility Obligations secured by the U.S. Facility Collateral and entitled to all benefits of the Loan Documents.

(d)         Funding of Overadvance Loans . Agent may require Applicable Lenders to honor requests for Overadvance Loans and to forbear from requiring the applicable Borrower(s) to cure an Overadvance, (a) when no other Event of Default is known to Agent, as long as (i) the Overadvance does not continue for more than 30 consecutive days (and no Overadvance may exist for at least five consecutive days thereafter before further Overadvance Loans are required), and (ii) (A) if a Canadian Overadvance, such Overadvance, when combined with all Canadian Protective Advances and all other Canadian Overadvances existing at such time, is not known by Agent to exceed 10% of the Canadian Borrowing Base, (B) if a UK Overadvance, such Overadvance, when combined with all UK Protective Advances and all other UK Overadvances existing at such time, is not known by Agent to exceed 10% of the UK Borrowing Base or (C) if a U.S. Overadvance, such Overadvance, when combined with all U.S. Protective Advances and all other U.S. Overadvances existing at such time, is not known by Agent to exceed 10% of the U.S. Borrowing Base; and (b) regardless of whether an Event of Default exists, if Agent discovers an Overadvance not previously known by it to exist, as long as from the date of such discovery the Overadvance does not continue for more than 30 consecutive days. Required Lenders may at any time revoke Agent’s authority under the immediately preceding sentence to require Lenders to honor requests for Overadvance Loans and to forbear from requiring the applicable Borrowers to cure an Overadvance by written notice to Agent. In no event shall Overadvance Loans be required that would cause (A) Canadian Revolver Usage to exceed the aggregate Canadian Revolver Commitments, (B) the UK Revolver Usage to exceed the aggregate UK Revolver Commitments or (C) the U.S. Revolver Usage to exceed the aggregate U.S. Revolver Commitments. Any funding of an Overadvance Loan or sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders of the Event of Default caused thereby. In no event shall any Borrower or other Obligor be deemed a beneficiary of this Section nor authorized to enforce any of its terms.

2.1.6             Protective Advances .

(a)         Canadian Protective Advances . Agent shall be authorized, in its discretion, at any time that any conditions in Section 6 are not satisfied, to make Canadian Base Rate Loans or Canadian Prime Rate Loans to Canadian Borrower (as applicable, through its Canadian Lending Office, branch or Affiliate) (“ Canadian Protective Advances ”) (i) up to an aggregate amount, when combined with all Canadian Overadvances and all other Canadian Protective Advances, of 10% of the Canadian Borrowing Base outstanding at any time, if Agent deems such Loans necessary or desirable to preserve or protect Canadian Facility Collateral, or to enhance the collectability or repayment of the Canadian Facility Obligations, as long as such Loans do not cause Canadian Revolver Usage to exceed the Canadian Borrowing Base; or (ii) to pay any other amounts chargeable to Canadian Facility Obligors under any of the Loan Documents, including interest, costs, fees and expenses. Canadian Lenders shall participate on a Pro Rata basis in Canadian Protective Advances outstanding from time to time. Required

 

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Lenders may at any time revoke Agent’s authority to make further Canadian Protective Advances under clause (i) by written notice to Agent. Absent such revocation, Agent’s determination that funding of a Canadian Protective Advance is appropriate shall be conclusive. All Canadian Protective Advances shall be Canadian Facility Obligations, secured by the Canadian Facility Collateral and, if denominated in Canadian Dollars, shall be treated for all purposes as a Canadian Prime Rate Loan or, if denominated in Dollars, shall be treated for all purposes as a Canadian Base Rate Loan.

(b)         UK Protective Advances . Agent shall be authorized, in its discretion, at any time that any conditions in Section 6 are not satisfied, to make UK Base Rate Loans to UK Borrower (“ UK Protective Advances ”) (i) up to an aggregate amount, when combined with all UK Overadvances and all other UK Protective Advances, of 10% of the UK Borrowing Base outstanding at any time, if Agent deems such Loans necessary or desirable to preserve or protect UK Facility Collateral, or to enhance the collectability or repayment of the UK Facility Obligations, as long as such Loans do not cause UK Revolver Usage to exceed the UK Borrowing Base; or (ii) to pay any other amounts chargeable to UK Facility Obligors under any of the Loan Documents, including interest, costs, fees and expenses. UK Lenders shall participate on a Pro Rata basis in UK Protective Advances outstanding from time to time. Required Lenders may at any time revoke Agent’s authority to make further UK Protective Advances under clause (i) by written notice to Agent. Absent such revocation, Agent’s determination that funding of a UK Protective Advance is appropriate shall be conclusive. All UK Protective Advances shall be UK Facility Obligations and secured by the UK Facility Collateral.

(c)         U.S. Protective Advances . Agent shall be authorized, in its discretion, at any time that any conditions in Section 6 are not satisfied, to make U.S. Base Rate Loans to U.S. Borrowers (“ U.S. Protective Advances ”) (i) up to an aggregate amount, when combined with all U.S. Overadvances and all other U.S. Protective Advances, of 10% of the U.S. Borrowing Base outstanding at any time, if Agent deems such Loans necessary or desirable to preserve or protect U.S. Facility Collateral, or to enhance the collectability or repayment of the U.S. Facility Obligations, as long as such Loans do not cause U.S. Revolver Usage to exceed the U.S. Borrowing Base; or (ii) to pay any other amounts chargeable to U.S. Facility Obligors under any of the Loan Documents, including interest, costs, fees and expenses. U.S. Lenders shall participate on a Pro Rata basis in U.S. Protective Advances outstanding from time to time. Required Lenders may at any time revoke Agent’s authority to make further U.S. Protective Advances under clause (i) by written notice to Agent. Absent such revocation, Agent’s determination that funding of a U.S. Protective Advance is appropriate shall be conclusive. All U.S. Protective Advances shall be U.S. Facility Obligations and secured by the U.S. Facility Collateral.

2.1.7       Reallocation of Revolver Commitments .

(a)         Reallocation Mechanism . Subject to the terms and conditions of this Section 2.1.7 , the Borrower Agent may request that the Lenders to certain Borrower Groups (and such Lenders hereby agree to) change the then current allocation of each such Lender’s (and, if applicable, each of its Affiliate’s and branch’s) Commitments among the Borrower Group Commitments in order to effect an increase or decrease to particular Borrower Group Commitments, with any such increase or decrease in a Borrower Group Commitment to be accompanied by a concurrent and equal decrease or increase, respectively, in the other Borrower Group Commitments (each, a “ Reallocation ”). Any such Reallocation shall be subject to the

 

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following conditions: (i) the Borrower Agent shall have provided to Agent a written request (in reasonable detail) at least ten (10) Business Days prior to the requested effective date therefor (which effective date must be a Business Day) (the “ Reallocation Date ”) setting forth the proposed Reallocation Date and the amounts of the proposed Borrower Group Commitment reallocations to be effected, (ii) any such Reallocation shall increase or decrease the applicable Borrower Group Commitments in an amount equal to $2,500,000 and in increments of $500,000 in excess thereof, (iii) after giving effect to any such Reallocation (A) the U.S. Revolver Commitments shall be at least 75% of the Commitments and (B) the UK Revolver Commitments shall in no event exceed $10,000,000, (iv) no more than one Reallocation may be requested in any Fiscal Quarter, (v) no Default or Event of Default shall have occurred and be continuing either as of the date of such request or on the Reallocation Date (both immediately before and after giving effect to such Reallocation), (vi) any increase in a Borrower Group Commitment shall result in a dollar-for-dollar decrease in one or more of the other Borrower Group Commitments, and any decrease in a Borrower Group Commitment pursuant to this Section 2.1.7 shall result in a dollar-for-dollar increase in one or more of the other Borrower Group Commitments, (vii) in no event shall the sum of all the Borrower Group Commitments exceed the aggregate amount of the Commitments then in effect, (viii) after giving effect to such Reallocation, no Overadvance would exist or would result therefrom, and (ix) at least three (3) Business Days prior to the proposed Reallocation Date, a Senior Officer of the Borrower Agent shall have delivered to Agent a certificate in form and substance acceptable to Agent certifying as to compliance with the foregoing conditions and demonstrating (in reasonable detail) the calculations required in connection therewith, which certificate shall be deemed recertified to Agent by a Senior Officer of the Borrower Agent on and as of the Reallocation Date.

(b)         Reallocations Generally. Agent shall promptly inform the Lenders of the affected Borrower Groups of any request for a Reallocation. On the Reallocation Date, each Lender’s affected Borrower Group Commitments shall be increased or decreased on a pro rata basis based on the affected Borrower Group Commitments of the Lenders. If the conditions set forth in Section 2.1.7(a) are not satisfied on the applicable Reallocation Date (or, to the extent such conditions relate to an earlier date, on such earlier date), Agent shall notify the Borrower Agent in writing that the requested Reallocation will not be effectuated; provided that Agent shall in all cases be entitled to rely (without liability) on the certificate delivered by the Borrower Agent pursuant to Section 2.1.7(a) in making its determination as to the satisfaction of the conditions set forth in Section 2.1.7(a) . On each Reallocation Date, Agent shall notify the Lenders of the affected Borrower Groups and the Borrower Agent, on or before 3:00 p.m. (Eastern time) by facsimile, e-mail or other electronic means, of the occurrence of the Reallocation to be effected on such Reallocation Date, the amount of the Loans held by each such Lender as a result thereof and the amount of the affected Borrower Group Commitments of each such Lender as a result thereof. To the extent necessary where a Lender in one Borrower Group and its separate Affiliate or branch that is a Lender in another Borrower Group are participating in a Reallocation, the Reallocation among such Persons shall be deemed to have been consummated pursuant to an Assignment. The respective Pro Rata shares of the Lenders shall thereafter be determined based on such reallocated amounts (subject to any subsequent changes thereto in accordance with this Agreement), and Agent and the affected Lenders shall make such adjustments as Agent shall deem necessary so that the outstanding Loans and LC Obligations of each Lender equals its Pro Rata share thereof after giving effect to the Reallocation.

2.1.8       Increase in U.S. Revolver Commitments . U.S. Borrowers may request an increase in U.S. Revolver Commitments from time to time upon notice to Agent, as long as (a) the requested increase is in a minimum amount of $10,000,000 and is offered on the same terms as existing

 

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U.S. Revolver Commitments, except for a closing fee specified by U.S. Borrowers, (b) increases under this Section 2.1.8 do not exceed $25,000,000 in the aggregate and no more than five (5) increases are made, (c) no reduction in Commitments pursuant to Section 2.1.4 has occurred prior to the requested increase, (d) the requested increase does not cause the Commitments to exceed 90% of any applicable cap under any Subordinated Debt agreement, (e) the requested increase does not cause the Commitments to exceed 90% of any applicable cap contained in the Term Loan Documents (excluding the effect of any provision permitting Revolver Loans or Letters of Credit in amounts exceeding any expressed dollar cap in reliance upon the Borrowing Base), and (f) the Obligors deliver such resolutions, acknowledgements, and reaffirmations as are requested by the Agent in connection with such increase. Agent shall promptly notify U.S. Lenders of the requested increase and, within ten (10) Business Days thereafter, each U.S. Lender shall notify Agent if and to what extent such U.S. Lender commits to increase its U.S. Revolver Commitment. Any U.S. Lender not responding within such period shall be deemed to have declined an increase. If U.S. Lenders fail to commit to the full requested increase, other Lenders or Eligible Assignees may issue additional U.S. Revolver Commitments and become U.S. Lenders hereunder. Agent may allocate, in its discretion, the increased U.S. Revolver Commitments among committing U.S. Lenders and, if necessary, other Lenders and Eligible Assignees. Provided the conditions set forth in Section 6.2 are satisfied, total U.S. Revolver Commitments shall be increased by the requested amount (or such lesser amount committed by U.S. Lenders, other Lenders and Eligible Assignees) on a date agreed upon by Agent and Borrower Agent, but no later than 45 days following U.S. Borrowers’ increase request. Agent, Obligors, and new and existing Lenders shall execute and deliver such documents and agreements as Agent deems appropriate to evidence the increase in and allocations of U.S. Revolver Commitments. On the effective date of an increase, the U.S. Revolver Usage and other exposures under the U.S. Revolver Commitments shall be reallocated among U.S. Lenders, and settled by Agent if necessary, in accordance with U.S. Lenders’ adjusted shares of such Commitments.

2.2         Canadian Letter of Credit Facility .

2.2.1             Issuance of Canadian Letters of Credit . Canadian Issuing Bank shall issue Canadian Letters of Credit in Canadian Dollars or, at the option of Canadian Borrower, Dollars, or any other currency acceptable to Agent and Canadian Issuing Bank, from time to time until 30 days prior to the Revolver Termination Date (or until the Canadian Commitment Termination Date, if earlier), on the terms set forth herein, including the following:

(a)        Canadian Borrower acknowledges that Canadian Issuing Bank’s issuance of any Canadian Letter of Credit is conditioned upon Canadian Issuing Bank’s receipt of a Canadian LC Application with respect to the requested Canadian Letter of Credit, as well as such other instruments and agreements as Canadian Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Canadian Issuing Bank shall have no obligation to issue any Canadian Letter of Credit unless (i) Canadian Issuing Bank receives a Canadian LC Request and Canadian LC Application at least three Business Days prior to the requested date of issuance; (ii) each Canadian LC Condition is satisfied; and (iii) if a Defaulting Lender exists that is a Canadian Lender, such Canadian Lender or Canadian Borrower has entered into arrangements satisfactory to Agent and Canadian Issuing Bank to eliminate any Fronting Exposure associated with such Canadian Lender. If, in sufficient time to act, Canadian Issuing Bank receives written notice from Agent or Required Lenders that a Canadian LC Condition has not been satisfied, Canadian Issuing Bank shall not issue the requested Canadian Letter of Credit. Prior to receipt of any such notice, Canadian Issuing Bank shall not be deemed to have knowledge of any failure of Canadian LC Conditions.

 

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(b)        Canadian Letters of Credit may be requested by Canadian Borrower to support obligations incurred in the Ordinary Course of Business, or as otherwise approved by Agent. Increase, renewal or extension of a Canadian Letter of Credit shall be treated as issuance of a new Canadian Letter of Credit, except that Canadian Issuing Bank may require a new Canadian LC Application in its discretion.

(c)        Canadian Borrower assumes all risks of the acts, omissions or misuses of any Canadian Letter of Credit by the beneficiary. In connection with issuance of any Canadian Letter of Credit, none of Agent, Canadian Issuing Bank or any Canadian Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Canadian Letter of Credit or Document; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and Canadian Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Canadian Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of Canadian Issuing Bank, Agent or any Canadian Lender, including any act or omission of a Governmental Authority. The rights and remedies of Canadian Issuing Bank under the Loan Documents shall be cumulative. Canadian Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Canadian Borrower are discharged with proceeds of any Canadian Letter of Credit.

(d)        In connection with its administration of and enforcement of rights or remedies under any Canadian Letters of Credit or Canadian LC Documents, Canadian Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in whatever form believed by Canadian Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Canadian Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Canadian Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Canadian Letters of Credit or Canadian LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

2.2.2             Canadian Letter of Credit Reimbursement; Canadian Participations .

(a)        If Canadian Issuing Bank honors any request for payment under a Canadian Letter of Credit, Canadian Borrower shall pay to Canadian Issuing Bank, on the same day (“ Canadian Reimbursement Date ”), the amount paid by Canadian Issuing Bank under such Canadian Letter of Credit, together with interest at the interest rate for Canadian Prime Rate Loans (if the Canadian Letter of Credit was denominated in Canadian Dollars) and Canadian Base Rate Loans (if the Canadian Letter of Credit was denominated in Dollars) from the Canadian Reimbursement Date until payment by Canadian Borrower. The obligation of Canadian Borrower to reimburse Canadian Issuing Bank for any payment made under a Canadian

 

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Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any Canadian Letter of Credit or the existence of any claim, setoff, defense or other right that Canadian Borrower may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, Canadian Borrower shall be deemed to have requested a Borrowing of Canadian Prime Rate Loans or Canadian Base Rate Loans, as applicable, in an amount necessary to pay all amounts due Canadian Issuing Bank in the currency in which the underlying Canadian Letter of Credit was issued on any Canadian Reimbursement Date and each Canadian Lender shall fund its Pro Rata share of such Borrowing whether or not the Canadian Revolver Commitments have terminated, an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied.

(b)        Each Canadian Lender hereby irrevocably and unconditionally purchases from Canadian Issuing Bank, without recourse or warranty, an undivided Pro Rata participation in all Canadian LC Obligations outstanding from time to time. Canadian Issuing Bank is issuing Canadian Letters of Credit in reliance upon this participation. If Canadian Borrower does not make a payment to Canadian Issuing Bank when due hereunder, Agent shall promptly notify Canadian Lenders and each Canadian Lender shall within one Business Day after such notice pay to Agent, for the benefit of Canadian Issuing Bank, such Canadian Lender’s Pro Rata share of such payment. Upon request by a Canadian Lender, Canadian Issuing Bank shall provide copies of Canadian Letters of Credit and Canadian LC Documents in its possession at such time.

(c)        The obligation of each Canadian Lender to make payments to Agent for the account of Canadian Issuing Bank in connection with Canadian Issuing Bank’s payment under a Canadian Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a Canadian Letter of Credit having been determined to be forged, fraudulent, noncompliant, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; any waiver by Canadian Issuing Bank of a requirement that exists for its protection (and not Canadian Borrower’s protection) or that does not materially prejudice Canadian Borrower; any honor of an electronic demand for payment even if a draft is required; any payment of an item presented after a Canadian Letter of Credit’s expiration date if authorized by applicable customs or practices; or any setoff or defense that a Canadian Facility Obligor may have with respect to any Canadian Facility Obligations. Canadian Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by Canadian Borrower or other Person of any obligations under any Canadian LC Documents. Canadian Issuing Bank does not make to Canadian Lenders any express or implied warranty, representation or guaranty with respect to any Canadian Letter of Credit, Canadian Facility Collateral, Canadian LC Document or Canadian Facility Obligor. Canadian Issuing Bank shall not be responsible to any Canadian Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any Canadian LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any Canadian Facility Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Canadian Facility Obligor.

(d)        No Canadian Issuing Bank Indemnitee shall be liable to any Canadian Lender or other Person for any action taken or omitted to be taken in connection with any

 

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Canadian Letter of Credit or Canadian LC Document except as a result of its gross negligence or willful misconduct. Canadian Issuing Bank may refrain from taking any action with respect to a Canadian Letter of Credit until it receives written instructions (and in its discretion, appropriate assurances) from the Canadian Lenders.

2.2.3       Canadian Letter of Credit Cash Collateral . Subject to Section 2.1.5 , if at any time (a) an Event of Default exists, (b) the Canadian Commitment Termination Date has occurred, or (c) the Revolver Termination Date is scheduled to occur within 20 Business Days, then Canadian Borrower shall, at Canadian Issuing Bank’s or Agent’s request, Cash Collateralize all outstanding Canadian Letters of Credit. Canadian Borrower shall, at Canadian Issuing Bank’s or Agent’s request at any time, Cash Collateralize the Fronting Exposure of any Defaulting Lender that is a Canadian Lender. If as a result of fluctuations in Spot Rates or otherwise the Dollar Equivalent of the Canadian LC Obligations exceeds the Canadian Letter of Credit Subline, the excess amount shall be payable by the Canadian Borrower within three (3) Business Days following demand by Agent or the Canadian Issuing Bank. If Canadian Borrower fails to provide any Cash Collateral as required hereunder, Canadian Lenders may (and shall upon direction of Agent) advance, as Canadian Revolver Loans, the amount of Cash Collateral required (whether or not the Canadian Revolver Commitments have terminated, a Overadvance exists or the conditions in Section 6 are satisfied).

2.3         UK Letter of Credit Facility .

2.3.1             Issuance of UK Letters of Credit . UK Issuing Bank shall issue UK Letters of Credit in Sterling or, at the option of the UK Borrower, Dollars or Euros, or any other currency acceptable to Agent and UK Issuing Bank, from time to time until 30 days prior to the Revolver Termination Date (or until the UK Commitment Termination Date, if earlier), on the terms set forth herein, including the following:

(a)        UK Borrower acknowledges that UK Issuing Bank’s issuance of any UK Letter of Credit is conditioned upon UK Issuing Bank’s receipt of a UK LC Application with respect to the requested UK Letter of Credit, as well as such other instruments and agreements as UK Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. UK Issuing Bank shall have no obligation to issue any UK Letter of Credit unless (i) UK Issuing Bank receives a UK LC Request and UK LC Application at least three Business Days prior to the requested date of issuance; (ii) each UK LC Condition is satisfied; and (iii) if a Defaulting Lender exists that is a UK Lender, such UK Lender or UK Borrower has entered into arrangements satisfactory to Agent and UK Issuing Bank to eliminate any Fronting Exposure associated with such UK Lender. If, in sufficient time to act, UK Issuing Bank receives written notice from Agent or Required Lenders that a UK LC Condition has not been satisfied, UK Issuing Bank shall not issue the requested UK Letter of Credit. Prior to receipt of any such notice, UK Issuing Bank shall not be deemed to have knowledge of any failure of UK LC Conditions.

(b)        UK Letters of Credit may be requested by UK Borrower to support obligations incurred in the Ordinary Course of Business, or as otherwise approved by Agent. Increase, renewal or extension of a UK Letter of Credit shall be treated as issuance of a new UK Letter of Credit, except that UK Issuing Bank may require a new UK LC Application in its discretion.

(c)        UK Borrower assumes all risks of the acts, omissions or misuses of any UK Letter of Credit by the beneficiary. In connection with issuance of any UK Letter of Credit, none of Agent, UK Issuing Bank or any UK Lender shall be responsible for the existence,

 

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character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a UK Letter of Credit or Document; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and UK Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any UK Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of UK Issuing Bank, Agent or any UK Lender, including any act or omission of a Governmental Authority. The rights and remedies of UK Issuing Bank under the Loan Documents shall be cumulative. UK Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against UK Borrower are discharged with proceeds of any UK Letter of Credit.

(d)        In connection with its administration of and enforcement of rights or remedies under any UK Letters of Credit or UK LC Documents, UK Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in whatever form believed by UK Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. UK Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. UK Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to UK Letters of Credit or UK LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

2.3.2             UK Letter of Credit Reimbursement; UK Participations .

(a)        If UK Issuing Bank honors any request for payment under a UK Letter of Credit, UK Borrower shall pay to UK Issuing Bank, on the same day (“ UK Reimbursement Date ”), the amount paid by UK Issuing Bank under such UK Letter of Credit, together with interest at the interest rate for UK Base Rate Loans from the UK Reimbursement Date until payment by UK Borrower. The obligation of UK Borrower to reimburse UK Issuing Bank for any payment made under a UK Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any UK Letter of Credit or the existence of any claim, setoff, defense or other right that UK Borrower may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, UK Borrower shall be deemed to have requested a Borrowing of UK Base Rate Loans in an amount necessary to pay all amounts due UK Issuing Bank in the currency in which the underlying UK Letter of Credit was issued on any UK Reimbursement Date and each UK Lender shall fund its Pro Rata share of such Borrowing whether or not the UK Revolver Commitments have terminated, a Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied.

(b)        Each UK Lender hereby irrevocably and unconditionally purchases from UK Issuing Bank, without recourse or warranty, an undivided Pro Rata participation in all UK LC

 

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Obligations outstanding from time to time. UK Issuing Bank is issuing UK Letters of Credit in reliance upon this participation. If UK Borrower does not make a payment to UK Issuing Bank when due hereunder, Agent shall promptly notify UK Lenders and each UK Lender shall within one Business Day after such notice pay to Agent, for the benefit of UK Issuing Bank, such UK Lender’s Pro Rata share of such payment. Upon request by a UK Lender, UK Issuing Bank shall provide copies of UK Letters of Credit and UK LC Documents in its possession at such time.

(c)        The obligation of each UK Lender to make payments to Agent for the account of UK Issuing Bank in connection with UK Issuing Bank’s payment under a UK Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a UK Letter of Credit having been determined to be forged, fraudulent, noncompliant, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; any waiver by UK Issuing Bank of a requirement that exists for its protection (and not UK Borrower’s protection) or that does not materially prejudice UK Borrower; any honor of an electronic demand for payment even if a draft is required; any payment of an item presented after a UK Letter of Credit’s expiration date if authorized by applicable customs or practices; or any setoff or defense that a UK Facility Obligor may have with respect to any UK Facility Obligations. UK Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by UK Borrower or other Person of any obligations under any UK LC Documents. UK Issuing Bank does not make to UK Lenders any express or implied warranty, representation or guaranty with respect to any UK Letter of Credit, UK Facility Collateral, UK LC Document or UK Facility Obligor. UK Issuing Bank shall not be responsible to any UK Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any UK LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any UK Facility Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any UK Facility Obligor.

(d)        No UK Issuing Bank Indemnitee shall be liable to any UK Lender or other Person for any action taken or omitted to be taken in connection with any UK Letter of Credit or UK LC Document except as a result of its gross negligence or willful misconduct. UK Issuing Bank may refrain from taking any action with respect to a UK Letter of Credit until it receives written instructions (and in its discretion, appropriate assurances) from the UK Lenders.

2.3.3       UK Letter of Credit Cash Collateral . Subject to Section 2.1.5 , if at any time (a) an Event of Default exists, (b) the UK Commitment Termination Date has occurred, or (c) the Revolver Termination Date is scheduled to occur within 20 Business Days, then UK Borrower shall, at UK Issuing Bank’s or Agent’s request, Cash Collateralize all outstanding UK Letters of Credit. UK Borrower shall, at UK Issuing Bank’s or Agent’s request at any time, Cash Collateralize the Fronting Exposure of any Defaulting Lender that is a UK Lender. If as a result of fluctuations in Spot Rates or otherwise the Dollar Equivalent of the UK LC Obligations exceeds the UK Letter of Credit Subline, the excess amount shall be payable by the UK Borrower within three (3) Business Days following demand by Agent or the UK Issuing Bank. If UK Borrower fails to provide any Cash Collateral as required hereunder, UK Lenders may (and shall upon direction of Agent) advance, as UK Revolver Loans, the amount of Cash Collateral required (whether or not the UK Revolver Commitments have terminated, a Overadvance exists or the conditions in Section 6 are satisfied).

 

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2.4         U.S. Letter of Credit Facility .

2.4.1             Issuance of U.S. Letters of Credit . U.S. Issuing Bank shall issue U.S. Letters of Credit (which, together with the Existing Letters of Credit, constitute U.S. Letters of Credit) in Dollars, or any other currency acceptable to Agent and U.S. Issuing Bank, from time to time until 30 days prior to the Revolver Termination Date (or until the U.S. Commitment Termination Date, if earlier), on the terms set forth herein, including the following:

(a)        Each U.S. Borrower acknowledges that U.S. Issuing Bank’s issuance of any U.S. Letter of Credit is conditioned upon U.S. Issuing Bank’s receipt of a U.S. LC Application with respect to the requested U.S. Letter of Credit, as well as such other instruments and agreements as U.S. Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. U.S. Issuing Bank shall have no obligation to issue any U.S. Letter of Credit unless (i) U.S. Issuing Bank receives a U.S. LC Request and U.S. LC Application at least three Business Days prior to the requested date of issuance; (ii) each U.S. LC Condition is satisfied; and (iii) if a Defaulting Lender exists that is a U.S. Lender, such U.S. Lender or U.S. Borrowers have entered into arrangements satisfactory to Agent and U.S. Issuing Bank to eliminate any Fronting Exposure associated with such U.S. Lender. If, in sufficient time to act, U.S. Issuing Bank receives written notice from Agent or Required Lenders that a U.S. LC Condition has not been satisfied, U.S. Issuing Bank shall not issue the requested U.S. Letter of Credit. Prior to receipt of any such notice, U.S. Issuing Bank shall not be deemed to have knowledge of any failure of U.S. LC Conditions.

(b)        U.S. Letters of Credit may be requested by a U.S. Borrower to support obligations incurred in the Ordinary Course of Business, or as otherwise approved by Agent. Increase, renewal or extension of a U.S. Letter of Credit shall be treated as issuance of a new U.S. Letter of Credit, except that U.S. Issuing Bank may require a new U.S. LC Application in its discretion.

(c)        U.S. Borrowers assume all risks of the acts, omissions or misuses of any U.S. Letter of Credit by the beneficiary. In connection with issuance of any U.S. Letter of Credit, none of Agent, U.S. Issuing Bank or any U.S. Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a U.S. Letter of Credit or Document; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a U.S. Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any U.S. Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of U.S. Issuing Bank, Agent or any U.S. Lender, including any act or omission of a Governmental Authority. The rights and remedies of U.S. Issuing Bank under the Loan Documents shall be cumulative. U.S. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against U.S. Borrowers are discharged with proceeds of any U.S. Letter of Credit.

 

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(d)        In connection with its administration of and enforcement of rights or remedies under any U.S. Letters of Credit or U.S. LC Documents, U.S. Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in whatever form believed by U.S. Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. U.S. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. U.S. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to U.S. Letters of Credit or U.S. LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

(e)        As of the Closing Date, each of the Existing Letters of Credit shall constitute, for all purposes of this Agreement and the other Loan Documents, a U.S. Letter of Credit issued and outstanding hereunder.

2.4.2             U.S. Letter of Credit Reimbursement; U.S. Participations .

(a)        If U.S. Issuing Bank honors any request for payment under a U.S. Letter of Credit, U.S. Borrowers shall pay to U.S. Issuing Bank, on the same day (“ U.S. Reimbursement Date ”), the amount paid by U.S. Issuing Bank under such U.S. Letter of Credit, together with interest at the interest rate for U.S. Base Rate Loans from the U.S. Reimbursement Date until payment by U.S. Borrowers. The obligation of U.S. Borrowers to reimburse U.S. Issuing Bank for any payment made under a U.S. Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any U.S. Letter of Credit or the existence of any claim, setoff, defense or other right that U.S. Borrowers may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, U.S. Borrowers shall be deemed to have requested a Borrowing of U.S. Base Rate Loans in an amount necessary to pay all amounts due U.S. Issuing Bank on any U.S. Reimbursement Date and each U.S. Lender shall fund its Pro Rata share of such Borrowing whether or not the U.S. Revolver Commitments have terminated, a U.S. Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied.

(b)        Each U.S. Lender hereby irrevocably and unconditionally purchases from U.S. Issuing Bank, without recourse or warranty, an undivided Pro Rata participation in all U.S. LC Obligations outstanding from time to time. U.S. Issuing Bank is issuing U.S. Letters of Credit in reliance upon this participation. If U.S. Borrowers do not make a payment to U.S. Issuing Bank when due hereunder, Agent shall promptly notify U.S. Lenders and each U.S. Lender shall within one Business Day after such notice pay to Agent, for the benefit of U.S. Issuing Bank, such U.S. Lender’s Pro Rata share of such payment. Upon request by a U.S. Lender, U.S. Issuing Bank shall provide copies of U.S. Letters of Credit and U.S. LC Documents in its possession at such time.

(c)        The obligation of each U.S. Lender to make payments to Agent for the account of U.S. Issuing Bank in connection with U.S. Issuing Bank’s payment under a U.S. Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a U.S. Letter of Credit having been determined to be forged, fraudulent, noncompliant, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; any waiver by U.S.

 

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Issuing Bank of a requirement that exists for its protection (and not a U.S. Borrower’s protection) or that does not materially prejudice a U.S. Borrower; any honor of an electronic demand for payment even if a draft is required; any payment of an item presented after a U.S. Letter of Credit’s expiration date if authorized by the UCC or applicable customs or practices; or any setoff or defense that a U.S. Facility Obligor may have with respect to any U.S. Facility Obligations. U.S. Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by any U.S. Borrower or other Person of any obligations under any U.S. LC Documents. U.S. Issuing Bank does not make to U.S. Lenders any express or implied warranty, representation or guaranty with respect to any U.S. Letter of Credit, U.S. Facility Collateral, U.S. LC Document or U.S. Facility Obligor. U.S. Issuing Bank shall not be responsible to any U.S. Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any U.S. LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any U.S. Facility Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any U.S. Facility Obligor.

(d)        No U.S. Issuing Bank Indemnitee shall be liable to any U.S. Lender or other Person for any action taken or omitted to be taken in connection with any U.S. Letter of Credit or U.S. LC Document except as a result of its gross negligence or willful misconduct. U.S. Issuing Bank may refrain from taking any action with respect to a U.S. Letter of Credit until it receives written instructions (and in its discretion, appropriate assurances) from the U.S. Lenders.

2.4.3             U.S. Letter of Credit Cash Collateral . Subject to Section 2.1.5 , if at any time (a) an Event of Default exists, (b) the U.S. Commitment Termination Date has occurred, or (c) the Revolver Termination Date is scheduled to occur within 20 Business Days, then U.S. Borrowers shall, at U.S. Issuing Bank’s or Agent’s request, Cash Collateralize all outstanding U.S. Letters of Credit. U.S. Borrowers shall, at U.S. Issuing Bank’s or Agent’s request at any time, Cash Collateralize the Fronting Exposure of any Defaulting Lender that is a U.S. Lender. If U.S. Borrowers fail to provide any Cash Collateral as required hereunder, U.S. Lenders may (and shall upon direction of Agent) advance, as U.S. Revolver Loans, the amount of Cash Collateral required (whether or not the U.S. Revolver Commitments have terminated, a U.S. Overadvance exists or the conditions in Section 6 are satisfied).

2.5         Resignation of Issuing Banks . An Issuing Bank may resign at any time upon notice to Agent and Borrower Agent. From the effective date of such resignation, such Issuing Bank shall have no obligation to issue, amend, renew, extend or otherwise modify any Letter of Credit, but shall continue to have all rights and other obligations of an Issuing Bank hereunder relating to any Letter of Credit issued by it prior to such date. Agent shall promptly appoint a replacement Issuing Bank, which, as long as no Default exists, shall be reasonably acceptable to Borrower Agent.

2.6         Effect of Amendment and Restatement . Upon the execution and delivery of this Agreement, the “Obligations”, under and as defined in the Original Loan Agreement, obligations and other liabilities (including, without limitation, interest, fees and out-of-pocket expenses accrued to the date hereof) governed by the Original Loan Agreement (collectively, the “ Original Obligations ”) shall continue to be in full force and effect, but shall be governed by the terms and conditions set forth in this Agreement and shall be deemed to be U.S. Facility Obligations hereunder. The Original Obligations, together with any and all additional U.S. Facility Obligations incurred by U.S. Facility Obligors hereunder or under any of the other Loan Documents, shall continue to be secured by all of the U.S. Security Documents provided in connection with the Original Loan Agreement (and, from and after the date hereof, shall be secured by all of the U.S. Security Documents provided in connection with this Agreement, whether on the Closing Date or otherwise), all as more specifically set forth in this

 

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Agreement and the U.S. Security Documents. Each U.S. Facility Obligor hereby reaffirms its obligations under each Loan Document (as defined in the Original Loan Agreement, collectively, the “ Original Loan Documents ”) to which it is party, as amended, restated, supplemented or otherwise modified by this Agreement and by the other Loan Documents delivered on the Closing Date. Each Borrower agrees that each such Original Loan Document shall remain in full force and effect following the execution and delivery of this Agreement and that all references to the “Loan Agreement” or “Credit Agreement” in such Original Loan Documents shall be deemed to refer to this Agreement. The execution and delivery of this Agreement shall constitute an amendment, replacement and restatement, but not a novation or repayment, of the Original Obligations.

SECTION 3

INTEREST, FEES AND CHARGES

3.1          Interest .

3.1.1             Rates and Payment of Interest .

(a)        The Canadian Facility Obligations shall bear interest (i) if a Canadian BA Rate Loan, at the Canadian BA Rate for the applicable Interest Period, plus the Applicable Margin pertaining to such Canadian BA Rate Loan; (ii) if a Canadian Prime Rate Loan, at the Canadian Prime Rate in effect from time to time, plus the Applicable Margin pertaining to such Canadian Prime Rate Loan; (iii) if a Canadian Base Rate Loan, at the Canadian Base Rate in effect from time to time, plus the Applicable Margin pertaining to such Canadian Base Rate Loan; (iv) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin pertaining to such LIBOR Loan; and (v) if any other Canadian Facility Obligation (including, to the extent permitted by law, interest not paid when due), at the Canadian Prime Rate in effect from time to time, plus the Applicable Margin for Canadian Prime Rate Loans. The UK Facility Obligations shall bear interest (i) if a UK Base Rate Loan, at the UK Base Rate in effect from time to time, plus the Applicable Margin pertaining to such UK Base Rate Loan; (ii) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin pertaining to such LIBOR Loan; and (iii) if any other UK Facility Obligation (including, to the extent permitted by law, interest not paid when due), at the UK Base Rate in effect from time to time, plus the Applicable Margin for UK Base Rate Loans. The U.S. Facility Obligations shall bear interest (i) if a U.S. Base Rate Loan, at the U.S. Base Rate in effect from time to time, plus the Applicable Margin pertaining to such U.S. Base Rate Loan; (ii) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin pertaining to such LIBOR Loan; and (iii) if any other U.S. Facility Obligation (including, to the extent permitted by law, interest not paid when due), at the U.S. Base Rate in effect from time to time, plus the Applicable Margin for U.S. Base Rate Loans.

(b)        During an Insolvency Proceeding with respect to any Borrower, or during any other Event of Default if Agent or Required Lenders in their discretion so elect, Obligations shall bear interest at the Default Rate (whether before or after any judgment). Each Borrower acknowledges that the cost and expense to Agent and Lenders due to an Event of Default are difficult to ascertain and that the Default Rate is fair and reasonable compensation for this.

(c)        Interest shall accrue from the date a Loan is advanced or Obligation is incurred or payable, until paid in full by Borrowers. Interest accrued on the Loans shall be due and payable in arrears, (i) on the first day of each month and (ii) on any date of prepayment, with

 

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respect to the principal amount of Loans being prepaid. In addition, interest accrued on the (i) Canadian Revolver Loans shall be due and payable on the Canadian Revolver Commitment Termination Date, (ii) UK Revolver Loans shall be due and payable on the UK Revolver Commitment Termination Date and (iii) U.S. Revolver Loans shall be due and payable on the U.S. Revolver Commitment Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the Loan Documents and, if no payment date is specified, shall be due and payable on demand . Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on demand .

(d)        Interest on the Loans shall be payable in the currency of the underlying Revolver Loan.

3.1.2             Application of LIBOR to Outstanding Loans .

(a)        Borrowers may on any Business Day, subject to delivery of a Notice of Conversion/Continuation and the other terms hereof, elect to convert any portion of any Base Rate Loan funded in Dollars to, or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR Loan. During any Default or Event of Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a LIBOR Loan.

(b)        Whenever Borrowers within a Borrower Group desire to convert or continue Loans as LIBOR Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m. (Local Time) at least three Business Days before the requested conversion or continuation date. Promptly after receiving any such notice, Agent shall notify each Applicable Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period (which shall be deemed to be 30 days if not specified). If, upon the expiration of any Interest Period for any LIBOR Loan, Borrower Agent shall have failed to deliver a Notice of Conversion/Continuation with respect thereto as required above, the applicable Borrower Group shall be deemed to have elected to convert such Loans into Base Rate Loans. Agent does not warrant or accept responsibility for, nor shall it have any liability with respect to, administration, submission or any other matter related to any rate described in the definition of LIBOR.

3.1.3       Application of Canadian BA Rate to Outstanding Loans .

(a)        Canadian Borrower may on any Business Day, subject to delivery of a Notice of Conversion/Continuation and the other terms hereof, elect to convert any portion of any Canadian Prime Rate Loan to, or to continue any Canadian BA Rate Loan at the end of its Interest Period as, a Canadian BA Rate Loan. During any Default or Event of Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a Canadian BA Rate Loan.

(b)        Whenever Canadian Borrower desires to convert or continue Loans as Canadian BA Rate Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m. (Local Time) at least three Business Days before the requested conversion or continuation date. Promptly after receiving any such notice, Agent shall notify each Canadian Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest

 

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Period (which shall be deemed to be 30 days if not specified). If, upon the expiration of any Interest Period for any Canadian BA Rate Loans, Borrower Agent shall have failed to deliver a Notice of Conversion/Continuation with respect thereto as required above, Canadian Borrower shall be deemed to have elected to convert such Loans into Canadian Prime Rate Loans.

3.1.4             Interest Periods . In connection with the making, conversion or continuation of any Interest Period Loans, the Borrower Agent, on behalf of the applicable Borrower Group, shall select an interest period (“ Interest Period ”) to apply, which Interest Period shall be 30, 60, or 90 days (if available from all Applicable Lenders); provided, however, that:

(a)        the Interest Period shall begin on the date the Loan is made or continued as, or converted into, an Interest Period Loan, and shall expire on the numerically corresponding day in the calendar month at its end;

(b)        if any Interest Period begins on a day for which there is no corresponding day in the calendar month at its end or if such corresponding day falls after the last Business Day of such month, then the Interest Period shall expire on the last Business Day of such month, and if any Interest Period would otherwise expire on a day that is not a Business Day, the period shall expire on the next Business Day; and

(c)        no Interest Period shall extend beyond the Revolver Termination Date (or, in the case of any Loan owing by (i) Canadian Borrower, the Canadian Revolver Commitment Termination Date, (ii) UK Borrower, the UK Revolver Commitment Termination Date or (iii) any U.S. Borrower, the U.S. Revolver Commitment Termination Date, in each case if earlier).

3.1.5             Interest Rate Not Ascertainable . If, due to any circumstance affecting the interbank market, Agent determines that adequate and fair means do not exist for ascertaining LIBOR or the Canadian BA Rate on any applicable date or that any Interest Period is not available on the basis provided herein, then Agent shall immediately notify Borrower Agent of such determination. Until Agent notifies Borrower Agent that such circumstance no longer exists, the obligation of Lenders to make affected LIBOR Loans or Canadian BA Rate Loans, as applicable, shall be suspended and no further Loans may be converted into or continued as such LIBOR Loans or such Canadian BA Rate Loans, as applicable.

3.2         Fees .

3.2.1             Unused Line Fee .

(a)         Canadian Unused Line Fee . Canadian Borrower shall pay to Agent, for the Pro Rata benefit of Canadian Lenders, a fee equal to the Unused Line Fee Rate times the amount by which the Canadian Revolver Commitments exceed the average daily Canadian Revolver Usage during any month. Such fee shall be payable in arrears, on the first day of each month and on the Canadian Commitment Termination Date.

(b)         UK Unused Line Fee . UK Borrower shall pay to Agent, for the Pro Rata benefit of UK Lenders, a fee equal to the Unused Line Fee Rate times the amount by which the UK Revolver Commitments exceed the average daily UK Revolver Usage during any month. Such fee shall be payable in arrears, on the first day of each month and on the UK Commitment Termination Date.

 

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(c)         U.S. Unused Line Fee . U.S. Borrowers shall pay to Agent, for the Pro Rata benefit of U.S. Lenders, a fee equal to the Unused Line Fee Rate times the amount by which the U.S. Revolver Commitments exceed the average daily U.S. Revolver Usage during any month. Such fee shall be payable in arrears, on the first day of each month and on the U.S. Commitment Termination Date.

3.2.2             LC Facility Fees .

(a)         Canadian LC Facility Fees . Canadian Borrower shall pay (i) to Agent, for the Pro Rata benefit of Canadian Lenders, a fee equal to the Applicable Margin in effect for Canadian BA Rate Loans times the average daily Stated Amount of Canadian Letters of Credit, which fee shall be payable monthly in arrears, on the first day of each month; (ii) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the Stated Amount of each Canadian Letter of Credit, which fee shall be payable monthly in arrears, on the first day of each month; and (iii) to Canadian Issuing Bank, for its own account, all reasonable and customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of Canadian Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (i) shall be increased by 2% per annum.

(b)         UK LC Facility Fees . UK Borrower shall pay (i) to Agent, for the Pro Rata benefit of UK Lenders, a fee equal to the Applicable Margin in effect for LIBOR Revolver Loans times the average daily Stated Amount of UK Letters of Credit, which fee shall be payable monthly in arrears, on the first day of each month; (ii) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the Stated Amount of each UK Letter of Credit, which fee shall be payable monthly in arrears, on the first day of each month; and (iii) to UK Issuing Bank, for its own account, all reasonable and customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of UK Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (i) shall be increased by 2% per annum.

(c)         U.S. LC Facility Fees . U.S. Borrowers shall pay (i) to Agent, for the Pro Rata benefit of U.S. Lenders, a fee equal to the Applicable Margin in effect for LIBOR Revolver Loans times the average daily Stated Amount of U.S. Letters of Credit, which fee shall be payable monthly in arrears, on the first day of each month; (ii) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the Stated Amount of each U.S. Letter of Credit, which fee shall be payable monthly in arrears, on the first day of each month; and (iii) to U.S. Issuing Bank, for its own account, all reasonable and customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of U.S. Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (i) shall be increased by 2% per annum.

3.2.3             Fee Letters . Borrowers shall pay all fees set forth in any fee letter executed in connection with this Agreement or the Original Loan Agreement.

3.3          Computation of Interest, Fees, Yield Protection . All interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 360 days, or, in the case of interest on Canadian Prime Rate Loans and Canadian BA Rate Loans, on the basis of a 365 day year. Each determination by Agent of any interest, fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund or proration. All fees payable under Section 3.2 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the

 

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use, forbearance or detention of money, except to the extent such treatment is inconsistent with any Applicable Law. A certificate as to amounts payable by Borrowers under Section 3.4 , 3.6 , 3.7 , 3.9 or 5.8 , submitted to Borrower Agent by Agent or the affected Lender shall be final, conclusive and binding for all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate party within 10 days following receipt of the certificate. For the purpose of complying with the Interest Act (Canada), it is expressly stated that where interest is calculated pursuant hereto at a rate based upon a period of time different from the actual number of days in the year (for the purposes of this Section, the “first rate”), the yearly rate or percentage of interest to which the first rate is equivalent is the first rate multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by the number of days in the shorter period, and the parties hereto acknowledge that there is a material distinction between the nominal and effective rates of interest and that they are capable of making the calculations necessary to compare such rates and that the calculations herein are to be made using the nominal rate method and not on any basis that gives effect to the principle of deemed reinvestment of interest. 5“Each Canadian Domiciled Obligor confirms that it understands and is able to calculate the rate of interest applicable to the Canadian Facility Obligations based on the methodology for calculating per annum rates provided in this Agreement. Each Canadian Domiciled Obligor irrevocably agrees not to plead or assert, whether by way of defense or otherwise, in any proceeding relating to this Agreement or any other Loan Document, that the interest payable under this Agreement and the calculation thereof has not been adequately disclosed to the Canadian Domiciled Obligors as required pursuant to Section 4 of the Interest Act (Canada).

3.4          Reimbursement Obligations . Borrowers shall pay all Extraordinary Expenses promptly upon request. Borrowers shall also reimburse Agent and Security Trustees, upon presentation of a summary statement, for all legal, accounting, appraisal, consulting, and other fees, costs and expenses incurred by it in connection with (a) negotiation and preparation of any Loan Documents, including any amendment or other modification thereof; (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of Agent’s or any Security Trustee’s Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to the limits of Section 10.1.1(b) , each inspection, audit or appraisal with respect to any Obligor or Collateral, whether prepared by Agent’s personnel or a third party. All legal, accounting and consulting fees shall be charged to Borrowers by Agent’s or the applicable Security Trustee’s professionals at their full hourly rates, regardless of any alternative fee arrangements that Agent, any Security Trustee, any Lender or any of their Affiliates may have with such professionals that otherwise might apply to this or any other transaction. Borrowers acknowledge that counsel may provide Agent or one or more of the Security Trustee’s with a benefit (such as a discount, credit or accommodation for other matters) based on counsel’s overall relationship with Agent or such Security Trustee(s), including fees paid hereunder. If, for any reason (including inaccurate reporting in any Borrower Materials), it is determined that a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall immediately pay to Agent, for the ratable benefit of Lenders, an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by Borrowers under this Section shall be due on demand.

3.5          Illegality . If any Lender determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender to make, maintain or fund Interest Period Loans, or to determine or charge interest rates based upon the Canadian BA Rate or LIBOR, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, a currency in the London interbank market or to purchase, sell, issue or otherwise transact bankers’ acceptances in the Canadian interbank market, then, on notice

 

 

5 Added per Third Amendment.

 

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thereof by such Lender to Agent, any obligation of such Lender to make or continue affected Interest Period Loans or to convert Floating Rate Loans to affected Interest Period Loans shall be suspended until such Lender notifies Agent that the circumstances giving rise to such determination no longer exist. Upon delivery of such notice, Borrower(s) of the affected Borrower Group shall prepay or, if applicable, convert all affected Interest Period Loans of such Lender to Floating Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Interest Period Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Interest Period Loans. Upon any such prepayment or conversion, Borrower(s) of the affected Borrower Group shall also pay accrued interest on the amount so prepaid or converted.

3.6          Inability to Determine Rates . Agent will promptly notify Borrower Agent and the Applicable Lenders if, in connection with any Loan or request for a Loan, (a) Agent determines that (i) deposits or bankers’ acceptances are not being offered to (A) with respect to LIBOR, banks in the London interbank Eurodollar market or (B) with respect to the Canadian BA Rate, banks in the Canadian interbank market, in each case for the applicable Loan amount or Interest Period, or (ii) adequate and reasonable means do not exist for determining LIBOR or the Canadian BA Rate for the Interest Period; or (b) Agent or Required Lenders determine for any reason that LIBOR or the Canadian BA Rate for the Interest Period does not adequately and fairly reflect the cost to the Applicable Lenders of funding the Loan. Thereafter, the Applicable Lenders’ obligations to make or maintain affected Interest Period Loans and utilization of the LIBOR or the Canadian BA Rate component (if affected) in determining any other interest rate applicable to any of the Obligations shall be suspended until Agent (upon instruction by Required Lenders) withdraws the notice. Upon receipt of such notice, Borrower Agent may revoke any pending request for a LIBOR Loan or Canadian BA Rate Loan or, failing that, will be deemed to have requested a Base Rate Loan or a Canadian Prime Rate Loan, respectively.

3.7         Increased Costs; Capital Adequacy .

3.7.1             Increased Costs Generally . If any Change in Law shall:

(a)        impose, modify or deem applicable any reserve, liquidity, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in calculating LIBOR or the Canadian BA Rate) or Issuing Bank;

(b)        subject any Recipient to Taxes (other than (i) Indemnified Taxes otherwise indemnifiable under Section 5.8 and (ii) Excluded Taxes) on its Loan, Letter of Credit, Commitment or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(c)        impose on any Lender, Issuing Bank or interbank market any other condition, cost or expense affecting any Loan, Letter of Credit, participation in LC Obligations, Commitment or Loan Document;

and the result thereof shall be to increase the cost to a Lender of making or maintaining any Loan or Commitment, or converting to or continuing any interest option for a Loan, or to increase the cost to a Lender or an Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by a Lender or an Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such Issuing Bank, the Borrower Group to which such Lender or such Issuing Bank has a Commitment will pay to it such additional amount(s) as will compensate it for the additional costs incurred or reduction suffered.

 

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3.7.2             Capital Requirements . If a Lender or Issuing Bank determines that a Change in Law affecting such Lender or Issuing Bank or its 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, Issuing Bank’s or holding company’s capital as a consequence of this Agreement, or such Lender’s or Issuing Bank’s Commitments, Loans, Letters of Credit or participations in LC Obligations or Loans, to a level below that which such Lender, Issuing Bank or holding company could have achieved but for such Change in Law (taking into consideration its policies with respect to capital adequacy), then from time to time Borrower Group to which such Lender or Issuing Bank has a Commitment will pay to such Lender or Issuing Bank, as the case may be, such additional amounts as will compensate it or its holding company for the reduction suffered.

3.7.3             Canadian BA Rate Loan and LIBOR Loan Reserves . If any Lender is required to maintain reserves with respect to liabilities or assets consisting of or including Canadian Dollar or Eurocurrency funds or deposits, the Borrower Group to which such Lender has a Commitment shall pay additional interest to such Lender on each Canadian BA Rate Loan and LIBOR Loan equal to the costs of such reserves allocated to the Loan by the Lender (as determined by it in good faith, which determination shall be conclusive). The additional interest shall be due and payable on each interest payment date for the Loan; provided, however, that if the Lender notifies Borrower Agent (with a copy to Agent) of the additional interest less than 10 days prior to the interest payment date, then such interest shall be payable 10 days after Borrower Agent’s receipt of the notice.

3.7.4             Compensation . Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of its right to demand such compensation, but Borrowers of a Borrower Group shall not be required to compensate a Lender to such Borrower Group or an Issuing Bank for any increased costs or reductions suffered more than nine months (plus any period of retroactivity of the Change in Law giving rise to the demand) prior to the date that such Lender or such Issuing Bank notifies Borrower Agent of the applicable Change in Law and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor.

3.8          Mitigation . If any Lender gives a notice under Section 3.5 or requests compensation under Section 3.7, or if Borrowers are required to pay any Indemnified Taxes or additional amounts with respect to a Lender under Section 5.8, then at the request of Borrower Agent, such Lender shall use reasonable efforts to designate a different Lending Office or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (a) would eliminate the need for such notice or reduce amounts payable or to be withheld in the future, as applicable; and (b) would not subject the Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to it or unlawful. Borrowers shall pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

3.9          Funding Losses . If for any reason (a) any Borrowing, conversion or continuation of an Interest Period Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment or conversion of an Interest Period Loan occurs on a day other than the end of its Interest Period, (c) any Borrower Group fail to repay an Interest Period Loan when required hereunder, or (d) a Lender (other than a Defaulting Lender) is required to assign an Interest Period Loan prior to the end of its Interest Period pursuant to Section 13.4 , then such Borrower Group shall pay to Agent its customary administrative charge and to each Lender all losses, expenses and fees arising from redeployment of funds or termination of match funding. For purposes of calculating amounts payable under this Section, a Lender shall be deemed to have funded an Interest Period Loan by a matching deposit or other borrowing in the London interbank market or any

 

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other applicable market for a comparable amount and period, whether or not the Loan was in fact so funded.

3.10          Maximum Interest . Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (“ maximum rate ”). If Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest shall be applied to the principal of the Obligations of the Borrower Group to which such excess interest relates or, if it exceeds such unpaid principal, refunded to such Borrower Group. In determining whether the interest contracted for, charged or received by Agent or a Lender exceeds the maximum rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. Without limiting the generality of the foregoing provisions of this Section 3.10 , if any provision of any of the Loan Documents would obligate any Canadian Domiciled Obligor to make any payment of interest with respect to the Canadian Facility Obligations in an amount or calculated at a rate which would be prohibited by Applicable Law or would result in the receipt of interest with respect to the Canadian Facility Obligations at a criminal rate (as such terms are construed under the Criminal Code (Canada)), then notwithstanding such provision, such amount or rates shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by the applicable recipient of interest with respect to the Canadian Facility Obligations at a criminal rate, such adjustment to be effected, to the extent necessary, as follows: (i) first, by reducing the amount or rates of interest required to be paid by the Canadian Domiciled Obligors to the applicable recipient under the Loan Documents; and (ii) thereafter, by reducing any fees, commissions, premiums and other amounts required to be paid by the Canadian Domiciled Obligors to the applicable recipient which would constitute interest with respect to the Canadian Facility Obligations for purposes of Section 347 of the Criminal Code (Canada). Notwithstanding the foregoing, and after giving effect to all adjustments contemplated thereby, if the applicable recipient shall have received an amount in excess of the maximum permitted by that section of the Criminal Code (Canada), then Canadian Domiciled Obligors shall be entitled, by notice in writing to Agent, to obtain reimbursement from the applicable recipient in an amount equal to such excess, and pending such reimbursement, such amount shall be deemed to be an amount payable by the applicable recipient to the applicable Canadian Domiciled Obligor. Any amount or rate of interest with respect to the Canadian Facility Obligations referred to in this Section 3.10 shall be determined in accordance with generally accepted actuarial practices and principles as an effective annual rate of interest over the term that any Canadian Revolver Loan to Canadian Borrower remains outstanding on the assumption that any charges, fees or expenses that fall within the meaning of “interest” (as defined in the Criminal Code (Canada)) shall, if they relate to a specific period of time, be prorated over that period of time and otherwise be prorated over the period from the Closing Date to the date of Full Payment of the Canadian Facility Obligations, and, in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by Agent shall be conclusive for the purposes of such determination.

 

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SECTION 4

LOAN ADMINISTRATION

4.1          Manner of Borrowing and Funding Revolver Loans .

4.1.1             Notice of Borrowing .

(a)         Revolver Loans .    Whenever a Borrower Group desires funding of Revolver Loans, Borrower Agent shall give Agent a Notice of Borrowing. Such notice must be received by Agent by 11:00 a.m. (Local Time) (i) on the requested funding date, in the case of Floating Rate Loans, and (ii) at least three Business Days prior to the requested funding date, in the case of Interest Period Loans. Notices received after such time shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the amount of the Borrowing, (B) the requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as a U.S. Base Rate Loan or LIBOR Loan, in the case of the U.S. Borrowers, or a Canadian Base Rate Loan, LIBOR Loan, Canadian Prime Rate Loan or Canadian BA Rate Loan, in the case of Canadian Borrower, or a LIBOR Loan or a UK Base Rate Loan, in the case of UK Borrower, (D) in the case of an Interest Period Loan, the applicable Interest Period (which shall be deemed to be 30 days if not specified) and (E) the Borrower Group Commitment under which such Borrowing is proposed to be made and, if such Borrowing is requested for Canadian Borrower, whether such Loan is to be denominated in Dollars or Canadian Dollars and, if such Borrowing is requested for UK Borrower, whether such Loan is to be denominated in Sterling, Dollars or Euros. Notwithstanding anything to the contrary contained herein, given that U.S. Borrowers elected to utilize FILO Loans on the Original Closing Date, all U.S. Revolver Loans outstanding from time to time up to the FILO Amount shall be deemed to be outstanding FILO Loans for all purposes under this Agreement.

(b)         Deemed Requests for Revolver Loans . Unless payment is otherwise made by a Borrower Group, the becoming due of any Obligation of the Obligor Group to which such Borrower Group belongs (whether principal, interest, fees or other charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and Secured Bank Product Obligations) shall be deemed to be a request for Revolver Loans by such Borrower Group on the due date in the amount due and shall bear interest at the per annum rate applicable hereunder to Base Rate Loans, in the case of such Obligations owing by any Obligor (other than a Canadian Domiciled Obligor), or to Canadian Prime Rate Loans, in the case of such Obligations owing by a Canadian Domiciled Obligor, and the Loan proceeds shall be disbursed as direct payment of such Obligation. In addition, Agent may, at its option, charge any such amount owed by any Obligor Group against any operating, investment or other account of a Borrower that is a member of such Obligor Group maintained with Agent or any of its Affiliates.

(c)         Controlled Disbursement Accounts . If any Borrower within a Borrower Group maintains a disbursement account with Agent or any of its Affiliates or branches, then presentation for payment in the account of a Payment Item when there are insufficient funds to cover it shall be deemed to be a request for Revolver Loans by such Borrower Group on the presentation date, in the amount of the Payment Item, and shall bear interest at the per annum rate applicable hereunder to Base Rate Loans, in the case of insufficient funds owing by any Obligor (other than a Canadian Domiciled Obligor), or to Canadian Prime Rate Loans, in the case of insufficient funds owing by a Canadian Domiciled Obligor. Proceeds of such Loan may be disbursed directly to such account.

 

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4.1.2             Fundings by Lenders . Except for Borrowings to be made as Swingline Loans, Agent shall endeavor to notify the Applicable Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by 1:00 p.m. on the proposed funding date for a Floating Rate Loan or by 3:00 p.m. at least two Business Days before a proposed funding of an Interest Period Loan. Each Applicable Lender shall fund its Pro Rata share of a Borrowing in immediately available funds not later than 3:00 p.m. on the requested funding date, unless Agent’s notice is received after the times provided above, in which case each Applicable Lender shall fund by 11:00 a.m. on the next Business Day. Subject to its receipt of such amounts from Applicable Lenders, Agent shall disburse the Borrowing proceeds as directed by Borrower Agent. Unless Agent shall have received (in sufficient time to act) written notice from an Applicable Lender that it does not intend to fund its share of a Borrowing, Agent may assume that such Applicable Lender has deposited or promptly will deposit its share with Agent, and Agent may disburse a corresponding amount to the Borrower or Borrowers within such Borrower Group. If an Applicable Lender’s share of a Borrowing or of a settlement under Section 4.1.3(d) is not received by Agent, then the Borrower or Borrowers within such Borrower Group agree to repay to Agent on demand the amount of such share, together with interest thereon from the date disbursed until repaid, at the rate applicable to the Borrowing. A Lender or Issuing Bank may fulfill its obligations under Loan Documents through one or more Lending Offices, and this shall not affect any obligation of Obligors under the Loan Documents or with respect to any Obligations.

4.1.3             Swingline Loans; Settlement .

(a)         Canadian Swingline Loans . To fulfill any request for a Canadian Base Rate Loan or a Canadian Prime Rate Loan hereunder, Canadian Swingline Lender may in its discretion, advance Canadian Swingline Loans to Canadian Borrower, up to an aggregate outstanding amount of $1,000,000. Canadian Swingline Loans shall constitute Canadian Revolver Loans for all purposes, except that payments thereon shall be made to Canadian Swingline Lender for its own account until the Canadian Lenders have funded their participations therein as provided below.

(b)         UK Swingline Loans . To fulfill any request for a UK Base Rate Loan, UK Swingline Lender may in its discretion, advance UK Swingline Loans to UK Borrower, up to an aggregate outstanding amount of $1,000,000. UK Swingline Loans shall constitute UK Revolver Loans for all purposes, except that payments thereon shall be made to UK Swingline Lender for its own account until the UK Lenders have funded their participations therein as provided below.

(c)         US Swingline Loans . To fulfill any request for a U.S. Base Rate Loan, U.S. Swingline Lender may in its discretion, advance U.S. Swingline Loans to U.S. Borrowers, up to an aggregate outstanding amount equal to the difference of (i) $10,000,000 less (ii) the aggregate outstanding amount of all Canadian Swingline Loans and UK Swingline Loans. U.S. Swingline Loans shall constitute U.S. Revolver Loans for all purposes, except that payments thereon shall be made to U.S. Swingline Lender for its own account until the U.S. Lenders have funded their participations therein as provided below.

(d)         Settlement of Loans . Settlement of Loans, including Swingline Loans, among Lenders and Agent shall take place on a date determined from time to time by Agent (but at least weekly, unless the settlement amount is de minimis), on a Pro Rata basis in accordance with the Settlement Report delivered by Agent to Lenders. Between settlement dates, Agent may in its discretion apply payments on Revolver Loans to Swingline Loans (such that payments on Canadian Revolver Loans are applied to Canadian Swingline Loans, payments on UK Revolver

 

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Loans are applied to UK Swingline Loans, and payments on U.S. Revolver Loans are applied to U.S. Swingline Loans) regardless of any designation by Borrower Agent or any provision herein to the contrary. Each Canadian Lender, UK Lender and U.S. Lender hereby purchases, without recourse or warranty, an undivided Pro Rata participation in all Canadian Swingline Loans, UK Swingline Loans and U.S. Swingline Loans, respectively, outstanding from time to time until settled. If a Swingline Loan cannot be settled among the Applicable Lenders, whether due to an Obligor’s Insolvency Proceeding or for any other reason, each Applicable Lender shall pay the amount of its participation in the Loan to the applicable Swingline Lender, in immediately available funds, within one Business Day after Agent’s request therefor. Lenders’ obligations to make settlements and to fund participations are absolute, irrevocable and unconditional, without offset, counterclaim or other defense, and whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section 6 are satisfied. When settling any Canadian Revolver Loans and any Canadian Swingline Loans pursuant to this Section 4.1.3(d) , Agent shall act through Bank of America (Canada).

4.1.4             Notices . Borrower Agent may request, convert or continue Loans, select interest rates and transfer funds based on telephonic instructions or e-mailed instructions to Agent, in each case to be confirmed in accordance with this Section 4.1.4 . Borrower Agent shall confirm each such request by prompt delivery to Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if applicable, but if it differs materially from the action taken by Agent or Lenders, the records of Agent and Lenders shall govern. Neither Agent nor any Lender shall have any liability for any loss suffered by a Borrower as a result of Agent or any Lender acting upon its understanding of telephonic or e-mailed instructions from a person believed in good faith by Agent or any Lender to be a person authorized to give such instructions on Borrower Agent’s behalf.

4.2          Defaulting Lender . Notwithstanding anything herein to the contrary:

4.2.1             Reallocation of Pro Rata Share; Amendments . For purposes of determining Lenders’ obligations or rights to fund, participate in or receive collections with respect to Loans and Letters of Credit (including existing Swingline Loans, Protective Advances and LC Obligations), Agent may in its discretion reallocate Pro Rata shares by excluding a Defaulting Lender’s Commitments and Loans from the calculation of shares. A Defaulting Lender shall have no right to vote on any amendment, waiver or other modification of a Loan Document, except as provided in Section 14.1.1(c) .

4.2.2             Payments; Fees . Agent may, in its discretion, receive and retain any amounts payable to a Defaulting Lender under the Loan Documents, and a Defaulting Lender shall be deemed to have assigned to Agent such amounts until all Obligations owing to Agent, non-Defaulting Lenders and other Secured Parties have been paid in full. Agent may use such amounts to cover the Defaulting Lender’s defaulted obligations, to Cash Collateralize such Lender’s Fronting Exposure, to readvance the amounts to Borrowers or to repay Obligations. A Lender shall not be entitled to receive any fees accruing hereunder while it is a Defaulting Lender and its unfunded Commitment shall be disregarded for purposes of calculating the unused line fee under Section 3.2.1 . If any LC Obligations owing to a Defaulting Lender are reallocated to other Lenders, fees attributable to such LC Obligations under Section 3.2.2 shall be paid to such Lenders. Agent shall be paid all fees attributable to LC Obligations that are not reallocated.

4.2.3             Status; Cure . Agent may determine in its discretion that a Lender constitutes a Defaulting Lender and the effective date of such status shall be conclusive and binding on all parties, absent manifest error. Borrowers, Agent and each Issuing Bank may agree in writing that a Lender has ceased to be a Defaulting Lender, whereupon Pro Rata shares shall be reallocated without exclusion of the

 

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reinstated Lender’s Commitments and Loans, and the Revolver Usage and other exposures under the Revolver Commitments shall be reallocated among Lenders and settled by Agent (with appropriate payments by the reinstated Lender, including payment of any breakage costs for reallocated Interest Period Loans) in accordance with the readjusted Pro Rata shares. Unless expressly agreed by Borrowers, Agent and each Issuing Bank, no reinstatement of a Defaulting Lender shall constitute a waiver or release of claims against such Lender. The failure of any Lender to fund a Loan, to make a payment in respect of LC Obligations or otherwise to perform obligations hereunder shall not relieve any other Lender of its obligations under any Loan Document. No Lender shall be responsible for default by another Lender. When settling exposures under the Canadian Revolver Commitments pursuant to this Section 4.2.3 , Agent shall act through Bank of America (Canada).

4.3         Number and Amount of Interest Period Loans; Determination of Rate . Each Borrowing of Interest Period Loans when made shall be in a minimum amount of $1,000,000 (or its Dollar Equivalent in any other currency or Cdn$1,000,000 as regards Canadian BA Rate Loans), plus an increment of $100,000 (or its Dollar Equivalent in any other currency or Cdn$100,000 as regards Canadian BA Rate Loans) in excess thereof. No more than 5 Borrowings of Interest Period Loans may be outstanding at any time with respect to the Borrower Group consisting of U.S. Borrowers, and no more than 2 Borrowings of Interest Period Loans may be outstanding at any time with respect to any other Borrower Group. A ll Interest Period Loans to a Borrower Group having the same length, beginning date of their Interest Periods and currency shall be aggregated together and considered one Borrowing for this purpose. Upon determining Canadian BA Rate or LIBOR for any Interest Period requested by Borrowers within a Borrower Group, Agent shall promptly notify Borrower Agent thereof by telephone or electronically and, if requested by Borrower Agent, shall confirm any telephonic notice in writing (including, without limitation, via a writing transmitted electronically).

4.4          Borrower Agent . Each Obligor hereby designates Parent Borrower (“ Borrower Agent ”) as its representative and agent for all purposes under the Loan Documents, including requests for and receipt of Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications, delivery of Borrower Materials, payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with Agent, any Security Trustee, any Issuing Bank or any Lender. Borrower Agent hereby accepts such appointment. Agent, Security Trustees, Issuing Banks and Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of borrowing) delivered by Borrower Agent on behalf of any Obligor. Agent, Security Trustees, Issuing Banks and Lenders may give any notice or communication with an Obligor to Borrower Agent on behalf of such Obligor. Each of Agent, Security Trustees Issuing Banks and Lenders shall have the right, in its discretion, to deal exclusively with Borrower Agent for all purposes under the Loan Documents. Each Obligor agrees that any notice, election, communication, delivery, representation, agreement, action, omission or undertaking on its behalf by Borrower Agent shall be binding upon and enforceable against it.

4.5          One Obligation . Without in any way limiting any Guarantee of any Obligor of the Obligations of any other Obligor, (a) the Canadian Revolver Loans, the Canadian LC Obligations and the other Canadian Facility Obligations owing by each Canadian Facility Obligor constitute one general obligation of the Canadian Facility Obligors and (unless otherwise expressly provided in any Loan Document) shall be secured by Agent’s or applicable Security Trustee’s Lien upon all Collateral of each Canadian Facility Obligor, provided that each Credit Party shall be deemed to be a creditor of, and the holder of a separate claim against, each Canadian Facility Obligor to the extent of any Canadian Facility Obligations jointly or severally owed by such Canadian Facility Obligor to such Credit Party, (b) the UK Revolver Loans, the UK LC Obligations and the other UK Facility Obligations owing by each UK

 

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Facility Obligor constitute one general obligation of the UK Facility Obligors and (unless otherwise expressly provided in any Loan Document) shall be secured by Agent’s and UK Security Trustee’s Lien upon all Collateral of each UK Facility Obligor, provided that each Credit Party shall be deemed to be a creditor of, and the holder of a separate claim against, each UK Facility Obligor to the extent of any UK Facility Obligations owed by such UK Facility Obligor to such Credit Party and (c) the U.S. Revolver Loans, the U.S. LC Obligations and the other U.S. Facility Obligations owing by each U.S. Facility Obligor constitute one general obligation of the U.S. Facility Obligors and (unless otherwise expressly provided in any Loan Document) shall be secured by Agent’s or the applicable Security Trustee’s Lien upon all Collateral of each U.S. Facility Obligor, provided that each Credit Party shall be deemed to be a creditor of, and the holder of a separate claim against, each U.S. Facility Obligor to the extent of any U.S. Facility Obligations jointly or severally owed by such U.S. Facility Obligor to such Credit Party.

4.6          Effect of Termination . On the effective date of the termination of all Commitments, all Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products; provided that (a) on the effective date of the termination of all Canadian Revolver Commitments, all Canadian Facility Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products provided for the account of Canadian Domiciled Obligors and their Affiliates domiciled in Canada, (b) on the effective date of the termination of all UK Revolver Commitments, all UK Facility Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products provided for the account of UK Domiciled Obligors and their Affiliates domiciled in the UK, and (c) on the effective date of the termination of all U.S. Revolver Commitments, all U.S. Facility Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products provided for the account of U.S. Domiciled Obligors and their Affiliates domiciled in the U.S. Until Full Payment of all Obligations, all undertakings of Borrowers contained in the Loan Documents shall continue, and Agent and Security Trustees shall retain their Liens in the Collateral and all of their rights and remedies under the Loan Documents. Agent and Security Trustees shall not be required to terminate their Liens unless Agent or a Security Trustee receives Cash Collateral or a written agreement, in each case satisfactory to Agent, protecting Agent and Lenders from dishonor or return of any Payment Item previously applied to the Obligations. Sections 2.2 , 2.3 , 2.4 , 3.4 , 3.6 , 3.7 , 3.9 , 5.4 , 5.8 , 5.9 , 12 , 14.2 , this Section, and each indemnity or waiver given by an Obligor or Lender in any Loan Document, shall survive Full Payment of the Obligations.

4.7         Limitation on Borrowings .

4.7.1    Notwithstanding anything to the contrary contained herein, each of the parties hereto acknowledge and agree that maximum principal amount of U.S. Revolver Loans and/or U.S. LC Obligations which Parent Borrower shall be entitled to have outstanding at any time under this Agreement for its own account (and not for the account of any other U.S. Borrower) shall not exceed $2,500,000 in the aggregate; it being understood and agreed by each of the parties hereto that any Borrowing and/or Letter of Credit requested by Parent Borrower in its capacity as Borrower Agent which exceed the above noted limitation shall be Borrowings and/or Letters of Credit for the account of one or more of the other Borrowers and not for the account of Parent Borrower; provided that nothing set forth in this Section shall in any way affect or limit the duties and obligations of each Borrower with respect to the Obligations set forth in Section 5.10 .

4.7.2    Agent and Lenders shall have the right, at any time in their Permitted Discretion, to condition Loans and Letters of Credit upon a separate calculation of borrowing availability for each Borrower and to restrict the disbursement and use of Loans and Letters of Credit to a Borrower based on that calculation.

 

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SECTION 5

PAYMENTS

5.1          General Payment Provisions .    All payments of Obligations shall be made without offset, counterclaim or defense of any kind, free and clear of (and without deduction for) any Taxes, and in immediately available funds, not later than 12:00 (Local Time) on the due date. Any payment after such time shall be deemed made on the next Business Day. Any payment of an Interest Period Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Section 3.9 . Borrowers agree that Agent shall have the continuing, exclusive right to apply and reapply payments and proceeds of Collateral against the Obligations, in such manner as Agent deems advisable (so long as such application or reapplication could not reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section 956 of the Code), but whenever possible, any prepayment of Loans shall be applied first to Floating Rate Loans and then to Interest Period Loans. All payments with respect to any Obligation shall be made in the currency of the underlying Obligation. Any payment made contrary to the requirements of the preceding sentence shall be subject to the terms of Section 5.11 . If any payment under the Loan Documents shall be stated to be due on a day other than a Business Day, the due date shall be extended to the next Business Day and such extension of time shall be included in any computation of interest and fees.

5.2          Repayment of Revolver Loans . Canadian Facility Obligations shall be due and payable in full on the Canadian Commitment Termination Date, UK Facility Obligations shall be due and payable in full on the UK Commitment Termination Date and U.S. Facility Obligations shall be due and payable in full on the U.S. Commitment Termination Date, in each case unless payment is sooner required hereunder. Revolver Loans may be prepaid from time to time, without penalty or premium. Subject to Section 2.1.5 , if an Overadvance exists at any time (including, without limitation, with respect to the U.S. Revolver Loans as the result of a scheduled reduction in the FILO Amount), the Borrower Group owing such Overadvance shall, on the sooner of Agent’s demand or the first Business Day after any Borrower of such Borrower Group has knowledge thereof, repay Revolver Loans in an amount sufficient to reduce Revolver Usage of such Borrower Group to the Borrowing Base of such Borrower Group. If any Asset Disposition includes the disposition of Inventory, Accounts or Revolver Priority Collateral, the Obligor Group that includes the Obligor(s) that made such Asset Disposition shall apply the Net Proceeds of such Asset Disposition to repay the Revolver Loans of the Borrower Group(s) included within such Obligor Group (if more than one Borrower Group is included in such Obligor Group, such Net Proceeds shall be applied ratably to repay the Revolver Loans of such Borrower Groups, but in no event shall Net Proceeds of Asset Dispositions made by Foreign Obligors be applied to the Obligations of the U.S. Borrowers if such application could reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section 956 of the Code) equal to the greater of (a) the net book value of such Inventory, Accounts and Revolver Priority Collateral, or (b) the reduction in Borrowing Base of such Borrower Group(s) resulting from the disposition (if there is no such reduction, the amount described in this clause (b) shall be deemed to be zero).

5.3          Payment of Other Obligations . Obligations other than Loans, including LC Obligations and Extraordinary Expenses, shall be paid by Borrowers as provided in the Loan Documents or, if no payment date is specified, on demand.

5.4          Marshaling; Payments Set Aside . None of Agent, Security Trustees, Issuing Banks or Lenders shall be under any obligation to marshal any assets in favor of any Obligor or against any Obligations. If any payment by or on behalf of any Borrower or Borrowers is made to Agent, any Security Trustee, any Issuing Bank or any Lender, or if Agent, any applicable Security Trustee, any

 

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Issuing Bank or any Lender exercises a right of setoff, and any of such payment or setoff is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Agent, a Security Trustee, an Issuing Bank or a Lender in its discretion) to be repaid to a Creditor Representative or any other Person, then the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment or setoff had not occurred.

5.5         Application and Allocation of Payments .

5.5.1             Application . Payments made by a Borrower Group (or any member thereof) hereunder shall be applied (a) first, as specifically required hereby; (b) second, to Obligations of such Borrower Group then due and owing; (b) third, to other Obligations specified by Borrower Agent; and (c) fourth, as determined by Agent in its Permitted Discretion. Any payment of the U.S. Revolver Loans shall be applied first to the U.S. Revolver Loans that are not FILO Loans until repaid in full, and then to FILO Loans.

5.5.2             Post-Default Allocation . Notwithstanding anything in any Loan Document to the contrary, but subject to the Intercreditor Agreement, during an Event of Default, monies to be applied to the Obligations, whether arising from payments by Obligors, realization on Collateral, setoff or otherwise, shall be allocated as follows:

(a)         with respect to monies, payments, Property or Collateral of or from the Canadian Domiciled Obligors, together with any allocations pursuant to subclause (x) of any other clause of this Section 5.5.2 :

(i)           first , to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent or any Security Trustee, to the extent owing by any of the Canadian Domiciled Obligors;

(ii)          second , to all amounts owing to Canadian Swingline Lender or Agent on Canadian Swingline Loans, Canadian Protective Advances, and Canadian Revolver Loans and participations that a Defaulting Lender has failed to settle or fund;

(iii)         third , to all amounts owing to Canadian Issuing Bank on Canadian LC Obligations;

(iv)         fourth , to all Canadian Facility Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing by any of the Canadian Domiciled Obligors to Lenders (exclusive of any UK Facility Obligations which are guaranteed by the Canadian Domiciled Obligors);

(v)          fifth , to all Canadian Facility Obligations (other than Secured Bank Product Obligations) constituting interest owing by any of the Canadian Domiciled Obligors (exclusive of any UK Facility Obligations which are guaranteed by the Canadian Domiciled Obligors);

(vi)         sixth , to Cash Collateralize all Canadian LC Obligations;

(vii)        seventh , to all Canadian Revolver Loans, and to Secured Bank Product Obligations of Canadian Domiciled Obligors arising under Hedging Agreements (including Cash Collateralization thereof, but excluding any such Secured Bank Product

 

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Obligation which is a UK Facility Obligation guaranteed by any of the Canadian Domiciled Obligors) up to the amount of Canadian Availability Reserves existing therefor;

(viii)       eighth , to all other Secured Bank Product Obligations of any of the Canadian Domiciled Obligors (but excluding any such Secured Bank Product Obligation which is a UK Facility Obligation guaranteed by any of the Canadian Domiciled Obligors);

(ix)          ninth , to all other Canadian Facility Obligations (exclusive of any UK Facility Obligations which are guaranteed by any of the Canadian Domiciled Obligors); and Obligations.

(x)           tenth , to be applied ratably to all other Foreign Facility

(b)         with respect to monies, payments, Property or Collateral of or from the UK Domiciled Obligors, together with any allocations pursuant to subclause (x) of any other clause of this Section 5.5.2 :

(i)           first , to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent or any Security Trustee, to the extent owing by any of the UK Domiciled Obligors;

(ii)          second , to all amounts owing to UK Swingline Lender or Agent on UK Swingline Loans, UK Protective Advances, and UK Revolver Loans and participations that a Defaulting Lender has failed to settle or fund;

(iii)         third , to all amounts owing to UK Issuing Bank on UK LC Obligations;

(iv)         fourth , to all UK Facility Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing by any of the UK Domiciled Obligors to Lenders (exclusive of any Canadian Facility Obligations which are guaranteed by the UK Domiciled Obligors);

(v)          fifth , to all UK Facility Obligations (other than Secured Bank Product Obligations) constituting interest owing by any of the UK Domiciled Obligors (exclusive of any Canadian Facility Obligations which are guaranteed by the UK Domiciled Obligors);

(vi)         sixth , to Cash Collateralize all UK LC Obligations;

(vii)        seventh , to all UK Revolver Loans, and to Secured Bank Product Obligations of UK Domiciled Obligors arising under Hedging Agreements (including Cash Collateralization thereof, but excluding any such Secured Bank Product Obligation which is a Canadian Facility Obligation guaranteed by any of the UK Domiciled Obligors) up to the amount of UK Availability Reserves existing therefor;

(viii)       eighth , to all other Secured Bank Product Obligations of any of the UK Domiciled Obligors (but excluding any such Secured Bank Product Obligation

 

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which is a Canadian Facility Obligation guaranteed by any of the UK Domiciled Obligors);

(ix)         ninth , to all other UK Facility Obligations (exclusive of any Canadian Facility Obligations which are guaranteed by any of the UK Domiciled Obligors); and

(x)          tenth , to be applied ratably to all other Foreign Facility Obligations.

(c)         with respect to monies, payments, Property or Collateral of or from the U.S. Obligors, together with any allocations pursuant to subclause (x) of any other clause of this Section 5.5.2 :

(i)           first , to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent or any Security Trustee, to the extent owing by any of the U.S. Obligors;

(ii)          second , to all amounts owing to U.S. Swingline Lender or Agent on U.S. Swingline Loans, U.S. Protective Advances, and U.S. Revolver Loans and participations that a Defaulting Lender has failed to settle or fund;

(iii)         third , to all amounts owing to U.S. Issuing Bank on U.S. LC Obligations;

(iv)         fourth , to all U.S. Facility Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing by any of the U.S. Obligors to Lenders (exclusive of any Foreign Facility Obligations which are guaranteed by the U.S. Obligors);

(v)          fifth , to all U.S. Facility Obligations (other than Secured Bank Product Obligations) constituting interest owing by any of the U.S. Obligors (exclusive of any Foreign Facility Obligations which are guaranteed by the U.S. Obligors);

(vi)         sixth , to Cash Collateralize all U.S. LC Obligations;

(vii)        seventh , to all U.S. Revolver Loans, and to Secured Bank Product Obligations of U.S. Obligors arising under Hedging Agreements (including Cash Collateralization thereof, but excluding any such Secured Bank Product Obligation which is a Foreign Facility Obligation guaranteed by any of the U.S. Obligors) up to the amount of U.S. Availability Reserves existing therefor;

(viii)       eighth , to all other Secured Bank Product Obligations of any of the U.S. Obligors (but excluding any such Secured Bank Product Obligation which is a Foreign Facility Obligation guaranteed by any of the U.S. Obligors);

(ix)         ninth , to all other U.S. Facility Obligations (exclusive of any Foreign Facility Obligations which are guaranteed by any of the U.S. Obligors); and

(x)          tenth , to be applied ratably to all other Obligations.

 

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(d)         with respect to monies, payments, Property or Collateral of or from the Foreign Obligors that are neither Canadian Domiciled Obligors nor UK Domiciled Obligors, in each case to be applied ratably:

(i)          first , to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent or any Security Trustee, to the extent owing by Foreign Obligors;

(ii)         second , (A) to all amounts owing to Canadian Swingline Lender or Agent on Canadian Swingline Loans, Canadian Protective Advances, Canadian Revolver Loans and participations that a Defaulting Lender has failed to settle or fund and (B) to all amounts owing to UK Swingline Lender or Agent on UK Swingline Loans, UK Protective Advances, UK Revolver Loans and participations that a Defaulting Lender has failed to settle or fund;

(iii)         third , to all amounts owing to Canadian Issuing Bank on Canadian LC Obligations and all amounts owing to UK Issuing Bank on UK LC Obligations;

(iv)         fourth , to all Foreign Facility Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing by any of the Foreign Obligors to Lenders;

(v)          fifth , to all Foreign Facility Obligations (other than Secured Bank Product Obligations) constituting interest owing by any of the Foreign Obligors;

(vi)          sixth , to Cash Collateralize all Canadian LC Obligations and all UK LC Obligations;

(vii)         seventh , to all Canadian Revolver Loans, all UK Revolver Loans and to Secured Bank Product Obligations of Foreign Obligors arising under Hedging Agreements (including Cash Collateralization thereof) up to the amount of Canadian Availability Reserves or UK Availability Reserves, as applicable, existing therefor;

(viii)        eighth , to all other Secured Bank Product Obligations of any of the Foreign Obligors; and

(ix)          ninth , to be applied ratably to all other Foreign Facility Obligations.

Amounts shall be applied to payment of each category of Obligations set forth within subsections (a) through (d) above, as applicable, only after Full Payment of amounts payable from time to time under all preceding categories set forth within such subsection. If amounts are insufficient to satisfy a category, they shall be paid ratably among outstanding Obligations in the category. Monies and proceeds obtained from an Obligor shall not be applied to its Excluded Swap Obligations, but appropriate adjustments shall be made with respect to amounts obtained from other Obligors to preserve the allocations in any applicable category. Agent shall have no obligation to calculate the amount of any Secured Bank Product Obligation and may request a reasonably detailed calculation thereof from a Secured Bank Product Provider. If the provider fails to deliver the calculation within five days following request, Agent may assume the amount is zero.

 

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The allocations set forth in this Section are solely to determine the rights and priorities among Secured Parties, and may be changed by agreement of the affected Secured Parties, without the consent of any Obligor (so long as such change could not reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section 956 of the Code). This Section is not for the benefit of or enforceable by any Obligor, and each Borrower irrevocably waives the right to direct the application of any payments or Collateral proceeds subject to this Section. Any amount applied to the U.S. Revolver Loans shall be applied first to the U.S. Revolver Loans that are not FILO Loans until repaid in full, and then to FILO Loans.

5.5.3             Erroneous Application . Agent shall not be liable for any application of amounts made by it in good faith and, if any such application is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should have been made shall be to recover the amount from the Person that actually received it (and, if such amount was received by a Secured Party, the Secured Party agrees to return it).

5.6          Dominion Account . The ledger balance in the Dominion Accounts of each Borrower as of the end of a Business Day shall be applied to the Obligations of the Obligor Group to which such Borrower belongs at the beginning of the next Business Day, during any Dominion Trigger Period. If a credit balance results from such application, it shall not accrue interest in favor of Borrowers and shall be made available to Borrowers of the applicable Borrower Group as long as no Default exists.

5.7          Account Stated . Agent shall maintain, in accordance with its customary practices, loan account(s) evidencing the Debt of Borrowers hereunder. Any failure of Agent to record anything in a loan account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing hereunder. Entries made in a loan account shall constitute presumptive evidence of the information contained therein. If any information contained in a loan account is provided to or inspected by any Person, the information shall be conclusive and binding on such Person for all purposes absent manifest error, except to the extent such Person notifies Agent in writing within 30 days after receipt or inspection that specific information is subject to dispute.

5.8         Taxes .

5.8.1             Payments Free of Taxes; Obligation to Withhold; Tax Payment .

(a)        All payments of Obligations by Obligors shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If Applicable Law requires the deduction or withholding of any Tax from any such payment by Agent or an Obligor, then Agent or such Obligor shall be entitled to make such deduction or withholding based on information and documentation provided pursuant to Section 5.9 .

(b)        If Agent or any Obligor is required by the Code to withhold or deduct Taxes, including backup withholding and withholding taxes, from any payment, then (i) Agent shall pay the full amount that it determines is to be withheld or deducted to the relevant Governmental Authority pursuant to the Code, and (ii) to the extent the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(c)        If Agent or any Obligor is required by any Applicable Law other than the Code to withhold or deduct Taxes, including backup withholding and withholding taxes, from any payment, then (i) Agent or such Obligor, as required by Applicable Law, shall pay the full amount that it determines is to be withheld or deducted to the relevant Governmental Authority pursuant to such Applicable Law, and (ii) to the extent the withholding or deduction is made on

 

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account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

5.8.2             Payment of Other Taxes . Without limiting the foregoing, Borrowers shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at Agent’s option, timely reimburse Agent for payment of, any Other Taxes.

5.8.3             Tax Indemnification .

(a)        Each Obligor shall indemnify and hold harmless, on a joint and several basis, each Lender, each Security Trustee and Agent against any Indemnified Taxes (including those imposed or asserted on or attributable to amounts payable under this Section) payable or paid by a Lender, a Security Trustee or Agent or required to be withheld or deducted from a payment to a Lender, a Security Trustee or Agent, in each case with respect to any Obligations of the Obligor Group to which such Obligor belongs, 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. The applicable Obligor shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate as to the amount of such payment or liability delivered to Borrower Agent by a Lender, a Security Trustee (in each of the foregoing cases, with a copy to Agent) or Agent on its own behalf shall be conclusive absent manifest error.

(b)        Each Lender shall indemnify and hold harmless, on a several basis, (i) Agent against any Indemnified Taxes attributable to such Lender (but only to the extent Borrowers have not already paid or reimbursed Agent therefor and without limiting Borrowers’ obligation to do so), (ii) Agent and Borrowers, as applicable, against any Taxes attributable to such Lender’s failure to maintain a Participant register as required hereunder, and (iii) Agent and Borrowers, as applicable, against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Agent or a Borrower in connection with any Obligations, 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. Each Lender shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate as to the amount of such payment or liability delivered to any Lender by Agent or the Borrower Agent shall be conclusive absent manifest error.

5.8.4       United Kingdom Tax Matters . The provisions of Section 5.8 (other than this Section 5.8.4 ) and Section 5.9.1 shall not apply, and instead the provisions of this Section 5.8.4 shall apply, to any advance under any Loan Document to UK Borrower (the “ Relevant Borrower ” for the purposes of this Section 5.8.4 ). For the avoidance of doubt, this Section 5.8.4 shall not apply to any advance under any Loan Document to any Borrower other than UK Borrower.

(a)         Definitions . Solely for the purposes of this Section 5.8.4 , the following terms shall have the following meanings:

FATCA Deduction : a deduction or withholding from a payment under a Loan Document required by FATCA.

 

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Qualifying Lender :

(a)        a Lender (other than a Lender within clause (b) of the definition of Qualifying Lender) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Loan Document and is:

 

  (i)

a Lender;

(A)        that is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Loan Document; or

(B)        in respect of an advance under a Loan Document by a Person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that such advance under a Loan Document was made,

and, in each case, which is within the charge to United Kingdom Corporation Tax with respect to any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or

 

  (ii)

a Lender which is:

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

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

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

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

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

 

  (iii)

a Treaty Lender; or

(b)        a building society (as defined for the purposes of section 880 of the ITA) making an advance.

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

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

(b)        a partnership each member of which is:

 

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

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

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

Tax Credit : a credit against, relief or remission for, or repayment of, any Tax.

Tax Deduction : a deduction or withholding for or on account of Tax from a payment under a Loan Document, other than a FATCA Deduction.

Tax Payment : either the increase in a payment made by an Obligor to a Lender or Agent under Section 5.8.4(b) or 5.8.4(c) .

Treaty State : a jurisdiction having a Treaty with the United Kingdom which makes provision for full exemption from Tax imposed by the United Kingdom on interest.

UK Non-Bank Lender :

(a)        a Lender (which falls within clause (a)(ii) of the definition of Qualifying Lender) which is a party to this Agreement and which has provided a Tax Confirmation to Agent; and

(b)        where a Lender becomes a party after the Closing Date, an Eligible Assignee which gives a Tax Confirmation in the Assignment which it executes on becoming a party hereunder.

(b)         Tax Gross-up .

(i)        Each Relevant Borrower shall make all payments to be made by it under any Loan Document without any Tax Deduction unless a Tax Deduction is required by Applicable Law.

(ii)        A Relevant Borrower shall, promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify Agent accordingly. Similarly, a Lender shall promptly notify Agent on becoming so aware in respect of a payment payable to that Lender. If Agent receives such notification from a Lender it shall notify the Relevant Borrower.

(iii)        If a Tax Deduction is required by Applicable Law to be made by a Relevant Borrower, the amount of the payment due from that Relevant Borrower shall be increased to an amount which (after making any Tax Deduction) is equal to the payment which would have been made by the Relevant Borrower if no Tax Deduction had been required.

(iv)        A payment shall not be increased under clause (iii) above by reason of a Tax Deduction on account of Taxes imposed by the United Kingdom if, on the date on which the payment falls due:

 

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(A)        the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or

(B)        the relevant Lender is a Qualifying Lender solely by virtue of clause (a)(ii) of the definition of Qualifying Lender, and:

(1)        an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a “ Direction ”) under section 931 of the ITA which relates to the payment and that Lender has received from the Relevant Borrower making the payment a certified copy of that Direction; and

(2)        the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or

(C)        the relevant Lender is a Qualifying Lender solely by virtue of clause (a)(ii) of the definition of Qualifying Lender and:

(1)        the relevant Lender has not given a Tax Confirmation to the Relevant Borrower; and

(2)        the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Relevant Borrower, on the basis that the Tax Confirmation would have enabled the Relevant Borrower to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA; or

(D)        the relevant Lender is a Treaty Lender and the Relevant Borrower making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under clause (b)(vii) , (b)(xi) or (f)(i) (as applicable) below.

(v)        If a Relevant Borrower is required to make a Tax Deduction, that Relevant Borrower shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(vi)        Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Relevant Borrower making that Tax Deduction shall deliver to Agent for the benefit of the Lender entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

(vii)        A Treaty Lender and each Relevant Borrower which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Relevant Borrower to obtain authorization to make that payment without a Tax Deduction.

 

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(viii)      Nothing in clause (b)(vii) above shall require a Treaty Lender to:

(A)        register under the HMRC DT Treaty Passport scheme;

(B)         apply the HMRC DT Treaty Passport scheme to any advance if it has so registered; or

(C)        file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport Scheme to apply to this Agreement in accordance with subsections (b)(xi) or (f)(i) (HMRC DT Treaty Passport scheme confirmation) and the Relevant Borrower making that payment has not complied with its obligations under subsections (b)(xii) or (f)(ii) (HMRC DT Treaty Passport scheme confirmation).

(ix)       A UK Non-Bank Lender which becomes a party on the day on which this Agreement is entered into gives a Tax Confirmation to Agent by entering into this Agreement.

(x)        A UK Non-Bank Lender shall promptly notify Agent and the Relevant Borrower if there is any change in the position from that set out in the Tax Confirmation.

(xi)       A Treaty Lender which becomes a party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of Agent and without liability to any Relevant Borrower) by notifying Agent and the Relevant Borrower of its scheme reference number and its jurisdiction of Tax residence.

(xii)      Where a Lender notifies Agent and the Relevant Borrower as described in clause (b)(xi) above each Relevant Borrower shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date of this Agreement and shall promptly provide the Lender with a copy of that filing.

(xiii)      If a Lender has not included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with clause (b)(xi) above or clause (f)(i) (HMRC DT Treaty Passport scheme confirmation), no Relevant Borrower shall file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lender’s advance or its participation in any advance.

(c)         Tax Indemnity .

(i)         The Relevant Borrowers shall (within three (3) Business Days of demand by Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Taxes by that Protected Party in respect of a Loan Document.

(ii)         Clause (c)(i) above shall not apply:

(A)        with respect to any Taxes that are described in clause (a) of the definition of Excluded Taxes; or

 

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(B)        to the extent a loss, liability or cost:

(1)        is compensated for by an increased payment under Section 5.8.4(b)(iii) ;

(2)        would have been compensated for by an increased payment under Section 5.8.4(b)(iii) but was not so compensated solely because one of the exclusions in Section 5.8.4(b)(iv) applied; or

(3)        relates to a FATCA Deduction.

(iii)         A Protected Party making, or intending to make a claim under Section 5.8.4(c)(i) above shall promptly notify Agent of the event which will give, or has given, rise to the claim, following which Agent shall notify the Borrower Agent.

(iv)        A Protected Party shall, on receiving a payment from the Relevant Borrowers under this Section 5.8.4(c) , notify Agent.

(d)         Tax Credit . If a Relevant Borrower makes a Tax Payment and the relevant Protected Party determines that:

(i)        a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and

(ii)        that Protected Party has obtained and utilized that Tax Credit, the relevant Protected Party shall pay an amount to the Relevant Borrower which that Protected Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Relevant Borrower.

(e)         Lender Status Confirmation . Each New Lender shall indicate, in the Assignment which it executes on becoming a party, and for the benefit of Agent and without liability to any Relevant Borrower, which of the following categories it falls within:

(i)         not a Qualifying Lender;

(ii)        a Qualifying Lender (other than a Treaty Lender); or

(iii)       a Treaty Lender.

If a New Lender fails to indicate its status in accordance with this Section 5.8.4(e) , then such New Lender or Lender (as appropriate) shall be treated for the purposes of this Agreement (including by each Relevant Borrower) as if it is not a Qualifying Lender until such time as it notifies Agent which category of Qualifying Lender applies (and Agent, upon receipt of such notification, shall inform the Relevant Borrower). For the avoidance of doubt, an Assignment shall not be invalidated by any failure of a New Lender to comply with this Section 5.8.4(e) .

(f)         HMRC DT Treaty Passport Scheme Confirmation .

(i)        A New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement,

 

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shall include an indication to that effect (for the benefit of Agent and without liability to any Relevant Borrower) in the Assignment which it executes by including its scheme reference number and its jurisdiction of Tax residence in that Assignment.

(ii)         Where an Assignment includes the indication described in clause (f)(i) above in the relevant Assignment, each Relevant Borrower which is a party as a Borrower as at the date that the relevant Assignment is executed (the “ HMRC Transfer Date ”) shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of that HMRC Transfer Date and shall promptly provide the Lender with a copy of that filing.

(g)           United Kingdom Stamp Taxes . The Relevant Borrowers shall pay and, within three (3) Business Days of demand, indemnify each Lender against any cost, loss or liability that Lender incurs in relation to all stamp duties, registration or other similar Taxes payable in respect of any Loan Document.

(h)           Value Added Tax .

(i)        All amounts set out or expressed in a Loan Document to be payable by any party to any Lender which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to clause (ii) below, if VAT is or becomes chargeable on any supply made by any Lender to any party under a Loan Document, that party shall pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Lender shall promptly provide an appropriate VAT invoice to such party).

(ii)        If VAT is or becomes chargeable on any supply made by any Lender (the “ VAT Supplier ”) to any other Lender (the “ VAT Recipient ”) under a Loan Document, and any party other than the VAT Recipient (the “ VAT Relevant Party ”) is required by the terms of any Loan Document to pay an amount equal to the consideration for that supply to the VAT Supplier (rather than being required to reimburse or indemnify the VAT Recipient in respect of that consideration),

(A)        (where the VAT Supplier is the person required to account to the relevant Tax authority for the VAT) the VAT Relevant Party must also pay to the VAT Supplier (at the same time as paying that amount) an additional amount equal to the amount of VAT. The VAT Recipient must (where this subsection (ii)(A) applies) promptly pay to the VAT Relevant Party an amount equal to any credit or repayment the VAT Recipient receives from the relevant Tax authority which the VAT Recipient reasonably determines relates to the VAT chargeable on that supply; and

(B)        (where the VAT Recipient is the person required to account to the relevant Tax authority for the VAT), the VAT Relevant Party must promptly, following demand from the VAT Recipient, pay to the VAT Recipient an amount equal to the VAT chargeable on that supply. The VAT Recipient must (where this subsection (ii)(B) applies) promptly pay to the VAT Relevant Party an amount equal to any credit or repayment the VAT Recipient receives from the relevant Tax authority which the VAT Recipient reasonably determines relates to the VAT chargeable on that supply.

(iii)        Where a Loan Document requires any party to reimburse or indemnify a Lender for any cost or expense in connection with such Loan Document, the reimbursement or

 

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indemnity (as the case may be) shall be for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant Tax authority).

(iv)        Any reference in this Section 5.8.4 to any party shall, at any time when such party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the United Kingdom Value Added Tax Act 1994).

(v)        In relation to any supply made by a Lender to any party under a Loan Document, if reasonably requested by such Lender, that party must as promptly as reasonably practicable provide such Lender with details of that party’s VAT registration and such other information as is reasonably requested in connection with such Lender’s VAT reporting requirements in relation to such supply.

(i)         FATCA Deduction .

(i)        The Relevant Borrower (and Agent to the extent it makes a payment on behalf of the Relevant Borrower) may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and shall not be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

(ii)        Each party to this Agreement shall promptly, upon becoming aware that it must make a FATCA Deduction to which Section 5.8.4(i)(i) above applies (or that there is any change in the rate or the basis of such FATCA Deduction), notify the party to whom it is making the payment and, in addition, shall notify the Relevant Borrower and Agent.

Except as otherwise expressly provided in this Section 5.8.4 , a reference to “determines” or “determined” in connection with Tax provisions contained in Section 5.8.4 means a determination made in the absolute discretion of the person making the determination.

5.8.5             Evidence of Payments . If Agent or an Obligor pays any Taxes pursuant to this Section, then upon request, Agent shall deliver to Borrower Agent or Borrower Agent shall deliver to Agent, respectively, a copy of a receipt issued by the appropriate Governmental Authority evidencing the payment, a copy of any return required by Applicable Law to report the payment, or other evidence of payment reasonably satisfactory to Agent or Borrower Agent, as applicable.

5.8.6             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 by Borrowers or with respect to which an Obligor has paid additional amounts pursuant to this Section, it shall pay Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by Obligors with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such party, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that Borrowers agree, upon request by such party, to repay the amount paid over to Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such party if such party is required to repay such refund to the Governmental Authority. Notwithstanding anything herein to the contrary, no Recipient shall be required to pay any amount to Borrowers if such payment would place the Recipient in a less favorable net after-Tax position than it would have been in if the Tax subject to

 

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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. In no event shall Agent or any Lender be required to make its tax returns (or any other information relating to its taxes that it deems confidential) available to any Borrower or other Person.

5.8.7             Lenders/Issuing Bank . For purposes of Sections 5.8 and 5.9 , the term “Lender” shall include the Issuing Bank.

5.8.8             Survival . Each party’s obligations under Sections 5.8 and 5.9 shall survive the resignation or replacement of Agent or any assignment of rights by or replacement of a Lender, the termination of the Commitments, and the repayment, satisfaction, discharge or Full Payment of any Obligations.

5.9         Lender Tax Information .

5.9.1             Status of Lenders . Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments of Obligations shall deliver to Borrower Agent and Agent properly completed and executed documentation reasonably requested by Borrowers or Agent as will permit such payments to be made without or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrower Agent or Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Borrower Agent or Agent to enable them to determine whether such Lender is subject to backup withholding or information reporting requirements. Notwithstanding the foregoing, such documentation (other than documentation described in Sections 5.9.2(a) , (b)  and (d)) shall not be required if a Lender reasonably believes delivery of the documentation would subject it to any material unreimbursed cost or expense or would materially prejudice its legal or commercial position.

5.9.2             Documentation . Without limiting the foregoing, if any Borrower is a U.S. Person,

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

(b)        Any Foreign Lender (as used in this Section 5.9.2 , “Foreign Lender” means a Lender or Issuing Bank that is not a U.S. Person) shall, to the extent it is legally entitled to do so, deliver to Borrower Agent and 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 hereunder (and from time to time thereafter upon reasonable request of Borrower Agent or Agent), whichever of the following is applicable:

(i)        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-E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty, and (y) with respect to other payments under the Loan Documents, IRS Form W-8BEN-E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

 

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

(iii)       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 in form satisfactory to Agent 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 a 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 (“ U.S. Tax Compliance Certificate ”), and (y) executed originals of IRS Form W-8BEN-E; or

(iv)       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-E, a U.S. Tax Compliance Certificate in form satisfactory to Agent, 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 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 Borrower Agent and 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 hereunder (and from time to time thereafter upon the reasonable request of Borrower Agent or Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit Borrowers or Agent to determine the withholding or deduction required to be made; and

(d)        if payment of an Obligation to a Lender would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code), such Lender shall deliver to Borrower Agent and Agent at the time(s) prescribed by law and otherwise as reasonably requested by Borrower Agent or Agent such documentation prescribed by Applicable Law (including Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower Agent or Agent as may be necessary for them to comply with their obligations under FATCA and to determine that such Lender has complied with its 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 Original Closing Date, and for purposes of Section 5.8 and Section 5.9 , the term “Applicable Law” shall include FATCA.

5.9.3     Redelivery of Documentation . If any form or certification previously delivered by a Lender pursuant to this Section expires or becomes obsolete or inaccurate in any respect, such Lender shall promptly update the form or certification or notify Borrower Agent and Agent in writing of its inability to do so.

5.9.4     FATCA Non-grandfathered Obligation . For purposes of determining withholding Taxes imposed under FATCA, the Obligors and Agent shall treat (and the Lenders hereby authorize Agent to treat) the Loan Documents as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

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5.10     Nature and Extent of Each Borrower’s Liability .

5.10.1         Joint and Several Liability of U.S. Obligors . Each U.S. Obligor agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Agent and the other Secured Parties the prompt payment and performance of, all Obligations, except its Excluded Swap Obligations. Each U.S. Obligor agrees that its guarantee obligations hereunder constitute a continuing guaranty of payment and not of collection, that such obligations shall not be discharged until Full Payment of the Obligations, and that such obligations are absolute and unconditional, irrespective of (a) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations or Loan Document, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound; (b) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by Agent or any other Secured Party with respect thereto; (c) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for any Obligations or any action, or the absence of any action, by Agent or any other Secured Party in respect thereof (including the release of any security or guaranty); (d) the insolvency of any Obligor; (e) any election by Agent or any other Secured Party in an Insolvency Proceeding for the application of Section 1111(b)(2) of the U.S. Bankruptcy Code; (f) any borrowing or grant of a Lien by any other Obligor, as debtor-in-possession under Section 364 of the U.S. Bankruptcy Code or otherwise; (g) the disallowance of any claims of Agent or any other Secured Party against any Obligor for the repayment of any Obligations under Section 502 of the U.S. Bankruptcy Code or otherwise; or (h) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except Full Payment of all Obligations.

5.10.2         Waivers by U.S. Obligors .

(a)        Each U.S. Obligor expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Agent or any other Secured Party to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Obligor. Each U.S. Obligor waives all defenses available to a surety, guarantor or accommodation co-obligor other than Full Payment of Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of Obligations as long as it is an Obligor. It is agreed among each U.S. Obligor, Agent and the other Secured Parties that the provisions of this Section 5.10 are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Agent, Issuing Banks and Lenders would decline to make Loans and issue Letters of Credit. Each U.S Obligor acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such business.

(b)        Agent and the other Secured Parties may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon Collateral or any Real Estate by judicial foreclosure or nonjudicial sale or enforcement, without affecting any rights and remedies under this Section 5.10 . If, in taking any action in connection with the exercise of any rights or remedies, Agent or any other Secured Party shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any U.S. Obligor or other Person, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each U.S. Obligor consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any U.S. Obligor might otherwise have had. Any election of remedies that results in denial or impairment of the right of Agent or any other

 

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Secured Party to seek a deficiency judgment against any Obligor shall not impair any other U.S. Obligor’s obligation to pay the full amount of the Obligations. Each U.S. Obligor waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for Obligations, even though that election of remedies destroys such U.S. Obligor’s rights of subrogation against any other Person. Agent may bid Obligations, in whole or part, at any foreclosure, trustee or other sale, including any private sale, and the amount of such bid need not be paid by Agent but shall be credited against the Obligations. The amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral of the U.S. Obligors, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this Section 5.10 , notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent or any other Secured Party might otherwise be entitled but for such bidding at any such sale.

5.10.3         Extent of Liability of U.S. Obligors; Contribution .

(a)        Notwithstanding anything herein to the contrary, each U.S. Obligor’s liability under this Section 5.10 shall not exceed the greater of (i) all amounts for which such U.S. Obligor is primarily liable, as described in clause (c) below, and (ii) such U.S. Obligor’s Allocable Amount.

(b)        If any U.S. Obligor makes a payment under this Section 5.10 of any Obligations (other than amounts for which such U.S. Obligor is primarily liable) (a “ Guarantor Payment ”) that, taking into account all other Guarantor Payments previously or concurrently made by any other U.S. Obligor, exceeds the amount that such U.S. Obligor would otherwise have paid if each U.S. Obligor had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such U.S Obligor’s Allocable Amount bore to the total Allocable Amounts of all U.S. Obligors, then such U.S. Obligor shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other U.S. Obligor for the amount of such excess, ratably based on their respective Allocable Amounts in effect immediately prior to such Guarantor Payment. The “ Allocable Amount ” for any U.S. Obligor shall be the maximum amount that could then be recovered from such U.S. Obligor under this Section 5.10 without rendering such payment voidable under Section 548 of the U.S. Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common law.

(c)        Nothing contained in this Section 5.10.3 shall limit the liability of any Obligor to pay or guarantee Loans made directly or indirectly to it (including Loans advanced hereunder to any other Person and then re-loaned or otherwise transferred to, or for the benefit of, such Obligor), LC Obligations relating to Letters of Credit issued to support its business, Secured Bank Product Obligations incurred to support its business, and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Obligor shall be primarily liable for all purposes hereunder.

5.10.4         Joint and Several Liability of Foreign Obligors .

(a)        Each Foreign Obligor agrees that it is jointly and severally liable for, and absolutely, irrevocably and unconditionally guarantees to Agent and the other Foreign Facility Secured Parties the prompt payment and performance of, all Foreign Facility Obligations (but

 

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excluding for the avoidance of doubt, any U.S. Facility Obligations and its Excluded Swap Obligations) (the “ Foreign Cross-Guarantee ”). Each Foreign Obligor agrees that its guarantee obligations hereunder constitute a continuing guarantee of payment and not of collection, that such guarantee obligations shall not be discharged until Full Payment of all Foreign Facility Obligations, and that such guarantee obligations are absolute and unconditional, irrespective of (i) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Foreign Facility Obligation or any Loan Document, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound; (ii) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by Agent, any Security Trustee or any other Foreign Facility Secured Party with respect thereto; (iii) the existence, value or condition of, or failure to perfect, register, stamp or terminate a Lien or to preserve rights against, any security or guaranty for the Foreign Facility Obligations or any action, or the absence of any action, by Agent, any Security Trustee or any other Foreign Facility Secured Party in respect thereof (including the release, variation or discharge of any security or guarantee of, or the release of, any Obligor or any other Person (other than a release of such Foreign Obligor) whether under the terms of any proposal, composition or arrangement with any creditor of any Obligor or any other Person or otherwise); (iv) the insolvency of any Obligor or any Insolvency Proceeding in relation to any Obligor; (v) any election by Agent or any other Secured Party in an Insolvency Proceeding for the application of Section 1111(b)(2) of the U.S. Bankruptcy Code (or the substantial equivalent under any other Applicable Law); (vi) any borrowing or grant of a Lien by any other Obligor, as debtor-in-possession under Section 364 of the U.S. Bankruptcy Code (or the substantial equivalent under any other Applicable Law) or otherwise; (vii) the disallowance of any claims of Agent or any other Secured Party against any Obligor for the repayment of any Obligations under Section 502 of the U.S. Bankruptcy Code (or the substantial equivalent under any other Applicable Law) or otherwise; (viii) any incapacity or lack of power, authority or legal personality of, or dissolution or change in the members or status of, any Obligor or any other Person; or (ix) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except Full Payment of all Foreign Facility Obligations.

(b)        Each Foreign Obligor agrees with each Foreign Facility Secured Party and its successors and permitted assigns that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Foreign Facility Secured Party and its successors and permitted assigns immediately on demand against any cost, loss or liability it incurs as a result of a Foreign Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Loan Document on the date when it would have been due. The amount payable by a Foreign Obligor under this indemnity will not exceed the amount it would have had to pay under this Section 5.10 if the amount claimed had been recoverable on the basis of a guarantee.

(c)        Without prejudice to the generality of Section 5.10.4(a) above, each Foreign Obligor expressly confirms that it intends that the guarantee created by this Section 5.10.4 shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Loan Documents and/or any facility or amount made available under any of the Loan Documents for the purposes of or in connection with (i) acquisitions of any nature; (ii) increasing working capital; (iii) enabling investor distributions to be made; (iv) carrying out restructurings; (v) refinancing existing credit facilities; (vi) refinancing any other Debt; (vii) making credit available to new Foreign Borrower(s); (viii) any other variation or

 

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extension of the purposes for which any such facility or amount might be made available from time to time; and (ix) any fees, costs and/or expenses associated with any of the foregoing.

5.10.5     Waivers by Foreign Obligors .

(a)        Each Foreign Obligor hereby expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Agent, any Security Trustee or any other Foreign Facility Secured Party to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Foreign Facility Obligation before, or as a condition to, proceeding against such Obligor. Each Foreign Obligor waives all defenses available to a surety, guarantor or accommodation co-obligor other than Full Payment of all Foreign Facility Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of Foreign Facility Obligations as long as it is an Obligor. It is agreed among each Foreign Obligor, Agent and the other Foreign Facility Secured Parties that the provisions of this Section 5.10 are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Agent, Issuing Banks and Lenders would decline to make Loans and issue Letters of Credit to Foreign Borrowers. Each Foreign Obligor acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business and those of its direct or indirect holding companies, and can be expected to benefit such business.

(b)        Agent, Security Trustees and the other Foreign Facility Secured Parties may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon the Collateral or Real Estate by judicial foreclosure or non-judicial sale or enforcement, to the extent permitted under Applicable Law, without affecting any rights and remedies under this Section 5.10 . If, in taking any action in connection with the exercise of any rights or remedies, Agent, any Security Trustee or any other Foreign Facility Secured Party shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Obligor or other Person, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each Foreign Obligor consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any Foreign Obligor might otherwise have had. Any election of remedies that results in denial or impairment of the right of Agent, any Security Trustee or any other Foreign Facility Secured Party to seek a deficiency judgment against any Obligor shall not impair any Foreign Obligor’s obligation to pay the full amount of the Foreign Facility Obligations. Each Foreign Obligor waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for the Foreign Facility Obligations, even though that election of remedies destroys such Foreign Obligor’s rights of subrogation against any other Person. Agent may bid Obligations of the Foreign Obligors, in whole or in part, at any foreclosure, trustee or other sale, including without limitation any private sale, and the amount of such bid need not be paid by Agent but shall be credited against the Foreign Facility Obligations. The amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral of the Foreign Obligors, and the difference between such bid amount and the remaining balance of the Foreign Facility Obligations shall be conclusively deemed to be the amount of the Foreign Facility Obligations guaranteed under this Section 5.10 , notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent or any other Foreign Facility Secured Party might otherwise be entitled but for such bidding at any such sale.

 

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(c)        Each Mexican Domiciled Obligor hereby expressly acknowledges and agrees that this Agreement is governed by the laws of the State of New York as set forth in Section 14.14 and expressly agrees that any rights and privileges that it might otherwise have under the laws of Mexico shall not be applicable to this Agreement, indemnities and other assurances contained herein or any guarantee granted by such Mexican Domiciled Obligor, on the date hereof or in the future, pursuant to this Agreement. For such purposes, each Mexican Domiciled Obligor hereby unconditionally and irrevocably waives any rights to which it may be entitled (including the rights to excusión, orden, división and subrogación ), to the extent applicable, under Articles 2813, 2814, 2815, 2816, 2817, 2818, 2819, 2820, 2821, 2822, 2823, 2824, 2826, 2827, 2828, 2830, 2835, 2836, 2837, 2838, 2839, 2840, 2842, 2844, 2846, 2847, 2848 and 2849 of the Federal Civil Code ( Código Civil Federal ) and the corresponding provisions of the Civil Codes of the States of Mexico and the Federal District of Mexico (or any successor provisions). Each Mexican Domiciled Obligor represents that (i) it is familiar with the contents of the articles referred to in subparagraph (c) above; (ii) it will receive valuable direct and indirect benefits as a result of the entering into this Foreign Cross-Guaranty or any Loan Document to which it is a party; (iii) it is solvent pursuant to the terms of the Mexican Bankruptcy Law; (iv) it has not been declared in concurso mercantil or bankruptcy ( quiebra ) or other similar insolvency procedure; and (v) there is no pending and, to its knowledge, threatened action, claim, requirement or proceeding before any court, governmental agency, arbitrator or jurisdictional entity that affects or could affect the legality, validity or enforceability of this Foreign Cross-Guaranty.

5.10.6     U.S. Limitations . To the extent that providing such Foreign Cross-Guarantee would reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section 956 of the Code, the Foreign Cross-Guarantee shall not require any Foreign Obligor that is not or is not required to be a U.S. Facility Obligor to guarantee any Obligations of any other Foreign Obligor that is disregarded as an entity separate from any U.S. Subsidiary for U.S. federal income tax purposes.

5.10.7     Joint Enterprise . Each Borrower has requested that Agent, Issuing Banks and Lenders make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’ business most efficiently and economically. Obligors’ business is a mutual and collective enterprise, and the successful operation of each Obligor is dependent upon the successful performance of the integrated group. Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease administration of the facility, all to their mutual advantage. Borrowers acknowledge that Agent’s, Issuing Banks’ and Lenders’ willingness to extend credit and to administer the Collateral on a combined basis hereunder is done solely as an accommodation to Borrowers and at Borrowers’ request.

5.10.8         Subordination . Each Obligor hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Obligor, howsoever arising, to the Full Payment of all Obligations.

5.10.9         Keepwell . Each Obligor that is a Qualified ECP when its guaranty of or grant of Lien as security for a Swap Obligation becomes effective hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide funds or other support to each Specified Obligor with respect to such Swap Obligation as may be needed by such Specified Obligor from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby

 

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incurred without rendering such Qualified ECP’s obligations and undertakings under this Section 5.10 voidable under any applicable fraudulent transfer or conveyance act, and in each case only so long as providing such funds or support could not reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section 956 of the Code). The obligations and undertakings of each Qualified ECP under this Section shall remain in full force and effect until Full Payment of all Obligations. Each Obligor intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support or other agreement” for the benefit of, each Obligor for all purposes of the Commodity Exchange Act.

5.11      Currency Matters . Dollars are the currency of account and payment for each and every sum at any time due from Obligors hereunder or under any other Loan Document unless otherwise specifically provided in this Agreement, any other Loan Document or otherwise agreed to by Agent; provided that:

5.11.1   each repayment of a Revolver Loan, LC Obligation or a part thereof shall be made in the currency in which such Revolver Loan or LC Obligation is denominated at the time of that repayment;

5.11.2   each payment of interest shall be made in the currency in which the principal or other sum in respect of which such interest is denominated;

5.11.3   (a) each payment of fees pursuant to Section 3.2.1(c) shall be in Dollars; (b) each payment of fees pursuant to Section 3.2.1(a) shall be in Dollars or Canadian Dollars and (c) each payment of fees pursuant to Section 3.2.1(b) shall be in Dollars or Sterling, which payment currency, in the case of clauses (b) and (c) above, shall be at the option of the relevant Borrower Group, and the amount of any such payment made in a currency other than Dollars determined by Agent based on the Spot Rate;

5.11.4   each payment of fees pursuant to Section 3.2.2 shall be in the currency of the underlying Letter of Credit; and

5.11.5   each payment in respect of Extraordinary Expenses and any other costs, expenses and indemnities shall be made in the currency in which the same were incurred by the party to whom payment is to be made.

No payment to any Credit Party or any Security Trustee (whether under any judgment or court order or otherwise) shall discharge the obligation or liability of the Obligor in respect of which it was made unless and until such Credit Party or such Security Trustee shall have received Full Payment in the currency in which such obligation or liability is payable pursuant to the above provisions of this Section 5.11 . Agent has the right, at the expense of the applicable Obligor, to convert any payment made in an incorrect currency into the applicable currency required under this Agreement. To the extent that the amount of any such payment shall, on actual conversion into such currency, fall short of such obligation or liability actual or contingent expressed in that currency, such Obligor (together with the other Obligors within its Obligor Group or other obligors pursuant to any Guarantee of the Obligations of such Obligor Group) agrees to indemnify and hold harmless such Credit Party or such Security Trustee, with respect to the amount of the shortfall with respect to amounts payable by such Obligor hereunder, with such indemnity surviving the termination of this Agreement and any legal proceeding, judgment or court order pursuant to which the original payment was made which resulted in the shortfall. To the extent that the amount of any such payment to a Credit Party or a Security Trustee shall, upon an actual conversion into such currency, exceed such obligation or liability, actual or contingent, expressed in that currency, such Credit Party or such Security Trustee shall return such excess to the members of the affected Borrower Group.

 

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SECTION 6

CONDITIONS PRECEDENT

6.1                                   Conditions Precedent to Closing Date . In addition to the conditions set forth in Section 6.2 , Lenders shall not be required to fund any requested Loan, issue any Letter of Credit, or otherwise extend credit to Borrowers hereunder, until the time that each of the following conditions has been satisfied (the date, if any, upon which such conditions are first satisfied is referred to herein as the “ Closing Date ”):

(a)        Each Loan Document shall have been duly executed and delivered to Agent by each of the signatories thereto, and each Obligor shall be in compliance with all terms thereof; provided, however , that Borrowers shall not be required to deliver a Lien Waiver on the Closing Date for a location for which Agent has established a Rent and Charges Reserve.

(b)        [Reserved.]

(c)        Each Collateral and Guarantee Requirement shall have been satisfied and Agent shall have received a completed Perfection Certificate dated as of the Closing Date and signed by an executive officer or Financial Officer of each Obligor, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code, PPSA and equivalent filings made with respect to the Obligors in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to Agent (including PPSA estoppel letters) that the Liens indicated by such financing statements (or similar documents) are permitted by Section 10.2.2 or have been released or will be released pursuant to UCC-3 financing statements, PPSA termination statements or other release documentation delivered to Agent.

(d)        Agent shall have received duly executed agreements establishing and/or evidencing each Dominion Account and (where applicable) related lockbox and each Controlled Account, each in form and substance, and with financial institutions, satisfactory to Agent.

(e)        Agent shall have received certificates, in form and substance satisfactory to it, from a knowledgeable Senior Officer of each Borrower and each Mexican Domiciled Obligor certifying that, after giving effect to the initial Loans and transactions hereunder, (i) no Default exists; (ii) the representations and warranties set forth in Section 9 are true and correct; and (iii) such Borrower has complied with all agreements and conditions to be satisfied by it under the Loan Documents.

(f)        Agent shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligor’s Organic Documents (including, without limitation, charter documents of such Obligor that are, except with respect to a UK Domiciled Obligor or a Dutch Domiciled Obligor, certified by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization) are true and complete, and in full force and effect, without amendment except as shown; (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and (with respect to the U.S. Obligors, together with the resolutions delivered pursuant to Section 6 of the Original Loan Agreement) constitute all resolutions adopted with respect to this credit facility; and (iii) to the title, name and signature of each Person

 

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authorized to sign the Loan Documents. Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.

(g)        Agent shall have received a written opinion of Cahill Gordon & Reindel LLP, as well as any local counsel to Obligors or Agent (including, without limitation, Canadian, English, Mexican and Dutch counsel), in form and substance satisfactory to Agent.

(h)        Agent shall have received good standing certificates for each Obligor (other than the Dutch Domiciled Obligors) issued by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization and each jurisdiction in the United States, Canada, the United Kingdom, Mexico or the Netherlands where such Obligor’s conduct of business or ownership of Property necessitates qualification (in each case, to the extent that such certificates or certificates of similar subject matter are issued, in general, by such officials in such jurisdictions).

(i)         Agent shall have received copies of policies or certificates of insurance for the insurance policies carried by Obligors, together with a loss payable endorsement naming Agent as loss payee and reasonably acceptable to Agent, all in compliance with the Loan Documents.

(j)         Agent shall have completed its business, financial and legal due diligence of Obligors, including a roll-forward of its previous field examination, with results satisfactory to Agent. No material adverse change in the financial condition of Obligors and their Subsidiaries, taken as a whole, or in the quality, quantity or value of any Collateral shall have occurred since December 31, 2014. The capital structure of the Obligors shall be satisfactory to Agent.

(k)        Borrowers shall have paid all fees and expenses (provided that legal fees required to be paid as a condition precedent to the occurrence of the Closing Date shall be limited to such legal fees as to which Borrowers have received a summary invoice) required to be paid to Agent and/or the Lenders under the Loan Documents on or prior to the Closing Date.

(l)         Agent shall have received a Borrowing Base Report as of the most recent month ending at least 15 days prior to the Closing Date.

(m)       Agent and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act and other AML Legislation.

(n)        Agent shall have received executed copies of the any Term Loan Document or modifications to the Term Loan Documents executed in connection with the Transactions, which shall be in form and substance satisfactory to Agent and shall be in full force and effect.

(o)        Agent shall have received the originals of any pledged Collateral representing all of the issued and outstanding shares of the Equity Interests constituting Collateral and required to be delivered to Agent under the Loan Documents, in each case together with stock powers (or the equivalent, including, without limitation, endorsements ( endosos )) duly executed in blank with respect thereto (except with respect to uncertificated pledged Collateral and such Collateral that constitutes Term Priority Collateral).

 

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(p)        Agent shall have received payoff or release letters, in form and substance satisfactory to Agent, confirming that the Obligors and their Subsidiaries are released from all obligations under any Debt not expressly permitted by this Agreement and providing a release of all of the Liens existing with respect to any such Debt in and to the assets of the applicable Obligors and their Subsidiaries, together with termination statements and other documentation evidencing the termination of any such Liens in and to the properties and assets of the applicable Obligors and their Subsidiaries.

(q)        Agent shall have received evidence, in form and substance satisfactory to Agent, that the Mexican Domiciled Obligors have irrevocably appointed the Borrower Agent, before a Mexican notary public, a special irrevocable power of attorney, in the form of Exhibit E , to act as its agent for service of process.

6.2          Conditions Precedent to All Credit Extensions . Agent, Issuing Banks and Lenders shall not be required to fund any Loans, arrange for issuance of any Letters of Credit or grant any other accommodation to or for the benefit of Borrowers, unless the following conditions are satisfied:

(a)        No Default or Event of Default shall exist at the time of, or result from, such funding, issuance or grant;

(b)        The representations and warranties of each Obligor in the Loan Documents shall be true and correct on the date of, and upon giving effect to, such funding, issuance or grant (except for representations and warranties that expressly relate to an earlier date);

(c)        All conditions precedent in any other Loan Document shall be satisfied;

(d)        No event shall have occurred or circumstance exist that has or could reasonably be expected to have a Material Adverse Effect; and

(e)        With respect to issuance of a Letter of Credit, the LC Conditions shall be satisfied.

Each request (or deemed request) by Borrowers for funding of a Loan, issuance of a Letter of Credit or grant of an accommodation shall constitute a representation by Borrowers that the foregoing conditions are satisfied on the date of such request and on the date of such funding, issuance or grant. As an additional condition to any funding, issuance or grant, Agent shall have received such other information, documents, instruments and agreements as it deems appropriate in connection therewith.

SECTION 7

COLLATERAL

7.1          Grant of Security Interest . As security for the full and timely payment and performance of all Obligations, the Borrowers shall, and shall cause each other Obligor to, on or before the Closing Date, subject to any applicable limitations set forth in the Security Documents, do or cause to be done all things necessary in the opinion of Agent in its Permitted Discretion to cause each Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of such Obligors. Without limiting the foregoing, the Borrowers shall deliver, and shall cause each other Obligor to deliver, to Agent, in form and substance reasonably acceptable to Agent, the Security Documents to which such Obligors are required to be party and, subject to the Agreed Security Principles (if applicable) and the

 

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limitations set forth in the Security Documents, shall take such further action and deliver or cause to be delivered such further documents as required by the Security Documents or otherwise as Agent may reasonably request to effect the transactions contemplated by this Section 7 .

7.2       Cash Collateral .

7.2.1        [ Reserved .]

7.2.2         Cash Collateral .    Cash Collateral may be invested, at Agent’s Permitted Discretion (and with the consent of Borrower Agent, as long as no Event of Default exists), but Agent shall have no duty to do so, regardless of any agreement or course of dealing with any Obligor, and shall have no responsibility for any investment or loss. As security for the Obligations, each Obligor shall grant to Agent, in accordance with the applicable Collateral and Guarantee Requirement, a security interest in and Lien upon all Cash Collateral held from time to time and all proceeds thereof, whether held in a Cash Collateral Account or otherwise. Agent may apply Cash Collateral of (a) a U.S. Obligor to the payment of any Obligations and (b) a Foreign Obligor to the payment of any Foreign Facility Obligations, in each case, to the payment of such Obligations as they become due, in such order as Agent may elect. Each Cash Collateral Account and all Cash Collateral shall be under the sole dominion and control of Agent. No U.S. Obligor or other Person claiming through or on behalf of any U.S. Obligor shall have any right to any Cash Collateral until Full Payment of all Obligations. No Foreign Obligor or other Person claiming through or on behalf of any Foreign Obligor shall have any right to any Cash Collateral until Full Payment of all Foreign Facility Obligations.

7.3          Collateral Assignment of Leases .    To further secure the prompt payment and performance of the Foreign Facility Obligations, each Canadian Domiciled Obligor and each U.S. Domiciled Obligor hereby transfers and assigns to Agent and/or Security Trustee all of such Obligor’s right, title and interest in, to and under all now or hereafter existing leases of real property with annual rents in excess of $1,500,000 to which such Obligor is a party, whether as lessor or lessee, and all extensions, renewals, modifications and proceeds thereof. To further secure the prompt payment and performance of all Obligations, each U.S. Obligor hereby transfers and assigns to Agent all of such Obligor’s right, title and interest in, to and under all now or hereafter existing leases of real property with annual rents in excess of $1,500,000 to which such Obligor is a party, whether as lessor or lessee, and all extensions, renewals, modifications and proceeds thereof.

7.4          Limitations . The Lien on Collateral granted under the Security Documents is given as security only and shall not subject Agent, any Security Trustee, any Issuing Bank or any Lender to, or in any way modify, any obligation or liability of Obligors relating to any Collateral. In no event shall the grant of any Lien under any Loan Document secure an Excluded Swap Obligation of the granting Obligor.

SECTION 8

COLLATERAL ADMINISTRATION

8.1          Borrowing Base Reports; Reallocation of U.S. Availability . By the 15th day of each month, Borrower Agent shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a Borrowing Base Report as of the close of business of the previous month, and at such other times as Agent may request; provided , that , during any Borrowing Base Trigger Period, by Wednesday of each week, Borrower Agent shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a Borrowing Base Report as of the close of business of the previous week, and at such other times as Agent may request. In addition, upon the occurrence and during the continuation of an Event of Default,

 

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Borrower Agent shall deliver to Agent (and Agent shall promptly deliver same to Lenders) Borrowing Base Reports on a more frequent basis if requested by Agent. All information (including calculation of Total Availability and each component of Total Availability) in a Borrowing Base Report shall be certified by Borrower Agent. Agent may from time to time adjust any such report (a) to reflect Agent’s reasonable estimate of declines in value of Collateral, due to collections received in the Dominion Accounts or otherwise; (b) to adjust advance rates to reflect changes in dilution, quality, mix and other factors affecting Collateral; and (c) to the extent any information or calculation does not comply with this Agreement. The Borrowers may neither (a) reallocate the Foreign Allocated U.S. Availability component of any Foreign Borrower’s Borrowing Base if such reallocation would result in an Overadvance for such Foreign Borrower nor (b) allocate U.S. Availability to any Foreign Borrower’s Borrowing Base if such reallocation would result in a U.S. Overadvance.

8.2       Accounts .

8.2.1         Records and Schedules of Accounts . Each Borrower shall keep accurate and complete records of its Accounts in all material respects, including all payments and collections thereon, in a manner consistent with past business practices, and shall submit to Agent sales, collection, reconciliation and other reports in form satisfactory to Agent, on such periodic basis as Agent may request. Each Borrower shall also provide to Agent, on each date that a Borrowing Base Report is delivered or required to be delivered pursuant to Section 8.1 , an ineligible Account reconciliation report and a detailed aged trial balance of all Accounts as of the end of the preceding month, specifying each Account’s Account Debtor name and address, amount, invoice date and due date, showing any discount, allowance, credit, authorized return or dispute, and, if a Borrowing Base Trigger Period is in effect or such materials are reasonably requested by Agent, documents evidencing proof of delivery, copies of invoices and invoice registers, copies of related documents, repayment histories, status reports and other information as Agent may reasonably request. If Accounts in an aggregate face amount of $2,000,000 or more cease to be Eligible Accounts, Borrower Agent shall notify Agent of such occurrence promptly (and in any event within one Business Day) after any Borrower has knowledge thereof.

8.2.2        [ Reserved .]

8.2.3        [ Reserved .]

8.2.4         Maintenance of Dominion Account . Obligors shall maintain each Dominion Account and each Controlled Account pursuant to lockbox or other arrangements acceptable to Agent. Each Obligor shall obtain, on or prior to the applicable deadline set forth in the Security Document(s) to which such Obligor is a party, an agreement (in form and substance satisfactory to Agent) from the lockbox servicers (if applicable), Dominion Account bank and other depositories and securities intermediaries with whom Controlled Accounts are maintained, establishing Agent’s or a Security Trustee’s control over and Lien in the lockboxes (if applicable), each Dominion Account and each Controlled Account, which may be exercised by Agent or the applicable Security Trustee during any Dominion Trigger Period, requiring immediate deposit of all remittances received in the lockbox (if applicable) or other Controlled Accounts to a Dominion Account, and waiving offset rights of such servicer or bank, except for customary administrative charges. If a Dominion Account is not maintained with Bank of America or Bank of America (Canada), Agent may, during any Dominion Trigger Period, require immediate transfer of all funds in such account to a Dominion Account maintained with Bank of America or Bank of America (Canada), as applicable. Agent and Lenders assume no responsibility to any Obligor for any lockbox arrangement, Controlled Account or Dominion Account, including any claim of accord and satisfaction or release with respect to any Payment Items accepted by any bank.

 

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8.2.5         Proceeds of Collateral . Obligors shall request in writing and otherwise take all necessary steps to ensure that all payments on Accounts or otherwise relating to Collateral are made directly to a Dominion Account (or a lockbox relating to a Dominion Account). If any Obligor or Subsidiary receives cash or Payment Items with respect to any Collateral, it shall hold same in trust for Agent and Security Trustees and promptly (not later than the next Business Day) deposit same into a Dominion Account. Foreign Borrowers shall not participate in any cash pooling arrangements.

8.3       Inventory .

8.3.1         Records and Reports of Inventory . Each Borrower shall keep accurate and complete records of its Inventory in all material respects, including costs and daily withdrawals and additions, in a manner consistent with past business practice, and shall submit to Agent inventory and reconciliation reports in form satisfactory to Agent, on such periodic basis as Agent may request. Each Borrower shall conduct a physical inventory at least once per calendar year (and on a more frequent basis if requested by Agent when an Event of Default exists) and periodic cycle counts consistent with historical practices, and shall provide to Agent a report based on each such inventory and count promptly upon completion thereof, together with such supporting information as Agent may request. Agent may participate in and observe each physical count.

8.3.2        [ Reserved .]

8.3.3         Acquisition, Sale and Maintenance . Each Borrower shall make commercially reasonable efforts to assure that all Inventory is produced in accordance with Applicable Law, including the FLSA. Borrowers shall use, store and maintain all Inventory with reasonable care and caution, in accordance with applicable standards of any insurance and in conformity with all Applicable Law.

8.4        [ Reserved .]

8.5          Deposit Accounts .    Each Obligor shall take all actions necessary to establish and maintain Agent’s (or the applicable Security Trustee’s) control of, and first priority perfected Lien on, each Deposit Account and Securities Account (in each case, other than Excluded Accounts) as required by this Agreement and/or the Security Documents. Each applicable Obligor shall be the sole account holder of each applicable Deposit Account and Securities Account (in each case, other than Excluded Accounts) of such Obligor and shall not allow any other Person (other than Agent, a Security Trustee , the Senior Term Agent and/or Term Loan Agent or in respect of any Permitted Encumbrance arising under clause (j) of the definition thereof) to have control over or a Lien on any such Deposit Account, Securities Account or any Property deposited or held therein.

8.6       General Provisions .

8.6.1        [ Reserved .]

8.6.2         Insurance of Collateral; Condemnation Proceeds .

(a)        [Reserved.]

(b)        Any Net Proceeds of insurance (other than proceeds from workers’ compensation or D&O insurance) and any Net Proceeds of awards arising from condemnation of any Collateral shall be paid to Agent and/or the Controlling Term Loan Agent as required pursuant to the Loan Documents, the Senior Term Loan Documents, the Term Loan Documents

 

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and the Intercreditor Agreement. Any such Net Proceeds of insurance or condemnation awards that relate to Revolver Priority Collateral shall be applied to payment of the Revolver Loans, and then to other Obligations. Subject to the Intercreditor Agreement and clause (c) below, any such Net Proceeds of insurance or condemnation awards that relate to Term Priority Collateral, to the extent not timely applied to repair, restore or replace such property or asset in accordance with the Senior Term Loan Documents and/or the Term Loan Documents, shall be applied first to the Senior Term Debt and/or the Term Loan Debt until paid in full, then to U.S. Revolver Loans until paid in full and then to other Obligations.

(c)        To the extent permitted by the Senior Term Loan Documents and the Term Loan Documents and subject to the Intercreditor Agreement, Borrowers may use Net Proceeds of insurance that relate to Equipment or Real Estate and Net Proceeds of awards arising from condemnation of Real Estate to repair, restore or replace such Equipment or Real Estate.

8.6.3         Protection of Collateral . All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral of an Obligor Group, all Taxes payable with respect to any Collateral of an Obligor Group (including any sale thereof), and all other payments required to be made by Agent or a Security Trustee to any Person to realize upon any Collateral of an Obligor Group, shall be borne and paid by such Obligor Group. Neither Agent nor any Security Trustee shall be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while Collateral is in Agent’s or such Security Trustee’s actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Obligors’ sole risk.

SECTION 9

REPRESENTATIONS AND WARRANTIES

9.1        General Representations and Warranties . To induce Agent and Lenders to enter into this Agreement and to make available the Commitments, Loans and Letters of Credit, each Obligor represents and warrants that, on the Closing Date and at each time that the following representations and warranties are made or deemed to be made thereafter:

9.1.1         Organization; Powers . Each Obligor and each Subsidiary of each Obligor is duly organized or incorporated, validly existing and in good standing (where applicable) under the laws of the jurisdiction of its organization or incorporation, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

9.1.2         Authorization; Enforceability . The Transactions to be entered into by each Obligor are within such Obligor’s powers and have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by each Obligor and constitutes, and each other Loan Document to which any Obligor is to be a party, when executed and delivered by such Obligor, will constitute, a legal, valid and binding obligation of such Obligor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

9.1.3         Governmental Approvals; No Conflicts . The Transactions and the other transactions contemplated hereby (a) do not require any consent or approval of, registration or filing with,

 

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or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of any Obligor or any Subsidiary of any Obligor or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, or give rise to a right thereunder to require any payment to be made by any Obligor or any Subsidiary of any Obligor, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of any Obligor or any Subsidiary of any Obligor, except Liens created under the Loan Documents and Liens permitted by Section 10.2.2 , and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect. Schedule 9.1.3 sets forth for each Obligor a description of each license from a Governmental Authority which is material to the conduct of the business of such Obligor as of the Closing Date.

9.1.4         Financial Condition; No Material Adverse Change .

(a)        The Obligors have heretofore furnished to Agent and the Lenders the consolidated balance sheet of the Parent Borrower and its consolidated Subsidiaries and the related statements of income, stockholders equity and cash flows (i) as of and for the fiscal years ended December 31, 2013 and December 31, 2014, reported on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and for each Fiscal Quarter ended subsequent to December 31, 2014 and at least 45 days prior to the Closing Date, in each case certified by its chief financial officer (it being understood that the Obligors have furnished the foregoing referenced in clause (i) to Agent on the Original Closing Date). Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Parent Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)        The Obligors have heretofore furnished to Agent a pro forma consolidated balance sheet of the Parent Borrower and its consolidated Subsidiaries and related pro forma consolidated statement of income of the Parent Borrower as of and for the 12-month period ending on the last day of the most recently completed four-Fiscal Quarter period for which financial statements were delivered under Section 9.1.4(a) , prepared after giving effect to the Transactions and the other transactions contemplated hereby to be consummated on the Closing Date as if the Transactions and such other transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such income statements).

(c)        Except as disclosed in the financial statements referred to above, except for the Disclosed Matters and except for liabilities arising as a result of the Transactions, after giving effect to the Transactions, neither the Parent Borrower nor any Subsidiary of the Parent Borrower has, as of the Closing Date, any contingent liabilities that would be material to the Parent Borrower and its Subsidiaries, taken as a whole.

 

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(d)        Since December 31, 2014, there has been no event, change or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.

9.1.5         Properties .

(a)        Each of the Parent Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business (including its Real Estate that is subject to a Mortgage), except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b)        Each of the Parent Borrower and its Subsidiaries owns, or is licensed to use, all Intellectual Property material to its business, and the use thereof by the Parent Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c)         Schedule 9.1.5 sets forth the address of each real property that is owned or leased by the Parent Borrower or any of its Subsidiaries as of the Closing Date after giving effect to the Transactions.

9.1.6         Litigation and Environmental Matters .

(a)        There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Parent Borrower, threatened against or affecting the Parent Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters set forth on Schedule 9.1.6 ) or (ii) that involve any of the Loan Documents or the Transactions.

(b)        Except for the Disclosed Matters set forth on Schedule 9.1.6 and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Parent Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c)        Since the Original Closing Date, there has been no change in the status of the Disclosed Matters set forth on Schedule 9.1.6 that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

(d)        No Obligor is in default with respect to any order, injunction or judgment of any Governmental Authority, except for such defaults which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

9.1.7         Compliance with Laws and Agreements . Each of the Parent Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority

 

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applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

9.1.8         Investment Company Status . Neither the Parent Borrower nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

9.1.9         Taxes . Each of the Parent Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Parent Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, there is no pending audit of any Obligor with any federal, state, provincial, local or foreign tax authority, except as could not reasonably be expected to result in a Material Adverse Effect.

9.1.10          Employee Benefit Plans .

(a)         ERISA . No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, the present value of all accumulated benefit obligations of all underfunded U.S. Pension Plans (based on the assumptions used for purposes of the Financial Accounting Standards Board Accounting Standards Codification Topic No. 715-30) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $10,000,000 the fair market value of the assets of all such underfunded U.S. Pension Plans.

(b)         Canadian Employee Plans . No Canadian Employee Plan provides for medical, life or other welfare benefits (through insurance or otherwise), with respect to any current or former employee of any Canadian Domiciled Obligor or any Affiliate thereof after retirement or other termination of service (other than coverage mandated by requirements of Applicable Law or coverage provided through the end of the month containing the date of termination from service or otherwise where part of a severance package or with respect to injured or disabled employees). Canadian Domiciled Obligors are in compliance with the requirements of the PBA and any binding FSCO requirements of general application with respect to each Canadian Pension Plan and in compliance with any FSCO directive or order directed specifically at a Canadian Pension Plan. No Canadian Pension Plan has any Unfunded Current Liability. No fact or situation that may reasonably be expected to result in a Material Adverse Effect exists in connection with any Canadian Pension Plan. No Canadian Domiciled Obligor or Subsidiary contributes to or participates in a Canadian Multi-Employer Plan. No Canadian Domiciled Obligor or an Affiliate thereof maintains, contributes or has any liability with respect to a Canadian Pension Plan which provides benefits on a defined benefit basis. No Termination Event has occurred. All contributions required to be made by any Canadian Domiciled Obligor or Subsidiary to any Canadian Pension Plan have been made in a timely fashion in accordance with the terms of such Canadian Pension Plan and the PBA. No Lien has arisen, choate or inchoate, in respect of any Canadian Domiciled Obligor or their property in connection with any Canadian Pension Plan (other than contribution amounts not yet due).

(c)         Foreign Plans . All Foreign Plans are in compliance with, and have been established, administered and operated in accordance with, the terms of such Foreign Plans and

 

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Applicable Law, except for any failure to so comply, establish, administer or operate the Foreign Plans as would not reasonably be expected to have a Material Adverse Effect. All contributions or other payments which are due with respect to each Foreign Plan have been made in full and there are no funding deficiencies thereunder, except to the extent any such events would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(d)         UK Pension Plan . No UK Domiciled Obligor is or has at any time been (1) an employer (as defined for the purposes of sections 38 to 51 of the Pensions Act 2004(UK)) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act (1993)(UK)) or (2) “connected” with or an “associate” (as those terms are used in sections 38 and 43 of the Pensions Act 2004(UK)) of such an employer.

(e)         6 Use of Plan Assets. No Borrower uses “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments.

9.1.11         Disclosure . The Parent Borrower has disclosed to Agent and the Lenders all agreements, instruments and corporate or other restrictions to which the Parent Borrower or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the other reports, financial statements, certificates or other information furnished by or on behalf of any Obligor to Agent or any Lender in connection with the negotiation of the Original Loan Agreement, this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of 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, the Parent Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time such projections were prepared.

9.1.12         Subsidiaries . The Parent Borrower does not have any subsidiaries other than the other Obligors and the Subsidiaries of the other Obligors. Schedule 9.1.12 sets forth the name of, and the ownership interest of the Parent Borrower in, each Subsidiary of the Parent Borrower and identifies each Subsidiary that is an Obligor, in each case as of the Closing Date.

9.1.13         Insurance . Schedule 9.1.13 sets forth a description of all material insurance policies maintained by or on behalf of the Parent Borrower and the Subsidiaries as of the Closing Date. As of the Closing Date, all premiums due in respect of such insurance have been paid.

9.1.14         Labor Matters . As of the Closing Date, there are no strikes, lockouts or slowdowns against the Parent Borrower or any Subsidiary pending or, to the knowledge of the Parent Borrower, threatened that could reasonably be expected to have a Material Adverse Effect. All payments due from the Parent Borrower or any Subsidiary, or for which any claim may be made against the Parent Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Parent Borrower or such Subsidiary except for those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Parent Borrower or any Subsidiary is bound.

 

 

6 Added per Third Amendment.

 

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9.1.15         Solvency . Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of each Loan made on the Closing Date and after giving effect to the application of the proceeds of such Loans, (a) the fair value of the assets of each Obligor, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of each Obligor will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) each Obligor will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or fall due and (d) the Obligors, on a consolidated basis, will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

9.1.16         Senior Indebtedness . The Obligations constitute “Senior Debt”, however defined, under the terms of any Debt that is subordinated in right of payment to the Obligations.

9.1.17         Security Documents .

(a)         Canadian Security Documents .

(i)        The Foreign Facility Guarantee and Collateral Agreement , the Canadian Security Agreement and each Deed of Movable Hypothec is effective to create in favor of Agent, for the benefit of the Canadian Facility Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and (A) in respect of any such Collateral in which a security interest can be perfected by control or possession, such Collateral has been delivered to Agent, in its capacity as agent for the Foreign Facility Secured Parties solely for the purpose of perfecting the security interest granted to Agent in such Collateral, and for so long as Agent remains in control or possession of such Collateral, the security interest in such Collateral created by the Foreign Facility Guarantee and Collateral Agreement, the Canadian Security Agreement and each Deed of Movable Hypothec shall constitute a perfected first priority security interest in all right, title and interest of the pledgor thereunder in such Collateral, in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 10.2.2 and (B) in respect of such Collateral in which a security interest can be perfected by the filing of a UCC or PPSA financing statement or a hypothec registration in accordance with the Civil Code, financing statements and registrations, as applicable, in appropriate form have been filed or registered in the offices specified on Schedule 1.04 to the Perfection Certificate most recently delivered to Agent, and the security interests created by the Foreign Facility Guarantee and Collateral Agreement, the Canadian Security Agreement and each Deed of Movable Hypothec constitute perfected security interests in all right, title and interest of the grantors thereunder in such Collateral, in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 10.2.2 .

(ii)        [Reserved].

(iii)       The Canadian Security Agreement (or a summary thereof) will within ten (10) days of the Closing Date be filed in the Canadian Intellectual Property Office and each other intellectual property registration office where same has been filed, the financing statements and registrations referred to in Section 9.1.17(a)(i)(B) above have been appropriately filed and registered and each security interest created by the Foreign Facility Guarantee and Collateral Agreement, the Canadian Security Agreement

 

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and each Deed of Movable Hypothec constitutes or will constitute a perfected security interest in all right, title and interest of the grantors thereunder in the Intellectual Property in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the Canadian Intellectual Property Office and each other intellectual property registration office where same has been filed, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the Canadian Intellectual Property Office and each other intellectual property registration office where same has been filed and subsequent PPSA filings may be necessary to better evidence or perfect a Lien on registered Intellectual Property acquired by the Obligors after the Closing Date), other than with respect to Liens permitted by Section 10.2.2 .

(iv)        Each Canadian Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to Agent, for the benefit of the Canadian Facility Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Real Estate thereunder and the proceeds thereof, and when the Canadian Mortgages are filed in the appropriate offices, the Lien created by each Canadian Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Real Estate and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section 10.2.2 .

(b)         UK and Dutch Security Documents .

(i)        Each Dutch Security Document is effective to create in favor of Agent, for the benefit of the Foreign Facility Secured Parties, a legal, valid and enforceable security interest in the Collateral described in such Dutch Security Document.

(ii)       Each UK Security Agreement is effective to create in favor of the UK Security Trustee, for the benefit of the Foreign Facility Secured Parties, a legal, valid and enforceable security interest in the “Security Assets” (as defined in the UK Security Agreements).

(iii)      Under the law of each Obligor’s jurisdiction of incorporation or organization it is not necessary that any UK Security Document be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar Tax be paid on or in relation to any UK Security Document or the transactions contemplated by any UK Security Document, except (a) registration of particulars of each UK Security Document granted by a UK Domiciled Obligor at the Companies Registration Office in England and Wales in accordance with Part 25 (Company Charges) of the Companies Act 2006 (UK) or any regulations relating to the registration of charges made under, or applying the provisions of, the Companies Act 2006 (UK), (b) filing, registration or recordation on a voluntary basis or as required in order to perfect the security interest created by any UK Security Document in any relevant jurisdiction and (c) in each case, payment of associated fees, stamp Taxes or mortgage duties.

 

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(iv)      Each UK Domiciled Obligor’s payment obligations under the Loan Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

(v)        Each UK Security Document has or will have the ranking in priority which it is expressed to have in the relevant UK Security Document and, other than as permitted under or contemplated by the Loan Documents, it is not subject to any prior ranking or pari passu ranking Lien.

(c)         U.S. Security Documents .

(i)        The Guarantee and Collateral Agreement is effective to create in favor of Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the “Pledged Collateral” (as defined in the Guarantee and Collateral Agreement) and, in respect of such Pledged Collateral in which a security interest can be perfected by control, such Collateral has been delivered to Agent or the Controlling Term Loan Agent, in its capacity as agent for Agent solely for the purpose of perfecting the security interest granted to Agent in such Collateral, and for so long as Agent or the Controlling Term Loan Agent, as applicable, remains in control of such Collateral, the security interest in such “Pledged Collateral” created by the Guarantee and Collateral Agreement shall constitute a perfected junior priority security interest (subordinate only to the security interests under the Senior Term Loan Documents and the Term Loan Documents) in all right, title and interest of the pledgor thereunder in such “Pledged Collateral”, in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 10.2.2 and subject to the Intercreditor Agreement.

(ii)       The Guarantee and Collateral Agreement is effective to create in favor of Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the “Collateral” other than the “Pledged Collateral” (in each case as defined in the Guarantee and Collateral Agreement) and, in respect of such Collateral in which a security interest can be perfected by the filing of a UCC financing statement, financing statements in appropriate form have been filed in the offices specified on Schedule 1.04 to the Perfection Certificate most recently delivered to Agent, and the security interest created by the Guarantee and Collateral Agreement constituted a perfected security interest in all right, title and interest of the grantors thereunder in such Collateral (other than the Intellectual Property), in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 10.2.2 and subject to the Intercreditor Agreement.

(iii)       The Guarantee and Collateral Agreement (or a summary thereof) has been filed in the United States Patent and Trademark Office and the United States Copyright Office, the financing statements referred to in Section 9.1.17(c)(ii) above have been appropriately filed and the security interest created by the Guarantee and Collateral Agreement constitutes a perfected security interest in all right, title and interest of the grantors thereunder in the Intellectual Property in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the United States Patent

 

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and Trademark Office and the United States Copyright Office and subsequent UCC filings may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Obligors after the Original Closing Date), other than with respect to Liens permitted by Section 10.2.2 and subject to the Intercreditor Agreement.

(iv)       Each Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Real Estate thereunder and the proceeds thereof, and when the Mortgages are filed in the appropriate offices, the Lien created by each Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Real Estate and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section 10.2.2 and subject to the Intercreditor Agreement.

(v)       The information set forth in the Schedules to the Guarantee and Collateral Agreement is true, complete and correct as of the Closing Date.

(d)         Mexican Security Documents .

(i)        Each Mexican Security Document is effective to create in favor of Agent, for the benefit of the Foreign Facility Secured Parties, a legal, valid and enforceable security interest in the “Pledged Assets ( Bienes Pignorados )” (as defined in the corresponding Mexican Security Document).

(ii)       When each Mexican Security Document has been filed in the RUG and IMPI, if applicable, the security interest created therein will constitute a perfected security interest in all right, title and interest of the grantors thereunder in the Collateral described therein, including but not limited to Equipment, Inventory and Intellectual Property in which a security interest may be perfected by filing, recording or registering a security agreement, in the RUG and IMPI, as applicable, in each case prior and superior in right to any other Person.

Each provision of this Section 9.1.17 shall be subject to any applicable limitation set forth in the applicable Security Documents.

9.1.18         Federal Reserve Regulations .

(a)        Neither the Parent Borrower nor any of any Obligor’s Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

(b)        No part of the proceeds of any Revolver Loan or any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the regulations of the Board, including Regulation U or X.

 

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9.1.19         Anti-Corruption Laws and Sanctions . The Parent Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Parent Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Parent Borrower, its Subsidiaries and their respective officers and employees and to the knowledge of the Parent Borrower its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Parent Borrower, any Subsidiary of any Obligor or any of their respective directors, officers or employees, or (b) to the knowledge of the Parent Borrower, any agent of the Parent Borrower or any Subsidiary of any Obligor that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by this Agreement will violate Anti-Corruption Laws or applicable Sanctions.

9.1.20         Accounts . Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by Borrowers with respect thereto. Borrowers warrant, with respect to each Account shown as an Eligible Account in a Borrowing Base Report, that:

(a)        it is genuine and in all respects what it purports to be;

(b)        it arises out of a completed, bona fide sale and delivery of goods in the Ordinary Course of Business, and substantially in accordance with any purchase order, contract or other document relating thereto;

(c)        it is for a sum certain, maturing as stated in the applicable invoice, a copy of which has been furnished or is available to Agent on request;

(d)        it is not subject to any offset, Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section 10.2.2(a) or Section 10.2.2(r) is prior to the Lien of Agent or the applicable Security Trustee, unless an Availability Reserve is in effect with respect thereto)), deduction, defense, dispute, counterclaim or other adverse condition except as arising in the Ordinary Course of Business and disclosed to Agent; and it is absolutely owing by the Account Debtor, without contingency in any respect;

(e)        no purchase order, agreement or Applicable Law restricts assignment of the Account to Agent (regardless of whether, under the UCC, the PPSA, the Civil Code or other Applicable Law, the restriction is ineffective), and the applicable Borrower is the sole payee or remittance party shown on the invoice;

(f)        no extension, compromise, settlement, modification, credit, deduction or return has been authorized or is in process with respect to the Account, except discounts or allowances granted in the Ordinary Course of Business for prompt payment that are reflected on the face of the invoice related thereto and in the reports submitted to Agent hereunder; and

(g)        to Borrowers’ knowledge, without investigation, (i) there are no facts or circumstances that are reasonably likely to impair the enforceability or collectability of such Account; (ii) the Account Debtor had the capacity to contract when the Account arose, continues to meet the applicable Borrower’s customary credit standards, is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased doing business; and (iii) there are no proceedings or actions threatened or pending against any Account Debtor that could reasonably be expected to have a material adverse effect on the Account Debtor’s financial condition.

 

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9.1.21        [ Reserved .]

9.1.22         Centre of Main Interests and Establishments . For the purposes of The Council of the European Union regulation No. 1346/2000 on Insolvency Proceedings (the “ CMI Regulation ”), each of the UK Domiciled Obligors’ centre of main interest (as that term is used in Article 3(1) of the CMI Regulation) is situated in its jurisdiction of incorporation and none of them have an “establishment” (as that term is used in Article 2(h) of the CMI Regulation) in any other jurisdiction.

9.1.23         Material Contracts . Schedule 9.1.23 hereto sets forth for each Obligor, as of the Closing Date, a list of all of the material contracts and agreements to which such Obligor is a party, including, without limitation, all Specified Vendor Receivables Financing Documents (other than agreements disclosed to Agent pursuant to Section 10.1.2(h) , agreements relating to Debt described on Schedule 10.2.1 , real property leases identified on Schedule 2.03 to the Perfection Certificate delivered to Agent on the Closing Date, and Licenses identified on Schedule 4.04 to the Perfection Certificate delivered to Agent on the Closing Date).

9.1.24         Trade Relations . To the Obligors’ knowledge, there exists no actual or threatened termination, limitation or adverse modification of any business relationship between any Obligor or Subsidiary and any customer or supplier, or any group of customers or suppliers, who individually or in the aggregate are material to the business of such Obligor or Subsidiary, except for those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. To the Obligors’ knowledge, there exists no condition or circumstance that could reasonably be expected to impair the ability of any Obligor or Subsidiary to conduct its business at any time hereafter in substantially the same manner as conducted on the Original Closing Date.

9.1.25         Payable Practices . No Obligor or Subsidiary has made any material change in its historical accounts payable practices from those in effect on the Original Closing Date.

9.1.26         Spin-Off . The Spin-Off was consummated on the Original Closing Date in accordance with Applicable Law and the Spin-Off Documentation (without giving effect to any modification or waiver of any provisions of, or any consent given in respect of, the Spin-Off Documentation not approved by Agent).

9.1.27         EEA Financial Institution . No Obligor is an EEA Financial Institution.

SECTION 10

COVENANTS AND CONTINUING AGREEMENTS

10.1          Affirmative Covenants . On and after the Closing Date and until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees and expenses payable hereunder have been paid in full and all Letters of Credit have expired, terminated or been Cash Collateralized and all unpaid drawings under any Letters of Credit shall have been reimbursed, each Obligor shall, and shall cause each Subsidiary to:

10.1.1         Inspections; Appraisals .

(a)        Permit Agent from time to time, subject to reasonable notice and normal business hours, to visit and inspect the Properties of any Obligor or Subsidiary, inspect, audit and make extracts from any Obligor’s or Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Obligor’s or Subsidiary’s

 

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business, financial condition, assets, prospects and results of operations. Lenders may participate in any such visit or inspection, at their own expense. Neither Agent nor any Lender shall have any duty to any Obligor to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligor. Obligors acknowledge that all inspections, appraisals and reports are prepared by Agent and Lenders for their purposes, and Obligors shall not be entitled to rely upon them. Notwithstanding anything to the contrary herein, no Obligor or Subsidiary shall be required to disclose, permit the inspection, examination or making of copies of, or discuss any document, information, or other matter (A) that constitutes non-financial trade secrets or non-financial proprietary information of any Obligor or Subsidiary and/or any of its customers and/or suppliers, (B) in respect of which disclosure to Agent or any Lender (or any of their respective representatives or contractors) is prohibited by Applicable Law, (C) that is subject to attorney-client or similar privilege or constitutes attorney work product or (D) in respect of which any Obligor or Subsidiary owes confidentiality obligations to any third party (provided such confidentiality obligations were not entered into in contemplation of the requirements of this Section 10.1.1(a) ) and disclosure to Agent, any Lender or any Issuing Bank is prohibited notwithstanding the confidentiality obligations set forth in Section 14.12 unless Agent, Lenders and Issuing Banks agree to be bound by such additional confidentiality obligations with respect to such confidential information as may be reasonably requested by the Obligors and/or such third party to permit such disclosure.

(b)        Reimburse Agent for all charges, costs and expenses of Agent in connection with (i) examinations of any Obligor’s books and records or any other financial or Collateral matters as Agent deems appropriate, up to one time per Loan Year (or up to two times per Loan Year during a Reporting Trigger Period); and (ii) appraisals of any Obligor’s Inventory up to one time per Loan Year (or up to two times per Loan Year during a Reporting Trigger Period); provided , however , that if an examination or appraisal is initiated during a Default or Event of Default, all charges, costs and expenses relating thereto shall be reimbursed by Obligors without regard to such limits. Obligors agree to pay Agent’s then standard charges for examination activities, including charges for Agent’s internal examination and appraisal groups, as well as the charges of any third party used for such purposes.

10.1.2         Financial and Other Information . Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP reflecting all financial transactions, and furnish to Agent and Lenders:

(a)        within 90 days after the end of each Fiscal Year of Parent Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “ going concern ” or like qualification or exception (except for any such qualification or exception resulting from any current maturity of Loans hereunder) and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Parent Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied (it being understood that the obligation to furnish the foregoing to Agent and the Lenders shall be deemed to be satisfied in respect of any Fiscal Year of Parent Borrower by the filing of Parent Borrower’ annual report on Form 10-K for such Fiscal Year with the Commission to the extent the foregoing are included therein);

 

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(b)        within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of Parent Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of Parent Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (it being understood that the obligation to furnish the foregoing to Agent and the Lenders shall be deemed to be satisfied in respect of any Fiscal Quarter of Parent Borrower by the filing of Parent Borrower’s quarterly report on Form 10-Q for such Fiscal Quarter with the Commission to the extent the foregoing are included therein);

(c)        during any Reporting Trigger Period, as soon as available, and in any event within 30 days after the end of each month, unaudited balance sheets as of the end of such month and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on a consolidated basis for Obligors and their Subsidiaries and on a consolidating basis for each Obligor, from the Obligors’ internal operating statements (which are not intended to be prepared in accordance with GAAP), certified by a Financial Officer of Parent Borrower as fairly presenting the financial position and results of operations for such month;

(d)        concurrently with delivery of financial statements under clauses (a), (b) and (c) above, or more frequently if requested by Agent while a Default or Event of Default exists, a Compliance Certificate executed by a Financial Officer of the Parent Borrower which, inter alia shall (i) certify as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) set forth reasonably detailed calculations demonstrating compliance with the financial covenant set forth in Section 10.3 (whether or not a Financial Covenant Trigger Period is in effect), (iii) state whether any change in GAAP or in the application thereof has occurred since the date of Parent Borrower’s audited financial statements referred to in Section 9.1.4 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (iv) identify all Subsidiaries existing on the date of such certificate and indicate, for each such Subsidiary, whether such Subsidiary is an Obligor and/or a Foreign Subsidiary and/or an Immaterial Subsidiary and whether such Subsidiary was formed or acquired since the end of the previous Fiscal Quarter;

(e)         7 promptly following any request therefor, provide information and documentation reasonably requested by Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the PATRIOT Act, the Beneficial Ownership Regulation, and the AML Legislation;

(f)        not later than February 15 of each Fiscal Year, projections of Borrowers’ consolidated balance sheets, results of operations, cash flow, Total Availability and each component of Total Availability for such Fiscal Year, quarter by quarter;

 

 

7 Added per Third Amendment.

 

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(g)        at Agent’s request, a listing of each Borrower’s trade payables, specifying the trade creditor and balance due, and a detailed trade payable aging, all in form reasonably satisfactory to Agent;

(h)        promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Parent Borrower or any Subsidiary with the Commission or with any national securities exchange, as the case may be (it being understood that the obligation to furnish the foregoing to Agent and the Lenders shall be deemed to be satisfied to the extent the foregoing are filed with the Commission);

(i)        promptly upon Obligors’ receipt thereof, (A) copies of all material compliance reports filed and material correspondence regarding any active or pending investigation or enforcement action concerning any Obligor with any state, federal, local or foreign regulatory agency and (B) all material correspondence, if any, alleging violation of or requesting compliance by any Obligor with laws, regulations, etc. or requests for information pursuant to interstate commerce laws, antitrust laws, securities laws, worker safety laws (OSHA), etc.;

(j)        except to the extent already provided for in this Section 10.1.2 , promptly after the sending thereof, copies of any proposed waiver, consent, or amendment concerning any of the Senior Term Loan Documents and/or the Term Loan Documents;

(k)        promptly upon the effectiveness thereof, (A) a description of each license from a Governmental Authority which becomes effective after the Closing Date and is material to the conduct of the business of the Obligors and their respective Subsidiaries, taken as a whole, and (B) a description of each material contract or agreement to which any Obligor is a party, including, without limitation, each Specified Vendor Receivables Financing Document (other than contracts and agreements disclosed to Agent pursuant to Section 10.1.2(h) , agreements described on Schedule 9.1.23 or Schedule 10.2.1 , and without duplication of real property leases identified on Schedule 2.03 to the Perfection Certificate most recently delivered to Agent and Licenses identified on Schedule 4.04 to the Perfection Certificate most recently delivered to Agent);

(l)        prior to any sale, transfer or other disposition of Revolver Priority Collateral in an aggregate amount in excess of $5,000,000 in reliance on Section 10.2.5(j) , Borrowers shall deliver to Agent a Borrowing Base Report, in form and substance acceptable to Agent in all respects, showing that, after giving pro forma effect to such disposition, no Overadvance exists, Canadian Revolver Usage does not exceed the Canadian Borrowing Base, UK Revolver Usage does not exceed the UK Borrowing Base, U.S. Revolver Usage does not exceed the U.S. Borrowing Base and Total Revolver Usage does not exceed the Total Borrowing Base; and

(m)       such other reports and information (financial or otherwise) as Agent may reasonably request from time to time in connection with any Collateral or any Borrower’s, Subsidiary’s or other Obligor’s financial condition or business.

Each Obligor represents and warrants that it and each of its Subsidiaries either (i) has no registered or publicly traded securities outstanding or (ii) files its financial statements with the Commission and/or makes its financial statements available to potential holders of its 144A securities, and, accordingly, each Borrower hereby (x) authorizes Agent to make the financial statements to be provided under Section 10.1.2(a) and (b)  above, along with the Loan Documents, available to all Lenders and (y) agrees that at

 

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the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Obligor will not request that any other material be posted to all Lenders without expressly representing and warranting to Agent in writing that (A) such materials do not constitute material non-public information within the meaning of the federal securities laws (“ MNPI ”) or (B) (i) the Parent Borrower and its Subsidiaries have no outstanding publicly traded securities, including 144A securities, and (ii) if at any time the Parent Borrower or any of its Subsidiaries issues publicly traded securities, including 144A securities, the Obligors will, following the issuance of such securities, make such materials that do constitute MNPI at the time of issuance of such securities publicly available by press release or public filing with the Commission.

10.1.3         Notices .

(a)        Notify Agent and Lenders in writing, promptly after an Obligor’s obtaining knowledge thereof, of any of the following that affects an Obligor: (i) the commencement of any proceeding or investigation, whether or not covered by insurance, if an adverse determination could reasonably be expected to result in a Material Adverse Effect; (ii) any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract; (iii) any default under or termination of a Material Agreement; (iv) the existence of any Default or Event of Default; (v) any judgment for the payment of money in an aggregate amount exceeding $2,500,000 that remains undischarged for a period of 30 consecutive days, during which execution is not effectively stayed, or the occurrence of any action legally taken by a judgment creditor to attach or levy upon assets in order to enforce any such judgment; (vi) the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect; (vii) any violation or asserted violation of any Applicable Law (including ERISA, PBA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have a Material Adverse Effect; (viii) any Release by an Obligor or with respect to any Real Estate owned, leased or occupied by an Obligor; or receipt of any Environmental Notice, in each case where the expected remedial costs or liability is reasonably expected to exceed $2,500,000; (ix) the occurrence of any ERISA Event or Termination Event that, alone or together with any other ERISA Events or Termination Events that have occurred, could reasonably be expected to result in liability of the Parent Borrower and its Subsidiaries in an aggregate amount exceeding $10,000,000; (x) the discharge of or any withdrawal or resignation by Obligors’ independent accountants; (xi) any material audit of any Obligor with any federal, state, provincial, local or foreign tax authority; or (xii) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Parent Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

(b)        [Reserved.]

(c)        Each year, within 90 days after the end of each Fiscal Year of Parent Borrower, Parent Borrower (on behalf of itself and the other Obligors) shall deliver to Agent a certificate of a Financial Officer of Parent Borrower (i) setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent Perfection Certificate delivered pursuant to this Section and (ii) certifying that all UCC and PPSA financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each

 

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governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period).

10.1.4         Landlord and Storage Agreements . Upon request, provide Agent with copies of all existing agreements, and promptly after execution thereof provide Agent with copies of all future agreements, between an Obligor and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral.

10.1.5         Compliance with Laws . Each of the Obligors will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Each Obligor will maintain in effect and enforce policies and procedures designed to ensure compliance by such Obligor, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

10.1.6         Payment of Obligations . Each of the Obligors will, and will cause each of the Subsidiaries to, pay its Debt and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except (a) those being contested in good faith by appropriate proceedings and for which such Obligor or such Subsidiary, as applicable, has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (b) to the extent the failure to make payment could not reasonably be expected to result in a Material Adverse Effect; provided that no amounts received from any Obligor shall be applied to Excluded Swap Obligations of such Obligor.

10.1.7         Insurance . Each of the Obligors will, and will cause each of the Subsidiaries to, maintain insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. Such insurance shall be maintained with financially sound and reputable insurance companies, except that a portion of such insurance program (not to exceed that which is customary in the case of companies engaged in the same or similar business or having similar properties similarly situated) may be effected through self-insurance; provided adequate reserves therefor, in accordance with GAAP, are maintained. In addition, each of the Obligors will, and will cause each of its Subsidiaries to, maintain all insurance required to be maintained pursuant to the Security Documents. With respect to each Mortgaged Property that is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, the applicable Obligor will maintain, with financially sound and reputable insurance companies, such flood insurance as is required under Applicable Law, including Regulation H of the Board of Governors. The Parent Borrower will furnish to the Lenders, upon request of Agent, information in reasonable detail as to the insurance so maintained. All insurance policies or certificates (or certified copies thereof) with respect to such insurance shall be endorsed to Agent’s reasonable satisfaction for the benefit of the Lenders (including by naming Agent as lender loss payee, as appropriate).

10.1.8         Existence; Conduct of Business .

(a)        Each of the Obligors will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its

 

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legal existence and the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names the loss of which would have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 10.2.3 or disposition permitted under Section 10.2.5 .

(b)        The Parent Borrower will cause all the Equity Interests of each Subsidiary which is a Borrower to be owned, directly or indirectly, by the Parent Borrower or any Subsidiary.

10.1.9         Future Subsidiaries; Further Assurances .

(a)        If any additional Subsidiary is formed or acquired after the Original Closing Date, the Parent Borrower will, within five Business Days after such Subsidiary is formed or acquired, notify Agent and the Lenders thereof and, within 30 days (or such longer period as may be agreed to by Agent) after any such Subsidiary that is organized, incorporated or formed in the same jurisdiction or country as any member of any then-existing Obligor Group (each, a “ Permitted Jurisdiction ”; as of the Closing Date, the Permitted Jurisdictions include the United States, the United Kingdom, Canada, the Netherlands, and Mexico and any state, province, territory or other jurisdiction of any of the foregoing countries; Permitted Jurisdictions will be deemed to include, without limitation, the jurisdiction or country of each New Borrower) is formed or acquired, cause each applicable Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary, including with respect to any Equity Interest in or Debt of such Subsidiary owned by or on behalf of any Obligor, including delivery of such legal opinions, in form and substance satisfactory to Agent, as it shall deem appropriate in its Permitted Discretion. For the avoidance of doubt, notwithstanding anything herein or in the other Loan Documents to the contrary, no action in any jurisdiction that is not a Permitted Jurisdiction or required by the Laws of any jurisdiction that is not a Permitted Jurisdiction shall be required in order to create any security interests in assets located, titled, registered or filed outside of a Permitted Jurisdiction or to perfect such security interests (it being understood that there shall be no security agreement or pledge agreement governed by the Laws of any jurisdiction that is not a Permitted Jurisdiction). Agent may grant extensions of time for the perfection of security interests in particular assets and the delivery of assets and Security Documents (other than U.S. Security Documents) or any other compliance with the requirements of this Section 10.1.9 where it reasonably determines, in consultation with the Borrower Agent, that perfection or compliance cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or such Security Documents. For the avoidance of doubt, no additional Subsidiary that is formed or acquired after the Original Closing Date that is not a U.S. Subsidiary Obligor shall be subject to the U.S. Facility Collateral and Guarantee Requirement.

(b)        Each of the Obligors will 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, Lien registrations, fixture filings, mortgages, deeds of trust, landlord waivers and other documents), which may be required under any Applicable Law, or which Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Obligors. The Obligors also agree to provide to Agent, from time to time upon request, evidence reasonably satisfactory to Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

 

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(c)        If any assets (including any real property or improvements thereto or any interest therein) having a book value or fair market value of (a) $500,000 or more in the aggregate during the Senior Term Period or (b)  $5,000,000 or more in the aggregate at any other time are acquired by any Obligor after the Closing Date or through the acquisition of a Subsidiary Obligor or through the conversion of a Subsidiary into a Subsidiary Obligor (other than, in each case, assets constituting Collateral under any Security Document that become subject to the Lien of such Security Document upon acquisition thereof), the Parent Borrower or, if applicable, the relevant Subsidiary Obligor will notify Agent and the Lenders thereof, and, if reasonably requested by Agent or the Required Lenders, the Parent Borrower will cause such assets to be subjected to a Lien securing all Obligations of the Obligor Group of which the Obligor which is the direct owner of such Subsidiary Obligor is a member and will take, and cause the Subsidiary Obligors to take, such actions as shall be necessary or reasonably requested by Agent to grant and perfect such Liens, including actions described in paragraph (b) of this Section, all at the expense of the Obligors.

(d)        Any Subsidiary that is organized in any jurisdiction approved by Agent and Lenders, but is not a Canadian Subsidiary, UK Subsidiary or U.S. Subsidiary, may, at the election of the Borrower Agent and with the written approval of Agent and Lenders, become a Foreign Borrower hereunder (such Subsidiary, a “ New Borrower ”) upon (i) the execution and delivery to Agent and/or Security Trustees (A) by the Persons required to be parties thereto (including, with respect to the amendment of this Agreement, in accordance with Section 14.1.1 ) of an amendment and joinder to this Agreement and the other applicable Loan Documents, together with supplements to the applicable Loan Documents executed by such New Borrower and any other Person required by the terms of such Loan Documents to be party to such supplement, which may, if agreed to by Borrower Agent and Agent, provide for the addition to this Agreement of additional agreed security principals and for any appropriate modification to the tax gross-up provisions (including the definition of the Excluded Taxes) to reflect the withholding tax rules in the applicable new jurisdiction(s), all in form and substance acceptable to Agent in all respects, (B) by such New Borrower of Security Documents in form and substance satisfactory to Agent and any relevant Security Trustee as may be required for the relevant jurisdiction (provided that, to the extent appropriate with respect to such jurisdiction, any such new Security Document shall be in substantially the same form as any comparable Security Document to which any similarly-situated existing Obligor is party) and satisfaction of requirements substantially the same as the Collateral and Guarantee Requirement of the other Foreign Borrowers, modified as appropriate with respect to the relevant jurisdiction, (C) by an executive officer or Financial Officer of such New Borrower (and other Obligors, to the extent reasonably requested by Agent) of a completed Perfection Certificate dated as of the date that the joinder of such New Borrower to the applicable Loan Documents is effective (with respect to such New Borrower, the “ Joinder Date ”), together with all attachments contemplated thereby, including without limitation the results of a search of the relevant Lien-related filings made with respect to such New Borrower in the jurisdictions contemplated by such Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to Agent that the Liens indicated by such financing statements (or similar documents) are permitted by Section 10.2.2 or have been released or will be released pursuant to appropriate release documentation delivered to Agent, (D) by Borrower Agent of a Borrowing Base Report incorporating such New Borrower as of the most recent month ending at least 15 days prior to the Joinder Date, (E) by a knowledgeable Senior Officer of such New Borrower of a certificate of the type described in Section 6.1(e) , (F) by a duly authorized officer of such New Borrower of a certificate of the type described in Section 6.1(f) , together with all attachments thereto (including, without limitation, items that are the applicable jurisdictional

 

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equivalent of those referred to in Section 6.1(h) ), (G) by a knowledgeable Senior Officer of Borrower Agent, a certificate, in form and substance reasonably satisfactory to Agent, certifying that, after giving effect to the joinder of such New Borrower on the Joinder Date and any Loan or Letter of Credit to be extended or issued to or on behalf of the New Borrower on such date, no Default exists and the representations and warranties set forth in Section 9 are true and correct and (H) such other documents, instruments and agreements as Agent may reasonably require; (ii) Agent’s receipt of duly executed agreements establishing and/or evidencing each Dominion Account and related lockbox and each Controlled Account of such New Borrower, each in form and substance, and with financial institutions, satisfactory to Agent; (iii) Agent’s receipt of a written opinion of counsel to such New Borrower, as well as any local counsel to such New Borrower or Agent, in form and substance satisfactory to Agent; (iv) to the extent not previously delivered to Agent, Agent’s receipt of copies of policies or certificates of insurance for the insurance policies carried by such New Borrower, together with a loss payable endorsement naming Agent as loss payee and reasonably acceptable to Agent, all in compliance with the Loan Documents; (v) the completion of Agent’s business, legal and financial due diligence (it being understood that examinations and appraisals conducted pursuant to this clause (v) shall not be included in the limits on the number of examinations or appraisals provided in Section 10.1.1 ) with respect to such New Borrower, with results satisfactory to Agent, and Agent’s and the Applicable Lenders’ (for purposes of this clause (v), the Applicable Lenders being the Lenders that will provide a Commitment to such New Borrower) receipt of all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act; (vi) Agent’s receipt of payoff or release letters, in form and substance satisfactory to Agent, confirming that such New Borrower is released from all obligations under any Debt not expressly permitted by this Agreement and providing a release of all of the Liens existing with respect to any such Debt in and to the assets of such New Borrower, together with termination statements and other documentation evidencing the termination of any such Liens in and to the properties and assets of such New Borrower and (vii) payment by Borrowers of all fees and expenses to be paid to Agent and/or the Lenders under the Loan Documents on or prior to the Joinder Date.

(e)        Each provision of the Section 10.1.9 shall be subject to any applicable limitation set forth in the applicable Security Documents and the Agreed Security Principles.

10.1.10         Casualty and Condemnation . The Parent Borrower (a) will furnish to Agent and the Lenders prompt written notice of casualty or other insured damage to any material portion of any Collateral having a book value or fair market value of $1,000,000 or more or the commencement of any action or proceeding for the taking of any Collateral having a book value or fair market value of $1,000,000 or more or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement, the Security Documents and the Intercreditor Agreement.

10.1.11         Canadian Pension Plans and UK Pension Plans .

(a)        Promptly after any Canadian Domiciled Obligor or any Affiliate knows or has reason to know of the occurrence of any of the following events, the applicable Canadian Domiciled Obligor will deliver to Agent a certificate of a Senior Officer of the applicable Canadian Domiciled Obligor setting forth details as to such occurrence and the action, if any, that such Canadian Domiciled Obligor or such Affiliate is required or proposes to take, together with

 

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any notices (required, proposed or otherwise) given to or filed with or by such Canadian Domiciled Obligor, such Affiliate, the FSCO, a Canadian Employee Plan participant (other than notices relating to an individual participant’s benefits) or the Canadian Employee Plan administrator with respect to any violation or asserted violation of any Applicable Law (including the PBA) or the occurrence of any Termination Event.

(b)        Each Canadian Domiciled Obligor’s and its Subsidiaries’ Canadian Pension Plans shall be duly registered and administered in all respects in material compliance with, as applicable, the PBA, the Income Tax Act (Canada) and all other Applicable Laws (including regulations, orders and directives), and the terms of the Canadian Pension Plans and any agreements relating thereto. Each Canadian Domiciled Obligor shall ensure that it and its Subsidiaries: (i) have no Unfunded Current Liability in respect of any Canadian Pension Plan, including any Canadian Pension Plan to be established and administered by it or them; (ii) pay all amounts required to be paid by it or them in respect of such Canadian Pension Plan when due; (iii) have no Lien on any of its or their property that arises or exists in respect of any Canadian Pension Plan except as disclosed in Schedule 10.2.2 ; (iv) do not engage in a prohibited transaction or breach any applicable laws with respect to any Canadian Pension Plan that could reasonably be expected to result in a Material Adverse Effect in respect of such Canadian Pension Plan; (v) do not permit to occur or continue any Termination Event; and (vi) not maintain, contribute or have any liability in respect of a Canadian Pension Plan which provides benefits on a defined benefit basis during the term of this Agreement.

(d)        Each UK Domiciled Obligor shall ensure that all pension schemes operated by or maintained for the benefit of members of the UK Domiciled Obligors and/or any of their employees are fully funded based on the statutory funding objective under sections 221 and 222 of the Pensions Act 2004 (UK) and that no action or omission (including, without limitation, the termination or commencement of winding-up proceedings of any such pension scheme or any UK Domiciled Obligor ceasing to employ any member of such a pension scheme) is taken by any UK Domiciled Obligor in relation to such a pension scheme which has or is reasonably likely to have a Material Adverse Effect.

(e)        Each UK Domiciled Obligor shall ensure that no UK Domiciled Obligor is or has been at any time an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004 (UK)) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993 (UK)) or “connected” with or an “associate” of (as those terms are used in sections 38 or 43 of the Pensions Act 2004 (UK)) such an employer.

(f)        Each UK Domiciled Obligor shall deliver to Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the UK Domiciled Obligor), actuarial reports in relation to all pension schemes mentioned in paragraph (c) above.

(g)        Each UK Domiciled Obligor shall promptly notify Agent of any material change in the rate of contributions to any pension schemes mentioned in (c) above paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise).

10.1.12         Maintenance of Properties . Each of the Obligors will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of their business, taken as a whole, in good working order and condition, ordinary wear and tear excepted; provided that the foregoing

 

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shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 10.2.3 or disposition permitted under Section 10.2.5 .

10.1.13         Use of Proceeds and Letters of Credit . The proceeds of the Revolver Loans will be used only for general corporate purposes and Permitted Acquisitions. Letters of Credit will be available only for general corporate purposes. No part of the proceeds of any Revolver Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the regulations of the Board, including Regulations T, U and X.

10.1.14         Banking Relationships; Controlled Accounts; Deposit and Security Accounts . Within ninety (90) days of the Original Closing Date and continuing thereafter, each of the U.S. Domiciled Obligors will, and will cause each of the U.S. Subsidiaries to, maintain Bank of America or Wells Fargo Bank as their principal depository bank, including for the maintenance of operating and depository accounts, administration and services, funds transfer services, information reporting services, and other Cash Management Services. All Controlled Accounts of the UK Domiciled Obligors shall be held in the United States. Each of the Obligors will cause all of their Deposit Accounts and Securities Accounts that do not constitute Excluded Accounts to be maintained in jurisdictions (and in no event in any jurisdiction that is not a Permitted Jurisdiction) and with banks or other financial institutions such that such Deposit Accounts and Securities Accounts may be subject to Deposit Account Control Agreements or Securities Account Control Agreements, as applicable, to the extent required by the Loan Documents without giving effect to the Agreed Security Principles (except with respect to the following, to which the Agreed Securities Principles will apply: (a) Deposit Accounts and Securities Accounts maintained by a UK Domiciled Obligor in the United Kingdom, to the extent permitted to be maintained in such country pursuant to this Section 10.1.14 , (b) Deposit Accounts and Securities Accounts maintained by a Mexican Domiciled Obligor in Mexico and (c) Securities Accounts maintained by a Canadian Domiciled Obligor in Canada).

10.1.15         Post-Closing Deliverables . The Obligors shall deliver, or cause to be delivered, the following items to Agent, in each case in form and substance satisfactory to Agent and its counsel, and/or cause the following to occur, in each case on or before expiration of the respective specified time periods, in each case as extended in writing by Agent in the sole discretion of Agent:

(a)  No later than twenty (20) Business Days after the Closing Date (i) an amendment to the Intercreditor Agreement, executed and delivered by Agent and Term Loan Agent, (ii) an amendment to the Guarantee and Collateral Agreement, executed and delivered by Agent and the U.S. Obligors, and (iii) a copy of an amendment to the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), executed by the Term Loan Agent and the U.S. Obligors.

(b)  No later than twenty (20) Business Days after the Closing Date, a certificate of a duly authorized officer of Parent Borrower certifying that an attached copy of resolutions of the applicable governing body of Parent Borrower authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and, together with the resolutions delivered by the Parent Borrower pursuant to Section 6 of the Original Loan Agreement, constitute all resolutions adopted with respect to this credit facility. Upon receipt thereof, Agent may conclusively rely on such certificate until it is otherwise notified by the applicable Obligor in writing.

(c)  No later than twenty (20) Business Days after the Closing Date, an amendment to the Limited Liability Company Agreement of Horizon International Holdings

 

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LLC, a Delaware limited liability company, certified by a duly authorized officer thereof, to permit Agent and its assignees to exercise all voting, management, economic and other membership rights under such Limited Liability Company Agreement, as amended, in connection with the enforcement and/or transfer of its rights and/or interests in the Equity Interests in Horizon International Holdings LLC pledged to Agent, in each case to the extent such enforcement and/or transfer is permitted by the Loan Documents.

(d)  No later than twenty (20) Business Days after the Closing Date, evidence that all direct and indirect Subsidiaries of the Parent Borrower are insureds under the insurance policies set forth on Schedule 9.1.13.

(e)  No later than sixty (60) Business Days after the Closing Date (provided that if Obligors are unable to comply with this covenant within such time period after exercising commercially reasonable efforts, Obligors shall be automatically granted an additional sixty (60) Business Day period to comply with this covenant so long as Obligors continue to exercise commercially reasonable efforts to complete the same), evidence, in form and substance satisfactory to Agent, that the Liens on the assets of Cequent Performance in favor of Heller Financial Inc. have been released, together with, in each case unless Cequent Performance (in its reasonable business judgment) and Agent shall reasonably determine that such Trademark is in no way material to the conduct of Cequent Performance’s business, a release of the interest of Heller Financial Inc. in Trademarks “Hidden Hitch Logo — TMA582876”, “Pyramid, Hitchball & Design — TMA317445” and “Hidden Hitch — TMA390183” of Cequent Performance and evidence that filings appropriate to evidence the release of such Liens have been properly filed with the Canadian Intellectual Property Office.

(f)        Not later than thirty (30) days following the Closing Date, in each case unless Cequent Performance or Cequent Consumer, as applicable and in its reasonable business judgment, and Agent shall reasonably determine that the applicable Patent or Trademark is in no way material to the conduct of Cequent Performance’s or Cequent Consumer’s business, as applicable, cause to be filed with the PTO an update to the Owner Name to reflect the proper Obligor (Cequent Consumer Products, Inc. or Cequent Performance Products, Inc.) as owner for each of the following Patents and Trademarks and provide evidence of filing of the same to Agent: (i) adjustable enclosure and mounting box for a trailer hitch electrical connector (Reg. # 6,076,691) (currently assigned to Mascotech, Inc.); (ii) trailer hitch with load adjustment (Reg. # 6,722,682) (current owner is Hidden Hitch International); and (iii) sealed multiple-contact electrical connector (Reg. # 6,338,644) (current owner is Theodore Bargman, Inc. D/B/A The Bargman Company).

(g)           Each Obligor will and will case each other Obligor to satisfy the post-closing conditions described in Schedule I to the Fourth Amendment within the timelines set forth therein.

Except with respect to the extension of the deadline from that set forth in the Post-Closing Agreement referred to below with respect to the deliverables required by clause (f) of this Section 10.1.15 , this Section 10.1.15 does not amend or modify, or waive or release any obligation under, that certain Post-Closing Agreement, dated as of the Original Closing Date, by and among the U.S. Borrowers, the Lenders party thereto, and Agent, as such Post-Closing Agreement may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms.

 

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10.1.16          Retention of Consultant. The Obligors shall continue to retain Brian Whittman of Alvarez & Marsal as a consultant to and as an officer of the Borrowers for a period ending no sooner than March 31, 2019.

10.2     Negative Covenants . On and after the Closing Date and until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees and expenses payable hereunder have been paid in full and all Letters of Credit have expired, terminated or been Cash Collateralized and all unpaid drawings under any Letters of Credit shall have been reimbursed, each Obligor covenants and agrees with the Lenders that:

10.2.1         Debt; Certain Equity Securities .

(a)        None of the Obligors will, nor will they permit any Subsidiary to, create, incur, assume or permit to exist any Debt or obligations under Hedging Agreements, except (and provided, however, that during the Senior Term Period no additional arrangements for Debt described in clauses (i)(B), (ii), (iii)(B), (iv), (vii), (viii), (ix), (x), (xii), (xiii) or (xx) below may be incurred by any Obligor or any Subsidiary) :

(i)        (A) Debt created under the Loan Documents, (B) any Term Loan Debt and , (C) any Permitted Term Loan Refinancing Debt and (D) Senior Term Loan Debt ;

(ii)       (A) financings in respect of sales of accounts receivable by a Foreign Subsidiary permitted by Section 10.2.5(c)(i ) , (B) the Specified Vendor Receivables Financing and (C) the Specified Vendor Payables Financing;

(iii)       (A) Debt existing on the Original Closing Date and set forth in Schedule 10.2.1 and (B)  extensions, renewals and replacements of any such Debt that do not increase the outstanding principal amount as specified on such Schedule 10.2.1 or result in an earlier maturity date or decreased weighted average life thereof;

(iv)       Permitted Unsecured Debt of the Parent Borrower; provided that the Net Leverage Ratio (disregarding the proceeds of such Permitted Unsecured Debt in calculating Unrestricted Domestic Cash), on a pro forma basis after giving effect to the incurrence of such Permitted Unsecured Debt (and any related repayment of Debt) and recomputed as of the last day of the most recently ended Fiscal Quarter of the Parent Borrower for which financial statements are available, as if such incurrence (and any related repayment of Debt) had occurred on the first day of the relevant period is no greater than 4.00 to 1.00;

(v)        Debt of the Parent Borrower to any Subsidiary and of any Subsidiary to the Parent Borrower or any other Subsidiary; provided that Debt of any Subsidiary that is not a U.S. Obligor to the Parent Borrower or any Subsidiary Obligor shall be subject to Section 10.2.4 ;

(vi)       Guarantees by the Parent Borrower of Debt of any Subsidiary and by any Subsidiary of Debt of the Parent Borrower or any other Subsidiary; provided that Guarantees by the Parent Borrower or any Subsidiary Obligor of Debt of any Subsidiary that is not a U.S. Obligor shall be subject to Section 10.2.4 ;

 

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(vii)    Guarantees by the Parent Borrower or any Subsidiary, as the case may be, in respect of (A) the Term Loan Debt, (B) any Permitted Term Loan Refinancing Debt, or (C) any Permitted Unsecured Debt or (D) Senior Term Loan Debt; provided that none of the Parent Borrower or any Subsidiary, as the case may be, shall Guarantee such Debt unless it also has Guaranteed the Obligations pursuant to a Guaranty;

(viii)    Debt of the Parent Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Debt assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Debt that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life thereof; provided that (A) such Debt is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Debt permitted by this clause (viii)shall not exceed $20,000,000 at any time outstanding;

(ix)      Debt arising as a result of an Acquisition Lease Financing or any other sale and leaseback transaction permitted under Section 10.2.6 ;

(x)       Debt of any Person that becomes a Subsidiary after the Original Closing Date; provided that (A) such Debt exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Debt permitted by this clause (x) shall not exceed $25,000,000 at any time outstanding, less the liquidation value of any outstanding Assumed Preferred Stock;

(xi)      Debt of the Parent Borrower or any Subsidiary in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety appeal or similar bonds and completion guarantees provided by the Parent Borrower and the Subsidiaries in the ordinary course of their business;

(xii)      other unsecured Debt of the Parent Borrower or any Subsidiary in an aggregate principal amount not exceeding $15,000,000 at any time outstanding, less the liquidation value of any applicable Qualified Parent Borrower Preferred Stock issued and outstanding pursuant to clause (b) of the definition of Qualified Parent Borrower Preferred Stock;

(xiii)     secured Debt in an aggregate amount not exceeding $50,000,000 at any time outstanding, in each case in respect of Debt of Foreign Subsidiaries (exclusive of any Debt of Foreign Subsidiaries arising under the Loan Documents);

(xiv)     Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the Ordinary Course of Business; provided , however , that such Debt is extinguished within ten days of incurrence;

(xv)       Debt arising in connection with endorsement of instruments for deposit in the Ordinary Course of Business;

 

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(xvi)     Debt incurred in connection with the financing of insurance premiums in an aggregate amount at any time outstanding not to exceed the premiums owed under such policy, if applicable;

(xvii)    contingent obligations to financial institutions, in each case to the extent in the Ordinary Course of Business and on terms and conditions which are within the general parameters customary in the banking industry, entered into to obtain cash management services or deposit account overdraft protection services (in an amount similar to those offered for comparable services in the financial industry) or other services in connection with the management or opening of deposit accounts or incurred as a result of endorsement of negotiable instruments for deposit or collection purposes and other customary, contingent obligations of the Parent Borrower and its Subsidiaries incurred in the Ordinary Course of Business;

(xviii)   unsecured guarantees by the Parent Borrower or any Subsidiary Obligor of facility leases of any Obligor;

(xix)     obligations of the Parent Borrower or any Subsidiary Obligor under Hedging Agreements permitted under Section 10.2.7 with respect to (A) any Permitted Bond Hedge Transaction, (B) any Permitted Warrant Transaction and/or interest rates, foreign currency exchange rates or commodity prices, in each case not entered into for speculative purposes; provided that if such Hedging Agreements relate to interest rates, (i) such Hedging Agreements relate to payment obligations on Debt otherwise permitted to be incurred by the Loan Documents and (ii) the notional principal amount of such Hedging Agreements at the time incurred does not exceed the principal amount of the Debt to which such Hedging Agreements relate;

(xx)     Alternative Incremental Debt; provided that the aggregate principal amount of any Alternative Incremental Debt established on any date shall not exceed (i) (together with the aggregate amount of all Incremental Term Commitments established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount on such date and (ii) an additional amount subject to the Maximum Alternative Incremental Debt Amount as of such date;

(xxi)     Debt arising under a declaration of joint and several liability used for the purpose of section 2:403 of the Dutch Civil Code (and any residual liability under such declaration arising pursuant to section 2:404(2) of the Dutch Civil Code);

(xxii)    any Capital Lease Obligations of a Person that becomes a Subsidiary pursuant to the Westfalia Acquisition; provided that (A) such Capital Lease Obligation exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Debt permitted by this clause (xxii) shall not exceed $15,000,000 at any time outstanding; and

(xxiii)   any Permitted Convertible Indebtedness and replacements or refinancings thereof in an aggregate principal amount not to exceed $125 million at the time of issuance; provided that at the time of and immediately after the issuance of such Debt, the Required Conditions are met.

 

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(b)        None of the Obligors will, nor will they permit any Subsidiary to, issue any preferred stock or other preferred Equity Interests, except (i) Qualified Parent Borrower Preferred Stock, (ii) Assumed Preferred Stock and (iii) preferred stock or preferred Equity Interests held by the Parent Borrower or any Subsidiary (and provided, however, that during the Senior Term Period no Qualified Parent Borrower Preferred Stock or Assumed Preferred Stock may be issued by the Parent Borrower or any Subsidiary) .

10.2.2         Liens . None of the Obligors will, nor will they permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except (and provided, however, that during the Senior Term Period no additional Liens described in clauses (a)(iii), (c), (e), (f), (h), (i), (j), (n) or (r) below may be created, assumed or incurred by the Borrower or any Subsidiary) :

(a)         (i) Liens created under the Loan Documents, (ii)  Liens created under the Term Loan Documents and , (iii)  Liens in respect of any Permitted Term Loan Refinancing Debt and (iv) Liens created under the Senior Term Loan Documents ;

(b)        Permitted Encumbrances;

(c)        Liens in respect of the Specified Vendor Receivables Financing;

(d)        any Lien on any property or asset of the Parent Borrower or any Subsidiary existing on the Original Closing Date and set forth in Schedule 10.2.2 ; provided that (i) such Lien shall not apply to any other property or asset of the Parent Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secured on the Original Closing Date and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e)        any Lien existing on any property or asset prior to the acquisition thereof by the Parent Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Original Closing Date prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Parent Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be;

(f)        Liens on fixed or capital assets acquired, constructed or improved by, or in respect of Capital Lease Obligations of, the Parent Borrower or any Subsidiary; provided that (i) such security interests secure Debt permitted by Section 10.2.1(a)(viii) , (ii) such security interests and the Debt secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Debt secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Parent Borrower or any Subsidiary;

(g)        Liens, with respect to any Mortgaged Property, described in the applicable schedule of the title policy covering such Mortgaged Property;

 

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(h)        Liens in respect of sales of accounts receivable by Foreign Subsidiaries permitted by Section 10.2.5(c)(i) ;

(i)        other Liens securing liabilities permitted hereunder in an aggregate amount not exceeding (i) in respect of consensual Liens, $5,000,000 and (ii) in respect of all such Liens, $10,000,000, in each case at any time outstanding;

(j)        Liens in respect of Debt permitted by Section 10.2.1(a)(xiii) , provided that the assets subject to such Liens are not located in the United States;

(k)        Liens, rights of setoff and other similar Liens existing solely with respect to cash and Permitted Investments on deposit in one or more accounts maintained by any Lender, in each case granted in the Ordinary Course of Business in favor of such Lender with which such accounts are maintained, securing amounts owing to such Lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Debt for Borrowed Money;

(l)        licenses or sublicenses of Intellectual Property granted by the Parent Borrower or any Subsidiary in the Ordinary Course of Business and not interfering in any material respect with the ordinary conduct of business of the Parent Borrower or any Subsidiary;

(m)        the filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

(n)        Liens for the benefit of a seller deemed to attach solely to cash earnest money deposits in connection with a letter of intent or acquisition agreement with respect to a Permitted Acquisition;

(o)        Liens deemed to exist in connection with investments permitted under Section 10.2.4 that constitute repurchase obligations and in connection with related set-off rights;

(p)        Liens of a collection bank arising in the Ordinary Course of Business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(q)        Liens of sellers of goods to the Parent Borrower or any Subsidiary arising under Article 2 of the UCC in effect in the relevant jurisdiction in the Ordinary Course of Business, covering only the goods sold and covering only the unpaid purchase price for such goods and related expenses; and

(r)        Liens on Collateral securing Alternative Incremental Debt, provided that such Alternative Incremental Debt shall be secured only by a Lien on the Collateral having the same priorities in the Term Priority Collateral and the Revolver Priority Collateral as the Term Loan Debt (or on a subordinated basis) with the Obligations and, in each case, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to Agent.

 

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10.2.3         Fundamental Changes .

(a)        None of the Obligors will, nor will they permit any Subsidiary to merge into or consolidate with any Person, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge into a Borrower in a transaction in which such Borrower is the surviving corporation, (ii) any Subsidiary (other than a Borrower) may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (if any party to such merger is a Subsidiary Obligor) is a Subsidiary Obligor for which the Collateral and Guarantee Requirement has been satisfied and (iii) any Subsidiary (other than a Borrower or Subsidiary Obligor) may liquidate or dissolve if the Parent Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Parent Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 10.2.4 . Notwithstanding the foregoing, this Section 10.2.3 shall not prohibit any Permitted Acquisition.

(b)        The Parent Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Parent Borrower and its Subsidiaries on the date of execution of the Original Loan Agreement and businesses reasonably related thereto.

10.2.4         Investments, Loans, Advances, Guarantees and Acquisitions . None of the Obligors will, nor will they permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except (and provided, however, that during the Senior Term Period the Obligors or any Subsidiary may not make an additional purchase, acquisition, advance, or investment pursuant to any of the clauses (d) (unless consistent with prior practice and in the ordinary course of business), (f), (g), (q), (r) or (s) below) :

(a)        Permitted Investments;

(b)        investments existing on the Original Closing Date and set forth on Schedule 10.2.4 ;

(c)        [Reserved];

(d)        investments by the Parent Borrower and the Subsidiaries in their respective Subsidiaries that exist immediately prior to any applicable transaction; provided that (i) any such Equity Interests held by an Obligor shall be pledged pursuant to a Security Document acceptable to Agent, to the extent required by this Agreement; (ii) investments (excluding any such investments, loans, advances and Guarantees to such Subsidiaries that are assumed and exist on the date any Permitted Acquisition is consummated and that are not made, incurred or created in contemplation of or in connection with such Permitted Acquisition) by Obligors in, and loans and advances by Obligors to, and Guarantees by Obligors of Debt (or lease obligations) of, Subsidiaries that are not Obligors made after the Original Closing Date shall only be permitted if, at the time of and after giving effect to such investment, (x) the Required Conditions are met and

 

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(y) the aggregate principal amount of any Debt (or lease obligations) of Subsidiaries that are not Obligors subject to any Guarantee by any Obligor made after the Original Closing Date shall not at any time exceed $40,000,000;

(e)        loans or advances made by the Parent Borrower to any Subsidiary and made by any Subsidiary to the Parent Borrower or any other Subsidiary; provided that (i) any such loans and advances made by an Obligor shall be evidenced by a promissory note pledged pursuant to a Security Document and (ii) any such loans and advances made by Obligors to Subsidiaries that are not Obligors shall only be permitted if, at the time of and after giving effect to such investment, the Required Conditions are met;

(f)        Guarantees permitted by Section 10.2.1(a)(vii) ;

(g)        Guarantees in respect of any Specified Vendor Payables Financing;

(h)        investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the Ordinary Course of Business;

(i)        any investments in or loans to any other Person received as noncash consideration for sales, transfers, leases and other dispositions permitted by Section 10.2.5 ;

(j)        Guarantees by the Parent Borrower and the Subsidiaries of leases entered into by any Subsidiary as lessee; provided that such Guarantees made by Obligors to Subsidiaries that are not Obligors shall only be permitted if, at the time of and after giving effect to such investment, the Required Conditions are met, and the amount of lease obligations which is the subject of any such Guarantees shall be subject to the limitation set forth in clause (d) above;

(k)        extensions of credit in the nature of accounts receivable or notes receivable in the Ordinary Course of Business;

(l)        loans or advances to employees made in the Ordinary Course of Business consistent with prudent business practice and not exceeding $2,500,000 in the aggregate outstanding at any one time;

(m)        investments in the form of Hedging Agreements permitted under Section 10.2.7 ;

(n)        [Reserved];

(o)        payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the Ordinary Course of Business;

(p)        [Reserved];

(q)        investments, loans or advances in addition to those permitted by the other clauses of this Section 10.2.4 not exceeding in the aggregate $25,000,000 at any time outstanding, provided that no Default exists at the time that such investment, loan or advance is made or is caused thereby;

 

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(r)        investments made (i) in an amount not to exceed the Net Proceeds of any issuance of Equity Interests in Parent Borrower issued after the Original Closing Date or (ii) with Equity Interests in Parent Borrower; and

(s)        other investments by the Parent Borrower or any Subsidiary so long as the Required Conditions are met.

10.2.5         Asset Sales . None of the Obligors will, nor will they permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will they permit any Subsidiary to issue any additional Equity Interest in such Subsidiary, except (and provided, however, that during the Senior Term Period the Obligors or any Subsidiary may not, sell, transfer, lease or otherwise dispose of any additional asset, including any Equity Interest owned by it, nor will the Obligors permit any Subsidiary to issue any additional Equity Interest in such Subsidiary pursuant to any of the clauses (c), (e), (f) or (j) below) :

(a)        sales, transfers, leases and other dispositions of inventory, used or surplus equipment or other obsolete assets, Permitted Investments and investments referred to in Section 10.2.4(h) in the Ordinary Course of Business;

(b)        sales, transfers and dispositions to the Parent Borrower or a Subsidiary; provided that any such sales, transfers or dispositions involving a Subsidiary that is not a U.S. Obligor shall be made in compliance with Section 10.2.9 ;

(c)        (i) sales of accounts receivable and related assets by a Foreign Subsidiary pursuant to customary terms whereby recourse and exposure in respect thereof to any Foreign Subsidiary does not exceed at any time $35,000,000 and (ii) sales of accounts receivables and related assets pursuant to the Specified Vendor Receivables Financing;

(d)        the creation of Liens permitted by Section 10.2.2 and dispositions as a result thereof;

(e)        sales or transfers that are permitted sale and leaseback transactions pursuant to Section 10.2.6 ;

(f)        sales and transfers that constitute part of an Acquisition Lease Financing;

(g)        Restricted Payments permitted by Section 10.2.8 ;

(h)        transfers and dispositions constituting investments permitted under Section 10.2.4 ;

(i)        sales, transfers and other dispositions of property identified on Schedule 10.2.5 ; and

(j)        so long as no Event of Default shall have occurred and then be continuing, sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary) that are not permitted by any other clause of this Section; provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this clause (j) shall not exceed (i) 15% of the aggregate fair market value of all assets of the Parent Borrower (determined as of the end of its most recent Fiscal Year), including any Equity Interests owned by it, during any Fiscal Year of the Parent Borrower; provided that such amount shall be

 

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increased, in respect of the Fiscal Year ending on December 31, 2016, and each Fiscal Year thereafter by an amount equal to the total unused amount of such permitted sales, transfers and other dispositions for the immediately preceding Fiscal Year (without giving effect to the amount of any unused permitted sales, transfers and other dispositions that were carried forward to such preceding Fiscal Year) and (ii) 35% of the aggregate fair market value of all assets of the Parent Borrower as of the Original Closing Date, including any Equity Interests owned by it, during the time subsequent to the Original Closing Date; provided , further , however , that Obligors shall comply with Section 10.1.2(l) concerning any sale, transfer or other disposition of Revolver Priority Collateral in an aggregate amount in excess of $5,000,000;

provided that (x) all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by clauses (b) or (h) above) shall be made for fair value and (y) all sales, transfers, leases and other dispositions permitted by clauses (i) and (j) above shall be for at least 75% cash consideration.

10.2.6          Sale and Leaseback Transactions . None of the Obligors will, nor will they permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except , in each case, during the Senior Term Period, for (a) any such sale of any fixed or capital assets (other than any such transaction to which (b) or (c) below is applicable) that is made for cash consideration in an amount not less than the cost of such fixed or capital asset in an aggregate amount less than or equal to $10,000,000, so long as the Capital Lease Obligations associated therewith are permitted by Section 10.2.1(a)(viii) , (b) in the case of property owned as of or after the Original Closing Date, any such sale of any fixed or capital assets that is made for cash consideration in an aggregate amount not less than the fair market value of such fixed or capital assets not to exceed $20,000,000 in the aggregate, in each case, so long as the Capital Lease Obligations (if any) associated therewith are permitted by Section 10.2.1(a)(viii) , and (c) any Acquisition Lease Financing.

10.2.7          Hedging Agreements . None of the Obligors will, nor will they permit any Subsidiary to, enter into any Hedging Agreement, other than (a) Hedging Agreements entered into in the Ordinary Course of Business and which are not speculative in nature to hedge or mitigate risks to which the Parent Borrower or any other Subsidiary is exposed in the conduct of its business or the management of its assets or liabilities (including Hedging Agreements that effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)), (b)  except during the Senior Term Period, any Permitted Bond Hedge Transaction and (c)  except during the Senior Term Period , any Permitted Warrant Transaction.

10.2.8          Restricted Payments; Certain Payments of Debt .

(a)        None of the Obligors will, nor will they permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except (and provided, however, that the Borrower or any Subsidiary may not during the Senior Term Period declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment or incur any obligation (contingent or otherwise) to do so pursuant to any of the clauses (iii), (iv), (v), (vi), (vii) or (viii) below) :

(i)        Parent Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional Equity Interests in Parent Borrower;

 

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(ii)        Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests;

(iii)       the Parent Borrower may (A) use the proceeds of the Term Loan Debt to pay the Original Closing Date Dividend and (B) make other Restricted Payments not exceeding $5,000,000 from and after the Original Closing Date, in each case pursuant to and in accordance with stock option plans, equity purchase programs or agreements or other benefit plans, in each case for management or employees or former employees of the Parent Borrower and the Subsidiaries;

(iv)       the Parent Borrower may make other Restricted Payments; provided that at the time of and immediately after giving effect to such Restricted Payments (and any Debt incurred in connection therewith), the Required Conditions are met;

(v)        each of the Parent Borrower and Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, may pay purchase price adjustments required to be paid by such Person pursuant to the Westfalia Purchase Agreement, without giving effect to any amendment thereto not specifically described in the definition of “Westfalia Purchase Agreement”;

(vi)        the Parent Borrower may make any Restricted Payments in respect of Permitted Convertible Indebtedness permitted under Section 10.2.8(b );

(vii)       the Parent Borrower may pay the premium in respect of, and otherwise perform its obligations under, any Permitted Bond Hedge Transaction; and

(viii)      the Parent Borrower may make any Restricted Payments and/or payments or deliveries required by the terms of, and otherwise perform its obligations under, any Permitted Warrant Transaction (including, without limitation, making payments and/or deliveries due upon exercise and settlement or termination thereof).

(b)        None of the Obligors will, nor will they permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Debt, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Debt, except (and provided, however, that the Borrower or any Subsidiary may not during the Senior Term Period make, or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness pursuant to any of the clauses (vi), (vii) or (ix) (other than as required to comply with its obligations as in effect on the Fourth Amendment Effective Date) below) :

(i)         payment of Debt created under the Loan Documents;

(ii)        payment of regularly scheduled interest and principal payments as and when due in respect of any Debt, other than payments in respect of subordinated Debt prohibited by the subordination provisions thereof;

 

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(iii)      refinancings of Debt to the extent permitted by Section 10.2.1 ;

(iv)      payment of secured Debt out of the proceeds of any sale or transfer of the property or assets securing such Debt;

(v)        [reserved];

(vi)       payments of Debt with the Net Proceeds of an issuance of Equity Interests in Parent Borrower;

(vii)      payments of Debt; provided that at the time of and immediately after giving effect to such payment, the Required Conditions are met;

(viii)     the Parent Borrower may make any deliveries in shares of common stock (or other securities or property following a merger event or other change of the common stock of the Parent Borrower so long as any such securities do not constitute Disqualified Equity Interests of an Obligor) in connection with any conversion of any Permitted Convertible Indebtedness;

(ix)       the Parent Borrower may make any cash payments in lieu of issuing fractional shares in connection with a conversion (including pursuant to any put transaction), exchange, refinancing or extension of any Permitted Convertible Indebtedness; and

(x)        the Parent Borrower may purchase any Permitted Bond Hedge Transaction and perform its obligations thereunder.

(c)       None of the Obligors will, nor will they permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless , in each case except during the Senior Term Period, (i) in the case of any Synthetic Purchase Agreement related to any Restricted Debt, the payments required to be made by the Parent Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 10.2.8(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of the Parent Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders.

10.2.9          Transactions with Affiliates . None of the Obligors will, nor will they permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:

(a)        transactions that are at prices and on terms and conditions not less favorable to the Parent Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties;

(b)        transactions between or among the Parent Borrower and the Subsidiaries not involving any other Affiliate (to the extent not otherwise prohibited by other provisions of this Agreement);

(c)        any Restricted Payment permitted by Section 10.2.8 ; and

 

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(d)        transactions pursuant to agreements in effect on the Original Closing Date and listed on Schedule 10.2.9 ( provided that this clause (d) shall not apply to any extension, or renewal of, or any amendment or modification of such agreements that is less favorable to the Parent Borrower or the applicable Subsidiaries, as the case may be).

10.2.10          Restrictive Agreements . None of the Obligors will, nor will they permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of any Obligor or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Parent Borrower or any other Subsidiary or to Guarantee Debt of the Parent Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document or any Specified Vendor Receivables Financing Document, Specified Vendor Payables Financing Document , Senior Term Loan Document or any Term Loan Document that are customary, in the reasonable judgment of the board of directors thereof, for the market in which such Debt is issued so long as such restrictions do not prevent, impede or impair (x) the creation of Liens and Guarantees in favor of the Lenders under the Loan Documents or (y) the satisfaction of the obligations of the Obligors under the Loan Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the Original Closing Date and identified on Schedule 10.2.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale; provided , further , that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder and (iv) clause (a) of the foregoing shall not apply to (A) restrictions or conditions imposed by any agreement relating to secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt and (B) customary provisions in leases and other agreements restricting the assignment thereof.

10.2.11 Amendment of Material Documents . None of the Obligors will, nor will they permit any Subsidiary to, amend, restate, modify or waive any of its rights under (a) (i) its certificate of incorporation, by-laws or other organizational documents and/or (ii) any Material Agreement, Spin-Off Documentation or other agreements (including joint venture agreements) other than the Term Loan Documents, in each case to the extent such amendment, restatement, modification or waiver is adverse to Agent or Lenders in any material respect (it being agreed that the addition or removal of Obligors from participation in a Specified Vendor Receivables Financing or Specified Vendor Payables Financing shall not constitute an amendment, modification or waiver of any Specified Vendor Receivables Financing Document or Specified Vendor Payables Financing Document, as applicable, that is adverse to the Lenders), (b) the Term Loan Documents to the extent such amendment, restatement, modification or waiver (i) results in a maturity date earlier than 91 days following the Latest Maturity Date then in effect with respect to the Obligations, (ii) results in a decreased weighted average life of the Term Loan Debt (other than as a result of an amendment solely to the final maturity date permitted by clause (i) above), (iii) adds any mandatory prepayment provision or changes any mandatory prepayment provision in a manner that would increase the amount of any mandatory prepayment of the Term Loan Debt 8 (provided, however, that this clause (iii) shall not restrict the modification to the definition of “ECF Percentage” effected by the Term Loan Agreement Fourth Amendment), (iv) increases the “Applicable Margin” or similar component of interest thereunder by more than 3.0% (other than as a result of accrual of interest at the default rate), or (v) adds an additional covenant or event of default or makes any covenant or event of default in any Term Loan Document materially more restrictive or burdensome prior to the Latest Maturity Date then in effect (unless this Agreement is amended to provide all of the Lenders with the

 

 

8 Added per Third Amendment.

 

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benefits of such covenant or event of default), in each case under this clause (v) other than covenants and events of default solely relating to the Term Priority Collateral or (c) the documents evidencing any Permitted Convertible Indebtedness to the extent such amendment, restatement, modification or waiver (i) results in a maturity date earlier than 91 days following the Latest Maturity Date then in effect with respect to the Obligations or (ii) adds any required principal amortization or any mandatory prepayment or repurchase provision or changes any mandatory prepayment or repurchase provision in a manner that would increase the amount of any mandatory prepayment or repurchase obligation in respect of any Permitted Convertible Indebtedness.

10.2.12          Use of Proceeds . No Borrower will request any Revolver Loan or Letter of Credit, and no Borrower shall use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Revolver Loan or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a Person organized in the United States, Canada, Mexico or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

10.2.13          Plans . The Obligors will not, and will not permit any Subsidiary to maintain, sponsor, contribute to or otherwise incur liability or obligations in respect of a Canadian Pension Plan that provides benefits on a defined benefit basis without the prior written consent of Agent.

10.2.14          Accounting Changes . None of the Obligors will, nor will they permit any Subsidiary to, make any material change in accounting treatment or reporting practices, except as required by GAAP and in accordance with Section 1.2 ; or change its Fiscal Year; provided that the Obligors may, upon written notice to Agent, change their Fiscal Year to another date, in which case the Obligors and Agent will, and are hereby authorized to, many any adjustments to this Agreement that are necessary to reflect such change in Fiscal Year.

10.3         Financial Covenant .    As long as any Commitment or Obligation is outstanding, Obligors shall:

10.3.1         Fixed Charge Coverage Ratio . Maintain a Fixed Charge Coverage Ratio for each 12 month period of at least 1.0 to 1.0 while a Financial Covenant Trigger Period is in effect, measured for the most recent period for which financial statements were delivered hereunder prior to the Financial Covenant Trigger Period and each period ending thereafter until the Financial Covenant Trigger Period is no longer in effect.

SECTION 11

EVENTS OF DEFAULT; REMEDIES ON DEFAULT

11.1          Events of Default . Each of the following shall be an “Event of Default” if it occurs for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:

(a)        the Borrowers shall fail to (i) pay any principal of any Loan or any LC Obligation when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise or (ii) provide Cash Collateral when and as the same shall be required by Section 2.2.3 , 2.3.3 or 2.4.3 ;

 

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(b)        any Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Section 11.1 ) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

(c)        any representation or warranty made or deemed made by or on behalf of any Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)        any Obligor shall fail to observe or perform any covenant, condition or agreement contained in Section 8.1, 8.2.4, 8.2.5, 8.6.2, 10.1.1, 10.1.2, 10.1.3(a)(iv) , 10.1.7 , 10.1.8 (with respect to the existence of any Obligor and ownership of the Obligors other than the Parent Borrower), 10.1.8(b) , 10.1.13 , 10.1.14, 10.1.15, 10.1.16, Section 10.2 or Section 10.3 of this Agreement, or, to the extent that such Obligor is a party thereto or otherwise obligated thereby (whether pursuant to the agreement of an Obligor that is party thereto or otherwise), Section 5.13 of the Guarantee and Collateral Agreement or Section 5.13 of the Foreign Facility Guarantee and Collateral Agreement;

(e)        any Obligor shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document, to the extent that such Obligor is a party thereto or otherwise obligated thereby (whether pursuant to the agreement of an Obligor that is party thereto or otherwise) (other than those failures specified in clause (a), (b) or (d) of this Section 11.1 ), and such failure shall continue unremedied for a period of 30 days (or, with respect to a failure to observe or perform any covenant, condition or agreement contained in Section 8 of the Guarantee and Collateral Agreement or Section 8 of the Foreign Facility Guarantee and Collateral Agreement, a period of 15 days) after notice thereof from Agent to the Borrower Agent (which notice will be given at the request of any Lender);

(f)        the Parent Borrower or any Subsidiary shall fail to make any payment (whether of principal, interest or other payment obligations) in respect of any Material Debt, when and as the same shall become due and payable after giving effect to any applicable grace period with respect thereto;

(g)        any event or condition occurs that results in any Material Debt becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Debt or any trustee or agent on its or their behalf to cause any Material Debt to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Debt that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Debt; provided further that this clause (g) shall not apply to any Permitted Convertible Indebtedness or any Permitted Warrant Transaction to the extent such event or condition occurs as a result of (x) the satisfaction of a conversion contingency, (y) the exercise by a holder of Permitted Convertible Indebtedness of a conversion right resulting from the satisfaction of a conversion contingency or (z) a required repurchase in respect of any Permitted Warrant Transaction;

(h)        an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, winding-up, reorganization arrangement, a proposal or other

 

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relief in respect of any Obligor or any Subsidiary or its debts, or of a substantial part of its assets, under any federal, state, provincial or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a Creditor Representative or similar official for the Parent Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)        the Parent Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, winding-up, reorganization, arrangement, a proposal or other relief under any federal, state, provincial or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Section, (iii) apply for or consent to the appointment of a Creditor Representative or similar official for the Parent Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)        the Parent Borrower or any Subsidiary shall become unable, admit in writing in a court proceeding its inability or fail generally to pay its debts as they become due or, with respect to any UK Borrower or UK Subsidiary, (i) it, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its Debt (ii) the value of its assets shall become less than the value of its liabilities (taking into account contingent and prospective liabilities) or (iii) a moratorium or other protection from its creditors is declared or imposed in respect of any its Debt;

(k)        one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 shall be rendered against the Parent Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Parent Borrower or any Subsidiary to enforce any such judgment;

(l)        an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect on the Parent Borrower and its Subsidiaries;

(m)        any Lien covering property having a book value or fair market value of $5,000,000 or more purported to be created under any Security Document shall cease to be, or shall be asserted in writing by any Obligor not to be, a valid and perfected Lien on any Collateral, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of Agent’s failure to maintain possession (or the failure of Agent’s agent or designee, including without limitation the Controlling Term Loan Agent, as Agent’s agent for perfection pursuant to the Intercreditor Agreement, to maintain possession) of any stock certificates, promissory notes or other instruments delivered to it under the Guarantee and Collateral Agreement and/or the Foreign Facility Guarantee and Collateral Agreement;

(n)        any Guaranty shall cease to be, or shall have been asserted in writing not to be, in full force and effect;

 

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(o)        the Parent Borrower or any Subsidiary shall challenge the subordination provisions of the Subordinated Debt or assert that such provisions are invalid or unenforceable or that the Obligations of any Obligor, or the Obligations of any Subsidiary under any Guaranty, are not senior Debt under the subordination provisions of the Subordinated Debt, or any court, tribunal or government authority of competent jurisdiction shall judge the subordination provisions of the Subordinated Debt to be invalid or unenforceable or such Obligations to be not senior Debt under such subordination provisions or otherwise cease to be, or shall be asserted not to be, legal, valid and binding obligations of the parties thereto, enforceable in accordance with their terms;

(p)        a Change in Control shall occur;

(q)        an Obligor denies or contests the validity or enforceability of any Loan Document (including, without limitation, the Intercreditor Agreement) or Obligations, or any Loan Document (including, without limitation, the Intercreditor Agreement) ceases to be in full force or effect for any reason (other than a waiver or release by Agent and Lenders);

(r)        a loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $5,000,000;

(s)        any event occurs or condition exists that has a Material Adverse Effect;

or

(t)        (i) a Termination Event occurs or any Canadian Multi-Employer Plan is terminated, in each case, in circumstances which would result or could reasonably be expected to result in a Canadian Facility Obligor being required to make a contribution to or in respect of a Canadian Pension Plan or a Canadian Multi-Employer Plan or result in the appointment, by FSCO, of an administrator to wind up a Canadian Pension Plan, (ii) any Canadian Domiciled Obligor is in default with respect to any required contribution to a Canadian Pension Plan, or (iii) any Lien arises (save for a contribution amount not yet due) in connection with any Canadian Pension Plan; provided, however, that an event or circumstance of the type described in clause (i), (ii) or (iii) shall constitute an Event of Default under this clause (t) only if such event or circumstance, in the opinion of the Required Lenders, when taken together with all other events and circumstances of the type described in such clauses that have occurred or existed on or after the Closing Date, could reasonably be expected to result in a Material Adverse Effect (it being acknowledged that, for purposes of this clause (t), funding deficiencies and other benefit liabilities existing as of the Closing Date shall be included in the determination of whether a Material Adverse Effect has occurred or exists).

11.2          Remedies upon Default . If an Event of Default described in Section 11.1(h) or (i) occurs with respect to any Obligor, then to the extent permitted by Applicable Law, all Obligations (other than Secured Bank Product Obligations) shall become automatically due and payable and all Commitments shall terminate, without any action by Agent or notice of any kind. In addition, or if any other Event of Default exists, Agent may in its discretion (and shall upon written direction of Required Lenders) do any one or more of the following from time to time:

(a)        declare any Obligations (other than Secured Bank Product Obligations) immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Obligors to the fullest extent permitted by law;

 

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(b)        terminate, reduce or condition any Commitment, or make any adjustment to any Borrowing Base;

(c)        require Obligors to Cash Collateralize their LC Obligations, Secured Bank Product Obligations and other Obligations that are contingent or not yet due and payable, and if Obligors fail to deposit such Cash Collateral, Agent may (and shall upon the direction of Required Lenders) advance the required Cash Collateral as Revolver Loans (whether or not an Overadvance exists or is created thereby, or the conditions in Section 6 are satisfied); and

(d)        together with the Security Trustees (as applicable), exercise any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC, PPSA or other similar domestic or foreign statutes. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Borrowers to assemble Collateral, at Borrowers’ expense, and make it available to Agent and Security Trustees at a place designated by Agent or Security Trustees (as applicable); (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by an Obligor, Obligors agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Agent or Security Trustees (as applicable), in their discretion, deem advisable. Each Obligor agrees that 10 days’ notice of any proposed sale or other disposition of Collateral by Agent or a Security Trustee shall be reasonable, and that any sale conducted on the internet or to a Licensor of Intellectual Property shall be commercially reasonable. Agent and Security Trustees may conduct sales on any Obligor’s premises, without charge, and any sale may be adjourned from time to time in accordance with Applicable Law. Agent and Security Trustees shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Agent and/or Security Trustees may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may credit bid and set off the amount of such price against the Obligations.

11.3          License . Agent and Security Trustees are hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of Obligors, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other Property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral. Each Obligor’s rights and interests under Intellectual Property shall inure to Agent’s and Security Trustees’ benefit.

11.4          Setoff . At any time during an Event of Default, Agent, Security Trustees, Issuing Banks, Lenders, and any of their Affiliates are authorized, 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 Agent, such Security Trustee, such Issuing Bank, such Lender or such Affiliate to or for the credit or the account of an Obligor against its Obligations, whether or not Agent, such Security Trustee, such Issuing Bank, such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of Agent, such Security Trustee, such Issuing Bank, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness. The rights of Agent, each

 

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Security Trustee, each Issuing Bank, each Lender and each such Affiliate under this Section are in addition to other rights and remedies (including other rights of setoff) that such Person may have.

11.5         Remedies Cumulative; No Waiver .

11.5.1         Cumulative Rights . All agreements, warranties, guaranties, indemnities and other undertakings of Obligors under the Loan Documents are cumulative and not in derogation of each other. The rights and remedies of Agent, Security Trustees and Lenders under the Loan Documents are cumulative, may be exercised at any time and from time to time, concurrently or in any order, and are not exclusive of any other rights or remedies available by agreement, by law, at equity or otherwise. All such rights and remedies shall continue in full force and effect until Full Payment of all Obligations.

11.5.2         Waivers . No waiver or course of dealing shall be established by (a) the failure or delay of Agent, any Security Trustee or any Lender to require strict performance by any Obligor under any Loan Document, or to exercise any rights or remedies with respect to Collateral or otherwise; (b) the making of any Loan or issuance of any Letter of Credit during a Default, Event of Default or other failure to satisfy any conditions precedent; or (c) acceptance by Agent, any Security Trustee or any Lender of any payment or performance by an Obligor under any Loan Documents in a manner other than that specified therein. Any failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a subsequent date.

SECTION 12

AGENT

12.1          Appointment, Authority and Duties of Agent .

12.1.1         Appointment and Authority .

(a)        Each Secured Party appoints and designates Bank of America as Agent under all Loan Documents. Agent may, and each Secured Party authorizes Agent to, enter into all Loan Documents to which Agent is intended to be a party and accept all Security Documents. Any action taken by Agent in accordance with the provisions of the Loan Documents, and the exercise by Agent of any rights or remedies set forth therein, together with all other powers reasonably incidental thereto, shall be authorized by and binding upon all Secured Parties. Without limiting the generality of the foregoing, Agent, together with the Security Trustees, as applicable, shall have the sole and exclusive authority to (i) act as the disbursing and collecting agent for Lenders with respect to all payments and collections arising in connection with the Loan Documents; (ii) execute and deliver as Agent each Loan Document, including any intercreditor or subordination agreement, and accept delivery of each Loan Document; (iii) act as collateral agent and security trustee, as applicable, for Secured Parties for purposes of perfecting and administering Liens under the Loan Documents, and for all other purposes stated therein; (iv) manage, supervise or otherwise deal with Collateral; and (v) take any Enforcement Action or otherwise exercise any rights or remedies with respect to any Collateral or under any Loan Documents, Applicable Law or otherwise. Agent alone shall be authorized to determine eligibility and applicable advance rates under any Borrowing Base, whether to impose or release any reserve, or whether any conditions to funding or issuance of a Letter of Credit have been satisfied, which determinations and judgments, if exercised in good faith, shall exonerate Agent from liability to any Secured Party or other Person for any error in judgment.

 

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(b)        In its capacity as Agent, for the purposes of holding any hypothec granted pursuant to the laws of the Province of Québec, each of the Secured Parties hereby irrevocably appoints and authorizes Agent and, to the extent necessary, ratifies the appointment and authorization of Agent, to act as the hypothecary representative of the applicable Secured Parties as contemplated under Article 2692 of the Civil Code of Québec, and to enter into, to take and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties that are conferred upon Agent under any related Deed of Movable Hypothec. Agent shall have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to Agent pursuant to any such Deed of Movable Hypothec and Applicable Law. Any person who becomes a Secured Party shall, by its execution of an Assignment, be deemed to have consented to and confirmed Agent as the person acting as hypothecary representative holding the aforesaid hypothecs as aforesaid and to have ratified, as of the date it becomes a Secured Party, all actions taken by Agent in such capacity. The substitution of Agent pursuant to the provisions of this Section 12 also constitutes the substitution of Agent as hypothecary representative as aforesaid.

12.1.2         Duties . The title of “Agent” is used solely as a matter of market custom and the duties of Agent are administrative in nature only. Agent has no duties except those expressly set forth in the Loan Documents, and in no event does Agent have any agency, fiduciary or implied duty to or relationship with any Secured Party or other Person by reason of any Loan Document or related transaction. The conferral upon Agent of any right shall not imply a duty to exercise such right, unless instructed to do so by Lenders in accordance with this Agreement.

12.1.3         Agent Professionals . Agent may perform its duties through agents and employees. Agent may consult with and employ Agent Professionals, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by an Agent Professional. Agent shall not be responsible for the negligence or misconduct of any agents, employees or Agent Professionals selected by it with reasonable care.

12.1.4         Instructions of Required Lenders . The rights and remedies conferred upon Agent under the Loan Documents may be exercised without the necessity of joining any other party, unless required by Applicable Law. In determining compliance with a condition for any action hereunder, including satisfaction of any condition in Section 6 , Agent may presume that the condition is satisfactory to a Secured Party unless Agent has received notice to the contrary from such Secured Party before Agent takes the action. Agent may request instructions from Required Lenders or other Secured Parties with respect to any act (including the failure to act) in connection with any Loan Documents or Collateral, and may seek assurances to its satisfaction from Secured Parties of their indemnification obligations against Claims that could be incurred by Agent. Agent may refrain from any act until it has received such instructions or assurances, and shall not incur liability to any Person by reason of so refraining. Instructions of Required Lenders shall be binding upon all Secured Parties, and no Secured Party shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting pursuant to instructions of Required Lenders. Notwithstanding the foregoing, instructions by and consent of specific parties shall be required to the extent provided in Section 14.1.1 . In no event shall Agent be required to take any action that it determines in its discretion is contrary to Applicable Law or any Loan Documents or could subject any Agent Indemnitee to liability.

 

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12.2         Security Trustees .

12.2.1     Appointment .

(a)        The Secured Parties hereby appoint the UK Security Trustee to hold (i) any security interest created by any UK Security Agreement; and (ii) the covenants and undertakings of the relevant UK Security Agreements, with respect to any jurisdiction where the concept of trust is appropriate, in trust for the Secured Parties and with respect to any jurisdiction where the concept of trust is not appropriate, as security agent for the Secured Parties, and, in each case, the UK Security Trustee accepts that appointment.

(b)        Each Security Trustee, its subsidiaries and associated companies may each retain for its own account and benefit any fee, remuneration and profits paid to it in connection with (i) its activities under the Loan Documents and (ii) its engagement in any kind of banking or other business with any Obligor.

12.2.2     Delegation . Each Security Trustee may delegate to any Person on such terms (which may include the power to sub-delegate) and subject to such conditions as it thinks fit, all or any of the rights, powers, authorities and discretions vested in it by any of the Loan Documents.

12.2.3     Separate Security Trustees .

(a)        Each Security Trustee may (whether for the purpose of complying with any law or regulation of any overseas jurisdiction, or for any other reason) appoint any Person to act jointly with such Security Trustee either as a separate trustee or as a co-trustee (each an “ Appointee ”) on such terms and subject to such conditions as such Security Trustee thinks fit and with such of the rights, powers, authorities and discretions vested in such Security Trustee by any Loan Document as may be conferred by the instrument of appointment of the Appointee.

(b)        Each Security Trustee may pay reasonable remuneration to any Appointee, together with any costs and expenses (including legal fees) reasonably incurred by the Appointee in connection with its appointment. All such remuneration, costs and expenses shall be treated, for the purposes of this Agreement, as paid or incurred by the applicable Security Trustee.

12.2.4     The UK Security Agreements .

(a)        Each Secured Party confirms its approval of the relevant UK Security Agreements and of any security interest intended to be created under it, and authorizes and instructs the UK Security Trustee to execute and deliver the relevant UK Security Agreements.

(b)        The UK Security Trustee may accept without enquiry the title (if any) which any Person may have to any assets over which security interest is intended to be created by the relevant UK Security Agreements, and shall not be liable to any other party for any defect in or failure of any such title.

(c)        The UK Security Trustee shall not be (i) liable or responsible to any Secured Party for any failure to perfect, protect, register, make any filing or give notice in respect of the security interest intended to be created by the relevant UK Security Agreements, unless that failure arises directly from its own gross negligence or willful misconduct; (ii) obliged to insure any assets over which security interest is intended to be created by the relevant UK Security

 

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Agreements, to require any other person to maintain any such insurance, or to make any enquiry or conduct any investigation into the legality, validity, effectiveness, adequacy or enforceability of any insurance existing over any such asset; or (iii) obliged to hold in its own possession the relevant UK Security Agreements, title deed or other document relating to any assets over which security interest is intended to be created by the relevant UK Security Agreements.

12.2.5     Security Trustee as Proprietor . Each Secured Party confirms that it does not wish to be registered as a joint proprietor of any mortgage or charge created pursuant to the relevant UK Security Agreements and accordingly (a) authorizes the UK Security Trustee to hold such mortgages and charges in its sole name as trustee for the relevant Secured Parties; and (b) requests the UK Land Registry (or other relevant registry) to register the UK Security Trustee as a sole proprietor (or heritable creditor, as the case may be) of any such mortgage or charge.

12.2.6     Investments . Except to the extent that this Agreement or a UK Security Agreement otherwise requires, any monies received by the UK Security Trustee under or pursuant to a UK Security Agreement may be (a) invested in any investments which it may select and which are authorized by Applicable Law; or (b) placed on deposit at any bank or institution (including itself) on such terms as it may think fit, in each case in the name or under the control of the UK Security Trustee, and those monies, together with any accrued income (net of any applicable Tax) shall be held by the UK Security Trustee to the order of Agent, and shall be payable to Agent on demand.

12.2.7     Secured Parties’ Indemnity to the UK Security Trustee . Each Secured Party shall indemnify the UK Security Trustee, its delegates and sub-delegates and Appointees (each an “ Indemnified Party ”), within three (3) Business Days of demand, against any cost, loss or liability incurred by the UK Security Trustee or the relevant Indemnified Party (otherwise than by reason of the gross negligence or willful misconduct of the UK Security Trustee or that Indemnified Party) in acting as UK Security Trustee or its delegate, sub-delegate or Appointee under the relevant UK Security Agreements (except to the extent that the UK Security Trustee or the relevant Indemnified Party has been reimbursed by any Obligor pursuant to the relevant UK Security Agreements).

12.2.8     Conduct of business by the UK Security Trustee . No provision of this Agreement will (a) interfere with the right of the UK Security Trustee to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; (b) oblige the UK Security Trustee to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or (c) oblige the UK Security Trustee to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of tax.

12.2.9     Liability of UK Security Trustee .

(a)        The UK Security Trustee shall not nor shall any of its officers, employees or agents from time to time be responsible for: (i) the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by any Obligor or any other person given in or in connection with the relevant UK Security Agreements; or (ii) the legality, validity, effectiveness, adequacy or enforceability of the relevant UK Security Agreements or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with the relevant UK Security Agreements.

(b)        Without limiting Section 12.2.9(a) , the UK Security Trustee shall not be liable for any action taken by it or not taken by it under or in connection with the relevant UK Security Agreements, unless directly caused by its gross negligence or willful misconduct.

 

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(c)        No party (other than the UK Security Trustee) may take any proceedings against any officer, employee or agent of the UK Security Trustee in respect of any claim it might have against the UK Security Trustee or in respect of any act or omission of any kind by that officer, employee or agent in relation to the relevant UK Security Agreements and any officer, employee or agent of the UK Security Trustee may rely on this Section 12.2.9 and the provisions of the Contracts (Rights of Third Parties) Act 1999, as amended.

(d)        The UK Security Trustee shall not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Loan Documents to be paid by the UK Security Trustee, if the UK Security Trustee has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by the UK Security Trustee for that purpose.

(e)        Without affecting the responsibility of the Obligors for information supplied by them or on their behalf in connection with any Loan Document, each Secured Party confirms to the UK Security Trustee that it has been, and shall continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with the relevant UK Security Agreements, including but not limited to: (i) the financial condition, status and nature of the Obligors; (ii) the legality, validity, effectiveness, adequacy or enforceability of the relevant UK Security Agreements and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the relevant UK Security Agreements; (iii) whether such Secured Party has recourse, and the nature and extent of that recourse, against any party or any of its respective assets under or in connection with any Loan Document, the transactions contemplated by the UK Security Agreements or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the relevant UK Security Agreements; and (iv) the adequacy, accuracy and/or completeness of any information provided by any person under or in connection with the relevant UK Security Agreements, the transactions contemplated by the relevant UK Security Agreements or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the relevant UK Security Agreements.

12.2.10 Other UK Security Agreement Matters .

(a)        The UK Security Trustee shall accept without investigation, requisition or objection, such title as any person may have to the assets which are subject to the relevant UK Security Agreements and shall not (i) be bound or concerned to examine or enquire into the title of any person; (ii) be liable for any defect or failure in the title of any person, whether that defect or failure was known to the UK Security Trustee or might have been discovered upon examination or enquiry and whether capable of remedy or not; or (iii) be liable for any failure on its part to give notice of the relevant UK Security Agreements to any third party or otherwise perfect or register the security interests created by the relevant UK Security Agreements (unless such failure arises directly from the UK Security Trustee’s gross negligence or willful misconduct).

(b)        The UK Security Trustee shall hold the relevant UK Security Agreements and all proceeds of enforcement of them in trust for the Secured Parties on the terms and conditions of this Agreement.

(c)        The relevant UK Security Agreements shall rank as continuing security interest for the discharge of the liabilities secured by it.

 

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12.2.11 Disposals .

(a)        Subject to Section 12.3.1 , the UK Security Trustee is authorized by each of the Secured Parties to execute on behalf of itself and each such Secured Party without the need for any further referral to or authority from such Secured Party, any release of the security interests created by the relevant UK Security Agreements over that asset and, if such asset comprises all of the shares in any Obligor, the UK Security Trustee is further authorized, without the need for any further referral to or authority from such Secured Party, to execute a release of any security interests granted by such Obligor over its assets pursuant to any of the UK Security Agreements provided that in each such case the proceeds are applied in the manner provided for in this Agreement as if they were realizations pursuant to the relevant UK Security Agreements.

(b)        Each Secured Party undertakes to execute such releases and other documents as may be necessary to give effect to the releases specified in Section 12.2.11(a) .

12.2.12 Trust . The perpetuity period for each trust created by this Agreement shall be 80 years.

12.2.13 Appointment and Retirement of UK Security Trustee . The UK Security Trustee (a) subject to the appointment of a successor (provided that no Default exists, in consultation with the Borrower Agent) may, and must if Agent requires, retire at any time from its position as UK Security Trustee under the Loan Documents without assigning any reason, and (b) must give notice of its intention to retire by giving to the other Secured Parties and the Borrower Agent not less than 30 days’ nor more than 60 days’ notice.

12.2.14 Appointment of Successor . Agent may (provided that no Default exists, in consultation with the Borrower Agent) appoint a successor to the UK Security Trustee, during the period of notice set forth in Section 12.2.13 . If no successor is appointed by Agent, the UK Security Trustee may appoint (after consultation with Agent and, provided that no Default exists, the Borrower Agent) its successor. The Secured Parties shall promptly enter into any agreements that the successor may reasonably require to effect its appointment.

12.2.15 Discharge of UK Security Trustee . From the date that the appointment of a successor is effected under Section 12.2.14 , the retiring UK Security Trustee must be discharged from any further obligations under the Loan Documents as UK Security Trustee, and the successor to the UK Security Trustee and each of the other Secured Parties have the same rights and obligations between themselves as they would have had if the successor had been a party to those Loan Documents.

12.3         Agreements Regarding Collateral and Borrower Materials .

12.3.1         Lien Releases; Care of Collateral .

(a)        Canadian Facility Secured Parties hereby authorize Agent and any Security Trustee to release any Lien with respect to any Canadian Facility Collateral (i) upon Full Payment of the Canadian Facility Obligations; (ii) that is the subject of a disposition or Lien that Borrower Agent certifies in writing is an asset disposition permitted by Section 10.2.5 or a Permitted Encumbrance entitled to priority over Agent’s or Security Trustees’ Liens, as applicable (and Agent and Security Trustees may rely conclusively on any such certificate without further inquiry); (iii) that does not constitute a material part of the Canadian Facility Collateral; (iv) that is required to be released pursuant to the terms of any intercreditor agreement pertaining to any Canadian Facility Collateral; or (v) subject to Section 14.1 , with the consent of

 

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Required Lenders. Canadian Facility Secured Parties hereby authorize Agent and Security Trustees to subordinate their Liens to any Purchase Money Lien or other Lien entitled to priority under this Agreement.

(b)        UK Facility Secured Parties hereby authorize Agent and any Security Trustee to release any Lien with respect to any UK Facility Collateral (i) upon Full Payment of the UK Facility Obligations; (ii) that is the subject of a disposition or Lien that Borrower Agent certifies in writing is an asset disposition permitted by Section 10.2.5 or a Permitted Encumbrance entitled to priority over Agent’s or Security Trustees’ Liens, as applicable (and Agent and Security Trustees may rely conclusively on any such certificate without further inquiry); (iii) that does not constitute a material part of the UK Facility Collateral; (iv) that is required to be released pursuant to the terms of any intercreditor agreement pertaining to any UK Facility Collateral; or (v) subject to Section 14.1 , with the consent of Required Lenders. UK Facility Secured Parties hereby authorize Agent and Security Trustees to subordinate their Liens to any Purchase Money Lien or other Lien entitled to priority under this Agreement.

(c)        U.S. Facility Secured Parties hereby authorize Agent and any Security Trustee to release any Lien with respect to any U.S. Facility Collateral (i) upon Full Payment of the Obligations; (ii) that is the subject of a disposition or Lien that Borrower Agent certifies in writing is an asset disposition permitted by Section 10.2.5 or a Permitted Encumbrance entitled to priority over Agent’s or Security Trustees’ Liens, as applicable (and Agent and Security Trustees may rely conclusively on any such certificate without further inquiry); (iii) that does not constitute a material part of the U.S. Facility Collateral; (iv) that is required to be released pursuant to the terms of the Intercreditor Agreement; or (v) subject to Section 14.1 , with the consent of Required Lenders. The U.S. Facility Secured Parties hereby authorize Agent and Security Trustees to subordinate their Liens to any Purchase Money Lien or other Lien entitled to priority under this Agreement.

(d)        Agent has no obligation to assure that any Collateral exists or is owned by an Obligor, or is cared for, protected or insured, nor to assure that Agent’s Liens have been properly created, perfected or enforced, or are entitled to any particular priority, nor to exercise any duty of care with respect to any Collateral.

(e)        In each case as specified in this Section 12.3.1 , Agent and any Security Trustee will (and each Secured Party authorizes Agent and Security Trustee to), at the Borrowers’ expense, execute and deliver to the applicable Obligor such documents as such Obligor 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 Guaranties, in each case in accordance with the terms of the Loan Documents and this Section 12.3.1 . This Agreement and the security interest of the Secured Parties in the Collateral provided hereunder shall terminate upon the Full Payment of the Obligations (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection in each case as to which no claim has been asserted or is reasonably expected to be asserted). A Guarantor shall automatically be released from its obligations under the Loan Documents and the security interest of the Secured Parties in the Collateral of such Guarantor shall be automatically released in the event that all the Equity Interests of such Guarantor shall be sold, transferred or otherwise disposed of to a person that is not an Affiliate of a Borrower in accordance with the terms of this Agreement and the other Loan Documents; provided that the Required Lenders (or, if required by the terms of this Agreement, such Lenders specified in this Agreement) shall have consented to such sale, transfer or other

 

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disposition (to the extent required by this Agreement and the other Loan Documents) and the terms of such consent did not provide otherwise. The security interest of the Secured Parties in any Collateral that is sold, transferred or otherwise disposed of in accordance with this Agreement and the other Loan Documents (including pursuant to a waiver or amendment of the terms hereof) shall automatically terminate and be released, and such Collateral shall be sold free and clear of the security interest created by the Loan Documents.

12.3.2         Possession of Collateral .

(a)        Agent and Canadian Facility Secured Parties hereby appoint each Canadian Lender as agent (for the benefit of Canadian Facility Secured Parties) for the purpose of perfecting Liens on any Canadian Facility Collateral held or controlled by such Canadian Lender, to the extent such Liens are perfected by possession or control.

(b)        Agent and UK Facility Secured Parties hereby appoint each UK Lender as agent (for the benefit of UK Facility Secured Parties) for the purpose of perfecting Liens on any UK Facility Collateral held or controlled by such UK Lender, to the extent such Liens are perfected by possession or control.

(c)        Agent and U.S. Facility Secured Parties hereby appoint each U.S. Lender as agent (for the benefit of U.S. Facility Secured Parties) for the purpose of perfecting Liens on any U.S. Facility Collateral held or controlled by such U.S. Lender, to the extent such Liens are perfected by possession or control.

(d)        If any Lender obtains possession or control of any Collateral, it shall notify Agent thereof and, promptly upon Agent’s request, deliver such Collateral to Agent or otherwise deal with it in accordance with Agent’s instructions.

12.3.3         Reports . Agent shall promptly provide to each Applicable Lender, when complete, any field examination, audit or appraisal report prepared for Agent with respect to any Obligor or Collateral (“ Report ”). Reports and other Borrower Materials may be made available to Lenders by providing access to them on the Platform, but Agent shall not be responsible for system failures or access issues that may occur from time to time. Each Lender agrees (a) that Reports are not intended to be comprehensive audits or examinations, and that Agent or any other Person performing an audit or examination will inspect only limited information and will rely significantly upon Borrowers’ books, records and representations; (b) that Agent makes no representation or warranty as to the accuracy or completeness of any Borrower Materials and shall not be liable for any information contained in or omitted from any Borrower Materials, including any Report; and (c) to keep all Borrower Materials confidential and strictly for such Lender’s internal use, not to distribute any Report or other Borrower Materials (or the contents thereof) to any Person (except to such Lender’s Participants, attorneys and accountants), and to use all Borrower Materials solely for administration of the Obligations. Each Lender shall indemnify and hold harmless Agent and any other Person preparing a Report from any action such Lender may take as a result of or any conclusion it may draw from any Borrower Materials, as well as from any Claims arising as a direct or indirect result of Agent furnishing same to such Lender, via the Platform or otherwise.

12.4          Reliance By Agent . Agent shall be entitled to rely, and shall be fully protected in relying, upon any certification, notice or other communication (including those by telephone, telex, telegram, telecopy or e-mail) believed by it to be genuine and correct and to have been signed, sent or made by the proper Person. Agent shall have a reasonable and practicable amount of time to act upon any

 

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instruction, notice or other communication under any Loan Document, and shall not be liable for any delay in acting.

12.5          Action Upon Default . Agent shall not be deemed to have knowledge of any Default or Event of Default, or of any failure to satisfy any conditions in Section 6 , unless it has received written notice from Borrower Agent or Required Lenders specifying the occurrence and nature thereof. If any Lender acquires knowledge of a Default, Event of Default or failure of such conditions, it shall promptly notify Agent and the other Lenders thereof in writing. Each Secured Party agrees that, except as otherwise provided in any Loan Documents or with the written consent of Agent and Required Lenders, it will not take any Enforcement Action, accelerate Obligations (other than Secured Bank Product Obligations) or assert any rights relating to any Collateral.

12.6          Ratable Sharing . If any Lender obtains any payment or reduction of any Obligation, whether through set-off or otherwise, in excess of its ratable share of such Obligation, such Lender shall forthwith purchase from Secured Parties participations in the affected Obligation as are necessary to share the excess payment or reduction on a Pro Rata basis or in accordance with Section 5.5.2 , as applicable. If any of such payment or reduction is thereafter recovered from the purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. Notwithstanding the foregoing, if a Defaulting Lender obtains a payment or reduction of any Obligation, it shall immediately turn over the full amount thereof to Agent for application under Section 4.2.2 and it shall provide a written statement to Agent describing the Obligation affected by such payment or reduction. No Lender shall set off against a Controlled Account or a Dominion Account without Agent’s prior consent.

12.7          Indemnification . EACH SECURED PARTY SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES AND ISSUING BANK INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS, ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY SUCH INDEMNITEE, PROVIDED THAT ANY CLAIM AGAINST AN AGENT INDEMNITEE RELATES TO OR ARISES FROM ITS ACTING AS OR FOR AGENT (IN THE CAPACITY OF AGENT). In Agent’s Permitted Discretion, it may reserve for any Claims made against an Agent Indemnitee or Issuing Bank Indemnitee, and may satisfy any judgment, order or settlement relating thereto, from proceeds of Collateral prior to making any distribution of Collateral proceeds to Secured Parties. If Agent is sued by any Creditor Representative, debtor-in-possession or other Person for any alleged preference or fraudulent transfer, then any monies paid by Agent in settlement or satisfaction of such proceeding, together with all interest, costs and expenses (including attorneys’ fees) incurred in the defense of same, shall be promptly reimbursed to Agent by each Secured Party to the extent of its Pro Rata share.

12.8         Successor Agent and Co-Agents .

12.8.1         Resignation; Successor Agent . Agent may resign at any time by giving at least 30 days written notice thereof to Lenders and Borrower Agent. Required Lenders may appoint a successor to replace the resigning Agent, which successor shall be (a) a U.S. Lender or an Affiliate of a U.S. Lender; or (b) a financial institution that is organized under the laws of the U.S. or any state or district thereof and reasonably acceptable to Required Lenders and (provided no Default exists) Borrower Agent. If no successor agent is appointed prior to the effective date of Agent’s resignation, then Agent may appoint a successor agent that is a financial institution that is organized under the laws of the U.S. or any state or district thereof and acceptable to Agent (which shall be a Lender unless no Lender accepts the role) or in the absence of such appointment, Required Lenders shall on such date assume all rights and duties of Agent hereunder. Upon acceptance by any successor Agent of its appointment hereunder, such

 

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successor Agent shall thereupon succeed to and become vested with all the powers and duties of the retiring Agent without further act. On the effective date of its resignation, the retiring Agent shall be discharged from its duties and obligations hereunder but shall continue to have all rights and protections under the Loan Documents with respect to actions taken or omitted to be taken by it while Agent, including the indemnification set forth in Sections 12.7 , 12.17 and 14.2 , and all rights and protections under this Section 12 . Any successor to Bank of America by merger or acquisition of stock or this loan shall continue to be Agent hereunder without further act on the part of any Secured Party or Obligor.

12.8.2         Co-Collateral Agent . It is the intent of the parties that there shall be no violation of any Applicable Law denying or restricting the right of financial institutions to transact business in any jurisdiction. If appropriate under Applicable Law (including, without limitation, any situation in which Agent believes that it may be limited in the exercise of any rights or remedies under the Loan Documents due to any Applicable Law), Agent may appoint a Person to serve as a separate security trustee, co-collateral agent or separate collateral agent under any Loan Document. Each right, remedy and protection intended to be available to Agent under the Loan Documents shall also be vested in such agent. Secured Parties shall execute and deliver any instrument, agreement or other document that Agent may request to effect such appointment. If any such separate security trustee, co-collateral agent or separate collateral agent shall die, dissolve, become incapable of acting, resign or be removed, then all the rights and remedies of such agent, to the extent permitted by Applicable Law, shall vest in and be exercised by Agent until appointment of a new agent.

12.9          Limitation on Responsibilities of Agent . Agent shall not be liable to any Secured Party for any action taken or omitted to be taken under the Loan Documents, except for losses directly and solely caused by Agent’s gross negligence or willful misconduct. Agent does not assume any responsibility for any failure or delay in performance or any breach by any Obligor, Lender or other Secured Party of any obligations under the Loan Documents. Agent does not make any express or implied representation, warranty or guarantee to Secured Parties with respect to any Obligations, Collateral, Liens, Loan Documents or Obligor. No Agent Indemnitee shall be responsible to Secured Parties for any recitals, statements, information, representations or warranties contained in any Loan Documents or Borrower Materials; the execution, validity, genuineness, effectiveness or enforceability of any Loan Documents; the genuineness, enforceability, collectability, value, sufficiency, location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien therein; the validity, enforceability or collectability of any Obligations; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor or Account Debtor. No Agent Indemnitee shall have any obligation to any Secured Party to ascertain or inquire into the existence of any Default or Event of Default, the observance by any Obligor of any terms of the Loan Documents, or the satisfaction of any conditions precedent contained in any Loan Documents.

12.10          Due Diligence and Non-Reliance . Each Lender acknowledges and agrees that it has, independently and without reliance upon Agent or any other Lenders, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of each Obligor and its own decision to enter into this Agreement and to fund Loans and participate in LC Obligations hereunder. Each Secured Party has made such inquiries as it feels necessary concerning the Loan Documents, Collateral and Obligors. Each Secured Party acknowledges and agrees that the other Secured Parties have made no representations or warranties concerning any Obligor, any Collateral or the legality, validity, sufficiency or enforceability of any Loan Documents or Obligations. Each Secured Party will, independently and without reliance upon any other Secured Party, and based upon such financial statements, documents and information as it deems appropriate at the time, continue to make and rely upon its own credit decisions in making Loans and participating in LC Obligations, and in taking or refraining from any action under any Loan Documents. Except for notices, reports and other information

 

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expressly requested by a Lender, Agent shall have no duty or responsibility to provide any Secured Party with any notices, reports or certificates furnished to Agent by any Obligor or any credit or other information concerning the affairs, financial condition, business or Properties of any Obligor (or any of its Affiliates) which may come into possession of Agent or its Affiliates.

12.11     Remittance of Payments and Collections .

12.11.1         Remittances Generally . All payments by any Lender to Agent shall be made by the time and on the day set forth in this Agreement, in immediately available funds. If no time for payment is specified or if payment is due on demand by Agent and request for payment is made by Agent by 1:00 p.m. (Local Time) on a Business Day, payment shall be made by Lender not later than 3:00 p.m. (Local Time) on such day, and if request is made after 1:00 p.m. (Local Time), then payment shall be made by 11:00 a.m. (Local Time) on the next Business Day. Payment by Agent to any Secured Party shall be made by wire transfer, in the type of funds received by Agent. Any such payment shall be subject to Agent’s right of offset for any amounts due from such payee under the Loan Documents.

12.11.2         Failure to Pay . If any Secured Party fails to pay any amount when due by it to Agent pursuant to the terms hereof, such amount shall bear interest, from the due date until paid in full, at the greater of the Federal Funds Rate or the rate determined by Agent as customary for interbank compensation for two Business Days and thereafter at the Default Rate for U.S. Base Rate Loans. In no event shall Borrowers be entitled to credit for any interest paid by a Secured Party to Agent, nor shall a Defaulting Lender be entitled to interest on amounts held by Agent pursuant to Section 4.2 .

12.11.3         Recovery of Payments . If Agent pays an amount to a Secured Party in the expectation that a related payment will be received by Agent from an Obligor and such related payment is not received, then Agent may recover such amount from the Secured Party. If Agent determines that an amount received by it must be returned or paid to an Obligor or other Person pursuant to Applicable Law or otherwise, then Agent shall not be required to distribute such amount to any Secured Party. If any amounts received and applied by Agent to Obligations held by a Secured Party are later required to be returned by Agent pursuant to Applicable Law, such Secured Party shall pay to Agent, on demand , its share of the amounts required to be returned.

12.12      Individual Capacities . As a Lender, Bank of America shall have the same rights and remedies under the Loan Documents as any other Lender, and the terms “Lenders,” “Required Lenders” or any similar term shall include Bank of America in its capacity as a Lender. Agent, Lenders and their Affiliates may accept deposits from, lend money to, provide Bank Products to, act as financial or other advisor to, and generally engage in any kind of business with, Obligors and their Affiliates, as if they were not Agent or Lenders hereunder, without any duty to account therefor to any Secured Party. In their individual capacities, Agent, Lenders and their Affiliates may receive information regarding Obligors, their Affiliates and their Account Debtors (including information subject to confidentiality obligations), and shall have no obligation to provide such information to any Secured Party.

12.13      Titles . Each Lender, other than Bank of America, that is designated in connection with this credit facility as an “Arranger,” “Bookrunner” or “Agent” of any kind shall have no right or duty under any Loan Documents other than those applicable to all Lenders, and shall in no event have any fiduciary duty to any Secured Party.

12.14      Bank Product Providers . Each Secured Bank Product Provider, by delivery of a notice to Agent of a Bank Product, agrees to be bound by the Loan Documents, including Sections 5.5 , 14.3.3 and 12 . Each Secured Bank Product Provider shall indemnify and hold harmless Agent Indemnitees, to

 

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the extent not reimbursed by Obligors, against all Claims that may be incurred by or asserted against any Agent Indemnitee in connection with such provider’s Secured Bank Product Obligations.

12.15          No Third Party Beneficiaries . This Section 12 is an agreement solely among Secured Parties and Agent, and shall survive Full Payment of the Obligations. This Section 12 does not confer any rights or benefits upon Borrowers or any other Person. As between Borrowers and Agent, any action that Agent may take under any Loan Documents or with respect to any Obligations shall be conclusively presumed to have been authorized and directed by Secured Parties.

12.16          Authorization Regarding Intercreditor Agreement . Each Lender hereby (a) consents to the subordination of Liens provided for in the Intercreditor Agreement, (b) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement, (c) authorizes and instructs Agent to enter into the Intercreditor Agreement on behalf of such Lender and agrees that Agent may take such actions on its behalf as is contemplated by the terms of the Intercreditor Agreement, and (d) acknowledges (or is deemed to acknowledge) that a copy of the Intercreditor Agreement was delivered, or made available, to such Lender and it has received and reviewed the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and any of the other Loan Documents, the terms of the Intercreditor Agreement shall govern and control except as expressly set forth in the Intercreditor Agreement.

12.17          Withholding Taxes . To the extent required by any Applicable Law, and subject to Section 5.8.4, Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. If the IRS or any other Governmental Authority asserts a claim that Agent did not properly withhold Tax from amounts paid to or for the account of any Lender because (a) the appropriate form was not delivered or was not properly executed by such Lender, (b) such Lender failed to notify Agent of a change in circumstance which rendered the exemption from, or reduction of, withholding Tax ineffective or for any other reason or (c) such Lender otherwise failed to comply with Section 5.9 , or if Agent reasonably determined that a payment was made to a Lender pursuant to this Agreement without deduction or applicable withholding Tax from such payment, such Lender shall indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as Tax or otherwise, including any expenses (including legal expenses) incurred

12.18         9 Lender Representations and Warranties .

(a)        Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Agent and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Obligor, that at least one of the following is and will be true:

(i)        such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,

(ii)        the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class

 

 

9 Added per Third Amendment.

 

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exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,

(iii)        (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

(iv)        such other representation, warranty and covenant as may be agreed in writing between the Agent, in its sole discretion, and such Lender.

(b)        In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Agent and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Obligor, that:

(i)        none of the Agent or the Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Agent under this Agreement, any Loan Document or any documents related to hereto or thereto),

(ii)        the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

(iii)        the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations),

 

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(iv)        the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

(v)        no fee or other compensation is being paid directly to the Agent or the Arranger or any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement.

(c)        The Agent and the Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

SECTION 13

BENEFIT OF AGREEMENT; ASSIGNMENTS

13.1          Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective successors and assigns, except that (a) no Obligor shall have the right to assign its rights or delegate its obligations under any Loan Documents; and (b) any assignment by a Lender must be made in compliance with Section 13.3 . Agent may treat the Person which made any Loan as the owner thereof for all purposes until such Person makes an assignment in accordance with Section 13.3 . Any authorization or consent of a Lender shall be conclusive and binding on any subsequent transferee or assignee of such Lender.

13.2         Participations .

13.2.1         Permitted Participants; Effect . Subject to Section 13.3.3 , any Lender may sell to a financial institution (“ Participant ”) a participating interest in the rights and obligations of such Lender under any Loan Documents. Despite any sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, it shall remain solely responsible to the other parties hereto for performance of such obligations, it shall remain the holder of its Loans and Borrower Group Commitments for all purposes, all amounts payable by the applicable Obligor Group shall be determined as if it had not sold such participating interests, and the applicable Obligor Group and Agent shall continue to deal solely and directly with such Lender in connection with the Loan Documents. Each Lender shall be solely responsible for notifying its

 

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Participants of any matters under the Loan Documents, and Agent and the other Lenders shall not have any obligation or liability to any such Participant. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Sections 3.7 or 5.8 unless Borrower Agent agrees otherwise in writing to the grant of such participating interest.

13.2.2         Voting Rights . Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, waiver or other modification of a Loan Document other than that which forgives principal, interest or fees, reduces the stated interest rate or fees payable with respect to any Loan or Commitment in which such Participant has an interest, postpones the Commitment Termination Date in respect of a Borrower Group in which such Participant has an interest or any date fixed for any regularly scheduled payment of principal, interest or fees on such Loan or Commitment, or releases any Borrower, Guarantor or other Obligor or substantially all Collateral.

13.2.3         Participant Register . Each Lender that sells a participation shall, acting as a non-fiduciary agent of Borrowers (solely for tax purposes), maintain a register in which it enters the Participant’s name, address and interest in Commitments, Loans (and stated interest) and LC Obligations. Entries in the register shall be conclusive, absent manifest error, and such Lender shall treat each Person recorded in the register as the owner of the participation for all purposes, notwithstanding any notice to the contrary. No Lender shall have an obligation to disclose any information in such register except to the extent necessary to establish that a Participant’s interest is in registered form under the Code.

13.2.4         Benefit of Setoff . Obligors agree that each Participant shall have a right of set-off in respect of its participating interest to the same extent as if such interest were owing directly to a Lender, and each Lender shall also retain the right of set-off with respect to any participating interests sold by it. By exercising any right of set-off, a Participant agrees to share with Lenders all amounts received through its set-off, in accordance with Section 12.6 as if such Participant were a Lender.

13.3         Assignments .

13.3.1         Permitted Assignments . A Lender may assign to an Eligible Assignee any of its rights and obligations under the Loan Documents, as long as (a) each assignment is of a constant, and not a varying, percentage of the transferor Lender’s rights and obligations under the Loan Documents and, in the case of a partial assignment, is in a minimum principal amount of $5,000,000 (unless otherwise agreed by Agent in its discretion) and integral multiples of $5,000,000 in excess of that amount; (b) except in the case of an assignment in whole of a Lender’s rights and obligations, the aggregate amount of the Commitments retained by the transferor Lender is at least $5,000,000 (unless otherwise agreed by Agent in its discretion); and (c) the parties to each such assignment shall execute and deliver an Assignment to Agent for acceptance and recording. Nothing herein shall limit the right of a Lender to pledge or assign any rights under the Loan Documents to secure obligations of such Lender, including a pledge or assignment to a Federal Reserve Bank; provided, however, that no such pledge or assignment shall release the Lender from its obligations hereunder nor substitute the pledge or assignee for such Lender as a party hereto.

13.3.2         Effect; Effective Date . Upon delivery to Agent of an assignment notice in the form of Exhibit B and a processing fee of $3,500 (unless otherwise agreed by Agent in its discretion), the assignment shall become effective as specified in the notice, if it complies with this Section 13.3 . From such effective date, the Eligible Assignee shall for all purposes be a Lender under the Loan Documents, and shall have all rights and obligations of a Lender thereunder. Upon consummation of an assignment, the transferor Lender, Agent and Borrowers shall make appropriate arrangements for issuance of replacement and/or new notes, if applicable. The transferee Lender shall comply with Section

 

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5.9 and deliver, upon request, an administrative questionnaire satisfactory to Agent. The assigning Lender shall deliver a copy of such assignment notice to Borrower Agent concurrently with the delivery of the same to Agent.

13.3.3         Certain Assignees . No assignment or participation may be made to a Borrower, Affiliate of a Borrower, Defaulting Lender or natural person. Agent has no obligation to determine whether any assignee is permitted under the Loan Documents. Assignment by a Defaulting Lender shall be effective only if there is concurrent satisfaction of all outstanding obligations of the Defaulting Lender under the Loan Documents in a manner satisfactory to Agent, including payment by the Eligible Assignee or Defaulting Lender to Agent of an aggregate amount sufficient upon distribution (through direct payment, purchases of participations or other methods acceptable to Agent) to satisfy all funding and payment liabilities of the Defaulting Lender. If assignment by a Defaulting Lender occurs (by operation of law or otherwise) without compliance with the foregoing sentence, the assignee shall be deemed a Defaulting Lender for all purposes until compliance occurs.

13.3.4         Register . Agent, acting as a non-fiduciary agent of Borrowers (solely for tax purposes), shall maintain (a) a copy (or electronic equivalent) of each Assignment and Acceptance delivered to it, and (b) a register for recordation of the names, addresses and Commitments of, and the Loans, interest and LC Obligations owing to, each Lender. Entries in the register shall be conclusive, absent manifest error, and Borrowers, Agent and Lenders shall treat each Person recorded in such register as a Lender for all purposes under the Loan Documents, notwithstanding any notice to the contrary. Agent may choose to show only one Borrower as the borrower in the register, without any effect on the liability of any Obligor with respect to the Obligations. The register shall be available for inspection by Borrowers or any Lender, from time to time upon reasonable notice.

13.4          Replacement of Certain Lenders . If a Lender (a) within the last 120 days failed to give its consent to any amendment, waiver or action for which consent of all Lenders was required and Required Lenders consented, (b) is a Defaulting Lender, or (c) within the last 120 days gave a notice under Section 3.5 or requested payment or compensation under Section 3.7 or 5.8 (and has not designated a different Lending Office pursuant to Section 3.8 ), then Agent or Borrower Agent may, upon 10 days’ notice to such Lender, require it to assign its rights and obligations under the Loan Documents to Eligible Assignee(s), pursuant to appropriate Assignment(s), within 20 days after the notice. Agent is irrevocably appointed as attorney-in-fact to execute any such Assignment if the Lender fails to execute it. Such Lender shall be entitled to receive, in cash, concurrently with such assignment, all amounts owed to it under the Loan Documents through the date of assignment.

SECTION 14

MISCELLANEOUS

14.1          Consents, Amendments and Waivers .

14.1.1         Amendment . No modification of any Loan Document, including any extension or amendment of a Loan Document or any waiver of a Default or Event of Default, shall be effective without the prior written agreement of Agent (with the consent of Required Lenders) and each Obligor party to such Loan Document; provided, however, that

(a)        without the prior written consent of Agent, no modification shall alter any provision in a Loan Document that relates to any rights, duties or discretion of Agent;

 

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(b)        (i) without the prior written consent of Canadian Issuing Bank, no modification shall alter Section 2.2 or any other provision in a Loan Document that relates to Canadian Letters of Credit or any rights, duties or discretion of Canadian Issuing Bank, (ii) without the prior written consent of UK Issuing Bank, no modification shall alter Section 2.3 or any other provision in a Loan Document that relates to UK Letters of Credit or any rights, duties or discretion of UK Issuing Bank and (iii) without the prior written consent of U.S. Issuing Bank, no modification shall alter Section 2.4 or any other provision in a Loan Document that relates to U.S. Letters of Credit or any rights, duties or discretion of U.S. Issuing Bank;

(c)        without the prior written consent of each affected Lender, including a Defaulting Lender, no modification shall (i) increase the Borrower Group Commitment of such Lender; (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees payable to such Lender (except as provided in Section 4.2 ); (iii) extend the Commitment Termination Date applicable to such Lender’s Obligations; or (iv) amend this clause (c);

(d)        without the prior written consent of all Lenders (except any Defaulting Lender), no modification shall (i) alter Section 5.5.2, or 14.1.1 ; (ii) amend the definition of any Borrowing Base, FILO Amount, any Accounts Formula Amount or any Inventory Formula Amount (or any defined term used in such definitions) if the effect of such amendment is to increase borrowing availability, Pro Rata or Required Lenders; (iii) release all or substantially all Collateral; (iv) except in connection with a merger, disposition or similar transaction expressly permitted hereby, release any Obligor from liability for any Obligations; or (v) increase the Maximum Facility Amount;

(e)        without the prior written consent of a Secured Bank Product Provider, no modification shall affect its relative payment priority under Section 5.5.2 ;

(f)        Agent and the applicable Obligors may amend, modify or supplement any Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document; and

(g)        Agent and the Borrowers may amend this Agreement without the consent of any Lender or Required Lenders in order to provide the Lenders with the benefits of any additional covenants, additional events of default, more restrictive covenants or more restrictive events of default that are added to Senior Term Loan Documents and/or the Term Loan Documents.

Notwithstanding anything in this Section 14.1.1 to the contrary, (a) this Agreement may be amended (or amended and restated) with the written consent of only Agent, the Borrower Agent and each Lender to add one or more additional credit facilities to this Agreement for a new jurisdiction and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share in the benefits of this Agreement and the other Loan Documents and (b) the consent of all Lenders (except any Defaulting Lender) is required for an increase in the Maximum Facility Amount. By their execution of this Agreement, the Required Lenders consent to the execution of the amendments to the Intercreditor Agreement and the Guarantee and Collateral Agreement that are referred to in Section 10.1.15 .

14.1.2         Limitations . The agreement of Obligors shall not be required for any modification of a Loan Document that deals solely with the rights and duties of Lenders, Agent, Security

 

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Trustees and/or Issuing Banks as among themselves. Only the consent of the parties to any agreement relating to fees or a Bank Product shall be required for modification of such agreement, and no Bank Product provider (in such capacity) shall have any right to consent to modification of any Loan Document other than its Bank Product agreement. Any waiver or consent granted by Agent or Lenders hereunder shall be effective only if in writing and only for the matter specified.

14.1.3         Payment for Consents . No Obligor will, directly or indirectly, pay any remuneration or other thing of value, whether by way of additional interest, fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as consideration for agreement by such Lender with any modification of any Loan Documents, unless such remuneration or value is concurrently paid, on the same terms, on a Pro Rata basis to all Lenders providing their consent.

14.2          Indemnity . EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ASSERTED BY ANY OBLIGOR OR OTHER PERSON OR ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE. In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.

14.3         Notices and Communications .

14.3.1         Notice Address . Subject to Section 4.1.4 , all notices and other communications by or to a party hereto shall be in writing and shall be given to any Obligor, at Borrower Agent’s address shown on the signature pages hereof, and to any other Person at its address shown on the signature pages hereof (or, in the case of a Person who becomes a Lender after the Closing Date, at the address shown on its Assignment), or at such other address as a party may hereafter specify by notice in accordance with this Section 14.3 . Each communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three Business Days after deposit in the local mail system of the recipient, with first-class postage pre-paid, addressed to the applicable address; or (c) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged. Notwithstanding the foregoing, no notice to Agent pursuant to Section 2.1.4 , 2.2 , 2.3 , 2.4 , 3.1.2 or 4.1.1 shall be effective until actually received by the individual to whose attention at Agent such notice is required to be sent. Any written communication that is not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party. Any notice received by Borrower Agent shall be deemed received by all Obligors.

14.3.2         Communications . Electronic communications (including e-mail, messaging and websites) may be used only in a manner acceptable to Agent and only for routine communications, such as delivery of Borrower Materials, administrative matters, distribution of Loan Documents and matters permitted under Section 4.1.4 . Secured Parties make no assurance as to the privacy or security of electronic communications. E-mail and voice mail shall not be effective notices under the Loan Documents.

14.3.3         Platform . Borrower Materials shall be delivered pursuant to procedures approved by Agent, including electronic delivery (if possible) upon request by Agent to an electronic system maintained by Agent (“ Platform ”). Borrower Agent shall notify Agent of each posting of Borrower Materials on the Platform and the materials shall be deemed received by Agent only upon its receipt of such notice. Borrower Materials and other information relating to this credit facility may be

 

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made available to Secured Parties on the Platform. The Platform is provided “as is” and “as available.” Agent does not warrant the accuracy or completeness of any information on the Platform nor the adequacy or functioning of the Platform, and expressly disclaims liability for any errors or omissions in the Borrower Materials or any issues involving the Platform. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY AGENT WITH RESPECT TO BORROWER MATERIALS OR THE PLATFORM. No Agent Indemnitee shall have any liability to Obligors, Secured Parties or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) relating to use by any Person of the Platform, including any unintended recipient, nor for delivery of Borrower Materials and other information via the Platform, internet, e-mail, or any other electronic platform or messaging system.

14.3.4         Public Information . Obligors and Secured Parties acknowledge that “public” information may not be segregated from material non-public information on the Platform. Secured Parties acknowledge that Borrower Materials may include Obligors’ material non-public information, and should not be made available to personnel who do not wish to receive such information or may be engaged in investment or other market-related activities with respect to an Obligor’s securities.

14.3.5         Non-Conforming Communications . Agent and Lenders may rely upon any communications purportedly given by or on behalf of any Obligor even if they were not made in a manner specified herein, were incomplete or were not confirmed, or if the terms thereof, as understood by the recipient, varied from a later confirmation. Each Obligor shall indemnify and hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any electronic or telephonic communication purportedly given by or on behalf of an Obligor.

14.4          Performance of Obligors’ Obligations . Agent may, in its Permitted Discretion at any time and from time to time, at the expense of the applicable Obligor Group, pay any amount or do any act required of an Obligor under any Loan Documents or otherwise lawfully requested by Agent to (a) enforce any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or priority of Agent’s or any Security Trustee’s Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a Lien. All payments, costs and expenses (including Extraordinary Expenses) of Agent under this Section shall be reimbursed to Agent by Obligors, on demand, with interest from the date incurred until paid in full, at the Default Rate applicable to U.S. Base Rate Loans. Any payment made or action taken by Agent under this Section shall be without prejudice to any right to assert an Event of Default or to exercise any other rights or remedies under the Loan Documents.

14.5          Credit Inquiries . Agent and Lenders may (but shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Obligor or Subsidiary.

14.6          Severability . Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect.

14.7          Cumulative Effect; Conflict of Terms . The provisions of the Loan Documents are cumulative. The parties acknowledge that the Loan Documents may use several limitations or measurements to regulate similar matters, and they agree that these are cumulative and that each must be performed as provided. Except as otherwise provided in another Loan Document (by specific reference to

 

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the applicable provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document, the provision herein shall govern and control.

14.8          Counterparts; Execution . Any Loan Document may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement shall become effective when Agent has received counterparts bearing the signatures of all parties hereto. Agent may (but shall have no obligation to) accept any signature, contract formation or record-keeping through electronic means, which shall have the same legal validity and enforceability as manual or paper-based methods, to the fullest extent permitted by Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act.

14.9          Entire Agreement . Time is of the essence with respect to all Loan Documents and Obligations. The Loan Documents constitute the entire agreement, and supersede all prior understandings and agreements, among the parties relating to the subject matter thereof.

14.10          Relationship with Lenders . The obligations of each Lender hereunder are several, and no Lender shall be responsible for the obligations or Commitments of any other Lender. Amounts payable hereunder to each Lender shall be a separate and independent debt. It shall not be necessary for Agent or any other Lender to be joined as an additional party in any proceeding for such purposes. Nothing in this Agreement and no action of Agent, Lenders or any other Secured Party pursuant to the Loan Documents or otherwise shall be deemed to constitute Agent and any Secured Party to be a partnership, joint venture or similar arrangement, nor to constitute control of any Obligor.

14.11          No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated by any Loan Document, Obligors acknowledge and agree that (a)(i) this credit facility and any arranging or other services by Agent, any Lender, any of their Affiliates or any arranger are arm’s-length commercial transactions between Obligors and their Affiliates, on one hand, and Agent, any Lender, any of their Affiliates or any arranger, on the other hand; (ii) Obligors have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate; and (iii) Obligors are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated by the Loan Documents; (b) each of Agent, Lenders, their Affiliates and any arranger is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for Obligors, their Affiliates or any other Person, and has no obligation with respect to the transactions contemplated by the Loan Documents except as expressly set forth therein; and (c) Agent, Lenders, their Affiliates and any arranger may be engaged in a broad range of transactions that involve interests that differ from those of Obligors and their Affiliates, and have no obligation to disclose any of such interests to Obligors or their Affiliates. To the fullest extent permitted by Applicable Law, each Obligor hereby waives and releases any claims that it may have against Agent, Lenders, their Affiliates and any arranger with respect to any breach of agency or fiduciary duty in connection with any transaction contemplated by a Loan Document.

14.12          Confidentiality . Each of Agent, Lenders and Issuing Banks shall maintain the confidentiality of all Information (as defined below), except that Information may be disclosed (a) to its Affiliates, and to its and their partners, directors, officers, employees, agents, advisors and representatives (provided they are informed of the confidential nature of the Information and instructed to keep it confidential); (b) to the extent requested by any governmental, regulatory or self-regulatory authority purporting to have jurisdiction over it or its Affiliates; (c) to the extent required by Applicable Law or by any subpoena or other legal process; (d) to any other party hereto; (e) in connection with any action or

 

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proceeding relating to any Loan Documents or Obligations; (f) subject to an agreement containing provisions substantially the same as this Section, to any Transferee or any actual or prospective party (or its advisors) to any Bank Product or to any swap, derivative or other transaction under which payments are to be made by reference to an Obligor or Obligor’s obligations; (g) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) is available to Agent, any Lender, any Issuing Bank or any of their Affiliates on a nonconfidential basis from a source other than Obligors; (h) on a confidential basis to a provider of a Platform; or (i) with the consent of Borrower Agent. Notwithstanding the foregoing, Agent and Lenders may publish or disseminate general information concerning this credit facility for league table, tombstone and advertising purposes, and may use Obligors’ logos, trademarks or product photographs in advertising materials. As used herein, “Information” means information received from an Obligor or Subsidiary relating to it or its business that is identified as confidential when delivered. A Person required to maintain the confidentiality of Information pursuant to this Section shall be deemed to have complied if it exercises a degree of care similar to that accorded its own confidential information. Each of Agent, Lenders and Issuing Banks acknowledges that (i) Information may include material non-public information; (ii) it has developed compliance procedures regarding the use of such information; and (iii) it will handle the material non-public information in accordance with Applicable Law.

14.13     Certifications Regarding Senior Term Loan Documents and Term Loan Documents . Obligors certify to Agent and Lenders that neither the execution or performance of the Loan Documents nor the incurrence of any Obligations by Obligors violates the Senior Term Loan Documents or the Term Loan Documents. Obligors further certify that the Commitments and Obligations constitute “Indebtedness” permitted under each of the Senior Term Loan Documents and the Term Loan Agreement. Agent may condition Borrowings, Letters of Credit and other credit accommodations under the Loan Documents from time to time upon Agent’s receipt of evidence that the Commitments and Obligations continue to constitute “Indebtedness” permitted under each of the Senior Term Loan Agreement and the Term Loan Agreement at such time.

14.14      GOVERNING LAW .     UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

14.15     Consent to Forum .

14.15.1         Forum . EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 . A final judgment in any proceeding of any such court shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or any other manner provided by Applicable Law.

 

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14.15.2     Other Jurisdictions .    Nothing herein shall limit the right of Agent, any Security Trustee or any Lender to bring proceedings against any Obligor (other than a Mexican Domiciled Obligor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Obligors). Nothing in this Agreement shall be deemed to preclude enforcement by Agent or any Security Trustee of any judgment or order obtained in any forum or jurisdiction. Final judgment against an Obligor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Obligor is domiciled, by suit on the judgment.

14.16     Waivers by Obligors . To the fullest extent permitted by Applicable Law, each Obligor waives (a) the right to trial by jury (which Agent, each Security Trustee and each Lender hereby also waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment, demand, protest, notice of presentment, default, non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by Agent or any Security Trustee on which an Obligor may in any way be liable, and hereby ratifies anything Agent and/or such Security Trustee may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Agent or any Security Trustee to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against Agent, any Security Trustee, any Issuing Bank or any Lender, on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof. Each Obligor acknowledges that the foregoing waivers are a material inducement to Agent, Security Trustees, Issuing Banks and Lenders entering into this Agreement and that they are relying upon the foregoing in their dealings with Obligors. Each Obligor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. Notwithstanding the above, each Mexican Domiciled Obligor further waives any right to any jurisdiction (other than as provided under Sections 14.14 and 14.15 above) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Obligors, and waives any objection to those courts on the ground of venue or forum non conveniens .

14.17     Patriot Act Notice and “Know Your Client/Customer” Checks . Agent and Lenders hereby notify Obligors that pursuant to the Patriot Act, the Proceeds of Crime Act, the Money Laundering Regulations 2007 (UK), Proceeds of Crime Act 2002 (UK), Terrorism Act 2000 (UK) and other applicable anti-money laundering, anti-terrorist financing, economic or trade sanctions and “know your client” or “know your customer” policies, regulations, laws or rules (the Proceeds of Crime Act and such other applicable policies, regulations, laws or rules, collectively, including any guidelines or orders thereunder, “ AML Legislation ”), Agent and Lenders are required to obtain, verify and record information that identifies each Obligor, including its legal name, address, tax ID number and other information that will allow Agent and Lenders to identify it in accordance with the Patriot Act and the AML Legislation. Agent and Lenders will also require information regarding each personal guarantor, if any, and may require information regarding Obligors’ management and owners, such as legal name, address, social security number and date of birth. Obligors shall, promptly upon request, provide all documentation and other information as Agent, any Issuing Bank or any Lender may request from time to time in order to comply with any obligations under the Patriot Act and/or the AML Legislation.

 

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14.18      Canadian Anti-Money Laundering Legislation . If Agent has ascertained the identity of any Canadian Facility Obligor or any authorized signatories of any Canadian Facility Obligor for the purposes of applicable AML Legislation, then Agent:

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

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

Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Canadian Lenders agrees that Agent has no obligation to ascertain the identity of the Canadian Facility Obligors or any authorized signatories of the Canadian Facility Obligors on behalf of any Canadian Lender, or to confirm the completeness or accuracy of any information it obtains from any Canadian Facility Obligor or any such authorized signatory in doing so.

14.19      NO ORAL AGREEMENT .    THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

14.20      Process Agent .    Without prejudice to any other mode of service allowed under any relevant law, each Foreign Domiciled Obligor (a) irrevocably appoints the Borrower Agent, as its agent for service of process in relation to any action or proceeding arising out of or relating to any Loan Documents, and (b) agrees that failure by a process agent to notify such Obligor of any process will not invalidate the proceedings concerned. For purposes of clarity, nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. Notwithstanding the above, each Mexican Domiciled Obligor shall appoint the Borrower Agent as its agent for service of process in relation to any action or proceeding arising out of or relating to any Loan Document in the form of an instrument containing a special irrevocable power of attorney granted before a Mexican notary public, in the form attached hereto as Exhibit E or otherwise in form and substance satisfactory to Agent.

14.21     Acknowledgement and Consent to Bail-In of EEA Financial Institutions .

Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

(b)    the effects of any Bail-in Action on any such liability, including, if applicable:

 

  (i)

a reduction in full or in part or cancellation of any such liability;

 

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  (ii)

a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

  (iii)

the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

[Remainder of page intentionally left blank; signatures begin on following page]

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the date set forth above.

 

 

OBLIGORS :

 

HORIZON GLOBAL CORPORATION,

 

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor and the Borrower Agent

 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

              39400 Woodward Avenue, Suite 100

 
 

              Bloomfield Hills, MI 48304

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 
 

CEQUENT PERFORMANCE PRODUCTS, INC.,

 

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor 10 1

 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

              39400 Woodward Avenue, Suite 100

 
 

              Bloomfield Hills, MI 48304

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 

 

 

 

10 1  

Name changed to Horizon Global Americas Inc.

 

CEQUENT CONSUMER PRODUCTS, INC. ,

 

an Ohio corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor 11 2

 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

              39400 Woodward Avenue, Suite 100

 
 

              Bloomfield Hills, MI 48304

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 
 

CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641, as UK Borrower, a UK Facility Obligor, a Canadian Facility Guarantor and a Canadian Facility Obligor

 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

                                                                     

 
 

                                                                     

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 
 

CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario, as Canadian Borrower, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

                                                                     

 
 

                                                                     

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 

 

 

11 2 Merged into Cequent Performance Products, Inc.

 

HORIZON GLOBAL COMPANY LLC ,

 

a Delaware limited liability company, as a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

              39400 Woodward Avenue, Suite 100

 
 

              Bloomfield Hills, MI 48304

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 
 

HORIZON INTERNATIONAL HOLDINGS LLC ,

 

a Delaware limited liability company, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

                                                                     

 
 

                                                                     

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 
 

CEQUENT NEDERLAND HOLDINGS B.V. ,

 

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

              3062 Rotterdam

 
 

              Max Euwelaan 35

 
 

              the Netherlands

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 

 

CEQUENT MEXICO HOLDINGS B.V.,

 

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By:                                                                                       

 
 

Name:                                                                                  

 
 

Title:                                                                                    

 
 

Address:

 
 

              3062 Rotterdam

 
 

              Max Euwelaan 35

              the Netherlands

 
 

              Attn:                                                                       

 
 

              Telecopy:                                                             

 
 

CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V.,

 

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By:                                                                                       

 
 

Name:                                                                                  

 
 

Title:                                                                                    

 
 

Address:

 
 

                                                                                             

 
 

                                                                                             

 
 

              Attn:                                                                       

 
 

              Telecopy:                                                             

 
 

CEQUENT TRAILER PRODUCTS, S. DE R.L. de C.V.,

 

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor 12 3

 

By:                                                                                       

 
 

Name:                                                                                  

 
 

Title:                                                                                    

 
 

Address:

 

 

12 3 Merged into Cequent Electrical Products de Mexico, S. DE R.L. de C.V.

 

                                                                                             

 
 

              Attn:                                                                       

 
 

              Telecopy:                                                             

 

 

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V.,

 

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By:                                                                                       

 
 

Name:                                                                                  

 
 

Title:                                                                                    

 
 

Address:

 
 

                                                                                             

 
 

                                                                                             

 
 

              Attn:                                                                       

 
 

              Telecopy:                                                             

 

 

AGENT AND LENDERS :

 

BANK OF AMERICA, N.A. ,

  as Agent, a U.S. Lender, a UK Lender and UK Swingline Lender
 

By:                                                                                       

 
 

Name:                                                                                  

 
 

Title:                                                                                    

 
 

Address:

 
 

              Bank of America, N.A.

 
 

              Business Capital

              2600 West Big Beaver Road

              Troy, Michigan 48084

              Attn: Steve Siravo

              Telecopy: 248-631-0515

 
 

BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender and Canadian Swingline Lender

 

By:                                                                                       

 
 

Name:                                                                                  

 
 

Title:                                                                                    

 
 

Address:

 
 

                                                                                             

 
 

                                                                                             

 
 

              Attn:                                                                       

 
 

              Telecopy:                                                             

 
  BANK OF AMERICA, N.A. (acting through its London branch), as UK Security Trustee
 

By:                                                                                       

 
 

Name:                                                                                  

 
 

Title:                                                                                    

 
 

Address:

 
 

                                                                                             

 
 

                                                                                             

 
 

              Attn:                                                                       

 
 

              Telecopy:                                                             

 

  

WELLS FARGO BANK, NATIONAL

ASSOCIATION , as a U.S. Lender

  

By:                                                                                       

 
  

Name:                                                                                  

 
  

Title:                                                                                    

 
  

Address:

 
  

                                                                                             

 
  

                                                                                             

 
  

                                                                                             

 
  

              Attn:                                                                       

 
  

              Telecopy:                                                             

 
  

WELLS FARGO CAPITAL FINANCE

CORPORATION CANADA , as a Canadian Lender

  

By:                                                                                       

 
  

Name:                                                                                  

 
  

Title:                                                                                    

 
  

Address:

 
  

                                                                                             

 
  

                                                                                             

 
  

                                                                                             

 
  

              Attn:                                                                       

 
  

              Telecopy:                                                             

 
  

WELLS FARGO BANK, NATIONAL

ASSOCIATION , (London branch), as a UK Lender

  

By:                                                                                       

 
  

Name:                                                                                  

 
  

Title:                                                                                    

 
  

Address:

 
  

                                                                                             

 
  

                                                                                             

 
  

                                                                                             

 
  

              Attn:                                                                       

 
  

              Telecopy:                                                             

 

  BANK OF MONTREAL , as a U.S. Lender, a Canadian Lender and a UK Lender
 

By:                                                              

 
 

Name:                                                         

 
 

Title:                                                           

 
 

Address:

 
 

                                                                     

 
 

                                                                     

 
 

                                                                     

 
 

              Attn:                                              

 
 

              Telecopy:                                      

 

EXHIBIT A

to

AMENDED AND RESTATED LOAN AGREEMENT

ASSIGNMENT AND ACCEPTANCE

Reference is made to the Amended and Restated Loan Agreement dated as of December 22, 2015, as amended (“ Loan Agreement ”), by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (“ Parent Borrower ”), CEQUENT PERFORMANCE PRODUCTS, INC. , a Delaware corporation (“ Cequent Performance ”), CEQUENT CONSUMER PRODUCTS, INC. , an Ohio corporation (“ Cequent Consumer ”), CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Cequent Performance, Cequent Consumer, and Cequent UK, collectively, “ Borrowers ”), the other Persons from time to time party thereto as Obligors (as defined therein), the financial institutions party thereto from time to time as Lenders, and BANK OF AMERICA, N.A. , a national banking association, in its capacity as agent and security trustee for itself and the other Secured Parties (as defined therein) (“ Agent ”). Terms are used herein as defined in the Loan Agreement.

                                                                                                       (“ Assignor ”) and                                                                               (“ Assignee ”) agree as follows:

1.        Assignor hereby assigns to Assignee and Assignee hereby purchases and assumes from Assignor (a) a principal amount of $                  of Assignor’s outstanding [Canadian/UK/US] Revolver Loans and $          of Assignor’s participations in [Canadian/UK/US] LC Obligations, and (b) the amount of $                  of Assignor’s [Canadian/UK/US] Revolver Commitment (which represents          % of the total [Canadian/UK/US] Revolver Commitments) (the foregoing items being, collectively, “ Assigned Interest ”), together with an interest in the Loan Documents corresponding to the Assigned Interest. This Agreement shall be effective as of the date (“ Effective Date ”) indicated in the corresponding Assignment Notice delivered to Agent, provided such Assignment Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if applicable. From and after the Effective Date, Assignee hereby expressly assumes, and undertakes to perform, all of Assignor’s obligations in respect of the Assigned Interest, and all principal, interest, fees and other amounts which would otherwise be payable to or for Assignor’s account in respect of the Assigned Interest shall be payable to or for Assignee’s account, to the extent such amounts accrue on or after the Effective Date.

2.        Assignor (a) represents that as of the date hereof, prior to giving effect to this assignment, its [Canadian/UK/US] Revolver Commitment is $                      , and the outstanding balance of its [Canadian/UK/US] Revolver Loans and participations in [Canadian/UK/US] LC Obligations is $                      ; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other instrument or document furnished pursuant thereto, other than that Assignor is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; and (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance by Borrowers of their obligations under the Loan Documents. [Assignor is attaching the promissory note[s] held by it and requests that Agent exchange such note[s] for new promissory notes payable to Assignee [and Assignor].]

3.        Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment; (b) confirms that it has received copies of the Loan Agreement and such other Loan Documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment; (c) agrees that it shall, independently and without reliance upon Assignor and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents; (d) confirms that it is an Eligible Assignee; (e) appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under the Loan Agreement as are delegated to Agent by the terms thereof, together with such powers as are incidental thereto; (f) agrees that it will observe and perform all obligations that are required to be performed by it as a “Lender” under the Loan Documents; (g) represents and warrants that the assignment evidenced hereby will not result in a non-exempt “prohibited transaction” under Section 406 of ERISA; and (h) represents and warrants that it is [[not a Qualifying Lender]/[a Qualifying Lender (other than a Treaty Lender)]/[a Treaty Lender]] .

4.        This Agreement shall be governed by the laws of the State of New York. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Agreement shall remain in full force and effect.

5.        Each notice or other communication hereunder shall be in writing, shall be sent by messenger, by telecopy or facsimile transmission, or by first-class mail, shall be deemed given when sent and shall be sent as follows:

 

(a)          

If to Assignee, to the following address (or to such other address as Assignee may designate from time to time):

      
      
      
(b)          

If to Assignor, to the following address (or to such other address as Assignor may designate from time to time):

      
      
      

Payments hereunder shall be made by wire transfer of immediately available [Canadian Dollars/Dollars/Euros/Sterling] as follows:

If to Assignee, to the following account (or to such other account as Assignee may designate from time to time):

 

 

                                                                      

  
 

                                                                      

  
 

ABA No.                                                      

  
 

                                                                      

  
 

Account No.                                                  

  
 

Reference:                                                     

  

If to Assignor, to the following account (or to such other account as Assignor may designate from time to time):

 

                                                                      

  
 

ABA No.                                                      

  
 

                                                                      

  
 

Account No.                                                  

  
 

Reference:                                                     

  

IN WITNESS WHEREOF , this Assignment and Acceptance is executed as of                          .

 

 

                                                                                  

  
 

(“Assignee”)

  
 

By Title:

  
 

                                                                                  

  
 

(“Assignor”)

  
 

By Title:

  

EXHIBIT B

to

AMENDED AND RESTATED LOAN AGREEMENT

ASSIGNMENT NOTICE

Reference is made to (1) the Amended and Restated Loan Agreement dated as of December 22, 2015, as amended (“ Loan Agreement ”), by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (“ Parent Borrower ”), CEQUENT PERFORMANCE PRODUCTS, INC. , a Delaware corporation (“ Cequent Performance ”), CEQUENT CONSUMER PRODUCTS, INC. , an Ohio corporation (“ Cequent Consumer ”), CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Cequent Performance, Cequent Consumer, and Cequent UK, collectively, “ Borrowers ”), the other Persons from time to time party thereto as Obligors (as defined therein), the financial institutions party thereto from time to time as Lenders, and BANK OF AMERICA, N.A. , a national banking association, in its capacity as agent and security trustee for itself and the other Secured Parties (as defined therein) (“ Agent ”); and (2) the Assignment and Acceptance dated as of                      , 20         (“ Assignment”), betw een                                  (“ Assignor ”) and                                  (“ Assignee ”). Terms are used herein as defined in the Loan Agreement.

Assignor hereby notifies Borrower Agent and Agent of Assignor’s intent to assign to Assignee pursuant to the Assignment (a) a principal amount of $              of Assignor’s outstanding [Canadian/UK/US] Revolver Loans and $              of Assignor’s participations in [Canadian/UK/US] LC Obligations, and(b) the amount of $                  of Assignor’s [Canadian/UK/US] Revolver Commitment (which represents   % of the total [Canadian/UK/US] Revolver Commitments) (the foregoing items being, collectively, the “ Assigned Interest ”), together with an interest in the Loan Documents corresponding to the Assigned Interest. This Agreement shall be effective as of the date (“ Effective Date ”) indicated below, provided this Assignment Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if applicable. Pursuant to the Assignment, Assignee has expressly assumed all of Assignor’s obligations under the Loan Agreement to the extent of the Assigned Interest, as of the Effective Date.

For purposes of the Loan Agreement, Agent shall deem Assignor’s [Canadian/UK/US] Revolver Commitment to be reduced by $                  , and Assignee’s [Canadian/UK/US] Revolver Commitment to be increased by $                  .

[The Assignee indicates for the benefit of Agent and without liability to any Relevant Borrower that it is [not a Qualifying Lender][a Qualifying Lender (other than a Treaty Lender)][a Treaty Lender].] 13 4

The address of Assignee to which notices and information are to be sent under the terms of the Loan Agreement is:

 

       
       
       
       

 

 

13 4 To be inserted where the Assignee is participating in a UK Revolver Commitment.

The address of Assignee to which payments are to be sent under the terms of the Loan Agreement is shown in the Assignment.

This Notice is being delivered to Borrower Agent and Agent pursuant to Section 13.3 of the Loan Agreement. Please acknowledge your acceptance of this Notice by executing and returning to Assignee and Assignor a copy of this Notice.

IN WITNESS WHEREOF , this Assignment Notice is executed as of                                .

 

 

                                                                              

  
 

(“Assignee”)

  
 

By Title:

  
 

                                                                              

  
 

(“Assignor”)

  
 

By Title:

  

ACKNOWLEDGED AND AGREED,

AS OF THE DATE SET FORTH ABOVE:

BORROWER AGENT :*

HORIZON GLOBAL CORPORATION ,

a Delaware corporation

By Title:

* No signature required if Assignee is a Lender, Affiliate of a Lender or Approved Fund, or if an Event of Default exists.

BANK OF AMERICA, N.A. ,

as Agent

By   Title:

EXHIBIT C-1

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF IN-TRANSIT INVENTORY LIEN WAIVER

See attached.

EXHIBIT C-2

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF VENDOR LIEN WAIVER

See attached.

EXHIBIT D

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF PERFECTION CERTIFICATE

(On file with Agent).

EXHIBIT E

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF SPECIAL IRREVOCABLE POWER OF ATTORNEY

[English version for reference purposes only]

To be executed and delivered in Spanish language, by each Mexican Domiciled Obligor/Grantor in the presence of and formalized by a Mexican notary public .

[Each Mexican Domiciled Obligor/Grantor] (the “ Grantor ”), hereby grants a special irrevocable power of attorney for litigation and collections in favor of HORIZON GLOBAL CORPORATION , a Delaware corporation (the “ Process Agent ”), in terms of the first paragraph of article 2554 of the Federal Civil Code and corresponding articles of the Civil Codes of all States of the United Mexican States and of the Federal District of Mexico. This power of attorney is limited in its scope but is as broad as necessary and may be exercised in any jurisdiction, limited pursuant to paragraph fourth of such article 2554 of the Federal Civil Code and corresponding articles of the Civil Codes of all States of the United Mexican States and of the Federal District of Mexico, so that the Process Agent, in the name and on behalf of the Grantor, carries out any of the following actions: receive any and all notices and service of process in connection with any suits, actions, proceedings and judgments of all kinds, including, without limitation, judicial, administrative or arbitration proceedings in any way relating to (i) the Amended and Restated Loan Agreement, dated December 22, 2015, as amended, amended and restated, supplemented or otherwise modified from time to time (the “ Loan Agreement ”), signed by, among others, the Grantor and Bank of America, N.A. (the “ Agent ”); and (ii) any other agreement, instrument or document related to the Loan Agreement. The Grantor hereby appoints as its conventional domicile exclusively to receive any of the notices and service of process referred above, 39400 Woodward Avenue, Suite 100, Bloomfield Hills, Michigan 48304, United States of America, or any other domicile notified in writing by the Process Agent to the Grantor and Agent. This power of attorney is granted in satisfaction of a condition set forth in the Loan Agreement, and it is therefore irrevocable.

[Spanish Translation]

[Cada sociedad mexicana parte del crédito] (la “ Sociedad ”) otorga en este acto un Poder Especial irrevocable para Pleitos y Cobranzas en favor de HORIZON GLOBAL CORPORATION , una sociedad existente de conformidad con las leyes de Delaware, Estados Unidos de Norteamérica (el “ Agente de Proceso ”), de conformidad con el primer párrafo del artículo dos mil quinientos cincuenta y cuatro del Código Civil Federal y los artículos correspondientes de los Códigos Civiles de todos los estados de los Estados Unidos Mexicanos y el Distrito Federal. Este Poder Especial es limitado en cuanto a su objeto pero tan amplio como sea necesario en Derecho, y podrá ser ejercido en cualquier jurisdicción, limitado conforme al cuarto párrafo del mencionado artículo 2554 del Código Civil Federal y los artículos correspondientes de los Códigos Civiles de todos los estados de los Estados Unidos Mexicanos y el Distrito Federal, a efecto de que el Agente de Proceso, en nombre y representación de la Sociedad, realice cualesquiera de los siguientes actos: reciba cualesquiera notificaciones, emplazamientos y cualquier otro tipo de comunicaciones y documentos relacionados con demandas, acciones, procedimientos y sentencias de todo tipo, incluyendo enunciativa más no limitativamente, derivadas de procedimientos judiciales, administrativos o arbitrales que de cualquier manera se relacionen con (i) el Contrato de Crédito ( Amended and Restated Loan Agreement ), según el mismo sea modificado, adicionado o reexpresado ocasionalmente (el “ Contrato de Crédito ”), celebrado con fecha 22 de diciembre de 2015 entre la Sociedad y Bank of America, N.A. (el “ Agente ”), entre otros; y (ii) cualquier otro contrato, instrumento o documento relacionado con el Contrato de Crédito. La Sociedad designa en este acto como su domicilio convencional exclusivamente para recibir cualesquiera de las notificaciones, emplazamientos, comunicaciones y documentos mencionados con anterioridad, 39400 Avenida Woodward, Suite 100, Bloomfield Hills, Michigan 48304, Estados Unidos de Norteamérica, o cualquier otro domicilio que notifique por escrito el Agente de Proceso a la Sociedad y al Agente. Este Poder Especial se otorga en cumplimiento de una condición prevista en el Contrato de Crédito, y es por lo tanto irrevocable.

EXHIBIT F

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF NOTICE OF BORROWING

See attached.

SCHEDULE 1.1(A)

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING LETTERS OF CREDIT

 

Instrument #    Product    Stucky    Company    Beneficiary      Outstanding Amount        Liability(In USD)      Issue Date    Expiry
Date 		   Alt Instr # 

68114201

  

Standby Letter of Credit

  

130HGC

   HORIZON GLOBAL CORPORATION   

NATIONAL UNION

FIRE INSURANCE CO.

     USD 300,000.00        300,000.00     

2015/08/03

  

2016/06/30

    
   

68113152

  

Standby Letter of Credit

  

130HGC

   HORIZON GLOBAL CORPORATION    THE HANOVER INSURANCE COMPANY      USD 500,000.00        500,000.00     

2015/06/30

  

2016/06/30

    
   

68120743

  

Standby Letter of Credit

  

130HGC

   HORIZON GLOBAL CORPORATION    CI BANCO SOCIEDAD ANONIMA      USD 763,980.00        763,980.00     

2015/10/07

  

2016/08/20

    
   

68113141

  

Standby Letter of Credit

  

130HGC

   HORIZON GLOBAL CORPORATION    JPMORGAN CHASE BANK N.A.      USD 4,486,480.31        4,486,480.31     

2015/06/30

  

2016/06/30

    
   

68114766

  

Standby Letter of Credit

  

130HGC

   HORIZON GLOBAL CORPORATION    CIBANCO SOCIEDAD ANONIMA      USD 367,459.56        367,459.56     

2015/08/27

  

2016/08/27

    

SCHEDULE 1.1(B)

to

AMENDED AND RESTATED LOAN AGREEMENT

COMMITMENTS OF LENDERS

 

Canadian Lender

  

 

     Canadian Revolver     

Commitment

Bank of America, N.A. (acting through its Canada branch)    $823,529.40

(41.176470588%)

Wells Fargo Capital Finance Corporation

Canada

   $588,235.29

(29.411764706%)

Bank of Montreal    $588,235.29

(29.411764706%)

Total:    $2,000,000

 

UK Lender

  

 

UK Revolver
         Commitment         

Bank of America, N.A. (acting through its London branch)    $1,235,294.12

(41.176470588%)

Wells Fargo Bank, National Association

(London branch)

   $882,352.94

(29.411764706%)

Bank of Montreal    $882,352.94

(29.411764706%)

Total:    $3,000,000

 

U.S. Lender

  

 

U.S. Revolver

         Commitment         

Bank of America, N.A.    $38,705,882.36

(41.176470588%)

Wells Fargo Bank,

National Association

   $27,647,058.82

(29.411764706%)

Bank of Montreal    $27,647,058.82

(29.411764706%)

Total:    $94,000,000

SCHEDULE 9.1.3

to

AMENDED AND RESTATED LOAN AGREEMENT

GOVERNMENTAL LICENSES

SCHEDULE 9.1.5

to

AMENDED AND RESTATED LOAN AGREEMENT

REAL PROPERTY

SCHEDULE 9.1.6

to

AMENDED AND RESTATED LOAN AGREEMENT

DISCLOSED MATTERS

 

1.

Proceedings and investigations pending against Borrowers or Subsidiaries:

 

2.

Threatened proceedings or investigations of which any Borrower or Subsidiary is aware:

 

3.

Environmental matters of which any Borrower or Subsidiary is aware:

 

4.

Pending Commercial Tort Claim(s) of any Obligor:

SCHEDULE 9.1.12

to

AMENDED AND RESTATED LOAN AGREEMENT

SUBSIDIARIES

 

1.

The corporate names, jurisdictions of incorporation, and authorized and issued Equity Interests of each Borrower and Subsidiary are as follows:

 

Name

   Jurisdiction   

Number and Class of Authorized Equity

Interests

  

Number and Class

of Issued Equity Interests

                
                
                
                

 

2.

The record holders of Equity Interests of each Borrower and Subsidiary are as follows:

 

Name

  

Class of Equity

Interests

  

Number of Equity

Interests

   Record Owner
                
                
                
                

 

3.

All agreements binding on holders of Equity Interests of Borrowers and Subsidiaries with respect to such interests are as follows:

 

4.

In the five years preceding the Closing Date, no Borrower or Subsidiary has acquired any substantial assets from any other Person nor been the surviving entity in a merger or combination, except:

 

5.

The following Subsidiaries are Obligors:

SCHEDULE 9.1.13

to

AMENDED AND RESTATED LOAN AGREEMENT

INSURANCE

SCHEDULE 9.1.23

to

AMENDED AND RESTATED LOAN AGREEMENT

MATERIAL CONTRACTS

SCHEDULE 10.2.1

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING DEBT

SCHEDULE 10.2.2

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING LIENS

SCHEDULE 10.2.4

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING INVESTMENTS

SCHEDULE 10.2.5

to

AMENDED AND RESTATED LOAN AGREEMENT

PERMITTED ASSET DISPOSITIONS

SCHEDULE 10.2.9

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING AFFILIATE TRANSACTIONS

SCHEDULE 10.2.10

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING RESTRICTIVE AGREEMENTS

EXHIBIT B

Second Amendment to Intercreditor Agreement

{see attached}

SECOND

AMENDMENT TO

INTERCREDITOR AGREEMENT

This Second Amendment to the Intercreditor Agreement (this “ Amendment ”) is dated as of February 20, 2019, and is by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (the “ Borrower ”), certain of its subsidiaries signatory hereto (the Borrower and each such Subsidiary a “ Grantor ”, and collectively, the “ Grantors ”), BANK OF AMERICA, N.A. in its capacity as administrative agent and collateral agent for the ABL Lenders and the ABL Secured Parties (the “ ABL Agent ”), JPMORGAN CHASE BANK, N.A. in its capacity as administrative agent and collateral agent for the Term Lenders and the Term Secured Parties party to the Term Loan Credit Agreement, as amended, restated, supplemented or otherwise modified from time to time, and CORTLAND CAPITAL MARKET SERVICES LLC in its capacity as administrative agent and collateral agent for the Term Lenders and Term Secured Parties party to that certain bridge credit agreement, as amended, restated, supplemented or otherwise modified, dated as of February 20, 2019 by and among the Borrower, the Grantors, the administrative agent and collateral agent and the lenders party thereto from time to time (each a “ Term Agent ”, and collectively, the “ Term Agents ”).

RECITALS:

WHEREAS, the Borrower, Grantors, ABL Agent and Term Agents are party to an Intercreditor Agreement dated as of June 30, 2015 (as amended, restated, supplemented, or otherwise modified before the date of this Amendment, the “ Intercreditor Agreement ”).

WHEREAS, the parties desire to modify the Intercreditor Agreement in certain respects.

NOW, THEREFORE, in consideration of the premises, the parties agree as follows:

1.        Definitions . Defined terms used but not defined in this Amendment are as defined in the Intercreditor Agreement.

2.        Amendments to Intercreditor Agreement . With effect as of the effective date, the Intercreditor Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Intercreditor Agreement attached as Exhibit A hereto.

3.        Conditions . The effectiveness of this Amendment is subject to satisfaction of the condition that the ABL Agent and Term Agents have each received this Amendment executed by the ABL Agent, Term Agents and the Grantors.

4.        Miscellaneous.

 

(a)

This Amendment is governed by, and is to be construed in accordance with laws of the State of New York, without giving effect to any conflict of law principles except federal laws relating to national banks. Each provision of this Amendment is severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

 

2

(b)

By executing and delivering this Agreement, Horizon International Holdings LLC, a Delaware limited liability company hereby becomes a party to the Acknowledgement to the Intercreditor Agreement as an ABL Guarantor and Term Guarantor thereunder with the same force and effect as if originally named therein as an ABL Guarantor and Term Guarantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations of an ABL Guarantor and Term Guarantor thereunder.

 

(c)

This Amendment binds the ABL Agent, the Term Agents and each Grantor and their respective successors and assigns, and will inure to the benefit of the ABL Agent, the Term Agents, the Lenders, and each Grantor and the successors and assigns of the ABL Agent, each Term Agent and each Lender.

 

(d)

Except as specifically modified or amended by the terms of this Amendment, all other terms and provisions of the Intercreditor Agreement are incorporated by reference in this Amendment and in all respects continue in full force and effect. Each Grantor, by execution of this Amendment, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions that are contained in the Intercreditor Agreement.

 

(e)

Each reference in the Intercreditor Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import, and each reference to the Intercreditor Agreement in any and all instruments or documents delivered in connection therewith, will be deemed to refer to the Intercreditor Agreement, as amended by this Amendment.

 

(f)

The parties may sign this Amendment in several counterparts, each of which will be deemed to be an original but all of which together will constitute one instrument.

[Signature pages to follow]

 

2

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

 

HORIZON GLOBAL CORPORATION ,
as the Borrower
By:     /s/ Brian Whittman                                        
 

Name:  Brian Whittman

Title:  Vice President, Finance

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

HORIZON GLOBAL COMPANY LLC,

as a Grantor
         By:  

/s/ Brian Whittman

    Name:  Brian Whittman
    Title:    Vice President, Finance
HORIZON GLOBAL AMERICAS INC.,
as a Grantor
  By:  

/s/ Brian Whittman

    Name:  Brian Whittman
    Title:    Vice President, Finance

HORIZON INTERNATIONAL HOLDINGS
LLC, as a Grantor

  By:  

/s/ Brian Whittman

      Name:  Brian Whittman
      Title:    Vice President, Finance

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

BANK OF AMERICA, N.A. ,

as the ABL Agent

By:  

 /s/ Kindra Mullarky

   Name:  Kindra Mullarky
   Title:  SVP

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

JPMORGAN CHASE BANK, N.A. , as a Term Agent
By:  

/s/ Sabir Hashmy

  Name:  Sabir Hashmy
 

Title:  Managing Director

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

CORTLAND CAPITAL MARKET SERVICES

LLC, as a Term Agent

By:       /s/ Jessica J. Mead                                        
  Name:  Jessica J. Mead
  Title:  General Counsel

 

[Signature Page to Amendment to ABL/Term Intercreditor Agreement]

EXHIBIT A

Amendments to Intercreditor Agreement

See attached.

“ Additional Term Collateral Documents ” means, with respect to any series, issue or class of Additional Term Debt, each of the collateral agreements, security agreements and other instruments and documents executed and delivered by any Term Loan Party for purposes of providing collateral security for any Additional Term Obligations (including any Amendment or Refinancing thereof).

“ Additional Term Debt ” means any Indebtedness secured by Liens on the Collateral; provided , that (i) at the time of incurrence thereof, such Indebtedness is permitted by the ABL Documents and the Term Documents to be (x) incurred, (y) guaranteed on a senior, pari passu or junior basis with respect to the Term Obligations outstanding under the Term Loan Credit Agreement and (z) secured by Liens on the Collateral on a senior, pari passu or junior basis with the Liens on the Collateral securing the Term Obligations outstanding under the Term Loan Credit Agreement and (ii) the conditions set forth in Section 7.20 shall have been satisfied with respect to such Indebtedness and, unless the agent, trustee or other representative for the holders of such Indebtedness is already a party to this Agreement, such agent, trustee or other representative shall have become a party to this Agreement pursuant to Section 7.20.

“ Additional Term Debt Facility ” means each credit facility, indenture or other governing agreement (other than the Term Loan Credit Agreement) with respect to any Additional Term Debt.

“ Additional Term Documents ” means, with respect to any series, issue or class of Additional Term Debt, (a) the Additional Term Debt Facility, (b) the Additional Term Collateral Documents and (c) the other operative agreements evidencing or governing such Indebtedness.

“ Additional Term Joinder ” means a Joinder Agreement substantially in the form of Exhibit I hereto or such other form as agreed by the ABL Agent and each Term Agent.

“ Additional Term Obligations ” means, with respect to any series, issue or class of Additional Term Debt, all obligations of every nature of each Term Loan Party from time to time owed to the Additional Term Secured Parties, or any of them, under any Additional Term Document, including, without limitation, all “Obligations” of each Term Loan Party or similar term as defined in any Additional Term Document, whether for principal, interest, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Additional Term Documents (including interest, fees, indemnification payments, expense reimbursements and other amounts which, but for the commencement of an Insolvency Proceeding with respect to such Term Loan Party, would have accrued on or been payable with respect to any Additional Term Obligation, whether or not a claim is allowed or allowable against such Term Loan Party for such interest, fees, indemnification payments, expense reimbursements and other amounts in the related Insolvency Proceeding), as the same may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Additional Term Secured Parties ” means, with respect to any series, issue or class of Additional Term Obligations, the holders of such obligations, the agent, trustee or other representative with respect thereto, and the beneficiaries of each indemnification obligation undertaken by any Term Loan Party under any related Additional Term Documents.

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

“ Agent(s) ” means individually the ABL Agent or any Term Agent and collectively means both the ABL Agent and each Term Agent.

permitted to be incurred and secured under each of the then extant ABL Documents and Term Documents and, if requested, true and complete copies of each of the material Additional Term Documents relating to such Additional Term Debt; and

(c) (c)  the Additional Term Documents relating to such Additional Term Debt shall provide that each Additional Term Secured Party with respect to such Additional Term Debt will be subject to, and bound by, the provisions of this Agreement in its capacity as a holder of such Additional Term Debt . ; and

(d)              the parties hereto acknowledge that Cortland Capital Market Services LLC , in its capacity as Administrative Agent (the “Bridge Agent”) under the Credit Agreement, dated as of February 20, 2019, with the Term Loan Parties and the lenders party thereto (the “Bridge Credit Agreement”), has become a party as a Term Agent and Additional Term Secured Party to this agreement by executing an Additional Term Joinder on February 20, 2019 and that, as between the Term Agents and the Term Secured Parties on the one side and the ABL Agent and the ABL Secured Parties on the other side, the Bridge Agent and its successors in such capacity shall (i) be deemed to be the Designated Term Agent until Discharge of Term Obligations owing in respect of the Bridge Credit Agreement and (ii) have the exclusive right and power to exercise all rights and remedies of each of the Term Agents under this Agreement on behalf of each of the Term Agents and the Term Secured Parties and the ABL Agent and the ABL Secured Parties are hereby authorized and directed by each of the Term Agents to recognize and interact with Bridge Agent in accordance with the foregoing on behalf of the Term Agents and Term Secured Parties.

Section 7.21 Additional Intercreditor Agreements . Notwithstanding anything to the contrary contained in this Agreement, each party hereto agrees that the Term Secured Parties (as among themselves) may enter into intercreditor agreements (or similar arrangements) with the relevant Term Agents governing the rights, benefits and privileges of Term Secured Parties with respect to the Term Obligations or a portion thereof (as among themselves), in respect of any or all of the Collateral and the applicable Term Documents, including as to the application of Proceeds of any Collateral, voting rights, control of any Collateral and waivers with respect to any Collateral, in each case so long as the terms thereof do not violate or conflict with the provisions of this Agreement.

[SIGNATURE PAGES FOLLOW]

Schedule I

Post-Closing Requirements

 

  1.

As soon as practicable following the Amendment Effective Date (and in any event, no later than the second Business Day following the Amendment Effective Date (with extensions to be granted by the Agent at the direction of the Required Lenders)), the Borrowers shall provide evidence in the form of an intercompany note executed by the Borrowers and all applicable Subsidiaries that indebtedness and other liabilities (whether now existing or hereafter arising) owing by any Obligor as of the Amendment Effective Date to any Subsidiary that is not an Obligor shall be subordinated to the Obligations on subordination terms reasonably satisfactory to the Agent and the Required Lenders; it being understood that such intercompany note shall be delivered to the Controling Term Loan Agent within two Business Days of the Amendment Effective Date (or such later date as the Agent may determine in its reasonable discretion).

 

  2.

The Loan Parties shall take all necessary actions (subject to the Post-Closing Security Principles set out in paragraph 4 below) to satisfy the items described below within thirty (30) days after the Amendment Effective Date (or, in each case, such longer periods as the Agent, acting at the direction of the Required Lenders, may agree):

 

  (a)

For each Subsidiary domiciled in the United Kingdom:

 

  (i)

an English law guarantee and debenture over substantially all of its assets;

 

  (ii)

a share pledge agreement entered into by its shareholder relating to the pledge over its shares; and

 

  (iii)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in the United Kingdom to create a first priority perfected security interest therein, subject in each case to the Intercreditor Agreement.

 

  (b)

For each Subsidiary domiciled in Germany:

 

  (i)

a guarantee;

 

  (ii)

a share pledge agreement entered into by its shareholder relating to the pledge over its shares; and

 

  (iii)

security over substantially all of its assets located in Germany including but not limited to the following security documents, if applicable:

 

  (A)

an account pledge agreement relating to all accounts held by it with banks in Germany;

 

  (B)

a global assignment agreement relating to the assignment of accounts receivable from the selling of goods and the provision of services as well as other accounts receivable agreed to be assigned

 

I-2

  by it (including, but not limited to, insurance claims and intercompany loan receivables);

 

  (C)

a security transfer agreement relating to the security transfer of all moveable (including stock and inventory) and fixed assets over which security shall be granted;

 

  (D)

if it has any such rights, an Intellectual Property pledge agreement relating to the pledge of its Intellectual Property rights (including, but not limited to, patents, designs, utility models, trademarks, know-how and other Intellectual Property rights);

 

  (E)

if it owns any real estate, a land charge over the real estate held by it;

 

  (F)

if it owns any real estate, a security purpose agreement relating to the land charge granted by it; and

 

  (G)

if it is party to any relevant intercompany agreements, a subordination agreement in relation to any shareholder and intercompany loans and any other applicable, if any, intercompany claims.; and

 

  (iv)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in Germany to create a first priority perfected security interest therein, subject in each case to the Intercreditor Agreement.

 

  (c)

For each Subsidiary domiciled in the Netherlands:

 

  (i)

a guarantee;

 

  (ii)

an Omnibus Pledger (or similar agreement);

 

  (iii)

a share pledge agreement entered into by its shareholder relating to the pledge over its shares; and

 

  (iv)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in the Netherlands to create a first priority perfected security interest therein, subject in each case to the Intercreditor Agreement.

 

  3.

Each Subsidiary domiciled in the UK, Germany or the Netherlands shall deliver a New York law-governed guarantee and security agreement in form and substance satisfactory to the Agent within fourteen (14) days after the Amendment Effective Date (or such longer period as the Agent, acting at the direction of the Required Lenders, may agree).

 

  4.

The guarantees and security obligations to be provided pursuant to this Schedule I will be given in accordance with customary “agreed security principles” to be agreed in

 

I-3

 

good faith as soon as practicable following the Amendment Effective Date (and in any event, no later than the fifth Business Day following the Amendment Effective Date (or such longer period as the Agent, acting at the direction of the Required Lenders, may agree)) (the “ Post-Closing Security Principles ”) which will provide that all guarantees provided and security interests granted shall be first priority guarantees and security interests, as applicable and subject in each case to the Intercreditor Agreement, and embody a recognition by all parties that there may be certain legal and practical difficulties in obtaining effective or commercially reasonable guarantees and/or security from all relevant entities in each jurisdiction in which it has been agreed that guarantees and security will be granted. In particular:

 

  (a)

Guarantees and/or security shall not be created or perfected, or shall be subject to customary limitations, to the extent that it would result in (i) any breach of corporate benefit, financial assistance, fraudulent preference or thin capitalization laws or regulations (or analogous restrictions) of any applicable jurisdiction, (ii) a significant risk to the officers of the relevant grantor of security of contravention of their fiduciary duties and/or of civil or criminal liability, (iii) costs, burdens, difficulties or consequences that are disproportionate or excessive to the benefit obtained by such guarantees and/or security (as agreed by the Borrowers and the Agent) or (iv) a material adverse effect on the ability of the relevant person to conduct its operations and business in the ordinary course as otherwise permitted by the Loan Documents. For the purposes of this paragraph 4, “cost” includes, but is not limited to, income tax cost, registration taxes payable on the creation, the perfection or for the continuance of any guarantee or security, stamp duties, out-of-pocket expenses, and other fees and expenses directly incurred by the relevant grantor or any of its direct or indirect owners, subsidiaries or affiliates.

 

  (b)

As required in the relevant jurisdiction, the security documents should only operate to create security rather than to impose new commercial obligations or a repeat of clauses in other Loan Documents. Accordingly, the Post-Closing Security Principles will reflect that (i) such security documents should not contain additional representations, undertakings or indemnities (including, without limitation, in respect of insurance, information, maintenance or protection of assets or the payment of costs) unless these are the same as or consistent with those contained in the Loan Agreement or are required by law or necessary in the applicable jurisdiction for the provision of a guarantee or the creation or perfection of security interest; and (ii) nothing in any security document shall (or be construed to) prohibit any transaction, matter or other step (or a grantor taking or entering the same or dealing in any manner whatsoever in relation to any asset (including all rights, claims benefits, proceeds and documentation, and contractual counterparties in relation thereto) the subject of (or expressed to be the subject of) the security agreement) if not prohibited by the terms of the other Loan Documents or necessary in the applicable jurisdiction for the provision of a guarantee or the creation or perfection of security interest.

 

  (c)

Each security document should contain a clause which records that if there is a conflict between the security document and the Loan Agreement, then (to the extent permitted by applicable law) the provisions of the Loan Agreement will take priority over the provisions of the applicable security document.

 

I-4

EXHIBIT 10.3

Execution Version

 

 

$10,000,000

CREDIT AGREEMENT

dated as of February 20, 2019,

among

HORIZON GLOBAL CORPORATION,

The Lenders Party Hereto,

and

CORTLAND CAPITAL MARKET SERVICES LLC,

as Administrative Agent and Collateral Agent,

 

 

TABLE OF CONTENTS

 

     Page  

ARTICLE I

 

DEFINITIONS

 

SECTION 1.01         Defined Terms      1  
SECTION 1.02         Classification of Loans and Borrowings      20  
SECTION 1.03         Terms Generally      20  
SECTION 1.04         Accounting Terms; GAAP      20  
ARTICLE II

 

THE CREDITS

 

SECTION 2.01         Commitments      21  
SECTION 2.02         Loans and Borrowings      21  
SECTION 2.03         Requests for Borrowings      21  
SECTION 2.04         [ Reserved ]      22  
SECTION 2.05         [Reserved]      22  
SECTION 2.06         Funding of Borrowings      22  
SECTION 2.07         Interest Elections      22  
SECTION 2.08         Termination of Commitments      24  
SECTION 2.09         Repayment of Loans; Evidence of Debt      24  
SECTION 2.10         Maturity Date      24  
SECTION 2.11         Prepayment of Loans      24  
SECTION 2.12         Fees      25  
SECTION 2.13         Interest      26  
SECTION 2.14         Alternate Rate of Interest      26  
SECTION 2.15         Increased Costs      27  
SECTION 2.16         Break Funding Payments      28  
SECTION 2.17         Taxes      29  
SECTION 2.18         Payments Generally; Pro Rata Treatment; Sharing of Set-offs      31  
SECTION 2.19         Mitigation Obligations; Replacement of Lenders      32  
ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

SECTION 3.01         Organization; Powers      33  
SECTION 3.02         Authorization; Enforceability      33  
SECTION 3.03         Governmental Approvals; No Conflicts      33  
SECTION 3.04         Financial Condition; No Material Adverse Change      34  
SECTION 3.05         Properties      34  
SECTION 3.06         Litigation and Environmental Matters      35  
SECTION 3.07         Compliance with Laws and Agreements      35  
SECTION 3.08         Investment Company Status      35  
SECTION 3.09         Taxes      35  

 

-i-

     Page  
SECTION 3.10         ERISA      36  
SECTION 3.11         Disclosure      36  
SECTION 3.12         Subsidiaries      36  
SECTION 3.13         Insurance      36  
SECTION 3.14         Labor Matters      36  
SECTION 3.15         [Reserved]      36  
SECTION 3.16         Senior Indebtedness      36  
SECTION 3.17         Security Documents      36  
SECTION 3.18         Federal Reserve Regulations      37  
SECTION 3.19         Anti-Corruption Laws and Sanctions      38  
SECTION 3.20         Material Contracts      38  
SECTION 3.21         EEA Financial Institutions      38  
SECTION 3.22         Disclosure      38  
ARTICLE IV

 

CONDITIONS

 

SECTION 4.01         Closing Date      38  
ARTICLE V

 

AFFIRMATIVE COVENANTS

 

SECTION 5.01         Financial Statements and Other Information      40  
SECTION 5.02         Notices of Material Events      43  
SECTION 5.03         Information Regarding Collateral      44  
SECTION 5.04         Existence; Conduct of Business      44  
SECTION 5.05         Payment of Obligations      44  
SECTION 5.06         Maintenance of Properties      44  
SECTION 5.07         Insurance      45  
SECTION 5.08         Casualty and Condemnation      45  
SECTION 5.09         Books and Records; Inspection and Audit Rights; Lender Calls      45  
SECTION 5.10         Compliance with Laws      45  
SECTION 5.11         Use of Proceeds      46  
SECTION 5.12         [Reserved]      46  
SECTION 5.13         Further Assurances; Post-Closing Covenant      46  
ARTICLE VI

 

NEGATIVE COVENANTS

 

SECTION 6.01         Indebtedness; Certain Equity Securities      47  
SECTION 6.02         Liens      49  
SECTION 6.03         Fundamental Changes      50  
SECTION 6.04         Investments, Loans, Advances, Guarantees and Acquisitions      50  
SECTION 6.05         Asset Sales      52  
SECTION 6.06         Sale and Leaseback Transactions      52  
SECTION 6.07         Hedging Agreements      52  
SECTION 6.08         Restricted Payments; Certain Payments of Indebtedness      53  
SECTION 6.09         Transactions with Affiliates      54  

 

-ii-

     Page  

SECTION 6.10         Restrictive Agreements

     54  

SECTION 6.11         Amendment of Material Documents

     54  

SECTION 6.12         Use of Proceeds

     55  
ARTICLE VII

 

EVENTS OF DEFAULT

 

ARTICLE VIII

 

THE AGENTS

 

ARTICLE IX

 

[RESERVED]

 

ARTICLE X

 

MISCELLANEOUS

 

SECTION 10.01         Notices

     60  

SECTION 10.02         Waivers; Amendments

     60  

SECTION 10.03         Expenses; Indemnity; Damage Waiver

     62  

SECTION 10.04         Successors and Assigns

     63  

SECTION 10.05         Survival

     65  

SECTION 10.06         Counterparts; Integration; Effectiveness

     66  

SECTION 10.07         Severability

     66  

SECTION 10.08         Right of Setoff

     66  

SECTION 10.09         Governing Law; Jurisdiction; Consent to Service of Process

     66  

SECTION 10.10         WAIVER OF JURY TRIAL

     67  

SECTION 10.11         Headings

     67  

SECTION 10.12         Confidentiality

     67  

SECTION 10.13         Interest Rate Limitation

     68  

SECTION 10.14         Intercreditor Agreements

     68  

SECTION 10.15         Release of Liens and Guarantees

     68  

SECTION 10.16         PATRIOT Act

     69  

SECTION 10.17         No Fiduciary Duty

     69  

SECTION 10.18         Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     69  

 

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SCHEDULES :

 

Schedule 2.01

  

–  

  

Commitments

Schedule 3.03

  

–  

  

Governmental Approvals; No Conflicts

Schedule 3.05

  

–  

  

Real Property

Schedule 3.06

  

–  

  

Disclosed Matters

Schedule 3.12

  

–  

  

Subsidiaries

Schedule 3.13

  

–  

  

Insurance

Schedule 3.20

  

–  

  

Material Contracts

Schedule 5.13

  

–  

  

Post-Closing Conditions

Schedule 6.01

  

–  

  

Existing Indebtedness

Schedule 6.02

  

–  

  

Existing Liens

Schedule 6.04

  

–  

  

Existing Investments

Schedule 6.05

  

–  

  

Asset Sales

Schedule 6.09

  

–  

  

Existing Affiliate Transactions

Schedule 6.10

  

–  

  

Existing Restrictions

EXHIBITS :

     

Exhibit A

  

–  

  

Form of Assignment and Assumption

Exhibit B

  

–  

  

Form of Borrowing Request

Exhibit C

  

–  

  

Form of U.S. Tax Certificate

Exhibit D

  

–  

  

Form of Guarantee and Collateral Agreement

 

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CREDIT AGREEMENT dated as of February 20, 2019 (this “ Agreement ”), among HORIZON GLOBAL CORPORATION, the LENDERS party hereto and CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent.

RECITALS:

In consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01     Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

“ ABL Agent ” means Bank of America, N.A., as administrative agent and/or collateral agent, as applicable, under the ABL Credit Agreement, and its successors and assigns.

“ ABL Credit Agreement ” means the Amended and Restated Loan Agreement dated as of December 22, 2015, among the Borrower, the Subsidiaries party thereto as borrowers, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, as such document or the credit facility thereunder may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL Foreign Loan Party ” means any Foreign Subsidiary that is a party to the ABL Loan Documents as a borrower thereunder and/or is a party to any ABL Security Document as a grantor or guarantor thereunder.

“ ABL Guarantee and Collateral Agreement ” means the Guarantee and Collateral Agreement as defined in the ABL Credit Agreement.

“ ABL Loan ” means a loan made pursuant to the ABL Credit Agreement.

“ABL Loan Documents” means collectively (a) the ABL Credit Agreement, (b) the ABL Security Documents, (c) any promissory note evidencing loans under the ABL Credit Agreement and (d) any amendment, waiver, supplement or other modification to any of the documents described in clauses (a) through (c), in each case as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL Priority Collateral ” has the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.

“ ABL Security Documents ” means the collective reference to the ABL Guarantee and Collateral Agreement, the Mortgages (as defined in the ABL Credit Agreement) and all other security documents delivered to the ABL Administrative Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Loan Party under the ABL Credit Agreement or the ABL Guarantee and Collateral Agreement, as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL/Term Loan Intercreditor Agreement ” means the Intercreditor Agreement, dated as of June 30, 2015, among the Borrower, the other Loan Parties, the Collateral Agent, the Term Loan Agent and the ABL Agent.

“ ABR ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“ Adjusted LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate; provided that the Adjusted LIBO Rate shall not be less than 1.00% per annum.

“ Administrative Agent ” means Cortland Capital Market Services LLC, in its capacity as administrative agent for the Lenders hereunder.

“ 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.

“ Agent Fee Letter ” means that certain Fee Letter entered into by and among the Administrative Agent and the Borrower, dated as of the date hereof.

“ Agents ” means, collectively, the Administrative Agent and the Collateral Agent.

“ Agreement ” has the meaning assigned to such term in the preamble hereto.

“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in dollars with a maturity of one month plus 1%; provided that the Alternate Base Rate shall not be less than 2.00% per annum. For purposes of clause (c) above, the Adjusted LIBO Rate on any day shall be the LIBO Rate, two Business Days prior to such day for deposits in dollars with a maturity of one month. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof, then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above.

“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.

“ Applicable Law ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Applicable Rate ” means, for any day, (a) with respect to any ABR Loan, 5.50% per annum and (b) with respect to any Eurocurrency Loan, 6.50% per annum.

 

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“ Approved Budget ” means a budget of the Borrower delivered on or prior to the Closing Date setting forth receipts and disbursements of the Borrower and its Subsidiaries, in form and substance acceptable to the Lenders.

“ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered 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.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any Person whose consent is required by Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

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

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

“ Beneficial Ownership Certification ” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“ Beneficial Ownership Regulation ” means 31 C.F.R. § 1010.230.

“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrower ” means Horizon Global Corporation, a Delaware corporation.

“ Borrowing ” means Loans of the same Type, made, converted or continued on the same date and as to which a single Interest Period is in effect.

“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03, which shall be, in the case of any such written request, in the form of Exhibit B or any other form approved by the Administrative Agent.

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that when used in connection with any Eurocurrency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“ 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; provided that any change in GAAP

 

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after the Closing Date that would require lease obligations that would have been characterized and accounted for as operating leases in accordance with GAAP as in effect on the Closing Date to be characterized and accounted for as Capital Lease Obligations shall be disregarded for purposes hereof.

“ CFC ” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ Change in Control ” means (a) the acquisition of beneficial ownership, directly or indirectly, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder), of Equity Interests representing more than 35% of either the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in the Borrower or (b) the occurrence of any change in control (or similar event, however denominated) with respect to the Borrower under (i) any indenture or other agreement in respect of Material Indebtedness to which the Borrower or any Subsidiary is a party or (ii) any instrument governing any preferred stock of the Borrower or any Subsidiary having a liquidation value or redemption value in excess of $5,000,000.

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the date hereof, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date hereof or (c) compliance by any Lender (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date hereof; 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, promulgated or issued.

“ Closing Date ” means the date on which the conditions specified in Section 4.01 have been satisfied.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” means any and all “ Collateral ,” as defined in any applicable Security Document.

“ Collateral Agent ” means Cortland Capital Market Services LLC, in its capacity as collateral agent for the Lenders under the Security Documents.

“ Collateral and Guarantee Requirement ” means the requirement that:

(a)    the Collateral Agent shall have received from each party thereto (other than the Collateral Agent) either (i) a counterpart of the Guarantee and Collateral Agreement duly executed and delivered on behalf of such Loan Party, or (ii) in the case of any Person that becomes a Subsidiary Loan Party after the Closing Date, a supplement to each of the Guarantee and Collateral Agreement and the Intercreditor Agreements, in each case in the form specified therein, duly executed and delivered on behalf of such Subsidiary Loan Party;

(b)    all outstanding Equity Interests of the Borrower and each Subsidiary owned by or on behalf of any Loan Party shall have been pledged pursuant to the Guarantee and Collateral

 

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Agreement (except that the Loan Parties shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary or any CFC (other than with respect to any Subsidiary Loan Party that is organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), or the Netherlands)) and the Collateral Agent shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank, to the extent not delivered to the ABL Agent or the Term Loan Agent prior to the Closing Date;

(c)    all Indebtedness of the Borrower and each Subsidiary in an aggregate principal amount that exceeds $500,000 that is owing to any Loan Party shall be evidenced by a promissory note and shall have been pledged pursuant to the Guarantee and Collateral Agreement and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(d)    all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Guarantee and Collateral Agreement and perfect such Liens to the extent required by, and with the priority required by, the Guarantee and Collateral Agreement (in each case subject to the Intercreditor Agreements), shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;

(e)    the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to any Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 6.02, together with such endorsements, coinsurance and reinsurance as the Administrative Agent or the Required Lenders may reasonably request, but only to the extent such endorsements are (A) available in the relevant jurisdiction ( provided in no event shall the Collateral Agent request a creditors’ rights endorsement) and (B) available at commercially reasonable rates, (iii) if any Mortgaged Property is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, evidence of such flood insurance as may be required under Applicable Law, including Regulation H of the Board of Governors, and an acknowledged notice to the Borrower, (iv) if reasonably requested by the Administrative Agent, a current appraisal of any Mortgaged Property, prepared by an appraiser acceptable to the Administrative Agent, and in form and substance satisfactory to the Required Lenders (it being understood that if such appraisal is required in order to comply with the Administrative Agent’s internal policies, such request shall be deemed to be reasonable), (v) if reasonably requested by the Administrative Agent, an environmental assessment with respect to any Mortgaged Property, prepared by environmental engineers reasonably acceptable to the Administrative Agent, and such other reports, certificates, studies or data with respect to such Mortgaged Property as the Administrative Agent may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with the Administrative Agent’s internal policies, such request shall be deemed to be reasonable), and (vi) such abstracts, legal opinions and other documents as the Administrative Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; provided , however , in no event shall surveys be required to be obtained with respect to any Mortgaged Property; and

 

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(f)    each Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder;

provided , that, (i) with respect to any Subsidiary Loan Party that is a Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), or the Netherlands, the Collateral and Guarantee Requirement shall require the provision of the documents and satisfaction of the requirements set forth in Part B of Schedule 5.13 and (ii) with respect to any Subsidiary Loan Party that is a Foreign Subsidiary organized under the laws of any other jurisdiction, the Collateral and Guarantee Requirement shall be modified as reasonably requested by the Required Lenders to reflect the requirements and limitations of the jurisdiction in which such Foreign Subsidiary is organized.

“ Commission ” means the Securities and Exchange Commission or any Governmental Authority succeeding to any or all of the functions of said Commission.

“ Commitment ” means the several and not joint commitment of each Lender to make a Loan to the Borrower on the Closing Date as set forth on Schedule 2.01. The aggregate amount of all Commitments on the Closing Date is $10,000,000.

“ 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.

“ Convertible Notes ” means the 2.75% Convertible Senior Notes of the Borrower due 2022 issued pursuant to the Convertible Notes Indenture.

“ Convertible Notes Indenture ” means the First Supplemental Indenture between the Borrower and Wells Fargo Bank, National Association, dated as of February 1, 2017.

“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06.

“ dollars ” or “ $ ” refers to lawful money of the United States of America.

“ Domestic Subsidiary ” means any Subsidiary, other than the Foreign Subsidiaries.

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

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

 

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

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“ Environmental Liability ” means any liabilities, obligations, damages, losses, claims, actions, suits, judgments, or orders, contingent or otherwise (including any liability for damages, costs of environmental remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), directly or indirectly resulting from or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Environmental Notice ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person or any warrants, options or other rights to acquire such interests, but excluding any debt securities convertible into or referencing any of the foregoing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“ ERISA Event ” means (a) any “ reportable event ,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) a failure by any Plan to satisfy the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such Plan in each instance, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) a determination that any Plan is, or is expected to be, in “ at risk ” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA); (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (h) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is

 

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expected to be, insolvent, within the meaning of Title IV of ERISA or in “ endangered ” or “ critical ” status (within the meaning of Section 432 of the Code or Section 305 of ERISA).

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

“ Eurocurrency ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“ Event of Default ” has the meaning assigned to such term in Article VII.

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder or under any other Loan Document, (a) income or franchise taxes imposed on (or measured by) its net or overall gross income (or net worth or similar Taxes imposed in lieu thereof) by the United States of America, or by any other jurisdiction as a result of such recipient being organized in or having its principal office in or applicable lending office in such jurisdiction, or as a result of any other present or former connection (other than a connection arising solely from this Agreement or any other Loan Document) between such recipient and such jurisdiction, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Non-U.S. Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any United States withholding Taxes resulting from any law in effect (x) at the time such Non-U.S. Lender becomes a party to this Agreement or, with respect to any additional position in any Loan acquired after such Non-U.S. Lender becomes a party hereto, at the time such additional position is acquired by such Non-U.S. Lender or (y) at the time such Non-U.S. Lender designates a new lending office, except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, immediately prior to designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such United States withholding Tax pursuant to Section 2.17(a), (d) any United States withholding Tax imposed pursuant to FATCA and (e) any withholding Tax that is attributable to a recipient’s failure to comply with Section 2.17(g).

“ FATCA ” means (i) Sections 1471 through 1474 of the Code as of the date of this Agreement or any amended or successor provision that is substantively comparable and not materially more onerous to comply with, and, in each case, any regulations or official interpretations thereof, (ii) any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the date of this Agreement or any amended or successor provision as described in clause (i) above and (iii) any law, regulation, rule, promulgation or official agreement implementing an official government agreement with respect to the foregoing.

“ Federal Funds Effective Rate ” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate; provided that if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“ FLSA ” means the Fair Labor Standards Act of 1938, as amended from time to time.

 

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“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

“ GAAP ” means generally accepted accounting principles in the United States of America.

“ Governmental Authority ” means the government of the United States of America, any other nation or 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 body exercising such powers or functions, 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 or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term “ Guarantee ” shall not include endorsements for collection or deposit in the ordinary course of business.

“ Guarantee and Collateral Agreement ” means the Guarantee and Collateral Agreement, substantially in the form of Exhibit D, made by the Borrower and the Subsidiary Loan Parties party thereto in favor of the Collateral Agent for the benefit of the Secured Parties.

“ Hazardous Materials ” means all explosive, radioactive, hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedging Agreement ” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“ Immaterial Subsidiary ” means, at any date, any Subsidiary of the Borrower that, together with its consolidated Subsidiaries (i) does not, as of the last day of the fiscal quarter of the Borrower most recently ended on or prior to such date for which financial statements are available, have assets with a value in excess of 2.5% of the consolidated total assets of the Borrower and its consolidated Subsidiaries and (ii) did not, during the period of four consecutive fiscal quarters of the Borrower most recently ended on or prior to such date for which financial statements are available, have revenues exceeding 2.5% of the total revenues of the Borrower and its consolidated Subsidiaries; provided that, the aggregate assets or revenues of all Immaterial Subsidiaries, determined in accordance with GAAP, may not exceed 5.0% of consolidated assets or consolidated revenues, respectively, of the Borrower and its consolidated Subsidiaries, collectively, at any time (and the Borrower will promptly designate in writing to the Administrative Agent the Subsidiaries which will cease to be treated as “Immaterial Subsidiaries” in order to comply with the foregoing limitation).

 

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“ Impacted Interest Period ” has the meaning assigned to such term in the definition of “LIBO Rate.”

“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) solely for purposes of Section 6.01 hereof, any and all payment obligations of such Person under or Guarantee by such Person with respect to any Hedging Agreement. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term “ Indebtedness ” shall not include (a) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or capital stock and (b) trade payables and accrued expenses in each case arising in the ordinary course of business.

“ Indemnified Taxes ” means (a) any Taxes, other than Excluded Taxes, and (b) Other Taxes.

“ Intellectual Property Claim ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Intercreditor Agreements ” means the ABL/Term Loan Intercreditor Agreement and the Term Intercreditor Agreement.

“ Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07.

“ Interest Payment Date ” means (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December and (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

“ Interest Period ” means, with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one month thereafter, as the Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period

 

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that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“ Interpolated Rate ” means, at any time, the rate per annum (rounded to the same number of decimal places as the Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate (for the longest period for which that Screen Rate is available for dollars) that is shorter than the Impacted Interest Period and (b) the Screen Rate (for the shortest period for which that Screen Rate is available for dollars) that exceeds the Impacted Interest Period, in each case, as of the Specified Time on the Quotation Day for such Interest Period. When determining the rate for a period which is less than the shortest period for which the Screen Rate is available, the Screen Rate for purposes of clause (a) above shall be deemed to be the overnight rate for dollars determined by the Administrative Agent from such service as the Administrative Agent may select.

“ IRS ” means the United States Internal Revenue Service.

“ Latest Maturing Loans ” has the meaning assigned to such term in the definition of “Latest Maturity Date”.

“ Latest Maturity Date ” means, as of any date of determination, the latest Maturity Date applicable to any Loans outstanding or Commitments in effect hereunder (such latest maturing Loans or Commitments, the “ Latest Maturing Loans ”).

“ Lender Affiliate ” means, (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund that invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ Lenders ” means any Person that is a lender of Loans on the Closing Date or that shall have become a party hereto after the Closing Date pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

“ LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, a rate per annum equal to the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for dollars for a period equal in length to such Interest Period as displayed on the applicable Bloomberg screen page that displays such rate (or, in the event such rate does not appear on such Bloomberg page, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case the “ Screen Rate ”) as of the Specified Time on the Quotation Day for such Interest Period; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the Screen Rate shall not be available at such time for such Interest Period (an “ Impacted Interest Period ”) with respect to dollars, then the LIBO Rate shall be the Interpolated Rate at such time ( provided that if the Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement).

 

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“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“ Loan Documents ” means this Agreement, the Agent Fee Letter, the Security Documents, the ABL/Term Loan Intercreditor Agreement, the Term Intercreditor Agreement and the promissory notes, if any, executed and delivered pursuant to Section 2.09(e).

“ Loan Parties ” means the Borrower and the Subsidiary Loan Parties.

“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“ Margin Stock ” shall have the meaning assigned to such term in Regulation U.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, properties, assets, financial condition, or material agreements of the Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Loan Party in any material respect to perform any of its obligations under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document.

“ Material Agreements ” means any agreements or instruments relating to Material Indebtedness.

“ Material Indebtedness ” means (a) obligations in respect of the ABL Credit Agreement or the Term Loan Credit Agreement and (b) any other Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $2,500,000. For purposes of determining Material Indebtedness, the “ principal amount ” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time.

“ Maturity Date ” means February 28, 2019.

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

“ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be in form and substance reasonably satisfactory to the Administrative Agent.

“ Mortgaged Property ” means each parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

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“ Net Proceeds ” means, with respect to any event (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any noncash proceeds, but only as and when received, (ii) in the case of a casualty, insurance proceeds in excess of $500,000 and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and the Subsidiaries to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by the Borrower and the Subsidiaries as a result of such event to repay Indebtedness (other than Loans or loans under the Term Loan Credit Agreement) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all Taxes paid (or reasonably estimated to be payable) by the Borrower and the Subsidiaries, and the amount of any reserves established by the Borrower and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the 24-month period immediately following such event and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Borrower) to the extent such liabilities are actually paid within such applicable time periods.

“ Non-Consenting Lender ” has the meaning assigned to such term in Section 10.02(c).

“ Non-U.S. Lender ” means a Lender that is not a U.S. Person.

“ NYFRB ” means the Federal Reserve Bank of New York.

“ NYFRB Rate ” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Banking Day, for the immediately preceding Banking Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received to the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided , further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“ Obligations ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

“ OSHA ” means the Occupational Safety and Hazard Act of 1970.

“ Other Taxes ” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes imposed with respect to an assignment (other than an assignment under Section 2.19(b)).

“ Overnight Bank Funding Rate ” means, for any day, the rate comprised of both over-night federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

“ Participant ” has the meaning assigned to such term in Section 10.04(e).

 

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“ Participant Register ” has the meaning assigned to such term in Section 10.04(e).

“ PATRIOT Act ” has the meaning assigned to such term in Section 10.16.

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Perfection Certificate ” means a certificate in the form of Exhibit F hereto or any other form approved by the Collateral Agent.

“ Permitted Encumbrances ” means:

(a)    Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05;

(b)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.05;

(c)    pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)    deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)    judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f)    easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

(g)    ground leases in respect of real property on which facilities owned or leased by the Borrower or any of the Subsidiaries are located, other than any Mortgaged Property;

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

(i)    leases or subleases granted to other Persons and not interfering in any material respect with the business of the Borrower and the Subsidiaries, taken as a whole;

(j)    banker’s liens, rights of set-off or similar rights, in each case arising by operation of law; and

(k)    Liens in favor of a landlord on leasehold improvements in leased premises;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

 

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“ Permitted Investments ” means:

(a)    direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)    investments in commercial paper maturing within one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)    investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)    fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

(e)    securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(f)    securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(g)    investments of the quality as those identified on Schedule 6.04 as “ Qualified Foreign Investments ” made in the ordinary course of business;

(h)    cash; and

(i)    investments in funds that invest solely in one or more types of securities described in clauses (a), (e) and (f) above.

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

“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “ employer ” as defined in Section 3(5) of ERISA.

“ Prepayment Event ” means:

 

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(a)    any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of the Borrower or any Subsidiary, other than dispositions described in clauses (a), (b), (d) and (g) of Section 6.05; or

(b)    any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary having a book value or fair market value in excess of $500,000, but only to the extent that the Net Proceeds therefrom have not been applied to repair, restore or replace such property or asset within 365 days after such event;

(c)    the receipt of any cash by the Borrower or any Subsidiary not in the ordinary course of business, including without limitation (a) tax refunds, (b) pension plan reversions, (c) proceeds of insurance (including key man life insurance, but excluding Net Proceeds described in clause (b) above), (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (e) indemnity payments and (f) any purchase price adjustment received in connection with any purchase agreement to the extent not needed to reimburse the Borrower or applicable Subsidiary for any reasonable and customary out-of-pockets costs and expenses previously incurred by the Borrower or applicable Subsidiary with respect to which such purchase price adjustment was received;

(d)    the receipt of cash from any issuance of Equity Interests of the Borrower or any contribution of equity capital to the Borrower; or

(e)    the incurrence by the Borrower or any Subsidiary of any Indebtedness, other than Indebtedness permitted by Section 6.01(a).

“ Prime Rate ” means the per annum rate of interest publicly quoted from time to time by The Wall Street Journal as the “Prime Rate” in the United States (or, if The Wall Street Journal ceases quoting a prime rate of the type described, either (as determined by the Administrative Agent) (x) the per annum rate quoted as the base rate on such corporate loans in a different national publication as reasonably selected by Administrative Agent or (y) the highest per annum rate of interest published by the Federal Reserve Board in Federal Reserve statistical release H.15 (519) entitled “Selected Interest Rates” as the bank prime loan rate or its equivalent) or any similar release by the Federal Reserve Board.

“ Public-Sider ” means a Lender whose representatives may trade in securities of the Borrower or any of its Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement.

“ Quotation Day ” means, with respect to any Eurocurrency Loan for any Interest Period, two Business Days prior to the commencement of such Interest Period.

“ Real Estate ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Register ” has the meaning assigned to such term in Section 10.04(c).

“ Regulation U ” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Regulation X ” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

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

“ Release ” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“ Required Lenders ” means, at any time, Lenders having outstanding Loans representing more than 50% of the outstanding Loans at such time.

“ Restricted Indebtedness ” means Indebtedness of the Borrower or any Subsidiary, the payment, prepayment, redemption, repurchase or defeasance of which is restricted under Section 6.08(b).

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any partial or full cash settlement of Convertible Notes, sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or termination of any Equity Interests in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary.

“ Rolling 13-Week Cash Flow Forecast ” has the meaning assigned to such term in Section 5.01(j).

“ S&P ” means Standard & Poor’s Financial Services LLC, or any successor thereto.

“ Sanctioned Country ” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).

“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“ Sanctions ” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

“ Screen Rate ” has the meaning assigned to such term in the definition of “LIBO Rate”.

“ Secured Parties ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

“ Securities Act ” means the Securities Act of 1933, as amended.

 

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“ Security Documents ” means the Guarantee and Collateral Agreement, the Intercreditor Agreements, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

“ Specified Time ” means 11:00 a.m., London time.

“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “ Eurocurrency Liabilities ” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under any Applicable Law. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“ Subordinated Debt ” means any subordinated Indebtedness of the Borrower or any Subsidiary.

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“ Subsidiary ” means any subsidiary of the Borrower.

“ Subsidiary Loan Party ” means any Subsidiary that is not (i) a Foreign Subsidiary (other than any Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (ii) a CFC (other than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (iii) a U.S. Holdco or (iv) an Immaterial Subsidiary; provided , that the Required Lenders, in their sole discretion, may at any time request any Foreign Subsidiary, CFC or U.S. Holdco to become a Subsidiary Loan Party.

“ Supermajority Lenders ” means, at any time, Lenders having outstanding Loans and Commitments representing more than 66 2/3% of the outstanding Loans and Commitments at such time.

“ Synthetic Purchase Agreement ” means any swap, derivative or other agreement or combination of agreements pursuant to which the Borrower or a Subsidiary is or may become obligated to make (i) any payment (other than in the form of Equity Interests in the Borrower) in connection with a purchase by a third party from a Person other than the Borrower or a Subsidiary of any Equity Interest or Restricted Indebtedness or (ii) any payment (other than on account of a permitted purchase by it of any Equity Interest or any Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that phantom stock or similar plans providing for payments only to current or former directors, officers, consultants, advisors

 

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or employees of the Borrower or the Subsidiaries (or to their heirs or estates) shall not be deemed to be Synthetic Purchase Agreements.

“ Taxes ” means any and all present or future taxes (of any nature whatsoever), levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Term Collateral Proceeds Account ” means a deposit account identified to the ABL Agent in writing from time to time and in the name of the Company and for which the Term Loan Agent is the depositary bank which contains (or was established to contain) only those proceeds with respect to Term Priority Collateral.

“ Term Intercreditor Agreement ” means that Intercreditor Agreement, dated as of the date hereof, among the Borrower, the other Loan Parties, the Collateral Agent and the Term Loan Agent.

“ Term Loan Agent ” means the Administrative Agent under the Term Loan Credit Agreement.

“ Term Loan Credit Agreement ” means the Term Loan Credit Agreement, dated as of June 30, 2015, by and among Horizon Global Corporation, the several banks and other financial institutions or entities from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.

“ Term Loan Security Documents ” means the “Security Documents” as defined in the Term Loan Credit Agreement.

“ Term Priority Collateral ” has the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.

“ Transactions ” means, collectively, (a) the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the borrowing of the Loans on the Closing Date and the use of proceeds thereof, (b) the amendments to the Term Loan Credit Agreement, the ABL Credit Agreement and the ABL/Term Loan Intercreditor Agreement, and (c) the payment of the fees and expenses payable in connection with the foregoing.

“ Type ,” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“ U.S. Holdco ” means any existing or future Domestic Subsidiary the Equity Interests of which are held solely by Foreign Subsidiaries (other than Foreign Subsidiaries organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands); provided that such existing or newly formed Subsidiary shall not engage in any business or own any assets other than the ownership of Equity Interests in Foreign Subsidiaries and intercompany obligations that are otherwise permitted hereunder.

“ U.S. Person ” means a “ United States person ” within the meaning of Section 7701(a)(30) of the Code.

“ U.S. Tax Certificate ” has the meaning assigned to such term in Section 2.17(f)(i)(D)(2).

 

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

“ Work Fee ” has the meaning assigned to such term in Section 2.12(b).

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

SECTION 1.02     Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Eurocurrency Loan”). Borrowings also may be classified and referred to by Type (e.g., a “Eurocurrency Borrowing”).

SECTION 1.03     Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) 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, (d) 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; and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04     Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value,” as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments or any other Indebtedness under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

 

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ARTICLE II

The Credits

SECTION 2.01     Commitments .

(a)    Subject to the terms and conditions set forth herein, each Lender agrees to make a Loan to the Borrower on the Closing Date in a principal amount equal to its Commitment.

(b)    Amounts repaid or prepaid in respect of Loans may not be reborrowed.

SECTION 2.02     Loans and Borrowings .

(a)    Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b)    [Reserved]

(c)    Subject to Section 2.14, each Loan shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(d)    At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of 3 Eurocurrency Borrowings outstanding.

(e)    Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date applicable thereto.

SECTION 2.03     Requests for Borrowings . To request a Borrowing of Loans, the Borrower shall notify the Administrative Agent of such request in writing (i) in the case of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, two Business Days before the date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable and shall be delivered by hand, email or telecopy to the Administrative Agent of a written Borrowing Request signed by the Borrower. Each such written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i)    the aggregate amount of such Borrowing;

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

 

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(iii)    whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;

(iv)    in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “ Interest Period ”; and

(v)    the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04    [ Reserved ].

SECTION 2.05     [Reserved] .

SECTION 2.06     Funding of Borrowings .

(a)    Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. Upon receipt of all requested funds, the Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing Request.

(b)    Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 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 (i) in the case of such Lender, the greater of (x) the Federal Funds Effective Rate and (y) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, the applicable rate shall be determined as specified in clause (y) above, or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.07     Interest Elections .

(a)    Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such Borrowing Request or as otherwise provided in Section 2.03. Thereafter, the Borrower may elect to (i) convert any ABR Borrowing or any Eurocurrency Borrowing to a Borrowing of a different

 

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Type, (ii) continue any Borrowing and (iii) in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.

(b)    To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election, in writing, by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of Loans of the Type resulting from such election to be made on the effective date of such election. Each such Interest Election Request shall be irrevocable and shall be by hand delivery, email or telecopy to the Administrative Agent of a written Interest Election Request, and all such written Interest Election Requests shall be in a form approved by the Administrative Agent and signed by the Borrower.

(c)    Each Interest Election Request shall specify the following information in compliance with Section 2.02:

(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii)    the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

(iv)    if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “ Interest Period .”

If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d)    Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)    If an Interest Election Request with respect to a Eurocurrency Borrowing is not timely delivered prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

 

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SECTION 2.08     Termination of Commitments .

The Commitments shall terminate and be automatically and permanently reduced to $0 upon the earlier of the funding of the Loans and 5:00 p.m., New York City time, on February 20, 2019.

SECTION 2.09     Repayment of Loans; Evidence of Debt .

(a)    The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan of such Lender as provided in Section 2.10.

(b)    Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c)    The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d)    The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement; provided further , that in the event of any conflict between the records maintained pursuant to this section, the records maintained pursuant to paragraph 2.09(c) shall govern.

(e)    Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns). Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.04) be represented by one or more promissory notes in such form payable to the order of the payee and its registered assigns.

SECTION 2.10     Maturity Date .

(a)    To the extent not previously paid, all Loans shall be due and payable on the Maturity Date.

SECTION 2.11     Prepayment of Loans .

(a)    The Borrower shall not have the right to voluntarily prepay any Borrowing in whole or in part without the consent of the Required Lenders, unless, substantially simultaneously therewith, it also repays all then outstanding loans and other obligations under the Term Loan Credit Agreement.

(b)    [Reserved].

 

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(c)    In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower shall, within three Business Days after such Net Proceeds are received (and, in the case of any event described in clause (e) of the definition of the term Prepayment Event, on the date on which such Net Proceeds are received) prepay Borrowings of Loans in an aggregate amount equal to such Net Proceeds.

(d)    [Reserved].

(e)    Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (f) of this Section.

(f)    The Borrower shall notify the Administrative Agent by (x) in the case of prepayment of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment and (y) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify (i) whether the prepayment is of Eurocurrency Loans or ABR Loans, (ii) the prepayment date, (iii) the principal amount of each Borrowing or portion thereof to be prepaid and (iv) in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

SECTION 2.12     Fees .

(a)    The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times as set forth in the Agent Fee Letter.

(b)    On the Maturity Date, or on the date of a prepayment or repayment of any Loans in part or in full, voluntarily, mandatorily, or upon acceleration of the Loans for any reason, or on any date on which the Loans become due and payable for any reason, the Borrower shall pay to the Administrative Agent, for the ratable benefit of the Lenders, a work fee equal to $250,000 (the “ Work Fee ”). The Work Fee shall be fully and irrevocably due and payable in cash on the Maturity Date, or such date of prepayment or repayment, voluntarily, mandatorily or upon acceleration of the Loans for any reason, or on any date on which the Loans becomes due and payable for any reason. The Work Fee shall be earned by the Lenders upon the funding of the Loans as a fee in consideration of the Commitments and the making of the Loans and for the time and costs expended in extending the Commitments and the making of the Loans. It is understood and agreed that if the Loans are accelerated pursuant to this Agreement for any reason, including without limitation because of the commencement of any insolvency proceeding or other proceeding pursuant to any debtor relief laws (including the acceleration of claims by operation of law), the Work Fee payable pursuant to Section 2.12(b) determined as of the date of acceleration will also be due and payable as though the Loans were voluntarily repaid as of such date and shall constitute part of the Obligations in respect of the Loans, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Lender’s lost profits as a result thereof. The Work Fee payable in accordance with the immediately preceding sentence shall be presumed to be for the time and costs expended in extending the Commitments and making the Loans and the Borrower agrees that it is reasonable under the circumstances currently existing. The Work Fee shall also be payable in the event the Loans are satisfied or released by foreclosure

 

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(whether by power of judicial proceeding or otherwise) or deed in lieu of foreclosure. THE BORROWER EXPRESSLY WAIVES THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE WORK FEE IN CONNECTION WITH ANY SUCH ACCELERATION INCLUDING IN CONNECTION WITH ANY VOLUNTARY OR INVOLUNTARY ACCELERATION OF THE LOANS PURSUANT TO ANY INSOLVENCY PROCEEDING OR OTHER PROCEEDING PURSUANT TO ANY DEBTOR RELIEF LAWS. The Borrower expressly agrees that: (A) the Work Fee is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Work Fee shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between the Lenders and the Borrower giving specific consideration in this transaction for such agreement to pay the Work Fee; and (D) the Borrower shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Borrower expressly acknowledges that its agreement to pay the Work Fee to the Lenders as herein described is a material inducement for the Lenders to provide the Commitment and provide the Loans.

(c)    All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent. Fees paid shall not be refundable under any circumstances.

SECTION 2.13     Interest .

(a)    The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b)    The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c)    Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other overdue amount payable, 2% plus the rate applicable to ABR Loans.

(d)    Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e)    All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of an Adjusted LIBO Rate.

SECTION 2.14     Alternate Rate of Interest .

 

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(a)    If prior to the commencement of any Interest Period for a Eurocurrency Borrowing:

(i)    the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means (including by means of an Interpolated Rate or because the Screen Rate is not available or published on a current basis) do not exist for ascertaining the LIBO Rate or the Adjusted LIBO Rate for such Interest Period; or

(ii)    the Administrative Agent is advised by a majority in interest of the Lenders that the Adjusted LIBO Rate or LIBO Rate, as applicable for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loans) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by email, telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and such Lenders that the circumstances giving rise to such notice no longer exist, then (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective, (ii) any Eurocurrency Borrowing that is requested to be continued, shall be converted to an ABR Borrowing on the last day of the then current Interest Period applicable thereto and (iii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

(b)    If any Lender determines that any Applicable Law has made it unlawful, or if any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurocurrency Loans or to convert ABR Borrowings to Eurodollar Borrowings will be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower will upon demand from such Lender (with a copy to the Administrative Agent), either convert or prepay all Eurodollar Borrowings of such Lender to ABR Borrowings, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans. Upon any such conversion or prepayment, the Borrower will also pay accrued interest on the amount so converted or prepaid.

SECTION 2.15     Increased Costs .

(a)    If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);

(ii)    impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurocurrency Loans made by such Lender; or

(iii)    subject any Lender to any Taxes on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other

 

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than (A) Indemnified Taxes otherwise indemnifiable under Section 2.17 and (B) Excluded Taxes);

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)    If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)    A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)    Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16     Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurocurrency Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the applicable currency of a comparable amount and period from other banks in the Eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive

 

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absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.17     Taxes .

(a)    Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrower or the Administrative Agent shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or the Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or the Administrative Agent shall make such deductions and (iii) the Borrower or the Administrative Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(b)    In addition, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

(c)    The Borrower shall indemnify the Administrative Agent and each Lender, within 10 Business Days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower, hereunder or under any other Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) 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 Lender or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)    As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower 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.

(e)    Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting or expanding the obligation of the Borrower to do so) attributable to such Lender that are paid or payable 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. The indemnity under this Section shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f)    Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law, such properly completed and executed documentation prescribed by Applicable Law or 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. If any form or certification previously delivered pursuant to this

 

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Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 Business Days after such expiration, obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

(i)    Without limiting the generality of the foregoing, any Lender shall, to the extent it is legally eligible to do so, deliver to the Borrower and the Administrative Agent (in such number of copies reasonably requested by the Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable:

(A)    in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B)    in the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN-E or W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN-E or W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(C)    in the case of a Non-U.S. Lender for whom payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

(D)    in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN-E or W-8BEN and (2) a certificate substantially in the form of Exhibit C (a “ U.S. Tax Certificate ”) to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code (c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;

(E)    in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (g)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided , however , that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or

(F)    any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld.

 

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(ii)    Each Lender shall deliver to 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 or the Administrative Agent, to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(f)(ii), “ FATCA ” shall include any amendments made to FATCA after the date of this Agreement.

(g)    If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes (including additional amounts paid pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section 2.17 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided , however , that such indemnifying party, upon the request of such indemnified party, agrees to repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Nothing contained in this Section 2.17(g) shall require any indemnified party to make available its Tax returns or any other information relating to its Taxes which it deems confidential to the indemnifying party or any other Person.

(h)    For purposes of determining withholding Taxes imposed under FATCA, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Loan Documents as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

SECTION 2.18     Payments Generally; Pro Rata Treatment; Sharing of Set-offs .

(a)    The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest or fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise), on or before the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 12:00 noon, New York City time), on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices, except that payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments (including prepayments) to be made by the Borrower hereunder and under each other Loan Document, whether on account of principal, interest, fees or otherwise shall be made in dollars.

 

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(b)    If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c)    If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary 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; 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 any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(d)    Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment hereunder is due to the Administrative Agent for the account of the Lenders 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 amount due. In such event, if the Borrower has not in fact made such payment due to the Administrative Agent, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e)    If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.06(b), 2.18(d) or 10.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.19     Mitigation Obligations; Replacement of Lenders .

(a)    If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder

 

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to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, 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)    If (i) any Lender requests compensation under Section 2.15, (ii) the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or (iii) any Lender defaults in its obligation to fund Loans hereunder, 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 Section 10.04), all its interests, rights and obligations under this Agreement to an assignee selected by the Borrower that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, 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) and (ii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a material reduction in such compensation or payments. A Lender shall not be required to make any such assignment and 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. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee, and that the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01     Organization; Powers . Each of the Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02     Authorization; Enforceability . The Transactions to be entered into by each Loan Party are within such Loan Party’s powers and have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of the Borrower or such Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03     Governmental Approvals; No Conflicts . The Transactions and the other transactions contemplated hereby (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made

 

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and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except Liens created under the Loan Documents and Liens permitted by Section 6.02, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect. Schedule 3.03 sets forth for the Borrower and each Subsidiary Loan Party a description of each license from a Governmental Authority which is material to the conduct of the business of such Loan Party as of the Closing Date.

SECTION 3.04     Financial Condition; No Material Adverse Change .

(a)    The Borrower has heretofore furnished to the Administrative Agent its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal years ended December 31, 2016 and December 31, 2017, reported on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and for each fiscal quarter ended subsequent to December 31, 2017 and at least 45 days prior to the Closing Date, in each case certified by its chief financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)    The Borrower has heretofore furnished to the Administrative Agent a 13-week cash flow forecast and an Approved Budget, both of which have been prepared in good faith, based upon assumptions believed to be reasonable at the time such 13-week cash flow forecast and Approved Budget were prepared.

(c)    Except as disclosed in the financial statements referred to above, except for the Disclosed Matters and except for liabilities arising as a result of the Transactions, after giving effect to the Transactions, none of the Borrower or the Subsidiaries has, as of the Closing Date, any contingent liabilities that would be material to the Borrower and the Subsidiaries, taken as a whole.

SECTION 3.05     Properties .

(a)    Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business (including its Mortgaged Properties), except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b)    Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except

 

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for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c)    Schedule 3.05 sets forth the address of each real property that is owned or leased by the Borrower or any of its Subsidiaries as of the Closing Date after giving effect to the Transactions.

SECTION 3.06     Litigation and Environmental Matters .

(a)    There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan Documents or the Transactions.

(b)    Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of the Borrower or any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c)    Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

(d)    No Borrower or Subsidiary is in default with respect to any order, injunction or judgment of any Governmental Authority, except for such defaults which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07     Compliance with Laws and Agreements . Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

SECTION 3.08     Investment Company Status . None of the Borrower or any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09     Taxes . Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, there is no pending audit of the Borrower or any Subsidiary Loan Party with any federal, state, local or foreign tax authority, except as could not reasonably be expected to result in a Material Adverse Effect.

 

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SECTION 3.10     ERISA . No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of the Financial Accounting Standards Board Accounting Standards Codification Topic No. 715-30) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $100,000 the fair market value of the assets of all such underfunded Plans.

SECTION 3.11     Disclosure . The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which the Borrower or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the Information Memorandum nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of 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, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time such projections were prepared.

SECTION 3.12     Subsidiaries . Schedule 3.12 sets forth the name of, and the ownership interest of the Borrower in each Subsidiary of the Borrower and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing Date.

SECTION 3.13     Insurance . Schedule 3.13 sets forth a description of all material insurance policies maintained by or on behalf of the Borrower and the Subsidiaries as of the Closing Date. As of the Closing Date, all premiums due in respect of such insurance have been paid.

SECTION 3.14     Labor Matters . As of the Closing Date, there are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower, threatened that could reasonably be expected to have a Material Adverse Effect. All payments due from the Borrower or any Subsidiary, or for which any claim may be made against the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Borrower or such Subsidiary except for those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary is bound.

SECTION 3.15     [Reserved]

SECTION 3.16     Senior Indebtedness . The Obligations constitute “Senior Debt”, however defined, under the terms of any Indebtedness that is subordinated in right of payment to the Obligations.

SECTION 3.17     Security Documents .

(a)    The Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in

 

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the Collateral (as defined in the Guarantee and Collateral Agreement) and, when (i) in respect of Collateral in which a security interest can be perfected by control, such Collateral is delivered to the Collateral Agent and for so long as the Collateral Agent remains in possession of such Collateral, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected first priority security interest in all right, title and interest of the pledgor thereunder in such Collateral, in each case prior and superior in right to any other Person and (ii) in respect of Collateral in which a security interest can be perfected by the filing of UCC financing statements, financing statements in appropriate form are filed in the offices specified on Schedule 1.04 to the Perfection Certificate most recently delivered to the Collateral Agent, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest in all right, title and interest of the grantors thereunder in such Collateral (other than the Intellectual Property (as defined in the Guarantee and Collateral Agreement)), in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreements.

(b)    [Reserved]

(c)    When the Guarantee and Collateral Agreement (or a summary thereof) is filed in the United States Patent and Trademark Office and the United States Copyright Office and the financing statements referred to in Section 3.17(a) above are appropriately filed, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest in all right, title and interest of the grantors thereunder in the Intellectual Property (as defined in the Guarantee and Collateral Agreement) in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office and subsequent UCC filings may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Loan Parties after the Closing Date), other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreements.

(d)    Each Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Mortgaged Properties thereunder and the proceeds thereof, and when the Mortgages are filed in the appropriate offices, the Lien created by each Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Mortgaged Properties and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section 6.02 and subject to the Intercreditor Agreements.

SECTION 3.18     Federal Reserve Regulations .

(a)    None of the Borrower or any of the Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

(b)    No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the Regulations of the Board, including Regulation U or X.

 

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SECTION 3.19     Anti-Corruption Laws and Sanctions . The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective officers and employees and, to the knowledge of the Borrower, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Borrower, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing, use of proceeds or other transaction contemplated by this Agreement will violate Anti-Corruption Laws or applicable Sanctions.

SECTION 3.20     Material Contracts . Schedule 3.20 hereto sets forth for the Borrower and each Subsidiary Loan Party, as of the Closing Date, a list of all of the material contracts and agreements to which such Loan Party is a party (other than agreements disclosed to the Administrative Agent pursuant to Section 5.01(f), agreements relating to Indebtedness described on Schedule 6.01, real property leases identified on Schedule 2.03 to the Perfection Certificate delivered to the Administrative Agent on the Closing Date, and Licenses identified on Schedule 4.04 to the Perfection Certificate delivered to the Administrative Agent on the Closing Date).

SECTION 3.21     EEA Financial Institutions . No Loan Party is an EEA Financial Institution.

SECTION 3.22     Disclosure . As of the Closing Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Closing Date to any Lender in connection with this Agreement is true and correct in all respects.

ARTICLE IV

Conditions

SECTION 4.01     Closing Date . The obligations of the Lenders to make Loans hereunder is subject to the satisfaction of the following conditions:

(a)    The Agents shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Closing Date) of Jones Day LLP, in form and substance reasonably satisfactory to the Administrative Agent and the Lenders. The Borrower hereby requests such counsel to deliver such opinions.

(b)    The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of the Transactions and any other legal matters relating to the Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.

(c)    The Administrative Agent (or its counsel) shall have received the Term Intercreditor Agreement, executed and delivered by the Borrower, the other Loan Parties as of the Closing Date, the Collateral Agent and the Term Loan Agent.

 

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(d)    The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder or under any Loan Document.

(e)    The Collateral and Guarantee Requirement with respect to Loan Parties that are Domestic Subsidiaries shall have been satisfied and the Administrative Agent shall have received a completed Perfection Certificate dated the Closing Date and signed by an executive officer or Financial Officer of the Borrower, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code (or equivalent) filings made with respect to the Loan Parties in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Administrative Agent that the Liens indicated by such financing statements (or similar documents) are permitted by Section 6.02 or have been released or will be released pursuant to UCC-3 financing statements or other release documentation delivered to the Collateral Agent.

(f)    The Administrative Agent shall have received evidence that the insurance required by Section 5.07 and the Security Documents is in effect, together with endorsements naming the Collateral Agent, for the benefit of the Secured Parties, as additional insured and loss payee thereunder, to the extent required by Section 5.07.

(g)    After giving effect to the Transactions as of the Closing Date, none of the Borrower or any of its Subsidiaries shall have outstanding Indebtedness for borrowed money other than (i) Indebtedness incurred under this Agreement, (ii) Indebtedness incurred and outstanding under the ABL Credit Agreement and the Term Loan Credit Agreement and (iii) Indebtedness incurred and outstanding in compliance with Section 6.01 of this Agreement.

(h)    The Lenders shall have received the Approved Budget, a 13-week cash flow forecast and the financial statements referred to in Section 3.04(a) and (b).

(i)    The Administrative Agent and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act, which shall include, for the avoidance of doubt, a duly executed IRS Form W-9.

(j)    Each of the Term Loan Credit Agreement, the ABL Credit Agreement, the Term Loan Security Documents and the ABL/Term Loan Intercreditor Agreement shall have been amended in a manner acceptable to the Lenders.

(k)    The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified as to materiality) on and as of the Closing Date.

(l)    No Default or Event of Default shall have occurred and be continuing on the Closing Date or after giving effect to the Loans requested to be made on such date.

(m)    The Administrative Agent (or its counsel) shall have received from each party hereto (a) either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page of this Agreement) that such party has signed a

 

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counterpart of this Agreement and (b) a duly executed Borrowing Request and accompanying flow of funds.

(n)    The Borrower shall have retained local counsel in Germany, the UK and the Netherlands and shall have instructed such local counsel to cooperate with counsel to the Administrative Agent to satisfy the conditions described in Part B of Schedule 5.13 on an expedited basis.

The obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 5:00 p.m., New York City time, on February 20, 2019 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01     Financial Statements and Other Information . The Borrower will furnish to the Administrative Agent and each Lender:

(a)    within 90 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “ going concern ” or like qualification or exception (except for any such qualification or exception resulting from any current maturity of Loans hereunder) and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied in respect of any fiscal year of the Borrower by the filing of the Borrower’s annual report on Form 10-K for such fiscal year with the Commission to the extent the foregoing are included therein);

(b)    (i) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied in respect of any fiscal quarter of the Borrower by the filing of the Borrower’s quarterly report on Form 10-Q for such fiscal quarter with the Commission to the extent the foregoing are

 

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included therein) and (ii) within 30 days after the end of each fiscal month of the Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c)    within 90 days after the end of each fiscal year of the Borrower (but in any event no later than two Business Days after any delivery of financial statements under clause (a) above), or within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (but in any event no later than two Business Days after any delivery of financial statements under clause (b) above), a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) stating whether any change in GAAP or in the application thereof has occurred since the date of the Borrower’s audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (iii) identifying all Subsidiaries existing on the date of such certificate and indicating, for each such Subsidiary, whether such Subsidiary is a Subsidiary Loan Party, a Foreign Subsidiary and/or an Immaterial Subsidiary and whether such Subsidiary was formed or acquired since the end of the previous fiscal quarter;

(d)    within 90 days after the end of each fiscal year of the Borrower, (i) a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines) and (ii) a certificate of a Financial Officer of the Borrower (A) identifying any parcels of real property or improvements thereto with a value exceeding $2,000,000 that have been acquired by any Loan Party since the end of the previous fiscal year, (B) identifying any changes of the type described in Section 5.03(a) that have not been previously reported by the Borrower, (C) [reserved], (D) identifying any Intellectual Property (as defined in the Guarantee and Collateral Agreement) with respect to which a notice is required to be delivered under the Guarantee and Collateral Agreement and has not been previously delivered, and (E) identifying any Prepayment Events that have occurred since the end of the previous fiscal year and setting forth a reasonably detailed calculation of the Net Proceeds received from Prepayment Events since the end of such previous fiscal year;

(e)    [reserved];

(f)    promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the Commission or with any national securities exchange, as the case may be (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied to the extent the foregoing are filed with the Commission);

(g)    promptly upon the Borrower’s receipt thereof, (A) copies of all material compliance reports filed and material correspondence regarding any active or pending investigation or enforcement action concerning the Borrower or any Subsidiary Loan Party with any state, federal,

 

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local or foreign regulatory agency and (B) all material correspondence, if any, alleging violation of or requesting compliance by the Borrower or any Subsidiary Loan Party with laws, regulations, etc. or requests for information pursuant to interstate commerce laws, antitrust laws, securities laws, worker safety laws (OSHA), etc.;

(h)    except to the extent already provided for in this Section 5.01, promptly after the sending thereof, copies of any proposed waiver, consent, or amendment concerning any of the ABL Loan Documents;

(i)    promptly upon the effectiveness thereof, (A) a description of each license from a Governmental Authority which becomes effective after the Closing Date and is material to the conduct of the business of the Borrower and its Subsidiaries, taken as a whole, and (B) a description of each material contract or agreement to which the Borrower or any Subsidiary Loan Party is a party (other than contracts and agreements disclosed to the Administrative Agent pursuant to Section 5.01(f), agreements described on Schedule 3.20 or Schedule 6.01, and without duplication of real property leases identified on Schedule 2.03 to the Perfection Certificate most recently delivered to the Administrative Agent and Licenses identified on Schedule 4.04 to the Perfection Certificate most recently delivered to the Administrative Agent);

(j)    by no later than 5:00 p.m. (New York time) on each Wednesday, in each case in a form acceptable to the Required Lenders (it being acknowledged and agreed by the Lenders that the Forecast for North America and Europe-Africa delivered by the Borrower to the Administrative Agent and the Lenders on February 16, 2019 is in an acceptable form), (i) an updated 13-week statement of projected receipts and disbursements (each such statement, a “ Rolling 13-Week Cash Flow Forecast ”), (ii) a report showing actual receipts and disbursements through the prior week for North America and Europe-Africa, including a variance report showing the variance to the immediately prior Rolling 13-Week Cash Flow Forecast, and (iii) a flash report detailing revenues by segment for the prior week (it being understood and agreed that the Borrower shall commence development of procedures to be completed on or prior to March 4, 2019, permitting the Borrower to deliver flash reports detailing sales and KPIs by location, and, once available (and in any event commencing not later than March 4, 2019), such reports shall be delivered on a weekly basis pursuant to this clause (j)); provided that none of the documents, reports, or information delivered pursuant to this clause (j) shall be shared with or provided or distributed to any Public-Sider.

(k)    if, on or prior to February 25, 2019, the Loans have not been repaid in full in cash from the proceeds of new long-term Indebtedness incurred by the Borrower, the Borrower shall begin preparing additional materials as requested by the Lenders to be provided by dates requested by the Lenders, including, but not limited to, Rolling 13-Week Cash Flow Forecast, go-forward funding needs and accompanying budget and other documents reasonably requested by the Lenders to support strategic alternatives;

(l)    the Borrower shall furnish supplemental information from time to time as shall be necessary to ensure that the representation and warranty set forth in Section 3.11 shall remain true and correct in all respects on each date prior to the Maturity Date as if such representation and warranty were being made on such date; and

(m)    promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.

 

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The Borrower represents and warrants that it and any of its Subsidiaries either (i) has no registered or publicly traded securities outstanding or (ii) files its financial statements with the Commission and/or makes its financial statements available to potential holders of its 144A securities, and, accordingly, the Borrower hereby (x) authorizes the Administrative Agent to make the financial statements to be provided under Section 5.01(a) and (b)(i) above, along with the Loan Documents, available to all Lenders and (y) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Borrower will not request that any other material be posted to all Lenders without expressly representing and warranting to the Administrative Agent in writing that (A) such materials do not constitute material non-public information within the meaning of the federal securities laws (“ MNPI ”) or (B) (i) the Borrower and its Subsidiaries have no outstanding publicly traded securities, including 144A securities, and (ii) if at any time the Borrower or any of its Subsidiaries issues publicly traded securities, including 144A securities, then the Borrower will, upon the issuance of such securities, make such materials that do constitute MNPI at the time of issuance of such securities publicly available by press release or public filing with the Commission. In no event will the Administrative Agent post compliance certificates or budgets to Public-Siders.

SECTION 5.02     Notices of Material Events . The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:

(a)    the occurrence of any Default;

(b)    the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Subsidiary thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

(c)    the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $100,000;

(d)    any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract;

(e)    any material notice or default under or termination of a Material Agreement;

(f)    any judgment for the payment of money in an aggregate amount exceeding $250,000 that remains undischarged for a period of 30 consecutive days, during which execution is not effectively stayed, or the occurrence of any action legally taken by a judgment creditor to attach or levy upon assets in order to enforce any such judgment;

(g)    the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect;

(h)    any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have a Material Adverse Effect;

(i)    any Release by a Loan Party or with respect to any Real Estate owned, leased or occupied by a Loan Party; or receipt of any Environmental Notice, in each case where the expected remedial costs or liability is reasonably expected to exceed $250,000;

 

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(j)    the discharge of or any withdrawal or resignation by the Borrower’s independent accountants; and

(k)    any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03     Information Regarding Collateral .

(a)    The Borrower will furnish to the Administrative Agent prompt written notice of any change (i) in any Loan Party’s legal name, (ii) in the location of any Loan Party’s chief executive office or (iii) in any Loan Party’s jurisdiction of organization. The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless written notice has been delivered to the Collateral Agent, together with all applicable information to enable the Administrative Agent to make all filings under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent (on behalf of the Secured Parties) to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.

(b)    Each year, within 90 days after the end of each fiscal year of the Borrower, the Borrower (on behalf of itself and the other Loan Parties) shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower (i) setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section and (ii) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period).

SECTION 5.04     Existence; Conduct of Business . The Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names the loss of which would have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or disposition permitted under Section 6.05.

SECTION 5.05     Payment of Obligations . The Borrower will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except (a) those being contested in good faith by appropriate proceedings and for which the Borrower has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (b) to the extent the failure to make payment could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.06     Maintenance of Properties . The Borrower will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of their business, taken as a whole, in good working order and condition, ordinary wear and tear excepted; provided that the foregoing

 

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shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or disposition permitted under Section 6.05.

SECTION 5.07     Insurance . The Borrower will, and will cause each of the Subsidiaries to, maintain insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. Such insurance shall be maintained with financially sound and reputable insurance companies, except that a portion of such insurance program (not to exceed that which is customary in the case of companies engaged in the same or similar business or having similar properties similarly situated) may be effected through self-insurance; provided adequate reserves therefor, in accordance with GAAP, are maintained. In addition, the Borrower will, and will cause each of its Subsidiaries to, maintain all insurance required to be maintained pursuant to the Security Documents. With respect to each Mortgaged Property that is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, the applicable Loan Party will maintain, with financially sound and reputable insurance companies, such flood insurance as is required under Applicable Law, including Regulation H of the Board of Governors. The Borrower will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained. No later than 30 days after the Closing Date, all insurance policies or certificates (or certified copies thereof) with respect to such insurance shall be endorsed to the Collateral Agent’s reasonable satisfaction for the benefit of the Lenders (including by naming the Collateral Agent as lender loss payee or additional insured, as appropriate).

SECTION 5.08     Casualty and Condemnation . The Borrower (a) will furnish to the Administrative Agent and the Lenders prompt written notice of casualty or other insured damage to any material portion of any Collateral having a book value or fair market value of $1,000,000 or more or the commencement of any action or proceeding for the taking of any Collateral having a book value or fair market value of $1,000,000 or more or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Security Documents.

SECTION 5.09     Books and Records; Inspection and Audit Rights; Lender Calls . The Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested. Upon request by the Administrative Agent (acting on the instructions of the Required Lenders), and at minimum once per calendar week, the Borrower shall hold a telephone call for the benefit of the Administrative Agent and the Lenders to discuss the Borrower’s and its Subsidiaries’ operational and financial performance, the status of strategic initiatives and any other items reasonably requested to be covered by any Lender and respond to questions that are raised on such call.

SECTION 5.10     Compliance with Laws . The Borrower will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and

 

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their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

SECTION 5.11     Use of Proceeds . The Borrower will use the proceeds of the Loans on the Closing Date solely for incremental liquidity, working capital catch-up and fees and expenses incurred in connection with this Agreement and the transactions related thereto, in each case in a manner consistent with the Approved Budget. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.

SECTION 5.12    [Reserved]

SECTION 5.13     Further Assurances; Post-Closing Covenant .

(a)    The Borrower will, and will cause each Subsidiary Loan Party 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, fixture filings, mortgages, deeds of trust, landlord waivers and other documents), which may be required under any Applicable Law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

(b)    If any assets (including any real property or improvements thereto or any interest therein) having a book value or fair market value of $500,000 or more in the aggregate are acquired by the Borrower or any Subsidiary Loan Party after the Closing Date or through the acquisition of a Subsidiary Loan Party under Section 5.12 or through the conversion of a Subsidiary into a Subsidiary Loan Party under Section 5.12 (other than, in each case, assets constituting Collateral under the Guarantee and Collateral Agreement that become subject to the Lien of the Guarantee and Collateral Agreement upon acquisition thereof), the Borrower or, if applicable, the relevant Subsidiary Loan Party will notify the Administrative Agent and the Lenders thereof, and, if reasonably requested by the Administrative Agent or the Required Lenders, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Loan Parties.

(c)    The Borrower will, and will cause each Subsidiary Loan Party to, deposit the proceeds of any Term Priority Collateral in a Term Collateral Proceeds Account at any time (i) after the occurrence and during the continuance of an Event of Default under clauses (a), (h) or (i) of Article VII and (ii) after the occurrence and during the continuance of any other Event of Default after the Administrative Agent provides written notice to the Borrower to so deposit such proceeds.

(d)    The Borrower will, and will cause each Subsidiary Loan Party to, satisfy the post-closing conditions described in Schedule 5.13 within the timelines set forth therein.

(e)    The Borrower will use its reasonable best efforts to obtain and close, as soon as possible after the Closing Date, financing in amounts and on terms that are acceptable to the Required Lenders.

 

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ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01     Indebtedness; Certain Equity Securities .

(a)      The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

(i)       Indebtedness created under the Loan Documents;

(ii)      [reserved];

(iii)     Indebtedness existing on the date hereof and set forth in Schedule 6.01;

(iv)     [reserved];

(v)      Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that Indebtedness of any Subsidiary that is not a Loan Party or any Subsidiary Loan Party for which the Collateral and Guarantee Requirement has not been satisfied to the Borrower or any Subsidiary Loan Party shall be subject to Section 6.04;

(vi)     Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided that Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a Loan Party or any Subsidiary Loan Party for which the Collateral and Guarantee Requirement has not been satisfied shall be subject to Section 6.04;

(vii)    [reserved];

(viii)   [reserved];

(ix)     [reserved];

(x)      [reserved];

(xi)     Indebtedness of the Borrower or any Subsidiary in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety appeal or similar bonds and completion guarantees provided by the Borrower and the Subsidiaries in the ordinary course of their business;

(xii)    [reserved];

(xiii)   [reserved];

(xiv)    Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn

 

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against insufficient funds in the ordinary course of business; provided , however , that such Indebtedness is extinguished within 10 days of incurrence;

(xv)       Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(xvi)      Indebtedness incurred in connection with the financing of insurance premiums in an aggregate amount at any time outstanding not to exceed the premiums owed under such policy, if applicable;

(xvii)    contingent obligations to financial institutions, in each case to the extent in the ordinary course of business and on terms and conditions which are within the general parameters customary in the banking industry, entered into to obtain cash management services or deposit account overdraft protection services (in an amount similar to those offered for comparable services in the financial industry) or other services in connection with the management or opening of deposit accounts or incurred as a result of endorsement of negotiable instruments for deposit or collection purposes and other customary, contingent obligations, including obligations under Bank Products (as defined in the ABL Credit Agreement as in effect on the date hereof) other than Hedging Agreements, of the Borrower and its Subsidiaries incurred in the ordinary course of business;

(xviii)    unsecured guarantees by the Borrower or any Subsidiary Loan Party of facility leases of any Loan Party;

(xix)      payment obligations of or Guarantees by the Borrower or any Subsidiary Loan Party with respect to any Hedging Agreement permitted under Section 6.07 hereof; provided that if such Hedging Agreement is related to interest rates, (A) such Hedging Agreement shall relate to payment obligations on Indebtedness otherwise permitted to be incurred by the Loan Documents and (B) the notional amount of such Hedging Agreement shall not exceed the principal amount of the Indebtedness to which such Hedging Agreement relates;

(xx)      Indebtedness of the Borrower, any Subsidiary Loan Party or any ABL Foreign Loan Party under the ABL Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $99,000,000; provided that the Borrower will not, and will not permit any Subsidiary to, create, grant or permit to exist any Lien on the ABL Priority Collateral that is contractually subordinated (including pursuant to a last-out facility) or junior in priority to the Liens on the ABL Priority Collateral securing any of the “Loans” or any other “Obligations” (each as defined in the ABL Credit Agreement), unless such Lien on the ABL Priority Collateral is also contractually subordinated or junior in priority, in the same manner and to the same extent, to the Liens on ABL Priority Collateral securing the Obligations;

(xxi)      Indebtedness of the Borrower or any Subsidiary Loan Party under the Term Loan Credit Agreement in an aggregate principal amount not exceeding the amount outstanding thereunder on the Closing Date;

(xxii)     [reserved]; and

(xxiii)    Indebtedness of the Borrower outstanding on the Closing Date under the Convertible Notes.

 

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(b)    The Borrower will not, nor will it permit any Subsidiary to, issue any preferred stock or other preferred Equity Interests, except preferred stock or preferred Equity Interests held by the Borrower or any Subsidiary.

SECTION 6.02     Liens . The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a)    Liens created under the Loan Documents;

(b)    Permitted Encumbrances;

(c)    [reserved];

(d)    any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e)    [reserved];

(f)    [reserved];

(g)    Liens, with respect to any Mortgaged Property, described in the applicable schedule of the title policy covering such Mortgaged Property;

(h)    [reserved];

(i)    [reserved];

(j)    [reserved];

(k)    Liens, rights of setoff and other similar Liens existing solely with respect to cash and Permitted Investments on deposit in one or more accounts maintained by any Lender, in each case granted in the ordinary course of business in favor of such Lender with which such accounts are maintained, securing amounts owing to such Lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness for borrowed money;

(l)    licenses or sublicenses of Intellectual Property (as defined in the Guarantee and Collateral Agreement) granted by any Company in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business of the Borrower;

(m)    the filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

(n)    [reserved];

 

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(o)    Liens deemed to exist in connection with investments permitted under Section 6.04 that constitute repurchase obligations and in connection with related set-off rights;

(p)    Liens of a collection bank arising in the ordinary course of business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(q)    Liens of sellers of goods to the Borrower or any of its Subsidiaries arising under Article 2 of the UCC in effect in the relevant jurisdiction in the ordinary course of business, covering only the goods sold and covering only the unpaid purchase price for such goods and related expenses;

(r)    Liens on any Collateral (but not on any other property) under the Term Loan Security Documents; and

(s)    Liens under the ABL Security Documents (as defined in the ABL/Term Loan Intercreditor Agreement) (i) that are subject to the ABL/Term Loan Intercreditor Agreement, or (ii) on cash in favor of any Secured Party (as defined in the ABL Credit Agreement) created as a result of any requirement to provide cash collateral pursuant to the ABL Credit Agreement.

SECTION 6.03     Fundamental Changes .

(a)    The Borrower will not, nor will it permit any other Person to merge into or consolidate with any of them, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (if any party to such merger is a Subsidiary Loan Party) is a Subsidiary Loan Party for which the Collateral and Guarantee Requirement has been satisfied and (iii) any Subsidiary (other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

(b)    The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.

SECTION 6.04     Investments, Loans, Advances, Guarantees and Acquisitions . The Borrower will not, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except:

(a)    Permitted Investments;

(b)    investments existing on the date hereof and set forth on Schedule 6.04;

 

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(c)    [reserved];

(d)    investments by the Borrower and the Subsidiaries in their respective Subsidiaries that exist immediately prior to any applicable transaction; provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee and Collateral Agreement to the extent required by this Agreement and (ii) the aggregate amount of investments by Loan Parties in, and loans and advances by Loan Parties to, and Guarantees by Loan Parties of Indebtedness of, Subsidiaries that are not Loan Parties that have complied with the Collateral and Guarantee Requirement made after the Closing Date shall be consistent with the Approved Budget and shall, in any event, not at any time exceed $40,000,000;

(e)    loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary; provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Guarantee and Collateral Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (d) above;

(f)    [reserved];

(g)     [reserved];

(h)    investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(i)    any investments in or loans to any other Person received as noncash consideration for sales, transfers, leases and other dispositions permitted by Section 6.05;

(j)    Guarantees by the Borrower and the Subsidiaries of leases entered into by any Subsidiary as lessee; provided that the amount of such Guarantees made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (d) above;

(k)    extensions of credit in the nature of accounts receivable or notes receivable in the ordinary course of business and consistent with the Approved Budget;

(l)    loans or advances to employees made in the ordinary course of business consistent with prudent business practice and not exceeding $50,000 in the aggregate outstanding at any one time;

(m)    investments in the form of Hedging Agreements permitted under Section 6.07;

(n)     [reserved]; and

(o)    payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business.

Notwithstanding anything to the contrary in this Section 6.04, the Borrower will not, nor will it permit any Subsidiary to (i) form, acquire, incorporate or otherwise permit to exist any

 

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Subsidiary that is not a Subsidiary on the Closing Date or (ii) make a loan or other advance to any director or officer of the Borrower or any of its Subsidiaries.

SECTION 6.05     Asset Sales . The Borrower will not, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will it permit any Subsidiary to issue any additional Equity Interest in such Subsidiary, except:

(a)    sales, transfers, leases and other dispositions of inventory, used or surplus equipment or other obsolete assets, Permitted Investments and investments referred to in Section 6.04(h) in the ordinary course of business and consistent with the Approved Budget;

(b)    sales, transfers and dispositions to the Borrower or a Subsidiary consistent with the Approved Budget; provided that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in the ordinary course of business consistent with the Approved Budget and in compliance with Section 6.09;

(c)    [reserved]

(d)    the creation of Liens permitted by Section 6.02 and dispositions as a result thereof;

(e)    [reserved];

(f)    [reserved];

(g)    Restricted Payments permitted by Section 6.08;

(h)    transfers and dispositions constituting investments permitted under Section 6.04; and

(i)    sales, transfers and other dispositions of property identified on Schedule 6.05.

SECTION 6.06     Sale and Leaseback Transactions . The Borrower will not, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred.

SECTION 6.07     Hedging Agreements . The Borrower will not, nor will it permit any Subsidiary to, enter into any Hedging Agreement, other than Hedging Agreements entered into in the ordinary course of business and which are not speculative in nature to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its assets or liabilities (including Hedging Agreements that effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)) (it being understood that the Borrower and its Foreign Subsidiaries may enter into Hedging Agreements consisting of cross-currency swaps related to intercompany loans between the Borrower and/or its Foreign Subsidiaries).

 

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SECTION 6.08     Restricted Payments; Certain Payments of Indebtedness .

(a)      The Borrower will not, nor will it permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i)      the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional common Equity Interests in the Borrower;

(ii)     Subsidiaries may declare and pay dividends ratably with respect to their capital stock; and

(iii)    the Borrower may make payments or deliveries in shares of common stock and cash in lieu of fractional shares required by the terms of, and otherwise perform its obligations under, the Convertible Notes Indenture (including, without limitation, making payments of interest and principal thereon and/or making deliveries (other than in cash) due upon conversion thereof).

(b)     The Borrower will not, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

(i)      payment of Indebtedness created under the Loan Documents;

(ii)     payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of subordinated Indebtedness prohibited by the subordination provisions thereof;

(iii)    refinancings of Indebtedness to the extent permitted by Section 6.01;

(iv)     subject to the Term Intercreditor Agreement and the ABL/Term Loan Intercreditor Agreement, the payment of secured Indebtedness out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness;

(v)      payment of or in respect of (A) Indebtedness created under the ABL Loan Documents and (B) Indebtedness or obligations secured by the ABL Security Documents;

(vi)     [reserved];

(vii)    [reserved]; and

(viii)   the Borrower may make payments or deliveries in shares of common stock and cash in lieu of fractional shares required by the terms of, and otherwise perform its obligations under, the Convertible Notes Indenture (including, without limitation, making payments of interest and principal thereon and/or making deliveries (other than in cash) due upon conversion thereof).

 

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(c)    The Borrower will not, nor will it permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement.

SECTION 6.09     Transactions with Affiliates . The Borrower will not, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:

(a)    transactions that are at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties; provided that (i) in the case of any single transaction or series of transactions with a volume in excess of $500,000, the board of directors of the Borrower shall have made a determination in good faith that such transaction or series of transactions, as applicable, is on prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties and (ii) in the case of any single transaction or series of transactions with a volume in excess of $1,500,000, the board of directors of the Borrower shall have engaged an independent financial advisor reasonably acceptable to the Required Lenders and such independent financial advisor shall have made a determination and delivered a customary fairness opinion stating that such transaction or series of transactions, as applicable, is on prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties;

(b)    transactions between or among the Borrower and other Loan Parties not involving any other Affiliate (to the extent not otherwise prohibited by other provisions of this Agreement);

(c)    any Restricted Payment permitted by Section 6.08; and

(d)    transactions pursuant to agreements in effect on the Closing Date and listed on Schedule 6.09 ( provided that this clause (d) shall not apply to any extension, or renewal of, or any amendment or modification of such agreements that is less favorable to the Borrower or the applicable Subsidiaries, as the case may be).

SECTION 6.10     Restrictive Agreements . The Borrower will not, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document or existing on the date hereof and identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), and (ii) clause (a) of the foregoing shall not apply to (A) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (B) customary provisions in leases and other agreements restricting the assignment thereof.

SECTION 6.11     Amendment of Material Documents . The Borrower will not, nor will it permit any Subsidiary to, amend, restate, modify or waive any of its rights under (a) its certificate of incorporation, by-laws or other organizational documents, and (b) (i) any Material Agreement (other than any ABL Loan Document) or other agreements (including joint venture agreements), in each case to the

 

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extent such amendment, restatement, modification or waiver is adverse to the Lenders in any material respect, (ii) any employment agreement or arrangement with any member of the senior management of the Borrower or any Subsidiary, unless approved in writing by the Required Lenders exercising their reasonable discretion, (iii) any ABL Loan Document that (w) expands or adds to the obligations secured under any ABL Security Documents (other than any obligations constituting Indebtedness created under the ABL Credit Agreement), (x) adds any mandatory prepayment provisions (only to the extent resulting in a corresponding permanent commitment reduction or requiring prepayment from the net cash proceeds of the sale, transfer or other disposition of Term Priority Collateral or any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any Term Priority Collateral) or changes any mandatory prepayment provisions in a manner that would increase the amount of any mandatory prepayment of the ABL Loans (only to the extent resulting in a corresponding permanent commitment reduction), (y) increases the “Applicable Margin” or similar component of interest thereunder by more than 3.0% (other than as a result of accrual of interest at the default rate) or (z) adds an additional covenant or event of default or makes any covenant or event of default in the ABL Loan Documents materially more restrictive or burdensome prior to the Latest Maturity Date then in effect (unless this Agreement is amended to provide all of the Lenders with the benefits of such covenants or events of default), in each case under this clause (z), other than covenants and events of default solely relating to the Borrowing Base (as defined in the ABL Credit Agreement), the ABL Priority Collateral or similar matters relating primarily to the asset based revolving nature of the ABL Credit Agreement or in respect of any Offshore Facilities Refinancing (as defined in the ABL/Term Loan Intercreditor Agreement).

SECTION 6.12     Use of Proceeds . The Borrower will not request any Borrowing, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a Person organized in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto. The Borrower will not use the proceeds of the Loans in any manner that is not consistent with the Approved Budget.

ARTICLE VII

Events of Default

If any of the following events (“ Events of Default ”) shall occur:

(a)    the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)    the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of two Business Days;

(c)    any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other

 

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document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)    the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.04, 5.11 or 5.13(d) or (e) or in Article VI;

(e)    any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 10 days;

(f)    the Borrower or any Subsidiary shall fail to make any payment (whether of principal, interest or other payment obligations) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable grace period with respect thereto;

(g)    any event or condition occurs (including a “Fundamental Change” as defined in the Convertible Notes Indenture) that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;

(h)    an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)    the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)    the Borrower or any Subsidiary shall become unable, admit in writing in a court proceeding its inability or fail generally to pay its debts as they become due;

(k)    one or more judgments for the payment of money in an aggregate amount in excess of $100,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which

 

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execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;

(l)      an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m)    any Lien covering property having a book value or fair market value of $100,000 or more purported to be created under any Security Document shall cease to be, or shall be asserted in writing by any Loan Party not to be, a valid and perfected Lien on any Collateral, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of the Administrative Agent’s failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Guarantee and Collateral Agreement;

(n)    the Guarantee contained in Article II of the Guarantee and Collateral Agreement shall cease to be, or shall have been asserted in writing by a Loan Party not to be, in full force and effect;

(o)    the Borrower or any Subsidiary shall challenge the subordination provisions of the Subordinated Debt or assert that such provisions are invalid or unenforceable or that the Obligations of the Borrower, or the Obligations of any Subsidiary under the Guarantee and Collateral Agreement, are not senior Indebtedness under the subordination provisions of the Subordinated Debt, or any court, tribunal or government authority of competent jurisdiction shall judge the subordination provisions of the Subordinated Debt to be invalid or unenforceable or such Obligations to be not senior Indebtedness under such subordination provisions or otherwise cease to be, or shall be asserted not to be, legal, valid and binding obligations of the parties thereto, enforceable in accordance with their terms;

(p)    a Change in Control shall occur;

(q)    a Loan Party denies or contests the validity or enforceability of any Loan Documents (including any of the Intercreditor Agreements) or Obligations, or any Loan Document (including any of the Intercreditor Agreements) ceases to be in full force or effect for any reason (other than a waiver or release by the Administrative Agent and Lenders);

(r)    a loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $100,000;

(s)    any event occurs or condition exists that has a Material Adverse Effect; or

(t)    the Borrower shall fail to pay any fees and expenses of the Lenders (including fees and expenses of counsel) (to the extent any such fees and expenses have been invoiced on or prior to 5:00 p.m. New York City time on the Closing Date) prior to 5:00 p.m. New York City time on the Business Day immediately following the Closing Date; provided that if the Borrower shall have initiated the applicable wire transfers to reimburse such fees and expenses prior to 5:00 p.m. New York City time on the Business Day immediately following the Closing Date, then no Event of Default shall be deemed to have occurred under this clause (t) if such wires are received prior to 5:00 p.m. New York City time on the second Business Day following the Closing Date.

 

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then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower, accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE VIII

The Agents

Each of the Lenders hereby irrevocably appoints the Administrative Agent (it being understood that references in this Article VIII to the Administrative Agent shall be deemed to include the Collateral Agent) as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

The entity serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such entity and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02) and the Administrative Agent shall not be liable for any action taken or not taken by it in the absence of its own gross negligence or willful misconduct as finally judicially determined by a court of competent jurisdiction. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection

 

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with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

The Administrative Agent may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor from among the Lenders. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent. If no such successor is appointed, the Administrative Agent’s resignation shall nevertheless become effective 30 days following delivery of the resignation notice. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Administrative 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 it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

 

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ARTICLE IX

[Reserved]

ARTICLE X

Miscellaneous

SECTION 10.01     Notices . Except in the case of notices and other communications expressly permitted to be given by telephone, 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 telecopy, as follows:

(a)    if to the Borrower, to Horizon Global Corporation at 2600 West Big Beaver Rd., Suite 555, Troy, MI 48084, Attention of Jay Goldbaum, Legal Director (Telephone No. (248) 593-8838, Telecopy No. (248) 203-6434);

(b)    if to the Administrative Agent, to Cortland Capital Market Services LLC at 225 W. Washington St., 9 th Floor, Chicago, Illinois 60606, Attention: Frances Real and Legal Department, Email: cpcagency@cortlandglobal.com and legal@cortlandglobal.com , with a copy to Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, Attention: Monica Holland, Email: monica.holland@davispolk.com ; and

(c)    if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 10.02     Waivers; Amendments .

(a)    No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

(b)    Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative

 

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Agent and the Loan Party or Loan Parties that are parties thereto, in each case with the written consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone any date for the payment of any interest or fees payable hereunder, or reduce or forgive the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) postpone the maturity of any Loan, or any scheduled date of payment of the principal amount of any Loan under Section 2.10 without the written consent of the Supermajority Lenders, (v) change Section 2.18(a), (b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (vi) change the percentages set forth in the definitions of “ Required Lenders ”, “ Supermajority Lenders ” or any other provision of any Loan Document (including this Section) specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender, (vii) release all or substantially all of the Subsidiary Loan Parties from their Guarantees under the Guarantee and Collateral Agreement (except as expressly provided in the Guarantee and Collateral Agreement), without the written consent of each Lender, (viii) release all or substantially all of the Collateral from the Liens of the Security Documents, without the written consent of each Lender (except as expressly provided in the Security Documents), (ix) change the order of priority of payments set forth in Section 2.4 of the Guarantee and Collateral Agreement without the written consent of each Lender, (x) increase the amount of Indebtedness that is permitted to be incurred by the Borrower or any Subsidiary of the Borrower and that is secured by any of the Collateral on an equal priority basis with or senior priority basis to the Loans without the prior written consent of the Supermajority Lenders, (xi) agree to forbear, or instruct the Administrative Agent to forbear, from the exercise of remedies that are available under the Loan Documents after an Event of Default without the written consent of the Supermajority Lenders or (xii) modify any of the approval rights of the Supermajority Lenders under any Loan Document without the consent of each Lender; provided , further , that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Collateral Agent, without the written consent of the Administrative Agent or the Collateral Agent, as applicable. Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by the Borrower, the Required Lenders and the Administrative Agent if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement.

(c)    In connection with any proposed amendment, modification, waiver or termination (a “ Proposed Change ”) requiring the consent of all Lenders or all affected Lenders or the Supermajority Lenders, if the consent of the Required Lenders to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in paragraph (b) of this Section being referred to as a “ Non-Consenting Lender ”), then, so long as the Lender that is acting as Administrative Agent is not a Non-Consenting Lender, the Borrower may, at its sole expense and effort, upon notice to such Non-Consenting Lender and the Administrative Agent, require such Non-Consenting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) such Non-Consenting Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder 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), (ii) the Borrower or such assignee shall have paid to the Administrative Agent

 

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the processing and recordation fee specified in Section 10.04(b), (iii) such assignee shall consent to such Proposed Change and (iv) if such Non-Consenting Lender is acting as the Administrative Agent, it will not be required to assign and delegate its interests, rights and obligations as Administrative Agent under this Agreement. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee, and that the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective.

(d)    Notwithstanding the foregoing, the Administrative Agent and the Borrower may amend, modify or supplement any Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document.

SECTION 10.03     Expenses; Indemnity; Damage Waiver .

(a)    The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Lenders, Agents and their Affiliates, including the reasonable fees, charges and disbursements of counsel and financial advisors, in connection with the provision, negotiation and documentation of the credit facility provided for herein, due diligence investigation, the preparation and administration of the Loan Documents, the monitoring of the performance of the Borrower and its Affiliates, or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by the Agents or any Lender, including the fees, charges and disbursements of any counsel for the Agents or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b)    The Borrower hereby indemnifies the Agents, the Arrangers and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any Mortgaged Property or any other property currently or formerly owned or operated by the Borrower or any Subsidiary, or any Environmental Liability related in any way to the Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, and whether or not the same are brought by the Borrower, its equity holders, affiliates or creditors or any other Person and regardless of whether any Indemnitee is a party thereto; 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, bad faith or willful misconduct of such Indemnitee or (B) are determined by a court of competent jurisdiction by final and non-appealable judgment to have arisen out of a material breach in bad faith by such Indemnitee of its obligations under the Loan Documents or (C) result from a dispute solely among Indemnitees, other than any claims against an Indemnitee in its capacity or in fulfilling its role as an agent or arranger under the Loan Documents and other than any claims arising out of any act or omission of the Borrower or any of its Affiliates. This Section 10.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

 

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(c)    To the extent that any of the Borrower fails to pay any amount required to be paid by it to the Administrative Agent under paragraph (a) or (b) of this Section 10.03 (and without limiting such party’s obligation to do so), each Lender severally agrees to indemnify and hold to the Administrative Agent harmless from any such costs or liabilities, to the extent of such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided 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 in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the outstanding Loans and unused Commitments at the time.

(d)    To the extent permitted by Applicable Law, the Borrower 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 or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.

(e)    All amounts due under this Section 10.03 shall be payable promptly after written demand therefor.

(f)    No director, officer, employee, stockholder or member, as such, of any Loan Party shall have any liability for the Obligations or for any claim based on, in respect of or by reason of the Obligations or their creation; provided that the foregoing shall not be construed to relieve any Loan Party of its Obligations under any Loan Document.

(g)    For the avoidance of doubt, this Section 10.03 shall not apply to any Taxes, except to the extent any Taxes that represent losses, claims, damages or liabilities arising from any non-Tax claim.

SECTION 10.04     Successors and Assigns .

(a)    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent 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 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)    Any Lender may assign to one or more assignees (other than a natural person) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund, each of the Supermajority Lenders and the Administrative Agent must give their prior written consent to such assignment (which consent of the Administrative Agent shall not be unreasonably withheld or delayed), (ii) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, (iii) each partial assignment shall be made as

 

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an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, (iv) 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 and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and additional know-your-customer documentation; and provided , further , that any consent of the Borrower otherwise required under this paragraph shall not be required if an Event of Default under clauses (a), (h) or (i) of Article VII has occurred and is continuing. Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto 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 2.15, 2.16, 2.17 and 10.03). 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 (e) of this Section.

(c)    The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of 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, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior written notice.

(d)    Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire and know-your-customer documentation (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(e)    Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans); 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 and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents; 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 described in the first proviso to Section 10.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the limitations and requirements therein,

 

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including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) 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 agrees to be subject to the provisions of Section 2.19 as if it were an assignee under paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. With respect to any Loan made to the Borrower, each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or in connection with any income tax audit or other income tax proceeding of the Borrower. 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.

(f)    A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with the prior written consent of the Borrower. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower to comply with Section 2.17(f) as though it were a Lender.

(g)    Any Lender may, without the consent of the Borrower or the Administrative Agent, 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 any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

SECTION 10.05     Survival . All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

 

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SECTION 10.06     Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent 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 4.01, this Agreement shall become effective when it shall have been executed by the 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, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 10.07     Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 10.08     Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 10.09     Governing Law; Jurisdiction; Consent to Service of Process .

(a)    This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)    The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court 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, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c)    The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan

 

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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 law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)    Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 10.10     WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY 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, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)  CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)  ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 10.11     Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 10.12     Confidentiality . Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Lender Affiliates and to its and its Lender Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (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 pursuant to the terms hereof), (b) to the extent requested by any regulatory or quasi-regulatory authority, (c) to the extent required by Applicable Laws or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document 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 or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower, (h) to the extent such Information (i) is publicly available at the time of disclosure or becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower or any Subsidiary or (i) to data service providers, including league table providers, that serve the lending industry, so long as such information consists of information customarily provided to such data service providers. For the purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary; provided that, in the case of information received from the Borrower or any Subsidiary after the Closing Date, such information is clearly identified at the time of delivery as confidential. Any Person required to

 

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maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if 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 10.13     Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under Applicable Law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 10.14     Intercreditor Agreements . Each Lender hereby authorizes and directs the Administrative Agent and/or the Collateral Agent (a) to enter into the Intercreditor Agreements on its behalf, perform the Intercreditor Agreements on its behalf and take any actions thereunder as determined by the Administrative Agent or the Collateral Agent to be necessary or advisable to protect the interest of the Lenders, and each Lender agrees to be bound by the terms of the Intercreditor Agreements and (b) to enter into any other intercreditor agreement reasonably satisfactory to the Administrative Agent on its behalf, perform such intercreditor agreement on its behalf and take any actions thereunder as determined by the Administrative Agent or the Collateral Agent to be necessary or advisable to protect the interests of the Lenders, and each Lender agrees to be bound by the terms of such intercreditor agreement. Each Lender acknowledges that (i) the ABL/Term Loan Intercreditor Agreement governs, among other things, Lien priorities and rights of the Lenders and the ABL Secured Parties (as defined in the ABL/Term Loan Intercreditor Agreement) with respect to the Collateral, including the ABL Priority Collateral and (ii) the Term Intercreditor Agreement governs, among other things, Lien priorities and rights of the Lenders and the Junior Secured Parties (as defined in the Term Intercreditor Agreement) with respect to the Collateral, including the Term Priority Collateral. In the event of a conflict between any Intercreditor Agreement and any other Loan Document, the provisions of the applicable Intercreditor Agreement shall prevail.

SECTION 10.15     Release of Liens and Guarantees . (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Collateral Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 10.02) to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 10.02 or (ii) under the circumstances described in paragraph (b) below.

(b)    At such time as the Loans and the other obligations under the Loan Documents shall have been paid in full and the Commitments have been terminated, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person, the security interests in such Collateral created by the Security Documents shall be automatically released without delivery of any instrument or performance of any act by any Person. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, such

 

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certificate, believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.

(c)    In connection with any termination or release pursuant to this Section, the Administrative Agent and the Collateral Agent shall execute and deliver to any Loan Party all documents that such Loan Party shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent or the Collateral Agent.

SECTION 10.16     PATRIOT Act . Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ PATRIOT Act ”), it is required, or will be required in the future, to obtain, verify and record information that identifies the Borrower and the other Loan Parties, which information includes the name and address of the Borrower and the other Loan Parties and other information that will allow such Lender to identify the Borrower and the other Loan Parties in accordance with the PATRIOT Act.

SECTION 10.17     No Fiduciary Duty . Each Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “ Lenders ”), may have economic interests that conflict with those of the Borrower, its stockholders and/or its affiliates. The Borrower agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and the Borrower, its stockholders or its affiliates, on the other. The Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and there under) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise the Borrower, its stockholders or its Affiliates on other matters) or any other obligation to the Borrower except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower, its management, stockholders, creditors or any other Person. The Borrower acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to such borrower, in connection with such transaction or the process leading thereto.

SECTION 10.18     Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)    the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b)    the effects of any Bail-In Action on any such liability, including, if applicable:

 

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(i)    a reduction in full or in part or cancellation of any such liability;

(ii)    a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)    the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

[ Signature Pages Follow ]

 

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

 

HORIZON GLOBAL CORPORATION,
By:   

/s/ Brian Whittman

   Name: Brian Whittman
   Title: Vice President, Finance

 

[Signature Page to Bridge Credit Agreement]

CORTLAND CAPITAL MARKET SERVICES LLC, individually and as Administrative Agent,
By:   

/s/ Jessica J. Mead

   Name: Jessica J. Mead
   Title: General Counsel

 

[Signature Page to Bridge Credit Agreement]

LENDER SIGNATURE PAGE TO

THE CREDIT AGREEMENT

 

One Eleven Funding I, Ltd.

One Eleven Funding II, Ltd.

By: Credit Suisse Asset Management, LLC, as portfolio manager,

By:  

/s/ Thomas Flannery

       Name: Thomas Flannery
       Title: Authorized Signatory

 

[Signature Page to Bridge Credit Agreement]

LENDER SIGNATURE PAGE TO

THE CREDIT AGREEMENT

 

BTC Holdings Fund I, LLC ,

By:  Blue Torch Credit Opportunities Fund I LP, its sole member

By:  Blue Torch Credit Opportunities GP LLC, its general partner,

By:  

/s/ Kevin Genda

Kevin Genda
Authorized Signatory

 

[Signature Page to Bridge Credit Agreement]

LENDER SIGNATURE PAGE TO

THE CREDIT AGREEMENT

 

KCOF Management VIII, L.L.C.
By:  

/s/ Daniel Gewanter

       Name: Daniel Gewanter
       Title: Assistant Secretary

 

[Signature Page to Bridge Credit Agreement]

LENDER SIGNATURE PAGE TO

THE CREDIT AGREEMENT

 

SENIOR DEBT PORTFOLIO

By: Boston Management and Research

as Investment Advisor

By:  

/s/ Michael B. Botthof

       Name: Michael B. Botthof
       Title: Vice President

 

[Signature Page to Bridge Credit Agreement]

SCHEDULE 2.01

COMMITMENTS

[On file with the Administrative Agent]

SCHEDULE 3.03

GOVERNMENTAL APPROVALS; NO CONFLICTS

None.

SCHEDULE 3.05

REAL PROPERTY

Leased Property:

 

 

Subject Grantor

 

  

 

Street Address

 

   

Horizon Global Americas Inc.

 

  

29000-2 Aurora Rd, Solon, Ohio 44139

 

   

Horizon Global Americas Inc.

 

  

3310 William Richardson Ct., South Bend, Indiana 46628

 

   

Horizon Global Americas Inc.

 

  

105-2 LM Gaines Blvd.

Starke, Florida 75050

   

Horizon Global Americas Inc.

 

  

2 Bishop Place, Camp Hill, Pennsylvania 17011

 

   

Horizon Global Americas Inc.

 

  

2600 College Avenue, Goshen, Indiana 46528

 

   

Horizon Global Americas Inc.

 

  

3180 S Willow, 103, Fresno, California 93725

 

   

Horizon Global Americas Inc.

 

  

47912 Halyard Drive, Suite 100, Plymouth, Michigan 48170

 

   

Horizon Global Americas Inc.

 

  

1050 Indianhead Drive, Mosinee, Wisconsin 54455

 

   

Horizon Global Americas Inc.

 

  

6500 S. 35th Street, McAllen, Texas 78503

 

   

Horizon Global Americas Inc.

 

  

8460 Gran Vista Drive, Building C, El Paso, Texas 79907

 

   

Horizon Global Company LLC

 

  

2600 West Big Beaver Road, Troy, Michigan 48084

 

   

Horizon Global Americas Inc.

 

  

32901 W. 193 St.

Edgerton, Kansas 660211

SCHEDULE 3.06

DISCLOSED MATTERS

 

 

Matter

 

  

 

Overview

 

 

Volkswagen/Audi/Daimler & Westfalia

(Germany)

  

Product Liability : Westfalia advised of product concern Volkswagen. Product at issue is an electrically deployable towbar, which includes a locking pin supplied by a third party. To date, no evidence of failure in the field. No formal lawsuit has been filed.

SCHEDULE 3.12

SUBSIDIARIES

 

Corporate Name    Owner / Type of Equity Interest    Percentage Pledged    Is the Subsidiary an Obligor?
AH Forgings Proprietary Limited    100% owned by Horizon Global (South Africa) (Pty) Ltd.    None    No
C.P. Witter Limited    100% owned by Horizon Global European Holdings Limited    None    No
Cequent Bermuda Holdings Ltd.    100% owned by Horizon Euro Finance LLC    None    No
Cequent Brazil Holdings Coöperatief W.A.    99.99 % owned by Horizon Real Finance LLC and approx. 0.01% owned by Cequent Bermuda Holdings Ltd. (such ownership totaling 100%)    None    No
Cequent Electrical Products de México, S. de R.L. de C.V.    99.97% owned by Cequent Mexico Holdings B.V. and approx. 0.03% owned by Cequent Sales Company de México, S. de R.L. de C.V. (such ownership totaling 100%)    None    No
Cequent Indústria E Comércio Ltda.    99.99% owned by Cequent Brazil Holdings Coöperatief W.A. and 0.01% owned by Horizon Real Finance LLC (such ownership totaling 100%)    None    No
Cequent Mexico Holdings B.V.    100% owned by Cequent UK Limited    None    No
Cequent Nederland Holdings B.V.    100% owned by Horizon International Holdings LLC    100%    No
Horizon Global Americas Inc.    100% owned by Horizon Global Company LLC    100%    Yes
Cequent Sales Company de México, S. de R.L. de C.V.    99.97% owned by Cequent Nederland Holdings B.V. and approx. 0.03% owned by Cequent Mexico Holdings B.V. (such ownership totaling 100%)    None    No
Cequent Towing Products of Canada, Ltd.    100% owned by Cequent Nederland Holdings B.V.    None    No
Cequent UK Limited    100% owned by Cequent Nederland Holdings B.V.    None    No
HGHK Services C.V.    99.99% owned by Horizon Sourcing Holdings LLC and approx. 0.01% owned by Horizon Euro Finance LLC (such ownership totaling 100%)    None    No
HZN FinCo IRL Holdings Limited    100% owned by Cequent Nederland Holdings B.V.    None    No
HZN Sourcing Oy    100% owned by Cequent Nederland Holdings B.V.    None    No
Henrichs Beteiligungsgesellschaft mbH    100% owned by Westfalia-Automotive GmbH    None    No
Horizon Euro Finance LLC***    100% owned by Cequent Nederland Holdings B.V.    None    No
Horizon GBP Finance LLC***    100% owned by Cequent Bermuda Holdings Ltd.    None    No
Horizon Global Company LLC    100% owned by Horizon Global Corporation    100%    Yes
Horizon Global Digital Limited    100% owned by Cequent Nederland Holdings B.V.    None    No

Corporate Name    Owner / Type of Equity Interest    Percentage Pledged    Is the Subsidiary an Obligor?
Horizon Global European Holdings Limited    100% owned by Cequent Nederland Holdings B.V.    None    No
Horizon Global Germany GmbH    100% owned by C.P. Witter Limited    None    No
Horizon Global Holdings Australia Pty. Ltd.    100% owned by Cequent Bermuda Holdings Ltd.    None    No
Horizon Global Hong Kong Holdings Limited    100% owned by Cequent Nederland Holdings B.V.    None    No
Horizon Global (NZ) Limited    100% owned by Horizon Global Holdings Australia Pty Ltd.    None    No
Horizon Global Pty. Ltd.    100% owned by Horizon Global Holdings Australia Pty. Ltd.    None    No
Horizon Global (Shanghai) Trading Co. Ltd.    100% owned by Horizon Global Hong Kong Holdings Limited    None    No
Horizon Global (South Africa) (PTY) LTD.    100% owned by Cequent Nederland Holdings B.V.    None    No
Horizon Global Sourcing Operations and Innovation Center India Pvt. Ltd.    99.99% owned by Cequent Nederland Holdings B.V. and approx. 0.01% owned by Horizon Euro Finance LLC (such ownership totaling 100%)    None    No
Horizon International Holdings LLC    100% owned by Horizon Global Americas, Inc.    100%    Yes
Horizon Real Finance LLC***    100% owned by Cequent Bermuda Holdings Ltd.    None    No
Horizon Sourcing B.V.    100% owned by Cequent Nederland Holdings B.V.    None    No
Horizon Sourcing Holdings LLC***    100% owned by Horizon Euro Finance LLC    None    No
Kovil Oy    100% owned by Horizon Global (Germany) GmbH    None    No
Monoflex Nordic AB    100 % owned by Westfalia Nordic AB    None    No
Parkside Towbars Pty. Ltd.    100% owned by Horizon Global Pty. Ltd.    None    No
S.I.A.R.R. SAS    100% owned by Westfalia-Automotive SAS    None    No
Teljs Automotive Srl Unit 2    99.995% owned by Teljs B.V. and approx. 0.0025% owned by TeIJs Holding B.V. (such ownership totaling 100%)    None    No
Teljs B.V.    100% owned by Teljs Holding B.V.    None    No
Teljs Holding B.V.    100% owned by HG Germany Holdings GmbH    None    No
Terwa B.V.    100% owned by Terwa Holdings B.V.    None    No
Terwa China (China Rep Office)    100% owned by Terwa B.V.    None    No
Terwa Construction Systems Poland Sp.zo.o    100% owned by Terwa Construction Systems Srl    None    No
Terwa Construction Systems Srl    100% owned by Terwa B.V.    None    No
Terwa Holdings B.V.    100% owned by Teljs B.V.    None    No
Terwa Innovation B.V.    100% owned by Terwa Holdings B.V.    None    No

Corporate Name    Owner / Type of Equity Interest    Percentage Pledged    Is the Subsidiary an Obligor?
Terwa Investors B.V.    100% owned by Terwa Holdings B.V.    None    No
Terwa Romania Srl Unit 1    99.995% owned by TeIJs B.V. and approx. 0.0025% owned by Terwa Innovation B.V. (such ownership totaling 100%)    None    No
Westfalia American Hitch Inc.    100% owned by Westfalia-Automotive GmbH    None    No
Westfalia-Automotive Beteiligungsgesellschaft mbH    100% owned by Westfalia-Automotive GmbH    None    No
Westfalia-Automotive Denmark ApS    100% owned by Monoflex Nordic AB    None    No
Westfalia-Automotive GmbH    100% owned by Westfalia-Automotive Holding GmbH    None    No
Westfalia-Automotive Holding GmbH    100% owned by HG Germany Holdings GmbH    None    No
Westfalia-Automotive Italia S.r.l.    100% owned by Westfalia-Automotive GmbH    None    No
Westfalia-Automotive Polska Sp.Zo.o    100% owned by Westfalia-Automotive GmbH    None    No
Westfalia-Automotive Russland OOO    99.1% owned by Westfalia-Automotive GmbH and approx. 0.9% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH (such ownership totaling 100%)    None    No
Westfalia-Automotive SAS    100% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH    None    No
Westfalia Nordic AB    100% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH    None    No
Westfalia UK Ltd.    100% owned by Westfalia-Automotive GmbH    None    No
TriMotive Asia Pacific Limited    99.99% owned by Horizon Global Holdings Australia Pty. Ltd., approx. 0.001% owned by Horizon Euro Finance LLC, and approx. 0.0001% owned by Horizon GBP Finance LLC, (such ownership totaling 100%)    None    No

.

SCHEDULE 3.13

INSURANCE

[See attached.]

 

2018 -2019 HORIZON GLOBAL CORPORATION INSURANCE SUMMARY

Coverage   Carrier       AM Best    
Rating 		                  Policy  #                   Policy Term    Policy Limits    Deductibles / Retentions   

      DIC / DIL      

Master

Property US & Foreign (TIV: $636,962,029)   Allianz   A+ XV   USP00032718   6/30/18-19    $150,000,000 Loss Limit Per Occurrence    $150,000    Yes
Cargo   Indemnity Insurance Co of North America (Chubb)   A++ XV   N10757745   6/30/18-19    $5,000,000    $50,000 / $5,000 via truck or train    No
Primary General Liability/ Employee Benefits Liability Foreign Difference in Conditions/Limits General Liability Foreign Auto Excess Hired Non Owned Liability Foreign Voluntary Workers Compensation and Employers Liability   Federal (Chubb)   A++ XV   36036416  

6/30/18-19

 

   $1,000,000 Occurrence/$3,000,000 Products    US: $0 except $750,000 Products    Yes for General and Products Liability Only
 

6/30/18-19

 

   Aggregate /$4,000,000 General Aggregate    Foreign: $0
 

6/30/18-19

 

   $1,000,000 BI/PD Excess and DIC Only    Foreign: $0
 

6/30/18-19

 

   Voluntary Benefits for International Employees - Country of Hire    N/A
Pollution   Illinois Union Ins Co (Chubb Environmental)   A++ XV   PPL G46655102 002   6/30/18-19    $5,000,000 Per Pollution Condition/Aggregate    $50,000    Yes over Mexico-as required Only
Product Recall   Allianz Underwriters Insurance Co.   A+ XV   USL00038518   6/30/18-19    $12,000,000    $350,000 except 100,000 Euros Westfalia Germany    Yes
Auto   Great Northern (Chubb)   A++ XV   73594370   6/30/18-19    $2,000,000    $2,000 Physical Damage    No
Workers Compensation-CA, NH, NI, NY (USA)   Amerisure Mutual   A XI   WC2101771   6/30/18-19    Statutory/$1,000,000 Employers Liability    N/A    No
Workers Compensation-Other US States   Amerisure Ins Co   A XI   WC2101772   6/30/18-19    Statutory/$1,000,000 Employers Liability    N/A    No
Lead Umbrella   Allianz   A+ XV   USL00072118   6/30/18-19    $25,000,000    $25,000    No
Excess Umbrella-First Layer   Great American Assurance Co   A+ XIV   EXC2275333   6/30/18-19    $25,000,000    Excess of $25,000,000 Excess of Primary    No
Excess Umbrella-Second Layer   Endurance   A XV   EXC30000129002   6/30/18-19    $25,000,000    Excess of $50,000,000 Excess of Primary    No
Excess Umbrella-Third Layer   Federal (Chubb)   A++ XV   9364-25-14   6/30/18-19    $25,000,000    Excess of $75,000,000 Excess of Primary    No
Excess Punitive Damages Wrap   Allianz RKH Specialty   A+ XV   GBL003858181   6/30/18-19    $25,000,000    $10,000 SIR    No
D&O Primary   National Union (AIG)   A XV   01-571-52-11   6/30/18-19    $5,000,000    $1,000,000    Yes
Excess D&O-1st Layer   StarStone National Ins Co   A- XI   G83671180ASP   6/30/18-19    $5,000,000    Excess of $5,000,000    No
Excess D&O-2nd Layer   AXIS Insurance Co   A+ XV   MCN788245/01/2018   6/30/18-19    $5,000,000    Excess of $10,000,000    No
Excess D&O-3rd Layer   Great American   A+ XIV   DFX1491085   6/30/18-19    $5,000,000    Excess of $15,000,000    No
Excess D&O-4th Layer   XL Specialty Insurance   A XV   ELU156220-18   6/30/18-19    $5,000,000    Excess of $20,000,000    No
Excess D&O-5th Layer   Wesco Insurance Co   A- XV   EUW1522593 00   6/30/18-19    $5,000,000    Excess of $25,000,000    No
Excess D&O-6th Layer   QBE Insurance Corp   A XV   QPL0960501   6/30/18-19    $5,000,000    Excess of $30,000,000    No
Excess D&O-7th Layer   Endurance American Ins Co   A+ XV   DOX10013311800   6/30/18-19    $5,000,000    Excess of $35,000,000    No
Excess D&O-8th Layer   Berkley Assurance Co   A+ XV   BPRO8033035   6/30/18-19    $5,000,000    Excess of $40,000,000    No
Excess D&O-9th Layer   Hudson Insurance Co   A XV   HN-0303-5104   6/30/18-19    $5,000,000    Excess of $45,000,000    No
Excess D&O-10th Layer   Old Republic Insurance Co   A+ XII   ORPRO 41011   6/30/18-19    $5,000,000    Excess of $50,000,000    No
Excess D&O-11th Layer   Beazley Insurance Co, Inc   A XIII   V23973180101   6/30/18-19    $5,000,000    Excess of $55,000,000    No
Excess Side A   National Union (AIG)   A XV   01-590-77-05   6/30/18-19    $15,000,000    Excess of $60,000,000    No
Excess Side A   Westchester Fire Insurance Co.   A++ XV   G71151669 001   6/30/18-19    $5,000,000    Excess of $75,000,000    No
Employment Practices   National Union (AIG)   A XV   01-498-04-22   6/30/18-19    $10,000,000    $500,000 except $1,000,000 Class Action    No
Fiduciary   Illinois National (AIG)   A XV   01-457-51-26   6/30/18-19    $10,000,000    $25,000 except $50,000 Securities    No
Crime   National Union (AIG)   A XV   01-454-18-14   6/30/18-19    $10,000,000    $150,000 except $0 ERISA    No
Cyber Liability   Beazley Insurance Co, Inc   A XIII   V23973180101   6/30/18-19    $10,000,000    $100,000    No
Employed Lawyers Errors & Omissions Liability   Illinois National (AIG)   A XV   01-498-03-90   6/30/18-19    $1,000,000    $10,000    No
Kidnap & Ransom   National Union (AIG)   A XV   86-342-758   6/30/18-19    $15,000,000    $0    No
Business Travel Accident   ACE American   A++ XV   ADDN10892089   6/30/18-19    $200,000 Class I / $50,000 Class II & III    N/A    Yes

Summary does not include foreign local policy placements

SCHEDULE 3.20

MATERIAL CONTRACTS

 

1.

Supplier Agreement, dated as of November 6, 2006, between Horizon Global Americas Inc. (“HGA”), and Citibank, N.A. (“Citibank”), in connection with HGA’s sale to Citibank of certain accounts receivables resulting from HGA’s sale of goods to AutoZone, Inc.

2.

Purchase Agreement, dated as of May 8, 2012, between HGA and Bank of America, N.A. (“BofA”), in connection with HGA’s sale to BofA of certain accounts receivables resulting from HGA’s sale of goods to Balkamp, Inc.

3.

Supplier Agreement, effective as of September 27, 2011, between HGA and Branch Banking and Trust Company (“BB&T”), in connection with HGA’s sale to BB&T of certain accounts receivables resulting from HGA’s sale of goods to O’Reilly Automotive Stores, Inc. f/k/a O’Reilly Automotive, Inc. (“O’Reilly’s”), O’Reilly’s subsidiaries and related companies.

4.

Supplier Agreement, dated as of October 27, 2011, between HGA, and Citibank, in connection with HGA’s sale to Citibank of certain accounts receivables resulting from HGA’s sale of goods to Wal-Mart Stores, Inc.

5.

Accounts Receivable Purchase Agreement, effective as of October 22, 2009, between HGA and BofA, in connection with HGA’s sale to BofA of certain accounts receivables resulting from HGA’s sale of goods to Advance Stores Company, Incorporated and its successors and permitted assigns.

6.

HGA is registered with C2FO for participation in invoice “early pay” programs for the following customers:

 

  a.

Do It Best Corp.;

  b.

ACE Hardware Corporation;

  c.

Amazon.com, Inc.; and

  d.

Costco Wholesale Corporation

7.

HGA is registered with The Home Depot U.S.A. Inc. (“Home Depot”) for participation in Home Depot’s invoice “early pay” program.

8.

Online Supplier Agreement (Drafts), dated as of March 20, 2017, between PrimeRevenue, HGA and Citizens Bank of Pennsylvania, in connection with the sale of goods to Advance Auto. 1

9.

Online Supplier Agreement, dated as of March 20, 2017, between PrimeRevenue, HGA and Bank of Tokyo-Mitsubishi UFJ (BTMU), in connection with the sale of goods to Lowe’s.

10.

Accounts Receivable Purchase Agreement, dated as of May 17, 2017, between The Pep Boys – Manny, Moe & Jack, PrimeRevenue and HGA.

11.

Factoring Agreement, dated as of June 5, 2012, between Westfalia-Automotive GmbH and ABN AMRO Commercial Finance GmbH, as amended. 2

12.

Factoring Agreement, between S.I.A.R.R SAS and BNP Paribas. 3

 

 

 

1 In FY2018, discounted receivables relating to numbers 8, 9 and 10 above were approximately $50MM.

2 Total receivables sold by legal entity in 2018: approximately $233,746,004

3 Total receivables sold by legal entity in 2018: approximately $9,057,766

 

SCHEDULE 5.13

POST-CLOSING CONDITIONS

[Attached]

SCHEDULE 5.13

Post-Closing Schedule

 

1.

As soon as practicable following the Closing Date (and in any event, no later than the second Business Day following the Closing Date (with extensions to be granted by the Administrative Agent at the direction of the Required Lenders)), the Borrower shall provide evidence in the form of an intercompany note executed by the Borrower and all applicable Subsidiaries that indebtedness and other liabilitilies (whether now existing or hereafter arising) owing by any Loan Party as of the Closing Date to any Subsidiary that is not a Loan Party shall be subordinated to the Obligations on subordination terms reasonably satisfactory to the Administrative Agent and the Required Lenders; it being understood that such intercompany note shall be delivered to the Administrative Agent within five Business Days of the Closing Date (or such later date as the Administrative Agent may determine in its reasonable discretion).

 

2

The Loan Parties shall take all necessary actions (subject to the Agreed Security Principles set out in paragraph 2 below) to satisfy the items described below within thirty (30) days after the Closing Date (or, in each case, such longer periods as the Administrative Agent, acting at the direction of the Required Lenders, may agree):

 

  (a)

For each English Subsidiary Loan Party:

 

  (i)

an English law guarantee and debenture over substantially all of its assets;

 

  (ii)

a share pledge agreement entered into by its shareholder relating to the pledge over its shares; and

 

  (iii)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in the United Kingdom to create a first priority perfected security interest therein.

 

  (b)

For each German Subsidiary Loan Party:

 

  (i)

a guarantee;

 

  (ii)

a share pledge agreement entered into by its shareholder relating to the pledge over its shares; and

 

  (iii)

security over substantially all of its assets located in Germany including but not limited to the following security documents, if applicable:

 

  (A)

an account pledge agreement relating to all accounts held by it with banks in Germany;

 

  (B)

a global assignment agreement relating to the assignment of accounts receivable from the selling of goods and the provision of services as well as other accounts receivable agreed to be assigned by it (including, but not limited to, insurance claims and intercompany loan receivables);

 

  (C)

a security transfer agreement relating to the security transfer of all moveable (including stock and inventory) and fixed assets over which security shall be granted;

  (D)

if it has any such rights, an IP pledge agreement relating to the pledge of its intellectual property rights (including, but not limited to, patents, designs, utility models, trademarks, know-how and other IP rights);

 

  (E)

if it owns any real estate, a land charge over the real estate held by it;

SCHEDULE 6.01

EXISTING INDEBTEDNESS

 

Company   Bank  

Facility

Details

 

 

Outstanding Amount as of 1/27/2019

  Secured/ Unsecured
Westfalia-Automotive GmbH   N/A   Capital Lease with Portikus   $10,213,3508   Secured
Cequent Industria E Comerico Ltda., Westfalia-Automotive GmBH, Terwa Romania Srl Unit 1, Teljs Automotive Srl Unit 2, Terwa B.V., Terwa Construction Systems Srl, Horizon Americas, Inc.   N/A   Capital Leases   $2,788,967   Secured
Horizon Global Corporation Pty Ltd.  

National Australia

Bank Ltd., Australia

  Multi Facility Agreement   $11,728,530   Secured
Terwa Romania Srl Unit 1   ING   Overdraft Credit Facility   $1,258,548   Secured
Terwa Romania Srl Unit 1   N/A   Other   $982,857   Secured

Terwa B.V.

  N/A   Other   $85,598   Secured

Note: the above schedule is subject to year-end audit adjustments

 

  ●  

Indebtedness evidenced by those certain factoring agreements listed on Schedule 3.20.

 

Intercompany Debt as listed below:

 

Borrower    Lender    Amount     
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holding LLC    $44,789,896.27   
Horizon Global Corporation    Horizon International Holding LLC    $12,502,710.00   
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97   
Cequent Nederland Holdings B.V.    Horizon Global Company LLC    $117,280,750.00   
Westfalia – Automotive GmbH    Horizon Global Company LLC    $1,147,000,00   

SCHEDULE 6.02

EXISTING LIENS

Liens existing on the Closing Date in respect of:

1.        Indebtedness set forth on Schedule 6.01 encumbering the assets described on Schedule 6.01, to the extent that such Indebtedness is described as secured Indebtedness on such Schedule 6.01.

2.        Lien evidenced by Initial Filing Number OH00161477063, filed on September 25, 2012, by Raymond Leasing Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

3.        Lien evidenced by Initial Filing Number 2009 0236023, filed on January 23, 2009, by Air Liquide Industrial U.S. LP against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

4.        Lien evidenced by Initial Filing Number 2012 0866626, filed on March 6, 2012, by Wells Fargo Bank, N.A. against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

5.        Lien evidenced by Initial Filing Number 2013 2487248, filed on June 27, 2013, by Wells Fargo Financial Leasing, Inc. against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

6.        Lien evidenced by Initial Filing Number 2013 3798981, filed on September 19, 2013, by LCA Bank Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

7.        Lien evidenced by Initial Filing Number 2013 4703188, filed on November 29, 2013, by Well Fargo Financial Leasing, Inc. against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

8.        Lien evidenced by Initial Filing Number 2015 5309983, filed on November 12, 2015, by LCA Bank Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

9.        Lien evidenced by Initial Filing Number 2016 7591637, filed on December 7, 2016, by Well Fargo Bank, N.A. against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

10.      Lien evidenced by Initial Filing Number 2017 0850658, filed on February 7, 2017, by LCA Bank Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.).

11.      Lien evidenced by Initial Filing Number 2016 1548856, filed on March 15,2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Corporation.

12.      Lien evidenced by Initial Filing Number 2016 1812344, filed on March 28, 2016, by Leaf Capital Funding, LLC and/or its assigns against Horizon Global Corporation.

13.      Lien evidenced by Initial Filing Number 2016 3880422, filed on June 28, 2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Company LLC.

14.      Lien evidenced by Initial Filing Number 2017 3151500, filed on May 12, 2017, by Mitsubishi UFJ Lease & Finance (U.S.A.) Inc., against Horizon Global Company LLC and Horizon Global Americas Inc.

15.      Lien evidenced by Initial Filing Number 2017 3151542, filed on May 12, 2017, by Corporation Service Company, as representative,. against Horizon Global Company LLC.

16.      Lien evidenced by Initial Filing Number 2017 5703415, filed on August 28, 2017, by Summit Funding Group, Inc. against Horizon Global Company LLC.

17.      Lien evidenced by Initial Filing Number 2017 5906034, filed on September 6, 2017, by CT Corporation System, as representative,. against Horizon Global Company LLC and Horizon Global Americas Inc.

18.      Lien evidenced by Initial Filing Number 2017 8278089, filed on December 14, 2017, by CT Corporation System, as representative,. against Horizon Global Company LLC.

19.      Lien evidenced by Initial Filing Number 201 2274419, filed on April 3, 2018, by CT Corporation System, as representative,. against Horizon Global Company LLC.

20.      Lien evidenced by Initial Filing Number 2018 3737521, filed on June 1, 2018, by CT Corporation System, as representative,. against Horizon Global Company LLC.

SCHEDULE 6.04

EXISTING INVESTMENTS

 

  A.

Qualified Foreign Investments

 

  1.

Investments by Cequent Electrical Products de Mexico, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

 

  2.

Investments by Cequent Trailer Products, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

 

  B.

Other Investments

 

  1.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Juarez, Mexico facility; the aggregate amount of loans described in this clause (B)(1) and clause (B)(2) below do not exceed $5.0 million.

 

  2.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Reynosa, Mexico facility; the aggregate amount of loans described in this clause (B)(2) and clause (B)(1) above do not exceed $5.0 million.

 

  3.

Horizon Global Corporation’s investment in the Hong Kong Sourcing Office legal entity to provide legal restructuring and operational funding in an aggregate amount not exceeding $2.5 million.

 

  4.

Investments by Horizon Global Corporation in one or more wholly-owned foreign subsidiaries for the purpose of purchasing one or more foreign manufacturing facilities, including capital equipment and working capital, in an aggregate amount not exceeding $3.0 million.

 

  5.

Horizon Global Digital Limited’s investment in 20% of the issued share capital of Reckless Digital Group Holdings Limited in a total consideration of GBP 360,000 paid to Ellie Warriner (GBP 45,000) and Lindsay Reckless (GBP 315,000)

 

  6.

Horizon Global Digital Limited’s loan to Reckless Digital Group Holdings Limited to be used for growth initiatives and general working capital purposes, in an amount equal to GBP 300,000.

  7.

Cequent Industria e Comercio’s Ltda’s (fka Cequent Brazil Participacoes) purchase of Engetran Engenharia, Industria, Comercio de Pecas e Acessorios Veiculares Ltda from Jorge Correia Karan of which there remains about $100,000 outstanding.

 

  8.

Cequent Industria e Comercio Ltda’s purchase of Dhelfos Industria E Comercio De Acessorios Ltda from Ernani Mariano and Maria Luiza Gome De Goes, of which there remains about $2.5M outstanding.

 

  9.

Westfalia-Automotive GmbH owns 20% of EWV Management Consultancy Pty.

Intercompany Debt as listed below:

 

Borrower    Lender    Amount     
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holding LLC    $44,789,896.27   
Horizon Global Corporation    Horizon International Holding LLC    $12,502,710.00   
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97   
Cequent Nederland Holdings B.V.    Horizon Global Company LLC    $117,280,750.00   
Westfalia – Automotive GmbH    Horizon Global Company LLC    $1,147,000,00   

SCHEDULE 6.05

ASSET SALES

Item 1 below is an ongoing transactions with respect to the Company’s maquila structure and generally allow the Company to transact under the normal course of business under this structure.

 

1.

Intercompany sale for cash of machinery, equipment and/or inventory by Cequent Performance Products, Inc. to Cequent UK Limited, which such machinery, equipment and/or inventory will be located in Cequent UK Limited’s Reynosa, Mexico facility

 

2.

Terwa Holding B.V.’s pending divestiture of (i) all shares in Terwa B.V. to SISS Holding B.V; and (ii) construction-related assets of Terwa Romania Srl Unit 1 to Terwa Construction Systems Srl for a purchase price of $5.5M USD on cash-free, debt-free basis, inclusive of $450K vendor loan (see item 3 below)

 

3.

Terwa Holding B.V.’s pending receipt of vendor note from SISS Holding B.V. in connection with pending divestiture of (i) all shares in Terwa B.V. to SISS Holding B.V; and (ii) construction-related assets of Terwa Romania Srl Unit 1 to Terwa Construction Systems Srl

SCHEDULE 6.09

EXISTING AFFILIATE TRANSACTIONS

The items set forth on Schedule 6.04, Sections B1, B2, B3, B4 and B5. The item set forth on Schedule 6.05, Item 1.

SCHEDULE 6.10

EXISTING RESTRICTIVE AGREEMENTS

None.

EXHIBIT A

 

[FORM OF] ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “ Assignment and Assumption ”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] 1 Assignor identified in item 1 below ([the][each, an] “ Assignor ”) and [the][each] 2 Assignee identified in item 2 below ([the][each, an] “ Assignee ”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] 3 hereunder are several and not joint.] 4 Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “ Credit Agreement ”), receipt of a copy of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including without limitation any guarantees included in such facilities), and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “ Assigned Interest ”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

 

 

1.    Assignor[s]:

 

 

  
 

 

    

 

      

1 For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.

2 For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.

3 Select as appropriate.

4 Include bracketed language if there are either multiple Assignors or multiple Assignees.

 

EXHIBIT A

[Assignor [is] [is not] a Defaulting Lender]

 

2.    Assignee[s]:

 

 

  
 

 

    

[for each Assignee, indicate [Affiliate][Approved Fund] of [ identify Lender ]

 

3.

Borrower:                       Horizon Global Corporation

 

4.

Administrative Agent: Cortland Capital Market Services LLC, as the administrative agent under the Credit Agreement

 

5.    Credit Agreement:             

   Credit Agreement dated as of February 20, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among HORIZON GLOBAL CORPORATION, the lenders from time to time party thereto and CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent.

 

6.

Assigned Interest[s]:

 

Assignor[s

] 5

  Assignee[
s] 6 		 

Facility
Assigned

7

  Aggregate
Amount of
Commitment/Lo ans for all Lenders 8 		  Amount of Commitment/L oans Assigned 8   Percentage Assigned of Commitment/ Loans 9  

CUSIP

Number

           

$

 

$

  %        
           

$

 

$

  %        
            $   $   %        

 

[7.     Trade Date:

                           ] 10     

[Page break]

 

 

5 List each Assignor, as appropriate.

6 List each Assignee, as appropriate.

7 Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g., “Term Commitment,” “Incremental Term Commitment,” etc.)

8 Amount to be adjusted by the counterparties to take into account any payments or prepayments made between the Trade Date and the Effective Date.

9 Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.

10 To be completed if the Assignor(s) and the Assignee(s) intend that the minimum assignment amount is to be determined as of the Trade Date.

 

Effective Date:                              , 20 [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

ASSIGNOR[S] 11
[NAME OF ASSIGNOR]
By:  

 

  Title:
[NAME OF ASSIGNOR]
By:  

 

  Title:
ASSIGNEE[S] 12
[NAME OF ASSIGNEE]
By:  

 

  Title:
[NAME OF ASSIGNEE]
By:  

 

  Title:

 

 

 

 

11 Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

 

12 Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

 

Consented to and Accepted 13 :

Cortland Capital Market Services LLC, as Administrative Agent

By:  

 

  Title:
Consented to:
[Horizon Global Corporation, as the Borrower]
By:  

 

  Title:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13 Consents to be included to the extent required by Section 10.04(b) of the Credit Agreement.

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1.         Representations and Warranties .

1.1     Assignor[s] . [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any Subsidiary or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any Subsidiary or any other Person of any of their respective obligations under any Loan Document.

1.2.     Assignee[s] . [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under the Credit Agreement (subject to such consents, if any, as may be required under Section 10.04(b) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2.         Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which

 

have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date. Notwithstanding the foregoing, the Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to [the][the relevant] Assignee.

3.         General Provisions . This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

EXHIBIT B

[FORM OF] BORROWING REQUEST

Cortland Capital Market Services

LLC, as Administrative Agent

225 W. Washington St, 9th Floor

Chicago, IL 60606

Attn: Legal Department & CPC Agency

Email: legal@cortlandglobal.com; cpcagency@cortlandglobal.com

[DATE]

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of February 20, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among HORIZON GLOBAL CORPORATION, the lenders from time to time party thereto and CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent. Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Credit Agreement.

This notice constitutes a Borrowing Request and the Borrower hereby gives you notice, pursuant to Section 2.03 of the Credit Agreement, that it requests a Borrowing under the Credit Agreement, and in that connection the Borrower specifies the following information with respect to such Borrowing:

 

  (A)

Aggregate principal amount of Borrowing : $                             

 

  (B)

Date of Borrowing (which is a Business Day):                          

 

  (C)

Type of Borrowing: 14                                                                  

 

 

 

14         Specify ABR Borrowing or Eurocurrency Borrowing. If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.

2

 

  (D)

Interest Period and the last day thereof: 15                                     

 

  (E)

Location and number of the Borrower’s account to which proceeds of the requested Borrowing are to be disbursed: [NAME OF BANK] (Account No.:                          )

The Borrower hereby certifies that the conditions specified in paragraphs (m) and (n) of Section 4.02 of the Credit Agreement have been satisfied.

[Remainder of page intentionally left blank; signature page follows]

 

Very truly yours,
HORIZON GLOBAL CORPORATION
 

by

    

 

 

    Name:
    Title:

 

 

 

15         Applicable to Eurocurrency Borrowings only. Eurocurrency Borrowings shall be subject to the definition of “Interest Period” and can only be a period of one Interest Period is not specified for a Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

EXHIBIT C-1

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Lenders that Are Not Partnerships for U.S. Federal Income Tax Purposes)

Reference is made to the Credit Agreement dated as of February 20, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”) and Cortland Capital Market Services LLC, as Administrative Agent and Collateral Agent.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. person status on the applicable IRS Form W-8BEN-E or W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

 

By:  

 

    Name:
    Title:

Date:                  , 20[    ]

EXHIBIT C-2

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Lenders that Are Partnerships for U.S. Federal Income Tax Purposes)

Reference is made to the Credit Agreement dated as of February 20, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”) and Cortland Capital Market Services LLC, as Administrative Agent and Collateral Agent.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its partners/members’ conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) the applicable IRS Form W-8BEN-E or W-8BEN or (ii) an IRS form W- 8IMY accompanied by the applicable IRS form W-8 from each of such partner’s/ member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]

 

By:  

 

    Name:
    Title:

Date:                  , 20[    ]

EXHIBIT C-3

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Participants that are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is made to the Credit Agreement dated as of February 20, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”) and Cortland Capital Market Services LLC, as Administrative Agent and Collateral Agent. For purposes of this exhibit, “Non-U.S. Participant” shall mean a Participant that is not a U.S. Person.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. person status on the applicable IRS Form W-8BEN-E or W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]

 

By:  

 

    Name:
    Title:

Date:                  , 20[    ]

EXHIBIT C-4

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Participants that Are Partnerships for U.S. Federal Income Tax Purposes)

Reference is made to the Credit Agreement dated as of February 20, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”) and Cortland Capital Market Services LLC, as Administrative Agent and Collateral Agent. For purposes of this exhibit, Non-U.S. Participant shall mean a Participant that is not a U.S. Person.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its partners/members’ conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) the applicable IRS Form W-8BEN-E or W-8BEN or (ii) an IRS form W-8IMY accompanied by the applicable IRS form W-8 from each of such partner’s/ member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

    [NAME OF PARTICIPANT]   
  By:  

 

  
  Name:   
  Title:   

                  Date:                   , 20[    ]

EXHIBIT D

FORM OF GUARANTEE AND COLLATERAL AGREEMENT

[See attached]

 

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

made by

HORIZON GLOBAL CORPORATION

and certain of its Subsidiaries

in favor of

CORTLAND CAPITAL MARKET SERVICES LLC,

as Collateral Agent

Dated as of February 20, 2019

 

 

 

GUARANTEE AND COLLATERAL AGREEMENT

THIS GUARANTEE AND COLLATERAL AGREEMENT (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”) is entered into as of February 20, 2019 by and among HORIZON GLOBAL CORPORATION, a Delaware corporation (the “ Borrower ”), certain of its Subsidiaries signatories hereto (the Borrower and each such Subsidiary a “ Grantor ”, and collectively, the “ Grantors ”) and CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent (in such capacity, the “ Collateral Agent ”) for the entities (the “ Lenders ”) from time to time parties to the Credit Agreement, dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”) among the Borrower, the Lenders and the Collateral Agent.

PRELIMINARY STATEMENT

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;

WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Grantor;

WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of the Secured Parties;

NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:

ARTICLE I

DEFINITIONS

1.1.     Terms Defined in Credit Agreement . All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

1.2.     Terms Defined in UCC . Terms defined in the UCC which are not otherwise defined in this Agreement are used herein as defined in Articles 8 or 9 of the UCC.

1.3.     Definitions and Rules of Construction . Whenever the words “include”, “including”, or “includes” appear in this Agreement, they shall be read to be followed by the words “without limitation” or words having similar import.

ARTICLE II Definitions of Certain Terms Used Herein. As used in this Agreement, in addition to the terms defined in the Preliminary Statement, the following terms shall have the following meanings:

“ ABL Priority Collateral ” has the meaning set forth in the ABL/Term Loan Intercreditor Agreement.

“ Account Debtor ” shall mean any person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.

“ Article ” means a numbered article of this Agreement, unless another document is specifically referenced.

“ Collateral ” has the meaning set forth in Article III.

“ Collateral Deposit Account ” means each Deposit Account of a Grantor other than an Excluded Account.

“ Collection Account ” has the meaning set forth in Section 8.1(b).

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Excluded Accounts ” means (a) Excluded Trust Accounts, (b) Deposit Accounts and Securities Accounts of the Loan Parties containing not more than $50,000 individually or $250,000 in the aggregate at any time, and (c) zero-balance accounts that sweep on a daily basis to an account maintained with the ABL Collateral Agent or subject to a Deposit Account control agreement for the benefit of the ABL Collateral Agent pursuant to the terms of the ABL Loan Documents.

“ Excluded Contract ” means any contract or agreement to which a Grantor is a party or any governmental permit held by a Grantor to the extent that (a) the terms of such contract, agreement or permit prohibit or restrict the creation, incurrence or existence of the security interest granted hereunder therein or the assignment thereof without the consent of any party thereto other than the Borrower or any Subsidiary and (b) such prohibition or restriction is permitted under Section 6.10 of the Credit Agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law or principles of equity); provided that (i) the term “Excluded Contract” shall not include any rights for any amounts due or to become due pursuant to any Excluded Contract and (ii) the Liens in favor of the Secured Parties shall attach immediately at such time as the condition causing such unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such contract or agreement in which the creation, incurrence or existence of the security interest granted hereunder, or the assignment thereof, as the case may be, is not so prohibited or restricted; provided , further , that such Grantor shall use commercially

reasonable efforts to obtain all consents or waivers necessary to permit the grant of Liens in favor of the Secured Parties in such Excluded Contract.

“ Excluded Property ” means (a) any asset, including, without limitation, Accounts and proceeds of Inventory, of any kind, to the extent that (i) such asset is sold pursuant to any Specified Vendor Receivables Financing and in accordance with the applicable Specified Vendor Receivables Financing Documents and (ii) such sale or intended sale is permitted by Section 6.05(c)(ii) of the Credit Agreement, (b) any asset acquired, constructed or improved pursuant to a capital lease or purchase money indebtedness permitted by Section 6.01(a)(viii) of the Credit Agreement, (c) Excluded Contracts, (d) any Trademark applications filed in the United States Patent and Trademark Office on the basis of such Grantor’s “intent-to-use” such trademark solely to the extent that, and solely during the period in which, granting a security interest in such Trademark application prior to such filing would adversely affect the enforceability or validity or result in the voiding thereof, unless and until acceptable evidence of use of the Trademark has been filed with and accepted by the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), whereupon such trademark application will, without any further action taken on the part of such Grantor or the Collateral Agent, be deemed to constitute Collateral, (e) any shares of Voting Stock of any Foreign Subsidiary or CFC in excess of 65% of the issued and outstanding shares of Voting Stock of such Foreign Subsidiary or CFC (other than any CFC or Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (f) any property or assets for which the creation or perfection of pledges of, or security interests in, pursuant to the Security Documents would result in material adverse tax consequences to the Loan Parties, as reasonably determined by the Borrower in consultation with the Collateral Agent, (g) assets in circumstances where the cost of obtaining a security interest in such assets, including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary) would be excessive in light of the practical benefit to the Secured Parties afforded thereby as reasonably determined by the Borrower and the Collateral Agent, (h) any asset subject to a purchase money security interest, capital lease obligations or similar arrangement, in each case, to the extent the grant of a security interest therein would violate or invalidate such purchase money or similar arrangement or create a right of termination in favor of any other party thereto after giving effect to the applicable anti-assignment provisions of the New York UCC or other applicable law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the New York UCC or other applicable law notwithstanding such prohibition, (i) any property of a person existing at the time such person is acquired or merged with or into or consolidated with any Loan Party that is subject to a Lien permitted by Section 6.02(e) of the Credit Agreement to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of any other Lien on such property, (j) any Excluded Trust Accounts and (k) Equity Interests in any non-wholly owned Subsidiaries, but only to the extent that (x) the organizational documents or other agreements with equity holders of such non-wholly owned Subsidiaries do not permit or restrict the pledge of such Equity Interests, or (y) the pledge of such Equity Interests (including any exercise of remedies) would result in a change of control, repurchase obligation or other adverse consequence to any of the Loan Parties or such Subsidiary.

“ Excluded Trust Accounts ” means Deposit Accounts or Securities Accounts used exclusively (a) for payroll, taxes or employee benefits, (b) to receive proceeds of Accounts sold to third parties pursuant to Specified Vendor Receivables Financings permitted under the Loan Documents, (c) to hold cash and/or cash equivalents pledged to secure other obligations of the Borrower or any Subsidiary thereof pursuant to Liens permitted under the Loan Documents, (d) as escrow accounts, (e) as fiduciary or trust accounts, and accounts otherwise held exclusively for

the benefit of third parties, other than a Grantor and (f) that contain solely deposits permitted by clauses (c) and (d) of the definition of “Permitted Encumbrances” in the Credit Agreement, including in connection with any letters of credit issued pursuant to such clauses, if the documents governing such deposits prohibit the granting of a Lien on such deposits.

“ Exhibit ” refers to a specific exhibit to this Agreement, unless another document is specifically referenced.

“ Guarantor Obligations ” means with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including, without limitation, Article II), whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Collateral Agent or to the Secured Parties that are required to be paid by such Guarantor pursuant to the terms of this Agreement).

“ Guarantors ” means the Grantors; provided that each Grantor shall be considered a Guarantor only with respect to the Primary Obligations of any other Loan Party.

“ Intellectual Property ” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement, misappropriation or violation thereof, including the right to receive all proceeds and damages therefrom.

“ Licenses ” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“ Obligations ” means, with respect to any Grantor, the collective reference to its Primary Obligations and its Guarantor Obligations.

“ Patents ” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisionals, continuations, renewals, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Pledged Chattel Paper ” means all Chattel Paper, but only to the extent not constituting Excluded Property.

“ Pledged Collateral ” means all Instruments, Securities and other Investment Property of the Grantors (other than Excluded Property), whether or not physically delivered to the Collateral Agent pursuant to this Agreement.

“ Pledged Securities ” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

“ Primary Obligations ” means, with respect to any Loan Party, the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of such Loan Party to the Administrative Agent, the Collateral Agent or any other Secured Party, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, any other Loan Documents (other than this Agreement) or any other document made, delivered or given in connection herewith or therewith (other than this Agreement), whether on account of principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent, the Collateral Agent or to any other Secured Party that are required to be paid by such Loan Party pursuant to the terms of any of the foregoing agreements) or otherwise.

“ Proceeds ” means all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC and, in any event, shall include, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

“ Receivables ” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

“ Section ” means a numbered section of this Agreement, unless another document is specifically referenced.

“ Secured Parties ” means the collective reference to the Administrative Agent, the Collateral Agent and the Lenders.

“ Specified Permitted Liens ” means the Liens permitted under Sections 6.02(a) and 6.02(r) of the Credit Agreement, provided that such Liens on the Collateral securing the obligations of the Loan Parties under the ABL Loan Documents remain subject to the ABL/Term Loan Intercreditor Agreement.

“ Stock Rights ” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interests constituting Collateral, any right to receive Equity Interests and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interests.

“ Trademarks ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto,

including, without limitation, damages, claims, and payments for past and future infringements thereof; (d) all rights to sue for past, present, and future infringements of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ UCC ” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Collateral Agent’s or any Lender’s Lien on any Collateral.

“ Voting Stock ” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even where the right so to vote has been suspended by the happening of such a contingency.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE III

GUARANTEE

3.1.     Guarantee . (a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Loan Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Primary Obligations of the Loan Parties.

(b)    Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to fraudulent conveyances or transfers or the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

(c)    Each Guarantor agrees that the Primary Obligations of the Loan Parties may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Article II or affecting the rights and remedies of the Administrative Agent or any Lender hereunder.

(d)    The guarantee contained in this Article II shall remain in full force and effect until all the Primary Obligations of the Loan Parties (other than contingent obligations, indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) and the obligations of each Guarantor under the guarantee contained in this Article II shall have been satisfied by payment in full and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement the Loan Parties may be free from any Primary Obligations.

(e)    No payment made by the Borrower, any other Loan Party, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent, the Collateral Agent or any Lender from the Borrower, any other Loan Party, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any

set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Primary Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Primary Obligations of the Loan Parties or any payment received or collected from such Guarantor in respect of the Primary Obligations of the Loan Parties), remain liable for the Primary Obligations of the Loan Parties up to the maximum liability of such Guarantor hereunder until the Primary Obligations of the Loan Parties (other than contingent obligations, indemnification, expense reimbursement, tax gross-up or yield protection in each case as to which no claim has been made) are paid in full and the Commitments are terminated.

3.2.     Right of Contribution . Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Secured Parties, and each Guarantor shall remain liable to the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

3.3.     No Subrogation . Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Collateral Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Collateral Agent or any other Secured Party against the Borrower, any other Loan Party or any other Guarantor or any collateral security or guarantee or right of offset held by the Collateral Agent or any other Secured Party for the payment of the Primary Obligations of the Loan Parties, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower, any other Loan Party or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Collateral Agent and the other Secured Parties by the Loan Parties on account of the Primary Obligations (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) are paid in full and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Primary Obligations of the Loan Parties (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Collateral Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if required), to be applied against the Primary Obligations of the Loan Parties, whether matured or unmatured, in such order as the Collateral Agent may determine.

3.4.     Amendments, etc. with respect to the Primary Obligations . Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Primary Obligations of the Loan Parties made by the Collateral Agent or any other Secured Party may be rescinded by the Collateral Agent or such other Secured Party and any of the Primary Obligations of the Loan Parties continued, and the Primary Obligations of the Loan Parties, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or

in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent or any other Secured Party, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Collateral Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Collateral Agent or any other Secured Party for the payment of the Primary Obligations of the Loan Parties may be sold, exchanged, waived, surrendered or released. Neither the Collateral Agent nor any other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Primary Obligations of the Loan Parties or for the guarantee contained in this Article II or any property subject thereto.

3.5.     Guarantee Absolute and Unconditional . Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Primary Obligations of the Loan Parties and notice of or proof of reliance by the Collateral Agent or any other Secured Party upon the guarantee contained in this Article II or acceptance of the guarantee contained in this Article II; the Primary Obligations of the Loan Parties, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Article; and all dealings between the Loan Parties, on the one hand, and the Collateral Agent and the other Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Article II. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower, any other Loan Party or any of the Guarantors with respect to the Primary Obligations of the Loan Parties. Each Guarantor understands and agrees that the guarantee contained in this Article II shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Primary Obligations of the Loan Parties or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Collateral Agent or any other Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Collateral Agent or any other Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower, any other Loan Party or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Loan Parties for the Primary Obligations, or of such Guarantor under the guarantee contained in this Article II, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Collateral Agent or any other Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Loan Party, any other Guarantor or any other Person or against any collateral security or guarantee for the Primary Obligations of the Loan Parties or any right of offset with respect thereto, and any failure by the Collateral Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Loan Party, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Loan Party with Primary Obligations, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Collateral Agent or any other Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

3.6.     Reinstatement . The guarantee contained in this Article II shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Primary Obligations of the Loan Parties is rescinded or must otherwise be restored or returned by the Collateral Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower, any other Loan Party or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower, any other Loan Party or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

3.7.     Payments . Each Guarantor hereby guarantees that payments hereunder will be paid to the Collateral Agent without set-off or counterclaim in Dollars at its office designated by the Collateral Agent in writing to the Borrower from time to time.

ARTICLE IV

GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, assigns and grants to the Collateral Agent, on behalf of and for the benefit of the Secured Parties, to secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of such Grantor’s Obligations, a security interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “ Collateral ”), including:

(a)    all Accounts;

(b)    all Chattel Paper;

(c)    all Deposit Accounts;

(d)    all Documents (other than title documents with respect to Vehicles);

(e)    all Equipment;

(f)    all Fixtures;

(g)    all General Intangibles;

(h)    all Goods;

(i)    all Instruments;

(j)    all Intellectual Property;

(k)    all Inventory;

(l)    all Investment Property;

(m)    all cash or cash equivalents;

(n)    all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(o)    all Commercial Tort Claims;

(p)    all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing;

(q)    all other property not otherwise described above (except for any property specifically excluded from any clause in this section above, and any property specifically excluded from any defined term used in any clause of this section above);

(r)    all books and records pertaining to the Collateral; and

(s)    to the extent not otherwise included in the foregoing, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

provided , however , that notwithstanding any of the other provisions set forth in this Agreement or the other Loan Documents, no Excluded Property shall constitute Collateral under this Agreement. In addition, in no event shall perfection by control or similar arrangements be required with respect to any Deposit Account (other than the Term Collateral Proceeds Account) or Securities Account; provided that, to the extent any Deposit Accounts and Securities Accounts are under the control of the ABL Collateral Agent at any time pursuant to the terms of the ABL/Term Loan Intercreditor Agreement, the ABL Collateral Agent shall act as agent and gratuitous bailee for the Collateral Agent for the purpose of perfecting the Collateral Agent’s Liens in such Deposit Account and Securities Account.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

To induce the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby represents and warrants to the Collateral Agent and each Lender that:

5.1.     Title, Perfection and Priority . Such Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a security interest hereunder and has full power and authority to grant to the Collateral Agent the security interest in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained. When financing statements naming such Grantor as debtor and the Collateral Agent as secured party and providing a description of the Collateral with respect to which such Grantor has purported to grant a security interest hereunder have been filed in the appropriate offices against such Grantor in the locations listed on Schedule 1.04 to the Perfection Certificate delivered on the Closing Date (or specified by notice from the Borrower to

the Collateral Agent after the Closing Date in the case of filings, recordings or registrations required by Section 5.12 or 5.13 of the Credit Agreement), the Collateral Agent will have a fully perfected first priority security interest, subject only to Liens permitted under Section 5.1(e), in that Collateral of the Grantor in which a security interest may be perfected by filing of an initial financing statement in the appropriate office against such Grantor; provided that the filing of this Agreement (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent) with the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof is necessary to perfect the security interest of the Collateral Agent in respect of any United States issued and applied for Patents, United States federally registered and applied for Trademarks and United States registered and applied for Copyrights acquired by such Grantor after the date hereof. When the Collateral Agent takes possession or Control of all Collateral with respect to which a security interest may only be perfected by possession or Control, the Collateral Agent will have a fully perfected first priority (or such other priority required by any of the Intercreditor Agreements) security interest, subject only to Liens permitted under Section 5.1(e), in such Collateral.

Such Grantor represents and warrants that fully executed security agreements in the form hereof (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent) and containing a description of all Collateral consisting of Intellectual Property with respect to United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights have been delivered to the Collateral Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights in which a security interest may be perfected by filing or recording in the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof. When such security agreements or short-form agreements have been filed in the United States Patent and Trademark Office and the United States Copyright Office against such Grantor, the Collateral Agent will have a fully perfected first priority security interest, subject only to Liens permitted under Section 5.1(e), in respect of all Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights in which a security interest may be perfected by filing or recording in such offices, and no further or subsequent filing or recording will be necessary (other than the financing statements referred to in the paragraph above and such actions as are necessary to perfect the security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) with respect to any Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights acquired by such Grantor after the date hereof). Within the time period set forth in Schedule 5.13 of the Credit Agreement (or such later date as the Collateral Agent may agree in its sole discretion), each Grantor party to this Agreement as of the Closing Date shall provide a perfected security interest over substantially all material intellectual property owned by such Grantor but registered or licensed in a foreign country other than the U.S. where such a perfected security interest can readily be provided, omitting only that material intellectual property the pledge and/or perfection of which would, in such Grantor’s good faith

reasonable judgement, impose upon the Grantor or applicable Subsidiary material costs or material operational issues, or which the cost of doing so would, as reasonably agreed between such Grantor and the Administrative Agent, exceed the benefit thereof.

5.2.     Jurisdiction of Organization . The state of organization of such Grantor as of the Closing Date is set forth on Exhibit A.

5.3.     Principal Location . The address of such Grantor’s chief executive office as of the Closing Date and each other location where such Grantor maintains its books and records relating to any material portion of the Collateral, including accounts receivable and General Intangibles, are disclosed in Exhibit B.

5.4.     Absence of Other Liens . The Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such Grantor has not filed or consented to the filing of (a) any financing statement or analogous document under the Uniform Commercial Code or any other applicable laws covering any Collateral, (b) any assignment in which such Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (c) any assignment in which such Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such Grantor does not hold any commercial tort claim with a value in excess of $500,000 as of the Closing Date except as indicated on the Perfection Certificate.

5.5.     Deposit Accounts . All of such Grantor’s Deposit Accounts and Securities Accounts in existence on the Closing Date are listed on Exhibit E.

5.6.     [Reserved] .

5.7.     Chattel Paper . Such Grantor’s Pledged Chattel Paper is maintained at its chief executive office set forth in Exhibit B. None of the Pledged Chattel Paper has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person, other than those that have been terminated. The names of the obligors, amounts owing, due dates and other information with respect to its Pledged Chattel Paper are and will be correctly stated in all material respects in all records of such Grantor relating thereto.

5.8.     [Reserved] .

5.9.     Intellectual Property . Exhibit C sets forth a true and complete list of (i) each registered or applied for United States Patent, Trademark or Copyright owned by each Grantor as of the Closing Date (other than expired, abandoned or lapsed properties) and (ii) all Licenses under which a Grantor is an exclusive licensee of a registered or applied for Patent, Trademark or Copyright as of the Closing Date. All Intellectual Property listed on Exhibit C is subsisting and unexpired, and to the knowledge of such Grantor, valid and enforceable.

5.10.     [Reserved] .

5.11.     Pledged Collateral . (a) Exhibit D sets forth a complete and accurate list of all Pledged Securities (provided that, with respect to Pledged Securities constituting promissory

notes and debt securities, Exhibit D only sets forth such Pledged Securities evidencing Indebtedness having an aggregate principal amount in excess of $500,000, payable or due to such Grantor by or from any other Person (including any other Grantor)) owned by such Grantor as of the Closing Date. As of the Closing Date, such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Securities listed on Exhibit D as being owned by it, free and clear of any Liens, except for the security interest granted to the Collateral Agent for the benefit of the Lenders hereunder, Permitted Encumbrances and Specified Permitted Liens. Such Grantor further represents and warrants that (i) all Pledged Collateral (solely with respect to Pledged Collateral issued by a Person other than a wholly owned Subsidiary of a Grantor, to the best of the Grantors’ knowledge) owned by it constituting Equity Interests has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized and validly issued and are fully paid and non-assessable; (ii) with respect to any certificates delivered to the Collateral Agent representing Equity Interests, either such certificates are Securities as defined in Article 8 of the UCC as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Collateral Agent so that the Collateral Agent may take steps to perfect its security interest therein as a General Intangible; (iii) all such Pledged Collateral held by a securities intermediary (other than in an Excluded Account) is covered by a control agreement among such Grantor, the securities intermediary and the ABL Collateral Agent pursuant to which the ABL Collateral Agent has Control; provided that no such control agreements shall be required prior to the date that is 60 days after the Closing Date (or such later date as may be agreed by the ABL Collateral Agent in its reasonable discretion) and (iv) all Pledged Collateral which represents Indebtedness owed to such Grantor (solely with respect to Pledged Collateral issued by a Person other than a wholly owned Subsidiary of a Grantor, to the best of the Grantors’ knowledge) has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

(b)     In addition, (i) the pledge of the Pledged Collateral pursuant to this Agreement does not violate Regulation T, U or X of the Federal Reserve Board or any successor thereto, (ii) to the best of Grantor’s knowledge, none of the Pledged Collateral owned by it has been issued or transferred in material violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (iii) as of the Closing Date there are existing no options, warrants, calls or commitments of any character whatsoever (A) relating to such Pledged Collateral or (B) which obligate the issuer of any Equity Interests included in the Pledged Collateral that is a direct or indirect subsidiary of any Borrower to issue additional Equity Interests, and (iv) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Agreement or for the execution, delivery and performance of this Agreement by such Grantor, or for the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement in accordance with the Intercreditor Agreements or for the remedies in respect of the Pledged Collateral pursuant to this Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally or where the absence of which could not reasonably be expected to have a Material Adverse Effect.

ARTICLE VI

COVENANTS

From the date of this Agreement, and thereafter until this Agreement is terminated, each Grantor agrees that:

6.1.      General .

(a)     Collateral Records . Such Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the Collateral Agent a duly certified schedule or schedules in form and detail satisfactory to the Collateral Agent showing the identity, amount and location of any and all Collateral.

(b)     Authorization to File Financing Statements; Ratification . Such Grantor hereby authorizes the Collateral Agent to file, and if requested will deliver to the Collateral Agent, all financing statements and other documents and take such other actions as may from time to time be reasonably requested by the Collateral Agent in order to maintain a first priority perfected security interest (subject to the Intercreditor Agreements) in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Collateral Agent may be filed in any filing office in any applicable UCC jurisdiction and may (i) indicate such Grantor’s Collateral (1) as “all assets of the Grantor” or words of similar effect, regardless of whether any particular asset included in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC for the sufficiency or filing office acceptance of any financing statement or amendment, including whether such Grantor is an organization, the type of organization and any organization identification number issued to such Grantor. Such Grantor also agrees to furnish any such information described in the foregoing sentence to the Collateral Agent promptly upon request.

(c)     Further Assurances . Such Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the security interest of the Secured Parties in the Collateral and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Liens hereunder and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount in excess of $500,000 payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument, such note or instrument shall be immediately pledged and promptly delivered to the Collateral Agent, duly endorsed in a manner satisfactory to the Collateral Agent.

(d)     Disposition of Collateral . Such Grantor shall not make or permit to be made an assignment for security, pledge or hypothecation of the Collateral or grant any other Lien in respect of the Collateral, except as expressly permitted by the Credit Agreement. Such Grantor shall not make or permit to be made any transfer of the Collateral and such Grantor shall remain at all times in possession of the Collateral owned by it, except that (a) Inventory may be sold in the ordinary course of business and (b) unless and until the Collateral Agent shall notify the Borrower that an Event of Default shall have occurred and be continuing and that during the continuance thereof the Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of any Collateral (which notice may be given by telephone if promptly confirmed in writing), such Grantor may use and dispose of the Collateral in any lawful manner not prohibited by this Agreement, the Credit Agreement or any other Loan Document.

(e)     Liens . Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except for the Specified Permitted Liens and Liens otherwise permitted by the Credit Agreement.

(f)     Other Financing Statements . Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement naming the Collateral Agent as secured party without the prior written consent of the Collateral Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC.

(g)     Protection of Security . Such Grantor shall, at its own cost and expense and at the request of the Collateral Agent, take any and all commercially reasonable actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Collateral Agent in the Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the Credit Agreement.

(h)     Compliance with Terms . Such Grantor shall remain liable, as between itself and any relevant counterparty, to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Collateral, all in accordance with the terms and conditions thereof, and such Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.

6.2.      Receivables .

(a)     Certain Agreements on Receivables . Except with respect to Excluded Property, during the continuance of an Event of Default, such Grantor will not, without the Collateral Agent’s prior written consent, grant any extension of the time of payment of any of the Accounts, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts, compromises or settlements granted or made in the ordinary course of business and consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged.

(b)    [Reserved].

(c)    [Reserved].

(d)     Assignment of Security Interest . If at any time such Grantor shall take a security interest in any property of an Account Debtor or any other person to secure payment and performance of an Account (except with respect to Excluded Property), such Grantor shall promptly assign such security interest to the Collateral Agent. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other person granting the security interest.

(e)     Electronic Chattel Paper and Transferable Records . If such Grantor at any time holds or acquires an interest with a value in excess of $500,000 in any Electronic Chattel Paper or any “transferable record,” as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in §16 of the Uniform Electronic Transactions Act

as in effect in any relevant jurisdiction, such Grantor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, shall take such action as the Collateral Agent may reasonably request to vest in the Collateral Agent control under UCC §9-105 of such Electronic Chattel Paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Collateral Agent agrees with such Grantor that the Collateral Agent will arrange, pursuant to procedures satisfactory to the Collateral Agent and so long as such procedures will not result in the Collateral Agent’s loss of control, for the Grantor to make alterations to the Electronic Chattel Paper or transferable record permitted under UCC §9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or §16 of the Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by such Grantor with respect to such Electronic Chattel Paper or transferable record.

6.3.     [Reserved] .

6.4.     Delivery of Tangible Chattel Paper . If such Grantor shall at any time hold or acquire any Tangible Chattel Paper with a value in excess of $500,000, such Grantor shall promptly endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request (which may take the form of Exhibit F hereto).

6.5.     Uncertificated Securities . If any securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall promptly notify the Collateral Agent thereof and, at the Collateral Agent’s reasonable request and option, pursuant to an agreement in form and substance satisfactory to the Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities, without further consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the registered owner of the securities.

6.6.     Pledged Collateral .

(a)     Registration of Pledged Collateral . Such Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name of the Collateral Agent or its nominee at any time at the request of the Collateral Agent during the continuance of an Event of Default. Such Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Collateral registered in the name of such Grantor during the continuance of an Event of Default. The Collateral Agent shall at all times during the continuance of an Event of Default have the right to exchange the certificates representing Pledged Collateral for certificates of smaller or larger denominations for any purpose consistent with this Agreement.

(b)     Exercise of Rights in Pledged Collateral .

(i)    Without in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Agreement, the Credit Agreement or any other Loan Document; provided , however , that each Grantor agrees that it shall not exercise any such right for any purpose prohibited by the terms of, or if the result thereof could materially and adversely affect the rights inuring

to a holder of the Pledged Collateral or the rights and remedies of any of the Secured Parties under, this Agreement or the Credit Agreement or any other Loan Document or the ability of the Secured Parties to exercise the same.

(ii)    Such Grantor will permit the Collateral Agent or its nominee at any time after the occurrence and during the continuation of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interests or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof.

(iii)    Unless an Event of Default shall have occurred and be continuing, such Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement. If an Event of Default shall occur and be continuing and the Collateral Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, the Collateral Agent shall have the right to receive all such cash dividends, interest, payments and other Proceeds paid in respect of the Pledged Collateral.

6.7.     Intellectual Property .

(a)    Such Grantor shall notify the Collateral Agent immediately if it knows or has reason to know that any application or registration relating to any material Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, the United States Copyright Office or any court, but excluding routine matters during the course of any prosecution of applications before the United States Patent and Trademark Office, the United States Copyright Office or any similar authority or successor office thereof) regarding such Grantor’s ownership of any material Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.

(b)    Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall (i) file an application for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office or the United States Copyright Office or any successor office thereof or (ii) acquire any United States issued Patents or Patent applications, United States federally registered Trademarks (or Trademarks for which United States registration applications are pending) or United States registered (or applied for) Copyrights, such Grantor shall report such filing or acquisition to the Collateral Agent within 45 days after the end of each of the first three fiscal quarters of each fiscal year of such Grantor and within 90 days after the end of each fiscal year of such Grantor. Promptly after the provision of such reports, such Grantor shall execute and deliver to the Collateral Agent, and have recorded with the United States Patent and Trademark Office or the United States Copyright Office or any successor office thereof, one or more security agreements or short-form agreements, as applicable, as described in Section 4.1 of this Agreement and any and all other agreements, instruments, documents, and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s and the Secured Parties’ first priority security interest in any Copyright, Patent or Trademark and the goodwill of such Grantor relating thereto or represented thereby.

(c)    Such Grantor shall take all actions necessary to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents,

Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, unless such Grantor (in its reasonable business judgment) or the Collateral Agent shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of such Grantor’s business.

(d)    Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Collateral Agent shall reasonably deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 5.8.

(e)    Notwithstanding the foregoing provisions of this Section 5.7 or elsewhere in this Agreement, nothing in this Agreement shall prevent any Grantor from abandoning or discontinuing the use or maintenance of any Intellectual Property that is immaterial to the conduct of its business, or from failing to take action to enforce license agreements or pursue actions against infringers or take any other actions with respect to such Intellectual Property, if such Grantor determines in its reasonable business judgment that such abandonment, discontinuance, or failure to take action is desirable in the conduct of its business.

6.8.     Commercial Tort Claims . If such Grantor shall at any time hold or acquire a Commercial Tort Claim having a value in excess of $500,000, the Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor, including a summary description of such claim, and enter into an amendment to this Agreement, in the form of Exhibit F hereto, granting to the Collateral Agent a first priority (or such other priority required by any of the Intercreditor Agreements) security interest therein and in the proceeds thereof.

6.9.     Letter-of-Credit Rights . If such Grantor is at any time a beneficiary under a letter of credit now or hereafter issued in favor of such Grantor with a value in excess of $500,000, such Grantor shall promptly notify the Collateral Agent thereof and, at the request and option of the Collateral Agent, such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under the letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of the letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred or is continuing.

6.10.     [Reserved]

6.11.     [Reserved]

6.12.     No Interference . Such Grantor agrees that it will not interfere with any right, power and remedy of the Collateral Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Collateral Agent of any one or more of such rights, powers or remedies.

6.13.     Insurance . Such Grantor, at its own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto, in each case, upon prior notice from the Collateral Agent to the Grantors of its intention to exercise such rights. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 5.13, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby.

6.14.     Change of Name; Location of Collateral; Place of Business . Such Grantor agrees promptly to notify the Collateral Agent in writing of any change (i) in its corporate name, (ii) in the location of its chief executive office, or (iii) in its jurisdiction of organization. Such Grantor agrees not to effect or permit any change referred to in the preceding sentence unless written notice has been delivered to the Collateral Agent and all filings have been made under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority (or such other priority required by any of the Intercreditor Agreements) Lien upon all the Collateral. Such Grantor agrees promptly to notify the Collateral Agent if any material portion of the Collateral owned or held by such Grantor is damaged or destroyed.

6.15.     Credit Agreement Covenants . Such Grantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Grantor or any of its Subsidiaries.

6.16.     Delivery of the Pledged Equity .

(a)    Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent, for the benefit of the Secured Parties, any and all Pledged Securities; provided that the Grantors shall only be required to deliver Pledged Securities evidencing Indebtedness to the extent the principal amount thereof exceeds $500,000.

(b)    Each Grantor will cause any Indebtedness for borrowed money having an aggregate principal amount in excess of $500,000 owed to such Grantor by any Person to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent, for the benefit of the Secured Parties, pursuant to the terms hereof.

(c)    Upon delivery to the Collateral Agent, any Pledged Securities shall be accompanied by stock or security powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request (subject to the Collateral and Guarantee Requirement).

Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be deemed to supplement Exhibit D and made a part thereof; provided that failure to supplement Exhibit D shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

(d)    Notwithstanding anything to the contrary in this Section 5.16, if the actions described in this Section 5.16 have been taken in favor of the Term Loan Agent or the ABL Agent and, pursuant to the Term Intercreditor Agreement or the ABL/Term Intercreditor Agreement, as applicable, the Term Loan Agent or the ABL Agent, as applicable, acts as agent and gratuitous bailee for the Collateral Agent for the purpose of perfecting the Collateral Agent’s Liens hereunder, such action shall only be required to be taken at the request of the Required Lenders.

ARTICLE VII

EVENTS OF DEFAULT AND REMEDIES

7.1.     Remedies . (a) Upon the occurrence and during the occurrence and continuance of an Event of Default, the Collateral Agent may exercise any or all of the following rights and remedies:

(i)    those rights and remedies provided in this Agreement, the Credit Agreement, or any other Loan Document; provided that this Section 6.1(a) shall not be understood to limit any rights or remedies available to the Collateral Agent and the Secured Parties prior to an Event of Default;

(ii)    those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral) or under any other applicable law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

(iii)    without notice (except as specifically provided in Section 9.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Collateral Agent may deem commercially reasonable; and

(iv)    concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, exercise the voting and all other rights as a holder with respect thereto, collect and receive all cash dividends, interest, principal and other distributions made thereon and otherwise act with respect to the Pledged Collateral as though the Collateral Agent was the outright owner thereof.

(b)    The Collateral Agent, on behalf of the Secured Parties, may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral

and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

(c)    The Collateral Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase (including by credit bidding) for the benefit of the Collateral Agent and the Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption the Grantor hereby expressly releases.

(d)    Until the Collateral Agent is able to effect a sale, lease, or other disposition of Collateral, the Collateral Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent. The Collateral Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of the Collateral Agent’s remedies (for the benefit of the Collateral Agent and Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.

(e)    [Reserved].

(f)    Notwithstanding the foregoing, neither the Collateral Agent nor any other Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of its rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Obligations or to pursue or exhaust any of its rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

(g)    Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state securities laws, even if the applicable Grantor and the issuer would agree to do so.

7.2.     Grantor’s Obligations Upon Default . Upon the request of the Collateral Agent after the occurrence and during the occurrence and continuance of an Event of Default, each Grantor will:

(a)    assemble and make available to the Collateral Agent the Collateral and all books and records relating thereto at any place or places reasonably specified by the Collateral Agent, whether at a Grantor’s premises or elsewhere;

(b)    permit the Collateral Agent, by the Collateral Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or

the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy;

(c)    prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the Securities and Exchange Commission or any other applicable government agency, registration statements, a prospectus and such other documentation in connection with the Pledged Collateral as the Collateral Agent may request, all in form and substance satisfactory to the Collateral Agent, and furnish to the Collateral Agent, or cause an issuer of Pledged Collateral to furnish to the Collateral Agent, any information regarding the Pledged Collateral in such detail as the Collateral Agent may specify;

(d)    take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the Pledged Collateral to enable the Collateral Agent to consummate a public sale or other disposition of the Pledged Collateral; and

(e)    at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Collateral Agent, at any time, and from time to

(f)    time, promptly upon the Collateral Agent’s request, the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

7.3.     Grant of Intellectual Property License . For the exclusive purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies at any time upon the occurrence and during the continuance of an Event of Default, each Grantor hereby (a) grants to the Collateral Agent a non-exclusive, irrevocable (until the termination of this Agreement) license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any rights in, to or under any or all Intellectual Property now owned or hereafter acquired by such Grantor, wherever such Intellectual Property may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Collateral Agent may, upon the occurrence and during the continuation of an Event of Default, sell any of such Grantor’s Inventory directly to any Person, including, without limitation, Persons who have previously purchased such Grantor’s Inventory from any Grantor and in connection with any such sale or other enforcement of the Collateral Agent’s rights under this Agreement, may sell Inventory which bears any Trademark owned by or licensed to any Grantor and any Inventory that is covered by any Copyright owned by or licensed to any Grantor and the Collateral Agent may finish any work in process and affix any Trademark owned by or licensed to any Grantor and sell such Inventory as provided herein (it being understood that the Trademarks and Copyrights licensed to any such Grantor shall be subject to, and as permitted by, the terms of licenses governing such licensed Trademarks and Copyrights); provided, however, that nothing in this Section 6.3 shall require any Grantor to grant any license that is prohibited by any rule of law, statute or regulation, or is prohibited by, or constitutes a breach or default under or results in the termination of any contract, license, agreement, instrument or other document. With respect to Trademarks included in the foregoing license, such license shall be subject to the requirement that the quality of goods and services offered under the Trademarks by the Collateral Agent be substantially consistent with the quality of the goods and services offered thereunder by such Grantor prior to the Collateral Agent’s exercise of such license. Any license, sublicense or other transaction entered into by the

Collateral Agent in accordance herewith shall be binding upon the applicable Grantor notwithstanding any subsequent cure of an Event of Default. Upon the occurrence and during the continuance of an Event of Default, upon the Collateral Agent’s request, such Grantor will use its commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to the Collateral Agent of any material License held by such Grantor and to enforce the security interests granted hereunder.

7.4.      Application of Proceeds. The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows:

FIRST, to the payment of all reasonable costs and expenses incurred by the Collateral Agent (in its capacity as the Collateral Agent or Administrative Agent hereunder or under any other Loan Document) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent (or the Administrative Agent) hereunder or under any other Loan Document on behalf of any Grantor and any other reasonable costs or expenses incurred by the Collateral Agent (or the Administrative Agent) in connection with the exercise of any right or remedy hereunder or under any other Loan Document;

SECOND, to the payment in full of the Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Obligations owed to them on the date of any such distribution); and

THIRD, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.

7.5.     Proceeds to be Turned Over or Received by the Collateral Agent . In addition to the rights of the Collateral Agent and the Secured Parties specified in Section 7.2 with respect to payments of Accounts, if an Event of Default shall occur and be continuing, upon the request of the Collateral Agent, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, if required). All Proceeds received by the Collateral Agent hereunder shall be held by the Collateral Agent in a collateral account established by the Collateral Agent maintained under its sole dominion and control. All such Proceeds while held by the Collateral Agent in such a collateral account (or by such Grantor in trust for the Collateral Agent and the Secured Parties) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in the Intercreditor Agreements.

ARTICLE VIII

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

8.1.     Account Verification . The Collateral Agent may at any time after the occurrence and during the occurrence and continuance of an Event of Default, in the Collateral Agent’s own name, in the name of a nominee of the Collateral Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.

8.2.     Authorization for Collateral Agent to Take Certain Action . (a) Each Grantor irrevocably authorizes the Collateral Agent at any time and from time to time in the sole discretion of the Collateral Agent and appoints the Collateral Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Collateral Agent’s sole discretion to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement in such offices as the Collateral Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Collateral Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Collateral Agent to the Obligations as provided in the Credit Agreement, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are permitted by the Credit Agreement), (vii) to contact Account Debtors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Collateral Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Collateral, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Collateral Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Agreement; and such Grantor agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent in connection with any of the foregoing; provided that (a) this authorization shall not relieve such Grantor of any of its obligations under this Agreement or under the Credit Agreement and (b) the Collateral Agent shall exercise the foregoing rights in accordance with the Intercreditor Agreements, if effective and only after the occurrence and during the continuation of an Event of Default.

(b)    All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Collateral Agent, for the benefit of the Collateral Agent and Lenders, under this Section 7.2 are solely to protect the Collateral Agent’s interests in the Collateral and shall not be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

8.3.     Proxy . EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 7.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO AFTER THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT. IN ADDITION TO THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF ANY OF THE PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT.

8.4.     Nature of Appointment; Limitation of Duty . THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VII IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 9.23. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR ANY SECURED PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, NOR ANY OF THEIR OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE IX

[Reserved].

ARTICLE X

GENERAL PROVISIONS

10.1.     Waivers . Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article X, at least ten days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against the Collateral Agent or any Secured Party arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Collateral Agent or such Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Agreement or any Collateral.

10.2.     Limitation on Collateral Agent’s and Secured Parties’ Duty with Respect to the Collateral . The Collateral Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Collateral Agent and each Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Collateral Agent nor any Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Collateral Agent or such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose

of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 9.2 is to provide non-exhaustive indications of what actions or omissions by the Collateral Agent would be commercially reasonable in the Collateral Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 9.2. Without limitation upon the foregoing, nothing contained in this Section 9.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable law in the absence of this Section 9.2.

10.3.     Compromises and Collection of Collateral . The Grantors and the Collateral Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Collateral Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Collateral Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Collateral Agent shall be commercially reasonable so long as the Collateral Agent acts in good faith based on information known to it at the time it takes any such action.

10.4.     Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Collateral Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Agreement and the Grantors shall reimburse the Collateral Agent for any amounts paid by the Collateral Agent pursuant to this Section 9.4. The Grantors’ obligation to reimburse the Collateral Agent pursuant to the preceding sentence shall be an Obligation payable on demand.

10.5.     Specific Performance of Certain Covenants . Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 5.1(d), 5.1(e), 5.4, 5.5, 5.6, 5.7, 5.8, 5.10, 5.11, 5.13, 5.14, 5.16, 6.2, or 9.7 or in Article VIII will cause irreparable injury to the Collateral Agent and the Secured Parties, that the Collateral Agent and the Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Collateral Agent or the Secured Parties to seek and obtain specific performance of other obligations of the Grantors contained in this Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 9.5 shall be specifically enforceable against the Grantors.

10.6.     Dispositions Not Authorized . No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 5.1(d) and notwithstanding any course of dealing between any Grantor and the Collateral Agent or other conduct of the Collateral Agent, no authorization to sell, transfer or otherwise dispose of the Collateral (except as set forth in Section 5.1(d)) shall be binding upon the Collateral Agent or the Secured Parties unless such authorization is in writing signed by the Collateral Agent with the consent or at the direction of the Required Lenders.

10.7.     No Waiver; Amendments; Cumulative Remedies . No delay or omission of the Collateral Agent or any Secured Party to exercise any right or remedy granted under this Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Agreement whatsoever shall be valid unless in writing signed by the Collateral Agent with the concurrence or at the direction of the Lenders required under Section 10.02 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Agreement or by law afforded shall be cumulative and all shall be available to the Collateral Agent and the Secured Parties until the Obligations have been paid in full.

10.8.     Limitation by Law; Severability of Provisions . All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law or the Intercreditor Agreements (if effective), and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law and the Intercreditor Agreements (if effective) that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in any this Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable.

10.9.     Reinstatement . This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

10.10.     Benefit of Agreement . The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the Grantors, the Collateral Agent and the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Agreement or any interest herein, without the prior written consent of the Collateral Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Collateral Agent, for the benefit of the Collateral Agent and the Secured Parties, hereunder or under any of the other Security Documents.

10.11.     Survival of Representations . All representations and warranties of the Grantors contained in this Agreement shall survive the execution and delivery of this Agreement.

10.12.     [Reserved] .

10.13.     Headings . All headings used herein are for the purpose of reference only, are not part of this Agreement and are not to affect the construction of, or be taken into consideration in interpreting, this Agreement.

10.14.     Security Interest Absolute . All rights of the Collateral Agent hereunder, the security interest granted hereunder and all obligations of the Grantors hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations or this Agreement.

10.15.     Entire Agreement . This Agreement and the other Security Documents embody the entire agreement and understanding between the Grantors and the Collateral Agent relating to the Collateral and supersede all prior agreements and understandings between the Grantors and the Collateral Agent relating to the Collateral.

10.16.     GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS .

(a)     THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Each of the Grantors hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of New York, the courts of the United States District Court of the Southern District of New York, and any appellate court from any thereof (and, to the extent necessary to enforce the Secured Parties’ rights under the Loan Documents, courts where Collateral may be located or deemed to be located and any appellate court thereof), in any legal action or proceeding arising out of or relating to any Loan Document, or for recognition and enforcement of any judgment in respect thereof, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court; provided, that nothing contained herein or in any other Loan Document will prevent any Lender, the Administrative Agent or the Collateral Agent from bringing any action to enforce any award or judgment or exercise any right under the Security Documents or against any Collateral or any other property of any Grantor in any other forum in which jurisdiction can be established. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Collateral Agent, the Administrative Agent or the Lenders may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Grantors or their respective properties in the courts of any jurisdiction.

(c)    Each Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties

hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)    Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.1. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

10.17.     WAIVER OF JURY TRIAL . EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

10.18.     Indemnity . Each Grantor jointly and severally agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Collateral Agent may incur in connection with (i) the administration of this Agreement (including the customary fees and charges of the Collateral Agent for any monitoring or audits conducted by it or on its behalf with respect to the Accounts or Inventory), (ii) the custody or preservation of, or the sale of, collection from or other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform or observe any of the provisions hereof.

Without limitation of its indemnification obligations under the other Loan Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related 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 Indemnitee or any of its Affiliates.

Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 9.18 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any Lender. All amounts due under this Section 9.18 shall be payable on written demand therefor.

10.19.     Counterparts . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

10.20.     Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

10.21.     Intercreditor Agreements .

(a)    The terms of this Agreement, any Lien granted to the Collateral Agent (for the benefit of the Secured Parties) pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreements (if effective). In the event of any inconsistency between the provisions of this Agreement and the Intercreditor Agreements (if effective), the provisions of the Intercreditor Agreements shall supersede the provisions of this Agreement.

(b)    Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, all rights and remedies of the Collateral Agent (and the Secured Parties) shall be subject to the terms of the ABL/Term Loan Intercreditor Agreement (if effective), and until the Discharge of ABL Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), (i) no Grantor shall be required hereunder or under any other Loan Document to take any action with respect to ABL Priority Collateral that is inconsistent with such Grantor’s obligations under the applicable ABL Loan Documents and (ii) any obligation of any Grantor hereunder or under any other Loan Document with respect to the delivery or control of any ABL Priority Collateral, bill of lading or other document, the giving of any notice to any bailee or other Person, the provision of voting rights or the obtaining of any consent of any Person shall be deemed to be satisfied if such Grantor complies with the requirements of the similar provision of the applicable ABL Loan Document. Until the Discharge of ABL Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), the Collateral Agent may not require any Grantor to take any action with respect to the creation, perfection or priority of its security interest in the ABL Priority Collateral, whether pursuant to the express terms hereof or of any other Loan Document or pursuant to the further assurances provisions hereof or any other Loan Document, unless the ABL Collateral Agent (as defined in the ABL/Term Loan Intercreditor Agreement) shall have required such Grantor to take similar action pursuant to the terms of the applicable Loan Documents, and delivery of any ABL Priority Collateral to the ABL Collateral Agent (as defined in the ABL/Term Loan Intercreditor Agreement) pursuant to the applicable ABL Loan Documents and the ABL/Term Loan Intercreditor Agreement shall satisfy any delivery requirement hereunder or under any other Loan Document.

10.22.     Additional Grantors . Each Subsidiary of a Borrower that is required to become a party to this Agreement pursuant to Section 5.12 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto. Each Grantor expressly agrees that its obligations arising hereunder shall not be discharged, diminished or otherwise affected (a) by the addition or release of any other Grantor hereunder, (b) by any failure by the Borrower or any Grantor to cause any Subsidiary of the Borrower to become a Grantor hereunder or (c) by reason of the Collateral Agent’s or any of the other Secured Party’s actions in effecting, or failure to effect, any such joinder, or in releasing any Grantor hereunder, in each case, whether or not notice is given or consent is obtained from any Grantor. This Agreement shall be fully effective as to any Grantor that is or

becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Grantor hereunder.

10.23.     Releases . (a) This Agreement and the security interest of the Secured Parties on the Collateral provided hereunder shall terminate when all the Obligations (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) have been paid in full and the Lenders have no further commitment to lend, at which time the Collateral Agent shall execute and deliver to the Grantors or the Grantors’ designee, at the Grantors’ expense, all Uniform Commercial Code termination statements and similar documents which the Grantors shall reasonably request from time to time to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section 9.23(a) shall be without recourse to or warranty by the Collateral Agent.

(b)    A Guarantor shall automatically be released from its obligations hereunder and the security interest of the Secured Parties in the Collateral of such Guarantor shall be automatically released in the event that all the Equity Interests of such Guarantor shall be sold, transferred or otherwise disposed of to a person that is not an Affiliate of the Borrower in accordance with the terms of the Credit Agreement; provided that the Required Lenders (or, if required by the terms of the Credit Agreement, such greater percentage of the Lenders specified in the Credit Agreement) shall have consented to such sale, transfer or other disposition (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise. The security interest of the Secured Parties in any Collateral that is sold, transferred or otherwise disposed of in accordance with this Agreement, the Credit Agreement and the other Loan Documents (including pursuant to a waiver or amendment of the terms thereof) shall automatically terminate and be released, and such Collateral shall be sold free and clear of the security interest created hereby. In connection with any of the foregoing, the Collateral Agent shall execute and deliver to the Grantors or the Grantors’ designee, at the Grantors’ expense, all Uniform Commercial Code termination statements and similar documents (including any such documents as may be reasonably necessary in connection with the entry into by any Grantor of a Specified Vendor Receivables Financing) that the Grantors shall reasonably request from time to time to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section 9.23(b) shall be without recourse to or warranty by the Collateral Agent.

10.24.     Right of Setoff . If an Event of Default shall have occurred and be continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Secured Party to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor now or hereafter existing under this Agreement and the other Loan Documents held by such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Secured Party under this Section 9.24 are in addition to other rights and remedies (including other rights of setoff) which such Secured Party may have.

ARTICLE XI

NOTICES

11.1.     Sending Notices . Any notice required or permitted to be given under this Agreement shall be sent in accordance with Section 10.01 of the Credit Agreement (with any notice to a Grantor (other than the Borrower) being sent care of the Borrower).

11.2.     Change in Address for Notices . Each of the Grantors, the Collateral Agent and the Lenders may change the address for service of notice upon it by a notice in writing to the other parties.

ARTICLE XII

THE COLLATERAL AGENT

Cortland Capital Market Services LLC has been appointed Collateral Agent for the Lenders hereunder pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed by the parties to this Agreement that any authority conferred upon the Collateral Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to the Collateral Agent pursuant to the Credit Agreement, and that the Collateral Agent has agreed to act (and any successor Collateral Agent shall act) as such hereunder only on the express conditions contained in such Section 1. Any successor Collateral Agent appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Collateral Agent hereunder.

[Signature Page Follows]

IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this Agreement as of the date first above written.

 

GRANTORS:

 

HORIZON GLOBAL CORPORATION, as the Borrower

By:
Name:
Title:
HORIZON GLOBAL AMERICAS, INC., as a Guarantor
By:
Name:
Title:
HORIZON INTERNATIONAL HOLDINGS LLC, as a Guarantor
By:
Name:
Title:
HORIZON GLOBAL COMPANY LLC, as a Guarantor
By:
Name:
Title:

[Signature Page to Guarantee and Collateral Agreement]

CORTLAND CAPITAL MARKET SERVICES LLC, as Collateral Agent
By:
Name:
Title:

 

 

 

 

[Signature Page to Guarantee and Collateral Agreement]

[EXHIBITS A-E TO BE PROVIDED BY BORROWER]

 

Exhibit E / Page 1

EXHIBIT F

AMENDMENT

This Amendment, dated              ,      is delivered pursuant to [Section 5.4] [Section 5.8] of the Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Agreement. The undersigned hereby certifies that the representations and warranties in Article IV of the Agreement are and continue to be true and correct. The undersigned further agrees that this Amendment may be attached to that certain Guarantee and Collateral Agreement, dated as of February 20, 2019, between the undersigned, as the Grantors, and Cortland Capital Market Services LLC, as the Collateral Agent (as amended, restated, amended and restatement, supplemented or otherwise modified from time to time prior to the date hereof, the “ Agreement ”) and that the Collateral listed on Schedule I to this Amendment shall be and become a part of the Collateral referred to in said Agreement and shall secure all Obligations referred to in the Agreement.

 

 

By:

 

Name:        

   

Title:    

   

SCHEDULE I TO AMENDMENT

STOCKS

 

Name of

Grantor

   Issuer   

Certificate

Number(s)

  

Number of

Shares

   Class of Stock   

Percentage of

Outstanding Shares

                          
                          
                          
                          

BONDS

 

Name of

Grantor

   Issuer    Number    Face Amount    Coupon Rate    Maturity
                          
                          
                          
                          

GOVERNMENT SECURITIES

 

Name of

Grantor

   Issuer    Number    Type    Face Amount    Coupon Rate    Maturity
                               
                               
                               
                               

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)

 

Name of Grantor    Issuer    Description of Collateral   

Percentage Ownership

Interest

                
                
                
                

[Add description of custody accounts or arrangements with securities intermediary, if applicable]

COMMERCIAL TORT CLAIMS

 

Name of Grantor    Description of Claim    Parties   

Case Number; Name of

Court where Case was
Filed

                
                

Annex 1 to

Guarantee and Collateral Agreement

 

 

ASSUMPTION AGREEMENT, dated as of                          , 20      , made by                                      (the “ Additional Grantor ”), in favor of CORTLAND CAPITAL MARKET SERVICES LLC, as Collateral Agent (in such capacity, the “ Collateral Agent ”) for the banks and other financial institutions or entities (the “ Lenders ”) parties to the Credit Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such Credit Agreement.

W I T N E S S E T H :

WHEREAS, HORIZON GLOBAL CORPORATION (the “ Borrower ”), the Lenders and the Collateral Agent have entered into a Credit Agreement, dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Affiliates (other than the Additional Grantor) have entered into the Guarantee and Collateral Agreement, dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Guarantee and Collateral Agreement ”) in favor of the Collateral Agent for itself and for the benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party to the Guarantee and Collateral Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement;

NOW, THEREFORE, IT IS AGREED:

1.         Guarantee and Collateral Agreement . By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 9.22 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Guarantor and Grantor thereunder with the same force and effect as if originally named therein as a Guarantor and Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor and Grantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Exhibits A through E to the Guarantee and Collateral Agreement and hereby grants to the Collateral Agent, for the benefit of the Secured Parties, as collateral security for the prompt and complete payment or performance when due of the Obligations, a security interest in all of the Collateral (it being understood that,

 

as provided in the Guarantee and Collateral Agreement, “Collateral” does not include any Excluded Property). The Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Article IV of the Guarantee and Collateral Agreement with respect to itself is true and correct in all material respects (other than in the case of representations qualified by materiality, in which case such representations shall be true and correct) on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 1

2.         Governing Law . THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

 

[ADDITIONAL GRANTOR]

By:

 

Name:

 

Title:

 

 

 

 

 

1 To the extent applicable, such Additional Grantor shall also provide an Amendment in the form of Exhibit F

 

Annex 1-A to

Assumption Agreement

 

Supplement to Exhibit A

Supplement to Exhibit B

Supplement to Exhibit C

Supplement to Exhibit D

Supplement to Exhibit E

 

 

1

Exhibit 10.4

Execution Copy

FIRST AMENDMENT TO CREDIT AGREEMENT

FIRST AMENDMENT (this “ Amendment ”), dated as of February 26, 2019, to the Credit Agreement dated as of February 20, 2019 (as amended, supplemented, amended and restated or otherwise modified from time to time, including by this Amendment, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time party thereto (the “ Lenders ”), and Cortland Capital Market Services LLC, as Administrative Agent (in such capacity, the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, the parties hereto are parties to the Credit Agreement;

WHEREAS, the Borrower and the Lenders party hereto wish to make certain amendments to the Credit Agreement as described herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, which include all Loan Parties as of the date hereof, agree as follows:

SECTION 1.     DEFINITIONS . Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as therein defined.

SECTION 2.     AMENDMENT . With effect as of the Effective Date, Section 1.01 of the Credit Agreement is hereby amended by replacing the date “February 28, 2019” in the definition of “Maturity Date” therein with “March 7, 2019”.

SECTION 3.     CONDITIONS PRECEDENT . This Amendment shall become effective as of the date (the “ Effective Date ”) of the satisfaction or waiver of each of the conditions precedent set forth in this Section 3.

(a)         Execution and Delivery . The Administrative Agent shall have received counterparts of this Amendment duly executed by (i) each Loan Party, (ii) all Lenders, and (iii) the Administrative Agent.

(b)         No Default . Both prior to and after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the Effective Date.

(c)         Representations and Warranties . As of the Effective Date (both prior to and after giving effect to this Amendment) all representations and warranties contained in Section 5 shall be true and correct in all material respects (and, with respect to any representations and warranties that are qualified by materiality or reference to a “Material Adverse Effect” or contain a similar materiality qualification, in all respects).

The Borrower hereby represents and warrants to the Lenders and the Administrative Agent that, as of the Effective Date, the conditions specified in clauses (b) and (c) above are satisfied. For the purpose of determining compliance with the conditions specified in this Section 3, each Lender that has signed this Amendment shall be deemed to have accepted, and to be satisfied with, each document or other matter required under this Section 3.

 

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SECTION 4.     REPRESENTATIONS AND WARRANTIES . In order to induce the Lenders party hereto and the Administrative Agent to enter into this Amendment, the Borrower hereby represents and warrants to the Lenders party hereto and the Administrative Agent that (a) this Amendment has been duly authorized by all necessary organizational actions and, if required, actions by equity holders of the Borrower, (b) this Amendment has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law and (c) this Amendment will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries.

SECTION 5.     CONTINUING EFFECT . Except as expressly amended, waived or modified hereby, the Loan Documents shall continue to be and shall remain in full force and effect in accordance with their respective terms. This Amendment shall not constitute an amendment, waiver or modification of any provision of any Loan Document not expressly referred to herein and shall not be construed as an amendment, waiver or modification of any action on the part of the Borrower or the other Loan Parties that would require an amendment, waiver or consent of the Administrative Agent or the Lenders except as expressly stated herein, or be construed to indicate the willingness of the Administrative Agent or the Lenders to further amend, waive or modify any provision of any Loan Document amended, waived or modified hereby for any other period, circumstance or event. Except as expressly modified by this Amendment, the Credit Agreement and the other Loan Documents are ratified and confirmed and are, and shall continue to be, in full force and effect in accordance with their respective terms. Except as expressly set forth herein, each Lender and the Administrative Agent reserves all of its rights, remedies, powers and privileges under the Credit Agreement, the other Loan Documents, applicable law and/or equity. Any reference to the “Credit Agreement” in any Loan Document or any related documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment and the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include this Amendment.

SECTION 6.     GOVERNING LAW . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.     SUCCESSORS AND ASSIGNS . This Amendment shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, the Administrative Agent, the other Agents and the Lenders, and each of their respective successors and assigns, and shall not inure to the benefit of any third parties. The execution and delivery of this Amendment by any Lender prior to the Effective Date shall be binding upon its successors and assigns and shall be effective as to any Loans or Commitments assigned to it after such execution and delivery.

SECTION 8.     ENTIRE AGREEMENT . This Amendment, the Credit Agreement and the other Loan Documents represent the entire agreement of the Loan Parties, the Administrative Agent, the Agents, the Lenders and the Lenders, as applicable, with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any other Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Credit Agreement or the other Loan Documents.

SECTION 9.     RELEASE . Each of the Loan Parties (on behalf of itself and its Subsidiaries) for itself and for its successors in title and assignees and, to the extent the same is claimed by right of, through or under any of the Loan Parties, for its past, present and future employees, agents, representatives (other than legal representatives), officers, directors, shareholders, and trustees (each, a

 

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“ Releasing Party ” and collectively, the “ Releasing Parties ”), does hereby remise, release and discharge, and shall be deemed to have forever remised, released and discharged, the Administrative Agent, each of the Lenders and each of the other Secured Parties in their respective capacities as such under the Loan Documents, and the Agent’s, each Lender’s and each other Secured Party’s respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and entities to whom the Agent, each of the Lenders and each of the other Secured Parties or any of their respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals would be liable if such persons or entities were found to be liable to any Releasing Party or any of them (collectively, hereinafter the “ Releasees ”), from any and all manner of action and actions, cause and causes of action, claims, charges, demands, counterclaims, crossclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, rights of setoff and recoupment, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature, whether in law, equity or otherwise (including, without limitation, any claims relating to (i) the making or administration of the Loans, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability” theories, (ii) any covenants, agreements, duties or obligations set forth in the Loan Documents, (iii) increased financing costs, interest or other carrying costs, (iv) penalties, (v) lost profits or loss of business opportunity, (vi) legal, accounting and other administrative or professional fees and expenses and incidental, consequential and punitive damages payable to third parties, (vii) damages to business reputation, or (viii) any claims arising under 11 U.S.C. §§ 541-550 or any claims for avoidance or recovery under any other federal, state or foreign law equivalent), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing or heretofore existing against any of the Releasees, and which are, in each case, based on any act, fact, event or omission or other matter, cause or thing occurring at any time prior to or on the date hereof, directly or indirectly arising out of, connected with or relating to this Amendment, the Credit Agreement or any other Loan Document and the transactions contemplated hereby or thereby, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing (each, a “ Claim ” and collectively, the “ Claims ”); provided, that, no Releasing Party shall have any obligation with respect to Claims to the extent such Claims are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or bad faith of any Releasee. Each Releasing Party further stipulates and agrees with respect to all Claims, that it hereby waives, to the fullest extent permitted by applicable law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this Section 9. The Borrower and the other Loan Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by the Borrower or any other Loan Parties pursuant to this Section 9. If the Borrower, any other Loan Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, the Borrower and other Loan Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all reasonable and documented attorneys’ fees and costs incurred by any Releasee as a result of such violation. Each of the Releasing Parties hereby acknowledges that this release constitutes a material inducement to enter into this Amendment, that each Releasee has already relied on this release in entering into this Amendment, and that each Releasee will continue to rely on this release in its related future dealings. Each of the

 

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Releasing Parties hereby further warrants and represents that it has reviewed the terms of this Section 9 with its legal counsel and that it knowingly and voluntarily enters into the release contained in this Section 9 following consultation with legal counsel. This release is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this Section 9 and executed by each of the parties hereto).

SECTION 10.     LOAN DOCUMENT . This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

SECTION 11.     COUNTERPARTS . This Amendment may be executed by the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Amendment may be delivered by facsimile transmission or electronic PDF of the relevant signature page hereof.

SECTION 12.     HEADINGS . Section headings used in this Amendment are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

SECTION 13.     LOAN PARTY ACKNOWLEDGMENTS

13.1    Each Loan Party hereby (i) expressly acknowledges the terms of the Credit Agreement as amended by the Amendment, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and security agreements) to which it is a party, (iii) acknowledges, renews and extends its continued liability under all such Loan Documents and agrees such Loan Documents remain in full force and effect, (iv) agrees that each Security Document secures all Obligations of the Loan Parties in accordance with the terms thereof and (v) further confirms that each Loan Document to which it is a party is and shall continue to be in full force and effect and the same are hereby ratified and confirmed in all respects.

13.2    Each Loan Party hereby reaffirms, as of the Effective Date, (i) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Agreement and the transactions contemplated thereby, and (ii) its guarantee of payment of the Obligations pursuant to the Guarantee and Collateral Agreement and its grant of Liens on the Collateral to secure the Obligations.

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

 

  HORIZON GLOBAL CORPORATION ,
  as the Borrower
  By:   /s/ Brian Whittman                                             
    Name: Brian Whittman
    Title: Vice President, Finance

 

[Signature Page to First Amendment]

 

HORIZON GLOBAL COMPANY LLC , as a

    Guarantor

    By: /s/ Brian Whittman                            
                 Name: Brian Whittman
           Title: Vice President, Finance
 

HORIZON GLOBAL AMERICAS INC. , as a

    Guarantor

    By: /s/ Brian Whittman                            
           Name: Brian Whittman
           Title: Vice President, Finance:
 

HORIZON INTERNATIONAL HOLDINGS

     LLC , as a Guarantor

    By: /s/ Brian Whittman                            
           Name: Brian Whittman
           Title: Vice President, Finance

 

[Signature Page to First Amendment]

 

CORTLAND CAPITAL MARKET SERVICES

LLC , as Administrative Agent

  By:   /s/ Emily Ergang Pappas                                                 
    Name: Emily Ergang Pappas
    Title: Associate Counsel

 

[Signature Page to First Amendment]

LENDER SIGNATURE PAGE TO

THE AMENDMENT

 

  One Eleven Funding I, Ltd.
  One Eleven Funding II, Ltd.
 

By: Credit Suisse Asset Management, LLC, as portfolio

manager,

  By:   /s/ Thomas Flannery                    
          Name: Thomas Flannery
          Title: Authorized Signatory

 

[Signature Page to First Amendment]

LENDER SIGNATURE PAGE TO

THE AMENDMENT

 

  BTC Holdings Fund I, LLC ,
 

By: Blue Torch Credit Opportunities Fund I LP, its

sole member

 

By: Blue Torch Credit Opportunities GP LLC, its

general partner,

  By: /s/ Kevin Genda                        
  Kevin Genda
  Authorized Signatory

 

[Signature Page to First Amendment]

LENDER SIGNATURE PAGE TO

THE AMENDMENT

 

  KCOF Management VIII, L.L.C.
  By:   /s/ Daniel Gewanter                            
          Name: Daniel Gewanter
          Title: Assistant Secretary

 

[Signature Page to First Amendment]

LENDER SIGNATURE PAGE TO

THE AMENDMENT

 

  SENIOR DEBT PORTFOLIO
 

By: Boston Management and Research

as Investment Advisor

  By:   /s/ Michael B. Botthof                                             
         Name: Michael B. Botthof
         Title: Vice President

 

[Signature Page to First Amendment]

Exhibit 10.5

FIFTH AMENDMENT TO

AMENDED AND RESTATED LOAN AGREEMENT

AND OMNIBUS AMENDMENT

    This FIFTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT AND OMNIBUS AMENDMENT (this “ Amendment ”) is dated as of February 26, 2019, and is entered into by and among HORIZON GLOBAL CORPORATION, a Delaware corporation (“ Parent Borrower ”), HORIZON GLOBAL AMERICAS INC., a Delaware corporation (“ Horizon Americas ”) (f/k/a Cequent Performance Products, Inc., a Delaware corporation and successor by merger with Cequent Consumer Products, Inc., an Ohio corporation), CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Horizon Americas and Cequent UK, collectively, “ Borrowers ”), HORIZON GLOBAL COMPANY LLC, a Delaware limited liability company (“ Horizon Global ”), the other Persons party to this Amendment as Obligors, the financial institutions party to this Amendment as Lenders, and BANK OF AMERICA, N.A., a national banking association, in its capacity as agent for itself and the other Secured Parties (“ Agent ”).

    WHEREAS, the Borrowers, the other Obligors party hereto, the Agent and the Lenders have entered into that certain Amended and Restated Loan Agreement dated as of December 22, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”);

    WHEREAS, Parent Borrower, the other Obligors party thereto and Agent entered into that certain ABL Guarantee and Collateral Agreement dated as of June 30, 2015 (the “ ABL Guarantee ”) in order to secure the Obligations;

    WHEREAS, certain Borrowers, Horizon International Holdings LLC, a Delaware limited liability company, Cequent UK, Cequent Canada, Cequent Nederland Holdings B.V., a company formed under the laws of the Netherlands, Cequent Mexico Holdings B.V., a company formed under the laws of the Netherlands, Cequent Sales Company de Mexico, S. de R.L. de C.V., a limited liability company formed under the laws of Mexico, Cequent Electrical Products de Mexico, S. de R.L. de C.V., a limited liability company formed under the laws of Mexico, and Agent entered into that certain Foreign Facility Guarantee and Collateral Agreement dated as of December 22, 2015 in order to secure the Foreign Facility Obligations; and

    WHEREAS, the Borrowers and the other Obligors have requested that the Agent and the Required Lenders agree to enter into certain amendments to and agreements regarding the Loan Agreement described below.

    NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Loan Documents and this Amendment, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Initially capitalized terms used but not otherwise defined in this Amendment have the respective meanings set forth in the Loan Agreement, as amended hereby.

 

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ARTICLE II

AMENDMENTS TO LOAN AGREEMENT

  On the Amendment Effective Date (as defined below), the Loan Agreement is hereby amended as follows:

2.01     Dominion Trigger Period and Financial Covenant Trigger Period . Each reference to “February 28, 2019” in each of the definitions of “Dominion Trigger Period” and “Financial Covenant Trigger Period” shall be a reference to “March 7, 2019”.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

  Each Obligor hereby represents and warrants to each Lender and the Agent, as of the date hereof, as of the Amendment Effective Date, and at each time that the following representations and warranties are made or deemed to be made thereafter, as follows:

3.01     Authority . The execution, delivery and performance by such Obligor of each Loan Document described in Section 5.01 hereof, and the transactions contemplated hereby or thereby, have been duly authorized by all necessary action, and this Amendment is a legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

3.02     Representations and Warranties . Each representation and warranty of such Obligor in the Loan Documents is true and correct as of the date hereof, after giving effect to this Amendment (except for representations and warranties that expressly relate to an earlier date and except for the representations and warranties set forth in Section 9.1.4(d) {No Material Adverse Change} and Section 9.1.15(d) {Solvency} of the Loan Agreement).

3.03     Governmental Approvals; No Conflicts . The execution, delivery, and performance by such Obligor of the Loan Documents described in Section 5.01 hereof (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of any Obligor or any Subsidiary of any Obligor or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, or give rise to a right thereunder to require any payment to be made by any Obligor or any Subsidiary of any Obligor, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of any Obligor or any Subsidiary of any Obligor, except Liens created under the Loan Documents and Liens permitted by Section 10.2.2 of the Loan Agreement, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect.

 

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3.04     No Defaults . No Default or Event of Default has occurred and is continuing.

3.05     Beneficial Ownership Certification . As of the Amendment Effective Date, the information included in the Beneficial Ownership Certification (as defined in the Loan Agreement after giving effect to this Amendment), if applicable, is true and correct in all respects.

ARTICLE IV

CERTIFICATIONS AND AGREEMENTS

  The Obligors hereby certify to Agent and Lenders that (a) the First Amendment to Credit Agreement dated on or about the date hereof (the “ Senior Term Loan Agreement Amendment ”), by and among Parent Borrower, the lenders party thereto and Cortland Capital Market Services LLC, as administrative agent (the “ Senior Term Loan Agent ”) is not prohibited by Section 10.2.11 of the Loan Agreement, as amended by this Amendment, and (b) neither the execution or performance of this Amendment nor the incurrence of any Obligations by Obligors pursuant to the Loan Documents violates the Term Loan Documents or the Senior Term Loan Documents (as defined in the Loan Agreement after giving effect to this Amendment).

  In consideration for the amendments to the Loan Agreement contemplated hereby and notwithstanding any terms to the contrary set forth in the Loan Agreement, each Borrower acknowledges and agrees that during the Senior Term Period, (a) it shall not request the advance of any Loan (other than pursuant to Section 4.1.1(b) of the Loan Agreement with respect to any Obligation, including the fee set forth in Section 5.01(e), becoming due and payable) or the issuance of any Letter of Credit, and (b) each Lender shall have no duty or commitment to advance any Loan and no Issuing Bank shall have any duty or commitment to issue any Letter of Credit.

ARTICLE V

CONDITIONS PRECEDENT AND FURTHER ACTIONS

5.01     Conditions Precedent . This Amendment shall be deemed effective as of the date first set forth above when each of the following conditions precedent have been satisfied in form and substance satisfactory to the Agent and its counsel (such date, the “ Amendment Effective Date ”):

(a)    The Agent shall have received duly executed counterparts of this Amendment which, when taken together, bear the authorized signatures of the Obligors, the Agent and the Required Lenders;

(b)    The Agent shall have received fully executed copies of Senior Term Loan Agreement Amendment, which extends the maturity date of the Senior Term Loan Debt to a date no earlier than March 7, 2019 and is otherwise on terms and conditions satisfactory to Agent and in full force and effect, and all conditions precedent to effectiveness set forth in the Senior Term Loan Agreement Amendment shall have been met or waived by the Senior Term Loan Agent and/or the lenders party in thereto accordance with the terms of the Senior Term Loan Documents.

(c)    Upon the reasonable request of any Lender made at least five days prior to the Amendment Effective Date, the Obligors shall have provided to such Lender, and such Lender shall be reasonably satisfied with, the documentation and other information so requested in connection with the AML Legislation, including, without limitation, the PATRIOT Act, in each case at least five days prior to the Amendment Effective Date;

 

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(d)    At least five days prior to the Amendment Effective Date, any Obligor that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall deliver, to each Lender that so requests, a Beneficial Ownership Certification in relation to such Obligor; and

(e)    The Borrowers shall have paid to the Agent, for the ratable benefit of the Lenders providing their written consent to this Amendment, a fifth amendment fee equal to $30,000, which shall be shared by each consenting Lender in accordance with such consenting Lender’s ratable share of the outstanding Obligations owing to all consenting Lenders (which the Agent, in its discretion, may collect from Borrowers by charging the same as a Revolving Loan).

(f)    The Borrowers shall have paid all fees and expenses (provided that legal fees required to be paid as a condition precedent to the occurrence of the Amendment Effective Date shall be limited to such legal fees as to which Borrowers have received a summary invoice) owed to and/or incurred by the Agent in connection with this Amendment (which the Agent, in its discretion, may collect from Borrowers by charging the same as a Revolving Loan).

5.02     Further Actions . Each of the parties to this Amendment agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Amendment.

ARTICLE VI

REAFFIRMATION

Each Obligor hereby (i) acknowledges and consents to this Amendment; (ii) reaffirms its obligations under the Guaranties, the Security Documents and the other Loan Documents; (iii) reaffirms the Liens granted by it pursuant to the Security Documents; and (iv) confirms that the Guaranties, the Security Documents and the other Loan Documents remain in full force and effect, without defense, offset or counterclaim. Although each Guarantor has been informed of the terms of the Amendment, such Guarantor hereby confirms that it understands and agrees that the Agent and the Lenders have no duty to so notify such Guarantor or any other guarantor or to seek this or any future acknowledgment, consent or reaffirmation, and nothing contained herein shall create or imply any such duty as to any transaction, past or future.

ARTICLE VII

MISCELLANEOUS

7.01     Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective successors and assigns. The successors and assigns of the Obligors include, without limitation, their respective receivers, trustees, and debtors-in-possession.

7.02     Further Assurances . Each Obligor party hereto hereby agrees from time to time, as and when requested by the Agent or any Lender, to execute and deliver or cause to be executed and delivered all such documents, instruments and agreements and to take or cause to be taken such further or other action as the Agent or such Lender may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Amendment and the other Loan Documents.

7.03     Loan Document . This Amendment shall be deemed to be a “Loan Document” for all purposes under the Loan Agreement.

 

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7.04     Governing Law . THIS AMENDMENT AND, UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

7.05     Consent to Forum.

(a)     Forum . EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 OF THE LOAN AGREEMENT. A FINAL JUDGMENT IN ANY PROCEEDING OF ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR ANY OTHER MANNER PROVIDED BY APPLICABLE LAW.

(b)     Other Jurisdictions . Nothing herein shall limit the right of Agent, any Security Trustee or any Lender to bring proceedings against any Obligor (other than a Mexican Domiciled Obligor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Obligors). Nothing in this Amendment shall be deemed to preclude enforcement by Agent or any Security Trustee of any judgment or order obtained in any forum or jurisdiction. Final judgment against an Obligor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Obligor is domiciled, by suit on the judgment.

(c)    Each Mexican Domiciled Obligor waives any right to any jurisdiction (other than as provided under Section 7.04 above and this Section 7.05) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Obligors, and waives any objection to those courts on the ground of venue or forum non conveniens .

7.06     Severability . Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Amendment shall remain in full force and effect.

7.07     Entire Agreement . Time is of the essence of this Amendment. This Amendment constitutes 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.

7.08     Execution in Counterparts . This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment shall become effective on the Amendment Effective Date. Delivery of a signature page of

 

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this Amendment by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement.

7.09     Costs and Expenses . The Borrowers agree to reimburse Agent for all fees, costs and expenses, including the reasonable fees, costs and expenses of counsel or other advisors for advice, assistance, or other representation in connection with this Amendment.

7.10     Reference to and Effect upon the Loan Documents . The amendments and modifications described in this Amendment shall apply and be effective only with respect to the provisions of the Loan Agreement specifically identified in this Amendment. Except as expressly amended herein, the Loan Agreement and the other Loan Documents shall continue in full force and effect in accordance with the provisions thereof, and are hereby ratified and confirmed. In each case except as expressly provided in this Amendment, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver or amendment of any provision of any of the Loan Documents. Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Loan Agreement as amended hereby.

7.11     Section Headings . The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

Balance of Page Intentionally Left Blank

Signature Pages Follow

 

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IN WITNESS WHEREOF, duly authorized representatives of the parties have executed this Amendment and the parties have delivered this Amendment, each as of the day and year first written above.

 

 

OBLIGORS :

 

HORIZON GLOBAL CORPORATION,

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor and the Borrower Agent

 

By: /s/ Brian Whittman                                             

Name: Brian Whittman

Title: Vice President, Finance

 

HORIZON GLOBAL AMERICAS INC.,

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Brian Whittman                                             

Name: Brian Whittman

Title: Vice President, Finance

 

CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641, as UK Borrower, a UK Facility Obligor, a Canadian Facility Guarantor and a Canadian Facility Obligor

 

By: /s/ Jay Goldbaum                                              

Name: Jay Goldbaum

Title: Director

 

CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario, as Canadian Borrower, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Jay Goldbaum                                              

Name: Jay Goldbaum

Title: Vice President and Secretary

 

[Signatures continue on next page.]

 

HORIZON GLOBAL COMPANY LLC,

a Delaware limited liability company, as a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Brian Whittman                                             

Name: Brian Whittman

Title: Vice President, Finance

 

HORIZON INTERNATIONAL HOLDINGS LLC,

a Delaware limited liability company, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor, a U.S. Facility Guarantor and a U.S. Facility Obligor

  By: /s/ Brian Whittman                                             
  Name: Brian Whittman
  Title: Vice President, Finance
 

CEQUENT NEDERLAND HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

  By: /s/ Jay Goldbaum                                              
  Name: Jay Goldbaum
  Title: Director
 

CEQUENT MEXICO HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

  By: /s/ Jay Goldbaum                                              
  Name: Jay Goldbaum
  Title: Director

[Signatures continue on next page.]

 

CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V.,

 

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

  By: /s/ Jay Goldbaum                                              
  Name: Jay Goldbaum
  Title: Vice President and Director
 

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V.,

 

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

  By: /s/ Jay Goldbaum                                              
  Name: Jay Goldbaum
  Title: Vice President and Director

 

[Signatures continue on next page.]

 

AGENT AND REQUIRED LENDERS :

 

BANK OF AMERICA, N.A.,

as Agent, a U.S. Lender, a UK Lender and UK Swingline Lender

 

By: /s/ Kindra M. Mullarky                                                       

Name: Kindra M. Mullarky

Title: SVP

 

BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender and Canadian Swingline Lender

 

By: /s/ Sylwia Durkiewicz                                                        

Name: Sylwia Durkiewicz

Title: Vice President

 

BANK OF AMERICA, N.A. (acting through its London branch), as UK Security Trustee

 

By: /s/ Kindra M. Mullarky                                                       

Name: Kindra M. Mullarky

Title: SVP

 

[Signatures continue on next page.]

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a U.S. Lender

 

By: /s/ Nykole Hanna                                                 

Name: Nykole Hanna

Title: Authorized Signatory

 

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as a Canadian Lender

 

By: /s/ David G. Phillips                                             

Name: David G. Phillips

Title: Senior Vice President

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

(London branch), as a UK Lender

 

By: /s/ Patricia Del Busto                                            

Name: Patricia Del Busto

Title: Authorized Signatory

 

[Signatures continue on next page.]

 

BANK OF MONTREAL, as a U.S. Lender and a UK Lender

 

By: /s/ Elizabeth Mitchell                                                     

Name: Elizabeth Mitchell

Title: Vice President

 

BANK OF MONTREAL, Toronto Branch, as a Canadian Lender

 

By: /s/ Helen Alvarez-Hernandez                                         

Name: Helen Alvarez-Hernandez

Title: Managing Director

 

1

Exhibit 10.6

Execution Version

SECOND AMENDMENT TO CREDIT AGREEMENT

SECOND AMENDMENT (this “ Amendment ”), dated as of March 7, 2019, to the Credit Agreement dated as of February 20, 2019 (as amended, supplemented, amended and restated or otherwise modified from time to time, including by this Amendment, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time party thereto (the “ Lenders ”), and Cortland Capital Market Services LLC, as Administrative Agent (in such capacity, the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, the parties hereto are parties to the Credit Agreement;

WHEREAS, the Borrower and the Lenders party hereto wish to make certain amendments to the Credit Agreement as described herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, which include all Loan Parties as of the date hereof, agree as follows:

SECTION 1.     DEFINITIONS . Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as therein defined.

SECTION 2.     AMENDMENT . With effect as of the Effective Date, Section 1.01 of the Credit Agreement is hereby amended by replacing the date “March 7, 2019” in the definition of “Maturity Date” therein with “March 14, 2019”.

SECTION 3.     CONDITIONS PRECEDENT . This Amendment shall become effective as of the date (the “ Effective Date ”) of the satisfaction or waiver of each of the conditions precedent set forth in this Section 3.

(a)         Execution and Delivery . The Administrative Agent shall have received counterparts of this Amendment duly executed by (i) each Loan Party, (ii) all Lenders, and (iii) the Administrative Agent.

(b)         No Default . Both prior to and after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the Effective Date.

(c)         Representations and Warranties . As of the Effective Date (both prior to and after giving effect to this Amendment) all representations and warranties contained in Section 5 shall be true and correct in all material respects (and, with respect to any representations and warranties that are qualified by materiality or reference to a “Material Adverse Effect” or contain a similar materiality qualification, in all respects).

The Borrower hereby represents and warrants to the Lenders and the Administrative Agent that, as of the Effective Date, the conditions specified in clauses (b) and (c) above are satisfied. For the purpose of determining compliance with the conditions specified in this Section 3, each Lender that has

 

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signed this Amendment shall be deemed to have accepted, and to be satisfied with, each document or other matter required under this Section 3.

SECTION 4.     REPRESENTATIONS AND WARRANTIES . In order to induce the Lenders party hereto and the Administrative Agent to enter into this Amendment, the Borrower hereby represents and warrants to the Lenders party hereto and the Administrative Agent that (a) this Amendment has been duly authorized by all necessary organizational actions and, if required, actions by equity holders of the Borrower, (b) this Amendment has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law and (c) this Amendment will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries.

SECTION 5.     CONTINUING EFFECT . Except as expressly amended, waived or modified hereby, the Loan Documents shall continue to be and shall remain in full force and effect in accordance with their respective terms. This Amendment shall not constitute an amendment, waiver or modification of any provision of any Loan Document not expressly referred to herein and shall not be construed as an amendment, waiver or modification of any action on the part of the Borrower or the other Loan Parties that would require an amendment, waiver or consent of the Administrative Agent or the Lenders except as expressly stated herein, or be construed to indicate the willingness of the Administrative Agent or the Lenders to further amend, waive or modify any provision of any Loan Document amended, waived or modified hereby for any other period, circumstance or event. Except as expressly modified by this Amendment, the Credit Agreement and the other Loan Documents are ratified and confirmed and are, and shall continue to be, in full force and effect in accordance with their respective terms. Except as expressly set forth herein, each Lender and the Administrative Agent reserves all of its rights, remedies, powers and privileges under the Credit Agreement, the other Loan Documents, applicable law and/or equity. Any reference to the “Credit Agreement” in any Loan Document or any related documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment and the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include this Amendment.

SECTION 6.     GOVERNING LAW . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.     SUCCESSORS AND ASSIGNS . This Amendment shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, the Administrative Agent, the other Agents and the Lenders, and each of their respective successors and assigns, and shall not inure to the benefit of any third parties. The execution and delivery of this Amendment by any Lender prior to the Effective Date shall be binding upon its successors and assigns and shall be effective as to any Loans or Commitments assigned to it after such execution and delivery.

SECTION 8.     ENTIRE AGREEMENT . This Amendment, the Credit Agreement and the other Loan Documents represent the entire agreement of the Loan Parties, the Administrative Agent, the Agents, the Lenders and the Lenders, as applicable, with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any other Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Credit Agreement or the other Loan Documents.

SECTION 9.     RELEASE . Each of the Loan Parties (on behalf of itself and its Subsidiaries) for itself and for its successors in title and assignees and, to the extent the same is claimed by right of,

 

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through or under any of the Loan Parties, for its past, present and future employees, agents, representatives (other than legal representatives), officers, directors, shareholders, and trustees (each, a “ Releasing Party ” and collectively, the “ Releasing Parties ”), does hereby remise, release and discharge, and shall be deemed to have forever remised, released and discharged, the Administrative Agent, each of the Lenders and each of the other Secured Parties in their respective capacities as such under the Loan Documents, and the Agent’s, each Lender’s and each other Secured Party’s respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and entities to whom the Agent, each of the Lenders and each of the other Secured Parties or any of their respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals would be liable if such persons or entities were found to be liable to any Releasing Party or any of them (collectively, hereinafter the “ Releasees ”), from any and all manner of action and actions, cause and causes of action, claims, charges, demands, counterclaims, crossclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, rights of setoff and recoupment, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature, whether in law, equity or otherwise (including, without limitation, any claims relating to (i) the making or administration of the Loans, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability” theories, (ii) any covenants, agreements, duties or obligations set forth in the Loan Documents, (iii) increased financing costs, interest or other carrying costs, (iv) penalties, (v) lost profits or loss of business opportunity, (vi) legal, accounting and other administrative or professional fees and expenses and incidental, consequential and punitive damages payable to third parties, (vii) damages to business reputation, or (viii) any claims arising under 11 U.S.C. §§ 541-550 or any claims for avoidance or recovery under any other federal, state or foreign law equivalent), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing or heretofore existing against any of the Releasees, and which are, in each case, based on any act, fact, event or omission or other matter, cause or thing occurring at any time prior to or on the date hereof, directly or indirectly arising out of, connected with or relating to this Amendment, the Credit Agreement or any other Loan Document and the transactions contemplated hereby or thereby, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing (each, a “ Claim ” and collectively, the “ Claims ”); provided, that, no Releasing Party shall have any obligation with respect to Claims to the extent such Claims are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or bad faith of any Releasee. Each Releasing Party further stipulates and agrees with respect to all Claims, that it hereby waives, to the fullest extent permitted by applicable law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this Section 9. The Borrower and the other Loan Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by the Borrower or any other Loan Parties pursuant to this Section 9. If the Borrower, any other Loan Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, the Borrower and other Loan Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all reasonable and documented attorneys’ fees and costs incurred by any Releasee as a result of such violation. Each of the Releasing Parties hereby acknowledges that this release constitutes a material inducement to enter into

 

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this Amendment, that each Releasee has already relied on this release in entering into this Amendment, and that each Releasee will continue to rely on this release in its related future dealings. Each of the Releasing Parties hereby further warrants and represents that it has reviewed the terms of this Section 9 with its legal counsel and that it knowingly and voluntarily enters into the release contained in this Section 9 following consultation with legal counsel. This release is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this Section 9 and executed by each of the parties hereto).

SECTION 10.     LOAN DOCUMENT . This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

SECTION 11.     COUNTERPARTS . This Amendment may be executed by the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Amendment may be delivered by facsimile transmission or electronic PDF of the relevant signature page hereof.

SECTION 12.     HEADINGS . Section headings used in this Amendment are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

SECTION 13.     LOAN PARTY ACKNOWLEDGMENTS

13.1    Each Loan Party hereby (i) expressly acknowledges the terms of the Credit Agreement as amended by the Amendment, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and security agreements) to which it is a party, (iii) acknowledges, renews and extends its continued liability under all such Loan Documents and agrees such Loan Documents remain in full force and effect, (iv) agrees that each Security Document secures all Obligations of the Loan Parties in accordance with the terms thereof and (v) further confirms that each Loan Document to which it is a party is and shall continue to be in full force and effect and the same are hereby ratified and confirmed in all respects.

13.2    Each Loan Party hereby reaffirms, as of the Effective Date, (i) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Agreement and the transactions contemplated thereby, and (ii) its guarantee of payment of the Obligations pursuant to the Guarantee and Collateral Agreement and its grant of Liens on the Collateral to secure the Obligations.

[ remainder of page intentionally left blank ]

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

 

 

HORIZON GLOBAL CORPORATION ,

as the Borrower

  By:   /s/ Brian Whittman                                                                 
    Name: Brian Whittman
    Title: Vice President, Finance

 

[Signature Page to Second Amendment]

 

HORIZON GLOBAL COMPANY LLC , as a

    Guarantor

    By: /s/ Brian Whittman                                
           Name: Brian Whittman
           Title: Vice President, Finance
 

HORIZON GLOBAL AMERICAS INC. , as a

    Guarantor

    By: /s/ Brian Whittman                                
           Name: Brian Whittman
                Title: Vice President, Finance:
 

HORIZON INTERNATIONAL HOLDINGS

     LLC , as a Guarantor

    By: /s/ Brian Whittman                                
           Name: Brian Whittman
           Title: Vice President, Finance

 

[Signature Page to Second Amendment]

  CORTLAND CAPITAL MARKET SERVICES LLC , as Administrative Agent
  By:   /s/ Emily Ergang Pappas                                                       
    Name: Emily Ergang Pappas
    Title: Associate Counsel

 

[Signature Page to Second Amendment]

LENDER SIGNATURE PAGE TO

THE AMENDMENT

 

  One Eleven Funding I, Ltd.
  One Eleven Funding II, Ltd.
  By: Credit Suisse Asset Management, LLC, as portfolio manager,
  By:   /s/ Thomas Flannery                            
         Name: Thomas Flannery
         Title: Authorized Signatory

 

[Signature Page to Second Amendment]

LENDER SIGNATURE PAGE TO

THE AMENDMENT

 

  BTC Holdings Fund I, LLC ,
  By: Blue Torch Credit Opportunities Fund I LP, its sole member
  By: Blue Torch Credit Opportunities GP LLC, its general partner,
  By: /s/ Kevin Genda                
  Kevin Genda
  Authorized Signatory

 

[Signature Page to Second Amendment]

LENDER SIGNATURE PAGE TO

THE AMENDMENT

 

  KCOF Management VIII, L.L.C.
  By:   /s/ Daniel Gewanter                                
         Name: Daniel Gewanter
         Title: Assistant Secretary

 

[Signature Page to Second Amendment]

LENDER SIGNATURE PAGE TO

THE AMENDMENT

 

  SENIOR DEBT PORTFOLIO
 

By: Boston Management and Research

as Investment Advisor

  By:   /s/ Michael B. Botthof                                                     
         Name: Michael B. Botthof
         Title: Vice President

 

[Signature Page to Second Amendment]

Exhibit 10.7

Execution Version

SIXTH AMENDMENT TO

AMENDED AND RESTATED LOAN AGREEMENT

   This SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (this “ Amendment ”) is dated as of March 7, 2019, and is entered into by and among HORIZON GLOBAL CORPORATION, a Delaware corporation (“ Parent Borrower ”), HORIZON GLOBAL AMERICAS INC., a Delaware corporation (“ Horizon Americas ”) (f/k/a Cequent Performance Products, Inc., a Delaware corporation and successor by merger with Cequent Consumer Products, Inc., an Ohio corporation), CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Horizon Americas and Cequent UK, collectively, “ Borrowers ”), HORIZON GLOBAL COMPANY LLC, a Delaware limited liability company (“ Horizon Global ”), the other Persons party to this Amendment as Obligors, the financial institutions party to this Amendment as Lenders, and BANK OF AMERICA, N.A., a national banking association, in its capacity as agent for itself and the other Secured Parties (“ Agent ”).

   WHEREAS, the Borrowers, the other Obligors party hereto, the Agent and the Lenders have entered into that certain Amended and Restated Loan Agreement dated as of December 22, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”);

   WHEREAS, Parent Borrower, the other Obligors party thereto and Agent entered into that certain ABL Guarantee and Collateral Agreement dated as of June 30, 2015 (the “ ABL Guarantee ”) in order to secure the Obligations;

WHEREAS, certain Borrowers, Horizon International Holdings LLC, a Delaware limited liability company, Cequent UK, Cequent Canada, Cequent Nederland Holdings B.V., a company formed under the laws of the Netherlands, Cequent Mexico Holdings B.V., a company formed under the laws of the Netherlands, Cequent Sales Company de Mexico, S. de R.L. de C.V., a limited liability company formed under the laws of Mexico, Cequent Electrical Products de Mexico, S. de R.L. de C.V., a limited liability company formed under the laws of Mexico, and Agent entered into that certain Foreign Facility Guarantee and Collateral Agreement dated as of December 22, 2015 in order to secure the Foreign Facility Obligations; and

   WHEREAS, the Borrowers and the other Obligors have requested that the Agent and the Required Lenders agree to enter into certain amendments to and agreements regarding the Loan Agreement described below.

   NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Loan Documents and this Amendment, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

   Initially capitalized terms used but not otherwise defined in this Amendment have the respective meanings set forth in the Loan Agreement, as amended hereby.

 

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ARTICLE II

AMENDMENTS TO LOAN AGREEMENT

   On the Sixth Amendment Effective Date (as defined below), the Loan Agreement is hereby amended as follows:

2.01     Accounts . The following definitions are added to Section 1 (in appropriate alphabetical order):

“ “ New York Account ” Account number 65502-01805 established at Bank of America for the account of Bank of America (Canada).

“ Sixth Amendment ” means that certain Sixth Amendment to this Agreement, dated as of March 7, 2019 among the Borrowers, the other Obligors party thereto, the Agent and the Lenders party thereto.

“ Sixth Amendment Effective Date ” means the “Sixth Amendment Effective Date” as set forth in the Sixth Amendment.

“ Toronto Account ” Account number 90083255 established at Bank of America Canada.” ”

2.02     Financial Covenant Trigger Period . The definition of “Financial Covenant Trigger Period” is hereby amended and restated in its entirety as follows:

“ “ Financial Covenant Trigger Period ” any period from and after March 14, 2019, (a) commencing on the day that an Event of Default occurs, or U.S. Availability is less than or equal to the lesser of (A) 10% of the U.S. Borrowing Base or (B) 10% of the aggregate amount of all U.S. Revolver Commitments, and (b) continuing until, during each of the preceding 30 consecutive days, no Event of Default has existed and U.S. Availability has been greater than the lesser of (A) 10% of the U.S. Borrowing Base or (B) 10% of the aggregate amount of all U.S. Revolver Commitments.”

2.03     Dominion Account . The first sentence of Section 5.6 is amended and restated in its entirety as follows:

“ The available amount in the Dominion Accounts of each Borrower as of the end of a Business Day shall be applied to the Obligations of the Obligor Group to which such Borrower belongs at the beginning of the next Business Day during any Dominion Trigger Period; provided that during any Dominion Trigger Period, Obligors shall cause all amounts in excess of $400,000 in the aggregate in the deposit accounts of Canadian Borrower (taken as a whole) to be wire transferred in immediately available funds no later than the Business Day after exceeding such threshold as follows: (i) to the extent such monies are in U.S. Dollars, to the New York Account, and (ii) to the extent such monies are in Canadian Dollars, to the Toronto Account. All such amounts shall be applied to the Canadian Facility

 

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Obligations. Notwithstanding the foregoing, during the Senior Term Period, (i) the Obligors shall not have any obligation to deposit any proceeds of any Senior Term Loan into a Dominion Account or otherwise cause the same to be applied to the Obligations while any Dominion Trigger Period is in effect and (ii) so long as no Event of Default shall have occurred and be continuing, Agent shall not initiate a sweep of balances in (A) the operating account of Horizon Global Company LLC ending in ’89, (B) the account of Cequent UK Limited ending in ‘7981 or (C) the account of Cequent UK Limited ending in ‘2002.

2.04     Updated List of Bank Accounts . Section 10.1.15 is amended to add thereto a new clause (h) as follows:

“(h) Within five (5) Business Days following the Sixth Amendment Effective Date (or such later date as the Agent may consent in writing), Obligors shall furnish to Agent an executed officer’s certificate certifying and attaching a comprehensive list of deposit accounts and securities accounts of each Obligor substantially in the form of Schedule 3.03 of the Perfection Certificate.”

ARTICLE III

REPRESENTATIONS AND WARRANTIES

    Each Obligor hereby represents and warrants to each Lender and the Agent, as of the date hereof, as of the Sixth Amendment Effective Date, and at each time that the following representations and warranties are made or deemed to be made thereafter, as follows:

3.01     Authority . The execution, delivery and performance by such Obligor of each Loan Document described in Section 5.01 hereof, and the transactions contemplated hereby or thereby, have been duly authorized by all necessary action, and this Amendment is a legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

3.02     Representations and Warranties . Each representation and warranty of such Obligor in the Loan Documents is true and correct as of the date hereof, after giving effect to this Amendment (except for representations and warranties that expressly relate to an earlier date and except for the representations and warranties set forth in Section 9.1.4(d) {No Material Adverse Change} and Section 9.1.15(d) {Solvency} of the Loan Agreement).

3.03     Governmental Approvals; No Conflicts . The execution, delivery, and performance by such Obligor of the Loan Documents described in Section 5.01 hereof (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of any Obligor or any

 

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Subsidiary of any Obligor or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, or give rise to a right thereunder to require any payment to be made by any Obligor or any Subsidiary of any Obligor, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of any Obligor or any Subsidiary of any Obligor, except Liens created under the Loan Documents and Liens permitted by Section 10.2.2 of the Loan Agreement, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect.

3.04     No Defaults . No Default or Event of Default has occurred and is continuing.

3.05     Beneficial Ownership Certification . As of the Sixth Amendment Effective Date, the information included in the Beneficial Ownership Certification (as defined in the Loan Agreement after giving effect to this Amendment), if applicable, is true and correct in all respects.

ARTICLE IV

CERTIFICATIONS AND AGREEMENTS

The Obligors hereby certify to Agent and Lenders that (a) the Second Amendment to Credit Agreement dated on or about the date hereof (the “ Senior Term Loan Agreement Amendment ”), by and among Parent Borrower, the lenders party thereto and Senior Term Loan Agent is not prohibited by Section 10.2.11 of the Loan Agreement, as amended by this Amendment, and (b) neither the execution or performance of this Amendment nor the incurrence of any Obligations by Obligors pursuant to the Loan Documents violates the Term Loan Documents or the Senior Term Loan Documents (as defined in the Loan Agreement after giving effect to this Amendment).

In consideration for the amendments to the Loan Agreement contemplated hereby and notwithstanding any terms to the contrary set forth in the Loan Agreement, each Borrower Group acknowledges and agrees that, from and after the Sixth Amendment Effective Date, (i) such Borrower Group shall only be entitled to request Extensions of Credit for the purpose of funding normal operating expenses and payables consistent with prior practices and shall not request any Extension of Credit to materially increase the cash holdings of the Borrower Group and in no event shall request any Extension of Credit if, after giving effect thereto and after deducting all checks in float, Borrower Group shall have more than $4,000,000 in cash on hand and (ii) each Lender and Issuing Bank shall have no duty or commitment to make any Extension of Credit other than Extensions of Credit requested as provided above and otherwise consistent with the terms and conditions of the Loan Agreement. For purposes of this paragraph, “ Extension(s) of Credit ” means, with respect to any Borrower Group, the advance of any Loan by any Lender or the issuance of any Letter of Credit by any Issuing Bank to such Borrower Group from and after the Sixth Amendment Effective Date. THE PARTIES HERETO AGREE THAT THE TERMS

 

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OF THE SECOND PARAGRAPH OF ARTICLE IV OF THE FIFTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT DATED AS OF FEBRUARY 26, 2019 AMONG THE PARTIES HERETO SHALL BE DEEMED TO BE OF NO FURTHER FORCE OR EFFECT FROM AND AFTER THE SIXTH AMENDMENT EFFECTIVE DATE.

ARTICLE V

CONDITIONS PRECEDENT AND FURTHER ACTIONS

5.01     Conditions Precedent . This Amendment shall be deemed effective as of the date first set forth above when each of the following conditions precedent have been satisfied in form and substance satisfactory to the Agent and its counsel (such date, the “ Sixth Amendment Effective Date ”):

(a)    The Agent shall have received duly executed counterparts of this Amendment which, when taken together, bear the authorized signatures of the Obligors, the Agent and the Required Lenders;

(b)    The Agent shall have received fully executed copies of Senior Term Loan Agreement Amendment, which extends the maturity date of the Senior Term Loan Debt to a date no earlier than March 14, 2019 and is otherwise on terms and conditions satisfactory to Agent and in full force and effect, and all conditions precedent to effectiveness set forth in the Senior Term Loan Agreement Amendment shall have been met or waived by the Senior Term Loan Agent and/or the lenders party in thereto accordance with the terms of the Senior Term Loan Documents.

(c)    Upon the reasonable request of any Lender made at least five days prior to the Sixth Amendment Effective Date, the Obligors shall have provided to such Lender, and such Lender shall be reasonably satisfied with, the documentation and other information so requested in connection with the AML Legislation, including, without limitation, the PATRIOT Act, in each case at least five days prior to the Sixth Amendment Effective Date;

(d)    At least five days prior to the Sixth Amendment Effective Date, any Obligor that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall deliver, to each Lender that so requests, a Beneficial Ownership Certification in relation to such Obligor; and

(e)    The Borrowers shall have paid to the Agent, for the ratable benefit of the Lenders providing their written consent to this Amendment, a sixth amendment fee equal to $30,000, which shall be shared by each consenting Lender in accordance with such consenting Lender’s ratable share of the outstanding Obligations owing to all consenting Lenders (which the Agent, in its discretion, may collect from Borrowers by charging the same as a Revolving Loan).

(f)    The Borrowers shall have paid all fees and expenses (provided that legal fees required to be paid as a condition precedent to the occurrence of the Sixth Amendment Effective Date shall be limited to such legal fees as to which Borrowers have received a summary invoice) owed to and/or incurred by the Agent in connection with this Amendment (which the Agent, in its discretion, may collect from Borrowers by charging the same as a Revolving Loan).

 

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5.02     Further Actions . Each of the parties to this Amendment agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Amendment.

ARTICLE VI

REAFFIRMATION

Each Obligor hereby (i) acknowledges and consents to this Amendment; (ii) reaffirms its obligations under the Guaranties, the Security Documents and the other Loan Documents; (iii) reaffirms the Liens granted by it pursuant to the Security Documents; and (iv) confirms that the Guaranties, the Security Documents and the other Loan Documents remain in full force and effect, without defense, offset or counterclaim. Although each Guarantor has been informed of the terms of the Amendment, such Guarantor hereby confirms that it understands and agrees that the Agent and the Lenders have no duty to so notify such Guarantor or any other guarantor or to seek this or any future acknowledgment, consent or reaffirmation, and nothing contained herein shall create or imply any such duty as to any transaction, past or future.

ARTICLE VII

MISCELLANEOUS

7.01     Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective successors and assigns. The successors and assigns of the Obligors include, without limitation, their respective receivers, trustees, and debtors-in-possession.

7.02     Further Assurances . Each Obligor party hereto hereby agrees from time to time, as and when requested by the Agent or any Lender, to execute and deliver or cause to be executed and delivered all such documents, instruments and agreements and to take or cause to be taken such further or other action as the Agent or such Lender may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Amendment and the other Loan Documents.

7.03     Loan Document . This Amendment shall be deemed to be a “Loan Document” for all purposes under the Loan Agreement.

7.04     Governing Law . THIS AMENDMENT AND, UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

7.05    Consent to Forum.

(a)     Forum . EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING

 

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IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 OF THE LOAN AGREEMENT. A FINAL JUDGMENT IN ANY PROCEEDING OF ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR ANY OTHER MANNER PROVIDED BY APPLICABLE LAW.

(b)     Other Jurisdictions . Nothing herein shall limit the right of Agent, any Security Trustee or any Lender to bring proceedings against any Obligor (other than a Mexican Domiciled Obligor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Obligors). Nothing in this Amendment shall be deemed to preclude enforcement by Agent or any Security Trustee of any judgment or order obtained in any forum or jurisdiction. Final judgment against an Obligor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Obligor is domiciled, by suit on the judgment.

(c)    Each Mexican Domiciled Obligor waives any right to any jurisdiction (other than as provided under Section 7.04 above and this Section 7.05) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Obligors, and waives any objection to those courts on the ground of venue or forum non conveniens .

7.06     Severability . Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Amendment shall remain in full force and effect.

7.07     Entire Agreement . Time is of the essence of this Amendment. This Amendment constitutes 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.

7.08     Execution in Counterparts . This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment shall become effective on the Sixth Amendment Effective Date. Delivery of a signature page of this Amendment by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement.

 

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7.09     Costs and Expenses . The Borrowers agree to reimburse Agent for all fees, costs and expenses, including the reasonable fees, costs and expenses of counsel or other advisors for advice, assistance, or other representation in connection with this Amendment.

7.10     Reference to and Effect upon the Loan Documents . The amendments and modifications described in this Amendment shall apply and be effective only with respect to the provisions of the Loan Agreement specifically identified in this Amendment. Except as expressly amended herein, the Loan Agreement and the other Loan Documents shall continue in full force and effect in accordance with the provisions thereof, and are hereby ratified and confirmed. In each case except as expressly provided in this Amendment, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver or amendment of any provision of any of the Loan Documents. Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Loan Agreement as amended hereby.

7.11     Section Headings . The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

Balance of Page Intentionally Left Blank

Signature Pages Follow

 

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IN WITNESS WHEREOF, duly authorized representatives of the parties have executed this Amendment and the parties have delivered this Amendment, each as of the day and year first written above.

 

 

OBLIGORS :

 

HORIZON GLOBAL CORPORATION,

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor and the Borrower Agent

 

By: /s/ Brian Whittman                                        

Name: Brian Whittman

Title: Vice President, Finance

 

HORIZON GLOBAL AMERICAS INC.,

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Brian Whittman                                        

Name: Brian Whittman

Title: Vice President, Finance

 

CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641, as UK Borrower, a UK Facility Obligor, a Canadian Facility Guarantor and a Canadian Facility Obligor

 

By: /s/ Jay Goldbaum                                           

Name: Jay Goldbaum

Title: Director

 

CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario, as Canadian Borrower, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Jay Goldbaum                                           

Name: Jay Goldbaum

Title: Vice President and Secretary

 

[Signatures continue on next page.]

 

[Sixth Amendment to Amended and Restated ABL Loan Agreement]

 

HORIZON GLOBAL COMPANY LLC,

a Delaware limited liability company, as a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Brian Whittman                                    

Name: Brian Whittman

Title: Vice President, Finance

 

HORIZON INTERNATIONAL HOLDINGS LLC,

a Delaware limited liability company, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor, a U.S. Facility Guarantor and a U.S. Facility Obligor

 

By: /s/ Brian Whittman                                                     

Name: Brian Whittman

Title: Vice President, Finance

 

CEQUENT NEDERLAND HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Jay Goldbaum                                        

Name: Jay Goldbaum

Title: Director

 

CEQUENT MEXICO HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Jay Goldbaum                                        

Name: Jay Goldbaum

Title: Director

 

[Signatures continue on next page.]

[Sixth Amendment to Amended and Restated ABL Loan Agreement]

  

CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V.,

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Jay Goldbaum                                        

Name: Jay Goldbaum

Title: Vice President and Director

 

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V.,

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

 

By: /s/ Jay Goldbaum                                        

Name: Jay Goldbaum

Title: Vice President and Director

   [Signatures continue on next page.]

[Sixth Amendment to Amended and Restated ABL Loan Agreement]

 

AGENT AND REQUIRED LENDERS :

 

BANK OF AMERICA, N.A.,

as Agent, a U.S. Lender, a UK Lender and UK Swingline Lender

 

By: /s/ Robert J. Lund                                                     

Name: Robert J. Lund

Title: Senior Vice President

 

BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender and Canadian Swingline Lender

 

By: /s/ Sylwia Durkiewicz                                             

Name: Sylwia Durkiewicz

Title: Vice President

 

BANK OF AMERICA, N.A. (acting through its London branch), as UK Security Trustee

 

By: /s/ Robert J. Lund                                                     

Name: Robert J. Lund

Title: Senior Vice President

[Signatures continue on next page.]

 

[Sixth Amendment to Amended and Restated ABL Loan Agreement]

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a U.S. Lender

 

By: /s/ Nykole Hanna                                        

Name: Nykole Hanna

Title: Authorized Signatory

 

WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as a Canadian Lender

 

By: /s/ Trevor Tysick                                        

Name: Trevor Tysick

Title: Vice President

 

WELLS FARGO BANK, NATIONAL ASSOCIATION, (London branch), as a UK Lender

 

By: /s/ N B Hogg                                               

Name: N B Hogg

Title: Authorized Signatory

[Signatures continue on next page.]

 

[Sixth Amendment to Amended and Restated ABL Loan Agreement]

 

BANK OF MONTREAL, as a U.S. Lender and a UK Lender

 

By: /s/ Elizabeth Mitchell                                        

Name: Elizabeth Mitchell

Title: Vice President

 

BANK OF MONTREAL, Toronto Branch, as a Canadian Lender

 

By: /s/ Helen Alvarez-Hernandez                            

Name: Helen Alvarez-Hernandez

Title: Managing Director

 

[Sixth Amendment to Amended and Restated ABL Loan Agreement]

 

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Exhibit 10.8

Execution Version

THIRD AMENDMENT TO CREDIT AGREEMENT

THIRD AMENDMENT (this “ Amendment ”), dated as of March 14, 2019, to the Credit Agreement dated as of February 20, 2019 (as amended, supplemented, amended and restated or otherwise modified from time to time, including by this Amendment, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the several banks and other financial institutions or entities from time to time party thereto (the “ Lenders ”), and Cortland Capital Market Services LLC, as Administrative Agent (in such capacity, the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, the parties hereto are parties to the Credit Agreement;

WHEREAS, the Borrower and the Lenders party hereto wish to make certain amendments to the Credit Agreement as described herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, which include all Loan Parties as of the date hereof, agree as follows:

SECTION 1.     DEFINITIONS . Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as therein defined.

SECTION 2.     AMENDMENT . With effect as of the Effective Date, Section 1.01 of the Credit Agreement is hereby amended by replacing the date “March 14, 2019” in the definition of “Maturity Date” therein with “March 15, 2019”.

SECTION 3.     CONDITIONS PRECEDENT . This Amendment shall become effective as of the date (the “ Effective Date ”) of the satisfaction or waiver of each of the conditions precedent set forth in this Section 3.

(a)         Execution and Delivery . The Administrative Agent shall have received counterparts of this Amendment duly executed by (i) each Loan Party, (ii) all Lenders, and (iii) the Administrative Agent.

(b)         No Default . Both prior to and after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the Effective Date.

(c)         Representations and Warranties . As of the Effective Date (both prior to and after giving effect to this Amendment) all representations and warranties contained in Section 4 shall be true and correct in all material respects (and, with respect to any representations and warranties that are qualified by materiality or reference to a “Material Adverse Effect” or contain a similar materiality qualification, in all respects).

The Borrower hereby represents and warrants to the Lenders and the Administrative Agent that, as of the Effective Date, the conditions specified in clauses (b) and (c) above are satisfied. For the purpose of determining compliance with the conditions specified in this Section 3, each Lender that has

 

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signed this Amendment shall be deemed to have accepted, and to be satisfied with, each document or other matter required under this Section 3.

SECTION 4.     REPRESENTATIONS AND WARRANTIES . In order to induce the Lenders party hereto and the Administrative Agent to enter into this Amendment, the Borrower hereby represents and warrants to the Lenders party hereto and the Administrative Agent that (a) this Amendment has been duly authorized by all necessary organizational actions and, if required, actions by equity holders of the Borrower, (b) this Amendment has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law and (c) this Amendment will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries.

SECTION 5.     CONTINUING EFFECT . Except as expressly amended, waived or modified hereby, the Loan Documents shall continue to be and shall remain in full force and effect in accordance with their respective terms. This Amendment shall not constitute an amendment, waiver or modification of any provision of any Loan Document not expressly referred to herein and shall not be construed as an amendment, waiver or modification of any action on the part of the Borrower or the other Loan Parties that would require an amendment, waiver or consent of the Administrative Agent or the Lenders except as expressly stated herein, or be construed to indicate the willingness of the Administrative Agent or the Lenders to further amend, waive or modify any provision of any Loan Document amended, waived or modified hereby for any other period, circumstance or event. Except as expressly modified by this Amendment, the Credit Agreement and the other Loan Documents are ratified and confirmed and are, and shall continue to be, in full force and effect in accordance with their respective terms. Except as expressly set forth herein, each Lender and the Administrative Agent reserves all of its rights, remedies, powers and privileges under the Credit Agreement, the other Loan Documents, applicable law and/or equity. Any reference to the “Credit Agreement” in any Loan Document or any related documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment and the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include this Amendment.

SECTION 6.     GOVERNING LAW . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.     SUCCESSORS AND ASSIGNS . This Amendment shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, the Administrative Agent, the other Agents and the Lenders, and each of their respective successors and assigns, and shall not inure to the benefit of any third parties. The execution and delivery of this Amendment by any Lender prior to the Effective Date shall be binding upon its successors and assigns and shall be effective as to any Loans or Commitments assigned to it after such execution and delivery.

SECTION 8.     ENTIRE AGREEMENT . This Amendment, the Credit Agreement and the other Loan Documents represent the entire agreement of the Loan Parties, the Administrative Agent, the Agents, the Lenders and the Lenders, as applicable, with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any other Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Credit Agreement or the other Loan Documents.

SECTION 9.     RELEASE . Each of the Loan Parties (on behalf of itself and its Subsidiaries) for itself and for its successors in title and assignees and, to the extent the same is claimed by right of,

 

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through or under any of the Loan Parties, for its past, present and future employees, agents, representatives (other than legal representatives), officers, directors, shareholders, and trustees (each, a “ Releasing Party ” and collectively, the “ Releasing Parties ”), does hereby remise, release and discharge, and shall be deemed to have forever remised, released and discharged, the Administrative Agent, each of the Lenders and each of the other Secured Parties in their respective capacities as such under the Loan Documents, and the Agent’s, each Lender’s and each other Secured Party’s respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and entities to whom the Agent, each of the Lenders and each of the other Secured Parties or any of their respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals would be liable if such persons or entities were found to be liable to any Releasing Party or any of them (collectively, hereinafter the “ Releasees ”), from any and all manner of action and actions, cause and causes of action, claims, charges, demands, counterclaims, crossclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, rights of setoff and recoupment, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature, whether in law, equity or otherwise (including, without limitation, any claims relating to (i) the making or administration of the Loans, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability” theories, (ii) any covenants, agreements, duties or obligations set forth in the Loan Documents, (iii) increased financing costs, interest or other carrying costs, (iv) penalties, (v) lost profits or loss of business opportunity, (vi) legal, accounting and other administrative or professional fees and expenses and incidental, consequential and punitive damages payable to third parties, (vii) damages to business reputation, or (viii) any claims arising under 11 U.S.C. §§ 541-550 or any claims for avoidance or recovery under any other federal, state or foreign law equivalent), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing or heretofore existing against any of the Releasees, and which are, in each case, based on any act, fact, event or omission or other matter, cause or thing occurring at any time prior to or on the date hereof, directly or indirectly arising out of, connected with or relating to this Amendment, the Credit Agreement or any other Loan Document and the transactions contemplated hereby or thereby, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing (each, a “ Claim ” and collectively, the “ Claims ”); provided, that, no Releasing Party shall have any obligation with respect to Claims to the extent such Claims are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or bad faith of any Releasee. Each Releasing Party further stipulates and agrees with respect to all Claims, that it hereby waives, to the fullest extent permitted by applicable law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this Section 9. The Borrower and the other Loan Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by the Borrower or any other Loan Parties pursuant to this Section 9. If the Borrower, any other Loan Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, the Borrower and other Loan Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all reasonable and documented attorneys’ fees and costs incurred by any Releasee as a result of such violation. Each of the Releasing Parties hereby acknowledges that this release constitutes a material inducement to enter into

 

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this Amendment, that each Releasee has already relied on this release in entering into this Amendment, and that each Releasee will continue to rely on this release in its related future dealings. Each of the Releasing Parties hereby further warrants and represents that it has reviewed the terms of this Section 9 with its legal counsel and that it knowingly and voluntarily enters into the release contained in this Section 9 following consultation with legal counsel. This release is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this Section 9 and executed by each of the parties hereto).

SECTION 10.     LOAN DOCUMENT . This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

SECTION 11.     COUNTERPARTS . This Amendment may be executed by the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Amendment may be delivered by facsimile transmission or electronic PDF of the relevant signature page hereof.

SECTION 12.     HEADINGS . Section headings used in this Amendment are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

SECTION 13.     LOAN PARTY ACKNOWLEDGMENTS

13.1        Each Loan Party hereby (i) expressly acknowledges the terms of the Credit Agreement as amended by the Amendment, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and security agreements) to which it is a party, (iii) acknowledges, renews and extends its continued liability under all such Loan Documents and agrees such Loan Documents remain in full force and effect, (iv) agrees that each Security Document secures all Obligations of the Loan Parties in accordance with the terms thereof and (v) further confirms that each Loan Document to which it is a party is and shall continue to be in full force and effect and the same are hereby ratified and confirmed in all respects.

13.2        Each Loan Party hereby reaffirms, as of the Effective Date, (i) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Agreement and the transactions contemplated thereby, and (ii) its guarantee of payment of the Obligations pursuant to the Guarantee and Collateral Agreement and its grant of Liens on the Collateral to secure the Obligations.

[ remainder of page intentionally left blank ]

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

 

HORIZON GLOBAL CORPORATION ,

as the Borrower

By:  

/s/ Brian Whittman

  Name: Brian Whittman
  Title: Vice President, Finance

[Signature Page to Third Amendment]

HORIZON GLOBAL COMPANY LLC
  By:   /s/ Brian Whittman                        
    Name: Brian Whittman
    Title: Vice President, Finance
HORIZON GLOBAL AMERICAS INC.
  By:   /s/ Brian Whittman                        
    Name: Brian Whittman
    Title: Vice President, Finance:

HORIZON INTERNATIONAL HOLDINGS LLC

  By:  

/s/ Brian Whittman

    Name: Brian Whittman
    Title: Vice President, Finance

[Signature Page to Third Amendment]

CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent
By:  

/s/ Matthew Trybula

  Name: Matthew Trybula
  Title: Associate Counsel

[Signature Page to Third Amendment]

KCOF Management VIII, L.L.C., as a Lender
By:   /s/ Albert Scheer                            
          Name: Albert Scheer
          Title: Vice President

[Signature Page to Third Amendment]

BTC Holdings Fund I, LLC ,

By: Blue Torch Credit Opportunities Fund I LP, its

sole member

By: Blue Torch Credit Opportunities GP LLC, its

general partner,

as a Lender
By: /s/ Kevin Genda                        
Kevin Genda
Authorized Signatory

[Signature Page to Third Amendment]

SENIOR DEBT PORTFOLIO

By: Boston Management and Research

as Investment Advisor

as a Lender
By:  

/s/ Michael B. Botthof

      Name: Michael B. Botthof
      Title: Vice President

[Signature Page to Third Amendment]

One Eleven Funding I, Ltd.

One Eleven Funding II, Ltd.

By: Credit Suisse Asset Management, LLC, as portfolio manager,

as Lenders
By:   /s/ John M. Ladigoski                    
        Name: John M. Ladigoski
        Title: Authorized Signatory

[Signature Page to Third Amendment]

Exhibit 10.9

Execution Version

SECOND LIEN TERM LOAN CREDIT AGREEMENT

dated as of March 15, 2019,

among

HORIZON GLOBAL CORPORATION,

The Lenders Party Hereto,

and

CORTLAND CAPITAL MARKET SERVICES LLC,

as Administrative Agent and Collateral Agent

 

 

 

TABLE OF CONTENTS

 

          Page  
ARTICLE I  
DEFINITIONS  

SECTION 1.01

  

Defined Terms

     1  

SECTION 1.02

  

Classification of Loans and Borrowings

     26  

SECTION 1.03

  

Terms Generally

     26  

SECTION 1.04

  

Accounting Terms; GAAP

     27  
ARTICLE II  
THE CREDITS  

SECTION 2.01

  

Loans

     27  

SECTION 2.02

  

Borrowings

     27  

SECTION 2.03

  

Requests for Borrowings

     28  

SECTION 2.04

  

[Reserved]

     28  

SECTION 2.05

  

[Reserved]

     28  

SECTION 2.06

  

Funding of Borrowings

     28  

SECTION 2.07

  

Interest Elections

     29  

SECTION 2.08

  

Termination of Commitments

     30  

SECTION 2.09

  

Repayment of Loans; Evidence of Debt

     30  

SECTION 2.10

  

Maturity Date

     30  

SECTION 2.11

  

Prepayment of Loans

     30  

SECTION 2.12

  

Fees

     32  

SECTION 2.13

  

Interest

     33  

SECTION 2.14

  

Alternate Rate of Interest

     34  

SECTION 2.15

  

Increased Costs

     35  

SECTION 2.16

  

Break Funding Payments

     36  

SECTION 2.17

  

Taxes

     36  

SECTION 2.18

  

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

     39  

SECTION 2.19

  

Mitigation Obligations; Replacement of Lenders

     40  
ARTICLE III  
REPRESENTATIONS AND WARRANTIES  

SECTION 3.01

  

Organization; Powers

     41  

SECTION 3.02

  

Authorization; Enforceability

     41  

SECTION 3.03

  

Governmental Approvals; No Conflicts

     41  

SECTION 3.04

  

Financial Condition; No Material Adverse Change

     42  

SECTION 3.05

  

Properties

     42  

SECTION 3.06

  

Litigation and Environmental Matters

     42  

SECTION 3.07

  

Compliance with Laws and Agreements

     43  

SECTION 3.08

  

Investment Company Status

     43  

SECTION 3.09

  

Taxes

     43  

 

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          Page  

SECTION 3.10

  

ERISA

     43  

SECTION 3.11

  

Disclosure

     43  

SECTION 3.12

  

Subsidiaries

     44  

SECTION 3.13

  

Insurance

     44  

SECTION 3.14

  

Labor Matters

     44  

SECTION 3.15

  

Solvency

     44  

SECTION 3.16

  

[Reserved.]

     44  

SECTION 3.17

  

Security Documents

     44  

SECTION 3.18

  

Federal Reserve Regulations

     45  

SECTION 3.19

  

Anti-Corruption Laws and Sanctions

     45  

SECTION 3.20

  

Material Contracts

     46  

SECTION 3.21

  

EEA Financial Institutions

     46  

SECTION 3.22

  

Disclosure

     46  
ARTICLE IV  
CONDITIONS  

SECTION 4.01

  

Closing Date

     46  
ARTICLE V  
AFFIRMATIVE COVENANTS  

SECTION 5.01

  

Financial Statements and Other Information

     48  

SECTION 5.02

  

Notices of Material Events

     51  

SECTION 5.03

  

Information Regarding Collateral

     52  

SECTION 5.04

  

Existence; Conduct of Business

     53  

SECTION 5.05

  

Payment of Obligations

     53  

SECTION 5.06

  

Maintenance of Properties

     53  

SECTION 5.07

  

Insurance

     53  

SECTION 5.08

  

Casualty and Condemnation

     54  

SECTION 5.09

  

Books and Records; Inspection and Audit Rights

     54  

SECTION 5.10

  

Compliance with Laws

     54  

SECTION 5.11

  

Use of Proceeds

     54  

SECTION 5.12

  

Additional Subsidiaries

     54  

SECTION 5.13

  

Further Assurances

     55  

SECTION 5.14

  

Ratings

     55  
ARTICLE VI  
NEGATIVE COVENANTS  

SECTION 6.01

  

Indebtedness; Certain Equity Securities

     56  

SECTION 6.02

  

Liens

     59  

SECTION 6.03

  

Fundamental Changes

     60  

SECTION 6.04

  

Investments, Loans, Advances, Guarantees and Acquisitions

     61  

SECTION 6.05

  

Asset Sales

     62  

SECTION 6.06

  

Sale and Leaseback Transactions

     63  

SECTION 6.07

  

Hedging Agreements

     63  

SECTION 6.08

  

Restricted Payments; Certain Payments of Indebtedness

     63  

 

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          Page  

SECTION 6.09

  

Transactions with Affiliates

     65  

SECTION 6.10

  

Restrictive Agreements

     65  

SECTION 6.11

  

Amendment of Material Documents

     66  

SECTION 6.12

  

[Reserved]

     66  

SECTION 6.13

  

Secured Net Leverage Ratio

     66  

SECTION 6.14

  

Use of Proceeds

     67  

SECTION 6.15

  

Anti-Layering

     67  
ARTICLE VII  
EVENTS OF DEFAULT  
ARTICLE VIII  
THE AGENTS  
ARTICLE IX  
[RESERVED]  
ARTICLE X  
MISCELLANEOUS  

SECTION 10.01

  

Notices

     72  

SECTION 10.02

  

Waivers; Amendments

     73  

SECTION 10.03

  

Expenses; Indemnity; Damage Waiver

     74  

SECTION 10.04

  

Successors and Assigns

     76  

SECTION 10.05

  

Survival

     78  

SECTION 10.06

  

Counterparts; Integration; Effectiveness

     78  

SECTION 10.07

  

Severability

     79  

SECTION 10.08

  

Right of Setoff

     79  

SECTION 10.09

  

Governing Law; Jurisdiction; Consent to Service of Process

     79  

SECTION 10.10

  

WAIVER OF JURY TRIAL

     80  

SECTION 10.11

  

Headings

     80  

SECTION 10.12

  

Confidentiality

     80  

SECTION 10.13

  

Interest Rate Limitation

     80  

SECTION 10.14

  

Intercreditor Agreement

     81  

SECTION 10.15

  

Release of Liens and Guarantees

     81  

SECTION 10.16

  

PATRIOT Act

     81  

SECTION 10.17

  

No Fiduciary Duty

     82  

SECTION 10.18

  

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

     82  

 

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SCHEDULES :

    

Schedule 2.01

 

–

  

Commitments

Schedule 3.03

 

–

  

Governmental Approvals; No Conflicts

Schedule 3.05

 

–

  

Real Property

Schedule 3.06

 

–

  

Disclosed Matters

Schedule 3.12

 

–

  

Subsidiaries

Schedule 3.13

 

–

  

Insurance

Schedule 3.20

 

–

  

Material Contracts

Schedule 5.13

 

–

  

Post-Closing Schedule

Schedule 6.01

 

–

  

Existing Indebtedness

Schedule 6.02

 

–

  

Existing Liens

Schedule 6.04

 

–

  

Existing Investments

Schedule 6.09

 

–

  

Existing Affiliate Transactions

Schedule 6.10

 

–

  

Existing Restrictions

EXHIBITS :

    

Exhibit A

 

–

  

Form of Assignment and Assumption

Exhibit B

 

–

  

Form of Borrowing Request

Exhibit C

 

–

  

[Reserved]

Exhibit D

 

–

  

Form of Guarantee and Collateral Agreement

Exhibit E

 

–

  

Form of U.S. Tax Certificate

Exhibit F

 

–

  

Form of Perfection Certificate

Exhibit G

 

–

  

Form of Interest Election Request

Exhibit H

 

–

  

Form of Cash Election Request

 

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SECOND LIEN TERM LOAN CREDIT AGREEMENT dated as of March 15, 2019 (this “ Agreement ”), among HORIZON GLOBAL CORPORATION, as Borrower, each lender from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”), CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent and CORRE PARTNERS MANAGEMENT, L.L.C. as Lender Representative (together with its permitted successors in such capacity, the “ Lender Representative ”).

RECITALS:

In consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01      Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

“ ABL Agent ” means Bank of America, N.A., as administrative agent and/or collateral agent, as applicable, under the ABL Credit Agreement, and its successors and assigns.

“ ABL Credit Agreement ” means the ABL Credit Agreement dated as of June 30, 2015, among the Borrower, the Subsidiaries party thereto as borrowers, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, as such document or the credit facility thereunder has been amended on and prior to the date hereof and as may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement and the ABL/Term Loan Intercreditor Agreement.

“ ABL Foreign Loan Party ” means any Foreign Subsidiary that is a party to the ABL Loan Documents as a borrower thereunder and/or is a party to any ABL Security Document as a grantor or guarantor thereunder.

“ ABL Guarantee and Collateral Agreement ” means the Guarantee and Collateral Agreement as defined in the ABL Credit Agreement.

“ ABL Loan ” means a loan made pursuant to the ABL Credit Agreement.

“ ABL Loan Documents ” means collectively (a) the ABL Credit Agreement, (b) the ABL Security Documents, (c) any promissory note evidencing loans under the ABL Credit Agreement and (d) any amendment, waiver, supplement or other modification to any of the documents described in clauses (a) through (c), in each case as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL Priority Collateral ” has the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.

“ ABL Security Documents ” means the collective reference to the ABL Guarantee and Collateral Agreement, the Mortgages (as defined in the ABL Credit Agreement) and all other security

documents delivered to the ABL Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Loan Party under the ABL Credit Agreement or the ABL Guarantee and Collateral Agreement, as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL/Term Loan Intercreditor Agreement ” means the Amended and Restated Intercreditor Agreement, dated as of the date hereof, among the Borrower, the other Loan Parties, the ABL Agent, the First Lien Term Loan Agent and the Collateral Agent.

“ ABR ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“ Adjusted LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate; provided that the Adjusted LIBO Rate shall not be less than 1.00% per annum

“ Administrative Agent ” means Cortland Capital Market Services LLC, in its capacity as administrative agent for the Lenders hereunder.

“ Administrative Agent’s Account ” means the account from time to time designated by the Administrative Agent as the account to which payments hereunder are to be directed.

“ Administrative Questionnaire ” means, with respect to each Lender, 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.

“ Agent Fee Letter ” means that certain fee letter dated as of the date hereof, by and between the Borrower and the Administrative Agent, as it may be amended, amended and restated, supplemented or otherwise modified from time to time.

“ Agents ” means, collectively, the Administrative Agent, the Collateral Agent and the Lender Representative.

“ Agreed Security Principles ” has the meaning assigned in the Guarantee and Collateral Agreement.

“ Agreement ” has the meaning assigned to such term in the preamble hereto.

“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 1/2 of 1% and (c) the Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in dollars with a maturity of one month plus 1%; provided that the Alternate Base Rate shall not be less than 2.00% per annum. For purposes of clause (c) above, the Adjusted LIBO Rate on any day shall be the LIBO Rate, two Business Days prior to such day for deposits in dollars with a maturity of one month. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such

 

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change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof, then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above.

“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.

“ Applicable Law ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered 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.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any Person whose consent is required by Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

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

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

“ Beneficial Ownership Certification ” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“ Beneficial Ownership Regulation ” means 31 C.F.R. § 1010.230.

“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrower ” means Horizon Global Corporation, a Delaware corporation.

“ Borrowing ” means Loans of the same Type, made, converted or continued on the same date and as to which a single Interest Period is in effect.

“ Borrowing Request ” means a written request by the Borrower for a Borrowing in accordance with Section 2.03, which shall be in the form of Exhibit B or any other form approved by the Administrative Agent.

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that when used in connection with any Eurocurrency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

 

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“ Capital Expenditures ” means, for any period, without duplication, (a) the additions to property, plant and equipment and other capital expenditures of the Borrower and its consolidated Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Borrower for such period prepared in accordance with GAAP other than such additions and expenditures made with Net Proceeds from any casualty or other insured damage or condemnation or similar awards and (b) Capital Lease Obligations incurred by the Borrower and its consolidated Subsidiaries during such period.

“ 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; provided that any change in GAAP after the Closing Date that would require lease obligations that would have been characterized and accounted for as operating leases in accordance with GAAP as in effect on the Closing Date to be characterized and accounted for as Capital Lease Obligations shall be disregarded for purposes hereof.

“ Cash Election Request ” means a written request by the Borrower in accordance with Section 2.13(a), which shall be in the form of Exhibit H or any other form approved by the Administrative Agent.

“ Certificate of Designation ” means the Certificate of Designation of 18.0% Series A cumulative preferred stock of the Borrower dated as of the date hereof.

“ CFC ” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ Change in Control ” means (a) the acquisition of beneficial ownership, directly or indirectly, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder), of Equity Interests representing more than 35% of either the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in the Borrower or (b) the occurrence of any change in control (or similar event, however denominated) with respect to the Borrower under (i) any indenture or other agreement in respect of Material Indebtedness to which the Borrower or any Subsidiary is a party or (ii) any instrument governing any preferred stock of the Borrower or any Subsidiary having a liquidation value or redemption value in excess of $5,000,000.

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the date hereof, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date hereof or (c) compliance by any Lender (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date hereof; 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, promulgated or issued.

“ Closing Date ” means the date on which the conditions specified in Section 4.01 have been satisfied.

 

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“ Closing Date Preferred Shar es” means the shares of Series A cumulative preferred stock, par value $0.01 per share, issued by the Borrower to Lenders affiliated with the Lender Representative on the Closing Date, which may be converted into additional warrants upon receipt of such approval as may be required from the stockholders of the Borrower, pursuant to the Certificate of Designation.

“ Closing Date Warrants ” means the warrants issued by the Borrower to the Lenders on the Closing Date.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” means any and all “ Collateral ,” as defined in any applicable Security Document.

“ Collateral Agent ” means Cortland Capital Market Services LLC, in its capacity as collateral agent for the Secured Parties under the Security Documents.

“ Collateral and Guarantee Requirement ” means the requirement that (and, with respect to Foreign Subsidiaries, subject to the Agreed Security Principles):

(a)        the Collateral Agent shall have received from each party thereto (other than the Collateral Agent) either (i) a counterpart of the Guarantee and Collateral Agreement duly executed and delivered on behalf of such Loan Party, or (ii) in the case of any Person that becomes a Subsidiary Loan Party after the Closing Date, a supplement to each of the Guarantee and Collateral Agreement and the Intercreditor Agreements, in each case in the form specified therein, duly executed and delivered on behalf of such Subsidiary Loan Party;

(b)        all outstanding Equity Interests of the Borrower and each Subsidiary owned by or on behalf of any Loan Party shall have been pledged pursuant to the Guarantee and Collateral Agreement (except that the Loan Parties shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary or any CFC (other than in each case, with respect to any Foreign Subsidiary that is organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands)) and 100% of the Equity Interests of any Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands shall have been pledged and the Collateral Agent shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c)        all Indebtedness of the Borrower and each Subsidiary in an aggregate principal amount that exceeds $500,000 that is owing to any Loan Party shall be evidenced by a promissory note and shall have been pledged pursuant to the Guarantee and Collateral Agreement and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(d)        all documents and instruments, including Uniform Commercial Code financing statements and intellectual property security agreements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Guarantee and Collateral Agreement and perfect such Liens to the extent required by, and with the priority required by, the Guarantee and Collateral Agreement (in each case subject to the Intercreditor Agreements), shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;

 

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(e)        the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to any Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid second Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 6.02, together with such endorsements, coinsurance and reinsurance as the Administrative Agent, the Lender Representative or the Required Lenders may reasonably request, but only to the extent such endorsements are (A) available in the relevant jurisdiction ( provided in no event shall the Collateral Agent request a creditors’ rights endorsement) and (B) available at commercially reasonable rates, (iii) if any Mortgaged Property is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, evidence of such flood insurance as may be required under Applicable Law, including Regulation H of the Board of Governors, and an acknowledged notice to the Borrower, (iv) if reasonably requested by the Lender Representative, a current appraisal of any Mortgaged Property, prepared by an appraiser acceptable to the Lender Representative, and in form and substance satisfactory to the Required Lenders (it being understood that if such appraisal is required in order to comply with the Lender Representative’s internal policies, such request shall be deemed to be reasonable), (v) if reasonably requested by the Lender Representative, an environmental assessment with respect to any Mortgaged Property, prepared by environmental engineers reasonably acceptable to the Lender Representative, and such other reports, certificates, studies or data with respect to such Mortgaged Property as the Lender Representative may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with the Lender Representative’s internal policies, such request shall be deemed to be reasonable), and (vi) such abstracts, legal opinions and other documents as the Lender Representative or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; provided , however , in no event shall surveys be required to be obtained with respect to any Mortgaged Property; and

(f)        each Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder;

provided , that, (i) with respect to any Subsidiary Loan Party that is a Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands, the Collateral and Guarantee Requirement shall require the provision of the documents and satisfaction of the requirements set forth in Schedule 5.13 (with such amendments thereto and extensions of time as may be agreed by the Administrative Agent) and (ii) with respect to any Subsidiary Loan Party that is a Foreign Subsidiary organized under the laws of any other jurisdiction, the Collateral and Guarantee Requirement shall be modified as reasonably requested by the Required Lenders to reflect the requirements and limitations of the jurisdiction in which such Foreign Subsidiary is organized.

Notwithstanding the foregoing, no Subsidiary of the Borrower shall be a guarantor or other obligor under the First Lien Term Loan Documents unless it shall also be a guarantor of the Loans and a Subsidiary Loan Party under the Loan Documents.

“ Commission ” means the Securities and Exchange Commission or any Governmental Authority succeeding to any or all of the functions of said Commission.

 

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“ Commitment ” means, with respect to any Lender, such Lender’s commitment to make a Loan. The Commitments of all Lenders are set forth on Schedule 2.01 hereto. The aggregate amount of the Commitments as of the Closing Date is $51,020,408.

“ Consolidated EBITDA ” means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated cash interest expense for such period, (ii) consolidated income tax expense for such period (including all single business tax expenses imposed by state law), (iii) all amounts attributable to depreciation and amortization for such period, (iv) any extraordinary charges for such period, (v) interest-equivalent costs associated with any Specified Vendor Receivables Financing for such period, whether accounted for as interest expense or loss on the sale of receivables, and all Preferred Dividends, (vi) all losses during such period that relate to the retirement of Indebtedness, (vii) noncash expenses during such period resulting from the grant of Equity Interests to management and employees of the Borrower or any of the Subsidiaries, (viii) the aggregate amount of deferred financing expenses for such period, (ix) all other noncash expenses or losses of the Borrower or any of the Subsidiaries for such period (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), (x) fees, costs and expenses in connection with the Transactions, (xi) fees and expenses in connection with the issuance or offering of Equity Interests or any Indebtedness (in each case, whether or not consummated), (xii) costs and expenses of professional fees of the Borrower and its Subsidiaries or of any Agent or Lender to the extent the Borrower is required to reimburse such Agent or Lender therefor, (xiii) unusual or nonrecurring expenses or costs, including restructuring, moving and severance expense, provided that the aggregate amount added to Consolidated EBITDA pursuant to this clause (xiii) shall not exceed $ 5,000,000 in any four Fiscal Quarter period, (xiv) fees, costs and expenses incurred in connection with any proposed asset sale (whether or not consummated); provided that the aggregate amount added to Consolidated EBITDA pursuant to this clause (xiv) shall not exceed $5,000,000 for all periods and (xv) non-cash losses on asset sales, minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) any non-cash income, profits or gains for such period and (iii) any gains realized from the retirement of Indebtedness after the Closing Date, all determined on a consolidated basis in accordance with GAAP. If the Borrower or any Subsidiary has made any Significant Investment or any sale, transfer, lease or other disposition of assets outside of the ordinary course of business permitted by Section 6.05 during the relevant period for determining any leverage ratio hereunder, Consolidated EBITDA for the relevant period shall be calculated only for purposes of determining such leverage ratio after giving pro forma effect thereto, as if such Significant Investment or sale, transfer, lease or other disposition of assets had occurred on the first day of the relevant period for determining Consolidated EBITDA; provided that with respect to any Significant Investment, (x) any pro forma adjustment made to Consolidated EBITDA shall be in proportion to the percentage ownership of the Borrower or such Subsidiary, as applicable, in the Subject Person (e.g. if the Borrower acquires 70% of the Equity Interests of the Subject Person, a pro forma adjustment to Consolidated EBITDA shall be made with respect to no more than 70% of the EBITDA of the Subject Person) and (y) pro forma effect shall only be given to such Significant Investment if the Indebtedness of the Subject Person is included in Total Indebtedness for purposes of calculating the applicable leverage ratio in proportion to the percentage ownership of the Borrower or such Subsidiary, as applicable, in such Subject Person. Any such pro forma calculations may include operating and other expense reductions and other adjustments for such period resulting from any sale, transfer, lease or other disposition of assets that is being given pro forma effect to the extent that such operating and other expense reductions and other adjustments would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933 (“Regulation S-X”). Notwithstanding the foregoing, Consolidated EBITDA for the fiscal quarters ending March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 shall be deemed to be $4,390,000, $20,490,000, $17,090,000 and $-8,467,535, respectively.

 

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“ Consolidated Net Income ” means, for any period, the net income or loss of the Borrower and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Person (other than the Borrower or a Significant Investment) in which any other Person (other than the Borrower or any Subsidiary or any director holding qualifying shares in compliance with Applicable Law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of the Subsidiaries during such period, (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary or the date that such Person’s assets are acquired by the Borrower or any Subsidiary and (c) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income.

“ 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.

“ Convertible Notes ” means the 2.75% Convertible Senior Notes of the Borrower due 2022 issued pursuant to the Convertible Notes Indenture.

“ Convertible Notes Indenture ” means the First Supplemental Indenture between the Borrower and Wells Fargo Bank, National Association, dated as of February 1, 2017.

“ Credit Facility ” means a category of Commitments and extensions of credit thereunder.

“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“ Discharge of ABL Obligations ” has the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.

“ Discharge of Senior Obligations ” shall have the meaning as defined in the Term Intercreditor Agreement.

“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06.

“ dollars ” or “ $ ” refers to lawful money of the United States of America.

“ Domestic Subsidiary ” means any Subsidiary, other than the Foreign Subsidiaries.

“ ECF Percentage ” means 100%.

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

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

 

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

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“ Environmental Liability ” means any liabilities, obligations, damages, losses, claims, actions, suits, judgments, or orders, contingent or otherwise (including any liability for damages, costs of environmental remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), directly or indirectly resulting from or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Environmental Notice ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Equity Contribution Percentage ” means 66 2/3%.

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person or any warrants, options or other rights to acquire such interests, but excluding any debt securities convertible into or referencing any of the foregoing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“ ERISA Event ” means (a) any “ reportable event ,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) a failure by any Plan to satisfy the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such Plan in each instance, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) a determination that any Plan is, or is expected to be, in “ at risk ” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA; (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (h) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning

 

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the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA or in “ endangered ” or “ critical ” status (within the meaning of Section 432 of the Code or Section 305 of ERISA).

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

“ Eurocurrency ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“ Event of Default ” has the meaning assigned to such term in Article VII.

“ Excess Cash Flow ” means, for any fiscal year, the sum (without duplication) of:

(a)        Consolidated Net Income for such fiscal year, adjusted to exclude any gains or losses attributable to Prepayment Events; plus

(b)        the excess, if any, of the Net Proceeds received during such fiscal year by the Borrower and its consolidated Subsidiaries in respect of any Prepayment Events over (x) amounts permitted to be reinvested pursuant to Section 2.11(c) and (y) the aggregate principal amount of Loans prepaid pursuant to Section 2.11(c) in respect of such Net Proceeds; plus

(c)        depreciation, amortization and other noncash charges or losses deducted in determining such consolidated net income (or loss) for such fiscal year; plus

(d)        the sum of (i) the amount, if any, by which Net Working Capital decreased during such fiscal year plus (ii) the net amount, if any, by which the consolidated deferred revenues and other consolidated accrued long-term liability accounts of the Borrower and its consolidated Subsidiaries increased during such fiscal year plus (iii) the net amount, if any, by which the consolidated accrued long-term asset accounts of the Borrower and its consolidated Subsidiaries decreased during such fiscal year; minus

(e)        the sum of (i) any noncash gains included in determining such consolidated net income (or loss) for such fiscal year plus (ii) the amount, if any, by which Net Working Capital increased during such fiscal year plus (iii) the net amount, if any, by which the consolidated deferred revenues and other consolidated accrued long-term liability accounts of the Borrower and its consolidated Subsidiaries decreased during such fiscal year plus (iv) the net amount, if any, by which the consolidated accrued long-term asset accounts of the Borrower and its consolidated Subsidiaries increased during such fiscal year; minus

(f)        Capital Expenditures for such fiscal year and Capital Expenditures to be made within 90 days following the end of such fiscal year pursuant to binding agreements entered into by the Borrower or any of its consolidated Subsidiaries prior to the end of such fiscal year; provided that to the extent any such Capital Expenditure is not made (or if the amount of any such Capital Expenditures less than the amount deducted with respect hereto) within 90 days after such fiscal year, the amount (or such portion of the amount) thereof shall be added back to Excess Cash Flow for the subsequent period (except

 

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to the extent attributable to the incurrence of Capital Lease Obligations or otherwise financed by incurring Long-Term Indebtedness); minus

(g)        the aggregate principal amount of Long-Term Indebtedness repaid or prepaid by the Borrower and its consolidated Subsidiaries during such fiscal year, excluding (i) Indebtedness in respect of ABL Loans and other revolving Indebtedness (in each case except to the extent the revolving credit commitments in respect thereof are permanently reduced in the amount of and at the time of any such payment) and letters of credit, (ii) Loans prepaid pursuant to Section 2.11(c) or (d), (iii) optional prepayments of Loans and (iv) repayments or prepayments of Long-Term Indebtedness financed by incurring other Long-Term Indebtedness; minus

(h)        the noncash impact of currency translations and other adjustments to the equity account, including adjustments to the carrying value of marketable securities and to pension liabilities, in each case to the extent such items would otherwise constitute Excess Cash Flow.

“ Excess Cash Flow Period ” means each fiscal year of the Borrower, commencing December 31, 2019.

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder or under any other Loan Document, (a) income or franchise taxes imposed on (or measured by) its net or overall gross income (or net worth or similar Taxes imposed in lieu thereof) by the United States of America, or by any other jurisdiction as a result of such recipient being organized in or having its principal office in or applicable lending office in such jurisdiction, or as a result of any other present or former connection (other than a connection arising solely from this Agreement or any other Loan Document) between such recipient and such jurisdiction, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Non-U.S. Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any United States withholding Taxes resulting from any law in effect (x) at the time such Non-U.S. Lender becomes a party to this Agreement or, with respect to any additional position in any Loan acquired after such Non-U.S. Lender becomes a party hereto, at the time such additional position is acquired by such Non-U.S. Lender or (y) at the time such Non-U.S. Lender designates a new lending office, except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, immediately prior to designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such United States withholding Tax pursuant to Section 2.17(a), (d) any United States withholding Tax imposed pursuant to FATCA and (e) any withholding Tax that is attributable to a recipient’s failure to comply with Section 2.17(g).

“ FATCA ” means (i) Sections 1471 through 1474 of the Code as of the date of this Agreement or any amended or successor provision that is substantively comparable and not materially more onerous to comply with, and, in each case, any regulations or official interpretations thereof, (ii) any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the date of this Agreement or any amended or successor provision as described in clause (i) above and (iii) any law, regulation, rule, promulgation or official agreement implementing an official government agreement with respect to the foregoing.

“ Federal Funds Effective Rate ” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate; provided that if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement;

 

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provided , further , that if no such rate is available for such date, the Federal Funds Effective Rate shall be the average of the quotations (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) for the day of such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent.

“ Fee Letter ” means the Second Amended & Restated Fee Letter dated as of March 8, 2019, among the Borrower and the Lender Representative.

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“ First Lien Indebtedness ” means, collectively, (i) Indebtedness under the ABL Credit Agreement and (ii) Indebtedness under the First Lien Term Loan Credit Agreement.

“ First Lien Term Loan ” means a loan made pursuant to the First Lien Term Loan Credit Agreement.

“ First Lien Term Loan Agent ” means JPMorgan Chase Bank, N.A., as administrative agent and/or collateral agent, as applicable, under the First Lien Term Loan Credit Agreement, and its successors and assigns.

“ First Lien Term Loan Cap ” means, with respect to any Indebtedness under the First Lien Term Loan Documents, an amount equal to (a) the sum of (i) the $191,000,000 plus (ii) $20,000,000 minus (b) the amount of any principal repayments or prepayments applied to the Indebtedness under the First Lien Term Loan Documents after the Closing Date (excluding any prepayments resulting from a “Refinancing” made pursuant to (and as defined in) the Term Intercreditor Agreement).

“ First Lien Term Loan Credit Agreement ” means the Term Loan Credit Agreement, dated as of June 30, 2015, among the Borrower, the First Lien Term Loan Lenders and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, as such document or the credit facility thereunder may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement and the Term Intercreditor Agreement.

“ First Lien Term Loan Documents ” means collectively (a) the First Lien Term Loan Credit Agreement, (b) the First Lien Term Loan Security Documents, (c) any promissory note evidencing loans under the First Lien Term Loan Credit Agreement and (d) any amendment, waiver, supplement or other modification to any of the documents described in clauses (a) through (c), in each case as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement and the Term Intercreditor Agreement.

“ First Lien Term Loan Guarantee and Collateral Agreement ” means the Guarantee and Collateral Agreement as defined in the First Lien Credit Agreement.

“ First Lien Term Loan Lenders ” means the lenders from time to time party to the First Lien Term Loan Credit Agreement.

“ First Lien Term Loan Security Documents ” means the collective reference to the First Lien Guarantee and Collateral Agreement, the Mortgages (as defined in the First Lien Credit Agreement) and all other security documents delivered to the First Lien Administrative Agent granting a Lien on any

 

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property of any Person to secure the obligations and liabilities of any Loan Party under the First Lien Credit Agreement or the First Lien Guarantee and Collateral Agreement, as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ Fixed Charge Coverage Ratio ” means, on any date, the ratio of (a) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on or most recently prior to such date to (b) the sum of, in each case for the Borrower and its Subsidiaries for such period and to the extent paid in cash, (i) consolidated cash interest expense, (ii) interest-equivalent costs associated with any Specified Vendor Receivables Financing, whether accounted for as interest expense or loss on the sale of receivables, (iii) all Preferred Dividends and (iv) all required amortization payments on Indebtedness.

“ FLSA ” means the Fair Labor Standards Act of 1938, as amended from time to time.

“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

“ GAAP ” means generally accepted accounting principles in the United States of America.

“ Governmental Authority ” means the government of the United States of America, any other nation or 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 body exercising such powers or functions, 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 or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term “ Guarantee ” shall not include endorsements for collection or deposit in the ordinary course of business.

“ Guarantee and Collateral Agreement ” means the Second Lien Term Loan Guarantee and Collateral Agreement, substantially in the form of Exhibit D, made by the Borrower and the Subsidiary Loan Parties party thereto in favor of the Collateral Agent for the benefit of the Secured Parties.

“ Hazardous Materials ” means all explosive, radioactive, hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

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“ Hedging Agreement ” means any (i) interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement, (ii) Permitted Bond Hedging Agreement or (iii) Permitted Warrant Transaction.

“ Impacted Interest Period ” has the meaning assigned to such term in the definition of “LIBO Rate.”

“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) solely for purposes of Section 6.01 hereof, any and all payment obligations of such Person under or Guarantee by such Person with respect to any Hedging Agreement. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term “ Indebtedness ” shall not include (a) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or capital stock and (b) trade payables and accrued expenses in each case arising in the ordinary course of business.

“ Indemnified Taxes ” means (a) any Taxes, other than Excluded Taxes, and (b) Other Taxes.

“ Intellectual Property Claim ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Intercreditor Agreements ” means the ABL/Term Loan Intercreditor Agreement and the Term Intercreditor Agreement.

“ Interest Election Request ” means a written request by the Borrower to continue a Borrowing in accordance with Section 2.07, which shall be in the form of Exhibit G or any other form approved by the Administrative Agent.

“ Interest Payment Date ” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

 

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“ Interest Period ” means, with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two or three months thereafter, as the Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“ Interpolated Rate ” means, at any time, the rate per annum (rounded to the same number of decimal places as the Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate (for the longest period for which that Screen Rate is available for dollars) that is shorter than the Impacted Interest Period and (b) the Screen Rate (for the shortest period for which that Screen Rate is available for dollars) that exceeds the Impacted Interest Period, in each case, as of the Specified Time on the Quotation Day for such Interest Period. When determining the rate for a period which is less than the shortest period for which the Screen Rate is available, the Screen Rate for purposes of clause (a) above shall be deemed to be the overnight rate for dollars determined by the Administrative Agent from such service as the Administrative Agent may select.

“ IRS ” means the United States Internal Revenue Service.

“ Lender Affiliate ” means, (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund that invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ Lender Representative ” has the meaning assigned to such term in the preamble hereto.

“ Lenders ” has the meaning specified in the introductory paragraph to this Agreement and shall include any Person that shall have become a party hereto after the Closing Date pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

“ LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, a rate per annum equal to the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for dollars for a period equal in length to such Interest Period as published on the applicable Bloomberg page that displays such rate (or, in the event such rate does not appear on such Bloomberg pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case the “ Screen Rate ”) as of the Specified Time on the Quotation Day for such Interest Period; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the Screen Rate shall not be available at such time for such Interest Period (an “ Impacted Interest Period ”) with respect to dollars, then the LIBO Rate shall be

 

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the Interpolated Rate at such time ( provided that if the Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement). If no such offered rate exists, such rate will be the rate of interest per annum as reasonably determined by the Administrative Agent, at which deposits of dollars in immediately available funds are offered as of the Specified Time on the Quotation Day for such Interest Period by three major banks reasonably satisfactory to the Administrative Agent in the London interbank market for such Interest Period for the applicable principal amount on such date of determination.

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“ Liquidity ” means, at any time, the sum of (i) U.S. Availability, Canadian Availability and UK Availability (each as defined in the ABL Credit Agreement or the equivalent terms in any replacement or refinancing thereof) plus (ii) unrestricted cash and Cash Equivalents of the Borrower and its Domestic Subsidiaries, any Subsidiary organized under the laws of Canada and Cequent UK Limited.

“ Loan Documents ” means this Agreement, the Security Documents, the Intercreditor Agreements, the Fee Letter, the Agent Fee Letter and the promissory notes, if any, executed and delivered pursuant to Section 2.09(e).

“ Loan Parties ” means the Borrower and the Subsidiary Loan Parties.

“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“ Long-Term Indebtedness ” means any Indebtedness that, in accordance with GAAP, constitutes (or, when incurred, constituted) a long-term liability, including the current portion of any Long-Term Indebtedness.

“ Margin Stock ” shall have the meaning assigned to such term in Regulation U.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, properties, assets, financial condition, or material agreements of the Borrower and the Subsidiaries, taken as a whole, (b) the ability of the Loan Parties in any material respect to perform their obligations under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document.

“ Material Agreements ” means any agreements or instruments relating to Material Indebtedness.

“ Material Indebtedness ” means (a) obligations in respect of the ABL Credit Agreement, (b) obligations in respect of the First Lien Term Loan Credit Agreement and (c) any other Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the “ principal amount ” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if

 

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such Hedging Agreement were terminated at such time. For the avoidance of doubt, “Material Indebtedness” shall not include any obligations under any Permitted Warrant Transaction.

“ Maturity Date ” means September 30, 2021.

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

“ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be in form and substance reasonably satisfactory to the Lender Representative.

“ Mortgaged Property ” means each parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“ Net Proceeds ” means, with respect to any event (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any noncash proceeds, but only as and when received, (ii) in the case of a casualty, insurance proceeds in excess of $500,000 and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and the Subsidiaries to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by the Borrower and the Subsidiaries as a result of such event to repay Indebtedness (other than First Lien Indebtedness or the Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all Taxes paid (or reasonably estimated to be payable) by the Borrower and the Subsidiaries, and the amount of any reserves established by the Borrower and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the 24-month period immediately following such event and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Borrower) to the extent such liabilities are actually paid within such applicable time periods.

“ Net Working Capital ” means, at any date, (a) the consolidated current assets of the Borrower and its consolidated Subsidiaries as of such date (excluding cash and Permitted Investments) minus (b) the consolidated current liabilities of the Borrower and its consolidated Subsidiaries as of such date (excluding current liabilities in respect of Indebtedness). Net Working Capital at any date may be a positive or negative number. Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.

“ Non-Consenting Lender ” has the meaning assigned to such term in Section 10.02(c).

“ Non-U.S. Lender ” means a Lender that is not a U.S. Person.

“ NYFRB ” means the Federal Reserve Bank of New York.

“ NYFRB Rate ” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Banking Day, for the immediately preceding Banking Day); provided that if none of such rates are

 

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published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received to the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided , further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“ Obligations ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

“ OSHA ” means the Occupational Safety and Hazard Act of 1970.

“ Other Taxes ” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes imposed with respect to an assignment (other than an assignment under Section 2.19(b)).

“ Overnight Bank Funding Rate ” means, for any day, the rate comprised of both over-night federal funds and overnight Eurocurrency borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

“ Participant ” has the meaning assigned to such term in Section 10.04(e).

“ Participant Register ” has the meaning assigned to such term in Section 10.04(e).

“ PATRIOT Act ” has the meaning assigned to such term in Section 10.16.

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Perfection Certificate ” means a certificate in the form of Exhibit F hereto or any other form approved by the Collateral Agent.

“ Permitted Bond Hedge Transaction ” means any call or capped call option (or substantively equivalent derivative transaction) relating to the Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) purchased by the Borrower in connection with the issuance of any Permitted Convertible Indebtedness; provided, that the purchase price for such Permitted Bond Hedge Transaction, less the proceeds received by the Borrower from the sale of any related Permitted Warrant Transaction, does not exceed the net proceeds received by the Borrower from the sale of such Permitted Convertible Indebtedness issued in connection with such Permitted Bond Hedge Transaction.

“ Permitted Convertible Indebtedness ” means Indebtedness of the Borrower under the Convertible Notes outstanding on the Closing Date.

“ Permitted Encumbrances ” means:

(a)        Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05;

 

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(b)         carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.05;

(c)         pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)        deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)        judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f)        easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

(g)        ground leases in respect of real property on which facilities owned or leased by the Borrower or any of the Subsidiaries are located, other than any Mortgaged Property;

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

(i)        leases or subleases granted to other Persons and not interfering in any material respect with the business of the Borrower and the Subsidiaries, taken as a whole;

(j)         banker’s liens, rights of set-off or similar rights, in each case arising by operation of law; and

(k)        Liens in favor of a landlord on leasehold improvements in leased premises;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“ Permitted Investments ” means:

(a)        direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)         investments in commercial paper maturing within one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)         investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial

 

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bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)        fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

(e)         securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(f)         securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(g)         investments of the quality as those identified on Schedule 6.04 as “ Qualified Foreign Investments ” made in the ordinary course of business;

(h)        cash; and

(i)         investments in funds that invest solely in one or more types of securities described in clauses (a), (e) and (f) above.

“ Permitted Refinancing Indebtedness ” means any Indebtedness of the Borrower or any of its Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Borrower or any of its Subsidiaries; provided that (a) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest thereon and the amount of any reasonable expenses incurred in connection therewith), (b) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, and an average life to maturity greater than the average life to maturity of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, (c) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is contractually subordinated in right of payment to the Loans, such Permitted Refinancing Indebtedness is contractually subordinated in right of payment to the Loans on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, (d) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is pari passu in right of payment with the Loans or any guarantee therefor, such Permitted Refinancing Indebtedness is pari passu in right of payment with, or subordinated in right of payment to, the Loans or such guarantee, and, in any event, such Permitted Refinancing Indebtedness shall not have a higher priority with respect to payments or collateral than the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (e) the terms and conditions of such Permitted Refinancing Indebtedness shall be no more materially restrictive, when taken as a whole, than the terms and conditions of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded (and, to the extent the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded permits the payment of any interest thereon “in kind”, the Refinancing Indebtedness thereof shall likewise permit the payment of interest “in kind”), (f) such Permitted Refinancing Indebtedness is not incurred or guaranteed

 

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by any Person who is not an obligor under the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded and is not secured by any property that does not secure the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded and, if secured, shall not be secured at a higher priority than the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, (g) if the obligor of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is a Foreign Subsidiary, the proceeds of such Permitted Refinancing Indebtedness must be used for ordinary course working capital purposes of such Foreign Subsidiary and (h) such refinancing Indebtedness, if secured, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent.

“ Permitted Warrant Transaction ” means any call option, warrant or right to purchase (or substantively equivalent derivative transaction) relating to the Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) and/or cash (in an amount determined by reference to the price of such common stock) sold by the Borrower substantially concurrently with any purchase by the Borrower of a Permitted Bond Hedge Transaction.

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

“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “ employer ” as defined in Section 3(5) of ERISA.

“ Preferred Dividends ” means any cash dividends of the Borrower permitted hereunder to be paid with respect to preferred stock of the Borrower.

“ Prepayment Event ” means:

(a)        any sale, transfer or other disposition of any property or asset of the Borrower or any Subsidiary, other than (i) prior to the Discharge of ABL Obligations, ABL Priority Collateral, and (ii) dispositions described in clauses (a), (b), (d) and (g) of Section 6.05; or

(b)        any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary (other than, prior to the Discharge of ABL Obligations, ABL Priority Collateral) having a book value or fair market value in excess of $500,000, but only to the extent that the Net Proceeds therefrom have not been applied to repair, restore or replace such property or asset within 365 days after such event;

(c)        to the extent, prior to the Discharge of ABL Obligations, not constituting ABL Priority Collateral, the receipt of any cash by the Borrower or any Subsidiary not in the ordinary course of business in an amount in excess of $500,000 from (a) tax refunds, (b) pension plan reversions, (c) proceeds of insurance (including key man life insurance, but excluding Net Proceeds described in clause (b) above and Net Proceeds from product liability insurance), (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (e) indemnity payments and (f) any purchase price adjustment received in connection with any purchase agreement to the extent not needed to reimburse the Borrower or applicable Subsidiary for any reasonable and customary out-of-pockets costs and expenses previously incurred by the Borrower or applicable Subsidiary with respect to which such purchase price adjustment was received;

 

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(d)        the receipt of cash from any issuance of Equity Interests of the Borrower or any contribution of equity capital to the Borrower; or

(e)        the incurrence by the Borrower or any Subsidiary of any Indebtedness, other than Indebtedness permitted by Section 6.01(a) (except Indebtedness permitted by Section 6.01(a)(xiii).

“ Prepayment Premium ” has the meaning assigned to such term in Section 2.11(b).

“ Prime Rate ” means the “U.S. Prime Lending Rate” as published in The Wall Street Journal or if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as reasonably determined by the Administrative Agent) or any similar release by the Board (as reasonably determined by the Administrative Agent).

“ Public-Sider ” means a Lender whose representatives may trade in securities of the Borrower or any of its Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement or who otherwise has identified itself to the Administrative Agent in writing as a “Public-Sider”.

“ Qualified Borrower Preferred Stock ” means any preferred capital stock or preferred equity interest of the Borrower (a)(i) that does not provide for any cash dividend payments or other cash distributions in respect thereof prior to the Latest Maturity Date in effect as of the date of issuance of such Indebtedness and (ii) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event does not (x) mature or become mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (y) become convertible or exchangeable at the option of the holder thereof for Indebtedness or preferred stock that is not Qualified Borrower Preferred Stock or (z) become redeemable at the option of the holder thereof (other than as a result of a change of control event), in whole or in part, in each case on or prior to the date that is 365 days after the Latest Maturity Date in effect at the time of the issuance thereof; provided that the terms of such preferred stock or preferred equity interests shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of the Borrower. Qualified Borrower Preferred Stock shall include the Closing Date Preferred Shares.

“ Quotation Day ” means, with respect to any Eurocurrency Loan for any Interest Period, two Business Days prior to the commencement of such Interest Period.

“ Real Estate ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Register ” has the meaning assigned to such term in Section 10.04(c).

“ Regulation U ” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Regulation X ” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

 

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

“ Release ” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“ Required Lenders ” means, at any time, Lenders having outstanding Loans representing more than 50% of the outstanding Loans at such time.

“ Restricted Indebtedness ” means Indebtedness of the Borrower or any Subsidiary, the payment, prepayment, redemption, repurchase or defeasance of which is restricted under Section 6.08(b).

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any partial or full cash settlement of Convertible Notes, sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or termination of any Equity Interests in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary.

“ Rolling 13-Week Cash Flow Foreca st” has the meaning assigned to such term in Section 5.01(j).

“ S&P ” means Standard & Poor’s Financial Services LLC, or any successor thereto.

“ Sanctioned Country ” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).

“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“ Sanctions ” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

“ Screen Rate ” has the meaning assigned to such term in the definition of “LIBO Rate”.

“ Second Lien Term Loan Facility ” means the term loan facility hereunder consisting of the Loans.

“ Secured Indebtedness ” means Total Indebtedness that is secured by a Lien on any asset of the Borrower or any of its Subsidiaries.

 

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“ Secured Net Leverage Ratio ” means, on any date, the ratio of (a) Secured Indebtedness as of such date, to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

“ Secured Parties ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Security Documents ” means the Guarantee and Collateral Agreement, the Intercreditor Agreements, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

“ Senior Bridge Credit Agreement ” means the Credit Agreement, dated as of the February 20, 2019, by and among the Borrower, the several banks and other financial institutions or entities from time to time party thereto and Cortland Capital Market Services LLC, as Administrative Agent.

“ Significant Investment ” means any acquisition by the Borrower or a Subsidiary of more than 50% (but less than 100%) of the Equity Interests in a Person (such Person, the “ Subject Person ”), so long as such acquisition is permitted by Section 6.04.

“ Specified Time ” means 11:00 a.m., London time.

“ Specified Vendor Receivables Financing ” means the sale by the Borrower and certain Subsidiaries of accounts receivable to one or more financial institutions pursuant to third-party financing agreements in transactions constituting “true sales” which are permitted pursuant to Section 6.01(a)(iv).

“ Specified Vendor Receivables Financing Documents ” means all documents and agreements relating to the Specified Vendor Receivables Financing.

“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Required Lenders are subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “ Eurocurrency Liabilities ” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under any Applicable Law. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“ Subject Person ” has the meaning assigned to such term in the definition of “Significant Investment.”

“ Subordinated Debt ” means any subordinated Indebtedness of the Borrower or any Subsidiary.

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be

 

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consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“ Subsidiary ” means any subsidiary of the Borrower.

“ Subsidiary Loan Party ” means any Subsidiary that is not (a) a Foreign Subsidiary (other than any Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands), (b) a CFC (other than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands) or (c) a U.S. Holdco; provided , that if any Foreign Subsidiary, CFC or U.S. Holdco has become a guarantor or “Subsidiary Loan Party” (or equivalent term) under the First Lien Term Loan Documents, such Foreign Subsidiary, CFC or U.S. Holdco shall constitute and become a Subsidiary Loan Party.

“ Synthetic Purchase Agreement ” means any swap, derivative or other agreement or combination of agreements pursuant to which the Borrower or a Subsidiary is or may become obligated to make (i) any payment (other than in the form of Equity Interests in the Borrower) in connection with a purchase by a third party from a Person other than the Borrower or a Subsidiary of any Equity Interest or Restricted Indebtedness or (ii) any payment (other than on account of a permitted purchase by it of any Equity Interest or any Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that phantom stock or similar plans providing for payments only to current or former directors, officers, consultants, advisors or employees of the Borrower or the Subsidiaries (or to their heirs or estates) shall not be deemed to be Synthetic Purchase Agreements. For the avoidance of doubt, the term “Synthetic Purchase Agreement” shall not include any agreement, indenture or other document governing any Permitted Bond Hedge Transaction, Permitted Convertible Indebtedness or Permitted Warrant Transaction.

“ Taxes ” means any and all present or future taxes (of any nature whatsoever), levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Term Intercreditor Agreement ” means the Intercreditor Agreement, dated as of the date hereof, among the Borrower, the other Loan Parties, the First Lien Term Loan Agent and the Collateral Agent.

“ Term Collateral Proceeds Account ” means a deposit account subject to a control agreement satisfactory to the Collateral Agent which contains (or was established to contain) only those proceeds with respect to Term Priority Collateral.

“ Term Priority Collateral ” has the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.

“ Total Indebtedness ” means, as of any date, the aggregate principal amount of Indebtedness for borrowed money (including, without limitation, Capital Lease Obligations) of the Borrower and the Subsidiaries outstanding as of such date in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP.

 

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“ Transactions ” means, collectively, (a) the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the borrowing of the Loans on the Closing Date and the use of proceeds thereof, (b) the execution, delivery and performance by each Loan Party of amendments to the ABL Credit Agreement and the First Lien Term Loan Credit Agreement, (c) the issuance of the Closing Date Warrants, (d) the issuance of the Closing Date Preferred Shares, (e) the execution, delivery and performance of the Senior Bridge Credit Agreement and the repayment of the outstanding indebtedness under the Senior Bridge Credit Agreement on the date hereof and (f) the payment of the fees and expenses payable in connection with the foregoing.

“ Type ” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“ U.S. Holdco ” means any existing or future Domestic Subsidiary the Equity Interests of which are held solely by Foreign Subsidiaries (other than Foreign Subsidiaries organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands); provided that such existing or newly formed Subsidiary shall not engage in any business or own any assets other than the ownership of Equity Interests in Foreign Subsidiaries and intercompany obligations that are otherwise permitted hereunder.

“ U.S. Person ” means a “ United States person ” within the meaning of Section 7701(a)(30) of the Code.

“ U.S. Tax Certificate ” has the meaning assigned to such term in Section 2.17(f)(i)(D)(2).

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

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

SECTION 1.02        Classification of Loans and Borrowings. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Eurocurrency Loan”). Borrowings also may be classified and referred to by Type (e.g., a “Eurocurrency Borrowing”).

SECTION 1.03        Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) 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, (d) 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; and (e) the words “asset” and

 

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“property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04        Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if the Borrower notifies the Lender Representative that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Lender Representative notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value,” as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments or any other Indebtedness under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

ARTICLE II

The Credits

SECTION 2.01      Loans.

(a)        Subject to the terms and conditions set forth herein, each Lender severally and not jointly agrees to make on the Closing Date a Loan to the Borrower in a principal amount equal to its Commitment.

(b)        Amounts repaid or prepaid in respect of Loans may not be reborrowed.

SECTION 2.02      Borrowings.

(a)        Each Loan shall be made by the Lenders ratably in accordance with their respective Commitments.

(b)        The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(c)        Subject to Section 2.14, each Loan shall be comprised entirely of Eurocurrency Loans. Each Lender at its option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

 

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(d)        At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000. There shall not at any time be more than a total of five Eurocurrency Borrowings outstanding.

(e)        Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date applicable thereto.

SECTION 2.03      Requests for Borrowings. To request a Borrowing of Loans, the Borrower shall notify the Administrative Agent of such request in writing by delivery to the Administrative Agent of an executed Borrowing Request not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable and shall specify the following information in compliance with Section 2.02:

(i)    the aggregate amount of such Borrowing;

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

(iii)  the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “ Interest Period ”; and

(iv)  the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.

If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04      [Reserved]

SECTION 2.05      [Reserved]

SECTION 2.06      Funding of Borrowings.

(a)        Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time to the Administrative Agent’s Account. Upon receipt of all requested funds, the Administrative Agent will make such Loans available to the Borrower by wiring the amounts so received, in like funds, to an account of the Borrower as designated in the applicable Borrowing Request.

(b)        Unless the Administrative Agent shall have received written notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may (but shall be under no obligation to), 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

 

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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 (i) in the case of such Lender, the greater of (x) the Federal Funds Effective Rate and (y) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, the applicable rate shall be determined as specified in clause (y) above, or (ii) in the case of the Borrower, the interest rate applicable to Eurocurrency Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.07      Interest Elections.

(a)        Each Borrowing shall initially be comprised of Eurocurrency Loans and shall have an initial Interest Period as specified in such Borrowing Request or as otherwise provided in Section 2.03. Thereafter, the Borrower shall continue any Borrowing and may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.

(b)        To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election in writing by delivery to the Administrative Agent of an executed Interest Election Request by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of Eurocurrency Loans. Each such Interest Election Request shall be irrevocable.

(c)        Each Interest Election Request shall specify the following information in compliance with Section 2.02:

(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) below shall be specified for each resulting Borrowing);

(ii)  the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; and

(iii) the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “ Interest Period .”

If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d)        Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)        If an Interest Election Request with respect to a Eurocurrency Borrowing is not timely delivered prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is

 

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continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.08      Termination of Commitments. The Commitments shall terminate and be automatically and permanently reduced $0 upon the funding of the Loans on the Closing Date.

SECTION 2.09      Repayment of Loans; Evidence of Debt.

(a)        The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan of such Lender as provided in Section 2.10.

(b)        Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c)        The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d)        The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender, the Lender Representative or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement; provided, further that in the event of any conflict between the records maintained by any Lender and the records of the Administrative Agent in respect of such matters, the records of the Administrative Agent shall control in the absence of manifest error.

(e)        Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by such Lender.

SECTION 2.10    Maturity Date. To the extent not previously paid, all Loans shall be due and payable on the Maturity Date.

SECTION 2.11    Prepayment of Loans.

(a)        The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section.

(b)        In the event that all or any portion of the Loans is repaid or prepaid for any reason (including as a result of any mandatory prepayments, voluntary prepayments, payments made following acceleration of the Loans or after an Event of Default), such repayments or prepayments will be made

 

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together with a premium equal to 5.00% of the amount repaid or prepaid, if such repayment or prepayment occurs prior July 1, 2021 (the foregoing premium, the “ Prepayment Premium ”); provided that, with respect to any Lender, in the case of any prepayment of the Loans of such Lender from the proceeds of an issuance of Indebtedness, which Indebtedness shall have the same or greater economics as the Second Lien Term Loan Facility and shall have substantially similar terms (other than with respect to maturity), in which such Lender participates as a lender, the prepayment premium applicable to the Loans of such Lender prepaid with such proceeds shall be zero. If the Loans are accelerated or otherwise become due prior to their maturity date, in each case, as a result of an Event of Default (including upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)), the amount of principal of and premium on the Loans that becomes due and payable shall equal 100% of the principal amount of the Loans plus the Prepayment Premium in effect on the date of such acceleration or such other prior due date, as if such acceleration or other occurrence were a voluntary prepayment of the Loans accelerated or otherwise becoming due. Without limiting the generality of the foregoing, it is understood and agreed that if the Loans are accelerated or otherwise become due prior to their maturity date, in each case, in respect of any Event of Default (including upon the occurrence of a bankruptcy or insolvency event (including the acceleration of claims by operation of law)), the Prepayment Premium applicable with respect to a voluntary prepayment of the Loans will also be due and payable on the date of such acceleration or such other prior due date as though the Loans were voluntarily prepaid as of such date and shall constitute part of the Obligations, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Lender’s loss as a result thereof. Any premium payable above shall be presumed to be the liquidated damages sustained by each Lender and the Borrower agrees that it is reasonable under the circumstances currently existing. THE BORROWER EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE PREPAYMENT PREMIUM IN CONNECTION WITH ANY SUCH ACCELERATION. The Borrower expressly agrees (to the fullest extent it may lawfully do so) that: (A) the Prepayment Premium is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the Prepayment Premium shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between the Lenders and the Borrower giving specific consideration in this transaction for such agreement to pay the Prepayment Premium; and (D) the Borrower shall be estopped hereafter from claiming differently than as agreed to in this paragraph.

(c)        In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower shall, within three Business Days after such Net Proceeds are received (and, in the case of any event described in clause (e) of the definition of the term Prepayment Event, on the date on which such Net Proceeds are received) prepay Borrowings of Loans in an aggregate amount equal to (x) in the case of any Prepayment Event (other than any event described in clause (d) of the definition of the term Prepayment Event), 100% of such Net Proceeds (provided that in the case of any Prepayment Event described in clause (a) of the definition of Prepayment Event, 100% of such Net Proceeds up to $100,000,000, and then 100% of such Net Proceeds to the extent Net Proceeds from all such events exceed $115,000,000) and (y) in the case of any event described in clause (d) of the definition of the term Prepayment Event, the Equity Contribution Percentage of such Net Proceeds. Any required prepayments pursuant to this Section 2.11(c) as a result of a Prepayment Event described in clauses (a) thereof shall be without duplication of any repayment of the Loans made pursuant to Section 2.10(b) from the Net Proceeds of sales or dispositions permitted under Section 6.05(j).

(d)        Following the end of each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2019, the Borrower shall prepay Borrowings of Loans in an aggregate amount equal to the excess of (i) the ECF Percentage of Excess Cash Flow for such fiscal year over (ii)

 

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the sum of aggregate amount of optional prepayments of Loans and purchases of Loans pursuant to Section 10.04(h) (other than optional prepayments or purchases made with the proceeds of Long-Term Indebtedness) made by the Borrower during such fiscal year (provided that the aggregate amount of any such prepayment or purchase shall be the amount of the Borrower’s cash payment in respect of such purchase). Each prepayment pursuant to this Section 2.11(d) shall be made within 95 days after the end of such fiscal year; provided that, in the case of the fiscal year ending December 31, 2019, if on such date for prepayment, after giving effect to such prepayment, the “Required Conditions Test” (as defined in the ABL Credit Agreement as in effect as of the Closing Date) would not be satisfied, then the prepayment for such fiscal year shall be made on the earlier to occur of (i) the first date that the Required Conditions Test can be satisfied after giving effect to such prepayment and (ii) July 1, 2020. Notwithstanding the foregoing requirements of this Section 2.11(d), (i) with respect to the fiscal year ending December 31, 2019, the Borrower shall not be required to make a prepayment of the Loans pursuant to this Section 2.11(d) for such fiscal year to the extent that after giving effect to such prepayment, Liquidity of the Borrower and its Subsidiaries would be less than $30,000,000, and (ii) with respect to the fiscal year ending fiscal year ending December 31, 2020, the Borrower shall not be required to make a prepayment of the Loans pursuant to this Section 2.11(d) for such fiscal year to the extent that after giving effect to such prepayment, Liquidity of the Borrower and its Subsidiaries would be less than $15,000,000.

(e)        Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (f) of this Section.

(f)        The Borrower shall notify the Administrative Agent in writing by (x) in the case of prepayment of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment and (y) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment. Each such written notice shall be irrevocable and shall specify (i) whether the prepayment is of Eurocurrency Loans or ABR Loans, (ii) the prepayment date, (iii) the principal amount of each Borrowing or portion thereof to be prepaid and (iv) in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

(g)        Notwithstanding anything in this Section 2.11 to the contrary, until the Discharge of Senior Obligations, no mandatory prepayment that would otherwise be required to be made under Section 2.11(c) or (d) shall be required to be made, except with respect to the portion (if any) of the proceeds of any event giving rise to any mandatory prepayment under Section 2.11 of the First Lien Credit Agreement that have been declined or waived by the First Lien Term Loan Lenders (which such portion shall be applied pursuant to this Section 2.11 within five (5) Business Days after the First Lien Term Loan Lenders shall have declined or waived such payment).

SECTION 2.12      Fees.

(a)        Without duplication of any other fees set forth in this Agreement, the Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts set forth in the Agent Fee Letter at the times and in the manner set forth therein.

 

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(b)        All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent. Fees paid shall not be refundable under any circumstances.

SECTION 2.13      Interest.

(a)        The Company may, at its option, elect to pay interest on the Loans (i) entirely in cash (“ Cash Interest ”) or (ii) entirely by increasing the outstanding principal amount of the Loans by the amount of interest accrued thereon during the applicable period (“ PIK Interest ”). To make an election pursuant to this Section 2.13(a), the Borrower shall notify the Administrative Agent of such election in writing by delivery to the Administrative Agent, of an executed Cash Election Request by 12.00 p.m. (New York time) at least six Business Days prior to each Interest Payment Date indicating the form of payment of interest in respect of the Loans on such Interest Payment Date; provided that (i) all interest payable on the first Interest Payment Date to occur after the Closing Date shall be paid in kind and (ii) unless the Borrower shall have delivered a Cash Interest Request pursuant to this paragraph it shall be deemed to have elected to pay interest in the form of PIK Interest. PIK Interest shall be payable by automatically being added to, and made part of, the outstanding principal amount of the Loans by the amount of PIK Interest for such Interest Payment Date. Any interest so added to the principal amount of Loans shall bear interest as provided in this Section 2.13 from the date on which such interest has been so added. Unless the context otherwise requires, for all purposes hereof, references to “principal amount” of the Loans refers to the face amount of the Loans and not gross proceeds funded hereunder and includes any interest so capitalized and added to the principal amount of the Loans from the date on which such interest has been so added.

(b) (i)     The Loans comprising each ABR Borrowing shall bear interest at a per annum rate equal to (A) in the case of Cash Interest, the sum of the Alternate Base Rate plus 9.50% per annum, and (B) in the case of PIK Interest, the sum of the Alternate Base Rate plus 10.50% per annum.

(ii)        The Loans comprising each Eurocurrency Borrowing shall bear interest at a per annum rate equal to (A) in the case of Cash Interest, the sum of the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus 10.50% per annum, and (B) in the case of PIK Interest, the sum of the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus 11.50% per annum.

(c)        Notwithstanding the foregoing, upon the occurrence and during the continuance of an Event of Default, the principal amount of all Loans outstanding and, to the extent permitted by applicable law, any interest payments on the Loans or any fees or other amounts owed hereunder, shall thereafter, after as well as before judgment, bear interest payable on demand at a rate that is 2.00% per annum in excess of the interest rate otherwise payable hereunder with respect to the applicable Loans (or, in the case of any such fees and other amounts, at a rate which is 2.00% per annum in excess of the interest rate otherwise payable hereunder for ABR Loans); provided that in the case of Eurocurrency Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective such Eurocurrency Loans shall thereupon become ABR Loans and shall thereafter bear interest payable upon demand at a rate which is 2.00% per annum in excess of the interest rate otherwise payable hereunder for ABR Loans. Payment or acceptance of the increased rates of interest provided for in this Section 2.13(d) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of the Administrative Agent or any Lender.

(d)        Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and

 

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(iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e)        All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. The Administrative Agent shall promptly notify the Borrower and the relevant Lenders of each determination of an Adjusted LIBO Rate.

SECTION 2.14      Alternate Rate of Interest.

(a)        If prior to the commencement of any Interest Period for a Eurocurrency Borrowing:

(i)    the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means (including by means of an Interpolated Rate or because the Screen Rate is not available or published on a current basis) do not exist for ascertaining the LIBO Rate or the Adjusted LIBO Rate for such Interest Period; or

(ii)    the Administrative Agent is advised by a majority in interest of the Lenders that the Adjusted LIBO Rate or LIBO Rate, as applicable for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loans) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy or electronic mail as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and such Lenders that the circumstances giving rise to such notice no longer exist, then (i) any Interest Election Request that requests the continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective, (ii) any Eurocurrency Borrowing that is requested to be continued, shall be converted to an ABR Borrowing on the last day of the then current Interest Period applicable thereto, and (iii) if any Borrowing Request requests a Eurocurrency Borrowing, such Borrowing shall be made as an ABR Borrowing.

(b)        If any Lender determines that any Applicable Law has made it unlawful, or if any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, fund or continue any Eurocurrency Borrowing, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurocurrency Loans will be suspended until such Lender notifies the Administrative Agent and the Borrower in writing that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower will upon demand from such Lender (with a copy to the Administrative Agent), either convert or prepay all Eurocurrency Borrowings of such Lender to ABR Borrowings, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurocurrency Borrowings to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans. Upon any such conversion or prepayment, the Borrower will also pay accrued interest on the amount so converted or prepaid.

 

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(c)        If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (b) above have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (b) above have not arisen but the supervisor for the administrator of the Eurocurrency or a Governmental Authority having jurisdiction over the Required Lenders has made a public statement identifying a specific date after which the Adjusted LIBO Rate shall no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the Adjusted LIBO Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (but for the avoidance of doubt, such related changes shall not include a reduction of the applicable margin); provided that, if such alternate rate of interest as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement. Such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment.

SECTION 2.15      Increased Costs.

(a)        If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);

(ii)    impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurocurrency Loans made by such Lender; or

(iii)    subject any Lender to any Taxes on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other than (A) Indemnified Taxes otherwise indemnifiable under Section 2.17 and (B) Excluded Taxes);

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)        If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)        A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of

 

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this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)        Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16      Break Funding Payments. In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurocurrency Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the applicable currency of a comparable amount and period from other banks in the Eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.17      Taxes.

(a)        Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrower or the Administrative Agent shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or the Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or the Administrative Agent shall make such deductions and (iii) the Borrower or the Administrative Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(b)        In addition, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

(c)        The Borrower shall indemnify the Administrative Agent and each Lender, within 10 Business Days after written demand therefor, for the full amount of any Indemnified Taxes paid by the

 

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Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower, hereunder or under any other Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) 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 Lender or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)        As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower 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 Lender Representative.

(e)        Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting or expanding the obligation of the Borrower to do so) attributable to such Lender that are paid or payable 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. The indemnity under this Section shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f)        Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law, such properly completed and executed documentation prescribed by Applicable Law or 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. If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 Business Days after such expiration, obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

(i)    Without limiting the generality of the foregoing, any Lender shall, to the extent it is legally eligible to do so, deliver to the Borrower and the Administrative Agent (in such number of copies reasonably requested by the Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable:

(A)        in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B)        in the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN-E or W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN-E or W-8BEN establishing an exemption from, or reduction of, U.S.

 

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Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(C)        in the case of a Non-U.S. Lender for whom payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

(D)        in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN-E or W-8BEN and (2) a certificate substantially in the form of Exhibit E (a “ U.S. Tax Certificate ”) to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code (c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code or (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;

(E)        in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (f) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided , however , that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or

(F)        any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld.

(ii)    Each Lender shall deliver to 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 or the Administrative Agent, to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(f)(ii), “ FATCA ” shall include any amendments made to FATCA after the date of this Agreement.

(g)        If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes (including additional amounts paid pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section 2.17 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses (including any 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 request of such indemnified party, agrees to repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority)

 

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in the event such indemnified party is required to repay such refund to such Governmental Authority. Nothing contained in this Section 2.17(g) shall require any indemnified party to make available its Tax returns or any other information relating to its Taxes which it deems confidential to the indemnifying party or any other Person.

(h)        For purposes of determining withholding Taxes imposed under FATCA, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Loan Documents as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

SECTION 2.18      Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a)        The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest or fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise), on or before the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 12:00 noon, New York City time), on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made by wire transfer to the Administrative Agent’s Account, except that payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments (including prepayments) to be made by the Borrower hereunder and under each other Loan Document, whether on account of principal, interest, fees or otherwise shall be made in dollars.

(b)        If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c)        If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary 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; 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 any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and

 

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

(d)        Unless the Administrative Agent shall have received written notice from the Borrower prior to the date on which any payment hereunder is due to the Administrative Agent for the account of the Lenders 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 (but shall be under no obligation to), in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment due to the Administrative Agent, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e)        If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.06(b), 2.18(d) or 10.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.19      Mitigation Obligations; Replacement of Lenders.

(a)        If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, 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)        If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon written 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 Section 10.04), all its interests, rights and obligations under this Agreement to an assignee selected by the Borrower that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, 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) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a material reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise,

 

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the circumstances entitling the Borrower to require such assignment and delegation cease to apply. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee, and that the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective; provided, that, such assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire, a properly completed and duly executed copy of IRS Form W-9 (or other applicable tax form) and all other documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01        Organization; Powers. Each of the Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02        Authorization; Enforceability. The Transactions to be entered into by each Loan Party are within such Loan Party’s powers and have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of the Borrower or such Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03        Governmental Approvals; No Conflicts. The Transactions and the other transactions contemplated hereby (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except Liens created under the Loan Documents and Liens permitted by Section 6.02, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect. Schedule 3.03 sets forth for the Borrower and each Subsidiary Loan Party a description of each license from a

 

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Governmental Authority which is material to the conduct of the business of such Loan Party as of the Closing Date.

SECTION 3.04      Financial Condition; No Material Adverse Change.

(a)        The Borrower has heretofore furnished to the Lender Representative its consolidated balance sheet and statements of income, stockholders equity and cash flows (as of and for the fiscal year ended December 31, 2018, reported on by Deloitte & Touche LLP, independent public accountants, certified by its chief financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP.

(b)        [reserved].

(c)        Except as disclosed in the financial statements referred to above or the notes thereto, except for the Disclosed Matters and except for liabilities arising as a result of the Transactions, after giving effect to the Transactions, none of the Borrower or the Subsidiaries has, as of the Closing Date, any contingent liabilities that would be material to the Borrower and the Subsidiaries, taken as a whole.

(d)        Since December 31, 2017, there has been no event, change or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.05      Properties.

(a)        Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business (including its Mortgaged Properties), except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b)        Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c)        Schedule 3.05 sets forth the address of each real property that is owned or leased by the Borrower or any other Loan Party as of the Closing Date after giving effect to the Transactions.

SECTION 3.06      Litigation and Environmental Matters.

(a)        There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan Documents or the Transactions.

 

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(b)        Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of the Borrower or any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c)        Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

(d)        No Borrower or Subsidiary Loan Party is in default with respect to any order, injunction or judgment of any Governmental Authority, except for such defaults which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07      Compliance with Laws and Agreements. Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

SECTION 3.08      Investment Company Status. None of the Borrower or any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09      Taxes. Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, there is no pending audit of the Borrower or any Subsidiary Loan Party with any federal, state, local or foreign tax authority, except as could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.10      ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of the Financial Accounting Standards Board Accounting Standards Codification Topic No. 715-30) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of the assets of all such underfunded Plans.

SECTION 3.11      Disclosure. The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which the Borrower or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light

 

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of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time such projections were prepared.

SECTION 3.12        Subsidiaries. Schedule 3.12 sets forth the name of, and the ownership interest of the Borrower in each Subsidiary of the Borrower and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing Date.

SECTION 3.13      Insurance. Schedule 3.13 sets forth a description of all material insurance policies maintained by or on behalf of the Borrower and the Subsidiaries as of the Closing Date. As of the Closing Date, all premiums due in respect of such insurance have been paid.

SECTION 3.14      Labor Matters. As of the Closing Date, there are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower, threatened that could reasonably be expected to have a Material Adverse Effect. All payments due from the Borrower or any Subsidiary, or for which any claim may be made against the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Borrower or such Subsidiary except for those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary is bound.

SECTION 3.15      Solvency. Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of each Loan made on the Closing Date and after giving effect to the application of the proceeds of such Loans, (a) the fair value of the assets of each of the Borrower and the Borrower and its Subsidiaries, taken as a whole, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of each of the Borrower and the Borrower and its Subsidiaries, taken as a whole, will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) each of the Borrower and the Borrower and its Subsidiaries, taken as a whole, will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured and (d) the Loan Parties, on a consolidated basis, will not have unreasonably small capital with which to conduct the business in which they are engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

SECTION 3.16      [Reserved.]

SECTION 3.17      Security Documents.

(a)        The Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Guarantee and Collateral Agreement) and, when (i) in respect of Collateral in which a security interest can be perfected by control, such Collateral is delivered to the Collateral Agent and for so long as the Collateral Agent remains in possession of such Collateral, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest, subject in priority to the Liens securing the First Lien Indebtedness pursuant to the Intercreditor Agreements, in all right, title and interest of the pledgor thereunder in such Collateral, in each case prior and superior in right to any other Person subject to the Intercreditor Agreements and (ii) in respect of Collateral in which a security interest can be perfected by the filing of UCC financing statements, financing statements

 

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in appropriate form are filed in the offices specified on Schedule 1.04 to the Perfection Certificate most recently delivered to the Lender Representative, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest in all right, title and interest of the grantors thereunder in such Collateral (other than the Intellectual Property (as defined in the Guarantee and Collateral Agreement)), in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreements.

(b)        [Reserved]

(c)        When the Guarantee and Collateral Agreement (or a summary thereof) is filed in the United States Patent and Trademark Office and the United States Copyright Office and the financing statements referred to in Section 3.17(a) above are appropriately filed, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest in all right, title and interest of the grantors thereunder in the Intellectual Property (as defined in the Guarantee and Collateral Agreement) in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office and subsequent UCC filings may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Loan Parties after the Closing Date), other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreements.

(d)        Each Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Mortgaged Properties thereunder and the proceeds thereof, and when the Mortgages are filed in the appropriate offices, the Lien created by each Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Mortgaged Properties and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section 6.02 and subject to the Intercreditor Agreements.

SECTION 3.18      Federal Reserve Regulations.

(a)        None of the Borrower or any of the Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

(b)        No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the Regulations of the Board, including Regulation U or X.

SECTION 3.19      Anti-Corruption Laws and Sanctions. The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective officers and employees and, to the knowledge of the Borrower, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Borrower, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit

 

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facility established hereby, is a Sanctioned Person. No Borrowing, use of proceeds or other transaction contemplated by this Agreement will violate Anti-Corruption Laws or applicable Sanctions.

SECTION 3.20      Material Contracts. Schedule 3.20 hereto sets forth for the Borrower and each Subsidiary Loan Party, as of the Closing Date, a list of all of the material contracts and agreements to which such Loan Party is a party, including all Specified Vendor Receivables Financing Documents (other than agreements disclosed to the Administrative Agent and the Lender Representative pursuant to Section 5.01(f), agreements relating to Indebtedness described on Schedule 6.01, real property leases identified on Schedule 2.03 to the Perfection Certificate delivered to the Administrative Agent and the Lender Representative on the Closing Date, and Licenses identified on Schedule 4.04 to the Perfection Certificate delivered to the Administrative Agent and the Lender Representative on the Closing Date).

SECTION 3.21      EEA Financial Institutions. No Loan Party is an EEA Financial Institution.

SECTION 3.22      Disclosure. As of the Closing Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Closing Date to any Lender in connection with this Agreement is true and correct in all respects.

ARTICLE IV

Conditions

SECTION 4.01      Closing Date. The obligations of the Lenders to make Loans hereunder is subject to the satisfaction of the following conditions:

(a)        The Administrative Agent and the Required Lenders shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Closing Date) of Jones Day, in each case in form and substance reasonably satisfactory to the Required Lenders. The Borrower hereby requests such counsel to deliver such opinions.

(b)        The Administrative Agent and the Required Lenders shall have received such documents and certificates as the Required Lenders or their counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of the Transactions and any other legal matters relating to the Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Required Lenders and their counsel.

(c)        The Administrative Agent and the Required Lenders (or their counsel) shall have received an executed copy of each Intercreditor Agreement in form and substance reasonably satisfactory to the Required Lenders.

(d)        The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable on or prior to the Closing Date, including, without limitation, all amounts due and payable pursuant to the Agent Fee Letter and, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel), required to be reimbursed or paid by any Loan Party hereunder or under any Loan Document.

(e)        The Collateral and Guarantee Requirement shall have been satisfied and the Required Lenders shall have received a completed Perfection Certificate dated the Closing Date and signed by an executive officer or Financial Officer of the Borrower, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code (or

 

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equivalent) filings made with respect to the Loan Parties in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Required Lenders that the Liens indicated by such financing statements (or similar documents) are permitted by Section 6.02 or have been released or will be released pursuant to UCC-3 financing statements or other release documentation delivered to the Collateral Agent.

(f)        The Required Lenders shall have received evidence that the insurance required by Section 5.07 and the Security Documents is in effect, together with endorsements naming the Collateral Agent, for the benefit of the Secured Parties, as additional insured and loss payee thereunder, to the extent required by Section 5.07.

(g)        After giving effect to the Transactions as of the Closing Date, none of the Borrower or any of its Subsidiaries shall have outstanding Indebtedness for borrowed money other than (i) Indebtedness incurred under this Agreement, (ii) Indebtedness incurred and outstanding under the ABL Credit Agreement or the First Lien Term Loan Credit Agreement and (iii) Indebtedness incurred and outstanding in compliance with Section 6.01 of this Agreement.

(h)        The Required Lenders shall have received and be satisfied with the Borrower’s final draft annual financial statements for its fiscal year ending December 31, 2018 and a final draft audit opinion from Deloitte & Touche relating thereto without any qualification or exception as to “going concern” or the scope of audit.

(i)        The Administrative Agent shall have received an executed Borrowing Request.

(j)        The Required Lenders shall have received a certificate, in form and substance reasonably satisfactory to the Lender Representative, dated the Closing Date and signed by the chief financial officer of each of the Borrower, certifying that its Subsidiaries, on a consolidated basis after giving effect to the Transactions, are solvent.

(k)        The Agents and the Lenders shall have received a properly completed and duly executed copy of IRS Form W-9 for the Borrower in addition to all documentation and other information requested by the Agents at least three (3) Business Days prior to the Closing Date and required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act.

(l)        Since December 31, 2017, there has been no event, change or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.

(m)        The Required Lenders shall have received an amendment to (i) the ABL Credit Agreement and (ii) the First Lien Term Loan Credit Agreement, each of which shall permit the Transactions, waive any existing Events of Default (as defined in the ABL Credit Agreement or First Lien Term Loan Credit Agreement, as applicable) and shall be in form and substance satisfactory to the Lender Representative.

(n)        The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified as to materiality) on and as of the Closing Date.

 

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(o)        (i) No Default or Event of Default shall have occurred and be continuing on the Closing Date or after giving effect to the Loans requested to be made on such date and (ii) no event of default shall have occurred and be continuing under (A) the Senior Bridge Credit Agreement, (B) the ABL Loan Documents, (C) the First Lien Term Loan Documents or (D) any other Material Indebtedness on the Closing Date.

(p)        The Administrative Agent and the Lender Representative (or their counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Lender Representative (which may include facsimile or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(q)        The Required Lenders shall have received reasonably satisfactory evidence of the issuance by the Company of the Closing Date Warrants to the Lenders and the Closing Date Warrants shall be in form and substance reasonably satisfactory to the Required Lenders.

(r)        The Required Lenders shall have received a detailed consolidated budget for the fiscal year of the Borrower ending December 31, 2018 prepared in accordance with Section 5.01(e).

(s)        The Required Lenders shall have received satisfactory evidence of the repayment in full of all Indebtedness and other obligations under the Senior Bridge Credit Agreement, the termination of all of the obligations of the Borrower and its subsidiaries thereunder and the release of all guarantees and security interests relating thereto.

(t)        The Required Lenders shall have received reasonably satisfactory evidence of the issuance by the Company of the Closing Date Preferred Shares to the Lenders affiliated with the Lender Representative and the Certificate of Designation evidencing the Closing Date Preferred Shares shall be in form and substance reasonably satisfactory to the Lender Representative.

The Lender Representative shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding.

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01      Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent, the Lender Representative and each Lender:

(a)        within 90 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “ going concern ” or like qualification or exception (except for any such qualification or exception resulting from any potential breach of financial covenants or the current maturity of Loans hereunder) and without any qualification or

 

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exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lender Representative and the Lenders shall be deemed to be satisfied in respect of any fiscal year of the Borrower by the filing of the Borrower’s annual report on Form 10-K for such fiscal year with the Commission to the extent the foregoing are included therein);

(b)        within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lender Representative and the Lenders shall be deemed to be satisfied in respect of any fiscal quarter of the Borrower by the filing of the Borrower’s quarterly report on Form 10-Q for such fiscal quarter with the Commission to the extent the foregoing are included therein);

(c)        within 90 days after the end of each fiscal year of the Borrower (but in any event no later than two Business Days after any delivery of financial statements under clause (a) above), or within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (but in any event no later than two Business Days after any delivery of financial statements under clause (b) above), a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) stating whether any change in GAAP or in the application thereof has occurred since the date of the Borrower’s audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (iii) identifying all Subsidiaries existing on the date of such certificate and indicating, for each such Subsidiary, whether such Subsidiary is a Subsidiary Loan Party, a Foreign Subsidiary and/or an Immaterial Subsidiary and whether such Subsidiary was formed or acquired since the end of the previous fiscal quarter;

(d)        within 90 days after the end of each fiscal year of the Borrower, (i) a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines) and (ii) a certificate of a Financial Officer of the Borrower (A) identifying any parcels of real property or improvements thereto with a value exceeding $2,000,000 that have been acquired by any Loan Party since the end of the previous fiscal year, (B) identifying any changes of the type described in Section 5.03(a) that have not been previously reported by the Borrower, (C) [reserved], (D) identifying any Intellectual Property (as defined in the Guarantee and Collateral Agreement) with respect to which a notice is required to be delivered under the Guarantee and Collateral Agreement and has not been previously delivered, (E) identifying any Prepayment Events that have occurred since the end of the previous fiscal year and setting forth a reasonably detailed calculation of the Net Proceeds received from Prepayment Events since the end of such previous fiscal year and (F) if applicable, calculating Excess Cash Flow for the applicable Excess Cash Flow Period;

 

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(e)        no later than February 15 of each fiscal year of the Borrower (commencing with the fiscal year ending December 31, 2020), a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flow as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any material revisions of such budget that have been approved by senior management of the Borrower;

(f)        promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the Commission or with any national securities exchange, as the case may be (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lender Representative and the Lenders shall be deemed to be satisfied to the extent the foregoing are filed with the Commission);

(g)        promptly upon the Borrower’s receipt thereof, (A) copies of all material compliance reports filed and material correspondence regarding any active or pending investigation or enforcement action concerning the Borrower or any Subsidiary Loan Party with any state, federal, local or foreign regulatory agency and (B) all material correspondence, if any, alleging violation of or requesting compliance by the Borrower or any Subsidiary Loan Party with laws, regulations, etc. or requests for information pursuant to interstate commerce laws, antitrust laws, securities laws, worker safety laws (OSHA), etc.;

(h)        except to the extent already provided for in this Section 5.01, promptly after the sending thereof, copies of any proposed waiver, consent, or amendment concerning any of the ABL Loan Documents or the First Lien Term Loan Documents;

(i)        promptly upon the effectiveness thereof, (A) a description of each license from a Governmental Authority which becomes effective after the Closing Date and is material to the conduct of the business of the Borrower and its Subsidiaries, taken as a whole, and (B) a description of each material contract or agreement to which the Borrower or any Subsidiary Loan Party is a party, including each Specified Vendor Receivables Financing Document (other than contracts and agreements disclosed to the Lender Representative pursuant to Section 5.01(f), agreements described on Schedule 3.20 or Schedule 6.01, and without duplication of real property leases identified on Schedule 2.03 to the Perfection Certificate most recently delivered to the Administrative Agent and the Lender Representative and Licenses identified on Schedule 4.04 to the Perfection Certificate most recently delivered to the Administrative Agent and the Lender Representative);

(j)        by no later than 11:00 p.m. (New York time), in each case in a form reasonably acceptable to the Required Lenders (it being acknowledged and agreed by the Lenders that the Forecast for North America and Europe-Africa delivered by the Borrower to the Administrative Agent and the Lenders on February 16, 2019 is in an acceptable form), (i) on the last Wednesday of each fiscal month, an updated 13-week statement of projected receipts and disbursements (each such statement, a “ Rolling 13-Week Cash Flow Forecast ”), (ii) on each Wednesday, a report showing actual receipts and disbursements through the prior week for North America and Europe-Africa, including a variance report showing the variance to the immediately prior Rolling 13-Week Cash Flow Forecast with qualitative commentary explaining any material variations to such Rolling 13-Week Cash Flow Forecast, (iii) on the 15th day of each calendar month, a report detailing Liquidity for the last day of the previously ended fiscal month and indicating whether the Borrower is in compliance with Section 6.13(b), (iv) on each Wednesday, a flash report in a form reasonably acceptable to the Required Lenders providing estimated revenues by segment

 

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and those other key performance indicators by major location reasonably produced on a weekly basis for the prior week or those available monthly on a monthly basis for the prior month and (v) on the 15th day of each calendar month, an accounts payable aging report as of the prior fiscal month –end for Horizon Global Company LLC, Horizon Global Americas, Inc. and Westfalia- Automotive GmbH; provided that none of the documents, reports, or information delivered pursuant to this clause (j) shall be shared with or provided or distributed to any Public-Sider;

(k)        within 30 days after the end of each fiscal month of the Borrower, (i) its consolidated balance sheet and related statements of operations and cash flows as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, and a statement of cash flows on a year to date basis setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal quarter- and year-end audit adjustments and the absence of footnotes, and (ii) a variance analysis to the budget for the P&L on a segment basis with qualitative commentary, each in a form reasonably acceptable to the Required Lenders; provided that none of the documents, reports, or information delivered pursuant to this clause (k) shall be shared with or provided or distributed to any Public-Sider; and

(l)        promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.

The Borrower represents and warrants that it and any of its Subsidiaries either (i) has no registered or publicly traded securities outstanding or (ii) files its financial statements with the Commission and/or makes its financial statements available to potential holders of its 144A securities, and, accordingly, the Borrower hereby (x) authorizes the Administrative Agent and the Lender Representative to make the financial statements to be provided under Section 5.01(a) and (b) above, along with the Loan Documents, available to all Lenders and (y) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Borrower will not request that any other material be posted to all Lenders without expressly representing and warranting to the Administrative Agent and the Lender Representative in writing that (A) such materials do not constitute material non-public information within the meaning of the federal securities laws (“ MNPI ”) or (B) (i) the Borrower and its Subsidiaries have no outstanding publicly traded securities, including 144A securities, and (ii) if at any time the Borrower or any of its Subsidiaries issues publicly traded securities, including 144A securities, then the Borrower will, upon the issuance of such securities, make such materials that do constitute MNPI at the time of issuance of such securities publicly available by press release or public filing with the Commission. In no event will the Administrative Agent or the Lender Representative post compliance certificates or budgets to Public-Siders.

SECTION 5.02      Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:

(a)        the occurrence of any Default;

(b)        the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Subsidiary thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

 

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(c)        the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $5,000,000;

(d)        any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract;

(e)        any default under or termination of a Material Agreement;

(f)        any judgment for the payment of money in an aggregate amount exceeding $5,000,000 that remains undischarged for a period of 30 consecutive days, during which execution is not effectively stayed, or the occurrence of any action legally taken by a judgment creditor to attach or levy upon assets in order to enforce any such judgment;

(g)        the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect;

(h)        any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have a Material Adverse Effect;

(i)        any Release by a Loan Party or with respect to any Real Estate owned, leased or occupied by a Loan Party; or receipt of any Environmental Notice, in each case where the expected remedial costs or liability is reasonably expected to exceed $2,500,000;

(j)        the discharge of or any withdrawal or resignation by the Borrower’s independent accountants;

(k)        not later than two Business Days after the occurrence thereof, the occurrence of any default, event of default or cash dominion event under the ABL Credit Agreement; and

(l)        any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

SECTION 5.03      Information Regarding Collateral.

(a)        The Borrower will furnish to the Administrative Agent and the Lender Representative prompt written notice of any change (i) in any Loan Party’s legal name, (ii) in the location of any Loan Party’s chief executive office or (iii) in any Loan Party’s jurisdiction of organization. The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless written notice has been delivered to the Collateral Agent, together with all applicable information to enable the Administrative Agent to make all filings under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent (on behalf of the Secured Parties) to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.

(b)        Each year, within 90 days after the end of each fiscal year of the Borrower, the Borrower (on behalf of itself and the other Loan Parties) shall deliver to the Administrative Agent and the

 

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Lender Representative a certificate of a Financial Officer of the Borrower (i) setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section and (ii) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period).

SECTION 5.04      Existence; Conduct of Business. The Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names the loss of which would have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or disposition permitted under Section 6.05.

SECTION 5.05      Payment of Obligations. The Borrower will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except (a) those being contested in good faith by appropriate proceedings and for which the Borrower has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (b) to the extent the failure to make payment could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.06      Maintenance of Properties. The Borrower will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of their business, taken as a whole, in good working order and condition, ordinary wear and tear excepted; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or disposition permitted under Section 6.05.

SECTION 5.07      Insurance. The Borrower will, and will cause each of the Subsidiaries to, maintain insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. Such insurance shall be maintained with financially sound and reputable insurance companies, except that a portion of such insurance program (not to exceed that which is customary in the case of companies engaged in the same or similar business or having similar properties similarly situated) may be effected through self-insurance; provided adequate reserves therefor, in accordance with GAAP, are maintained. In addition, the Borrower will, and will cause each of its Subsidiaries to, maintain all insurance required to be maintained pursuant to the Security Documents. With respect to each Mortgaged Property that is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, the applicable Loan Party will maintain, with financially sound and reputable insurance companies, such flood insurance as is required under Applicable Law, including Regulation H of the Board of Governors. The Borrower will furnish to the Lenders, upon request of the Lender Representative, information in reasonable detail as to the insurance so maintained. All insurance policies or certificates (or certified copies thereof) with respect to such insurance shall be endorsed to the Collateral Agent’s reasonable satisfaction for the benefit of the Lenders (including by naming the Collateral Agent as lender loss payee or additional insured, as appropriate).

 

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SECTION 5.08      Casualty and Condemnation. The Borrower (a) will furnish to the Administrative Agent, the Lender Representative and the Lenders prompt written notice of casualty or other insured damage to any material portion of any Collateral having a book value or fair market value of $1,000,000 or more or the commencement of any action or proceeding for the taking of any Collateral having a book value or fair market value of $1,000,000 or more or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Security Documents.

SECTION 5.09      Books and Records; Cooperation; Inspection and Audit Rights; Lender Calls. (a) The Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.

(b)        The Borrower shall hold a telephone call (i) once per calendar month, for the benefit of the Administrative Agent and the Lenders that are not Public-Siders to discuss the Borrower’s and its Subsidiaries’ operational and financial performance, the status of strategic initiatives and any other items reasonably requested to be covered by any Lender and respond to questions that are raised on such call and (ii) in addition, once per calendar quarter, for the benefit of the Administrative Agent and Public-Siders to discuss the Borrower’s and its Subsidiaries’ operational and financial performance, the status of strategic initiatives and any other items reasonably requested to be covered by any Lender and respond to questions that are raised on such call.

(c)        The Borrower will, and will cause each of the Subsidiaries to reasonably cooperate with one financial advisor acting on behalf of all of the Agents and the Lenders.

SECTION 5.10      Compliance with Laws. The Borrower will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

SECTION 5.11      Use of Proceeds. The Borrower will use the proceeds of the Loans on the Closing Date solely (i) to consummate the Transactions, (ii) to pay the fees and expenses in connection with the Transactions, (iii) to repay the ABL Loans under the ABL Credit Agreement, (iv) repay the outstanding indebtedness under the Senior Bridge Credit Agreement and (v) for general corporate purposes. No part of the proceeds of any Loan will be used, whether directly or indirectly, (i) for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X or (ii) to make any Investment, Restricted Payment or other payment outside the ordinary course of business.

SECTION 5.12      Additional Subsidiaries. If any additional Subsidiary is formed or acquired after the Closing Date (or any existing Subsidiary becomes a Subsidiary Loan Party after the Closing Date), the Borrower will, within five Business Days after such Subsidiary is formed or acquired (or becomes a Subsidiary Loan Party), notify the Administrative Agent and the Lenders thereof and, within

 

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30 days (or such longer period as may be agreed to by the Administrative Agent) after such Subsidiary is formed or acquired (or becomes a Subsidiary Loan Party), cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary, including with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.

SECTION 5.13      Further Assurances.

(a)        The Borrower will, and will cause each Subsidiary Loan Party 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, fixture filings, mortgages, deeds of trust, landlord waivers and other documents), which may be required under any Applicable Law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrower also agrees to provide to the Lender Representative, from time to time upon request, evidence reasonably satisfactory to the Lender Representative as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

(b)        If any assets (including any real property or improvements thereto or any interest therein) having a book value or fair market value of $1,000,000 or more in the aggregate are acquired by the Borrower or any Subsidiary Loan Party after the Closing Date or through the acquisition of a Subsidiary Loan Party under Section 5.12 or through the conversion of a Subsidiary into a Subsidiary Loan Party under Section 5.12 (other than, in each case, assets constituting Collateral under the Guarantee and Collateral Agreement that become subject to the Lien of the Guarantee and Collateral Agreement upon acquisition thereof), the Borrower or, if applicable, the relevant Subsidiary Loan Party will notify the Lender Representative and the Lenders thereof, and, if reasonably requested by the Lender Representative or the Required Lenders, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Lender Representative to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Loan Parties.

(c)        The Borrower will, and will cause each Subsidiary Loan Party to, deposit the proceeds of any Term Priority Collateral that remain after the Discharge of Senior Obligations has occurred in a Term Collateral Proceeds Account at any time (i) after the occurrence and during the continuance of an Event of Default under clauses (a), (h) or (i) of Article VII and (ii) after the occurrence and during the continuance of any other Event of Default after the Administrative Agent provides written notice to the Borrower to so deposit such proceeds.

(d)        The Borrower will, and will cause each Subsidiary Loan Party to, satisfy the post-closing conditions described in Schedule 5.13 within the timelines set forth therein.

SECTION 5.14      Ratings. The Borrower will use commercially reasonable efforts to maintain (a) a long-term public corporate family and/or credit, as applicable, rating of the Borrower and (b) a credit rating for the Credit Facilities, in each case from each of Moody’s and S&P. It is understood and agreed that the foregoing is not an agreement to maintain any specific rating.

 

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ARTICLE VI

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01      Indebtedness; Certain Equity Securities.

(a)           The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

(i)        (A) Indebtedness created under the Loan Documents and (B) Indebtedness created under the First Lien Term Loan Documents in an aggregate principal amount not exceeding the First Lien Term Loan Cap plus increases to the principal amount thereof after the date hereof resulting from “in-kind” payments of interest or fees;

(ii)        [Reserved];

(iii)        (A) Indebtedness existing on the date hereof (which Indebtedness shall, to the extent the principal amount thereof exceeds $500,000, be set forth on Schedule 6.01) and (B) any Permitted Refinancing Indebtedness with respect to such Indebtedness;

(iv)        any Specified Vendor Receivables Financings in existence on the Closing Date and Permitted Refinancing Indebtedness thereof;

(v)        Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that Indebtedness of any Subsidiary that is not a Loan Party or any Subsidiary Loan Party for which the Collateral and Guarantee Requirement has not been satisfied to the Borrower or any Subsidiary Loan Party shall be subject to Section 6.04;

(vi)        Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided that Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a Loan Party or any Subsidiary Loan Party for which the Collateral and Guarantee Requirement has not been satisfied shall be subject to Section 6.04;

(vii)      [Reserved];

(viii)     Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life thereof; provided that (A) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this clause (viii) shall not exceed $10,000,000 at any time outstanding;

 

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(ix)      Indebtedness arising in connection with any retention of title arrangements ( verlängerter Eigentumsvorbehalt ) made in the ordinary course of business;

(x)       Indebtedness arising under a declaration of joint and several liability used for the purpose of section 2:403 of the Dutch Civil Code (and any residual liability under such declaration arising pursuant to section 2:404(2) of the Dutch Civil Code;

(xi)      Indebtedness of the Borrower or any Subsidiary in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety appeal or similar bonds and completion guarantees provided by the Borrower and the Subsidiaries in the ordinary course of their business;

(xii)      Indebtedness or other financings incurred by Foreign Subsidiaries in respect of accounts receivable and/or inventory in an aggregate amount not exceeding $10,000,000 at any time outstanding;

(xiii)     Indebtedness incurred by Foreign Subsidiaries that are not Loan Parties in an aggregate amount not exceeding $10,000,000 at any time outstanding; provided that the Net Proceeds thereof are applied in accordance with Section 2.11(c);

(xiv)     Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided , however , that such Indebtedness is extinguished within 10 days of incurrence;

(xv)      Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(xvi)     Indebtedness incurred in connection with the financing of insurance premiums in an aggregate amount at any time outstanding not to exceed the premiums owed under such policy, if applicable;

(xvii)     obligations to financial institutions, in each case to the extent in the ordinary course of business and on terms and conditions which are within the general parameters customary in the banking industry, entered into to obtain cash management services or deposit account overdraft protection services (in an amount similar to those offered for comparable services in the financial industry) or other services in connection with the management or opening of deposit accounts or incurred as a result of endorsement of negotiable instruments for deposit or collection purposes and other customary, obligations, including obligations under Bank Products (as defined in the ABL Credit Agreement as in effect on the date hereof) other than Hedging Agreements, of the Borrower and its Subsidiaries incurred in the ordinary course of business;

(xviii)     unsecured guarantees by the Borrower or any Subsidiary Loan Party of facility leases of any Loan Party;

(xix)       payment obligations of or Guarantees by the Borrower or any Subsidiary Loan Party with respect to any Hedging Agreement permitted under Section 6.07 hereof; provided that if such Hedging Agreement is related to interest rates, (A) such Hedging Agreement shall relate to payment obligations on Indebtedness otherwise permitted to be incurred by the Loan Documents and (B) the notional amount of such Hedging Agreement shall not exceed the principal amount of the Indebtedness to which such Hedging Agreement relates;

 

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(xx)      Indebtedness of the Borrower, any Subsidiary Loan Party or any ABL Foreign Loan Party under the ABL Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed $99,000,000, subject to Section 6.11, and any replacement or refinancing thereof; provided that the Borrower will not, and will not permit any Subsidiary to, create, grant or permit to exist any Lien on the ABL Priority Collateral that is contractually subordinated (including pursuant to a last-out facility for Indebtedness for borrowed money) or junior in priority to the Liens on the ABL Priority Collateral securing any of the “Loans” or any other “Obligations” (each as defined in the ABL Credit Agreement), unless such Lien on the ABL Priority Collateral is also contractually subordinated or junior in priority, in the same manner and to the same extent, to the Liens on ABL Priority Collateral securing the Obligations; it being understood and agreed that this proviso shall not restrict any refinancing or replacement of the ABL Credit Agreement (or replacement or refinancing thereof) being secured by a first priority lien on ABL Priority Collateral);

(xxi)      [reserved];

(xxii)     Indebtedness of the Borrower in an amount not to exceed $15,000,000 at any time outstanding; provided that (a) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date in effect at the time of the issuance of such Indebtedness and shall not have any principal payments due prior to such date, except upon the occurrence of a change of control or similar event (including asset sales), in each case so long as the provisions relating to change of control or similar events (including asset sales) included in the governing instrument of such Indebtedness provide that the provisions of this Agreement must be satisfied prior to the satisfaction of such provisions of such Indebtedness, (b) such Indebtedness is not Guaranteed by any Subsidiary of the Borrower other than the Loan Parties (which Guarantees shall be permitted only to the extent permitted by Section 6.01(a)(vi)), (c) such Indebtedness shall not have any financial maintenance covenants, (d) such Indebtedness shall not have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the definition of Change in Control set forth herein, and (e) such Indebtedness is subordinated to the Obligations on terms reasonably acceptable to the Required Lenders;

(xxiii)    (A) Indebtedness of the Borrower under the Convertible Notes outstanding on the Closing Date and (B) any Permitted Refinancing Indebtedness with respect thereto; provided that the interest rate, fees, or yield payable with respect to such Permitted Refinancing Indebtedness shall not be higher than the interest rate, fees, or yield payable under the Convertible Notes outstanding on the Closing Date; and

(xxiv)    [Reserved];

(xxv)     Indebtedness of the Borrower, and Guarantees thereof by any Subsidiary Loan Party, incurred after the Closing Date in an aggregate principal amount not to exceed the lesser of (A) $100,000,000 and (B) $100,000,000 minus the aggregate principal amount of prepayments of the Loans made by the Borrower pursuant to Section 2.10(b) after the Closing Date and prior to the date such Indebtedness is incurred, provided that (1) such Indebtedness is subordinated in right of payment to the Obligations and is subject to an intercreditor agreement reasonably acceptable to the Required Lenders, (2) the net proceeds therefrom shall be used to prepay First Lien Term Loans pursuant to Section 2.10(b) of the First Lien Credit Agreement and (3) such Indebtedness shall not mature prior to the date that is 91 days after the Maturity Date and shall not have any principal payments due prior to such date, except upon the occurrence of a change of control or similar event (including asset sales), in each case so long as the provisions

 

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relating to change of control or similar events (including asset sales) included in the governing instrument of such Indebtedness provide that the provisions of this Agreement must be satisfied prior to the satisfaction of such provisions of such Indebtedness.

(b)        The Borrower will not, nor will it permit any Subsidiary to, issue any preferred stock or other preferred Equity Interests other than Qualified Borrower Preferred Stock.

SECTION 6.02      Liens. The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a)        (i) Liens created under the Loan Documents and (ii) Liens created by the First Lien Term Loan Documents securing Indebtedness permitted under Section 6.01(i)(B), subject at all times to the Term Intercreditor Agreement;

(b)        Permitted Encumbrances;

(c)        Liens in respect of Specified Vendor Receivables Financings permitted under Section 6.01(a)(iv);

(d)        any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof (which Liens shall, to the extent securing Indebtedness with a principal amount in excess of $500,000, be set forth on Schedule 6.02); provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e)        Liens securing Indebtedness permitted by Section 6.01(a)(ix);

(f)        Liens on fixed or capital assets acquired, constructed or improved by, or in respect of Capital Lease Obligations of, the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (viii) of Section 6.01(a), (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Borrower or any Subsidiary;

(g)        Liens, with respect to any Mortgaged Property, described in the applicable schedule of the title policy covering such Mortgaged Property;

(h)        Liens in respect of sales or other financings of accounts receivable or inventory by Foreign Subsidiaries to the extent the Indebtedness is permitted by Section 6.01(a)(xii);

(i)        other Liens securing liabilities not in excess of $5,000,000;

(j)        Liens in respect of Indebtedness permitted by Section 6.01(a)(xiii), provided that the assets subject to such Liens are not located in the United States;

 

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(k)        Liens, rights of setoff and other similar Liens existing solely with respect to cash and Permitted Investments on deposit in one or more accounts maintained by any Lender, in each case granted in the ordinary course of business in favor of such Lender with which such accounts are maintained, securing amounts owing to such Lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness for borrowed money;

(l)        licenses or sublicenses of Intellectual Property (as defined in the Guarantee and Collateral Agreement) granted by any Company in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business of the Borrower;

(m)      the filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

(n)        Liens on Collateral securing Indebtedness permitted under Section 6.01(xxii) so long as such Liens rank junior in priority to the Liens securing the Obligations subject to intercreditor arrangements reasonably satisfactory to the Lender Representative;

(o)        Liens deemed to exist in connection with investments permitted under Section 6.04 that constitute repurchase obligations and in connection with related set-off rights;

(p)        Liens of a collection bank arising in the ordinary course of business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(q)        Liens of sellers of goods to the Borrower or any of its Subsidiaries arising under Article 2 of the UCC in effect in the relevant jurisdiction in the ordinary course of business, covering only the goods sold and covering only the unpaid purchase price for such goods and related expenses;

(r)        Liens on Collateral securing Indebtedness incurred pursuant to Section 6.01(a)(xxv), which Liens shall be junior in right of priority to the Obligations and shall be subject at all times to an intercreditor agreement reasonably acceptable to the Required Lenders; and

(s)        Liens under the ABL Security Documents (as defined in the ABL/Term Loan Intercreditor Agreement) (i) that are subject to the ABL/Term Loan Intercreditor Agreement, or (ii) on cash in favor of any Secured Party (as defined in the ABL Credit Agreement) created as a result of any requirement to provide cash collateral pursuant to the ABL Credit Agreement.

SECTION 6.03      Fundamental Changes.

(a)        The Borrower will not, nor will it permit any other Person to merge into or consolidate with any of them, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (if any party to such merger is a Subsidiary Loan Party) is a Subsidiary Loan Party for which the Collateral and Guarantee Requirement has been satisfied and (iii) any Subsidiary (other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the

 

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best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

(b)        The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.

SECTION 6.04      Investments, Loans, Advances, Guarantees and Acquisitions. The Borrower will not, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except:

(a)        Permitted Investments;

(b)        investments existing on the date hereof (which investments shall, to the extent they exceed $500,000, be set forth on Schedule 6.04);

(c)        [Reserved];

(d)        investments by the Borrower and the Subsidiaries in their respective Subsidiaries that exist immediately prior to any applicable transaction; provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee and Collateral Agreement to the extent required by this Agreement and (ii) the aggregate amount of investments by Loan Parties in, and loans and advances by Loan Parties to, and Guarantees by Loan Parties of Indebtedness of, Subsidiaries that are not Loan Parties that have complied with the Collateral and Guarantee Requirement made after the Closing Date shall not at any time exceed $10,000,000

(e)        loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary; provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Guarantee and Collateral Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (d) above;

(f)        [Reserved];

(g)        [Reserved];

(h)        investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(i)        any investments in or loans to any other Person received as noncash consideration for sales, transfers, leases and other dispositions permitted by Section 6.05;

 

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(j)        Guarantees by the Borrower and the Subsidiaries of leases entered into by any Subsidiary as lessee; provided that the amount of such Guarantees made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (d) above;

(k)        extensions of credit in the nature of accounts receivable or notes receivable in the ordinary course of business;

(l)        loans or advances to employees made in the ordinary course of business consistent with prudent business practice and not exceeding $50,000 in the aggregate outstanding at any one time;

(m)        investments in the form of Hedging Agreements permitted under Section 6.07;

(n)        [reserved];

(o)        payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(p)        [Reserved]; and

(q)        investments, loans or advances in addition to those permitted by the other clauses of this Section 6.04 not exceeding in the aggregate $1,000,000 at any time outstanding, provided that no Default exists at the time that such investment, loan or advance is made or is caused thereby.

SECTION 6.05      Asset Sales. The Borrower will not, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will it permit any Subsidiary to issue any additional Equity Interest in such Subsidiary, except:

(a)        sales, transfers, leases and other dispositions of inventory, used or surplus equipment or other obsolete assets, Permitted Investments and investments referred to in Section 6.04(h) in the ordinary course of business;

(b)        sales, transfers and dispositions to the Borrower or a Subsidiary; provided that any the book value and the fair market value (whichever is higher) of all property that is subject to such sales, transfers or dispositions from a Loan Party to a Subsidiary that is not a Loan Party shall not exceed $10,000,000 in the aggregate for all such sales, transfers or dispositions made after the date hereof and all such sales, transfers or dispositions shall be made in the ordinary course of business and in compliance with Section 6.04 and Section 6.09;

(c)        sales of accounts receivable and inventory and related assets by a Foreign Subsidiary pursuant to customary terms to the extent permitted by Section 6.01(a)(xii);

(d)        the creation of Liens permitted by Section 6.02 and dispositions as a result thereof;

(e)        sales of accounts receivable and related assets pursuant to the Specified Vendor Receivables Financings permitted under Section 6.01(a)(iv);

(f)        [reserved];

 

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(g)        Restricted Payments permitted by Section 6.08;

(h)        transfers and dispositions constituting investments permitted under Section 6.04;

(i)        [reserved];

(j)        sales, transfers and other dispositions of assets that are not permitted by any other clause of this Section; provided that (i) no Event of Default shall have occurred and be continuing, (ii) all sales, transfers and other dispositions permitted by this clause (j) shall be made for fair market value, (iii) all sales, transfers and other dispositions permitted by this clause (j) above shall be for 100% cash consideration, and (iv) all Net Proceeds thereof shall be applied as follows: (A) the first $100,000,000 of Net Proceeds shall be applied to repay First Lien Term Loans or, if the Discharge of Senior Obligations shall have occurred, the Loans, (B) after $100,000,000 of such Net Proceeds have been applied to repay the First Lien Tern Loans or the Loans in accordance with the clause (A) above, the next $15,000,000 of such Net Proceeds may be retained by the Borrower and (C) thereafter, all other Net Proceeds shall be applied to prepay the Loans pursuant to Section 2.11(c) (subject to Section 2.11(g));

provided that (x) all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by clauses (b) or (h) above) shall be made for fair value.

SECTION 6.06      Sale and Leaseback Transactions. The Borrower will not, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred.

SECTION 6.07      Hedging Agreements. The Borrower will not, nor will it permit any Subsidiary to, enter into any Hedging Agreement, other than (a) Hedging Agreements entered into in the ordinary course of business and which are not speculative in nature to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its assets or liabilities (including Hedging Agreements that effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)) (it being understood that the Borrower and its Foreign Subsidiaries may enter into Hedging Agreements consisting of cross-currency swaps related to intercompany loans between the Borrower and/or its Foreign Subsidiaries), (b) Permitted Bond Hedge Transactions and (c) Permitted Warrant Transactions..

SECTION 6.08      Restricted Payments; Certain Payments of Indebtedness.

(a)        The Borrower will not, nor will it permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i)    the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional common Equity Interests in the Borrower;

(ii)   Subsidiaries may declare and pay dividends ratably with respect to their capital stock;

(iii)  the Borrower may pay the premium in respect of, and may otherwise perform its obligations under, any Permitted Bond Hedge Transaction;

 

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(iv) the Borrower may make payments or deliveries in shares of common stock and cash in lieu of fractional shares required by the terms of, and otherwise perform its obligations under, the Convertible Notes Indenture (including, without limitation, making payments of interest and principal thereon and/or making deliveries (other than in cash) due upon conversion thereof); and

(v) the Transactions (but not, for the avoidance, any Restricted Payments made in cash).

(b)        The Borrower will not, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

(i)    payment of Indebtedness created under the Loan Documents;

(ii)   payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of subordinated Indebtedness prohibited by the subordination provisions thereof;

(iii)  refinancings of Indebtedness to the extent permitted by Section 6.01;

(iv)  subject to the Intercreditor Agreements, payment of secured Indebtedness out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness;

(v)   payment of or in respect of (A) Indebtedness created under the ABL Loan Documents, (B) Indebtedness or obligations secured by the ABL Security Documents, (C) Indebtedness created under the First Lien Term Loan Documents, and (D) Indebtedness or obligations secured by the First Lien Term Loan Security Documents;

(vi)  [reserved];

(vii) [reserved]; and

(viii) the Borrower may make payments or deliveries in shares of common stock and cash in lieu of fractional shares required by the terms of, and otherwise perform its obligations under, the Convertible Notes Indenture (including, without limitation, making payments of interest and principal thereon and/or making deliveries (other than in cash) due upon conversion thereof).

(c)        The Borrower will not, nor will it permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless, in the case of any Synthetic Purchase Agreement related to any Equity Interests of the Borrower, the payments required to be made by the Borrower are limited to amounts permitted to be paid under Section 6.08(a).

 

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SECTION 6.09    Transactions with Affiliates. The Borrower will not, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:

(a)        transactions that are at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties; provided that (i) in the case of any single transaction or series of transactions with a volume in excess of $500,000, the board of directors of the Borrower shall have made a determination in good faith that such transaction or series of transactions, as applicable, is on prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties and (ii) in the case of any single transaction or series of transactions with a volume in excess of $1,000,000, the board of directors of the Borrower shall have engaged an independent financial advisor reasonably acceptable to the Required Lenders and such independent financial advisor shall have made a determination and delivered a customary fairness opinion stating that such transaction or series of transactions, as applicable, is on prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties;

(b)        transactions between or among the Borrower and any other Loan Parties not involving any other Affiliate (to the extent not otherwise prohibited by other provisions of this Agreement);

(c)        any Restricted Payment permitted by Section 6.08; and

(d)        (i) transactions pursuant to agreements in effect on the Closing Date and listed on Schedule 6.09 ( provided that this clause (d) shall not apply to any extension, or renewal of, or any amendment or modification of such agreements that is less favorable to the Borrower or the applicable Subsidiaries, as the case may be) and (ii) the Transactions.

SECTION 6.10    Restrictive Agreements. The Borrower will not, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, any ABL Loan Document or any Junior Loan Document or that are customary, in the reasonable judgment of the board of directors thereof, for the market in which such Indebtedness is issued so long as such restrictions do not prevent, impede or impair (x) the creation of Liens and Guarantees in favor of the Lenders under the Loan Documents or (y) the satisfaction of the obligations of the Loan Parties under the Loan Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof and identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale; provided , further , that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder and (iv) clause (a) of the foregoing shall not apply to (A) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions

 

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apply only to the property or assets securing such Indebtedness and (B) customary provisions in leases and other agreements restricting the assignment thereof.

SECTION 6.11      Amendment of Material Documents. The Borrower will not, nor will it permit any Subsidiary to, amend, restate, modify or waive any of its rights under (a) its certificate of incorporation, by-laws or other organizational documents, and (b) (i) any Material Agreement (other than any ABL Loan Document or any First Lien Term Loan Document) or other agreements (including joint venture agreements), in each case to the extent such amendment, restatement, modification or waiver is adverse to the Lenders in any material respect, (ii) any ABL Loan Document that (w) expands or adds to the obligations secured under any ABL Security Documents (other than any obligations constituting Indebtedness created under the ABL Credit Agreement and permitted under Section 6.01), (x) adds any mandatory prepayment provisions (only to the extent resulting in a corresponding permanent commitment reduction or requiring prepayment from the net cash proceeds of the sale, transfer or other disposition of Term Priority Collateral or any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any Term Priority Collateral) or changes any mandatory prepayment provisions in a manner that would increase the amount of any mandatory prepayment of the ABL Loans (only to the extent resulting in a corresponding permanent commitment reduction), (y) increases the “Applicable Margin” or similar component of interest thereunder by more than 3.0% (other than as a result of accrual of interest at the default rate) or (z) adds an additional covenant or event of default or makes any covenant or event of default in the ABL Loan Documents materially more restrictive or burdensome prior to the Maturity Date (unless this Agreement is amended to provide all of the Lenders with the benefits of such covenants or events of default), in each case under this clause (z), other than covenants and events of default solely relating to the Borrowing Base (as defined in the ABL Credit Agreement), the ABL Priority Collateral or similar matters relating primarily to the asset based revolving nature of the ABL Credit Agreement, and (iii) any First Lien Term Loan Document except as otherwise permitted by the Term Intercreditor Agreement.

SECTION 6.12      [Reserved].

SECTION 6.13      Financial Covenants.

(a)      The Borrower will not permit the Secured Net Leverage Ratio as of the last day of any fiscal quarter commencing, with the fiscal quarter ending December 31, 2019, to exceed the ratio set forth below opposite such fiscal quarter:

 

Fiscal Quarter

   Net

Leverage Ratio

December 31, 2019

   6.75:1.00

March 31, 2020

   6.75:1.00

June 30, 2020

   6.75:1.00

September 30, 2020 and each

fiscal quarter ending thereafter

   5.25:1.00

(b)      The Borrower will not permit Liquidity to be less than $15,000,000 as of the last day of any fiscal month end, commencing with the month ending March 31, 2019.

(c)      The Borrower will not permit the Fixed Charge Coverage Ratio as of the last day of any fiscal quarter set forth below (commencing with the fiscal quarter ending March 31, 2020) to be below the ratio set forth below opposite such fiscal quarter:

 

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Fiscal Quarter    Fixed Charge Coverage Ratio

Fiscal quarters ended March 31, 2020

   0.75:1.00

June 30, 2020 and each fiscal quarter ending thereafter

   1.00:1.00

(d)        The Borrower will not permit Capital Expenditures in any fiscal year to exceed the amount set forth below opposite such fiscal year (it being understood that any unused amounts for any fiscal year may be used in the next succeeding fiscal year):

 

Fiscal Year    Maximum Capital Expenditures

2019

   $15,000,000

2020 and each fiscal year thereafter

   $25,000,000

SECTION 6.14      Use of Proceeds. The Borrower will not request any Borrowing, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a Person organized in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

SECTION 6.15      Anti-Layering. Notwithstanding anything to the contrary contained herein,

(a)        the Borrower will not, and will not permit any of its Subsidiaries to, incur, create, assume or suffer to exist any Lien (other than the Liens securing the Obligations) that is subordinated or junior to the Liens securing any other Indebtedness of the Loan Parties (including the Liens securing any First Lien Indebtedness), unless such Liens are also subordinated or junior to, in the same manner and to the same extent, the Liens securing the Obligations; and

(b)        the Borrower will not, and will not permit any of its Subsidiaries to, incur, create, assume or suffer to exist any Indebtedness if such Indebtedness is subordinate or junior in ranking in right of payment to any other Indebtedness of the Loan Parties (including any First Lien Indebtedness), unless such Indebtedness is expressly subordinated in right of payment to the obligations under this agreement.

ARTICLE VII

Events of Default

If any of the following events (“ Events of Default ”) shall occur:

(a)        the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

 

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(b)        the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

(c)        any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)        the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.04, 5.11 or 5.13(d) or in Article VI;

(e)        any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 20 days;

(f)        the Borrower or any Subsidiary shall fail to make any payment (whether of principal, interest or other payment obligations) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable grace period with respect thereto;

(g)         any event or condition occurs (including a “Fundamental Change” as defined in the Convertible Notes Indenture) that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to any Indebtedness outstanding under the ABL Credit Agreement unless (i) such default shall continue unremedied for a period of 15 days (during which period such default is not waived or cured), (ii) the ABL Agent or the lenders under the ABL Credit Agreement cause the ABL Loans to become due prior to their stated maturity and/or the Commitments (as defined in the ABL Credit Agreement) to terminate prior to their stated termination date or (iii) the ABL Agent and/or the lenders under the ABL Credit Agreement exercise secured creditor remedies as a result of such default; provided further that this clause (g) shall not apply to (A) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and (B) any Permitted Convertible Indebtedness to the extent such event or condition occurs as a result of (x) the satisfaction of a conversion contingency, (y) the exercise by a holder of Permitted Convertible Indebtedness of a conversion right resulting from the satisfaction of a conversion contingency or (z) a required repurchase under such Permitted Convertible Indebtedness in each case of this clause (B) solely to the extent that the obligation of the Borrower resulting from such event or condition is satisfied through the issuance of common Equity Interests of the Borrower other than the payment of cash in lieu of the issuance of fractional Equity Interests of the Company;

(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or

 

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any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)        the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)        the Borrower or any Subsidiary shall become unable, admit in writing in a court proceeding its inability or fail generally to pay its debts as they become due;

(k)        one or more judgments for the payment of money in an aggregate amount in excess of $1,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;

(l)        an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m)        any Lien covering property having a book value or fair market value of $1,000,000 or more purported to be created under any Security Document shall cease to be, or shall be asserted in writing by any Loan Party not to be, a valid and perfected Lien on any Collateral, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of the Administrative Agent’s failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Guarantee and Collateral Agreement;

(n)        the Guarantee contained in Article II of the Guarantee and Collateral Agreement shall cease to be, or shall have been asserted in writing by a Loan Party not to be, in full force and effect;

(o)        the Borrower or any Subsidiary shall challenge the subordination provisions of the Subordinated Debt or assert that such provisions are invalid or unenforceable or that the Obligations of the Borrower, or the Obligations of any Subsidiary under the Guarantee and Collateral Agreement, are not senior Indebtedness under the subordination provisions of the Subordinated Debt, or any court, tribunal or government authority of competent jurisdiction shall judge the subordination provisions of the Subordinated Debt to be invalid or unenforceable or such Obligations to be not senior Indebtedness under such subordination provisions or otherwise cease to be, or shall be asserted not to be, legal, valid and binding obligations of the parties thereto, enforceable in accordance with their terms;

(p)        a Change in Control shall occur;

 

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(q)        a Loan Party denies or contests the validity or enforceability of any Loan Documents (including any Intercreditor Agreement) or Obligations, or any Loan Document (including any Intercreditor Agreement) ceases to be in full force or effect for any reason (other than a waiver or release by the Administrative Agent, the Lender Representative and Lenders);

(r)        a loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $1,000,000; or

(s)        any event occurs or condition exists that has a Material Adverse Effect;

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon, premium (including the Prepayment Premium) and all fees and other obligations of the Borrower, accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

ARTICLE VIII

The Agents

Each of the Lenders hereby irrevocably appoints the Administrative Agent (it being understood that references in this Article VIII to the Administrative Agent shall be deemed to include the Collateral Agent) as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such Person and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02); provided, that the Administrative Agent shall not be required to take any action that, in its opinion or in the opinion of its counsel, could expose the Administrative

 

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Agent to liability or be contrary to any Loan Document or any requirement of Applicable Law, and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02) and the Administrative Agent shall not be liable for any action taken or not taken by it in the absence of its own gross negligence or willful misconduct as determined by a final non-appealable judgment by a court of competent jurisdiction; provided, that, no action taken or not taken at the direction of the Required Lenders shall be considered gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof conspicuously labeled as a “notice of default” is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

The Administrative Agent may resign at any time by notifying the Lenders and the Borrower and the Administrative Agent may be removed at any time with or without cause by an instrument or concurrent instruments in writing delivered to the Borrower and Administrative Agent and signed by the Required Lenders. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor from among the Lenders, which consultation shall not be required after and during the continuation of an Event of Default. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may (but shall be under no obligation to), on behalf of the Lenders, appoint a successor Administrative Agent. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring

 

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Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder; provided, that, Administrative Agent’s resignation shall nonetheless become effective within thirty (30) days after the Administrative Agent provides notices of its resignations to the Lenders and the Borrower. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Administrative 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 it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

ARTICLE IX

[Reserved]

ARTICLE X

Miscellaneous

SECTION 10.01    Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, 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 telecopy, as follows:(a) if to the Borrower, to Horizon Global Corporation at 2600 West Big Beaver Rd., Suite 555, Troy, MI 48084 Attention of Jay Goldbaum, General Counsel (Telephone No. (248) 593-8838, Telecopy No. (248) 203-6434), Email jgoldbaum@horizonglobal.com and bwhittman@horizonglobal.com ;

(b)        if to the Administrative Agent, to Cortland Capital Market Services LLC, 225 W. Washington St., 9th Floor, Chicago, Illinois 60606 Attention of Legal Department and Frances Real (Telecopy: (312) 376-0751, Telephone: (312) 564-5100, Email: legal@cortlandglobal.com and CPCAgency@cortlandglobal.com), with a copy (which shall not constitute notice) to Holland & Knight LLP, 131 South Dearborn Street, 30th Floor, Chicago, IL 60603 Attention of Joshua M. Spencer (Telecopy: (312) 578-6666, Telephone: (312) 928-6033, Email: Joshua.Spencer@hklaw.com);

(c)        if to the Lender Representative, to Corre Partners Management, L.L.C., 12 East 49 th Street, 40 th Floor, New York, New York, 10017; Attention of John Barrett (Telecopy: 646-863-7161, Telephone: 646-863-7152, Email john@correpartners.com ); and

(d)        if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given

 

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to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 10.02    Waivers; Amendments.

(a)        No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

(b)        Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders (with a copy to the Administrative Agent) or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, in each case with the written consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the maturity of any Loan, or any scheduled date of payment of the principal amount of any Loan under Section 2.10, or any date for the payment of any interest or fees payable hereunder, or reduce or forgive the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.18(a), (b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change the percentage set forth in the definition of “ Required Lenders ” or any other provision of any Loan Document (including this Section) specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender, (vi) release all or substantially all of the Subsidiary Loan Parties from their Guarantees under the Guarantee and Collateral Agreement (except as expressly provided in the Guarantee and Collateral Agreement), without the written consent of each Lender, (vii) release all or substantially all of the Collateral from the Liens of the Security Documents, without the written consent of each Lender (except as expressly provided in the Security Documents) or (viii) change the order of priority of payments set forth in Section 2.4 of the Guarantee and Collateral Agreement without the written consent of each Lender; provided , further , that (A) no such agreement shall amend, modify or otherwise affect the rights or duties of the Agents, without the prior written consent of the Administrative Agent or the Collateral Agent, as applicable. Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by the Borrower, the Required Lenders and the Administrative Agent if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement.

 

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(c)        In connection with any proposed amendment, modification, waiver or termination (a “ Proposed Change ”) requiring the consent of all Lenders or all affected Lenders, if the consent of the Required Lenders to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in paragraph (b) of this Section being referred to as a “ Non-Consenting Lender ”), then, so long as the Lender Representative is not a Non-Consenting Lender, the Borrower may, at its sole expense and effort, upon notice to such Non-Consenting Lender and the Lender Representative, require such Non-Consenting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (a) the Borrower shall have received the prior written consent of the Lender Representative, which consent shall not be unreasonably withheld, (b) such Non-Consenting Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder 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), (c) the Borrower or such assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 10.04(b), (d) such assignee shall consent to such Proposed Change and (e) if such Non-Consenting Lender is acting as the Lender Representative, it will not be required to assign and delegate its interests, rights and obligations as the Lender Representative under this Agreement. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee, and that the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective; provided , that, such assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire, a properly completed and duly executed copy of IRS Form W-9 (or other applicable tax form) and all other documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act

(d)        Notwithstanding the foregoing, (i) the Lender Representative and the Borrower may amend, modify or supplement any Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document and (ii) the Lender Representative and the Borrower may amend this Agreement without the consent of any Lender or Required Lenders in order to provide the Lenders with the benefits of any additional covenants, more restrictive covenants or events of default that are added to the ABL Loan Documents or the First Lien Term Loan Documents.

SECTION 10.03    Expenses; Indemnity; Damage Waiver.

(a)        The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents and their Affiliates, including the reasonable fees, charges and disbursements of on financial advisor. one primary counsel to the Administrative Agent and one primary counsel for the Lender Representative and the Lenders in connection with the provision, negotiation and documentation of the credit facility provided for herein, due diligence investigation, the preparation and administration of the Loan Documents, the monitoring of the performance of the Borrower and its Affiliates, or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses incurred by the Agents or any Lender, including the fees, charges and disbursements of any counsel for the Agents or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans; provided that, unless a Default has occurred and is continuing, the costs and expenses of the financial advisor

 

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to the Lenders in connection with the regular monitoring of the performance of the Borrower and its Affiliates with the Loan Documents reimbursable pursuant to this Section 10.03(a) shall not exceed $50,000 per month.

(b)        The Borrower hereby indemnifies (x) the Agents and each of its Related Parties (each such person being called an “ Agent Indemnitee ”) and (y) the Arrangers and each Lender, and each Related Party of any Arranger or Lender (each such person being called a “ Lender Indemnitee ”; and together with the Agent Indemnitees, each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any Mortgaged Property or any other property currently or formerly owned or operated by the Borrower or any Subsidiary, or any Environmental Liability related in any way to the Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, and whether or not the same are brought by the Borrower, its equity holders, affiliates or creditors or any other Person and regardless of whether any Indemnitee is a party thereto; 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) are determined by a court of competent jurisdiction by final and non-appealable judgment to have arisen out of a material breach in bad faith by such Lender Indemnitee of its obligations under the Loan Documents or (C) result from a dispute solely among Indemnitees, other than any claims against an Indemnitee in its capacity or in fulfilling its role as an agent or arranger under the Loan Documents and other than any claims arising out of any act or omission of the Borrower or any of its Affiliates. This Section 10.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(c)        To the extent that any of the Borrower fails to timely pay any amount required to be paid by it to the Administrative Agent under paragraph (a) or (b) of this Section 10.03 (and without limiting such party’s obligation to do so), each Lender severally agrees to pay to the Administrative Agent such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of any such actual and direct losses (other than lost profits), claims, damages, liabilities and related reasonable and documented out-of-pocket expenses (including any such amount in respect of a claim asserted by such Lender); provided 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 in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the outstanding Loans and unused Commitments at the time; ;provided, that, if the Loans have been paid in full prior to such determination, then such pro rata share shall be determined as of the last date that any Loan was outstanding.

(d)        To the extent permitted by Applicable Law, the Borrower 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 or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.

 

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(e)        All amounts due under this Section 10.03 shall be payable promptly after written demand therefor.

(f)        No director, officer, employee, stockholder or member, as such, of any Loan Party shall have any liability for the Obligations or for any claim based on, in respect of or by reason of the Obligations or their creation; provided that the foregoing shall not be construed to relieve any Loan Party of its Obligations under any Loan Document.

(g)        For the avoidance of doubt, this Section 10.03 shall not apply to any Taxes, except to the extent any Taxes that represent losses, claims, damages or liabilities arising from any non-Tax claim.

SECTION 10.04    Successors and Assigns.

(a)        The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent 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 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)        Any Lender may assign to one or more assignees (other than a natural person) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund, each of the Borrower and the Administrative Agent must give their prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed) ( provided that the Borrower shall be deemed to have consented to any assignment of Loans or Commitments unless it shall object thereto by written notice to the Administrative Agent within seven Business Days after having received notice thereof), (ii) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, (iii) 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, (iv) 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 and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire a properly completed and duly executed copy of IRS Form W-9 (or other applicable tax form) and all other documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act; and provided , further , that any consent of the Borrower otherwise required under this paragraph shall not be required if an Event of Default has occurred and is continuing. Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto 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

 

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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 2.15, 2.16, 2.17 and 10.03). 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 (e) of this Section.

(c)        The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount (and stated interest) of 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, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior written notice.

(d)        Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire, a properly completed and duly executed copy of IRS Form W-9 (or other applicable tax form) and all other documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(e)        Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans); 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 and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents; 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 described in clauses (i), (ii), (iii), (vi) or (vii) of the first proviso to Section 10.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the limitations and requirements therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) 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 agrees to be subject to the provisions of Section 2.19 as if it were an assignee under paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. With respect to any Loan made to the Borrower, each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant

 

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and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or in connection with any income tax audit or other income tax proceeding of the Borrower. 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.

(f)        A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with the prior written consent of the Borrower. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower to comply with Section 2.17(f) as though it were a Lender.

(g)        Any Lender may, without the consent of the Borrower or the Administrative Agent, 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 any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(h)        Notwithstanding anything to the contrary set forth in this Agreement or any other Loan Document, no assignments of the Loans shall be made to the Borrower or any Subsidiary thereof.

SECTION 10.05    Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

SECTION 10.06    Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent 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 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received

 

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counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 10.07    Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 10.08    Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 10.09    Governing Law; Jurisdiction; Consent to Service of Process.

(a)        This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)        The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court 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, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c)        The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)        Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

 

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SECTION 10.10    WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)  CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)  ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 10.11    Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

SECTION 10.12    Confidentiality. Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Lender Affiliates and to its and its Lender Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (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 pursuant to the terms hereof), (b) to the extent requested by any regulatory or quasi-regulatory authority, (c) to the extent required by Applicable Laws or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document 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 or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower, (h) to the extent such Information (i) is publicly available at the time of disclosure or becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower or any Subsidiary or (i) to data service providers, including league table providers, that serve the lending industry, so long as such information consists of information customarily provided to such data service providers. For the purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary; provided that, in the case of information received from the Borrower or any Subsidiary after the Closing Date, 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 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 10.13    Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under Applicable Law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect

 

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thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 10.14    Intercreditor Agreements. Each Lender hereby authorizes and directs the Administrative Agent and/or the Collateral Agent (a) to enter into each Intercreditor Agreement on its behalf, perform such Intercreditor Agreement on its behalf and take any actions thereunder as determined by the Administrative Agent or the Collateral Agent to be necessary or advisable to protect the interest of the Lenders, and each Lender agrees to be bound by the terms of such Intercreditor Agreement and (b) to enter into any other intercreditor agreement reasonably satisfactory to the Administrative Agent on its behalf, perform such intercreditor agreement on its behalf and take any actions thereunder as determined by the Administrative Agent or the Collateral Agent to be necessary or advisable to protect the interests of the Lenders, and each Lender agrees to be bound by the terms of such intercreditor agreement. Each Lender acknowledges that (i) the ABL/Term Loan Intercreditor Agreement governs, among other things, Lien priorities and rights of the Lenders and the other “Term Secured Parties” and the “ABL Secured Parties” (each as defined in the ABL/Term Loan Intercreditor Agreement) with respect to the Collateral and (ii) the Term Intercreditor Agreement governs, among other things, Lien priorities and rights of the Lenders and the “First Lien Secured Parties” (as defined in the Term Intercreditor Agreement) with respect to the Collateral. In the event of any inconsistency between any Loan Document and any Intercreditor Agreement, the provision of the applicable Intercreditor Agreement shall prevail.

SECTION 10.15    Release of Liens and Guarantees. (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Collateral Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 10.02) to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 10.02 or (ii) under the circumstances described in paragraph (b) below. (b) At such time as the Loans and the other obligations under the Loan Documents shall have been paid in full and the Commitments have been terminated, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person, the security interests in such Collateral created by the Security Documents shall be automatically released without delivery of any instrument or performance of any act by any Person. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, such certificate, believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.

(c)        In connection with any termination or release pursuant to this Section, the Administrative Agent and the Collateral Agent shall execute and deliver to any Loan Party all documents that such Loan Party shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent or the Collateral Agent.

SECTION 10.16    PATRIOT Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ PATRIOT Act ”), it is required, or will be required in the future, to obtain, verify and record information that identifies the Borrower and the other Loan Parties, which information includes the

 

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name and address of the Borrower and the other Loan Parties and other information that will allow such Lender to identify the Borrower and the other Loan Parties in accordance with the PATRIOT Act.

SECTION 10.17    No Fiduciary Duty. Each Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “ Lenders ”), may have economic interests that conflict with those of the Borrower, its stockholders and/or its affiliates. The Borrower agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and the Borrower, its stockholders or its affiliates, on the other. The Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and there under) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise the Borrower, its stockholders or its Affiliates on other matters) or any other obligation to the Borrower except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower, its management, stockholders, creditors or any other Person. The Borrower acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to such borrower, in connection with such transaction or the process leading thereto.

SECTION 10.18    Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)        the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b)        the effects of any Bail-In Action on any such liability, including, if applicable:

(i)        a reduction in full or in part or cancellation of any such liability;

(ii)        a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)        the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

SECTION 10.19    Warrants and Preferred Shares. The Borrower, the other Loan Parties and the Lenders acknowledge and agree that the Closing Date Warrants and the Closing Date Preferred

 

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Shares shall be treated as part of an “investment unit” as defined in Section 1273(c)(2) of the Code. In furtherance of such treatment, the parties further agree that the Second Lien Term Loan Facilities will be issued with original issue discount for U.S. federal income tax purposes, and the “issue price” for U.S. federal income tax purposes of the Second Lien Term Loan Facilities, the Closing Date Warrants and the Closing Date Preferred Shares shall be allocated between the Second Lien Term Loan Facilities, the Closing Date Warrants and the Closing Date Preferred Shares in accordance with the Code and applicable Treasury Regulations based on the assumption that the fair market value of the Closing Date Warrants and the Closing Date Preferred Shares shall each be as determined by the Lender Representative.    

[ Signature Pages Follow ]

 

-83-

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

 

HORIZON GLOBAL CORPORATION
By:      

/s/ Brian Whittman

  Name:   Brian Whittman
  Title:   Vice President, Finance

CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent
By:      

/s/ Emily Ergang Pappas

  Name:     Emily Ergang Pappas
  Title:     Associate Counsel

CORRE PARTNERS MANAGEMENT, L.L.C., as
            Lender Representative
By : /s/ Eric Soderlund                                                 
           Name:   Eric Soderlund
           Title:   Managing Partner

CORRE OPPORTUNITIES QUALIFIED MASTER FUND, LP, as a Lender
By : /s/ John Barrett                                                       
            Name:  John Barrett
            Title:  Authorized Signatory
CORRE OPPORTUNITIES II MASTER FUND, LP, as a Lender
By : /s/ John Barrett                                                       
            Name:  John Barrett
            Title:  Authorized Signatory
CORRE HORIZON FUND, LP, as a Lender
By : /s/ John Barrett                                                       
            Name:  John Barrett
            Title:  Authorized Signatory

ULYSSES PARTNERS, LP, as a Lender
By : /s/ Vincent Ognibene                                                 
       Name: Vincent Ognibene
  Title: Chief Financial Officer

SIMON CHARITABLE PRIVATE LLC, as a Lender

By : /s/ Karen A. Vereb                                                     

            Name: Karen A. Vereb

            Title: Secretary

By : /s/ James R. Fox                                                          

            Name: James R. Fox

            Title: Authorized Signer

PW FOCUS FUND LLC, as a Lender

By: Parkwood LLC, Managing Member

By : /s/ Karen A. Vereb                                                     

            Name: Karen A. Vereb

            Title: Secretary

By : /s/ James R. Fox                                                          

            Name: James R. Fox

            Title: Vice President

SIMON MARKETABLE, LP, as a Lender

By: Parkwood LLC, Managing Member

By : /s/ Karen A. Vereb                                                     

            Name: Karen A. Vereb

            Title: Secretary

By : /s/ James R. Fox                                                          

            Name: James R. Fox

            Title: Vice President

NEWPORT GLOBAL CREDIT FUND (MASTER) LP, as a Lender
By : /s/ Timothy T. Janszen                                                 
            Name: Timothy T. Janszen
            Title: CEO
NEWPORT GLOBAL OPPORTUNITIES FUND I-A LP, as a Lender
By : /s/ Timothy T. Janszen                                                 
            Name: Timothy T. Janszen
            Title: CEO
FIDELITY NATIONAL TITLE INSURANCE COMPANY, as a Lender
By : /s/ Timothy T. Janszen                                                 
            Name: Timothy T. Janszen
            Title: Authorized Signatory

JKI HOLDINGS, LLC, as a Lender
By : /s/ John C. Kennedy                                         
          Name: John C. Kennedy
          Title: Director

Schedule 2.01

COMMITMENTS

 

   

Lender

 

  

     Commitment     

 

   

Corre Opportunities Qualified Master Fund, LP

 

   $20,408,162    

 

   

Corre Opportunities II Master Fund, LP

 

   $2,551,020    

 

   

Corre Horizon Fund, LP

 

   $11,734,694    

 

   

Newport Global Credit Fund LP

 

   $319,388    

 

   

Newport Global Opportunities Fund I-A LP

 

   $5,296,939    

 

   

Fidelity National Title Insurance Company

 

   $2,036,735    

 

   

Ulysses Partners, LP

 

   $3,571,429    

 

   

JKI Holdings, LLC

 

   $2,551,020    

 

   

Simon Charitable Private LLC

 

   $943,878    

 

   

PW Focus Fund LLC

 

   $841,837    

 

   

Simon Marketable, LP

 

   $765,306    

 

   

TOTAL:

 

   $51,020,408    

 

SCHEDULE 3.03

GOVERNMENTAL APPROVALS; NO CONFLICTS

None.

SCHEDULE 3.05

REAL PROPERTY

Leased Property:

   

Subject Grantor

 

  

Street Address

 

   

Horizon Global Americas Inc.

 

  

29000-2 Aurora Rd, Solon, Ohio 44139

 

   

Horizon Global Americas Inc.

 

  

3310 William Richardson Ct., South Bend, Indiana 46628

 

Horizon Global Americas Inc.

  

105-2 LM Gaines Blvd.

Starke, Florida 75050

 

Horizon Global Americas Inc.

 

  

 

2 Bishop Place, Camp Hill, Pennsylvania 17011

 

 

Horizon Global Americas Inc.

 

  

2600 College Avenue, Goshen, Indiana 46528

 

 

Horizon Global Americas Inc.

 

  

3180 S Willow, 103, Fresno, California 93725

 

Horizon Global Americas Inc.

  

47912 Halyard Drive, Suite 100, Plymouth, Michigan

48170

 

Horizon Global Americas Inc.

 

  

1050 Indianhead Drive, Mosinee, Wisconsin 54455

 

 

Horizon Global Americas Inc.

 

  

6500 S. 35th Street, McAllen, Texas 78503

 

 

Horizon Global Americas Inc.

 

  

 

8460 Gran Vista Drive, Building C, El Paso, Texas 79907

 

 

Horizon Global Company LLC

 

  

2600 West Big Beaver Road, Troy, Michigan 48084

 

Horizon Global Americas Inc.

  

32901 W. 193 St.

Edgerton, Kansas 660211

 

Cequent Electrical Products S. de. R.L. de C.V.

 

  

8881 Enrique Pinocelli Ave

 

Cequent Electrical Products S. de. R.L. de C.V.

  

Pharr Bridge

Building #4

Ave. Prologis # 140

Edificio #4

Cequent Electrical Products S. de. R.L. de C.V.

  

Avenida Los Nogales, s/n Iotes 4, 5 y 6 edificio

(Building #1)

Cequent Electrical Products S. de. R.L. de C.V.

  

Avenida Los Nogales, s/n Iotes 4, 5 y 6 edificio

(Building #2)

Cequent Electrical Products S. de. R.L. de C.V.

  

Ave. de los Sauces #2060,

Parque Industrial Villa Florida

Cequent Electrical Products S. de. R.L. de C.V.

  

Industrial Drive

s/n/ Edificio 11

Parque Industrial, Puente Pharr

 

Cequent Nederland Holdings B.V.

 

  

Prins Bernhardplein 200 (1097 JB)

 

 

Cequent Towing Products of Canada Ltd.

 

  

295 Superior Blvd., Unit 1

 

SCHEDULE 3.06

DISCLOSED MATTERS

 

 

Matter

 

  

Overview

 

 

  Volkswagen/Audi/Daimler     & Westfalia

(Germany)

  

Product Liability: Westfalia advised of product concern by Volkswagen. Product at issue is a retractable towbar, which includes a locking pin supplied by a third party. To date, no accidents or safety-related incidents have been reported. No formal lawsuit has been filed. Westfalia has filed a claim with its insurance carrier.

SCHEDULE 3.12

SUBSIDIARIES

 

  Corporate Name   Owner / Type of Equity Interest   Percentage  
Pledged   		 

Is the Sub-    

sidiary an    

Obligor?    

AH Forgings Proprietary Limited   100% owned by Horizon Global (South Africa) (Pty) Ltd.   None   No
C.P. Witter Limited   100% owned by Horizon Global European Holdings Limited   None   No
Cequent Bermuda Holdings Ltd.   100% owned by Horizon Euro Finance LLC   None   No
Cequent Brazil Holdings Coöperatief W.A.   99.99 % owned by Horizon Real Finance LLC and approx. 0.01% owned by Cequent Bermuda Holdings Ltd. (such ownership totaling 100%)   None   No
Cequent Electrical Products de México, S. de R.L. de C.V.   99.97% owned by Cequent Mexico Holdings B.V. and approx. 0.03% owned by Cequent Sales Company de México, S. de R.L. de C.V. (such ownership totaling 100%)   100%   Yes
Cequent Indústria E Comércio Ltda.   99.99% owned by Cequent Brazil Holdings Coöperatief W.A. and 0.01% owned by Horizon Real Finance LLC (such ownership totaling 100%)   None   No
Cequent Mexico Holdings B.V.   100% owned by Cequent UK Limited   100%   Yes
Cequent Nederland Holdings B.V.   100% owned by Horizon International Holdings LLC   100%   Yes
Horizon Global Americas Inc.   100% owned by Horizon Global Company LLC   100%   Yes
Cequent Sales Company de México, S. de R.L. de C.V.   99.97% owned by Cequent Nederland Holdings B.V. and approx. 0.03% owned by Cequent Mexico Holdings B.V. (such ownership totaling 100%)   100%   Yes
Cequent Towing Products of Canada, Ltd.   100% owned by Cequent Nederland Holdings B.V.   100%   Yes
Cequent UK Limited   100% owned by Cequent Nederland Holdings B.V.   100%   Yes
HG Germany Holdings GmbH   100% owned by Cequent Nederland Holdings B.V.   100%   No
HGHK Services C.V.   99.99% owned by Horizon Sourcing Holdings LLC and approx. 0.01% owned by Horizon Euro Finance LLC (such ownership totaling 100%)   None   No
HZN FinCo IRL Holdings Limited   100% owned by Cequent Nederland Holdings B.V.   100%   No
HZN Sourcing Oy   100% owned by Cequent Nederland Holdings B.V.   100%   No
Henrichs Beteiligungsgesellschaft mbH   100% owned by Westfalia-Automotive GmbH   None   No
Horizon Euro Finance LLC***   100% owned by Cequent Nederland Holdings B.V.   100%   No
Horizon GBP Finance LLC***   100% owned by Cequent Bermuda Holdings Ltd.   None   No
Horizon Global Company LLC   100% owned by Horizon Global Corporation   100%   Yes
Horizon Global Digital Limited   100% owned by Cequent Nederland Holdings B.V.   100%   No

  Corporate Name   Owner / Type of Equity Interest   Percentage  
Pledged   		 

Is the Sub-    

sidiary an    

Obligor?    

Horizon Global European Holdings Limited

  100% owned by Cequent Nederland Holdings B.V.   100%   No

Horizon Global Germany GmbH

  100% owned by C.P. Witter Limited   None   No

Horizon Global Holdings Australia Pty. Ltd.

  100% owned by Cequent Bermuda Holdings Ltd.   None   No

Horizon Global Hong Kong Holdings Limited

  100% owned by Cequent Nederland Holdings B.V.   100%   No

Horizon Global (NZ) Limited

  100% owned by Horizon Global Holdings Australia Pty Ltd.   None   No

Horizon Global Pty. Ltd.

  100% owned by Horizon Global Holdings Australia Pty. Ltd.   None   No

Horizon Global (Shanghai) Trading Co. Ltd.

  100% owned by Horizon Global Hong Kong Holdings Limited   None   No

Horizon Global (South Africa) (PTY) LTD.

  100% owned by Cequent Nederland Holdings B.V.   100%   No

Horizon Global Sourcing Operations and Innovation Center India Pvt. Ltd.

  99.99% owned by Cequent Nederland Holdings B.V. and approx. 0.01% owned by Horizon Euro Finance LLC (such ownership totaling 100%)   None   No

Horizon International Holdings LLC

  100% owned by Horizon Global Americas, Inc.   100%   Yes

Horizon Real Finance LLC

  100% owned by Cequent Bermuda Holdings Ltd.   None   No
   

 

 

 

 

 

Horizon Sourcing B.V.

  100% owned by Cequent Nederland Holdings B.V.   100%   No

Horizon Sourcing Holdings LLC

  100% owned by Horizon Euro Finance LLC   None   No

Kovil Oy

  100% owned by Horizon Global (Germany) GmbH   None   No

Monoflex Nordic AB

  100 % owned by Westfalia Nordic AB   None   No

Parkside Towbars Pty. Ltd.

  100% owned by Horizon Global Pty. Ltd.   None   No

 

S.I.A.R.R. SAS

 

 

100% owned by Westfalia-Automotive SAS

 

  None   No

Teljs Automotive Srl Unit 2

  99.975% owned by Teljs B.V. and approx. 0.025% owned by TeIJs Holding B.V. (such ownership totaling 100%)   None   No

 

Teljs B.V.

 

  100% owned by Teljs Holding B.V.   None   No
       

Teljs Holding B.V.

  100% owned by Cequent Nederland Holdings B.V.   100%   No

Terwa Holdings B.V.

  99.975% owned by Teljs B.V. and approx. .025% owned by TelJs Holding B.V. (such ownership totaling 100%)  

None

 

 

No

 

       

Terwa Innovation B.V.

  100% owned by Terwa Holdings B.V.   None   No
       

Terwa Investors B.V.

  100% owned by Terwa Holdings B.V.   None   No

Terwa Romania Srl Unit 1

  99.975% owned by TeIJs B.V. and approx. 0.025% owned by Terwa Innovation B.V. (such ownership totaling 100%)   None  

No

 

Westfalia American Hitch Inc.

  100% owned by Westfalia-Automotive GmbH   None   No

 

  Corporate Name   Owner / Type of Equity Interest   Percentage  
Pledged   		 

Is the Sub-    

sidiary an    

Obligor?    

Westfalia-Automotive Beteiligungsgesellschaft mbH

  100% owned by Westfalia-Automotive GmbH   None   No

Westfalia-Automotive Denmark ApS

  100% owned by Monoflex Nordic AB   None   No

Westfalia-Automotive GmbH

  100% owned by Westfalia-Automotive Holding GmbH   None   No

Westfalia-Automotive Holding GmbH

  100% owned by HG Germany Holdings GmbH   None   No

Westfalia-Automotive Italia S.r.l.

  100% owned by Westfalia-Automotive GmbH   None   No

Westfalia-Automotive Polska Sp.Zo.o

  100% owned by Westfalia-Automotive GmbH   None   No

Westfalia-Automotive Russland OOO

  99.1% owned by Westfalia-Automotive GmbH and approx. 0.9% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH (such ownership totaling 100%)   None   No

 

Westfalia-Automotive SAS

  100% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH   None   No

Westfalia Nordic AB

  100% owned by Westfalia-Automotive Beteiligungsgesellschaft mbH   None   No

Westfalia UK Ltd.

  100% owned by Westfalia-Automotive GmbH   None   No

TriMotive Asia Pacific Limited

  99.99% owned by Horizon Global Holdings Australia Pty. Ltd., approx. 0.001% owned by Horizon Euro Finance LLC, and approx. 0.0001% owned by Horizon GBP Finance LLC, (such ownership totaling 100%)   None   No

SCHEDULE 3.13

INSURANCE

[See attached.]

2018 -2019 HORIZON GLOBAL CORPORATION INSURANCE SUMMARY

 

Coverage

 

 

 

Carrier

 

 

 

AM Best Rating

 

 

 

Policy #

 

 

 

Policy Term

 

 

 

Policy Limits

 

 

 

Deductibles / Retentions

 

  DIC / DIL
Master
Property US & Foreign (TIV: $636,962,029)   Allianz   A+ XV   USP00032718   6/30/18-19   $150,000,000 Loss Limit Per Occurrence   $150,000   Yes
Cargo   Indemnity Insurance Co of North America (Chubb)   A++ XV   N10757745   6/30/18-19   $5,000,000   $50,000 / $5,000 via truck or train   No
Primary General Liability/ Employee Benefits Liability Foreign Difference in Conditions/Limits General Liability Foreign Auto Excess Hired Non Owned Liability Foreign Voluntary Workers Compensation and Employers Liability   Federal (Chubb)   A++ XV   36036416   6/30/18-19  

 

$1,000,000 Occurrence/$3,000,000 Products

 

Aggregate /$4,000,000 General Aggregate

 

$1,000,000 BI/PD Excess and DIC Only

 

Voluntary Benefits for International Employees - Country of Hire

 

 

US: $0 except $750,000 Products

 

Foreign: $0

 

Foreign: $0

 

N/A

  Yes for
General
and
Products
Liability
Only
  6/30/18-19
  6/30/18-19
  6/30/18-19
Pollution   Illinois Union Ins Co (Chubb Environmental)   A++ XV   PPL G46655102 002   6/30/18-19   $5,000,000 Per Pollution Condition/Aggregate   $50,000   Yes over
Mexico-as
required
Only
Product Recall   Allianz Underwriters Insurance Co.   A+ XV   USL00038518   6/30/18-19   $12,000,000   $350,000 except 100,000 Euros Westfalia Germany   Yes
Auto   Great Northern (Chubb)   A++ XV   73594370   6/30/18-19   $2,000,000   $2,000 Physical Damage   No
Workers Compensation-CA, NH, NI, NY (USA)   Amerisure Mutual   A XI   WC2101771   6/30/18-19   Statutory/$1,000,000 Employers Liability   N/A   No
Workers Compensation-Other US States   Amerisure Ins Co   A XI   WC2101772   6/30/18-19   Statutory/$1,000,000 Employers Liability   N/A   No
Lead Umbrella   Allianz   A+ XV   USL00072118   6/30/18-19   $25,000,000   $25,000   No
Excess Umbrella-First Layer   Great American Assurance Co   A+ XIV   EXC2275333   6/30/18-19   $25,000,000   Excess of $25,000,000 Excess of Primary   No
Excess Umbrella-Second Layer   Endurance   A XV   EXC30000129002   6/30/18-19   $25,000,000   Excess of $50,000,000 Excess of Primary   No
Excess Umbrella-Third Layer   Federal (Chubb)   A++ XV   9364-25-14   6/30/18-19   $25,000,000   Excess of $75,000,000 Excess of Primary   No
Excess Punitive Damages Wrap   Allianz RKH Specialty   A+ XV   GBL003858181   6/30/18-19   $25,000,000   $10,000 SIR   No
D&O Primary   National Union (AIG)   A XV   01-571-52-11   6/30/18-19   $5,000,000   $1,000,000   Yes
Excess D&O-1st Layer   StarStone National Ins Co   A- XI   G83671180ASP   6/30/18-19   $5,000,000   Excess of $5,000,000   No
Excess D&O-2nd Layer   AXIS Insurance Co   A+ XV   MCN788245/01/2018   6/30/18-19   $5,000,000   Excess of $10,000,000   No
Excess D&O-3rd Layer   Great American   A+ XIV   DFX1491085   6/30/18-19   $5,000,000   Excess of $15,000,000   No
Excess D&O-4th Layer   XL Specialty Insurance   A XV   ELU156220-18   6/30/18-19   $5,000,000   Excess of $20,000,000   No
Excess D&O-5th Layer   Wesco Insurance Co   A- XV   EUW1522593 00   6/30/18-19   $5,000,000   Excess of $25,000,000   No
Excess D&O-6th Layer   QBE Insurance Corp   A XV   QPL0960501   6/30/18-19   $5,000,000   Excess of $30,000,000   No
Excess D&O-7th Layer   Endurance American Ins Co   A+ XV   DOX10013311800   6/30/18-19   $5,000,000   Excess of $35,000,000   No
Excess D&O-8th Layer   Berkley Assurance Co   A+ XV   BPRO8033035   6/30/18-19   $5,000,000   Excess of $40,000,000   No
Excess D&O-9th Layer   Hudson Insurance Co   A XV   HN-0303-5104   6/30/18-19   $5,000,000   Excess of $45,000,000   No
Excess D&O-10th Layer   Old Republic Insurance Co   A+ XII   ORPRO 41011   6/30/18-19   $5,000,000   Excess of $50,000,000   No
Excess D&O-11th Layer   Beazley Insurance Co, Inc   A XIII   V23973180101   6/30/18-19   $5,000,000   Excess of $55,000,000   No
Excess Side A   National Union (AIG)   A XV   01-590-77-05   6/30/18-19   $15,000,000   Excess of $60,000,000   No
Excess Side A   Westchester Fire Insurance Co.   A++ XV   G71151669 001   6/30/18-19   $5,000,000   Excess of $75,000,000   No
Employment Practices   National Union (AIG)   A XV   01-498-04-22   6/30/18-19   $10,000,000   $500,000 except $1,000,000 Class Action   No
Fiduciary   Illinois National (AIG)   A XV   01-457-51-26   6/30/18-19   $10,000,000   $25,000 except $50,000 Securities   No
Crime   National Union (AIG)   A XV   01-454-18-14   6/30/18-19   $10,000,000   $150,000 except $0 ERISA   No
Cyber Liability   Beazley Insurance Co, Inc   A XIII   V23973180101   6/30/18-19   $10,000,000   $100,000   No
Employed Lawyers Errors & Omissions Liability   Illinois National (AIG)   A XV   01-498-03-90   6/30/18-19   $1,000,000   $10,000   No
Kidnap & Ransom   National Union (AIG)   A XV   86-342-758   6/30/18-19   $15,000,000   $0   No
Business Travel Accident   ACE American   A++ XV   ADDN10892089   6/30/18-19   $200,000 Class I / $50,000 Class II & III   N/A   Yes

Summary does not include foreign local policy placements

SCHEDULE 3.20

MATERIAL CONTRACTS

 

  1.

Supplier Agreement, dated as of November 6, 2006, between Horizon Global Americas Inc. (“HGA”), and Citibank, N.A. (“Citibank”), in connection with HGA’s sale to Citibank of certain accounts receivables resulting from HGA’s sale of goods to AutoZone, Inc.

  2.

Purchase Agreement, dated as of May 8, 2012, between HGA and Bank of America, N.A. (“BofA”), in connection with HGA’s sale to BofA of certain accounts receivables resulting from HGA’s sale of goods to Balkamp, Inc.

  3.

Supplier Agreement, effective as of September 27, 2011, between HGA and Branch Banking and Trust Company (“BB&T”), in connection with HGA’s sale to BB&T of certain accounts receivables resulting from HGA’s sale of goods to O’Reilly Automotive Stores, Inc. f/k/a O’Reilly Automotive, Inc. (“O’Reilly’s”), O’Reilly’s subsidiaries and related companies.

  4.

Supplier Agreement, dated as of October 27, 2011, between HGA, and Citibank, in connection with HGA’s sale to Citibank of certain accounts receivables resulting from HGA’s sale of goods to Wal-Mart Stores, Inc.

  5.

HGA is registered with C2FO for participation in invoice “early pay” programs for the following customers:

  a.

Do It Best Corp.;

  b.

ACE Hardware Corporation;

  c.

Amazon.com, Inc.; and

  d.

Costco Wholesale Corporation

  6.

HGA is registered with The Home Depot U.S.A. Inc. (“Home Depot”) for participation in Home Depot’s invoice “early pay” program.

  7.

Online Supplier Agreement (Drafts), dated as of March 20, 2017, between PrimeRevenue, HGA and Citizens Bank of Pennsylvania, in connection with the sale of goods to Advance Auto. 1

  8.

Online Supplier Agreement, dated as of March 20, 2017, between PrimeRevenue, HGA and Bank of Tokyo-Mitsubishi UFJ (BTMU), in connection with the sale of goods to Lowe’s.

  9.

Accounts Receivable Purchase Agreement, dated as of May 17, 2017, between The Pep Boys – Manny, Moe & Jack, PrimeRevenue and HGA.

  10.

Factoring Agreement, dated as of June 5, 2012, between Westfalia-Automotive GmbH and ABN AMRO Commercial Finance GmbH, as amended. 2

  11.

Factoring Agreement, between S.I.A.R.R SAS and BNP Paribas. 3

 

 

1 In FY2018, discounted receivables relating to numbers 8, 9 and 10 above were approximately $50MM.

2 Total receivables sold by legal entity in 2018: approximately $233,746,004

3 Total receivables sold by legal entity in 2018: approximately $9,057,766

SCHEDULE 5.13

POST-CLOSING CONDITIONS

 

  1.

The Loan Parties shall take all necessary actions (subject to the Agreed Security Principles) to satisfy the items described below within sixty (60) days after the Closing Date (or, in each case, such longer periods as the Lender Representative may agree):

 

  (a)

For each Subsidiary domiciled or organized in England, to the extent applicable:

 

  (i)

an English law guarantee and debenture over substantially all of its assets;

 

  (ii)

an English law share pledge agreement entered into by its shareholder relating to the pledge over its shares;

 

  (iii)

such perfection actions as are necessary under English law to perfect the security interests contemplated by this clause (a); and

 

  (iv)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in England to create a first priority perfected security interest therein, subject to the Intercreditor Agreements.

 

  (b)

For each Subsidiary domiciled or organized in Germany, to the extent applicable:

 

  (i)

a German law guarantee;

 

  (ii)

a German law share pledge agreement entered into by its shareholder relating to the pledge over its shares;

 

  (iii)

security over substantially all of its assets located in Germany including but not limited to the following security documents, if applicable:

 

  (A)

a German law account pledge agreement relating to all accounts held by it with banks in Germany;

 

  (B)

a German law global assignment agreement relating to the assignment of accounts receivable from the selling of goods and the provision of services as well as other accounts receivable agreed to be assigned by it (including, but not limited to, insurance claims and intercompany loan receivables);

 

  (C)

a German law security transfer agreement relating to the security transfer of all moveable (including stock and inventory) and fixed assets over which security shall be granted;

 

  (D)

if it has any such rights, an Intellectual Property pledge agreement relating to the pledge of its intellectual property rights (including, but not limited to, patents, designs, utility models, trademarks, know-how and other IP rights);

 

  (E)

if it owns any real estate, a German law land charge over the real estate held by it;

 

  (F)

if it owns any real estate, a German law security purpose agreement relating to the land charge granted by it; and

  (G)

if it is party to any relevant intercompany agreements, a subordination agreement in relation to any shareholder and intercompany loans and any other applicable, if any, intercompany claims; and

 

  (iv)

such perfection actions as are necessary under German law to perfect the security interests contemplated by this clause (b); and

 

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in Germany to create a first priority perfected security interest therein.

 

  (c)

For each Subsidiary domiciled or organized in the Netherlands, to the extent applicable:

 

  (i)

a Dutch law guarantee;

 

  (ii)

a Dutch law omnibus pledge;

 

  (iii)

a Dutch share pledge agreement entered into by its shareholder relating to the pledge over its shares;

 

  (iv)

such perfection actions as are necessary under Dutch law to perfect the security interests contemplated by this clause (c); and

 

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in the Netherlands to create a first priority perfected security interest therein.

 

  (d)

For each Subsidiary domiciled or organized in Canada, to the extent applicable:

 

  (i)

a security agreement governed by the laws of the applicable Canadian province and the laws of Canada applicable therein;

 

  (ii)

such perfection actions as are necessary under Canadian law to perfect the security interests contemplated by this clause (d); and

 

  (iii)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in Canada to create a first priority perfected security interest therein.

 

  (e)

For each Subsidiary domiciled or organized in Mexico, to the extent applicable:

 

  (i)

an equity interest pledge agreement governed by the laws of the applicable pledgor;

 

  (ii)

a non-possessory pledge agreement governed by the laws of the applicable pledgor;

 

  (iii)

a certificate from the applicable Subsidiary domiciled in Mexico evidencing (a) an applicable pledge set forth in clause (i) or (ii) above, (b) a confirmation of the pledge created thereby and (c) a power of attorney granted by the applicable pledgor to the Collateral Agent;

 

  (iv)

such perfection actions as are necessary under Mexican law to perfect the security interests contemplated by this clause (e); and

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in Mexico to create a first priority perfected security interest therein.

 

  2.

All agreements, instruments, documents and legal opinion delivered pursuant to this Post-Closing Schedule shall be in form and substance reasonably satisfactory to the Lender Representative.

 

  3.

Each Subsidiary domiciled in the United Kingdom, Germany, the Netherlands, Mexico or Canada (or any political subdivision) that is not already party to the Guarantee and Collateral Agreement shall deliver a joinder to the Guarantee and Collateral Agreement in form and substance satisfactory to the Collateral Agent within twenty (20) days after the Sixth Amendment Effective Date (or such longer period as the Lender Representative may agree).

 

  4.

Subject to the Intercreditor Agreements, each Loan Party shall have delivered to the Collateral Agent original stock certificates and executed stock powers in blank representing 100% of the Equity Interests of each wholly-owned and direct Subsidiary of such Loan Party within thirty (30) days after the Sixth Amendment Effective Date (or such longer period as the Administrative Agent, acting at the direction of the Required Lenders, may agree), in each case to the extent, (a) such Subsidiary is domiciled or organized in the United Kingdom, Germany, Canada, the Netherlands or Mexico, and (b) such Equity Interests are certificated.

SCHEDULE 6.01

EXISTING INDEBTEDNESS

 

Company   Bank  

Facility

Details

 

 

Outstanding

Amount as of

2/24/2019

  Secured/ Unsecured

Westfalia-Automotive GmbH

  N/A   Capital Lease with Portikus   $10,075,538   Secured

Cequent Industria E Comerico Ltda., Westfalia-Automotive GmBH, Terwa Romania Srl Unit 1, Teljs Automotive Srl Unit 2, Horizon Americas, Inc.

  N/A   Capital Leases   $2,683,977   Secured

Horizon Global Corporation Pty Ltd.

 

National Australia

Bank Ltd., Australia

 

Multi Facility Agreement

 

  $15,276,725   Secured

Terwa Romania Srl Unit 1

  ING   Overdraft Credit Facility   $2,023,801   Secured

Terwa Romania Srl Unit 1

  N/A   Other   $912,997   Secured

Note: the above schedule is subject to year-end audit adjustments

 

  ·  

Indebtedness evidenced by those certain factoring agreements listed on Schedule 3.20.

Intercompany Debt as listed below:

 

Borrower    Lender    Amount
Cequent Electrical Products de Mexico S. de R.L. de C.V.    Cequent Sales Company de Mexico, S. de R.L. de C.V.    $1,481.19
Horizon Global (South Africa) (PPY) LTD.    Cequent Nederland Holdings B.V.    $212,463.40
C.P. Witter Limited    Cequent Nederland Holdings B.V.    $2,428,116.42
Trimotive Germany GmbH    Cequent Nederland Holdings B.V.    $974,950.00
Kovil Oy    Cequent Nederland Holdings B.V.    $297,187.70
HG Germany Holdings GmbH    Cequent Nederland Holdings B.V.    $126,170,000.00
AH Forgings Proprietary Limited    Cequent Nederland Holdings B.V.    $54,320.77
Westfalia – Automotive GmbH    Cequent Nederland Holdings B.V.    $1,720,498.85
Westfalia – Automotive SAS    Cequent Nederland Holdings B.V.    $277,011.97
Westfalia – Automotive Denmark ApS    Cequent Nederland Holdings B.V.    $1,270,557.13
Westfalia – Automotive Polska Sp. Zo.o    Cequent Nederland Holdings B.V.    $556,910.94

Westfalia – Automotive Italia S.r.l

   Cequent Nederland Holdings B.V.    $300,166.46

Teljs Automotive Srl Unit 2

   Cequent Nederland Holdings B.V.    $1,553,635.59

Horizon Global Holdings Australia Pty. Ltd.

   Horizon International Holdings LLC    $44,789,896.27

Horizon Global Corporation

   Horizon International Holdings LLC    $12,502,710.00

C.P. Witter Limited

   Cequent UK Limited    $637,950.00

HG Germany Holdings GmbH

   Horizon Global Corporation    $45,993,583.97

Cequent Nederland Holdings B.V.

   Horizon Global Company LLC    $117,280,750.00

Westfalia – Automotive GmbH

   Horizon Global Company LLC    $1,147,000,00

SCHEDULE 6.02

EXISTING LIENS

Liens existing on the Closing Date in respect of:

1.        Indebtedness set forth on Schedule 6.01 encumbering the assets described on Schedule 6.01, to the extent that such Indebtedness is described as secured Indebtedness on such Schedule 6.01.

2.        Lien evidenced by Initial Filing Number OH00161477063, filed on September 25, 2012, by Raymond Leasing Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in Equipment Master Lease No. 305351.

3.        Lien evidenced by Initial Filing Number 2009 0236023, filed on January 23, 2009, by Air Liquide Industrial U.S. LP against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting specific equipment, including a 13 ton CO2 tank, two gas vessels, and a vaporizer, located in Goshen, IN.

4.        Lien evidenced by Initial Filing Number 2012 0866626, filed on March 6, 2012, by Wells Fargo Bank, N.A. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in Master Lease Agreement No. 9679080.

5.        Lien evidenced by Initial Filing Number 2013 2487248, filed on June 27, 2013, by Wells Fargo Financial Leasing, Inc. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.) covering certain collateral constituting five Xerox Workcentre 5855 copiers.

6.        Lien evidenced by Initial Filing Number 2013 3798981, filed on September 19, 2013, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in the Lease Agreement #122662-003.

7.        Lien evidenced by Initial Filing Number 2013 4703188, filed on November 29, 2013, by Well Fargo Financial Leasing, Inc. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting two Xerox Workcentre 5855 copiers.

8.        Lien evidenced by Initial Filing Number 2015 5309983, filed on November 12, 2015, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting equipment specified in Lease Agreement No.122662-005.

9.        Lien evidenced by Initial Filing Number 2016 7591637, filed on December 7, 2016, by Well Fargo Bank, N.A. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting specific equipment.

10.        Lien evidenced by Initial Filing Number 2017 0850658, filed on February 7, 2017, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting equipment specified in Lease Agreement No.122662-06.

11.        Lien evidenced by Initial Filing Number 2016 1548856, filed on March 15, 2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Corporation, covering certain collateral constituting a Copystar CS 3051ci Copier.

12.        Lien evidenced by Initial Filing Number 2016 1812344, filed on March 28, 2016, by Leaf Capital Funding, LLC and/or its assigns against Horizon Global Corporation and Horizon Global Company LLC, as amended covering certain collateral constituting certain Herman Miller Furniture.

13.        Lien evidenced by Initial Filing Number 2016 3880422, filed on June 28, 2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Company LLC, covering certain collateral constituting a Copystar CS 4551ci Copier.

14.        Lien evidenced by Initial Filing Number 2017 3151500, filed on May 12, 2017, by Mitsubishi UFJ Lease & Finance (U.S.A.) Inc., against Horizon Global Company LLC and Horizon Global Americas Inc, covering certain collateral constituting equipment specified in Master Lease Agreement No. 105854.

15.        Lien evidenced by Initial Filing Number 2017 3151542, filed on May 12, 2017, by Corporation Service Company, as representative, against Horizon Global Company LLC, covering certain collateral constituting equipment specified in Master Lease Agreement No. 105854.

16.        Lien evidenced by Initial Filing Number 2017 5703415, filed on August 28, 2017, by Summit Funding Group, Inc. against Horizon Global Company LLC, covering certain collateral constituting certain equipment, goods, assets, and other tangible and intangible property specified in Master Lease Agreement No. 2677.

17.        Lien evidenced by Initial Filing Number 2017 5906034, filed on September 6, 2017, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 1 to Master Lease 300716.

18.        Lien evidenced by Initial Filing Number 2017 8278089, filed on December 14, 2017, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 2 to Master Lease 300716.

19.        Lien evidenced by Initial Filing Number 2018 2274419, filed on April 3, 2018, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 3 to Master Lease 300716.

20.        Lien evidenced by Initial Filing Number 2018 3737521, filed on June 1, 2018, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 4 to Master Lease 300716.

21.        Lien evidenced by Initial Filing Number 20172702832, filed on April 4, 2017, by MB Financial Bank, N.A. against Horizon Global Americas Inc., covering specific leased equipment.

22.        Lien evidenced by Initial Filing Number 20174044068, filed on June 20, 2017, by Wells Fargo Bank, N.A. against Horizon Global Americas Inc., covering specific equipment.

23.        Lien evidenced by Initial Filing Number 20174301955, filed on June 29, 2017, by the Bank of Tokyo-Mitsubishi UFJ, Ltd. against Horizon Global Americas Inc., covering certain collateral pursuant to Online Supplier Agreement, dated on or about March 20, 2017.

24.        Lien evidenced by Initial Filing Number 20175797631, filed on August 30, 2017, by Summit Funding Group, Inc. against Horizon Global Americas Inc., covering certain collateral identified in the Master Lease Agreement dated August 17, 2017.

25.        Lien evidenced by Initial Filing Number 20176070772, filed on September 13, 2017, by Bank of America, N.A. against Horizon Global Americas Inc. covering certain accounts receivables pursuant to Accounts Receivable Purchase Agreement.

26.        Lien evidenced by Initial Filing Number 201860000588, filed on August 30, 2018, by Crown Equipment Corporation against Horizon Global Americas Inc., covering certain equipment.

27.        Lien evidenced by Initial Filing Number 20189047487, filed on December 28, 2018, by Shi International Corp. against Horizon Global Americas Inc., covering certain equipment.

28.        Lien evidenced by Initial Filing Number 20190309851, filed on January 14, 2019, by Raymond Leasing Corporation against Horizon Global Americas Inc., covering certain equipment.

SCHEDULE 6.04

EXISTING INVESTMENTS

 

  A.

Qualified Foreign Investments

 

  1.

Investments by Cequent Electrical Products de Mexico, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

 

  2.

Investments by Cequent Trailer Products, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

 

  B.

Other Investments

 

  1.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Juarez, Mexico facility; the aggregate amount of loans described in this clause (B)(1) and clause (B)(2) below do not exceed $5.0 million.

 

  2.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Reynosa, Mexico facility; the aggregate amount of loans described in this clause (B)(2) and clause (B)(1) above do not exceed $5.0 million.

 

  3.

Horizon Global Corporation’s investment in the Hong Kong Sourcing Office legal entity to provide legal restructuring and operational funding in an aggregate amount not exceeding $2.5 million.

 

  4.

Investments by Horizon Global Corporation in one or more wholly-owned foreign subsidiaries for the purpose of purchasing one or more foreign manufacturing facilities, including capital equipment and working capital, in an aggregate amount not exceeding $3.0 million.

 

  5.

Horizon Global Digital Limited’s investment in 20% of the issued share capital of Reckless Digital Group Holdings Limited in a total consideration of GBP 360,000 paid to Ellie Warriner (GBP 45,000) and Lindsay Reckless (GBP 315,000)

 

  6.

Horizon Global Digital Limited’s loan to Reckless Digital Group Holdings Limited to be used for growth initiatives and general working capital purposes, in an amount equal to GBP 300,000.

  7.

Cequent Industria e Comercio’s Ltda’s (fka Cequent Brazil Participacoes) purchase of Engetran Engenharia, Industria, Comercio de Pecas e Acessorios Veiculares Ltda from Jorge Correia Karan of which there remains about $100,000 outstanding.

 

  8.

Cequent Industria e Comercio Ltda’s purchase of Dhelfos Industria E Comercio De Acessorios Ltda from Ernani Mariano and Maria Luiza Gome De Goes, of which there remains about $2.5M outstanding.

 

  9.

Westfalia-Automotive GmbH owns 20% of EWV Management Consultancy Pty.

 

  10.

Vendor note from SISS Holding B.V. to Terwa Holding B.V. in connection with Terwa Holding B.V.’s divestiture of (i) all shares in Terwa B.V. to SISS Holding B.V; and (ii) construction-related assets of Terwa Romania Srl Unit 1 to Terwa Construction Systems Srl

Intercompany Debt as listed below:

 

Borrower    Lender    Amount
Cequent Electrical Products de Mexico S. de R.L. de C.V.    Cequent Sales Company de Mexico, S. de R.L. de C.V.    $1,481.19
Horizon Global (South Africa) (PPY) LTD.    Cequent Nederland Holdings B.V.    $212,463.40
C.P. Witter Limited    Cequent Nederland Holdings B.V.    $2,428,116.42
Trimotive Germany GmbH    Cequent Nederland Holdings B.V.    $974,950.00
Kovil Oy    Cequent Nederland Holdings B.V.    $297,187.70
HG Germany Holdings GmbH    Cequent Nederland Holdings B.V.    $126,170,000.00
AH Forgings Proprietary Limited    Cequent Nederland Holdings B.V.    $54,320.77
Westfalia – Automotive GmbH    Cequent Nederland Holdings B.V.    $1,720,498.85
Westfalia – Automotive SAS    Cequent Nederland Holdings B.V.    $277,011.97
Westfalia – Automotive Denmark ApS    Cequent Nederland Holdings B.V.    $1,270,557.13
Westfalia – Automotive Polska Sp. Zo.o    Cequent Nederland Holdings B.V.    $556,910.94
Westfalia – Automotive Italia S.r.l    Cequent Nederland Holdings B.V.    $300,166.46
Teljs Automotive Srl Unit 2    Cequent Nederland Holdings B.V.    $1,553,635.59
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holdings LLC    $44,789,896.27
Horizon Global Corporation    Horizon International Holdings LLC    $12,502,710.00
C.P. Witter Limited    Cequent UK Limited    $637,950.00
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97

Cequent Nederland Holdings B.V.    Horizon Global Company LLC    $117,280,750.00
Westfalia – Automotive GmbH    Horizon Global Company LLC    $1,147,000,00

SCHEDULE 6.05

ASSET SALES

Item 1 below is an ongoing transactions with respect to the Company’s maquila structure and generally allow the Company to transact under the normal course of business under this structure.

 

1.

Intercompany sale for cash of machinery, equipment and/or inventory by Cequent Performance Products, Inc. to Cequent UK Limited, which such machinery, equipment and/or inventory will be located in Cequent UK Limited’s Reynosa, Mexico facility

SCHEDULE 6.09

EXISTING AFFILIATE TRANSACTIONS

The items set forth on Schedule 6.04, Sections B1, B2, B3, B4 and B5. The item set forth on Schedule 6.05, Item 1.

SCHEDULE 6.10

EXISTING RESTRICTIVE AGREEMENTS

None.

EXHIBIT A

[FORM OF] ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (the “ Assignment and Assumption ”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] 4 Assignor identified in item 1 below ([the][each, an] “ Assignor ”) and [the][each] 5 Assignee identified in item 2 below ([the][each, an] “ Assignee ”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] 6 hereunder are several and not joint.] 7 Capitalized terms used but not defined herein shall have the meanings given to them in the Second Lien Term Loan Credit Agreement identified below (as amended, the “ Credit Agreement ”), receipt of a copy of which is hereby acknowledged by [the][each] Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the] [each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including without limitation any guarantees included in such facilities), and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to

 

 

4  

For bracketed language here and elsewhere in this form relating to the Assignor(s), if the assignment is from a single Assignor, choose the first bracketed language. If the assignment is from multiple Assignors, choose the second bracketed language.

 

5  

For bracketed language here and elsewhere in this form relating to the Assignee(s), if the assignment is to a single Assignee, choose the first bracketed language. If the assignment is to multiple Assignees, choose the second bracketed language.

 

6  

Select as appropriate.

 

7  

Include bracketed language if there are either multiple Assignors or multiple Assignees.

clauses (i) and (ii) above being referred to herein collectively as [the][an] “ Assigned Interest ”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

 

1.    Assignor[s]:                                                               
                                                                
   [Assignor [is] [is not] a Defaulting Lender]
2.    Assignee[s]:                                                               
                                                                

[for each Assignee, indicate [Affiliate][Approved Fund] of [ identify Lender ]

 

3.   Borrower:   Horizon Global Corporation  
4.   Administrative Agent:   Cortland Capital Market Services LLC, as the administrative agent under the Credit Agreement  
5.   Credit Agreement:   Second Lien Term Loan Credit Agreement dated as of March 15, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among HORIZON GLOBAL CORPORATION, the lenders from time to time party thereto and CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent.  
6.     Assigned Interest[s]:    

 

       

 

    Aggregate Amount of       Percentage Assigned  
                                                  Commitment/Loans   Amount of Commit-   of Commit-  

 Assignor[s] 8  

 

Assignee[s] 9

        for all Lenders       ment/Loans Assigned 8        ment/Loans 10  
      $   $     %  
      $   $     %  
      $   $     %  

 

 

 

8  

List each Assignor, as appropriate.

 

9  

List each Assignee, as appropriate.

 

10  

Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder

Effective Date:             , 20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR[S] 11
[NAME OF ASSIGNOR]
By:    

 

  Title:
[NAME OF ASSIGNOR]
By:  

 

  Title:
ASSIGNEE[S] 12
[NAME OF ASSIGNEE]
By:  

 

  Title:
[NAME OF ASSIGNEE]
By:  

 

  Title:

 

 

 

 

11  

Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

 

12  

Add additional signature blocks as needed. Include both Fund/Pension Plan and manager making the trade (if applicable).

Consented to and Accepted 13 :

Cortland Capital Market Services LLC, as

      Administrative Agent

 

By:      

 

  Title:

Consented to:

[Horizon Global Corporation, as the Borrower]

 

By:      

 

  Title:

 

 

 

 

 

13  

Consents to be included to the extent required by Section 10.04(b) of the Credit Agreement.

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1.           Representations and Warranties .

1.1         Assignor[s] . [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any Subsidiary or any other Person obligated in respect of any Loan Document, or (iv) the performance or observance by the Borrower, any Subsidiary or any other Person of any of their respective obligations under any Loan Document.

1.2.       Assignee[s] . [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under the Credit Agreement (subject to such consents, if any, as may be required under Section 10.04(b) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee (including, without limitation, a properly completed and duly executed copy of IRS Form W-9 (or other applicable tax form) and all other documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including, without limitation, the Patriot Act); and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with

their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2.         Payments . From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date. Notwithstanding the foregoing, the Administrative Agent shall make all payments of interest, fees or other amounts paid or payable in kind from and after the Effective Date to [the][the relevant] Assignee.

3.         General Provisions . This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

EXHIBIT B

[FORM OF] BORROWING REQUEST

Cortland Capital Market Services LLC,

      as Administrative Agent

225 W. Washington St., 9th Floor

Chicago, Illinois 60606

Attention: Legal Department and Frances Real

(Telecopy: (312) 376-0751)

(Email: legal@cortlandglobal.com and

CPCAgency@cortlandglobal.com)

[DATE]

Ladies and Gentlemen:

Reference is made to the Second Lien Term Loan Credit Agreement dated as of March 15, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among HORIZON GLOBAL CORPORATION, the lenders from time to time party thereto and CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent. Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Credit Agreement.

This notice constitutes a Borrowing Request and the Borrower hereby gives you notice, pursuant to Section 2.03 of the Credit Agreement, that it requests a Borrowing under the Credit Agreement, and in that connection the Borrower specifies the following information with respect to such Borrowing:

 

  (A)

Aggregate principal amount of Borrowing: $         

 

  (B)

Date of Borrowing (which is a Business Day):         

 

  (C)

Interest Period and the last day thereof: 14

 

  (D)

Location and number of the Borrower’s account to which proceeds of the requested Borrowing are to be disbursed: [NAME OF BANK] (Account No.:                      )

The Borrower hereby certifies that the conditions specified in Section 4.01 of the Credit Agreement have been satisfied.

[Remainder of page intentionally left blank; signature page follows]

 

 

 

14  

Eurocurrency Borrowings shall be subject to the definition of “Interest Period” and can be a period of one, two or three months. If an Interest Period is not specified for a Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

Very truly yours,
HORIZON GLOBAL CORPORATION
by     

 

  Name:
  Title:

EXHIBIT C

[RESERVED]

EXHIBIT D

FORM OF GUARANTEE AND COLLATERAL AGREEMENT

[See attached]

Execution Version

 

 

 

SECOND LIEN TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

made by

HORIZON GLOBAL CORPORATION

and certain of its Subsidiaries

in favor of

CORTLAND CAPITAL MARKET SERVICES LLC,

as Collateral Agent

Dated as of March 15, 2019

 

 

 

SECOND LIEN TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

THIS SECOND LIEN TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”) is entered into as of March 15, 2019 by and among HORIZON GLOBAL CORPORATION, a Delaware corporation (the “ Borrower ”), certain of its Subsidiaries signatories hereto (the Borrower and each such Subsidiary a “ Grantor ”, and collectively, the “ Grantors ”), CORRE PARTNERS MANAGEMENT, L.L.C as Lender Representative (together with its permitted successors in such capacity, the “ Lender Representative ”) and CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent (in such capacity, the “ Collateral Agent ”) for the banks and other financial institutions or entities (the “ Lenders ”) and the other Secured Parties from time to time parties to the Second Lien Term Loan Credit Agreement, dated as of March 15, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”) among the Borrower, the Lenders, the Lender Representative, the Collateral Agent, and the other agents party thereto.

PRELIMINARY STATEMENT

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;

WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Grantor;

WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of the Secured Parties;

NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:

ARTICLE I

DEFINITIONS

1.1         Terms Defined in Credit Agreement . All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

1.2         Terms Defined in UCC or PPSA . Terms defined in the UCC or the PPSA which are not otherwise defined in this Agreement shall have the meanings set forth in the UCC or the PPSA, as applicable and as the context requires.

1.3         Definitions and Rules of Construction 1.4. Whenever the words “include”, “including”, or “includes” appear in this Agreement, they shall be read to be followed by the words “without limitation” or words having similar import.

1.4         Definitions of Certain Terms Used Herein . As used in this Agreement, in addition to the terms defined in the Preliminary Statement, the following terms shall have the following meanings:

“ ABL Priority Collateral ” has the meaning set forth in the ABL/Term Loan Intercreditor Agreement.

“ Account Debtor ” shall mean any person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.

“ Agreed Security Principles ” shall mean, with respect to the Foreign Domiciled Grantors, principles in recognition of certain legal and practical difficulties in obtaining effective guarantees and security from such Foreign Domiciled Grantors in jurisdictions in which it has been agreed that a Lien on Collateral will be granted in order to secure the Obligations, and the agreement that in such jurisdictions or with respect to the Obligations of such Foreign Domiciled Grantors:

(a)        general statutory limitations, financial assistance, capital maintenance, corporate benefit, corporate interest ( vennootschappelijk belang ), fraudulent preference, “thin capitalization” rules, tax restrictions or costs, retention of title claims, liquidity maintenance and similar principles may limit the ability of any such Foreign Domiciled Grantors to provide a guarantee or security or may require that the guarantee or security be limited by an amount or otherwise;

(b)        the consent of certain supervisory boards, works councils or other external bodies or persons may be required under Applicable Law in such jurisdiction to enable any such Foreign Domiciled Grantors to provide a guarantee or security, and such Foreign Domiciled Grantors shall use best efforts to obtain such consent, but such guarantee and/or security shall not be required unless such consent has been received;

(c)        any such Foreign Domiciled Grantor will not be required to give guarantees or enter into Security Documents if it would conflict with the fiduciary duties of the directors, officers, managers (or equivalent) of such Foreign Domiciled Grantor or contravene any legal prohibition or would result in (or in a material risk of) the contravention of the fiduciary duties of, or in civil, personal or criminal liability on the part of any directors, officers, managers (or equivalent) of any such Foreign Domiciled Grantor;

(d)        the Liens (including, for the avoidance of doubt, the maximum amount secured thereunder to the extent required by any Applicable Law) securing the Obligations and the extent of their perfection will be agreed by the Lender Representative and the Borrower, taking into account the cost (including material adverse tax consequences or material adverse effects on interest deductibility and stamp duty, notarization and registration fees) to such Foreign Domiciled Grantor of providing such Liens so as to ensure that it is not excessive in light of the benefit accruing to the Secured Parties;

(e)        in certain jurisdictions it may be either legally impossible or impractical (such impossibility or impracticality to be agreed by the Lender Representative and the Borrower) to grant guarantees or create Liens over certain categories of assets in which event such guarantees will not be granted and Liens will not be taken over such assets; provided that, to the extent a change in law makes it possible or practical to grant a Lien where it was previously considered impossible or impractical, such Foreign Domiciled Grantors will provide such guarantees and/or Liens subject to these Agreed Security Principles as soon as reasonably practicable;

(f)        no such Foreign Domiciled Grantors shall be required to guarantee or grant Liens to secure the Obligations to the extent that providing such guarantee or Liens would result in material adverse tax

consequences to a Grantor or a Subsidiary of a Grantor, as reasonably determined by Borrower in consultation with the Lender Representative; and

(g)        perfection of Liens, when required, and other legal formalities will be completed as soon as reasonably practicable and, in any event, within the time periods specified in the relevant Security Documents or this Agreement (as such times may be extended by Lender Representative in its reasonable discretion if the relevant provision so allows).

As of the Closing Date, the Grantors agree that no condition of any of the types described in the foregoing clauses (a) through (g) exists, and that the Agreed Security Principles shall not, as of the Closing Date, limit the guarantees provided (or to be provided) and Liens granted (or to be granted) by the Foreign Domiciled Grantors party to this Agreement on the Closing Date.

“ Applicable Law ” all laws, rules, regulations and governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law, common law and equitable principles (including, without limitation, any banking, exchange control, financial assistance, minimum capitalization, fraudulent conveyance, mandatory labor advice or similar rules or regulations), and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.

“ Article ” means a numbered article of this Agreement, unless another document is specifically referenced.

“ Canadian Domiciled Grantor ” each Grantor that is incorporated or organized under the laws of Canada or any province or territory of Canada.

“ Civil Code ” the Civil Code of Québec, or any successor statute, as amended from time to time, and includes all regulations thereunder.

“ Collateral ” has the meaning set forth in Article III.

“ Collateral Deposit Account ” means each Deposit Account of a Grantor other than an Excluded Account.

“ Collection Account ” has the meaning set forth in Section 8.1(b).

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Dutch Domiciled Grantor ” each Grantor that is incorporated or organized under the laws of the Netherlands or any jurisdiction of the Netherlands.

“ Excluded Accounts ” means (a) Excluded Trust Accounts, (b) Deposit Accounts and Securities Accounts of the Loan Parties containing not more than $50,000 individually or $250,000 in the aggregate at any time, and (c) zero-balance accounts that sweep on a daily basis to an account maintained with the

ABL Collateral Agent or subject to a Deposit Account control agreement for the benefit of the ABL Collateral Agent pursuant to the terms of the ABL Loan Documents.

“ Excluded Contract ” means any contract or agreement to which a Grantor is a party or any governmental permit held by a Grantor to the extent that (a) the terms of such contract, agreement or permit prohibit or restrict the creation, incurrence or existence of the security interest granted hereunder therein or the assignment thereof without the consent of any party thereto other than the Borrower or any Subsidiary and (b) such prohibition or restriction is permitted under Section 6.10 of the Credit Agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC, pursuant to the PPSA, pursuant to the Civil Code or pursuant to any other Applicable Law or principles of equity); provided that (i) the term “Excluded Contract” shall not include any rights for any amounts due or to become due pursuant to any Excluded Contract and (ii) the Liens in favor of the Secured Parties shall attach immediately at such time as the condition causing such unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such contract or agreement in which the creation, incurrence or existence of the security interest granted hereunder, or the assignment thereof, as the case may be, is not so prohibited or restricted; provided , further , that such Grantor shall use commercially reasonable efforts to obtain all consents or waivers necessary to permit the grant of Liens in favor of the Secured Parties in such Excluded Contract.

“ Excluded Property ” means (a) any asset, including, without limitation, Accounts and proceeds of Inventory, of any kind, to the extent that (i) such asset is sold pursuant to any Specified Vendor Receivables Financing and in accordance with the applicable Specified Vendor Receivables Financing Documents and (ii) such sale or intended sale is permitted by Section 6.05(c)(ii) of the Credit Agreement, (b) any asset acquired, constructed or improved pursuant to a capital lease or purchase money indebtedness permitted by Section 6.01(a)(viii) of the Credit Agreement, (c) Excluded Contracts, (d) any Trademark applications and/or registrations with the Mexican Trademark Office by a Grantor (other than a Mexican Domiciled Grantor) filed in the United States Patent and Trademark Office in each case on the basis of such Grantor’s “intent-to-use” such trademark solely to the extent that, and solely during the period in which, granting a security interest in such Trademark application prior to such filing would adversely affect the enforceability or validity or result in the voiding thereof, unless and until acceptable evidence of use of the Trademark has been filed with and accepted by the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), whereupon such trademark application will, without any further action taken on the part of such Grantor or the Collateral Agent, be deemed to constitute Collateral, (e) any property or assets for which the creation or perfection of pledges of, or security interests in, pursuant to the Security Documents would result in material adverse tax consequences to any Loan Party or any Subsidiary of Loan Party, as reasonably determined by the Borrower in consultation with the Collateral Agent, (f) assets in circumstances where the cost of obtaining a security interest in such assets, including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary) would be excessive in light of the practical benefit to the Secured Parties afforded thereby as reasonably determined by the Borrower and the Collateral Agent, (g) any asset subject to a purchase money security interest, capital lease obligations or similar arrangement, in each case, to the extent the grant of a security interest therein would violate or invalidate such purchase money or similar arrangement or create a right of termination in favor of any other party thereto after giving effect to the applicable anti-assignment provisions of the New York UCC, the PPSA, the Civil Code or other Applicable Law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the New York UCC or other Applicable Law notwithstanding such prohibition, (h) any property of a Person existing at the time such Person is acquired, merged or amalgamated with or into or consolidated with any Loan Party that is subject to a Lien permitted by Section 6.02(e) of the Credit Agreement to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of any other Lien on such property, (i) any Excluded Trust Accounts, (j) Equity Interests in any non-wholly owned Subsidiaries, but only to the extent that (x) the organizational documents or other agreements with equity holders of such non-wholly owned

Subsidiaries do not permit or restrict the pledge of such Equity Interests, or (y) the pledge of such Equity Interests (including any exercise of remedies) would result in a change of control, repurchase obligation or other adverse consequence to any of the Loan Parties or such Subsidiary and (k) any assets excluded from constituting Collateral in accordance with Section 9.26.

“ Excluded Trust Accounts ” means Deposit Accounts or Securities Accounts used exclusively (a) for payroll, taxes or employee benefits, (b) to receive proceeds of Accounts sold to third parties pursuant to Specified Vendor Receivables Financings permitted under the Loan Documents, (c) to hold cash and/or cash equivalents pledged to secure other obligations of the Borrower or any Subsidiary thereof pursuant to Liens permitted under the Loan Documents, (d) as escrow accounts, (e) as fiduciary or trust accounts, and accounts otherwise held exclusively for the benefit of third parties, other than a Grantor and (f) that contain solely deposits permitted by clauses (c) and (d) of the definition of “Permitted Encumbrances” in the Credit Agreement, including in connection with any letters of credit issued pursuant to such clauses, if the documents governing such deposits prohibit the granting of a Lien on such deposits.

“ Exhibit ” refers to a specific exhibit to this Agreement, unless another document is specifically referenced.

“ Foreign Domiciled Grantor ” any Grantor that is not a U.S. Domiciled Grantor.

“ German Domiciled Grantor ” means any Grantor which is formed or organized under the laws of Germany.

“ Guarantor Obligations ” means with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including, without limitation, Article II), whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Collateral Agent or to the Secured Parties that are required to be paid by such Guarantor pursuant to the terms of this Agreement).

“ Guarantors ” means the Grantors; provided that each Grantor shall be considered a Guarantor only with respect to the Primary Obligations of any other Loan Party.

“ Intellectual Property ” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement, misappropriation or violation thereof, including the right to receive all proceeds and damages therefrom.

“ Licenses ” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“ Mexican Domiciled Grantors ” means each Grantor organized or incorporated under the laws of Mexico or any jurisdiction thereof.

“ Obligations ” means, with respect to any Grantor, the collective reference to its Primary Obligations and its Guarantor Obligations.

“ Patents ” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisionals, continuations, renewals, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Pledged Chattel Paper ” means all Chattel Paper, but only to the extent not constituting Excluded Property.

“ Pledged Collateral ” means all Instruments, Securities and other Investment Property of the Grantors (other than Excluded Property), whether or not physically delivered to the Collateral Agent pursuant to this Agreement.

“ Pledged Securities ” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

“ PPSA ” means the Personal Property Security Act (Ontario), as amended from time to time, (or any successor statute) and the regulations thereunder; provided, however, if validity, perfection and effect of perfection and non-perfection and opposability of the Collateral Agent’s security interest in and Lien on any Collateral of any Canadian Domiciled Grantor are governed by the personal property security laws of any jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code) in such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.

“ Primary Obligations ” means, with respect to any Loan Party, the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of such Loan Party to the Administrative Agent, the Collateral Agent or any other Secured Party, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, any other Loan Documents (other than this Agreement) or any other document made, delivered or given in connection herewith or therewith (other than this Agreement), whether on account of principal, interest, premium (including the Prepayment Premium) reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent, the Collateral Agent or to any other Secured Party that are required to be paid by such Loan Party pursuant to the terms of any of the foregoing agreements) or otherwise.

“ Proceeds ” means all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC or in any other Applicable Law, as applicable, and, in any event, shall include, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

“ Receivables ” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

“ Section ” means a numbered section of this Agreement, unless another document is specifically referenced.

“ Secured Parties ” means the collective reference to the Administrative Agent, the Collateral Agent, the Lender Representative and the Lenders.

“ Specified Permitted Liens ” means the Liens permitted under Sections 6.02(a) of the Credit Agreement, provided that such Liens on the Collateral securing the obligations of the Loan Parties under the ABL Loan Documents remain subject to the ABL/Term Loan Intercreditor Agreement.

“ STA ” means the Securities Transfer Act, 2006 (Ontario) (or any successor statute), as amended from time to time, and the regulations thereunder.

“ Stock Rights ” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interests constituting Collateral, any right to receive Equity Interests and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interests.

“ Trademarks ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (d) all rights to sue for past, present, and future infringements of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ U.S. Domiciled Grantor ” means each Grantor that is organized under the laws of a jurisdiction of the United States of America or any State thereof or the District of Columbia.

“ UCC ” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Collateral Agent’s or any Lender’s Lien on any Collateral.

“ UK Domiciled Grantor ” means each Grantor that is incorporated or organized under the laws of any legal jurisdiction of the United Kingdom.

“ Voting Stock ” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even where the right so to vote has been suspended by the happening of such a contingency.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II

GUARANTEE

2.1         Guarantee . (a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Loan Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Primary Obligations of the Loan Parties.

(b)  Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to fraudulent conveyances or transfers or the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

(c)  Each Guarantor agrees that the Primary Obligations of the Loan Parties may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Article II or affecting the rights and remedies of the Administrative Agent or any Lender hereunder.

(d)  The guarantee contained in this Article II shall remain in full force and effect until all the Primary Obligations of the Loan Parties (other than contingent obligations, indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) and the obligations of each Guarantor under the guarantee contained in this Article II shall have been satisfied by payment in full and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement the Loan Parties may be free from any Primary Obligations.

(e)  No payment made by the Borrower, any other Loan Party, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent, the Collateral Agent or any Lender from the Borrower, any other Loan Party, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Primary Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Primary Obligations of the Loan Parties or any payment received or collected from such Guarantor in respect of the Primary Obligations of the Loan Parties), remain liable for the Primary Obligations of the Loan Parties up to the maximum liability of such Guarantor hereunder until the Primary Obligations of the Loan Parties (other than contingent obligations, indemnification, expense reimbursement, tax gross-up or yield protection in each case as to which no claim has been made) are paid in full in cash and the Commitments are terminated.

2.2         Right of Contribution . Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Secured Parties, and each Guarantor shall remain liable to the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

2.3         No Subrogation . Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Collateral Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Collateral Agent or any other Secured

Party against the Borrower, any other Loan Party or any other Guarantor or any collateral security or guarantee or right of offset held by the Collateral Agent or any other Secured Party for the payment of the Primary Obligations of the Loan Parties, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower, any other Loan Party or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Collateral Agent and the other Secured Parties by the Loan Parties on account of the Primary Obligations (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) are paid in full in cash and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Primary Obligations of the Loan Parties (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) shall not have been paid in full in cash, such amount shall be held by such Guarantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Collateral Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if required), to be applied against the Primary Obligations of the Loan Parties, whether matured or unmatured, in such order as the Collateral Agent may determine.

2.4         Amendments, etc. with respect to the Primary Obligations . Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Primary Obligations of the Loan Parties made by the Collateral Agent or any other Secured Party may be rescinded by the Collateral Agent or such other Secured Party and any of the Primary Obligations of the Loan Parties continued, and the Primary Obligations of the Loan Parties, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent or any other Secured Party, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Collateral Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Collateral Agent or any other Secured Party for the payment of the Primary Obligations of the Loan Parties may be sold, exchanged, waived, surrendered or released. Neither the Collateral Agent nor any other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Primary Obligations of the Loan Parties or for the guarantee contained in this Article II or any property subject thereto.

2.5         Guarantee Absolute and Unconditional . Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Primary Obligations of the Loan Parties and notice of or proof of reliance by the Collateral Agent or any other Secured Party upon the guarantee contained in this Article II or acceptance of the guarantee contained in this Article II; the Primary Obligations of the Loan Parties, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Article; and all dealings between the Loan Parties, on the one hand, and the Collateral Agent and the other Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Article II. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower, any other Loan Party or any of the Guarantors with respect to the Primary Obligations of the Loan Parties. Each Guarantor understands and agrees that the guarantee contained in this Article II shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Primary Obligations of the Loan Parties or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time

to time held by the Collateral Agent or any other Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Collateral Agent or any other Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower, any other Loan Party or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Loan Parties for the Primary Obligations, or of such Guarantor under the guarantee contained in this Article II, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Collateral Agent or any other Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Loan Party, any other Guarantor or any other Person or against any collateral security or guarantee for the Primary Obligations of the Loan Parties or any right of offset with respect thereto, and any failure by the Collateral Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Loan Party, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Loan Party with Primary Obligations, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Collateral Agent or any other Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

2.6         Reinstatement . The guarantee contained in this Article II shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Primary Obligations of the Loan Parties is rescinded or must otherwise be restored or returned by the Collateral Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower, any other Loan Party or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower, any other Loan Party or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

2.7         Payments . Each Guarantor hereby guarantees that payments hereunder will be paid to the Collateral Agent without set-off or counterclaim in Dollars by wire transfer to the Administrative Agent’s Account or such other account designated by the Collateral Agent in writing to the Borrower.

2.8         Mexican Domiciled Grantors . Each Mexican Domiciled Grantor hereby expressly acknowledges and agrees that this Agreement is governed by the laws of the State of New York as set forth in Section 9.16 and expressly agrees that any rights and privileges that it might otherwise have under the laws of Mexico shall not be applicable to this Agreement, indemnities and other assurances contained herein or any guarantee granted by such Mexican Domiciled Grantor, on the date hereof or in the future, pursuant to this Agreement. For such purposes, each Mexican Domiciled Grantor hereby unconditionally and irrevocably waives any rights to which it may be entitled (including the rights to excusión, orden, división and subrogación), to the extent applicable, under Articles 2813, 2814, 2815, 2816, 2817, 2818, 2819, 2820, 2821, 2822, 2823, 2824, 2826, 2827, 2828, 2830, 2835, 2836, 2837, 2838, 2839, 2840, 2842, 2844, 2846, 2847, 2848 and 2849 of the Federal Civil Code (Código Civil Federal) and the corresponding provisions of the Civil Codes of the States of Mexico and the Federal District of Mexico (or any successor provisions). Each Mexican Domiciled Grantor represents that (a) it is familiar with the contents of the articles referred to above; (b) it will receive valuable direct and indirect benefits as a result of the entering into this Agreement and any other Loan Document to which it is a party; (c) it is solvent pursuant to the terms of the Mexican Bankruptcy Law; (d) it has not been declared in concurso mercantil or bankruptcy (quiebra) or other similar insolvency procedure; and (e) there is no pending and, to the best of its knowledge, threatened

action, claim, requirement or proceeding before any court, governmental agency, arbitrator or jurisdictional entity that affects or could affect the legality, validity or enforceability of this Agreement.

2.9           German Domiciled Grantors .

(a)         German Guarantor . For the purpose of this Agreement, a “German Guarantor” means any Grantor that is established in Germany as (i)  a limited liability company ( Gesellschaft mit beschr ä nkter Haftung ) or (ii)  a limited partnership ( Kommanditgesellschaft ) or a general partnership (offene Handelsgesellschaft) with, in each case, a limited liability company ( Gesellschaft mit beschr ä nkter Haftung ) as personally liable partner ( pers ö nlich haftender Gesellschafter ) (the “ PLP ”).

(b)         German Guaranty and Collateral Limitation . If a German Guarantor guarantees or secures otherwise obligations or liabilities (including guarantees, letters of credit or similar instruments) of any of its affiliated companies (verbundene Unternehmen) within the meaning of section 15 et seq. of the German Stock Corporation Act ( AktG ) that is not a direct or indirect subsidiary of the German Guarantor, the secured parties under this Agreement agree to enforce the guarantee granted in Article II of this Agreement (the “ Guaranty ”) and the Collateral granted in Article III of this Agreement against the German Guarantor or its PLP only to the extent that such enforcement would not:

(i)        result in a negative balance ( Unterbilanz ) of the German Guarantor or its PLP, i.e. reducing the net assets ( Reinverm ö gen ) of the Grantor or its PLP to an amount less than its registered share capital ( Stammkapital ), or

(ii)        if the net assets of the German Guarantor or its PLP are already less than the registered share capital result in its net assets ( Reinverm ö gen ) to be further reduced ( Vertiefung einer Unterbilanz )

and would thus in each case constitute a violation of the German capital maintenance rules pursuant to sections 30 and 31 of the German Limited Liability Company’s Act ( GmbHG ).

(c)         Net Assets . For the purposes of paragraph (b) above, “net assets” means the assets calculated on the basis of the balance sheet items listed in sections 266 para. 2 A, B (in deviation from section 272 para. 1 of the German Commercial Code ( HGB ) including not yet called outstanding contributions ( nicht eingeforderte ausstehende Einlagen )), C, D and E of the German Commercial Code ( HGB ) less all liabilities listed in section 266 para. 3 B, C, D and E HGB and less such amounts being subject to a distribution barrier pursuant to section 268 para. 8 HGB, section 253 para. 6 HGB or section 272 para. 5 HGB, always provided that for the purpose of calculating the enforceable amount (if any) the following balance sheet items shall be disregarded:

(i)        the amount of any increase of the registered share capital of the German Guarantor or its PLP other than as permitted pursuant to the Loan Documents and/or that has been effected without the prior written consent of the Collateral Agent;

(ii)        liabilities incurred by the German Guarantor or its PLP not permitted pursuant to the Loan Documents;

(iii)        liabilities of the German Guarantor or its PLP owed to any group member; and

(iv)        liabilities of the German Guarantor or its PLP owed to shareholders to the extent that such liabilities are subordinated pursuant to section 39 para. 1 no. 5 or section 39 para. 2 of the German Insolvency Code ( InsO ).

Unless deviations are required by mandatory law, the relevant net assets are to be determined in accordance with generally accepted accounting principles observing the accountings principles applied in the previous years for the creation of the non-consolidated financial statement.

(d)         Management Calculation . The enforcement of the Guarantee and of the Collateral against the German Guarantor shall initially only be excluded if and to the extent that no later than ten (10) Business Days following a written notice of the Collateral Agent to enforce the Guaranty and/or the Collateral (the “ Enforcement Notice ”), the managing directors of the German Guarantor or its PLP have submitted to the Collateral Agent an updated balance sheet of that German Guarantor or its PLP derived from the latest annual financial statement together with a detailed written calculation based on the date of receipt of the Enforcement Notice (the “ Management Calculation ”) confirming to their best knowledge which amount cannot be enforced as this would cause the net assets of the relevant German Guarantor or its PLP being less than (or to fall further below) its registered share capital.

(e)         Auditors’ Determination . The Collateral Agent is entitled to enforce the Guarantee and the Collateral in such an amount that is undisputed according to the Management Calculation and the German Guarantor is obliged to pay such undisputed amount to the Collateral Agent.

With regard to the disputed amount, the German Guarantor shall submit to the Collateral Agent within thirty (30)  Business Days after the Collateral Agent has partly or totally rejected the calculation in the Management Calculation a determination prepared by auditors of international standard and reputation (or otherwise accepted by the Collateral Agent) appointed (in coordination with the Collateral Agent) by and at the costs of the German Guarantor confirming to which extent the Guaranty and Collateral can be enforced against the German Guarantor on the date of receipt of the Enforcement Notice (the “ Auditors’ Determination ”). The Auditors’ Determination has to refer to a recent balance sheet of the German Guarantor or its PLP. The calculation of the Auditors’ Determination is final and binding upon the parties, safe for obvious mistakes. In case the Auditors’ Determination will not be submitted within the stipulated time period, the Collateral Agent is entitled to enforce the Guaranty and Collateral against the German Guarantor in full.

(f)         Required Actions . Provided that the Guarantee cannot be fully enforced against the German Guarantor due to the aforementioned provisions the German Guarantor or its PLP is obliged (to the extent legally permitted and necessary to enable the Collateral Agent to enforce the Guarantee and Collateral in full or with less limitations) to:

(i)        immediately dispose of any of its assets that are not required for the German Guarantor’s or its PLP’s business and the book value of which is significantly lower than its market value;

(ii)        otherwise realize all hidden reserves in relation to assets that are required for the German Guarantor’s or its PLP’s business; and

(iii)        adopt all other reasonable measures which are necessary to allow the Collateral Agent to fully enforce the Guarantee and the Collateral.

The German Guarantor will notify the Collateral Agent about the sale proceeds and the book value of its respective assets and of the realized hidden reserves.

(g)         No restrictions . The restrictions pursuant to Section  2.2 do not apply to the extent that:

(i)        the Guarantee is enforced against the German Guarantor or its PLP with regard to an amount that the German Guarantor or its PLP or any of their subsidiaries has utilized under or in connection with the Loan Documents;

(ii)        the Guarantee and/or Collateral is granted (i) in relation to amounts (not yet repaid) being on-lent or otherwise passed on to the German Guarantor or its PLP or its subsidiaries or otherwise be used for their purposes or (ii) in relation to liabilities deriving from letters of credit issued in order to secure liabilities of the German Guarantor or its PLP or their subsidiaries;

(iii)        insolvency proceedings against the German Guarantor’s assets are opened, unless the Federal High Court ( BGH ) has confirmed that section 30 of the German Limited Liability Company’s Act ( GmbHG) remains applicable in such event;

(iv)        according to statutory law or according to case law of the Federal High Court it has been established that the restrictions pursuant to paragraph (b) above are not (or not anymore) necessary in order to avoid that the managing directors of the German Guarantor or its PLP become personal liable, in particular pursuant to section 43 para. 2 and 3 of the German Limited Liability Company’s Act ( GmbHG ); or

(v)        the German Guarantor or its PLP is a dependent ( abh ä ngig ) and/or profit pooling ( gewinnabf ü hrend ) company subject to a domination and/or a profit and loss pooling agreement rendering section 30 para. 1 of the German Limited Liability Company’s Act ( GmbHG ) inapplicable.

(h)         No Prejudice . No limitation of enforcement will prejudice the right of the Collateral Agent to enforce the Guarantee and the Collateral pursuant to the provisions set forth above again at a later time.

2.10        Dutch Guaranty Limitations. Any guaranty pursuant to this Agreement given by a guarantor incorporated under the laws of the Netherlands (a “Dutch Guarantor”) is subject to the limitations on unlawful financial assistance within the meaning of section 2:98c of the Dutch Civil Code.

2.11         Guarantor Intent . Without prejudice to the generality of Sections 2.4 and 2.5, each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Loan Documents and/or any facility or amount made available under any of the Loan Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

2.12         Additional Security . This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Secured Party or its respective successors, indorsees, transferees and assigns.

ARTICLE III

GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, assigns and grants to the Collateral Agent, on behalf of and for the benefit of the Secured Parties, to secure the prompt and complete payment and performance when due

(whether at stated maturity, by acceleration or otherwise) of such Grantor’s Obligations, a security interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “ Collateral ”), including:

(a)        all Accounts;

(b)        all Chattel Paper;

(c)        all Deposit Accounts;

(d)        all Documents (other than title documents with respect to Vehicles);

(e)        all Equipment;

(f)         all Fixtures;

(g)        all General Intangibles;

(h)        all Goods;

(i)         all Instruments;

(j)         all Intellectual Property;

(k)        all Inventory;

(l)         all Investment Property;

(m)       all cash or cash equivalents;

(n)        all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

(o)        all Commercial Tort Claims;

(p)        all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing;

(q)        all other property not otherwise described above (except for any property specifically excluded from any clause in this section above, and any property specifically excluded from any defined term used in any clause of this section above);

(r)        all books and records pertaining to the Collateral; and

(s)        to the extent not otherwise included in the foregoing, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

provided , however , that notwithstanding any of the other provisions set forth in this Agreement or the other Loan Documents, no Excluded Property shall constitute Collateral under this Agreement. In addition, in no event shall perfection by control or similar arrangements be required with respect to any Deposit Account (other than the Term Collateral Proceeds Account) or Securities Account; provided that, to the extent any Deposit Accounts and Securities Accounts are under the control of the ABL Collateral Agent at any time pursuant to the terms of the ABL/Term Loan Intercreditor Agreement, the ABL Collateral Agent shall act as agent and gratuitous bailee for the Collateral Agent for the purpose of perfecting the Collateral Agent’s Liens in such Deposit Account and Securities Account.

Each Grantor acknowledges that (i) value has been given, (ii) it has rights in the Collateral (other than after-acquired collateral), (iii) it has not agreed to postpone the time of attachment of the security interest, and (iv) it has received a copy of this Agreement. In addition, the security interest granted herein does not attach to consumer goods (as defined in the PPSA) or extend to the last day of the term of any lease or agreement for lease of real property.

The Collateral Agent and the Lenders acknowledge that the granting of any Collateral pursuant to this Article III by any German Domiciled Grantor may not be valid, effective or enforceable in the jurisdiction (other than the U.S.) where such Collateral is located.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor other than any German Domiciled Grantor hereby represents and warrants to the Collateral Agent and each Lender that:

4.1             Title, Perfection and Priority . Such Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a security interest hereunder and has full power and authority to grant to the Collateral Agent the security interest in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained. When financing statements naming such Grantor as debtor and the Collateral Agent as secured party and providing a description of the Collateral with respect to which such Grantor has purported to grant a security interest hereunder have been filed in the appropriate offices against such Grantor in the locations listed on Schedule 1.04 to the Perfection Certificate delivered on the Closing Date (or specified by written notice from the Borrower to the Collateral Agent after the Closing Date in the case of filings, recordings or registrations required by Section 5.12 or 5.13 of the Credit Agreement) and at Companies House in England and Wales with respect to UK Domiciled Grantors, and in the RUG with respect to Mexican Domiciled Grantors, the Collateral Agent will have a fully perfected first priority security interest, (or such other priority as required by the Intercreditor Agreements), subject only to Liens permitted under Section 5.1(e), in that Collateral of such Grantor and in which a security interest may be perfected by filing of an initial financing statement in the appropriate office against such Grantor; provided (a) with respect to all Grantors, that the filing of this Agreement (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent and the Lender Representative) with the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof (collectively, the “ U.S. IP Filing Offices ”) is necessary to perfect the security interest of the Collateral Agent in respect of any United States issued and applied for Patents, United States federally registered and applied for Trademarks and United States registered and applied for Copyrights (the “ U.S. IP Filing Collateral ”) acquired by such Grantor after the date hereof; (b) with respect to Canadian Domiciled Grantors, that the filing of this Agreement (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent)

with the Canadian Intellectual Property Office or any successor office thereof (the “ Canadian IP Filing Office ”) is necessary to perfect the security interest of the Collateral Agent in respect of any Canadian issued and applied for Patents, Canadian federally registered and applied for Trademarks and Canadian registered and applied for Copyrights (the “ Canadian IP Filing Collateral ”) acquired by such Grantor after the date hereof, (c) with respect to Mexican Domiciled Grantors, that the filing of the corresponding Mexican Asset Pledge (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent) with the Mexican Institute of Intellectual Property (Instituto Mexicano de la Propiedad Intelectual) or any successor office thereof (the “ Mexican IP Filing Office ” and, together with the U.S. IP Filing Office and the Canadian IP Filing Office, the “ IP Filing Offices ”) is necessary to perfect the security interest of the Collateral Agent in respect of any Mexican issued and applied for Patents, Mexican federally registered and applied for Trademarks and Mexican registered and applied for Copyrights (the “ Mexican IP Filing Collateral ” and, together with the U.S. IP Filing Collateral, the Canadian IP Filing Collateral and the Mexican IP Filing Collateral, the “ IP Filing Collateral ”) acquired by such Grantor after the date hereof. When the Collateral Agent (or its agent or designee) takes possession or Control of all Collateral with respect to which a security interest may only be perfected by possession or Control under all Applicable Laws, the Collateral Agent will have a fully perfected first priority (or such other priority required by any of the Intercreditor Agreements) security interest, subject only to Liens permitted under Section 5.1(e), in such Collateral.

Such Grantor represents and warrants that fully executed security agreements in the form hereof (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent and the Lender Representative) and containing a description of all applicable Collateral consisting of IP Filing Collateral have been delivered to the Collateral Agent (or its designee) for recording by the applicable IP Filing Offices, with respect to the U.S. IP Filing Collateral pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, and, with respect to the other IP Filing Collateral, pursuant to Applicable Law, to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Collateral consisting of IP Filing Collateral. When such security agreements or short-form agreements have been filed in the applicable IP Filing Offices against such Grantor, the Collateral Agent will have a fully perfected first priority security interest, subject only to Liens permitted under Section 5.1(e), in respect of all Collateral consisting of IP Filing Collateral, and no further or subsequent filing or recording will be necessary (other than the financing statements referred to in the paragraph above and such actions as are necessary to perfect the security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) with respect to any IP Filing Collateral acquired by such Grantor after the date hereof)

None of the U.S. Domiciled Grantors shall be required, nor is the Collateral Agent authorized, to perfect the security interests granted by this Agreement with respect to Intellectual Property arising out of or located outside of the United States. None of the Foreign Domiciled Grantors shall be required, nor is the Collateral Agent authorized, to perfect the security interests granted by this Agreement with respect to Collateral arising out of or located outside of both the United States and the country under the laws of which such Foreign Domiciled Grantor is organized, incorporated or formed.

4.2         Type and Jurisdiction of Organization; Organizational and Identification Numbers . The (a) type of entity of such Grantor, (b) its jurisdiction or country and state or province of organization, incorporation or formation, (c) the organizational number issued to it by the competent authority or by its jurisdiction, state or province of organization, incorporation or formation and (d) its federal taxpayer identification number, VAT number or equivalent, in each case as of the Closing Date is set forth on Exhibit A.

4.3         Principal Location . The address of such Grantor’s chief executive office or corporate domicile (and if different, its registered office) as of the Closing Date and each other location where such

Grantor maintains its books and records relating to any material portion of the Collateral, including accounts receivable and General Intangibles, are disclosed in Exhibit B .

4.4         Absence of Other Liens . The Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such Grantor has not filed or consented to the filing of (a) any financing statement or analogous document under the UCC, the PPSA or any other Applicable Laws covering any Collateral, (b) any assignment in which such Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any IP Filing Office or in the records of the appropriate governmental office in such Grantor’s country of organization (or incorporation or formation, as applicable), if different, or (c) any assignment in which such Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such Grantor does not hold any commercial tort claim with a value in excess of $500,000 as of the Closing Date except as indicated on the Perfection Certificate.

4.5         Deposit Accounts . All of such Grantor’s Deposit Accounts and Securities Accounts in existence on the Closing Date are listed on Exhibit E.

4.6         [Reserved] .

4.7         Chattel Paper . Such Grantor’s Pledged Chattel Paper is maintained at its chief executive office set forth in Exhibit B. None of the Pledged Chattel Paper has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person, other than those that have been terminated. The names of the obligors, amounts owing, due dates and other information with respect to its Pledged Chattel Paper are and will be correctly stated in all material respects in all records of such Grantor relating thereto.

4.8         [Reserved] .

4.9         Intellectual Property . Exhibit C sets forth a true and complete list of (i) each registered or applied for Patent, Trademark or Copyright owned by each Grantor as of the Closing Date (other than expired, abandoned or lapsed properties) and (ii) all Licenses under which a Grantor is an exclusive licensee of a registered or applied for Patent, Trademark or Copyright as of the Closing Date. All Intellectual Property listed on Exhibit C is subsisting and unexpired, and to the knowledge of such Grantor, valid and enforceable.

4.10         [Reserved] .

4.11         Pledged Collateral . (a) Exhibit D sets forth a complete and accurate list of all Pledged Securities (provided that, with respect to Pledged Securities constituting promissory notes and debt securities, Exhibit D only sets forth such Pledged Securities evidencing Indebtedness having an aggregate principal amount in excess of $500,000, payable or due to such Grantor by or from any other Person (including any other Grantor)) owned by such Grantor as of the Closing Date. As of the Closing Date, such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Securities listed on Exhibit D as being owned by it, free and clear of any Liens, except for the security interest granted to the Collateral Agent for the benefit of the Secured Parties hereunder, Permitted Encumbrances and Specified Permitted Liens. Such Grantor further represents and warrants that (i) all Pledged Collateral (solely with respect to Pledged Collateral issued by a Person other than a wholly owned Subsidiary of a Grantor, to the best of the Grantors’ knowledge) owned by it constituting Equity Interests has been (to the extent such

concepts are relevant with respect to such Pledged Collateral) duly authorized and validly issued and are fully paid and non-assessable; (ii) with respect to any certificates delivered to the Collateral Agent (or its agent or designee) representing Equity Interests, either such certificates are Securities as defined in Article 8 of the UCC (or with respect to the Equity Interests owned by Foreign Domiciled Grantors, as defined in any other Applicable Law, as applicable) as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Collateral Agent so that the Collateral Agent may take steps to perfect its security interest therein as a General Intangible; (iii) all such Pledged Collateral held by a securities intermediary (other than in an Excluded Account) is covered by a control agreement among such Grantor, the securities intermediary and the ABL Collateral Agent pursuant to which the ABL Collateral Agent has Control; provided that no such control agreements shall be required prior to the date that is 60 days after the Closing Date (or such later date as may be agreed by the ABL Collateral Agent in its reasonable discretion) and (iv) all Pledged Collateral which represents Indebtedness owed to such Grantor (solely with respect to Pledged Collateral issued by a Person other than a wholly owned Subsidiary of a Grantor, to the best of the Grantors’ knowledge) has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

(b)        In addition, (i) the pledge of the Pledged Collateral pursuant to this Agreement does not violate Regulation T, U or X of the Federal Reserve Board or any successor thereto, (ii) to the best of such Grantor’s knowledge, none of the Pledged Collateral owned by it has been issued or transferred in material violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (iii) as of the Closing Date there are existing no options, warrants, calls or commitments of any character whatsoever (A) relating to such Pledged Collateral or (B) which obligate the issuer of any Equity Interests included in the Pledged Collateral that is a direct or indirect subsidiary of any Borrower to issue additional Equity Interests, and (iv) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Agreement or for the execution, delivery and performance of this Agreement by such Grantor, or for the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement in accordance with the Intercreditor Agreements or for the remedies in respect of the Pledged Collateral pursuant to this Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally or where the absence of which could not reasonably be expected to have a Material Adverse Effect.

ARTICLE V

COVENANTS

From the date of this Agreement, and thereafter until this Agreement is terminated, each Grantor agrees that:

5.1         General .

(a)         Collateral Records . Such Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the Collateral Agent or the Lender Representative may reasonably request, promptly to prepare and deliver to the Collateral Agent and the Lender Representative a duly certified schedule or

schedules in form and detail satisfactory to the Collateral Agent showing the identity, amount and location of any and all Collateral.

(b)         Authorization to File Financing Statements; Ratification . Such Grantor hereby authorizes the Collateral Agent (or its designee) to file, and if requested will deliver to the Collateral Agent (or its designee), all financing statements and other documents and take such other actions as may from time to time be reasonably requested by the Collateral Agent in order to maintain a first priority perfected security interest (subject to the Intercreditor Agreements) in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Collateral Agent (or its designee) may be filed in any filing office in any applicable UCC, PPSA or other jurisdiction that the Collateral Agent determines to be applicable (which shall include, with respect to the UK Domiciled Grantors, at Companies House in England and Wales, and may (i) indicate such Grantor’s Collateral (1) as “all assets of the Grantor” or words of similar effect, regardless of whether any particular asset included in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC or any other Applicable Law for the sufficiency or filing office acceptance of any financing statement or amendment, including whether such Grantor is an organization, the type of organization and any organizational identification number (or equivalent) issued to such Grantor. Such Grantor also agrees to furnish any such information described in the foregoing sentence to the Collateral Agent or the Lender Representative promptly upon request.

(c)         Further Assurances . Such Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent or the Lender Representative may from time to time reasonably request to better assure, preserve, protect and perfect the security interest of the Secured Parties in the Collateral and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Liens hereunder and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount in excess of $500,000 payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument, such note or instrument shall be immediately pledged and promptly delivered to the Collateral Agent and the Lender Representative (or their respective agent or designee), duly endorsed in a manner satisfactory to the Collateral Agent.

(d)         Disposition of Collateral . Such Grantor shall not make or permit to be made an assignment for security, pledge or hypothecation of the Collateral or grant any other Lien in respect of the Collateral, except as expressly permitted by the Credit Agreement. Such Grantor shall not make or permit to be made any transfer of the Collateral and such Grantor shall remain at all times in possession of the Collateral owned by it, except that (a) Inventory may be sold in the ordinary course of business and (b) unless and until the Collateral Agent shall notify the Borrower that an Event of Default shall have occurred and be continuing and that during the continuance thereof the Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of any Collateral (which notice may be given by telephone if promptly confirmed in writing), such Grantor may use and dispose of the Collateral in any lawful manner not prohibited by this Agreement, the Credit Agreement or any other Loan Document.

(e)         Liens . Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except for the Specified Permitted Liens and Liens otherwise permitted by the Credit Agreement.

(f)         Other Financing Statements . Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement naming the Collateral Agent as secured party without the prior written consent of the Collateral

Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC or other similar Applicable Law.

(g)         Protection of Security . Such Grantor shall, at its own cost and expense and at the request of the Collateral Agent, take any and all commercially reasonable actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Collateral Agent in the Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the Credit Agreement.

(h)         Compliance with Terms . Such Grantor shall remain liable, as between itself and any relevant counterparty, to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Collateral, all in accordance with the terms and conditions thereof, and such Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.

5.2         Receivables .

(a)         Certain Agreements on Receivables . Except with respect to Excluded Property, during the continuance of an Event of Default, such Grantor will not, without the Collateral Agent and the Lender Representative’s prior written consent, grant any extension of the time of payment of any of the Accounts, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts, compromises or settlements granted or made in the ordinary course of business and consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged.

(b)        [Reserved].

(c)        [Reserved].

(d)         Assignment of Security Interest . If at any time such Grantor shall take a security interest in any property of an Account Debtor or any other person to secure payment and performance of an Account (except with respect to Excluded Property), such Grantor shall promptly assign such security interest to the Collateral Agent to the extent legally permissible. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other person granting the security interest.

(e)         Electronic Chattel Paper and Transferable Records . If such Grantor at any time holds or acquires an interest with a value in excess of $500,000 in any Electronic Chattel Paper or any “transferable record,” as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in §16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction that constitutes Collateral, such Grantor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, shall take, to the extent legally permissible, such action as the Collateral Agent may reasonably request to vest in the Collateral Agent control under UCC §9-105 of such Electronic Chattel Paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Collateral Agent agrees with such Grantor that the Collateral Agent will arrange, pursuant to procedures satisfactory to the Collateral Agent and so long as such procedures will not result in the Collateral Agent’s loss of control, for the Grantor to make alterations to the Electronic Chattel Paper or transferable record permitted under UCC §9 105 or, as the

case may be, Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or §16 of the Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by such Grantor with respect to such Electronic Chattel Paper or transferable record.

5.3         [Reserved] .

5.4         Delivery of Tangible Chattel Paper . If such Grantor shall at any time hold or acquire any Tangible Chattel Paper with a value in excess of $500,000 that constitutes Collateral, such Grantor shall promptly endorse, assign and deliver the same to the Collateral Agent, accompanied by such instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request (which may take the form of Exhibit F hereto).

5.5         Uncertificated Securities . If any securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall promptly notify the Collateral Agent and the Lender Representative thereof in writing and, at the Collateral Agent’s reasonable request and option (with respect to a German Domiciled Grantor or a Dutch Domiciled Grantor, in a manner consistent with the Agreed Security Principles), pursuant to an agreement in form and substance satisfactory to the Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities, without further consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the registered owner of the securities. Such Grantor further agrees to promptly delivery to the Collateral Agent such documents, agreements and other material as may be reasonably necessary or advisable from time to time to provide the Collateral Agent with control over such uncertificated Collateral in the manner provided under section 24 of the STA (and, for purposes of section 27(1) of the STA, this Agreement shall constitute each Grantor’s irrevocable consent to entry into an agreement of the kind referred to in clause 24(1)(b) of the STA); provided however, that such consent shall be automatically revoked upon termination of this Agreement as set forth in Section 9.24 of this Agreement.

5.6         Pledged Collateral .

(a)         Registration of Pledged Collateral . Such Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name of the Collateral Agent or its nominee at any time at the request of the Collateral Agent or the Lender Representative during the continuance of an Event of Default. Such Grantor will promptly give to the Collateral Agent and the Lender Representative copies of any notices or other communications received by it with respect to Pledged Collateral registered in the name of such Grantor during the continuance of an Event of Default. The Collateral Agent shall at all times during the continuance of an Event of Default have the right to exchange the certificates representing Pledged Collateral for certificates of smaller or larger denominations for any purpose consistent with this Agreement.

(b)         Exercise of Rights in Pledged Collateral .

(i)        Without in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Agreement, the Credit Agreement or any other Loan Document; provided , however , that each Grantor agrees that it shall not exercise any such right for any purpose prohibited by the terms of, or if the result thereof could materially and adversely affect the rights inuring to a holder of the Pledged Collateral or the rights and remedies of any of the Secured Parties under, this Agreement or the Credit Agreement or any other Loan Document or the ability of the Secured Parties to exercise the same.

(ii)        Such Grantor will, to the extent legally permissible, permit the Collateral Agent or its nominee at any time after the occurrence and during the continuation of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interests or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof.

(iii)        Unless an Event of Default shall have occurred and be continuing, such Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid in respect of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement. If an Event of Default shall occur and be continuing and the Collateral Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, the Collateral Agent shall have the right to receive all such cash dividends, interest, payments and other Proceeds paid in respect of the Pledged Collateral.

5.7         Intellectual Property .

(a)        Such Grantor shall notify the Collateral Agent and the Lender Representative in writing immediately if it knows or has reason to know that any application or registration relating to any material Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in any IP Filing Office, any governmental office in such Grantor’s country of organization or any court, but excluding routine matters during the course of any prosecution of applications before any IP Filing Office, any successor office thereof or any similar authority) regarding such Grantor’s ownership of any material Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.

(b)        Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall (i) file an application for the registration of any Patent, Trademark or Copyright that constitutes Collateral with any IP Filing Office or any other governmental office in such Grantor’s country of organization or (ii) acquire any Intellectual Property that constitutes Collateral, such Grantor shall report such filing or acquisition to the Collateral Agent and the Lender Representative within 45 days after the end of each of the first three fiscal quarters of each fiscal year of such Grantor and within 90 days after the end of each fiscal year of such Grantor. Promptly after the provision of such reports, such Grantor shall execute and deliver to the Collateral Agent and the Lender Representative, and have recorded with the applicable IP Filing Office or the applicable governmental office in such Grantor’s country of organization, if different, one or more security agreements or short-form agreements, as applicable, as described in Section 4.1 of this Agreement and any and all other agreements, instruments, documents, and papers as the Collateral Agent or the Lender Representative may reasonably request to evidence the Collateral Agent’s and the Secured Parties’ first priority (or such other priority as required by the Intercreditor Agreement) security interest in any Copyright, Patent or Trademark and the goodwill of such Grantor relating thereto or represented thereby, but only to the extent that the same constitute Collateral.

(c)        Such Grantor shall take all actions necessary to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, unless such Grantor (in its reasonable business judgment) or the Lender Representative shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of such Grantor’s business.

(d)        Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and shall take such other actions as the Lender Representative shall reasonably deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 5.8.

(e)        Notwithstanding the foregoing provisions of this Section 5.7 or elsewhere in this Agreement, nothing in this Agreement shall prevent any Grantor from abandoning or discontinuing the use or maintenance of any Intellectual Property that is immaterial to the conduct of its business, or from failing to take action to enforce license agreements or pursue actions against infringers or take any other actions with respect to such Intellectual Property, if such Grantor determines in its reasonable business judgment that such abandonment, discontinuance, or failure to take action is desirable in the conduct of its business.

5.8         Commercial Tort Claims . If such Grantor shall at any time hold or acquire a Commercial Tort Claim having a value in excess of $500,000, the Grantor shall promptly notify the Collateral Agent and the Lender Representative thereof in a writing signed by such Grantor, including a summary description of such claim, and enter into an amendment to this Agreement, in the form of Exhibit F hereto, granting to the Collateral Agent a first priority (or such other priority required by any of the Intercreditor Agreements) security interest therein and in the proceeds thereof.

5.9         Letter-of-Credit Rights . If such Grantor is at any time a beneficiary under a letter of credit now or hereafter issued in favor of such Grantor with a value in excess of $500,000, such Grantor shall promptly notify the Collateral Agent and the Lender Representative thereof in writing and, at the request and option of the Collateral Agent or the Lender Representative, such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent and the Lender Representative, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under the letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of the letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred or is continuing.

5.10        [Reserved].

5.11         [Reserved] .

5.12         No Interference . Such Grantor agrees that it will not interfere with any right, power and remedy of the Collateral Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Collateral Agent of any one or more of such rights, powers or remedies.

5.13         Insurance . Such Grantor, at its own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto, in each case, upon prior notice from the Collateral Agent to the Grantors of its intention to exercise such

rights. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 5.13, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby.

5.14         Change of Name; Location of Collateral; Place of Business . Such Grantor agrees promptly to notify the Collateral Agent and the Lender Representative in writing of any change (i) in its corporate name, (ii) in the location of its chief executive office, (iii) in such Grantor’s type of organization, identity or structure or (iv) in such Grantor’s jurisdiction of organization or incorporation. Such Grantor agrees not to effect or permit any change referred to in the preceding sentence unless written notice has been delivered to the Collateral Agent and the Lender Representative and all filings have been made under the UCC, PPSA or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority (or such other priority required by the Intercreditor Agreements) Lien upon all the Collateral. Such Grantor agrees promptly to notify the Collateral Agent in writing if any material portion of the Collateral owned or held by such Grantor is damaged or destroyed.

5.15         Credit Agreement Covenants . Except to the extent prohibited by an Applicable Law, such Grantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Grantor or any of its Subsidiaries.

5.16         Delivery of the Pledged Equity .

(a)        Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent, for the benefit of the Secured Parties, any and all Pledged Securities, if and to the extent such Pledged Securities are certificated; provided that the Grantors shall only be required to deliver Pledged Securities evidencing Indebtedness to the extent the principal amount thereof exceeds $500,000.

(b)        Each Grantor will cause any Indebtedness for borrowed money having an aggregate principal amount in excess of $500,000 owed to such Grantor by any Person to be evidenced by a duly executed promissory note that is, if legally capable of being pledged, pledged and delivered to the Collateral Agent (or its agent or designee), for the benefit of the Secured Parties, pursuant to the terms hereof.

(c)        Upon delivery to the Collateral Agent (or its agent or designee), any Pledged Securities shall be accompanied by stock or security powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request (subject to the Collateral and Guarantee Requirement). Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be deemed to supplement Exhibit D and made a part thereof; provided that failure to supplement Exhibit D shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

(d)        Notwithstanding anything to the contrary in this Section 5.16, if the actions described in this Section 5.16 have been taken in favor of the First Lien Term Loan Agent or the ABL Agent and, pursuant to the Term Intercreditor Agreement or the ABL/Term Intercreditor Agreement, as applicable, the First Lien Term Loan Agent or the ABL Agent, as applicable, acts as agent and gratuitous

bailee for the Collateral Agent for the purpose of perfecting the Collateral Agent’s Liens hereunder, the requirement to take any such action shall be deemed to be satisfied.

ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES

6.1         Remedies . (a) Subject to the terms of the Intercreditor Agreements, upon the occurrence and during the occurrence and continuance of an Event of Default, the Collateral Agent may exercise any or all of the following rights and remedies:

(i)        those rights and remedies provided in this Agreement, the Credit Agreement, or any other Loan Document; provided that this Section 6.1(a) shall not be understood to limit any rights or remedies available to the Collateral Agent and the Secured Parties prior to an Event of Default;

(ii)        those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral), the PPSA (whether or not the PPSA applies to the affected Collateral) or under any other Applicable Law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

(iii)        without notice (except as specifically provided in Section 9.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Collateral Agent may deem commercially reasonable; and

(iv)        concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, exercise the voting and all other rights as a holder with respect thereto, collect and receive all cash dividends, interest, principal and other distributions made thereon and otherwise act with respect to the Pledged Collateral as though the Collateral Agent was the outright owner thereof.

(b)        The Collateral Agent, on behalf of the Secured Parties, may comply with any applicable state, provincial or federal law or other Applicable Law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

(c)        The Collateral Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase (including by credit bidding) for the benefit of the Collateral Agent and the other Secured Parties, the whole or any part of the Collateral so sold, free of any right of equity redemption, which equity redemption each Grantor hereby expressly releases.

(d)        Until the Collateral Agent is able to effect a sale, lease, or other disposition of Collateral, the Collateral Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent. The Collateral Agent may, if it so elects, seek the appointment of a receiver, trustee or keeper to take possession of Collateral and to enforce any of the Collateral Agent’s remedies (for the benefit of the Collateral Agent and the other Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.

(e)        [Reserved].

(f)        Notwithstanding the foregoing, neither the Collateral Agent nor any other Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of its rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Obligations or to pursue or exhaust any of its rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

(g)        Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state or provincial securities laws, or under other Applicable Law, even if the applicable Grantor and the issuer would agree to do so.

6.2         Grantor’s Obligations Upon Default . Upon the request of the Collateral Agent after the occurrence and during the occurrence and continuance of an Event of Default, each Grantor will:

(a)        assemble and make available to the Collateral Agent the Collateral and all books and records relating thereto at any place or places reasonably specified by the Collateral Agent, whether at a Grantor’s premises or elsewhere;

(b)        permit the Collateral Agent, by the Collateral Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy;

(c)        prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the Securities and Exchange Commission or any other applicable government agency, registration statements, a prospectus and such other documentation in connection with the Pledged Collateral as the Collateral Agent may request, all in form and substance satisfactory to the Collateral Agent, and furnish to the Collateral Agent, or cause an issuer of Pledged Collateral to furnish to the Collateral Agent, any information regarding the Pledged Collateral in such detail as the Collateral Agent may specify;

(d)        take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the Pledged Collateral to enable the Collateral Agent to consummate a public sale or other disposition of the Pledged Collateral; and

(e)        at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Collateral Agent, at any time, and from time to time, promptly upon the Collateral Agent’s request, the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

6.3         Grant of Intellectual Property License . For the exclusive purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies at any time upon the occurrence and during the continuance of an Event of Default, each Grantor hereby (a) grants to the Collateral Agent a non-exclusive, irrevocable (until the termination of this Agreement) license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any rights in, to or under any or all Intellectual Property now owned or hereafter acquired by such Grantor, wherever such Intellectual Property may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Collateral Agent may, upon the occurrence and during the continuation of an Event of Default, sell any of such Grantor’s Inventory directly to any Person, including, without limitation, Persons who have previously purchased such Grantor’s Inventory from any Grantor and in connection with any such sale or other enforcement of the Collateral Agent’s rights under this Agreement, may sell Inventory which bears any Trademark owned by or licensed to any Grantor and any Inventory that is covered by any Copyright owned by or licensed to any Grantor and the Collateral Agent may finish any work in process and affix any Trademark owned by or licensed to any Grantor and sell such Inventory as provided herein (it being understood that the Trademarks and Copyrights licensed to any such Grantor shall be subject to, and as permitted by, the terms of licenses governing such licensed Trademarks and Copyrights); provided, however, that nothing in this Section 6.3 shall require any Grantor to grant any license that is prohibited by any rule of law, statute or regulation, or is prohibited by, or constitutes a breach or default under or results in the termination of any contract, license, agreement, instrument or other document. With respect to Trademarks included in the foregoing license, such license shall be subject to the requirement that the quality of goods and services offered under the Trademarks by the Collateral Agent be substantially consistent with the quality of the goods and services offered thereunder by such Grantor prior to the Collateral Agent’s exercise of such license. Any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the applicable Grantor notwithstanding any subsequent cure of an Event of Default. Upon the occurrence and during the continuance of an Event of Default, upon the Collateral Agent’s request, such Grantor will use its commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to the Collateral Agent of any material License held by such Grantor and to enforce the security interests granted hereunder.

6.4         Application of Proceeds 6.5 . The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows:

FIRST, to the payment of all reasonable costs and expenses incurred by the Collateral Agent (in its capacity as the Collateral Agent or Administrative Agent hereunder or under any other Loan Document) and the Lender Representative in connection with such collection or sale or otherwise in connection with this Agreement or any of the Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent (or the Administrative Agent) hereunder or under any

other Loan Document on behalf of any Grantor and any other reasonable costs or expenses incurred by the Collateral Agent (or the Administrative Agent) in connection with the exercise of any right or remedy hereunder or under any other Loan Document;

SECOND, to the payment in full of the Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Obligations owed to them on the date of any such distribution); and

THIRD, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.

6.6         Proceeds to be Turned Over or Received by the Collateral Agent . In addition to the rights of the Collateral Agent and the Secured Parties specified in Section 7.2 with respect to payments of Accounts, if an Event of Default shall occur and be continuing, upon the request of the Collateral Agent, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, if required). All Proceeds received by the Collateral Agent hereunder shall be held by the Collateral Agent in a collateral account maintained under its sole dominion and control. All such Proceeds while held by the Collateral Agent in such a collateral account (or by such Grantor in trust for the Collateral Agent and the Secured Parties) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in the Intercreditor Agreements.

ARTICLE VII

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

7.1         Account Verification . The Collateral Agent may at any time after the occurrence and during the occurrence and continuance of an Event of Default, in the Collateral Agent’s own name, in the name of a nominee of the Collateral Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.

7.2         Authorization for Collateral Agent to Take Certain Action . (a) Each Grantor irrevocably authorizes the Collateral Agent at any time and from time to time in the sole discretion of the Collateral Agent and appoints the Collateral Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Collateral Agent’s sole discretion to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement in such

offices as the Collateral Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Collateral Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Collateral Agent to the Obligations as provided in the Credit Agreement, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are permitted by the Credit Agreement), (vii) to contact Account Debtors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Collateral Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Collateral, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Collateral Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Agreement; and such Grantor agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent in connection with any of the foregoing; provided that (a) this authorization shall not relieve such Grantor of any of its obligations under this Agreement or under the Credit Agreement and (b) the Collateral Agent shall exercise the foregoing rights in accordance with the Intercreditor Agreements, if effective and only after the occurrence and during the continuation of an Event of Default. (b) All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Collateral Agent, for the benefit of the Collateral Agent and Secured Parties, under this Section 7.2 are solely to protect the Collateral Agent’s interests in the Collateral and shall not be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct as determined by a final non-appealable judgment by a court of competent jurisdiction.

7.3         Proxy . EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 7.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL OR TO EXERCISE SUCH GRANTOR’S VOTING RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO AFTER THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT. IN ADDITION TO THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL, THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF ANY OF THE PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE

PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT.    

7.4         Nature of Appointment; Limitation of Duty . THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VII IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 9.23. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR ANY SECURED PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, NOR ANY OF THEIR OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE VIII

[Reserved].

ARTICLE IX

GENERAL PROVISIONS

9.1         Waivers . Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under Applicable Law, any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article X, at least ten days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by Applicable Law, each Grantor waives all claims, damages, and demands against the Collateral Agent or any Secured Party arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Collateral Agent or such Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by Applicable Law) of any kind in connection with this Agreement or any Collateral.

9.2         Limitation on Collateral Agent’s and Secured Parties’ Duty with Respect to the Collateral . The Collateral Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Collateral Agent and each Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Collateral Agent nor any Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Collateral Agent or such Secured Party, or any income thereon or as to the preservation of rights

against prior parties or any other rights pertaining thereto. To the extent that Applicable Law imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 9.2 is to provide non-exhaustive indications of what actions or omissions by the Collateral Agent would be commercially reasonable in the Collateral Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 9.2. Without limitation upon the foregoing, nothing contained in this Section 9.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by Applicable Law in the absence of this Section 9.2.

9.3         Compromises and Collection of Collateral . The Grantors and the Collateral Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Collateral Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Collateral Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Collateral Agent shall be commercially reasonable so long as the Collateral Agent acts in good faith based on information known to it at the time it takes any such action.

9.4         Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Collateral Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Agreement and the Grantors shall reimburse the Collateral Agent for any amounts paid by the Collateral Agent pursuant to this Section 9.4. The Grantors’ obligation to reimburse the Collateral Agent pursuant to the preceding sentence shall be an Obligation payable on demand.

9.5         Specific Performance of Certain Covenants . Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 5.1(d), 5.1(e), 5.4, 5.5, 5.6, 5.7, 5.8, 5.10, 5.11, 5.13, 5.14, 5.16, 6.2, or 9.7 or in Article VIII will cause irreparable injury to the Collateral Agent and the Secured Parties, that the Collateral Agent and the Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Collateral Agent or the Secured Parties to seek and obtain specific performance of other obligations of the Grantors contained in this Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 9.5 shall be specifically enforceable against the Grantors.

9.6         Dispositions Not Authorized . No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 5.1(d) and notwithstanding any course of dealing between any Grantor and the Collateral Agent or other conduct of the Collateral Agent, no authorization to sell, transfer or otherwise dispose of the Collateral (except as set forth in Section 5.1(d)) shall be binding upon the Collateral Agent or the Secured Parties unless such authorization is in writing signed by the Collateral Agent with the consent or at the direction of the Required Lenders.

9.7         No Waiver; Amendments; Cumulative Remedies . No delay or omission of the Collateral Agent or any Secured Party to exercise any right or remedy granted under this Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Agreement whatsoever shall be valid unless in writing signed by the Collateral Agent and the Lender Representative with the concurrence or at the direction of the Lenders required under Section 10.02 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Agreement or by law afforded shall be cumulative and all shall be available to the Collateral Agent and the Secured Parties until the Obligations have been paid in full in cash.

9.8         Limitation by Law; Severability of Provisions . All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law or the Intercreditor Agreements (if effective), and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law and the Intercreditor Agreements (if effective) that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in any this Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable.

9.9         Reinstatement . This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for insolvency, administration, liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver, administrator or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to Applicable Law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

9.10         Benefit of Agreement . The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the Grantors, the Collateral Agent and the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Agreement or any interest herein, without the prior written consent of the Collateral Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Collateral Agent, for the benefit of the Collateral Agent and the other Secured Parties, hereunder or under any of the other Security Documents.

9.11         Survival of Representations . All representations and warranties of the Grantors contained in this Agreement shall survive the execution and delivery of this Agreement.

9.12         [Reserved] .

9.13         Headings . All headings used herein are for the purpose of reference only, are not part of this Agreement and are not to affect the construction of, or be taken into consideration in interpreting, this Agreement.

9.14         Security Interest Absolute . All rights of the Collateral Agent hereunder, the security interest granted hereunder and all obligations of the Grantors hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations or this Agreement.

9.15         Entire Agreement . This Agreement and the other Security Documents embody the entire agreement and understanding between the Grantors and the Collateral Agent relating to the Collateral and supersede all prior agreements and understandings between the Grantors and the Collateral Agent relating to the Collateral.

9.16         GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS .

(a)         UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

(b)        Each of the Grantors hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of New York, the courts of the United States District Court of the Southern District of New York, and any appellate court from any thereof (and, to the extent necessary to enforce the Secured Parties’ rights under the Loan Documents, courts where Collateral may be located or deemed to be located and any appellate court thereof), in any legal action or proceeding arising out of or relating to any Loan Document, or for recognition and enforcement of any judgment in respect thereof, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the

extent permitted by law, in such Federal court; provided, that nothing contained herein or in any other Loan Document will prevent any Lender, the Lender Representative, the Administrative Agent or the Collateral Agent from bringing any action to enforce any award or judgment or exercise any right under the Security Documents or against any Collateral or any other property of any Grantor in any other forum in which jurisdiction can be established. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Collateral Agent, the Administrative Agent, the Lender Representative or the Lenders may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Grantors or their respective properties in the courts of any jurisdiction.

(c)        Each Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)        Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.1. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

(e)        Nothing herein shall limit the right of Collateral Agent or any Lender to bring proceedings against any Grantor (other than a Mexican Domiciled Grantor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Grantor). Nothing in this Agreement shall be deemed to preclude enforcement by the Collateral Agent of any judgment or order obtained in any forum or jurisdiction. Final judgment against a Grantor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Grantor is domiciled, by suit on the judgment. If any party incorporated under the laws of the Netherlands, is represented by an attorney (pursuant to a power of attorney governed by the laws of the Netherlands) in connection with the signing and/or execution of this Agreement or any other agreement, deed or document referred to in or made pursuant to this Agreement, it is hereby expressly acknowledged and accepted by the other parties to this Agreement that the existence and extent of the attorney’s authority and the effects of the attorney’s exercise or purported exercise of his or her authority shall be governed by the laws of the Netherlands.

(f)        Notwithstanding anything on the contrary set forth above, with respect to any action or proceeding arising out of or relating to this Agreement involving any party incorporated or organized under the laws of Mexico, each of the parties hereto (a) irrevocably submits to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York City and of the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (b) waives any other jurisdiction to which it may be entitled by reason of its present or future domicile or otherwise.

9.17         WAIVER OF JURY TRIAL . TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR HEREBY WAIVES THE RIGHT TO TRIAL BY JURY (WHICH COLLATERAL AGENT HEREBY ALSO WAIVES) IN ANY PROCEEDING OR DISPUTE OF ANY KIND RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, OBLIGATIONS OR COLLATERAL. EACH GRANTOR HAS REVIEWED THE FOREGOING WAIVER WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL AND OTHER RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT

OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. Notwithstanding the above, each Mexican Domiciled Grantor further waives any right to any jurisdiction (other than as provided under Section 9.16 above) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Grantors, and waives any objection to those courts on the ground of venue or forum non conveniens.

9.18         Indemnity . Each Grantor jointly and severally agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Collateral Agent may incur in connection with (i) the administration of this Agreement (including the customary fees and charges of the Collateral Agent for any monitoring or audits conducted by it or on its behalf with respect to the Accounts or Inventory), (ii) the custody or preservation of, or the sale of, collection from or other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform or observe any of the provisions hereof.

Without limitation of its indemnification obligations under the other Loan Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related 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 Indemnitee or any of its Affiliates.

Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 9.18 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any Lender. All amounts due under this Section 9.18 shall be payable on written demand therefor.

9.19         Counterparts . This Agreement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract.. This Agreement shall become effective when the Collateral Agent has received counterparts bearing the signatures of all parties hereto. The Collateral Agent may (but shall have no obligation to) accept any signature, contract formation or record-keeping through electronic means, which shall have the same legal validity and enforceability as manual or paper-based methods, to the fullest extent permitted by Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act.

9.20         Judgment Currency Conversion . If, for the purposes of enforcing judgment in any court or for any other purpose hereunder or in connection herewith, it is necessary to convert a sum due hereunder in any currency into another currency, such conversion should be carried out to the extent and in the manner provided in the Credit Agreement.

9.21         Severability . Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Agreement shall remain in full force and effect. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

9.22         Intercreditor Agreements .

(a)        The terms of this Agreement, any Lien granted to the Collateral Agent (for the benefit of the Secured Parties) pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreements (if effective). In the event of any inconsistency between the provisions of this Agreement and the Intercreditor Agreements (if effective), the provisions of the Intercreditor Agreements shall supersede the provisions of this Agreement.

(b)        Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, all rights and remedies of the Collateral Agent (and the Secured Parties) shall be subject to the terms of the ABL/Term Loan Intercreditor Agreement (if effective), and until the Discharge of ABL Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), (i) no Grantor shall be required hereunder or under any other Loan Document to take any action with respect to ABL Priority Collateral that is inconsistent with such Grantor’s obligations under the applicable ABL Loan Documents and (ii) any obligation of any Grantor hereunder or under any other Loan Document with respect to the delivery or control of any ABL Priority Collateral, bill of lading or other document, the giving of any notice to any bailee or other Person, the provision of voting rights or the obtaining of any consent of any Person shall be deemed to be satisfied if such Grantor complies with the requirements of the similar provision of the applicable ABL Loan Document. Until the Discharge of ABL Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), the Collateral Agent may not require any Grantor to take any action with respect to the creation, perfection or priority of its security interest in the ABL Priority Collateral, whether pursuant to the express terms hereof or of any other Loan Document or pursuant to the further assurances provisions hereof or any other Loan Document, unless the ABL Collateral Agent (as defined in the ABL/Term Loan Intercreditor Agreement) shall have required such Grantor to take similar action pursuant to the terms of the applicable Loan Documents, and delivery of any ABL Priority Collateral to the ABL Collateral Agent (as defined in the ABL/Term Loan Intercreditor Agreement) pursuant to the applicable ABL Loan Documents and the ABL/Term Loan Intercreditor Agreement shall satisfy any delivery requirement hereunder or under any other Loan Document.

(c)        Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Collateral Agent and the claims of the Collateral Agent and the Secured Parties pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted to and claims in favor of the Senior Secured Parties (as defined in the Term Intercreditor Agreement referred to below), including liens and security interests granted to, and claims of, JPMorgan Chase Bank, N.A., and the lenders pursuant to or in connection with the Credit Agreement dated as of June 30, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), among the Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent and (ii) the exercise of any right or remedy by the Collateral Agent hereunder is subject to the limitations and provisions of the Term Intercreditor Agreement dated as of March 15] 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Term Intercreditor Agreement”), among the Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as Senior Collateral Agent, and Cortland Capital Market Services LLC, as Junior Collateral Agent. In the event of any conflict between

the terms of the Term Intercreditor Agreement and the terms of this Agreement, the terms of the Term Intercreditor Agreement shall govern.

9.23         Additional Grantors . Each Subsidiary of a Borrower that is required to become a party to this Agreement pursuant to Section 5.12 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto. Each Grantor expressly agrees that its obligations arising hereunder shall not be discharged, diminished or otherwise affected (a) by the addition or release of any other Grantor hereunder, (b) by any failure by the Borrower or any Grantor to cause any Subsidiary of the Borrower to become a Grantor hereunder or (c) by reason of the Collateral Agent’s or any of the other Secured Party’s actions in effecting, or failure to effect, any such joinder, or in releasing any Grantor hereunder, in each case, whether or not notice is given or consent is obtained from any Grantor. This Agreement shall be fully effective as to any Grantor that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Grantor hereunder.

9.24         Releases .    (a) This Agreement and the security interest of the Secured Parties on the Collateral provided hereunder shall terminate when all the Obligations (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) have been paid in full in cash and the Lenders have no further commitment to lend, at which time the Collateral Agent shall execute and deliver to the Grantors or the Grantors’ designee, at the Grantors’ expense, all Uniform Commercial Code termination statements and similar documents which the Grantors shall reasonably request from time to time to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section 9.23(a) shall be without recourse to or warranty by the Collateral Agent.

(b)        A Guarantor shall automatically be released from its obligations hereunder and the security interest of the Secured Parties in the Collateral of such Guarantor shall be automatically released in the event that all the Equity Interests of such Guarantor shall be sold, transferred or otherwise disposed of to a person that is not an Affiliate of the Borrower in accordance with the terms of the Credit Agreement; provided that the Required Lenders (or, if required by the terms of the Credit Agreement, such greater percentage of the Lenders specified in the Credit Agreement) shall have consented to such sale, transfer or other disposition (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise. The security interest of the Secured Parties in any Collateral that is sold, transferred or otherwise disposed of in accordance with this Agreement, the Credit Agreement and the other Loan Documents (including pursuant to a waiver or amendment of the terms thereof) shall automatically terminate and be released, and such Collateral shall be sold free and clear of the security interest created hereby. In connection with any of the foregoing, the Collateral Agent shall execute and deliver to the Grantors or the Grantors’ designee, at the Grantors’ expense, all Uniform Commercial Code termination statements and similar documents (including any such documents as may be reasonably necessary in connection with the entry into by any Grantor of a Specified Vendor Receivables Financing) that the Grantors shall reasonably request from time to time to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section 9.23(b) shall be without recourse to or warranty by the Collateral Agent.

9.25         Right of Setoff . If an Event of Default shall have occurred and be continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Secured Party to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor now or hereafter existing under this Agreement and the other Loan Documents held by such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Loan Document and although

such obligations may be unmatured. The rights of each Secured Party under this Section 9.24 are in addition to other rights and remedies (including other rights of setoff) which such Secured Party may have.

9.26         A greed Security Principles; Excluded Property . Notwithstanding anything to the contrary in this Agreement, (a) the guaranty and grant of the security interest by the Grantors hereunder that are Foreign Domiciled Grantors and the Collateral of the Grantors hereunder that are Foreign Domiciled Grantors shall be subject to Agreed Security Principles and all representations, warranties, covenants and other provisions hereof shall be subject to the Agreed Security Principles, (b) with respect to any property or asset of any Foreign Domiciled Grantor, in the event of any irreconcilable conflict between this Agreement and any other Security Document with respect to such property or asset, the terms of such other Security Document shall govern and control and (c) to the extent any provision of the Credit Agreement, this Agreement or any of the other Security Documents excludes assets from the scope of the Collateral (including any Excluded Property), or from any requirement to take any action to perfect any security interest in favor of the Collateral Agent in the Collateral, the representations, warranties and covenants made by any relevant Grantor in this Agreement with respect to the creation, perfection or priority (as applicable) of the security interest granted in favor of the Collateral Agent shall be deemed not to apply to such excluded assets.

9.27         Parallel Debt Undertaking .

(a)           Purpose of the Parallel Debt Undertaking . The parallel debt undertaking created hereunder (“ Parallel Debt Undertaking ”) ( abstraktes Schuldanerkenntnis ) is constituted in order to secure the prompt and complete satisfaction of any Obligations. The Parallel Debt Undertaking shall also cover any future extension, prolongation, increase or novation of the Obligations.

(b)           Parallel Debt Undertaking . For the purposes of taking and ensuring the continuing validity of Liens under those Security Documents subject to the laws of (or to the extent affecting assets situated in) Germany, the Netherlands and such other jurisdictions as the Secured Parties and the Grantors (each acting reasonably) agree, notwithstanding any contrary provision in this Agreement:

(i)          each Grantor undertakes (such undertakings, the “Parallel Obligations”) to pay to the Collateral Agent amounts equal to all present and future amounts owing by it to the Secured Parties under the Loan Documents (“ Original Obligations ”);

(ii)          the Collateral Agent shall have its own independent right to demand and receive payment of the Parallel Obligations;

(iii)          the Parallel Obligations shall, subject to subsection (iv) below, not limit or affect the existence of the Original Obligations for which the Secured Parties shall have an independent right to demand payment;

(iv)          notwithstanding subsections (ii) and (iii) above, payment by a Grantor of its Parallel Obligations shall to the same extent decrease and be a good discharge of the corresponding Original Obligations owing to the relevant Secured Parties and payment by a Grantor of its Original Obligations to the relevant Secured Parties shall to the same extent decrease and be a good discharge of the Parallel Obligations owing by it to the Collateral Agent;

(v)          the Parallel Obligations are owed to the Collateral Agent in its capacity as Collateral Agent for the Secured Parties and not as agent or representative of any other person nor as trustee and the Parallel Debt Security shall secure the Parallel Obligations so owing;

(vi)          without limiting or affecting the Collateral Agent’s right to protect, preserve or enforce its rights under any Security Document, the Collateral Agent undertakes to each Secured Parties not to exercise its rights in respect of the Parallel Obligations without the consent of the relevant Secured Parties; and

(vii)          the Collateral Agent shall distribute any amount so received to the Secured Parties in accordance with the terms of this Agreement and the Loan Agreement (subject, in each case, to the terms of the Intercreditor Agreement) as if such amounts had been received in respect of the Original Obligations.

(c)           Release ( Sicherheitenfreigabe ) . Upon complete and irrevocable satisfaction of the Secured Obligations, the Collateral Agent shall as soon as reasonably practical at the cost and expense of the Grantors release the Parallel Debt Undertaking.

ARTICLE X

NOTICES

10.1         Sending Notices . Any notice required or permitted to be given under this Agreement shall be sent in accordance with Section 10.01 of the Credit Agreement (with any notice to a Grantor (other than the Borrower) being sent care of the Borrower).

10.2         Change in Address for Notices . Each of the Grantors, the Collateral Agent, the Lender Representative and the Lenders may change the address for service of notice upon it by a notice in writing to the other parties.

ARTICLE XI

THE COLLATERAL AGENT

Cortland Capital Market Services LLC has been appointed Collateral Agent for the Lenders hereunder pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed by the parties to this Agreement that any authority conferred upon the Collateral Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to the Collateral Agent pursuant to the Credit Agreement, and that the Collateral Agent has agreed to act (and any successor Collateral Agent shall act) as such hereunder only on the express conditions contained in such Article VIII. Any successor Collateral Agent appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Collateral Agent hereunder.

[Signature Page Follows]

IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this Agreement as of the date first above written.

 

GRANTORS:  

HORIZON GLOBAL CORPORATION, as the Borrower

By:  

 

 
  Name:               
  Title:  
HORIZON GLOBAL AMERICAS, INC., as a Guarantor
By:  

                                                                       

 
  Name:  
  Title:  
HORIZON INTERNATIONAL HOLDINGS LLC, as a Guarantor
By:  

 

 
  Name:  
  Title:  
HORIZON GLOBAL COMPANY LLC, as a Guarantor
By:  

 

 
  Name:  
  Title:  
CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641, as a Guarantor
By:  

 

 
  Name:  
  Title:  

CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario, as a Guarantor
By:  

 

              
  Name:  
  Title:  
CEQUENT NEDERLAND HOLDINGS B.V., a company formed under the laws of the Netherlands, as a Guarantor
By:  

 

 
  Name:  
  Title:  
CEQUENT MEXICO HOLDINGS B.V.,  
a company formed under the laws of the Netherlands, as a Guarantor
By:  

 

 
  Name:  
  Title:  
CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico, as a Guarantor
By:  

 

 
  Name:  
  Title:  
CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico, as a Guarantor
By:  

                                                                   

 
  Name:  
  Title:  

CORTLAND CAPITAL MARKET SERVICES LLC,

      as Collateral Agent

By:

 

 

 
 

Name:

 
 

Title:

 

CORRE PARTNERS MANAGEMENT, L.L.C as   Lender Representative

By:

 

                                                                     

 
 

Name:

 
 

Title:

 

EXHIBIT A

GRANTORS; IDENTIFYING INFORMATION

 

       

Grantor

  

Jurisdiction of

Organization &

Type of

Organization

 

  

Organizational

Identification

Number

  

Federal Tax

Identification

Number

EXHIBIT B

COLLATERAL RECORD LOCATIONS

 

     

Grantor

 

 

Location of Chief Executive Office

 

 

Location of Books and Records

 

EXHIBIT C

INTELLECTUAL PROPERTY RIGHTS

PATENTS

PATENTS OWNED BY EACH GRANTOR

[For each Grantor state if no patents are owned. List in numerical order by Patent No./Patent Application No.]

U.S. Patent Registrations

 

Grantor

 

 

Patent Numbers

 

 

Issue Date

 

U.S. Patent Applications

 

Grantor

 

 

Patent Application No.

 

 

Filing Date

 

Non-U.S. Patent Registrations

 

Grantor

 

 

Country

 

 

Issue Date

 

 

Patent No.

 

Non-U.S. Patent Applications

 

Grantor

 

 

Country

 

 

Filing Date

 

 

Patent Application No.

 

Patent Licenses; Grantor as Licensor

U.S. Patents

 

Grantor/Licensor   

 

Licensee Name

and Address

 

 

Date of License/

Sublicense

 

  Issue Date   Patent No.

U.S. Patent Applications

 

Grantor/Licensor   

 

Licensee Name

and Address

 

 

Date of License/

Sublicense

 

  Date Filed   Application No.

Non-U.S. Patents

 

Grantor/Licensor   

  Country  

Licensee Name

and Address

 

 

Date of License/

Sublicense

 

Issue

Date

 

Non-U.S.

Patent No.

Non-U.S. Patent Applications

 

Grantor/Licensor   

  Country  

Licensee Name

and Address

 

 

Date of License/

Sublicense

 

Date

Filed

 

Application

No.

Patent; Licenses; Grantor as Licensee

U.S. Patents

 

   Grantor/Licensee     

 

Licensor Name

and Address

 

Date of

License/ Sublicense

 

  Issue Date   Patent No.

U.S. Patent Applications

 

Grantor/Licensee   

 

Licensor Name

and Address

 

Date of

License/ Sublicense

 

  Date Filed   Application No.

Non-U.S. Patents

 

Grantor/Licensee   

  Country  

Licensor Name

and Address

 

 

Date of License/

Sublicense

 

Issue

Date

 

Non-U.S.

Patent No.

Non-U.S. Patent Applications

 

Grantor/Licensee   

  Country  

Licensor Name

and Address

 

 

Date of License/

Sublicense

 

Date

Filed

 

Application

No.

TRADEMARKS

OWNED TRADEMARK/TRADE NAMES

[For each Grantor state if no trademarks/trade names are owned. List in numerical order by trademark registration/application no.]

U.S. Trademark Registrations

 

Grantor

  Mark  

Reg. Date

 

  Reg. No.

U.S. Trademark Applications

 

Grantor

  Mark  

Filing Date

 

  Application No.

State Trademark Registrations

 

Grantor

  State  

Mark

 

  Reg. Date   Reg. No.

State Trademark Applications

 

Grantor

  State  

Mark

 

  Filing Date   Application No.

Non-U.S. Trademark Registrations

 

Grantor

  Country  

Mark

 

  Reg. Date   Reg. No.

Non-U.S. Trademark Applications

 

Grantor

  Country  

Mark

 

  Date Filed   Application No.

Trade Names

 

Grantor

  Country(s) Where Used   Trade Name

Trademark Licenses; Grantor as Licensor

U.S. Trademarks

 

Grantor/Licensor     

 

Licensee Name

and Address

 

Date of

License/Sublicense

 

  U.S. Mark   Reg. Date   Reg. No.

U.S. Trademark Applications

 

Grantor/Licensor     

  Country  

Licensee Name

and Address

 

 

Date of License/

Sublicense

 

Date

Filed

 

Application

No.

Non-U.S. Trademarks

 

Grantor/Licensor   

  Country  

Licensee Name

and Address

 

Date of License/

Sublicense

 

  Non-U.S. Mark   Reg. Date   Reg. No.

Non-U.S. Trademark Applications

 

Grantor/Licensor   

  Country  

Licensee Name

and Address

 

  Date of License/  

Sublicense

 

  Non-U.S. Mark   Date Filed  

Application

No.

D. Others

 

Grantor/Licensor

 

Licensee Name

and Address

 

Date of License/

Sublicense

 

Subject

Matter

Trademark Licenses; Grantor as Licensee

U.S. Trademarks

 

Grantor/Licensee    

 

Licensor Name

and Address

 

Date of Licensee/

Sublicensee

 

  U.S. Mark   Reg. Date   Reg. No.

U.S. Trademark Applications

 

Grantor/Licensee    

 

Licensor Name

and Address

 

Date of Licensee/

Sublicensee

 

  U.S. Mark  

Date

Filed

 

Application

No.

Non-U.S. Trademarks

 

Grantor/Licensee    

  Country  

Licensor Name

and Address

 

  Date of License/  

Sublicense

 

 

Non-U.S.

Mark

  Reg. Date   Reg. No.

Non-U.S. Trademark Applications

 

Grantor/Licensee   

  Country  

    Licensor Name    

and Address

 

Date of License/

Sublicense

 

 

Non-U.S.

Mark

  Date Filed  

Application

No.

D. Others

 

Grantor/Licensee

 

Licensor Name

and Address

 

Date of License/

Sublicense

 

Subject

Matter

COPYRIGHTS

COPYRIGHTS OWNED BY EACH GRANTOR

[State for each Grantor if no copyrights are owned. List in numerical order by Registration No.]

U.S. Copyright Registrations

 

Grantor

 

Title

 

  Reg. No.   Author

Pending U.S. Copyright Applications for Registration

 

Grantor

  Title  

Author

 

  Class   Date Filed

Non-U.S. Copyright Registrations

 

Grantor

  Title  

Author

 

  Class   Date Filed

Non-U.S. Pending Copyright Applications for Registration

 

Grantor

  Country   Title    Author    Class    Date Filed

[State for each Grantor whether such Grantor is not a party to a license/sublicense.]

Copyright Licenses; Grantor as Licensor

U.S. Copyrights

 

Grantor/Licensor     

 

Licensee Name

And Address

 

Date of Licensee/

Sublicense

 

Title of

U.S.

Copyright

 

  Author   Reg. No.

Non-U.S. Copyrights

 

     Grantor/Licensor     

 

Licensee Name

And Address

 

Date of Licensee/

Sublicense

 

Title of

U.S.

Copyright

 

  Author   Reg. No.

Copyright Licenses; Grantor as Licensee

U.S. Copyrights

 

Grantor/Licensor   

  

Licensee Name

And Address

  

Date of Licensee/

Sublicense

  

Title of

U.S.

Copyright

 

   Author    Reg. No.

Non-U.S. Copyrights

 

     Grantor/Licensor     

 

    Licensee Name    

and Address

  Country  

Date of

License/

Sublicense

 

 

Title of Non-U.S.

Copyright

  Author   Reg. No.

EXHIBIT D

PLEDGED EQUITY

 

Owner

   Issuer   

Type of

Equity

Interests

  

Issued and Outstanding

Equity Interests of each

class;

Options, Warrants and

Similar Rights

 

  

Number (and

percentage)

of Pledged

Equity Interests

  

Certificate No.

(if any)

PLEDGED DEBT

 

 

Grantor

   Issuer/Borrower   

Original Amount; Principal

Amount Outstanding

   Date of Note

EXHIBIT E

DEPOSIT ACCOUNTS

 

Grantor

 

Name of Institution and

Address

  Pledged Account Name    Pledged Account Number

SECURITIES ACCOUNTS

 

Grantor

 

Name of Institution and

Address

  Pledged Account Name    Pledged Account Number

EXHIBIT F

AMENDMENT

This Amendment, dated              ,          is delivered pursuant to [Section 5.4] [Section 5.8] of the Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Agreement. The undersigned hereby certifies that the representations and warranties in Article IV of the Agreement are and continue to be true and correct. The undersigned further agrees that this Amendment may be attached to that certain Second Lien Term Loan Guarantee and Collateral Agreement, dated as of March 15, 2018, between the undersigned, as the Grantors, Corre Partners Management, L.L.C., as the Lender Representative and Cortland Capital Market Services LLC, as the Collateral Agent (as amended, restated, amended and restatement, supplemented or otherwise modified from time to time prior to the date hereof, the “ Agreement ”) and that the Collateral listed on Schedule I to this Amendment shall be and become a part of the Collateral referred to in said Agreement and shall secure all Obligations referred to in the Agreement.

 

                                                                                          
By:
Name:                                                                               
Title:                                                                                  

SCHEDULE I TO AMENDMENT

STOCKS

 

Name of

Grantor

   Issuer   

Certificate

Number(s)

  

Number of

Shares

   Class of Stock   

Percentage of

Outstanding

Shares

                          
                          
                          
                          

BONDS

 

Name of

Grantor

   Issuer    Number    Face Amount    Coupon Rate    Maturity
                          
                          
                          
                          

GOVERNMENT SECURITIES

 

Name of

Grantor

   Issuer    Number    Type    Face Amount    Coupon Rate    Maturity
                               
                               
                               
                               

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)

 

Name of Grantor    Issuer    Description of Collateral   

Percentage Ownership

Interest

                
                
                
                

[ Add description of custody accounts or arrangements with securities intermediary, if applicable ]

COMMERCIAL TORT CLAIMS

 

Name of Grantor

   Description of Claim    Parties   

Case Number; Name of

Court where Case was

Filed

                
                

Annex 1 to

Second Lien Term Loan Guarantee and Collateral Agreement

ASSUMPTION AGREEMENT, dated as of              , 20      , made by                                          (the “ Additional Grantor ”), in favor of CORTLAND CAPITAL MARKET SERVICES LLC, as Collateral Agent (in such capacity, the “ Collateral Agent ”) for the banks and other financial institutions or entities (the “ Lenders ”) parties to the Credit Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such Credit Agreement.

W I T N E S S E T H :

WHEREAS, HORIZON GLOBAL CORPORATION (the “ Borrower ”), the Lenders, the Collateral Agent and the other agents party thereto have entered into a Second Lien Term Loan Credit Agreement, dated as of March 15, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Affiliates (other than the Additional Grantor) have entered into the Second Lien Term Loan Guarantee and Collateral Agreement, dated as of March 15, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Guarantee and Collateral Agreement ”) in favor of the Collateral Agent for itself and for the benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party to the Guarantee and Collateral Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement;

NOW, THEREFORE, IT IS AGREED:

1. Guarantee and Collateral Agreement . By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 9.22 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Guarantor and Grantor thereunder with the same force and effect as if originally named therein as a Guarantor and Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor and Grantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Exhibits A through E to the Guarantee and Collateral Agreement and hereby grants to the Collateral Agent, for the benefit of the Secured Parties, as collateral security for the prompt and complete payment or performance when due of the Obligations, a security interest in all of the Collateral (it being understood that, as provided in the Guarantee and Collateral Agreement, “Collateral” does not include any Excluded Property). The Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Article IV of the Guarantee and Collateral Agreement with respect to itself is true and correct in all material respects (other than in the case of representations qualified by materiality, in which case such representations shall be

true and correct) on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 1

2. Governing Law . THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

[ADDITIONAL GRANTOR]

By:                                                                         

       Name:

       Title:

 

                                                             

1  

To the extent applicable, such Additional Grantor shall also provide an Amendment in the form of Exhibit F

Annex 1-A to

Assumption Agreement

Supplement to Exhibit A

Supplement to Exhibit B

Supplement to Exhibit C

Supplement to Exhibit D

Supplement to Exhibit E

EXHIBIT E-1

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Lenders that Are Not Partnerships for U.S. Federal Income Tax Purposes)

Reference is made to the Second Lien Term Loan Credit Agreement dated as of March 15, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”) and Cortland Capital Market Services LLC, as Administrative Agent and Collateral Agent.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. person status on the applicable IRS Form W-8BEN-E or W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

By:                                                                               

              Name:

              Title:

Date:            , 20[    ]

EXHIBIT E-2

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Lenders that Are Partnerships for U.S. Federal Income Tax Purposes)

Reference is made to the Second Lien Term Loan Credit Agreement dated as of March 15, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”) and Cortland Capital Market Services LLC, as Administrative Agent and Collateral Agent.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its partners/members’ conduct of a U.S. trade or business.

The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) the applicable IRS Form W-8BEN-E or W-8BEN or (ii) an IRS form W-8IMY accompanied by the applicable IRS form W-8 from each of such partner’s/ member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

By:                                                                                       

              Name:

              Title:

Date:            , 20[    ]

EXHIBIT E-3

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Participants that are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is made to the Second Lien Term Loan Credit Agreement dated as of March 15, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”) and Cortland Capital Market Services LLC, as Administrative Agent and Collateral Agent. For purposes of this exhibit, “Non-U.S. Participant” shall mean a Participant that is not a U.S. Person.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (v) the interest payments in question are not effectively connected with the undersigned’s conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. person status on the applicable IRS Form W-8BEN-E or W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

By:                                                                                           

              Name:

              Title:

Date:            , 20[    ]

EXHIBIT E-4

[FORM OF]

U.S. TAX CERTIFICATE

(For Non-U.S. Participants that Are Partnerships for U.S. Federal Income Tax Purposes)

Reference is made to the Second Lien Term Loan Credit Agreement dated as of March 15, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the lenders from time to time party thereto (the “ Lenders ”) and Cortland Capital Market Services LLC, as Administrative Agent and Collateral Agent. For purposes of this exhibit, Non-U.S. Participant shall mean a Participant that is not a U.S. Person.

Pursuant to the provisions of Section 2.17 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are not effectively connected with the undersigned’s or its partners/members’ conduct of a U.S. trade or business.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) the applicable IRS Form W-8BEN-E or W-8BEN or (ii) an IRS form W-8IMY accompanied by the applicable IRS form W-8 from each of such partner’s/ member’s beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

[NAME OF LENDER]

By:                                                                                           

              Name:

              Title:

Date:            , 20[    ]

EXHIBIT F

FORM OF PERFECTION CERTIFICATE

(On file with Administrative Agent)

EXHIBIT G

[FORM OF] INTEREST ELECTION REQUEST

Cortland Capital Market Services LLC,

      as Administrative Agent

225 W. Washington St., 9th Floor

Chicago, Illinois 60606

Attention: Legal Department and Frances Real

(Telecopy: (312) 376-0751)

(Email: legal@cortlandglobal.com and

CPCAgency@cortlandglobal.com)

[DATE]

Ladies and Gentlemen:

The undersigned, HORIZON GLOBAL CORPORATION (the “ Borrower ), refers to the Second Lien Term Loan Credit Agreement dated as of March 15, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among the Borrower, the lenders from time to time party thereto and CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent (the “ Administrative Agent ”) and hereby gives you notice, irrevocably, pursuant to Section 2.08 of the Credit Agreement, that the undersigned hereby requests to continue the Borrowing referred to below, and in that connection sets forth below the information relating to such [conversion][continuation] (the “ Proposed Continuation ”) as required by Section 2.08 of the Credit Agreement:

(i)        The Proposed Continuation relates to the Borrowing originally made on              , 20      (the “ Outstanding Borrowing ”) in the principal amount of $          and currently maintained as an Eurocurrency Borrowing with an Interest Period of [                      ] month[s].

(ii)        The effective date of the Proposed Continuation is [               ,          ] (which is a Business Day).

(iii)        The Outstanding Borrowing shall be continued as a Borrowing of Eurocurrency Loans with an Interest Period of [                      ] month[s].

Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Credit Agreement.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

Very truly yours,
HORIZON GLOBAL CORPORATION
by   

 

   Name:
   Title:

[FORM OF] CASH ELECTION REQUEST

Cortland Capital Market Services LLC,

      as Administrative Agent

225 W. Washington St., 9th Floor

Chicago, Illinois 60606

Attention: Legal Department and Frances Real

(Telecopy: (312) 376-0751)

(Email: legal@cortlandglobal.com and

CPCAgency@cortlandglobal.com)

[DATE]

Reference is hereby made to the Second Lien Term Loan Credit Agreement dated as of March 15, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”), among HORIZON GLOBAL CORPORATION (the “ Borrower ), the lenders from time to time party thereto and CORTLAND CAPITAL MARKET SERVICES LLC, as Administrative Agent and Collateral Agent (the “ Administrative Agent ”). Capitalized terms used but not otherwise defined herein shall have the meanings specified in the Credit Agreement.

This notice constitutes a Cash Election Request and the Borrower hereby gives you notice pursuant to Section 2.13 of the Credit Agreement that, in respect of the Interest Payment Date first occurring after the date hereof it shall pay all interest due on such Interest Payment Date in cash.

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

Very truly yours,
HORIZON GLOBAL CORPORATION
by   

 

   Name:
     Title:

Exhibit 10.10

SIXTH AMENDMENT TO CREDIT AGREEMENT

SIXTH AMENDMENT (this “ Amendment ”), dated as of March 15, 2019, to the Term Loan Credit Agreement dated as of June 30, 2015 (as amended, supplemented, amended and restated or otherwise modified from time to time, including by this Amendment, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the subsidiaries of the Borrower party hereto as guarantors, the several banks and other financial institutions or entities from time to time party thereto (the “ Lenders ”), and JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”).

W I T N E S S E T H :

WHEREAS, the parties hereto are parties to the Credit Agreement;

WHEREAS, the Borrower and the Required Lenders wish to amend the Credit Agreement as described herein;

WHEREAS, the Borrower and the Required Lenders wish to instruct the Administrative Agent to enter into certain agreements as specified herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, which include all Loan Parties as of the date hereof, agree as follows:

SECTION 1.     DEFINITIONS . Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as therein defined.

SECTION 2.     AMENDMENTS .

(a) With effect as of the Effective Date, the Credit Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Credit Agreement attached as Exhibit A-1 hereto.

(b) With effect as of the Effective Date, the Credit Agreement is hereby further amended by replacing the below described Schedules to the Credit Agreement with the following Schedules attached as Exhibit A-2 hereto:

 

Schedule 6.01   –    Existing Indebtedness as of Sixth Amendment Effective Date
Schedule 6.02   –    Existing Liens as of Sixth Amendment Effective Date
Schedule 6.04   –    Existing Investments as of Sixth Amendment Effective Date

SECTION 3.     AUTHORIZATIONS AND INSTRUCTIONS . The Lenders party thereto, which collectively constitute the Required Lenders, hereby instruct and authorize the Administrative Agent, solely in its capacity as the Administrative Agent, to execute and deliver on the Effective Date (i) the new Term Intercreditor Agreement in the form of Exhibit B hereto, (ii) the amendment to the existing ABL/Term Loan Intercreditor Agreement in the form of Exhibit C hereto and (iii) the amendment to the Guarantee and Collateral Agreement in the form of Exhibit D hereto.

SECTION 4.     CONDITIONS PRECEDENT . This Amendment shall become effective as of the date (the “ Effective Date ”) of the satisfaction or waiver of each of the conditions precedent set forth in this Section 4.

(a)         Execution and Delivery . The Administrative Agent shall have received originals, facsimiles or copies in .pdf format unless otherwise specified, each properly executed, of (i) counterparts of this Amendment duly executed by each Loan Party, the Required Lenders, and the Administrative Agent, (ii) the Term Intercreditor Agreement in the form of Exhibit B hereto, (iii) the amendment to the existing ABL/Term Loan Intercreditor Agreement in the form of Exhibit C hereto, (iv) the amendment to the ABL Credit Agreement, (v) the amendment to the Guarantee and Collateral Agreement in the form of Exhibit D hereto, and (vi) the Junior Loan Documents.

(b)         Junior Loan Documents . All conditions to the effectiveness of the Junior Loan Documents shall have been satisfied and the Borrower shall have received or shall substantially simultaneously receive at least $50,000,000 of gross proceeds therefrom.

(c)         Amendment Fee . The Borrower shall have paid to the Administrative Agent for the account of each Lender executing a counterpart of this Amendment prior to 4:00 p.m., New York City time, on March 15, 2019, an amendment fee in an amount equal to 0.50% of such Lender’s Loans outstanding on the Effective Date.

(d)         Prepayment of the Senior Loans; Release of Liens . The Borrower shall have repaid the loans and other obligations under the Senior Credit Agreement pursuant to Section 2.11 of the Senior Credit Agreement in full in cash from the proceeds of the Junior Credit Agreement, the Senior Loan Documents shall have been terminated (except for any provisions which by the terms thereof survive such termination) and the liens in respect of such loans shall have been released.

(e)         Perfection Certificate . The Borrower shall have executed and delivered a new Perfection Certificate and the Schedules in form and substance satisfactory to the Administrative Agent and the Required Lenders.

(f)         Solvency Certificate . The Borrower shall have executed and delivered a solvency certificate in form and substance satisfactory to the Administrative Agent and the Required Lenders.

(g)         Fees and Expenses . The Borrower shall have paid to the Administrative Agent, the Lenders party hereto, or their respective advisors, as appropriate, all fees and other amounts of the professionals listed on Exhibit F hereto, to the extent due and payable on or prior to the Effective Date, and in each case, to the extent reasonably detailed invoices therefor have been received by the Borrower no later than 4:00 p.m., New York City time, on March 13, 2019.

(h)         Foreign Collateral . The Borrower shall (i) cause each of the following Subsidiaries of the Company organized in the Netherlands, the United Kingdom, Canada and Mexico to execute and deliver a joinder to the Guarantee and Collateral Agreement (in each case, in a form reasonably acceptable to the Required Lenders) and (ii) cause to be perfected the liens on the assets of each such Subsidiary of the Company organized in the Netherlands and the United Kingdom to the extent such liens can be perfected by the filing of a UCC financing statement, supplemental IP security agreements or delivery of requested possessory collateral: Cequent Electrical Products de Mexico, S. de R.L. de C.V., Cequent Mexico Holdings B.V., Cequent Nederland Holdings B.V.,

 

2

Cequent Sales Company de Mexico, S. de R.L. de C.V., Cequent Towing Products of Canada Ltd., and Cequent UK Limited.

(i)         Legal Opinions . The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Jones Day with respect to the Borrower and its Domestic Subsidiaries. The Borrower hereby requests such counsel to deliver such opinions.

(j)         No Default . Both prior to and after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the Effective Date.

(k)         Representations and Warranties . As of the Effective Date (both prior to and after giving effect to this Amendment) all representations and warranties contained in Section 5 (other than the representations and warranties contained in Section 3.15) shall be true and correct in all material respects (and, with respect to any representations and warranties that are qualified by materiality or reference to a “Material Adverse Effect” or contain a similar materiality qualification, in all respects).

For the purpose of determining compliance with the conditions specified in this Section 4, each Lender that has signed this Amendment shall be deemed to have accepted, and to be satisfied with, each document or other matter required under this Section 4.

SECTION 5.     REPRESENTATIONS AND WARRANTIES . In order to induce the Required Lenders and the Administrative Agent to enter into this Amendment, each Loan Party hereby represents and warrants to the Required Lenders and the Administrative Agent that (a) this Amendment has been duly authorized by all necessary organizational actions and, if required, actions by equity holders of each Loan Party, (b) this Amendment has been duly executed and delivered by each Loan Party and constitutes a legal, valid and binding obligation of each Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law and (c) this Amendment will not violate or result in a default under any indenture, agreement or other instrument binding upon any Loan Party or any of their Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by any Loan Party or any of their Subsidiaries.

SECTION 6.     CONTINUING EFFECT . Except as expressly amended, waived or modified hereby, the Loan Documents shall continue to be and shall remain in full force and effect in accordance with their respective terms. This Amendment shall not constitute an amendment, waiver or modification of any provision of any Loan Document not expressly referred to herein and shall not be construed as an amendment, waiver or modification of any action on the part of the Borrower or the other Loan Parties that would require an amendment, waiver or consent of the Administrative Agent or the Lenders except as expressly stated herein, or be construed to indicate the willingness of the Administrative Agent or the Lenders to further amend, waive or modify any provision of any Loan Document amended, waived or modified hereby for any other period, circumstance or event. Except as expressly modified by this Amendment, the Credit Agreement and the other Loan Documents are ratified and confirmed and are, and shall continue to be, in full force and effect in accordance with their respective terms. Except as expressly set forth herein, each Lender and the Administrative Agent reserves all of its rights, remedies, powers and privileges under the Credit Agreement, the other Loan Documents, applicable law and/or equity. Any reference to the “Credit Agreement” in any Loan Document or any related documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment and the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include this Amendment.

 

3

SECTION 7.     GOVERNING LAW . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

SECTION 8.     SUCCESSORS AND ASSIGNS . This Amendment shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, the Administrative Agent, the other Agents and the Lenders, and each of their respective successors and assigns, and shall not inure to the benefit of any third parties. The execution and delivery of this Amendment by any Lender prior to the Effective Date shall be binding upon its successors and assigns and shall be effective as to any Loans or Commitments assigned to it after such execution and delivery.

SECTION 9.     ENTIRE AGREEMENT . This Amendment, the Credit Agreement and the other Loan Documents represent the entire agreement of the Loan Parties, the Administrative Agent, the Agents, the Lenders and the Lenders, as applicable, with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any other Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Credit Agreement or the other Loan Documents.

SECTION 10.     RELEASE . Each of the Loan Parties (on behalf of itself and its Subsidiaries) for itself and for its successors in title and assignees and, to the extent the same is claimed by right of, through or under any of the Loan Parties, for its past, present and future employees, agents, representatives (other than legal representatives), officers, directors, shareholders, and trustees (each, a “ Releasing Party ” and collectively, the “ Releasing Parties ”), does hereby remise, release and discharge, and shall be deemed to have forever remised, released and discharged, the Administrative Agent, each of the Lenders and each of the other Secured Parties in their respective capacities as such under the Loan Documents, and the Agent’s, each Lender’s and each other Secured Party’s respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and entities to whom the Agent, each of the Lenders and each of the other Secured Parties or any of their respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals would be liable if such persons or entities were found to be liable to any Releasing Party or any of them (collectively, hereinafter the “ Releasees ”), from any and all manner of action and actions, cause and causes of action, claims, charges, demands, counterclaims, crossclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, rights of setoff and recoupment, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature, whether in law, equity or otherwise (including, without limitation, any claims relating to (i) the making or administration of the Loans, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability” theories, (ii) any covenants, agreements, duties or obligations set forth in the Loan Documents, (iii) increased financing costs, interest or other carrying costs, (iv) penalties, (v) lost profits or loss of business opportunity, (vi) legal, accounting and other administrative or professional fees and expenses and incidental, consequential and punitive damages payable to third parties, (vii) damages to business reputation, or (viii) any claims arising under 11 U.S.C. §§ 541-550 or any claims for avoidance or recovery under any other federal, state or foreign law equivalent), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing, heretofore existing or which may heretofore accrue against any of the Releasees, and which are, in each case, based on any act, fact, event or omission or other matter, cause or thing occurring at any time prior to or on the date hereof, directly or indirectly arising out of, connected with or relating to this

 

4

Amendment, the Credit Agreement or any other Loan Document and the transactions contemplated hereby or thereby, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing (each, a “ Claim ” and collectively, the “ Claims ”); provided, that, no Releasing Party shall have any obligation with respect to Claims to the extent such Claims are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or bad faith of any Releasee. Each Releasing Party further stipulates and agrees with respect to all Claims, that it hereby waives, to the fullest extent permitted by applicable law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, or any principle of common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this Section 11. The Borrower and the other Loan Parties, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by the Borrower or any other Loan Parties pursuant to this Section 11. If the Borrower, any other Loan Party or any of its successors, assigns or other legal representatives violates the foregoing covenant, the Borrower and other Loan Parties, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all reasonable and documented attorneys’ fees and costs incurred by any Releasee as a result of such violation. Each of the Releasing Parties hereby acknowledges that this release constitutes a material inducement to enter into this Amendment, that each Releasee has already relied on this release in entering into this Amendment, and that each Releasee will continue to rely on this release in its related future dealings. Each of the Releasing Parties hereby further warrants and represents that it has reviewed the terms of this Section 11 with its legal counsel and that it knowingly and voluntarily enters into the release contained in this Section 11 following consultation with legal counsel. This release is irrevocable, meaning that it may not be modified either orally or in writing (other than by a mutual written waiver specifically referring to this Section 11 and executed by each of the parties hereto).

SECTION 11.     LOAN DOCUMENT . This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

SECTION 12.     COUNTERPARTS . This Amendment may be executed by the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Amendment may be delivered by facsimile transmission or electronic PDF of the relevant signature page hereof.

SECTION 13.     HEADINGS . Section headings used in this Amendment are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

SECTION 14.     LOAN PARTY ACKNOWLEDGMENTS

14.1                           Each Loan Party hereby (i) expressly acknowledges the terms of the Credit Agreement as amended by the Amendment, (ii) ratifies and affirms its obligations under the Loan Documents (including guarantees and security agreements) to which it is a party, (iii) acknowledges, renews and extends its continued liability under all such Loan Documents and agrees such Loan Documents remain in full force and effect, (iv) agrees that each Security Document secures all Obligations of the Loan Parties in accordance with the terms thereof and (v) further confirms that each Loan Document to which it is a party is and shall continue to be in full force and effect and the same are hereby ratified and confirmed in all respects.

 

5

14.2                           Each Loan Party hereby reaffirms, as of the Effective Date, (i) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Agreement and the transactions contemplated thereby, and (ii) its guarantee of payment of the Obligations pursuant to the Guarantee and Collateral Agreement and its grant of Liens on the Collateral to secure the Obligations.

[ remainder of page intentionally left blank ]

 

6

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

 

HORIZON GLOBAL CORPORATION,

as the Borrower

By:  

/s/ Brian Whittman

  Name:  Brian Whittman
  Title:  Vice President, Finance
HORIZON GLOBAL COMPANY LLC
By:   /s/ Brian Whittman                                     
  Name:  Brian Whittman
  Title:  Vice President, Finance
HORIZON GLOBAL AMERICAS INC.
By:   /s/ Brian Whittman                                     
  Name:     Brian Whittman
  Title:     Vice President, Finance
HORIZON INTERNATIONAL HOLDINGS LLC
By:   /s/ Brian Whittman                                    
  Name: Brian Whittman
  Title: Vice President, Finance

 

[Signature Page to Sixth Amendment]

JPMORGAN CHASE BANK, N.A., as Administrative Agent
By:      /s/ Krys Szremski                                         
  Name: Krys Szremski
  Title: Executive Director

 

[Signature Page to Sixth Amendment]

CORRE OPPORTUNITIES QUALIFIED MASTER FUND, LP, as a Lender
By : /s/ John Barrett                                                               

Name: John Barrett

Title: Managing Partner

CORRE OPPORTUNITIES II MASTER FUND, LP, as

a Lender

By : /s/ John Barrett                                                               

Name: John Barrett

Title: Managing Partner

CORRE HORIZON FUND, LP, as a Lender
By : /s/ John Barrett                                                               

Name: John Barrett

Title: Managing Partner

 

[Signature Page to Sixth Amendment]

ATRIUM VIII

ATRIUM IX

ATRIUM XII

ATRIUM XIV

MADISON PARK FUNDING X, LTD.
MADISON PARK FUNDING XI, LTD.
MADISON PARK FUNDING XII, LTD.
MADISON PARK FUNDING XIII, LTD.
MADISON PARK FUNDING XIV, LTD.
MADISON PARK FUNDING XV, LTD.
MADISON PARK FUNDING XVI, LTD.
MADISON PARK FUNDING XVII, LTD.
MADISON PARK FUNDING XVIII, LTD.
MADISON PARK FUNDING XX, LTD.
MADISON PARK FUNDING XXI, LTD.
MADISON PARK FUNDING XXII, LTD.
ONE ELEVEN FUNDING I, LTD.
ONE ELEVEN FUNDING II, LTD.
By: Credit Suisse Asset Management, LLC, as portfolio manager
BENTHAM HIGH YIELD FUND
By: Credit Suisse Asset Management, LLC, as agent (sub-advisor) for Challenger Investment Services Limited, the Responsible Entity for Bentham High Yield Fund
CREDIT SUISSE FLOATING RATE HIGH INCOME FUND
CREDIT SUISSE STRATEGIC INCOME FUND
By: Credit Suisse Asset Management, LLC, as investment advisor
THE CITY OF NEW YORK GROUP TRUST
By: Credit Suisse Asset Management, LLC, as its manager
CREDIT SUISSE NOVA (LUX)
By: Credit Suisse Asset Management, LLC or Credit Suisse Asset Management Limited, each as a Co- Investment Adviser to Credit Suisse Fund Management S.A., management company for Credit Suisse Nova (Lux)
MADISON PARK FUNDING XIX, LTD.
MADISON PARK FUNDING XXIII, LTD.
MADISON PARK FUNDING XXIV, LTD.
MADISON PARK FUNDING XXV, LTD.
By: Credit Suisse Asset Management, LLC, as collateral manager
DOLLAR SENIOR LOAN FUND, LTD.
DOLLAR SENIOR LOAN FUND II, LTD.
RENAISSANCE INVESTMENT HOLDINGS LTD.
By Credit Suisse Asset Management, LLC, as investment manager
DAVINCI REINSURANCE LTD.
By: Credit Suisse Asset Management, LLC, as investment manager for DaVinci Reinsurance Holdings, Ltd., the owner of DaVinci Reinsurance Ltd.
KP FIXED INCOME FUND
By: Credit Suisse Asset Management, LLC, as Sub-Adviser for Callan Associates Inc., the Adviser for the KP Funds, the Trust for KP Fixed Income Fund,
as Lenders
By:  /s/ Thomas Flannery                                         

Name: Thomas Flannery

Title: Authorized Signatory

KCOF Management VIII, L.L.C.,

as a Lender

By:  /s/ Albert Scheer                                                 

Name: Albert Scheer

Title: Vice President

MONROE CAPITAL BSL CLO 2015-1, LTD.
BY: Monroe Capital Management LLC, as Collateral Manager and Attorney-in Fact
By:  /s/ Jeffrey Williams                                         

Name: Jeffrey Williams

Title: Managing Director

Eaton Vance CLO 2013-1 Ltd.
By:   Eaton Vance Management
Portfolio Manager
as a Lender
By:   /s/ Michael B. Botthof                            
        Name: Michael B. Botthof
        Title: Vice President

  BTC Holdings Fund I, LLC,
  By: Blue Torch Credit Opportunities Fund I LP, its sole member
  By: Blue Torch Credit Opportunities GP LLC, its general partner, as a Lender
  By:   /s/ Gary Manowitz                            
          Name: Gary Manowitz
          Title: CFO
  BTC Holdings SC Fund LLC,
  By: Blue Torch Credit Opportunities SC Master Fund LP, its sole member
  By: Blue Torch Credit Opportunities SC GP LLC, its General Partner, as a Lender
  By:   /s/ Gary Manowitz                            
          Name: Gary Manowitz
          Title: CFO
  SWISS CAPITAL BTC PRIVATE DEBT OFFSHORE SP,
  By: Blue Torch Capital LP, acting solely in its capacity as Investment Advisor to the Manager of Swiss Capital BTC Private Debt Offshore Fund SP, a segregated portfolio of Swiss Capital Private Debt (Offshore) Funds SPC, as a Lender
  By:   /s/ Gary Manowitz                            
          Name: Gary Manowitz
          Title: CFO
  SC BTC PRIVATE DEBT FUND LP,
  By: Blue Torch Capital LP, acting solely in its capacity as Investment Advisor to the Manager of SC BTC Private Debt Fund LP, as a Lender
  By:   /s/ Gary Manowitz                            
    Name: Gary Manowitz
    Title: CFO

SOLUS SENIOR HIGH INCOME FUND LP,

as a Lender

By: Solus Alternative Asset Management LP, its Investment Advisor
By:   /s/ Gordon J. Yeager                            
        Name: Gordon J. Yeager        
        Title: Executive Vice President

COLUMBIA STRATEGIC INCOME FUND,

a series of Columbia Funds Series Trust I, as a Lender

By:   /s/ Jerry R. Howard                            
        Name: Jerry R. Howard
        Title: Assistant Vice President

COLUMBIA FLOATING RATE FUND,

a series of Columbia Funds Series Trust II, as a Lender

By:   /s/ Jerry R. Howard                            
        Name:  Jerry R. Howard
 

      Title:  Assistant Vice President

Cent CLO 19 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC
as Collateral Manager
By:   /s/ Jerry R. Howard                            
        Name: Jerry R. Howard
        Title: Assistant Vice President

Cent CLO 20 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC
as Collateral Manager
By:   /s/ Jerry R. Howard                            
        Name: Jerry R. Howard
        Title: Assistant Vice President

Cent CLO 21 Limited,

as a Lender

By: Columbia Management Investment Advisers, LLC
as Collateral Manager
By:   /s/ Jerry R. Howard                            
        Name: Jerry R. Howard
        Title: Assistant Vice President

Cent CLO 24 Limited,
as a Lender
By: Columbia Management Investment Advisers, LLC
as Collateral Manager
By:   /s/ Jerry R. Howard                            
        Name: Jerry R. Howard
        Title: Assistant Vice President

Cutwater 2014-I, LTD,

as a Lender

as Assignee for and on behalf of the lender by its appointed investment manager/collateral manager, Insight North America LLC
By:   /s/ John Bluemke                            
        Name: John Bluemke
        Title: Authorized Signatory

CROWN POINT CLO II LTD.
CROWN POINT CLO III, LTD.,
as a Lender
By:   /s/ Sajedur Rahman                            
        Name: Sajedur Rahman
        Title: Authorized Signatory

EXHIBIT A-1

Amendments to Credit Agreement

See attached.

Exhibit A-1 to

the Fifth Sixth Amendment

[Conformed Credit Agreement Reflecting the First Amendment, dated as of September 19, 2016, Second Amendment, dated as of January 11, 2017 and 2017 Replacement Term Loan Amendment (Third Amendment), dated as of March 31, 2017, the Fourth Amendment, dated as of July 31, 2018, and the Fifth Amendment, dated as of February 20, 2019 and the Sixth Amendment, dated as of March 15, 2019 ]

TERM LOAN CREDIT AGREEMENT

dated as of June 30, 2015,

among

HORIZON GLOBAL CORPORATION,

The Lenders Party Hereto,

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent and Collateral Agent,

BMO CAPITAL MARKETS CORP.,

and

WELLS FARGO SECURITIES, LLC,

as Syndication Agents,

KEYBANC CAPITAL MARKETS INC.,

SIDOTI & COMPANY, LLC

and

ROTH CAPITAL PARTNERS, LLC

as Documentation Agents

J.P. MORGAN SECURITIES LLC,

BMO CAPITAL MARKETS CORP.,

WELLS FARGO SECURITIES, LLC,

as Joint Lead Arrangers and Joint Bookrunners 1

 

 

 

 

1 With respect to the Fourth Amendment, JPMorgan Chase Bank, N.A. was the sole Lead Arranger and JPMorgan Chase Bank, N.A. was the sole Bookrunner.

TABLE OF CONTENTS

 

        Page

ARTICLE I

 

DEFINITIONS

SECTION 1.01

  Defined Terms   1

SECTION 1.02

  Classification of Loans and Borrowings   30 39

SECTION 1.03

  Terms Generally   30 39

SECTION 1.04

  Accounting Terms; GAAP   31 39

 

ARTICLE II

 

THE CREDITS

SECTION 2.01

  Commitments   31 40

SECTION 2.02

  Loans and Borrowings   31 40

SECTION 2.03

  Requests for Borrowings   32 40

SECTION 2.04

  [Reserved]   33 41

SECTION 2.05

  [Reserved]   33 41

SECTION 2.06

  Funding of Borrowings   33 41

SECTION 2.07

  Interest Elections   33 42

SECTION 2.08

  Termination and Reduction of Commitments   34 43

SECTION 2.09

  Repayment of Loans; Evidence of Debt   35 43

SECTION 2.10

  Amortization of Term Loans   35 44

SECTION 2.11

  Prepayment of Loans   36 44

SECTION 2.12

  Fees   38 47

SECTION 2.13

  Interest   38 47

SECTION 2.14

  Alternate Rate of Interest   38 48

SECTION 2.15

  Increased Costs   39 49

SECTION 2.16

  Break Funding Payments   40 49

SECTION 2.17

  Taxes   40 50

SECTION 2.18

  Payments Generally; Pro Rata Treatment; Sharing of Set-offs   43 53

SECTION 2.19

  Mitigation Obligations; Replacement of Lenders   44 54

SECTION 2.20

  [Reserved].   45 54

SECTION 2.21

  Incremental Facilities 45 [Reserved]   54

SECTION 2.22

  [Reserved]   47 58

SECTION 2.23

  Extensions   47 58

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

SECTION 3.01

  Organization; Powers   48 59

SECTION 3.02

  Authorization; Enforceability   49 59

SECTION 3.03

  Governmental Approvals; No Conflicts   49 60

 

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         Page  

SECTION 3.04

  Financial Condition; No Material Adverse Change      49 60  

SECTION 3.05

  Properties      50 61  

SECTION 3.06

  Litigation and Environmental Matters      50 61  

SECTION 3.07

  Compliance with Laws and Agreements      51 61  

SECTION 3.08

  Investment Company Status      51 46  

SECTION 3.09

  Taxes      51 46  

SECTION 3.10

  ERISA      51 46  

SECTION 3.11

  Disclosure      51 46  

SECTION 3.12

  Subsidiaries      51 46  

SECTION 3.13

  Insurance      52 47  

SECTION 3.14

  Labor Matters      52 47  

SECTION 3.15

  Solvency      52 47  

SECTION 3.16

  Senior Indebtedness      52 47  

SECTION 3.17

  Security Documents      52 47  

SECTION 3.18

  Federal Reserve Regulations      53 64  

SECTION 3.19

  Anti-Corruption Laws and Sanctions      53 64  

SECTION 3.20

  Material Contracts      53 48  

SECTION 3.21

  EEA Financial Institutions      54 49  

SECTION 3.22

  Disclosure      49  
ARTICLE IV

 

CONDITIONS

 

SECTION 4.01

  Closing Date      54 64  

ARTICLE V

 

AFFIRMATIVE COVENANTS

 

 

SECTION 5.01

  Financial Statements and Other Information      56 66  

SECTION 5.02

  Notices of Material Events      58 70  

SECTION 5.03

  Information Regarding Collateral      59 71  

SECTION 5.04

  Existence; Conduct of Business      60 72  

SECTION 5.05

  Payment of Obligations      60 56  

SECTION 5.06

  Maintenance of Properties      60 56  

SECTION 5.07

  Insurance      60 56  

SECTION 5.08

  Casualty and Condemnation      60 56  

SECTION 5.09

  Books and Records; Cooperation; Inspection and Audit Rights 61 ; Lender Calls.      56  

SECTION 5.10

  Compliance with Laws      61 73  

SECTION 5.11

  Use of Proceeds      61 57  

SECTION 5.12

  Additional Subsidiaries      61 58  

SECTION 5.13

  Further Assurances      61 58  

SECTION 5.14

  Ratings      62 74  

ARTICLE VI

 

NEGATIVE COVENANTS

 

 

SECTION 6.01

  Indebtedness; Certain Equity Securities      62 74  

 

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         Page  
SECTION 6.02   Liens      65 77  
SECTION 6.03   Fundamental Changes      66 80  
SECTION 6.04   Investments, Loans, Advances, Guarantees and Acquisitions      67 80  
SECTION 6.05   Asset Sales      68 82  
SECTION 6.06   Sale and Leaseback Transactions      69 83  
SECTION 6.07   Hedging Agreements      70 83  
SECTION 6.08   Restricted Payments; Certain Payments of Indebtedness      70 84  
SECTION 6.09   Transactions with Affiliates      72 86  
SECTION 6.10   Restrictive Agreements      72 87  
SECTION 6.11   Amendment of Material Documents      72 87  
SECTION 6.12   [Reserved]      73 88  
SECTION 6.13   Net Leverage Ratio 73 Financial Covenants.      68  
SECTION 6.14   Use of Proceeds      74 91  
ARTICLE VII  
EVENTS OF DEFAULT  
ARTICLE VIII  
THE AGENTS  
ARTICLE IX  
[RESERVED]  
ARTICLE X  
MISCELLANEOUS  
SECTION 10.01   Notices      78 97  
SECTION 10.02   Waivers; Amendments      79 97  
SECTION 10.03   Expenses; Indemnity; Damage Waiver      81 100  
SECTION 10.04   Successors and Assigns      82 101  
SECTION 10.05   Survival      85 104  
SECTION 10.06   Counterparts; Integration; Effectiveness      85 104  
SECTION 10.07   Severability      85 104  
SECTION 10.08   Right of Setoff      85 104  
SECTION 10.09   Governing Law; Jurisdiction; Consent to Service of Process      86 105  
SECTION 10.10   WAIVER OF JURY TRIAL      86 105  
SECTION 10.11   Headings      86 105  
SECTION 10.12   Confidentiality      86 106  
SECTION 10.13   Interest Rate Limitation      87 106  
SECTION 10.14   Intercreditor Agreements      87 107  
SECTION 10.15   Release of Liens and Guarantees      87 107  
SECTION 10.16   PATRIOT Act      88 108  
SECTION 10.17   No Fiduciary Duty      88 108  
SECTION 10.18   Acknowledgement and Consent to Bail-In of EEA Financial Institutions      89 108  

 

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SCHEDULES :

    
Schedule 2.01   —    Commitments
Schedule 3.03   —    Governmental Approvals; No Conflicts
Schedule 3.05   —    Real Property
Schedule 3.06   —    Disclosed Matters
Schedule 3.12   —    Subsidiaries
Schedule 3.13   —    Insurance
Schedule 3.20   —    Material Contracts
Schedule 6.01   —    Existing Indebtedness
Schedule 6.01 A   —    Existing Indebtedness as of Fifth the Sixth Amendment Effective Date
Schedule 6.02   —    Existing Liens
Schedule 6.02 A   —    Existing Liens as of Fifth the Sixth Amendment Effective Date
Schedule 6.04   —    Existing Investments
Schedule 6.04 A   —    Existing Investments as of Fifth th e Sixth Amendment Effective Date
Schedule 6.05   —    Asset Sales
Schedule 6.05A   —    Asset Sales as of Fifth Amendment Date
Schedule 6.09   —    Existing Affiliate Transactions
Schedule 6.10   —    Existing Restrictions as of Fifth Amendment Effective Date
EXHIBITS :     
Exhibit A   —    Form of Assignment and Assumption
Exhibit B   —    Form of Borrowing Request
Exhibit C   —    Form of Intercreditor Agreement [Reserved]
Exhibit D   —    Form of Guarantee and Collateral Agreement
Exhibit E   —    Form of U.S. Tax Certificate
Exhibit F   —    Form of Perfection Certificate

 

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TERM LOAN CREDIT AGREEMENT dated as of June 30, 2015 (this “ Agreement ”), among HORIZON GLOBAL CORPORATION, the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as Administrative Agent and Collateral Agent.

RECITALS:

In consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01 Defined Terms . As used in this Agreement, the following terms have the meanings specified below:

“ 2017 Replacement Term Loan Amendment ” shall mean the 2017 Replacement Term Loan Amendment (Third Amendment to Credit Agreement), dated as of March 31, 2017, among the Borrower, the Lenders party thereto and the Administrative Agent.

“ 2017 Replacement Term Loan Commitment ” shall have the meaning set forth in the 2017 Replacement Term Loan Amendment. The aggregate amount of the Lenders’ 2017 Replacement Term Commitments on the 2017 Replacement Term Loan Facility Effective Date is $160,000,000.

“ 2017 Replacement Term Loan Facility ” shall have the meaning set forth in the 2017 Replacement Term Loan Amendment.

“ 2017 Replacement Term Loan Facility Effective Date ” shall have the meaning set forth in the 2017 Replacement Term Loan Amendment.

“ 2017 Replacement Term Loan Lender ” means a Lender with a 2017 Replacement Term Loan Commitment or an outstanding 2017 Replacement Term Loan. On and after the 2017 Replacement Term Loan Facility Effective Date, each reference to a “Term B Lender” in this Agreement shall be deemed to refer to a 2017 Replacement Term Loan Lender.

“ 2017 Replacement Term Loans ” shall have the meaning set forth in the 2017 Replacement Term Loan Amendment.

“ 2018 Incremental Term Loan Commitments ” has the meaning set forth in the Fourth Amendment.

“ 2018 Incremental Term Loan Lender ” means a Lender with a 2018 Incremental Term Loan Commitment or an outstanding 2018 Incremental Term Loan. On and after the Fourth Amendment Effective Date, each reference to a “Term B Lender” in this Agreement shall be deemed to refer to a 2018 Incremental Term Loan Lender.

“ 2018 Incremental Term Loans ” has the meaning set forth in the Fourth Amendment.

“ 2018 Term Loans ” means the 2017 Replacement Term Loans and the 2018 Incremental Term Loans. On and after the Fourth Amendment Effective Date, each reference to a “Term B Loan” in

this Agreement shall be deemed to refer to a 2018 Term Loan, except for such references in Section 4.01(g) and (m).

“ 2018 Term Loan Commitment ” means the 2017 Replacement Term Loan Commitment and the 2018 Incremental Term Loan Commitment.

“ ABL Agent ” means Bank of America, N.A., as administrative agent and/or collateral agent, as applicable, under the ABL Credit Agreement, and its successors and assigns.

“ ABL Credit Agreement ” means the ABL Credit Agreement to be dated as of the Closing Date, among the Borrower, the Subsidiaries party thereto as borrowers, the lenders party thereto and Bank of America, N.A., as administrative agent and collateral agent, as such document or the credit facility thereunder may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL Guarantee and Collateral Agreement ” means the Guarantee and Collateral Agreement as defined in the ABL Credit Agreement.

“ ABL Foreign Loan Party ” means any Foreign Subsidiary that is a party to the ABL Loan Documents as a borrower thereunder and/or is a party to any ABL Security Document as a grantor or guarantor thereunder.

“ABL Guarantee and Collateral Agreement” means the Guarantee and Collateral Agreement as defined in the ABL Credit Agreement .

“ ABL Loan ” means a loan made pursuant to the ABL Credit Agreement.

“ ABL Loan Documents ” means collectively (a) the ABL Credit Agreement, (b) the ABL Security Documents, (c) any promissory note evidencing loans under the ABL Credit Agreement and (d) any amendment, waiver, supplement or other modification to any of the documents described in clauses (a) through (c), in each case as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL Priority Collateral ” has the meaning assigned to such term in the ABL/Ter m Loan Intercreditor Agreement.

“ ABL Security Documents ” means the collective reference to the ABL Guarantee and Collateral Agreement, the Mortgages (as defined in the ABL Credit Agreement) and all other security documents delivered to the ABL Administrative Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Loan Party under the ABL Credit Agreement or the ABL Guarantee and Collateral Agreement, as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ ABL/Term Loan Intercreditor Agreement ” means the Amended and Restated Intercreditor Agreement, dated as of June 30, 2015 (as amended on the date hereof) the Sixth Amendment Effective Date , among the Borrower, the other Loan Parties, the Collateral Agent, the Senior Junior Agent and the ABL Agent.

 

 

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“ ABR ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

“ Acquisition Lease Financing ” means any sale or transfer by the Borrower or any Subsidiary of any property, real or personal, that is acquired pursuant to a Permitted Acquisition, in an aggregate amount not to exceed $20,000,000 at any time after the Closing Date, which property is rented or leased by the Borrower or such Subsidiary from the purchaser or transferee of such property, so long as the proceeds from such transaction consist solely of cash.

“ Adjusted LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate; provided that the Adjusted LIBO Rate shall not be less than 1.00% per annum.

“ Administrative Agent ” means JPMCB, in its capacity as administrative agent for the Lenders hereunder.

“ 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.

“ Agents ” means, collectively, the Administrative Agent, the Collateral Agent, the Syndication Agents and the Documentation Agents.

“ Agreement ” has the meaning assigned to such term in the preamble hereto.

“Agreed Security Principles” has the meaning assigned in the Guarantee and Collateral Agreement.

“ Alternate Base Rate ” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day) for a deposit in dollars with a maturity of one month plus 1%; provided that the Alternate Base Rate shall not be less than 2.00% per annum. For purposes of clause (c) above, the Adjusted LIBO Rate on any day shall be the LIBO Rate, two Business Days prior to such day for deposits in dollars with a maturity of one month. Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, as the case may be. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof, then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above.

“ Alternative Incremental Debt ” means any Indebtedness incurred by a Loan Party in the form of one or more series of secured or unsecured bonds, debentures, notes or similar instruments or in the form of loans; provided that:

 

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(a)          if such Indebtedness is secured, (i) such Indebtedness shall be secured by Liens on the Collateral on a pari passu or junior basis to the Liens on the Collateral securing the Obligations (but, in each case, without regard to the control of remedies) and shall not be secured by any property or assets of the Borrower or any of the Subsidiaries other than the Collateral ( provided that if such Indebtedness is in the form of loans, it may be secured by Liens on the Collateral only on a junior basis to the Liens on the Collateral securing the Obligations), (ii) the security agreements relating to such Indebtedness shall be substantially similar to the Security Documents (with such differences as are reasonably satisfactory to the Administrative Agent and other than, in the case of Indebtedness secured on a junior basis, with respect to priority) and (iii) such Indebtedness shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent,

(b)          such Indebtedness does not mature earlier than the date that is 91 days after the Latest Maturity Date in effect hereunder at the time of incurrence thereof and has a weighted average life to maturity no shorter than the Latest Maturing Term Loans in effect at the time of incurrence of such Indebtedness,

(c)          the definitive documentation in respect of such Indebtedness (i) contains covenants, events of default and other terms that are customary for similar Indebtedness in light of then-prevailing market conditions and (ii) shall not contain additional covenants or events of default not otherwise applicable to the Loans or covenants more restrictive than the covenants applicable to the Loans; provided that the foregoing clause (ii) shall not apply to covenants or events of default applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such Indebtedness; provided further that any such Indebtedness may include additional covenants or events of default not otherwise applicable to the Loans or covenants more restrictive than the covenants applicable to the Loans in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such Indebtedness so long as this Agreement is amended to provide all of the Lenders with the benefits of such additional covenants, events of default or more restrictive covenants,

(d)          such Indebtedness does not provide for any mandatory prepayment, redemption or repurchase (other than upon a change of control, fundamental change, conversion or exchange in the case of convertible or exchangeable Indebtedness, customary asset sale or event of loss mandatory offers to purchase, and customary acceleration rights after an event of default) prior to the date that is 91 days after the Latest Maturity Date in effect hereunder at the time of incurrence of such Indebtedness; provided that any such Indebtedness secured by Liens on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations (any such Indebtedness, “ Pari Passu Alternative Incremental Debt ”) may be subject to a mandatory prepayment offer from the Net Proceeds of any Prepayment Event so long as the holders of such Indebtedness receive no more than their ratable share of such prepayment (such ratable share to be calculated by reference to the outstanding amount of such Indebtedness, the outstanding amount of the Loans hereunder and the outstanding amount of Pari Passu Permitted Term Loan Refinancing Indebtedness, in each case immediately prior to such prepayment),

(e)          other than with respect to Alternative Incremental Debt the proceeds of which shall be used to finance a Limited Conditionality Acquisition, at the time of incurrence of such Alternative Incremental Debt, (i) no Default or Event of Default shall have occurred and be continuing, both immediately prior to and immediately after giving effect to the incurrence of such Alternative Incremental Debt and (ii) the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects

 

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if qualified by materiality) on and as of such date; provided that with respect to Alternative Incremental Debt the proceeds of which shall be used to finance a Limited Conditionality Acquisition, as of the date of entry into the applicable Limited Conditionality Acquisition Agreement (i) no Default or Event of Default shall have occurred and be continuing and (ii) the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date, and

(f)           such Indebtedness is not guaranteed by any Person other than Loan Parties.

Alternative Incremental Debt will include any Registered Equivalent Notes issued in exchange therefor.

“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.

“ Applicable Law ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Applicable Rate ” means, for any day, (a) with respect to the sum of (i) (x) for any ABR 2018 Term Loan, 5.00% per annum and ( ii y ) any Eurocurrency 2018 Term Loan, 6.00% per annum and (b) with respect to any Incremental Term Loan of any Series, the rate per annum specified in the Incremental Facility Agreement establishing the Incremental Term Commitments of such Series , plus (ii) 3.00% (the “PIK Portion”) .

“ Approved Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered 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.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any Person whose consent is required by Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.

“ Assumed Preferred Stock ” means any preferred stock or preferred equity interests of any Person that becomes a Subsidiary after the Closing Date; provided that (a) such preferred stock or preferred equity interests exist at the time such Person becomes a Subsidiary and are not created in contemplation of or in connection with such Person becoming a Subsidiary and (b) the aggregate liquidation value of all such outstanding preferred stock and preferred equity interests shall not exceed $10,000,000 at any time outstanding, less the aggregate principal amount of Indebtedness incurred and outstanding pursuant to Section 6.01(a)(x).

“ Available Amount ” means, as of any date of determination on or after the Fourth Amendment Effective Date, an amount equal to:

(a)          the sum of (without duplication):

(i)          if positive, the Cumulative Retained Excess Cash Flow Amount; and

 

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(ii)          the Net Proceeds received by the Borrower from (A) cash contributions (other than from a Subsidiary) to the Borrower or (B) the issuance and sale of its Equity Interests (other than a sale to a Subsidiary);

minus

(b)          the amount of any investments made in reliance on Section 6.04(s) prior to such date and any prepayments of Indebtedness made in reliance on Section 6.08(b)(vii) prior to such date;

minus

(c)          the portion of Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d) that is used pursuant to Section 6.08(a)(v) or Section 6.08(a)(vii).

For the avoidance of doubt, the Available Amount shall be deemed $0 (zero dollars) on the Fourth Amendment Effective Date irrespective of any amounts which may be attributed to the foregoing clause (a) prior to such date.

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

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

“ Base Incremental Amount ” means, as of any date, an amount equal to (a) $75,000,000 less (b) the aggregate principal amount of Incremental Term Commitments established prior to such date in reliance on the Base Incremental Amount less (c) the aggregate principal amount of Alternative Incremental Debt established prior to such date in reliance on the Base Incremental Amount.

“ Beneficial Ownership Certification ” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

“ Beneficial Ownership Regulation ” means 31 C.F.R. § 1010.230.

“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrower ” means Horizon Global Corporation, a Delaware corporation.

“ Borrower Registration Statement ” means the registration statement on Form S-1 filed by the Borrower with the Commission on March 31, 2015, including all exhibits and schedules thereto, in each case, as amended, supplemented or otherwise modified prior to the Closing Date.

“ Borrowing ” means Loans of the same Class and Type, made, converted or continued on the same date and as to which a single Interest Period is in effect.

 

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“ Borrowing Base ” shall have the meaning ascribed to such term in the ABL Credit Agreement (as defined in the ABL Credit Agreement on the Closing Date).

“ Borrowing Request ” means a request by the Borrower for a Borrowing in accordance with Section 2.03, which shall be, in the case of any such written request, in the form of Exhibit B or any other form approved by the Administrative Agent.

“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that when used in connection with any Eurocurrency Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“ Capital Expenditures ” means, for any period, without duplication, (a) the additions to property, plant and equipment and other capital expenditures of the Borrower and its consolidated Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Borrower for such period prepared in accordance with GAAP other than (x) such additions and expenditures classified as Permitted Acquisitions and (y) such additions and expenditures made with Net Proceeds from any casualty or other insured damage or condemnation or similar awards and (b) Capital Lease Obligations incurred by the Borrower and its consolidated Subsidiaries during such period.

“ 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; provided that any change in GAAP after the Closing Date that would require lease obligations that would have been characterized and accounted for as operating leases in accordance with GAAP as in effect on the Closing Date to be characterized and accounted for as Capital Lease Obligations shall be disregarded for purposes hereof.

“ CFC ” means a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ Change in Control ” means (a) the acquisition of beneficial ownership, directly or indirectly, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder), of Equity Interests representing more than 35% of either the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in the Borrower or (b) the occurrence of any change in control (or similar event, however denominated) with respect to the Borrower under (i) any indenture or other agreement in respect of Material Indebtedness to which the Borrower or any Subsidiary is a party or (ii) any instrument governing any preferred stock of the Borrower or any Subsidiary having a liquidation value or redemption value in excess of $5,000,000.

“ Change in Law ” means (a) the adoption of any law, rule or regulation after the date hereof, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date hereof or (c) compliance by any Lender (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date hereof; 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

 

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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, promulgated or issued.

“ Class ,” when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are 2017 Replacement Term B Loans or , 2018 Incremental Term Loans of any Series or 2018 Term Loans , (b) any Commitment, refers to whether such Commitment is a 2017 Replacement Term Loan Commitment , or a 2018 Incremental Term Loan Commitment or any other Incremental Term Commitment of any Series and (c) any Lender, refers to whether such Lender has a Loan or Commitment of a particular Class.

“ Closing Date ” means the date on which the conditions specified in Section 4.01 have been satisfied.

“ Closing Date Dividend ” has the meaning assigned to such term in the definition of “Transactions”.

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” means any and all “ Collateral ,” as defined in any applicable Security Document.

“ Collateral Agent ” means JPMCB, in its capacity as collateral agent for the Lenders under the Security Documents.

“ Collateral and Guarantee Requirement ” means the requirement that (and, with respect to Foreign Subsidiaries, subject to the Agreed Security Principles) :

(a)        the Collateral Agent shall have received from each party thereto (other than the Collateral Agent) either (i) a counterpart of the Guarantee and Collateral Agreement duly executed and delivered on behalf of such Loan Party, or (ii) in the case of any Person that becomes a Subsidiary Loan Party after the Closing Date, a supplement to each of the Guarantee and Collateral Agreement and the Intercreditor Agreement Agreements , in each case in the form specified therein, duly executed and delivered on behalf of such Subsidiary Loan Party;

(b)        all outstanding Equity Interests of the Borrower and each Subsidiary owned by or on behalf of any Loan Party shall have been pledged pursuant to the Guarantee and Collateral Agreement (except that the Loan Parties shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary , or any CFC (other than any CFC , in each case, with respect to any Foreign Subsidiary that is organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) , Mexico , Canada or the Netherlands)) and 100% of the Equity Interests of any Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands shall have been pledged and the Collateral Agent shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c)        all Indebtedness of the Borrower and each Subsidiary in an aggregate principal amount that exceeds $500,000 that is owing to any Loan Party shall be evidenced by a

 

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promissory note and shall have been pledged pursuant to the Guarantee and Collateral Agreement

 

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and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(d)        all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Guarantee and Collateral Agreement and perfect such Liens to the extent required by, and with the priority required by, the Guarantee and Collateral Agreement (in each case subject to the Intercreditor Agreement Agreements ), shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording;

(e)        the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to any Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 6.02, together with such endorsements, coinsurance and reinsurance as the Administrative Agent or the Required Lenders may reasonably request, but only to the extent such endorsements are (A) available in the relevant jurisdiction ( provided in no event shall the Collateral Agent request a creditors’ rights endorsement) and (B) available at commercially reasonable rates, (iii) if any Mortgaged Property is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, evidence of such flood insurance as may be required under Applicable Law, including Regulation H of the Board of Governors, and an acknowledged notice to the Borrower, (iv) if reasonably requested by the Administrative Agent, a current appraisal of any Mortgaged Property, prepared by an appraiser acceptable to the Administrative Agent, and in form and substance satisfactory to the Required Lenders (it being understood that if such appraisal is required in order to comply with the Administrative Agent’s internal policies, such request shall be deemed to be reasonable), (v) if reasonably requested by the Administrative Agent, an environmental assessment with respect to any Mortgaged Property, prepared by environmental engineers reasonably acceptable to the Administrative Agent, and such other reports, certificates, studies or data with respect to such Mortgaged Property as the Administrative Agent may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with the Administrative Agent’s internal policies, such request shall be deemed to be reasonable), and (vi) such abstracts, legal opinions and other documents as the Administrative Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; provided , however , in no event shall surveys be required to be obtained with respect to any Mortgaged Property; and

(f)        each Loan Party shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder;

provided , that, (i) with respect to any Subsidiary Loan Party that is a Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands, the Collateral and Guarantee Requirement shall require the provision of the documents and satisfaction of the requirements set forth in Schedule Exhibit E to the Fifth Sixth Amendment (with such amendments thereto and extensions of time as may be agreed by the Administrative Agent) and (ii) with respect to any Subsidiary Loan Party that is a

 

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Foreign Subsidiary organized under the laws of any other jurisdiction, the Collateral and Guarantee Requirement shall be modified as reasonably requested by the Required Lenders to reflect the requirements and limitations of the jurisdiction in which such Foreign Subsidiary is organized.

“ Commission ” means the Securities and Exchange Commission or any Governmental Authority succeeding to any or all of the functions of said Commission.

“ Commitment ” means a 2017 Replacement Term Loan Commitment , or a 2018 Incremental Term Loan Commitment or any other Incremental Term Commitment of any Series or any combination thereof (as the context requires).

“ Consolidated EBITDA ” means, for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated cash interest expense for such period, (ii) consolidated income tax expense for such period (including all single business tax expenses imposed by state law), (iii) all amounts attributable to depreciation and amortization for such period, (iv) any extraordinary charges for such period, (v) interest-equivalent costs associated with any Specified Vendor Receivables Financing for such period, whether accounted for as interest expense or loss on the sale of receivables, and all Preferred Dividends, (vi) all losses during such period that relate to the retirement of Indebtedness, (vii) noncash expenses during such period resulting from the grant of Equity Interests to management and employees of the Borrower or any of the Subsidiaries, (viii) the aggregate amount of deferred financing expenses for such period, (ix) all other noncash expenses or losses of the Borrower or any of the Subsidiaries for such period (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), (x) any nonrecurring fees, expenses or charges realized by the Borrower or any of the Subsidiaries for such period related to any offering of Equity Interests or incurrence of Indebtedness, whether or not consummated fees, costs and expenses in connection with the Sixth Amendment Transactions , (xi) fees and expenses in connection with the Transactions, (xii) any unusual or nonrecurring costs and expenses arising from the integration of any business acquired pursuant to any Permitted Acquisition consummated after the Closing Date not to exceed $7,500,000 in any fiscal year and $20,000,000 in the aggregate, (xiii) any unusual or nonrecurring costs and expenses arising from the integration of the Westfalia Group not to exceed $10,000,000 in any fiscal year and $30,000,000 in the aggregate, (xiv) the amount of reasonably identifiable and factually supportable “run rate” cost savings, operating expense reductions, and other synergies not to exceed $12,500,000 resulting from the Westfalia Acquisition that are projected by Borrower in good faith and certified by a Financial Officer of the Borrower in writing to the Administrative Agent to result from actions either taken or expected to be taken within eighteen (18) months of the Westfalia Acquisition Closing Date to take such action, net of the amount of actual benefits realized prior to or during such period from such actions (which cost savings, operating expense reductions, and synergies shall be calculated on a pro forma basis as though such cost savings, operating expense reductions, or synergies had been realized on the first day of such period), (xv) any issuance or offering of Equity Interests or any Indebtedness (in each case, whether or not consummated), (xii) costs and expenses of professional fees of the Borrower and its Subsidiaries or of any Agent or Lender to the extent the Borrower is required to reimburse such Agent or Lender therefor , (xiii) unusual or nonrecurring expenses or similar costs relating to cost savings projects , including restructuring, moving and severance expenses, not to exceed $25,000,000 in the aggregate from and after January 1, 2015; provided that no more than $7,500,000 may be counted in any fiscal year commencing on or after January 1, 2015, (xvi) net losses from discontinued operations, not to exceed in any fiscal year $7,500,000, (xvii) losses associated with the prepayment of leases (whether operating leases or capital leases) outstanding on January 1, 2015 from discontinued operations, and (xviii) losses or charges associated with asset sales otherwise permitted hereunder and any unusual or nonrecurring charges, so

 

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long as the expense, provided that the aggregate amount added back to Consolidated EBITDA pursuant to this clause ( xviii) does xiii) shall not exceed in the aggregate $5,000,000 in any four Fiscal Quarter period, (xiv) fees, costs and expenses incurred in connection with any proposed asset sale (whether or not consummated); provided that the aggregate amount added to Consolidated EBITDA pursuant to this clause (xiv) shall not exceed $5,000,000 for all periods and (xv) non-cash losses on asset sales , minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) any non-cash income, profits or gains for such period and (iii) any gains realized from the retirement of Indebtedness after the Closing Date, all determined on a consolidated basis in accordance with GAAP ; provided, however, that the amounts added to Consolidated Net Income pursuant to clauses (xii) through (xviii) above for any period shall not exceed 45% of Consolidated EBITDA for such period; provided further that such percentage shall decrease to (A) 35% of Consolidated EBITDA on September 30, 2019 and (B) 25% of Consolidated EBITDA on December  31, 2019 and thereafter (determined without including amounts added to Consolidated Net Income pursuant to clauses (xii) through (xviii) above for such period) . If the Borrower or any Subsidiary has made any Permitted Acquisition or Significant Investment or any sale, transfer, lease or other disposition of assets outside of the ordinary course of business permitted by Section 6.05 during the relevant period for determining any leverage ratio hereunder, Consolidated EBITDA for the relevant period shall be calculated only for purposes of determining such leverage ratio after giving pro forma effect thereto, as if such Permitted Acquisition or Significant Investment or sale, transfer, lease or other disposition of assets had occurred on the first day of the relevant period for determining Consolidated EBITDA; provided that with respect to any Significant Investment, (x) any pro forma adjustment made to Consolidated EBITDA shall be in proportion to the percentage ownership of the Borrower or such Subsidiary, as applicable, in the Subject Person (e.g. if the Borrower acquires 70% of the Equity Interests of the Subject Person, a pro forma adjustment to Consolidated EBITDA shall be made with respect to no more than 70% of the EBITDA of the Subject Person) and (y) pro forma effect shall only be given to such Significant Investment if the Indebtedness of the Subject Person is included in Total Indebtedness for purposes of calculating the applicable leverage ratio in proportion to the percentage ownership of the Borrower or such Subsidiary, as applicable, in such Subject Person. Any such pro forma calculations may include operating and other expense reductions and other adjustments for such period resulting from any Permitted Acquisition, or sale, transfer, lease or other disposition of assets that is being given pro forma effect to the extent that such operating and other expense reductions and other adjustments (a)  would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933 (“ Regulation S-X ”) or (b) are reasonably consistent with the purpose of Regulation S-X as determined in good faith by the Borrower in consultation with the Administrative Agent. . Notwithstanding the foregoing, Consolidated EBITDA for the fiscal quarters ending March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 shall be deemed to be $4,390,000, $20,490,000, $17,090,000 and $-8,467,535, respectively.

“ Consolidated Net Income ” means, for any period, the net income or loss of the Borrower and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Person (other than the Borrower or a Significant Investment) in which any other Person (other than the Borrower or any Subsidiary or any director holding qualifying shares in compliance with Applicable Law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of the Subsidiaries during such period, (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary or the date that such Person’s assets are acquired by the Borrower or any Subsidiary and (c) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income.

 

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“ 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.

“ Convertible Notes ” means the 2.75% Convertible Senior Notes of the Borrower due 2022 issued pursuant to the Convertible Notes Indenture.

“ Convertible Notes Indenture ” means the First Supplemental Indenture between the Borrower and Wells Fargo Bank, National Association, dated as of February 1, 2017.

“ Credit Facility ” means a category of Commitments and extensions of credit thereunder.

“ Cumulative Retained Excess Cash Flow Amount ” means, at any date of determination, an amount equal to the aggregate cumulative sum of the Retained Percentage of Excess Cash Flow for the Excess Cash Flow Periods ended on or prior to such date.

“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“ Discharge of Senior ABL Obligations ” shall have has the meaning as defined assigned to such term in the ABL/ Term Loan Intercreditor Agreement.

“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06.

“ Documentation Agents ” means KeyBanc Capital Markets Inc., Sidoti & Company, LLC and Roth Capital Partners, LLC.

“ dollars ” or “$” refers to lawful money of the United States of America.

“ Domestic Subsidiary ” means any Subsidiary, other than the Foreign Subsidiaries.

“ ECF Percentage ” means 75%; provided, that, with respect to any fiscal year of the Borrower commencing with the fiscal year ending December 31, 2017, the ECF Percentage shall be reduced to (a) 50% if the Net Leverage Ratio as of the last day of such fiscal year is no greater than 4.00 to 1.00 but greater than 3.00 to 1.00, (b) 25% if the Net Leverage Ratio of the last day of such fiscal year is no greater than 3.00 to 1.00 but greater than 2.50 to 1.00 and (c) 0% if the Net Leverage Ratio as of the last day of such fiscal year is less than or equal to 2.50 to 1.00. 100%.

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

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

 

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

“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“ Environmental Liability ” means any liabilities, obligations, damages, losses, claims, actions, suits, judgments, or orders, contingent or otherwise (including any liability for damages, costs of environmental remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), directly or indirectly resulting from or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Environmental Notice ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Equity Contribution Percentage” means 66 2/3% .

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person or any warrants, options or other rights to acquire such interests, but excluding any debt securities convertible into or referencing any of the foregoing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“ ERISA Event ” means (a) any “ reportable event ,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30 day notice period is waived); (b) a failure by any Plan to satisfy the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such Plan in each instance, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) a determination that any Plan is, or is expected to be, in “ at risk ” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA; (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (g) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (h) the receipt by the Borrower or any ERISA

 

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Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA or in “ endangered ” or “ critical ” status (within the meaning of Section 432 of the Code or Section 305 of ERISA).

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

“ Eurocurrency ,” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

“ Event of Default ” has the meaning assigned to such term in Article VII.

“ Excess Cash Flow ” means, for any fiscal year, the sum (without duplication) of:

(a)        Consolidated Net Income for such fiscal year, adjusted to exclude any gains or losses attributable to Prepayment Events; plus

(b)        the excess, if any, of the Net Proceeds received during such fiscal year by the 734 Borrower and its consolidated Subsidiaries in respect of any Prepayment Events over (x) amounts permitted to be reinvested pursuant to Section 2.11(c) and (y) the aggregate principal amount of Term Loans prepaid pursuant to Section 2.11(c) in respect of such Net Proceeds; plus

(c)        depreciation, amortization and other noncash charges or losses deducted in determining such consolidated net income (or loss) for such fiscal year; plus

(d)        the sum of (i) the amount, if any, by which Net Working Capital (adjusted to exclude changes arising from Permitted Acquisitions and Significant Investments) decreased during such fiscal year plus (ii) the net amount, if any, by which the consolidated deferred revenues and other consolidated accrued long-term liability accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year plus (iii) the net amount, if any, by which the consolidated accrued long-term asset accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) decreased during such fiscal year; minus

(e)        the sum of (i) any noncash gains included in determining such consolidated net income (or loss) for such fiscal year plus (ii) the amount, if any, by which Net Working Capital (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year plus (iii) the net amount, if any, by which the consolidated deferred revenues and other consolidated accrued long-term liability accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) decreased during such fiscal year plus (iv) the net amount, if any, by which the consolidated accrued long-term asset accounts of the Borrower and its consolidated Subsidiaries (adjusted to exclude changes arising from Permitted Acquisitions) increased during such fiscal year; minus

(f)         the sum of (i)  Capital Expenditures for such fiscal year and Capital Expenditures to be made within 90 days following the end of such fiscal year pursuant to binding agreements entered into by the Borrower or any of its consolidated Subsidiaries prior to the end of such fiscal

 

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year; provided that to the extent any such Capital Expenditure is not made (or if the amount of any such Capital Expenditures less than the amount deducted with respect hereto) within 90 days after such fiscal year, the amount (or such portion of the amount) thereof shall be added back to Excess Cash Flow for the subsequent period (except to the extent attributable to the incurrence of Capital Lease Obligations or otherwise financed by incurring Long-Term Indebtedness) plus (ii) cash consideration paid during such fiscal year to make acquisitions or other capital investments (except to the extent financed by incurring Long-Term Indebtedness or through the use of the Available Amount) ; minus

(g)        the aggregate principal amount of Long-Term Indebtedness repaid or prepaid by the Borrower and its consolidated Subsidiaries during such fiscal year, excluding (i) Indebtedness in respect of ABL Loans and other revolving Indebtedness (in each case except to the extent the revolving credit commitments in respect thereof are permanently reduced in the amount of and at the time of any such payment) and letters of credit, (ii) Term Loans prepaid pursuant to Section 2.11(c) or (d), (iii) optional prepayments of Term Loans (including purchases of Term Loans pursuant to Section 10.04(h)) , and (iv) repayments or prepayments of Long-Term Indebtedness financed by incurring other Long-Term Indebtedness or through the use of the Available Amount, (v) optional prepayments of Pari Passu Alternative Incremental Debt in the form of loans or Pari Passu Permitted Term Loan Refinancing Indebtedness in the form of loans and (vi) any prepayments of Pari Passu Alternative Incremental Debt or Pari Passu Permitted Term Loan Refinancing Indebtedness in lieu of mandatory prepayments of Term Loans in accordance with Section 2.11(c) ; minus

(h)        the noncash impact of currency translations and other adjustments to the equity account, including adjustments to the carrying value of marketable securities and to pension liabilities, in each case to the extent such items would otherwise constitute Excess Cash Flow.

“ Excess Cash Flow Period ” means each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2017 (other than December 31, 2018) .

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder or under any other Loan Document, (a) income or franchise taxes imposed on (or measured by) its net or overall gross income (or net worth or similar Taxes imposed in lieu thereof) by the United States of America, or by any other jurisdiction as a result of such recipient being organized in or having its principal office in or applicable lending office in such jurisdiction, or as a result of any other present or former connection (other than a connection arising solely from this Agreement or any other Loan Document) between such recipient and such jurisdiction, (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Non-U.S. Lender (other than an assignee pursuant to a request by the Borrower under Section 2.19(b)), any United States withholding Taxes resulting from any law in effect (x) at the time such Non-U.S. Lender becomes a party to this Agreement or, with respect to any additional position in any Loan acquired after such Non-U.S. Lender becomes a party hereto, at the time such additional position is acquired by such Non-U.S. Lender or (y) at the time such Non-U.S. Lender designates a new lending office, except to the extent that such Non-U.S. Lender (or its assignor, if any) was entitled, immediately prior to designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such United States withholding Tax pursuant to Section 2.17(a), (d) any United States withholding Tax imposed pursuant to FATCA and (e) any withholding Tax that is attributable to a recipient’s failure to comply with Section 2.17(g).

 

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“ Extended Term Loans ” has the meaning assigned to such term in Section 2.23(a).

“ Extension ” has the meaning assigned to such term in Section 2.23(a).

“ Extension Offer ” has the meaning assigned to such term in Section 2.23(a).

“ FATCA ” means (i) Sections 1471 through 1474 of the Code as of the date of this Agreement or any amended or successor provision that is substantively comparable and not materially more onerous to comply with, and, in each case, any regulations or official interpretations thereof, (ii) any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the date of this Agreement or any amended or successor provision as described in clause (i) above and (iii) any law, regulation, rule, promulgation or official agreement implementing an official government agreement with respect to the foregoing.

“ Federal Funds Effective Rate ” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate; provided that if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

“ Financial Officer ” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“ Fifth Amendment ” means that certain Fifth Amendment to this Credit Agreement, dated as of February 20, 2019, among the Borrower, the other Loan Parties, the Administrative Agent and the Lenders party thereto.

“ Fifth Amendment Effective Date ” means the “Effective Date” as set forth in the Fifth Amendment.

“ First Amendment ” means that certain First Amendment to Credit Agreement, dated as of September 19, 2016, among the Borrower, the Administrative Agent and the Lenders party thereto.

“ First Amendment Effective Date ” means the “Effective Date” as set forth in the First Amendment.

“ First Lien Secured Indebtedness ” means Total Indebtedness that is secured by a first priority Lien on any asset of the Borrower or any of its Subsidiaries (it being understood that any Indebtedness outstanding under this Agreement and any Indebtedness outstanding under the ABL Credit Agreement is First Lien Secured Indebtedness).

“ First Lien Net Leverage Ratio ” means, on any date, the ratio of (a) First Lien Secured Indebtedness as of such date less the aggregate amount (not to exceed $65,000,000) of the sum of Unrestricted Domestic Cash plus Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

 

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“Fixed Charge Coverage Ratio” means, on any date, the ratio of (a) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on or most recently prior to such date to (b) the sum of, in each case for the Borrower and its Subsidiaries for such period and to the extent paid in cash, (i) consolidated cash interest expense, (ii) interest-equivalent costs associated with any Specified Vendor Receivables Financing, whether accounted for as interest expense or loss on the sale of receivables, (iii) all Preferred Dividends and (iv) all required amortization payments on Indebtedness.

“ FLSA ” means the Fair Labor Standards Act of 1938, as amended from time to time.

“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

“ Fourth Amendment ” means that certain Fourth Amendment to Credit Agreement, dated as of July 31, 2018, among the Borrower, the other Loan Parties, the Administrative Agent and the Lenders party thereto.

“ Fourth Amendment Effective Date ” means the “Effective Date” as set forth in the Fourth Amendment.

“ GAAP ” means generally accepted accounting principles in the United States of America.

“ Governmental Authority ” means the government of the United States of America, any other nation or 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 body exercising such powers or functions, 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 or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided , that the term “ Guarantee ” shall not include endorsements for collection or deposit in the ordinary course of business.

“ Guarantee and Collateral Agreement ” means the Term Loan Guarantee and Collateral Agreement, substantially in the form of Exhibit D, made by the Borrower and the Subsidiary Loan Parties party thereto in favor of the Collateral Agent for the benefit of the Secured Parties.

“ Hazardous Materials ” means all explosive, radioactive, hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing

 

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materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedging Agreement ” means any (i) interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement, (ii) Permitted Bond Hedge Transaction Hedging Agreement or (iii) Permitted Warrant Transaction.

“Immaterial Subsidiary” means, at any date, any Subsidiary of the Borrower that, together with its consolidated Subsidiaries (i) does not, as of the last day of the fiscal quarter of the Borrower most recently ended on or prior to such date for which financial statements are available, have assets with a value in excess of 2.5% of the consolidated total assets of the Borrower and its consolidated Subsidiaries and (ii) did not, during the period of four consecutive fiscal quarters of the Borrower most recently ended on or prior to such date for which financial statements are available, have revenues exceeding 2.5% of the total revenues of the Borrower and its consolidated Subsidiaries; provided that, the aggregate assets or revenues of all Immaterial Subsidiaries, determined in accordance with GAAP, may not exceed 5.0% of consolidated assets or consolidated revenues, respectively, of the Borrower and its consolidated Subsidiaries, collectively, at any time (and the Borrower will promptly designate in writing to the Administrative Agent the Subsidiaries which will cease to be treated as “Immaterial Subsidiaries” in order to comply with the foregoing limitation).

“ Impacted Interest Period ” has the meaning assigned to such term in the definition of “LIBO Rate.”

“Incremental Facility Agreement” means an Incremental Facility Agreement, in form and substance reasonably satisfactory to the Administrative Agent, among the Borrower, the Administrative Agent and one or more Incremental Term Lenders, establishing Incremental Term Commitments of any Series and effecting such other amendments hereto and to the other Loan Documents as are contemplated by Section 2.21.

“Incremental Term Commitment” means, with respect to any Lender, the commitment, if any, of such Lender, established pursuant an Incremental Facility Agreement and Section 2.21, to make Incremental Term Loans of any Series hereunder, expressed as an amount representing the maximum principal amount of the Incremental Term Loans of such Series to be made by such Lender.

“Incremental Term Lender” means a Lender with an Incremental Term Commitment or an outstanding Incremental Term Loan.

“Incremental Term Loans” means any term loans made pursuant to Section 2.21(a).

“Incremental Term Maturity Date” means, with respect to Incremental Term Loans of any Series, the scheduled date on which such Incremental Term Loans shall become due and payable in full hereunder, as specified in the applicable Incremental Facility Agreement.

“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts

 

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payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances and (k) solely for purposes of Section 6.01 hereof, any and all payment obligations of such Person under or Guarantee by such Person with respect to any Hedging Agreement. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term “ Indebtedness ” shall not include (a) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or capital stock and (b) trade payables and accrued expenses in each case arising in the ordinary course of business.

“ Indemnified Taxes ” means (a) any Taxes, other than Excluded Taxes, and (b) Other Taxes.

“Intercreditor Agreement” means the Intercreditor Agreement, substantially in the form of Exhibit C, among the Borrower, the other Loan Parties, the Collateral Agent and the ABL Agent.

“ Information Memorandum ” means the Confidential Information Memorandum dated May 1, 2015, relating to the Borrower and the Transactions, and the Confidential Information Memorandum dated September 5, 2016, relating to the Borrower and the Westfalia Transactions.

“ Intellectual Property Claim ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Intercreditor Agreements ” means the ABL/Term Loan Intercreditor Agreement and the Term Intercreditor Agreement.

“ Interest Election Request ” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07.

“ Interest Payment Date ” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.

“ Interest Period ” means, with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter (or twelve months thereafter if, at the time of the relevant Borrowing, all Lenders participating therein agree to make an interest period of such duration available), as the Borrower may elect; provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such

 

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Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“ Interpolated Rate ” means, at any time, the rate per annum (rounded to the same number of decimal places as the Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate (for the longest period for which that Screen Rate is available for dollars) that is shorter than the Impacted Interest Period and (b) the Screen Rate (for the shortest period for which that Screen Rate is available for dollars) that exceeds the Impacted Interest Period, in each case, as of the Specified Time on the Quotation Day for such Interest Period. When determining the rate for a period which is less than the shortest period for which the Screen Rate is available, the Screen Rate for purposes of clause (a) above shall be deemed to be the overnight rate for dollars determined by the Administrative Agent from such service as the Administrative Agent may select.

“ IRS ” means the United States Internal Revenue Service.

“ JPMCB ” means JPMorgan Chase Bank, N.A.

“Junior Agent” means the Administrative Agent under the Junior Credit Agreement.

“Junior Credit Agreement” means the Second Lien Term Loan Credit Agreement, dated as of the Sixth Amendment Effective Date, by and among Horizon Global Corporation, the several banks and other financial institutions or entities from time to time party thereto and Cortland Capital Market Services LLC, as Administrative Agent.

“Junior Loan Documents” means the “Loan Documents” as defined in the Junior Credit Agreement.

“ Latest Maturing Term Loans ” has the meaning assigned to such term in the definition of “Latest Maturity Date”.

“ Latest Maturity Date ” means, as of any date of determination, the latest Maturity Date applicable to any Loans outstanding or Commitments in effect hereunder (such latest maturing Loans or Commitments, the “ Latest Maturing Term Loans ”).

“ Lender Affiliate ” means, (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course of its business and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund that invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ Lenders ” means each 2017 Replacement Term Loan Lender, each 2018 Incremental Term Loan Lender and any other Person that shall have become a party hereto after the Fourth Amendment Effective Date pursuant to an Assignment and Assumption or an Incremental Facility

 

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Agreement, as the case may be , other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

“ LIBO Rate ” means, with respect to any Eurocurrency Borrowing for any Interest Period, a rate per annum equal to the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for dollars for a period equal in length to such Interest Period as displayed on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on either of such Reuters pages, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case the “ Screen Rate ”) as of the Specified Time on the Quotation Day for such Interest Period; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement; provided further that if the Screen Rate shall not be available at such time for such Interest Period (an “ Impacted Interest Period ”) with respect to dollars, then the LIBO Rate shall be the Interpolated Rate at such time ( provided that if the Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement).

“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Liquidity” means, at any time, the sum of (i) U.S. Availability, Canadian Availability and UK Availability (each as defined in the ABL Credit Agreement or the equivalent terms in any replacement or refinancing thereof) plus (ii) unrestricted cash and Cash Equivalents of the Borrower and its Domestic Subsidiaries, any Subsidiary organized under the laws of Canada and Cequent UK Limited.

“Limited Conditionality Acquisition” has the meaning assigned to such term in Section 2.21(c).

“Limited Conditionality Acquisition Agreement” has the meaning assigned to such term in Section 2.21(c).

“ Loan Documents ” means this Agreement, any Incremental Facility Agreement, the Security Documents, the Intercreditor Agreement Agreements and the promissory notes, if any, executed and delivered pursuant to Section 2.09(e).

“ Loan Parties ” means the Borrower and the Subsidiary Loan Parties.

“ Loans ” means the loans made by the Lenders to the Borrower pursuant to this Agreement.

“ Long-Term Indebtedness ” means any Indebtedness that, in accordance with GAAP, constitutes (or, when incurred, constituted) a long-term liability, including the current portion of any Long-Term Indebtedness.

 

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“ Margin Stock ” shall have the meaning assigned to such term in Regulation U.

“ Material Adverse Effect ” means a material adverse effect on (a) the business, operations, properties, assets, financial condition, or material agreements of the Borrower and the Subsidiaries, taken as a whole, (b) the ability of any the Loan Party Parties in any material respect to perform any of its their obligations under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document.

“ Material Agreements ” means any agreements or instruments relating to Material Indebtedness.

“ Material Indebtedness ” means (a) obligations in respect of the ABL Credit Agreement and the Junior Credit Agreement and (b) any other Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and its Subsidiaries in an aggregate principal amount exceeding $ 25,000,000 5,000,000 . For purposes of determining Material Indebtedness, the “ principal amount ” of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. For the avoidance of doubt, the term “Material Indebtedness” shall not include any obligations under any Permitted Warrant Transaction.

“ Maturity Date ” means the Term Loan Maturity Date, the Incremental Term Maturity Date with respect to Incremental Term Loans of any Series or the scheduled maturity date in respect of any Extended Term Loans, as the context requires.

“ Maximum Alternative Incremental Debt Amount ” means an aggregate principal amount of Alternative Incremental Debt that would not, immediately after giving effect to the establishment thereof and any other Indebtedness incurred substantially simultaneously therewith (and any related repayment of Indebtedness), cause (a) with respect to any Pari Passu Alternative Incremental Debt, the First Lien Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Indebtedness (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), to exceed 3.25 to 1.00, (b) with respect to any Alternative Incremental Debt secured by Liens on the Collateral that are junior to the Liens on the Collateral securing the Obligations, the Secured Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Indebtedness (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), to exceed 3.50 to 1.00 and (c) with respect to any unsecured Alternative Incremental Debt, the Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Indebtedness (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), to exceed 4.00 to 1.00.

“ Maximum Incremental Amount ” means an amount represented by Incremental Term Commitments to be established pursuant to Section 2.21 that would not, immediately after giving effect to the establishment thereof (and assuming such Incremental Term Commitments are fully drawn), the establishment of any other Indebtedness incurred substantially simultaneously therewith and any related repayment of Indebtedness, cause the First Lien Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Indebtedness (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), to exceed 3.50 to 1.00.

“ Minimum Extension Condition ” has the meaning assigned to such term in Section 2.23(b).

 

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“ Minimum Tranche Amount ” has the meaning assigned to such term in Section 2.23(b).

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

“ Mortgage ” means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Obligations. Each Mortgage shall be in form and substance reasonably satisfactory to the Administrative Agent.

“ Mortgaged Property ” means each parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.

“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“ Net Leverage Ratio ” means, on any date, the ratio of (a) Total Indebtedness as of such date less the aggregate amount (not to exceed $65,000,000) of the sum of Unrestricted Domestic Cash plus Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

“ Net Proceeds ” means, with respect to any event (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any noncash proceeds, but only as and when received, (ii) in the case of a casualty, insurance proceeds in excess of $ 1,000,000 500,000 and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and the Subsidiaries to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by the Borrower and the Subsidiaries as a result of such event to repay Indebtedness (other than Loans , Pari Passu Alternative Incremental Debt or any Permitted Term Loan Refinancing Indebtedness o r Indebtedness unde r th e Junio r Loa n Documents ) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all Taxes paid (or reasonably estimated to be payable) by the Borrower and the Subsidiaries, and the amount of any reserves established by the Borrower and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the 24- month period immediately following such event and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Borrower) to the extent such liabilities are actually paid within such applicable time periods.

“ Net Working Capital ” means, at any date, (a) the consolidated current assets of the Borrower and its consolidated Subsidiaries as of such date (excluding cash and Permitted Investments) minus (b) the consolidated current liabilities of the Borrower and its consolidated Subsidiaries as of such date (excluding current liabilities in respect of Indebtedness). Net Working Capital at any date may be a positive or negative number. Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.

“ Non-Consenting Lender ” has the meaning assigned to such term in Section 10.02(c).

 

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“ Non-U.S. Lender ” means a Lender that is not a U.S. Person.

“ NYFRB ” means the Federal Reserve Bank of New York.

“ NYFRB Rate ” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Banking Day, for the immediately preceding Banking Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received to the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided , further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“ Obligations ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

“ OSHA ” means the Occupational Safety and Hazard Act of 1970.

“ Other Taxes ” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes imposed with respect to an assignment (other than an assignment under Section 2.19(b)).

“ Overnight Bank Funding Rate ” means, for any day, the rate comprised of both over-night federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

“ Pari Passu Alternative Incremental Debt ” has the meaning assigned to such term in the definition of “Alternative Incremental Debt”.

“ Pari Passu Permitted Term Loan Refinancing Indebtedness ” means Term Loan Refinancing Indebtedness that is secured by Liens on the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations.

“ Participant ” has the meaning assigned to such term in Section 10.04(e).

“ Participant Register ” has the meaning assigned to such term in Section 10.04(e).

“ PATRIOT Act ” has the meaning assigned to such term in Section 10.16.

“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Perfection Certificate ” means a certificate in the form of Exhibit F hereto or any other form approved by the Collateral Agent.

 

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“ Permitted Acquisition ” means any acquisition, whether by purchase, merger, consolidation or otherwise, by the Borrower or a Subsidiary of all or substantially all the assets of, or all of the Equity Interests in, a Person or a division, line of business or other business unit of a Person so long as (a) such acquisition shall not have been preceded by a tender offer that has not been approved or otherwise recommended by the board of directors of such Person, (b) such assets are to be used in, or such Person so acquired is engaged in, as the case may be, a business of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement or in a business reasonably related thereto and (c) immediately after giving effect thereto, (i) (other than with respect to Limited Conditionality Acquisitions) no Default has occurred and is continuing or would result therefrom, (ii) all transactions related thereto are consummated in all material respects in accordance with Applicable Laws, (iii) all of the Equity Interests (other than Assumed Preferred Stock) of each Subsidiary formed for the purpose of or resulting from such acquisition shall be owned directly by the Borrower or a Subsidiary and all actions required to be taken under Sections 5.12 and 5.13 have been taken, (iv) (other than with respect to Limited Conditionality Acquisitions) the Secured Net Leverage Ratio, on a pro forma basis after giving effect to such acquisition and recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available, as if such acquisition (and any related incurrence or repayment of Indebtedness) had occurred on the first day of the relevant period (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash) is no greater than 3.50 to 1.00, (v) any Indebtedness or any preferred stock that is incurred, acquired or assumed in connection with such acquisition shall be in compliance with Section 6.01 and (vi) the Borrower has delivered to the Administrative Agent an officers’ certificate to the effect set forth in clauses (a), (b) and (c)(i) through (v) above, together with all relevant financial information for the Person or assets to be acquired; provided further that no Limited Conditionality Acquisition shall become effective unless (i) no Default or Event of Default shall have occurred and be continuing as of the date of entry into the Limited Conditionality Acquisition Agreement, (ii) on the date of effectiveness of the Limited Conditionality Acquisition Agreement, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date and (iii) on the date of effectiveness of the Limited Conditionality Agreement and assuming any Indebtedness to be incurred or repaid in connection with such acquisition was incurred or repaid on such date, the Secured Net Leverage Ratio of the Borrower, on a pro forma basis after giving effect to such acquisition (and any related incurrence or repayment of Indebtedness, but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), is no greater than 3.50 to 1.00. Notwithstanding anything to the contrary herein, no acquisition or other transaction shall be deemed to be a Permitted Acquisition during the Senior Period.

 

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“ Permitted Bond Hedge Transaction ” means any call or capped call option (or substantively equivalent derivative transaction) relating to the Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) purchased by the Borrower in connection with the issuance of any Permitted Convertible Indebtedness and in each case existing as of the Sixth Amendment Effective Date ; provided, that the purchase price for such Permitted Bond Hedge Transaction, less the proceeds received by the Borrower from the sale of any related Permitted Warrant Transaction, does not exceed the net proceeds received by the Borrower from the sale of such Permitted Convertible Indebtedness issued in connection with such Permitted Bond Hedge Transaction.

“ Permitted Convertible Indebtedness ” means Indebtedness of the Borrower under the Convertible Notes outstanding on the Closing Date.

“ Permitted Encumbrances ” means:

(a)        Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05;

(b)        carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.05;

(c)        pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)        deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)        judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f)        easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

(g)        ground leases in respect of real property on which facilities owned or leased by the Borrower or any of the Subsidiaries are located, other than any Mortgaged Property;

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

(i)        leases or subleases granted to other Persons and not interfering in any material respect with the business of the Borrower and the Subsidiaries, taken as a whole;

 

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(j)        banker’s liens, rights of set-off or similar rights, in each case arising by operation of law; and

(k)        Liens in favor of a landlord on leasehold improvements in leased premises;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.

“ Permitted Investments ” means:

(a)        direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)        investments in commercial paper maturing within one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)        investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

(d)        fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

(e)        securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(f)        securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(g)        investments of the quality as those identified on Schedule 6.04 as “ Qualified Foreign Investments ” made in the ordinary course of business;

(h)        cash; and

(i)        investments in funds that invest solely in one or more types of securities described in clauses (a), (e) and (f) above.

“ Permitted Joint Venture and Foreign Subsidiary Investments ” means investments by the Borrower or any Subsidiary in the Equity Interests of (a) any Person that is not a Subsidiary or (b) any Person that is a Foreign Subsidiary, in an aggregate amount not to exceed $75,000,000 (provided that such amount shall be increased to $100,000,000 so long as the Net Leverage Ratio (calculated on a pro

 

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forma basis after giving effect to such investment and any related incurrence or repayment of Indebtedness) is less than 3.25 to 1.00).

“ Permitted Term Loan Refinancing Indebtedness ” means any Indebtedness incurred to refinance all or any portion of the outstanding Term Loans; provided that, (i of the Borrower or any of its Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Borrower or any of its Subsidiaries; provided that (a) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest thereon and the amount of any reasonable expenses incurred in connection therewith), (b) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, and an average life to maturity greater than the average life to maturity of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, (c) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is contractually subordinated in right of payment to the Term Loans, such Permitted Refinancing Indebtedness is contractually subordinated in right of payment to the Term Loans on terms at least as favorable to the Lenders as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, (d) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is pari passu in right of payment with the Term Loans or any guarantee therefor, such Permitted Refinancing Indebtedness is pari passu in right of payment with, or subordinated in right of payment to, the Term Loans or such guarantee, and, in any event, such Permitted Refinancing Indebtedness shall not have a higher priority with respect to payments or collateral than the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (e) the terms and conditions of such Permitted Refinancing Indebtedness shall be no more materially restrictive, when taken as a whole, than the terms and conditions of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded (and, to the extent the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded permits the payment of any interest thereon “in kind”, the Refinancing Indebtedness thereof shall likewise permit the payment of interest “in kind”), (f) such Permitted Refinancing Indebtedness is not incurred or guaranteed by any Person who is not an obligor under the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded and is not secured by any property that does not secure the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded and, if secured, shall not be secured at a higher priority than the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded, (g) if the obligor of the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is a Foreign Subsidiary, the proceeds of such Permitted Refinancing Indebtedness must be used for ordinary course working capital purposes of such Foreign Subsidiary and (h ) such refinancing Indebtedness, if secured, is secured only by Liens on the Collateral on a pari passu or junior basis with the Liens on the Collateral securing the Obligations ( provided that the Permitted Term Loan Refinancing Indebtedness shall not consist of bank loans that are secured by the Collateral on a pari passu basis with the Liens on the Collateral securing the Obligations) and is not secured by any property or assets of the Borrower or any of the Subsidiaries other than the Collateral, (ii) no Subsidiary that is not originally obligated with respect to repayment of the Indebtedness being refinanced is obligated with respect to the refinancing Indebtedness, (iii) the weighted average life to maturity of the refinancing Indebtedness shall be no shorter than the remaining weighted average life to maturity of the Terms Loans being refinanced, (iv) the maturity date in respect of the refinancing Indebtedness shall not be earlier than the maturity date in respect of the Indebtedness being refinanced, (v) the

 

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principal amount of such refinancing Indebtedness does not exceed the principal amount of the Indebtedness so refinanced except by an amount (such amount, the “ Additional Permitted Amount ”) equal to unpaid accrued interest and premium thereon at such time plus reasonable fees and expenses incurred in connection with such refinancing, (vi) the Indebtedness being so refinanced is paid down on a dollar-for-dollar basis by such refinancing Indebtedness (other than by the Additional Permitted Amount), (vii) the terms of any such refinancing Indebtedness (1) (excluding pricing, fees and rate floors and optional prepayment or redemption terms and subject to clause (2) below) reflect, in the Borrower’s reasonable judgment, then-existing market terms and conditions and (2) (excluding pricing, fees and rate floors) are no more favorable to the lenders providing such refinancing Indebtedness than those applicable to the Indebtedness being refinanced (in each case, including with respect to mandatory and optional prepayments); provided that the foregoing shall not apply to covenants or other provisions applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such refinancing Indebtedness; provided further that any such refinancing Indebtedness may contain, without any Lender’s consent, additional covenants or events of default not otherwise applicable to the Indebtedness being refinanced or covenants more restrictive than the covenants applicable to the Indebtedness being refinanced, in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such refinancing Indebtedness, so long as this Agreement is amended to provide all of the Lenders with the benefits of such additional covenants, events of default or more restrictive covenants and (viii) such refinancing Indebtedness, if secured, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to the Administrative Agent.

“ Permitted Unsecured Debt ” means any unsecured notes or bonds or other unsecured debt securities; provided that (a) such Indebtedness shall not mature prior to the date that is 91 days after the Latest Maturity Date in effect at the time of the issuance of such Indebtedness and shall not have any principal payments due prior to such date, except upon the occurrence of a change of control or similar event (including asset sales), in each case so long as the provisions relating to change of control or similar events (including asset sales) included in the governing instrument of such Indebtedness provide that the provisions of this Agreement must be satisfied prior to the satisfaction of such provisions of such Indebtedness, (b) such Indebtedness is not Guaranteed by any Subsidiary of the Borrower other than the Loan Parties (which Guarantees shall be unsecured and shall be permitted only to the extent permitted by Section 6.01(a)(vi)), (c) such Indebtedness shall not have any financial maintenance covenants, (d) such Indebtedness shall not have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the definition of Change in Control set forth herein and (e) such Indebtedness, if subordinated in right of payment to the Obligations, shall be subject to subordination and intercreditor provisions that are, in the Administrative Agent’s reasonable judgment, customary under then-existing market convention.

“ Permitted Warrant Transaction ” means any call option, warrant or right to purchase (or substantively equivalent derivative transaction) relating to the Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) and/or cash (in an amount determined by reference to the price of such common stock) sold by the Borrower substantially concurrently with any purchase by the Borrower of a Permitted Bond Hedge Transaction , in each case existing as of the Sixth Amendment Effective Date .

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

 

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“PIK Amount” has the meaning assigned to such term in Section 2.13(d).

“PIK Portion” has the meaning assigned to such term in the definition of “Applicable Rate.”

“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “ employer ” as defined in Section 3(5) of ERISA.

“ Preferred Dividends ” means any cash dividends of the Borrower permitted hereunder to be paid with respect to preferred stock of the Borrower.

“ Prepayment Event ” means:

(a)        any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of any property or asset of the Borrower or any Subsidiary, other than (i) prior to the Discharge of ABL Obligations, ABL Priority Collateral, and (ii)  dispositions described in clauses (a), (b), ( c), ( d) , (f), and (g) and (j) (but only to the extent the sales, transfers or other dispositions under clause (j) do not exceed $15,000,000) of Section 6.05 and Section 6.06(a); provided that an Acquisition Lease Financing shall not constitute a Prepayment Event ; or

(b)        any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary (other than, prior to the Discharge of ABL Obligations, ABL Priority Collateral ) having a book value or fair market value in excess of $500,000, but only to the extent that the Net Proceeds therefrom have not been applied to repair, restore or replace such property or asset within 365 days after such event;

(c)         to the extent, prior to the Discharge of ABL Obligations, not constituting ABL Priority Collateral , the receipt of any cash by the Borrower or any Subsidiary not in the ordinary course of business in an amount in excess of $500,000 from (a) tax refunds, (b) pension plan reversions, (c) proceeds of insurance (including key man life insurance, but excluding Net Proceeds described in clause (b) above and Net Proceeds from product liability insurance), (d) judgments, proceeds of settlements or other consideration of any kind in connection with any cause of action, (e) indemnity payments and (f) any purchase price adjustment received in connection with any purchase agreement to the extent not needed to reimburse the Borrower or applicable Subsidiary for any reasonable and customary out-of-pockets costs and expenses previously incurred by the Borrower or applicable Subsidiary with respect to which such purchase price adjustment was received;

(d)        the receipt of cash from any issuance of Equity Interests of the Borrower or any contribution of equity capital to the Borrower; or

(e)        the incurrence by the Borrower or any Subsidiary of any Indebtedness, other than Indebtedness permitted by Section 6.01(a) (except Indebtedness permitted by Section 6.01(a)(xiii)) .

 

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“ Prime Rate ” means the rate of interest per annum publicly announced from time to time by JPMCB as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

“ Public-Sider ” means a Lender whose representatives may trade in securities of the Borrower or any of its Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement or who otherwise has identified itself to the Administrative Agent as a “Public-Sider” .

“ Qualified Borrower Preferred Stock ” means any preferred capital stock or preferred equity interest of the Borrower (a)(i) that does not provide for any cash dividend payments or other cash distributions in respect thereof prior to the Latest Maturity Date in effect as of the date of issuance of such Indebtedness and (ii) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event does not (A)(x) mature or become mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (y) become convertible or exchangeable at the option of the holder thereof for Indebtedness or preferred stock that is not Qualified Borrower Preferred Stock or (z) become redeemable at the option of the holder thereof (other than as a result of a change of control event), in whole or in part, in each case on or prior to the date that is 365 days after the Latest Maturity Date in effect at the time of the issuance thereof and (B) provide holders thereunder with any rights upon the occurrence of a “ change of control ” event prior to the repayment of the Obligations and termination of the Commitments under the Loan Documents, (b) with respect to which the Borrower has delivered a notice to the Administrative Agent that it has issued preferred stock or preferred equity interests in lieu of incurring Indebtedness permitted by clause (xii) under Section 6.01(a), with such notice specifying to which of such Indebtedness such preferred stock or preferred equity interest applies; provided that (i) the aggregate liquidation value of all such preferred stock or preferred equity interest issued pursuant to this clause (b) shall not exceed at any time the dollar limitation related to the applicable Indebtedness hereunder, less the aggregate principal amount of such Indebtedness then outstanding and (ii) the terms of such preferred stock or preferred equity interests (x) shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of the Borrower and (y) shall otherwise be no less favorable to the Lenders, in the aggregate, than the terms of the applicable Indebtedness or (c) having an aggregate initial liquidation value not to exceed $10,000,000 ; provided that the terms of such preferred stock or preferred equity interests shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of the Borrower. Qualified Borrower Preferred Stock shall include the preferred equity interests of the Borrower issued to the lenders under the Junior Credit Agreement pursuant to the Sixth Amendment Transactions .

“ Quotation Day ” means, with respect to any Eurocurrency Loan for any Interest Period, two Business Days prior to the commencement of such Interest Period.

“ Real Estate ” has the meaning assigned to such term in the ABL Credit Agreement as of the date hereof.

“ Register ” has the meaning assigned to such term in Section 10.04(c).

“Registered Equivalent Notes” means, with respect to any bonds, notes, debentures or similar instruments originally issued in a Rule 144A or other private placement transaction under the Securities Act, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the Commission.

 

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“ Regulation U ” shall mean Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Regulation X ” shall mean Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

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

“ Release ” means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“ Replacement Term Loans ” has the meaning assigned to such term in Section 10.02(d).

“ Repricing Transaction ” means (a) any prepayment of Term B Loans with the proceeds of a substantially concurrent incurrence of term loan Indebtedness by the Borrower or any Subsidiary in respect of which the all-in yield is, on the date of such prepayment, lower than the all-in yield on such Term B Loans (with the all-in yield calculated by the Administrative Agent in accordance with standard market practice, taking into account, in each case, any interest rate floors, the Applicable Rate hereunder and the interest rate spreads under such Indebtedness, and any original issue discount and upfront fees applicable to or payable in respect of such Term B Loans and such Indebtedness with the original issue discount and upfront fees being equated to interest rate assuming a four-year life to maturity of such Indebtedness (but excluding arrangement, structuring, underwriting, commitment, amendment or other fees regardless of whether paid in whole or in part to any or all lenders of such Indebtedness and any other fees that are not paid generally to all lenders of such Indebtedness)) and (b) any amendment, amendment and restatement or other modification to this Agreement that reduces the all-in yield (calculated as set forth in clause (a) above) of the Term B Loans.

“ Required Lenders ” means, at any time, Lenders having outstanding Term Loans representing more than 50% of the outstanding Term Loans at such time.

“ Restricted Indebtedness ” means Indebtedness of the Borrower or any Subsidiary, the payment, prepayment, redemption, repurchase or defeasance of which is restricted under Section 6.08(b).

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any partial or full cash settlement of Convertible Notes, sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or termination of any Equity Interests in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary.

“ Retained Percentage ” means, with respect to any Excess Cash Flow Period, (a) 100% minus (b) the ECF Percentage with respect to such Excess Cash Flow Period.

“Rolling 13-Week Cash Flow Forecast” has the meaning assigned to such term in Section 5.01(j).

 

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“ S&P ” means Standard & Poor’s Financial Services LLC, or any successor thereto.

“ Sanctioned Country ” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).

“ Sanctioned Person ” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“ Sanctions ” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

“ Screen Rate ” has the meaning assigned to such term in the definition of “LIBO Rate”.

“ Secured Indebtedness ” means Total Indebtedness that is secured by a Lien on any asset of the Borrower or any of its Subsidiaries.

“ Secured Net Leverage Ratio ” means, on any date, the ratio of (a) Secured Indebtedness as of such date less the aggregate amount (not to exceed $65,000,000) of the sum of Unrestricted Domestic Cash plus Unrestricted Foreign Cash, in each case as of such date, to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

“ Secured Parties ” has the meaning assigned to such term in the Guarantee and Collateral Agreement.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Security Documents ” means the Guarantee and Collateral Agreement, the Intercreditor Agreement Agreements , the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the Obligations.

“ Senior Agent ” means the Administrative Agent under the Senior Credit Agreement.

“ Senior Credit Agreement ” means the Credit Agreement, dated as of the Fifth Amendment Effective Date, by and among Horizon Global Corporation, the several banks and other financial institutions or entities from time to time party thereto and Cortland Capital Market Services LLC, as Administrative Agent.

“ Senior Loan Documents ” means the “Loan Documents” as defined in the Senior Credit Agreement.

 

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“ Senior Period ” means the period beginning on the Fifth Amendment Date and ending at the time of the Discharge of Senior Obligations.

“ Series ” has the meaning assigned to such term in Section 2.21(b).

“ Significant Investment ” means any acquisition by the Borrower or a Subsidiary of more than 50% (but less than 100%) of the Equity Interests in a Person (such Person, the “ Subject Person ”), so long as such acquisition is permitted by Section 6.04.

“Sixth Amendment” means that certain Sixth Amendment to this Credit Agreement, dated as of March 15, 2019, among the Borrower, the other Loan Parties, the Administrative Agent and the Lenders party thereto.

“Sixth Amendment Effective Date” means the “Effective Date” as set forth in the Sixth Amendment.

“Sixth Amendment Transactions” means (a) the execution, delivery and performance of (1) the Senior Credit Agreement and the transactions contemplated thereby, the (2) the Fifth Amendment and the transactions contemplated thereby and (3) the Sixth Amendment to the ABL Loan Documents, (b) the refinancing of the Indebtedness under the Senior Credit Agreement on the Sixth Amendment Effective Date, (c) the execution, delivery and performance by each Loan Party of the Seventh Amendment to the ABL Loan Documents, (d) the execution, delivery and performance by each Loan Party of the Sixth Amendment and the transactions contemplated thereby, (e) the execution, delivery and performance by each Loan Party of the Junior Loan Documents and the transactions contemplated thereby, including the issuance of warrants and preferred equity interests of the Borrower pursuant thereto, and (f) the payment of the fees and expenses payable in connection with the foregoing.

“ Specified Time ” means 11:00 a.m., London time.

“ Specified Vendor Payables Financing ” means the sale by one or more vendors of the Borrower and certain Subsidiaries of accounts receivable (which such accounts receivable are accounts payable of the Borrower and such Subsidiaries) to one or more financial institutions pursuant to third- party financing agreements, to which the Borrower and such Subsidiaries are party, in transactions constituting “true sales”; provided that the aggregate amount of all such vendor payables financings shall not exceed $30,000,000 at any time outstanding.

“ Specified Vendor Payables Financing Documents ” means all documents and agreements relating to the Specified Vendor Payables Financing.

“ Specified Vendor Receivables Financing ” means the sale by the Borrower and certain Subsidiaries of accounts receivable to one or more financial institutions pursuant to third-party financing agreements in transactions constituting “true sales” ; provided that the aggregate amount of all such receivables financings shall not exceed $50,000,000 at any time outstanding which are permitted pursuant to Section 6.01(a)(iv) .

“ Specified Vendor Receivables Financing Documents ” means all documents and agreements relating to the Specified Vendor Receivables Financing.

 

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“ Spin-Off ” means a “spin-off” transaction with respect to the Borrower such that all of the Equity Interests in the Borrower are “spun-off” from TriMas ratably to the holders of all the Equity Interests in TriMas and the Borrower ceases to be a Subsidiary of TriMas and becomes a public company.

“ Spin-Off Agreement ” means a Separation and Distribution Agreement, dated as of or prior to the Closing Date, by and between the Borrower and TriMas.

“ Spin-Off Documentation ” means, collectively, the Spin-Off Agreement and all schedules, exhibits and annexes thereto and all side letters and agreements affecting the terms thereof or entered into in connection therewith, including, without limitation, (i) an employee matters agreement by and between the Borrower and TriMas, (ii) a tax sharing agreement by and between the Borrower and TriMas and (iii) a transition services agreement by and between the Borrower and TriMas.

“ Statutory Reserve Rate ” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “ Eurocurrency Liabilities ” in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurocurrency Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under any Applicable Law. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“ Subject Person ” has the meaning assigned to such term in the definition of “Significant Investment.”

“ Subordinated Debt ” means any subordinated Indebtedness of the Borrower or any Subsidiary.

“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

“ Subsidiary ” means any subsidiary of the Borrower.

“ Subsidiary Loan Party ” means any Subsidiary that is not (i) a Foreign Subsidiary (other than any Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) , Mexico, Canada or the Netherlands), (ii) a CFC (other than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) , Mexico, Canada or the Netherlands), or (iii) a U.S. Holdco or (iv) an Immaterial Subsidiary ; provided , that the Required Lenders, in their sole reasonable good faith discretion, may at any time request require any Foreign

 

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Subsidiary, CFC or U.S. Holdco to become a Subsidiary Loan Party if such Foreign Subsidiary, CFC or U.S. Holdco has become a “Loan Party” under the Senior Loan Documents .

“ Syndication Agents ” means BMO Capital Markets Corp. and Wells Fargo Securities, LLC.

“ Synthetic Purchase Agreement ” means any swap, derivative or other agreement or combination of agreements pursuant to which the Borrower or a Subsidiary is or may become obligated to make (i) any payment (other than in the form of Equity Interests in the Borrower) in connection with a purchase by a third party from a Person other than the Borrower or a Subsidiary of any Equity Interest or Restricted Indebtedness or (ii) any payment (other than on account of a permitted purchase by it of any Equity Interest or any Restricted Indebtedness) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Indebtedness; provided that phantom stock or similar plans providing for payments only to current or former directors, officers, consultants, advisors or employees of the Borrower or the Subsidiaries (or to their heirs or estates) shall not be deemed to be Synthetic Purchase Agreements. For the avoidance of doubt, the term “Synthetic Purchase Agreement” shall not include any agreement, indenture or other document governing any Permitted Bond Hedge Transaction, Permitted Convertible Indebtedness or Permitted Warrant Transaction.

“ Taxes ” means any and all present or future taxes (of any nature whatsoever), levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Term Collateral Proceeds Account ” means a deposit account identified to the ABL Agent in writing from time to time and in the name of the Company and for which JPMCB is the depositary bank which contains (or was established to contain) only those proceeds with respect to Term Priority Collateral.

“ Term Intercreditor Agreement ” means that Term Intercreditor Agreement, dated as of the Fifth Sixth Amendment Effective Date, among the Borrower, the other Loan Parties, the Collateral Agent and the Senior Junior Agent.

“ Term Lender ” means a Lender with outstanding Term Loans or a Commitment.

“ Term Loan ” means a 2018 Term Loan or an Incremental Term Loan of any Series .

“ Term Loan Maturity Date ” means the date that is the sixth anniversary of the Closing Date (or if such date is not a Business Day, the immediately preceding Business Day).

“ Term Priority Collateral ” has the meaning assigned to such term in the ABL/Term Loan Intercreditor Agreement.

“ Total Indebtedness ” means, as of any date, the aggregate principal amount of Indebtedness for borrowed money (including, without limitation, Capital Lease Obligations) of the Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP.

“Total Leverage Ratio” means, on any date, the ratio of (a) Total Indebtedness as of such date, to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters of the Borrower ended on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the

 

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fiscal quarter of the Borrower most recently ended prior to such date for which financial statements are available).

“ Transactions ” means, collectively, (a) the consummation of the Spin-Off in accordance with the terms of the Spin-Off Agreement, (b) the payment of a dividend on the Closing Date from the Borrower to TriMas in accordance with the Spin-Off Agreement (the “ Closing Date Dividend ”), (c) the execution, delivery and performance by each Loan Party of the ABL Loan Documents to which it is to be a party, the borrowing (if any) of the ABL Loans on the Closing Date and issuance (if any) of letters of credit thereunder on the Closing Date and the use of the proceeds of the foregoing, (d) the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the borrowing of the Loans on the Closing Date and the use of proceeds thereof, and (e) the payment of the fees and expenses payable in connection with the foregoing.

“ TriMas ” means TriMas Company LLC, a Delaware limited liability company.

“ Type ,” when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.

“ Unrestricted Domestic Cash ” means, as of any date, domestic unrestricted cash and domestic unrestricted Permitted Investments of the Borrower and its Domestic Subsidiaries as of such date.

“ Unrestricted Foreign Cash ” means, as of any date, unrestricted cash and unrestricted Permitted Investments of the Foreign Subsidiaries as of such date.

“ U.S. Holdco ” means any existing or future Domestic Subsidiary the Equity Interests of which are held solely by Foreign Subsidiaries (other than Foreign Subsidiaries organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada or the Netherlands) ; provided that such existing or newly formed Subsidiary shall not engage in any business or own any assets other than the ownership of Equity Interests in Foreign Subsidiaries and intercompany obligations that are otherwise permitted hereunder.

“ U.S. Person ” means a “ United States person ” within the meaning of Section 7701(a)(30) of the Code.

“ U.S. Tax Certificate ” has the meaning assigned to such term in Section 2.17(f)(i)(D)(2).

“ Westfalia Acquisition ” has the meaning set forth in the First Amendment.

“ Westfalia Acquisition Closing Date ” has the meaning set forth in the First Amendment.

“ Westfalia Purchase Agreement ” has the meaning set forth in the First Amendment.

“ Westfalia Transactions ” has the meaning set forth in the First Amendment.

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

 

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

SECTION 1.02       Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Term B Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type (e.g., a “Eurocurrency Term B Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Term B Loan Borrowing”) or by Type (e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency Term B Loan Borrowing”).

SECTION 1.03       Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) 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, (d) 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; and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

SECTION 1.04       Accounting Terms; GAAP .     Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made, without giving effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any Indebtedness or other liabilities of the Borrower or any Subsidiary at “fair value,” as defined therein and (ii) any treatment of Indebtedness in respect of convertible debt instruments or any other Indebtedness under Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

 

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ARTICLE II

The Credits

SECTION 2.01       Commitments .Subject to the terms and conditions set forth herein, each 2017 Replacement Term Lender agrees to make a 2017 Replacement Term Loan to the Borrower on the 2017 Replacement Term Loan Facility Effective Date in a principal amount not exceeding its 2017 Replacement Term Loan Commitment.

(b)        Amounts repaid or prepaid in respect of Term Loans may not be reborrowed.

SECTION 2.02       Loans and Borrowings .Each Loan shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Commitments of the applicable Class. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b)        [Reserved]

(c)        Subject to Section 2.14, each Loan shall be comprised entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith. Each Lender at its option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.

(d)        At the commencement of each Interest Period for any Eurocurrency Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of 12 Eurocurrency Borrowings outstanding.

(e)        Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date applicable thereto.

SECTION 2.03       Requests for Borrowings . To request a Borrowing of Term Loans, the Borrower shall notify the Administrative Agent of such request by telephone (i) in the case of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of the proposed Borrowing or (ii) in the case of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:whether the requested Borrowing is to be a Borrowing of Term B Loans or an Incremental Term Loan Borrowing of a particular Series ;

(ii)    the aggregate amount of such Borrowing;

 

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

(iv) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;

(v)  in the case of a Eurocurrency Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “ Interest Period ”; and

(vi)  the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04      [ Reserved ]. [Reserved] .Funding of Borrowings . SECTION 2.06 Funding of Borrowings.

(a)          Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon, New York City time to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with the Administrative Agent in New York City, and designated by the Borrower in the applicable Borrowing Request.

(b)         Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section 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 (i) in the case of such Lender, the greater of (x) the Federal Funds Effective Rate and (y) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, the applicable rate shall be determined as specified in clause (y) above, or (ii) in the case of the Borrower, the interest rate applicable to ABR Term B Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

 

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SECTION 2.07       Interest Elections .Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Borrowing, shall have an initial Interest Period as specified in such Borrowing Request or as otherwise provided in Section 2.03. Thereafter, the Borrower may elect to (i) convert any ABR Borrowing or any Eurocurrency Borrowing to a Borrowing of a different Type, (ii) continue any Borrowing and (iii) in the case of a Eurocurrency Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.

(b)        To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election, by telephone, by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of Term B Loans of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request, and all such written Interest Election Requests shall be in a form approved by the Administrative Agent and signed by the Borrower.

(c)        Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and

(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “ Interest Period .”

If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(d)        Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)        If an Interest Election Request with respect to a Eurocurrency Borrowing is not timely delivered prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be

 

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converted to or continued as a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.08       Termination and Reduction of Commitments .Unless previously terminated, the 2017 Replacement Term Loan Commitments shall terminate and be automatically and permanently reduced to $0 upon the earlier of (i) funding of the 2017 Replacement Term Loans on the 2017 Replacement Term Loan Facility Effective Date and (ii) 5:00 p.m., New York City time, on April 19, 2017. The proceeds of the 2017 Replacement Term Loans will be applied on the 2017 Replacement Term Loan Facility Effective Date to the principal amount of the Existing Term Loans (as defined in the 2017 Replacement Term Loan Amendment) outstanding at such time in order to prepay such principal amount in full. Upon the funding of the 2017 Replacement Term Loans on the 2017 Replacement Term Loan Facility Effective Date, the 2017 Replacement Term Loans shall constitute, on the terms provided in the 2017 Replacement Term Loan Amendment, Term Loans hereunder.

(b)        The Borrower may at any time terminate, or from time to time reduce, the Commitments of any Class; provided that each reduction of the Commitments of any Class shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000.

(c)        The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments of any Class under Section 2.08(b) at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable. Any reduction of the Commitments shall be permanent.

SECTION 2.09       Repayment of Loans; Evidence of Debt .The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Term Loan of such Lender as provided in Section 2.10.

(b)        Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(c)        The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d)        The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(e)        Any Lender may request that Loans of any Class made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans

 

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evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.04) be represented by one or more promissory notes in such form payable to the order of the payee and its registered assigns.

SECTION 2.10       Amortization of Term Loans . Subject to adjustment pursuant to paragraph (d) of this Section, the Borrower shall repay the 2018 Term Loans on the last day of each March, June, September and December, beginning on September 30, 2018, in an aggregate principal amount for each such date equal to 1.33% of the aggregate principal amount of the 2018 Term Loans outstanding on the Fourth Amendment Effective Date.

(b)         The In addition to the scheduled repayments specified in Section 2.10(a) above, the Borrower shall repay Incremental Term Loans of any Series in such amounts and on such date or dates as shall be specified therefor in the Incremental Facility Agreement establishing the Incremental Term Commitments of such Series (as such amounts may be adjusted pursuant to paragraph (d) of this Section or pursuant to such Incremental Facility Agreement). the Loans prior to March 31, 2020 in an aggregate principal amount of not less than $100,000,000 from the Net Proceeds of sales or dispositions permitted under Section 6.05(j), Qualified Borrower Preferred Stock or issuance of Indebtedness permitted under Section 6.01(a)(xxv) .

(c)        To the extent not previously paid, (i) all Term B Loans shall be due and payable on the Term Loan Maturity Date and (ii) all Incremental Term Loans of any Series shall be due and payable on the Incremental Term Maturity Date applicable thereto .

(d)        Any mandatory prepayment of a Borrowing of Term Loans of any Class shall be applied to reduce the subsequent scheduled repayments of the Borrowings of such Class to be made pursuant to this Section to the next eight scheduled repayments in direct order and thereafter ratably. Any optional prepayment of a Borrowing of Term Loans of any Class shall be applied to the scheduled repayments of the Borrowings of such Class as directed by the Borrower.

(e)        Prior to any repayment of any Term Loan Borrowings of any Class hereunder, the Borrower shall select the Borrowing or Borrowings of the applicable Class to be repaid and shall notify the Administrative Agent by telephone (confirmed by telecopy) of such selection not later than 11:00 a.m., New York City time, three Business Days before the scheduled date of such repayment. Each repayment of a Borrowing shall be applied ratably to the Loans included in the repaid Borrowing. Repayments of Term Loan Borrowings shall be accompanied by accrued interest on the amount repaid.

SECTION 2.11       Prepayment of Loans . The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to the requirements of this Section.

(b)        All (i) repayments pursuant to Section 2.10(b), all optional prepayments of 2018 Term Loans pursuant to Section 2.11(a) or and prepayments pursuant to Section 2.11(c) as a result of an event described in clause (c) of the definition of the term a Prepayment Event described in clauses (a), (d) o r (e )   thereof , in each case (i)  effected on or prior to the date that is the two-year anniversary of the Fourth Amendment Effective Date with the proceeds of a Repricing Transaction and (ii) amendments, amendments and restatements or other modifications of this Agreement on or prior to the date that is the two-year anniversary of the Fourth Amendment Effective Date constituting Repricing Transactions shall, in each case, befor e September 30, 2019 shall be accompanied by a fee payable to the Lenders in an amount equal to 1.00 3.00 % of the aggregate principal amount of 2018 Term Loans so prepaid, in the case of a transaction described in clause (i) of this paragraph, or 1.00 repaid or prepaid and (ii) effected after

 

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September 30, 2019 shall be accompanied by a fee payable to the Lenders in an amount equal to 5.00 % of the aggregate principal amount of 2018 Term Loans affected by such amendment, amendment and restatement or other modification (including any such Loans assigned in connection with the replacement of a Lender not consenting thereto), in the case of a transaction described in clause (ii) of this paragraph. Such fee so repaid or prepaid. The fees described in this Section 2.11(b) shall also be payable if all of the Loans become due and payable in the event of any acceleration of the Loans (in each case as if all of the Loans then outstanding had been prepaid at such time), including, without limitation, as a result of any event with respect to the Borrower described in clause (h) or clause (i) of Article VII, and whether automatic, as a matter of applicable law or by declaration of the Administrative Agent pursuant to Article VII.    Any fee payable pursuant to this Section 2.11(b) shall be paid by the Borrower to the Administrative Agent, for the account of the Lenders in respect of the 2018 Term Loans, on the date of such prepayment or acceleration .

(c)        In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event, the after the Sixth Amendment Effective Date, the Borrower shall, within three Business Days after such Net Proceeds are received (and, in the case of any event described in clause (e) of the definition of the term Prepayment Event, on the date on which such Net Proceeds are received) prepay Borrowings of Loans in an aggregate amount equal to such Net Proceeds; provided that (x) in the case of any Prepayment Event (other than any event described in clause ( a d ) of the definition of the term Prepayment Event, if the Borrower shall deliver, within such three Business Days, to the Administrative Agent a certificate of a Financial Officer to the effect that the Borrower and the Subsidiaries, intend to apply the Net Proceeds from such event (or a portion thereof specified in such certificate), within 180 days (or, during a Senior Period, 45 days) after receipt of such Net Proceeds, to acquire, during the Senior Period, substantially similar replacement assets and during any other period, real property, equipment or other tangible assets to be used in the business of the Borrower and the Subsidiaries, and certifying that no Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds in respect of such event (or the portion of ) , 100% of such Net Proceeds (provided that in the case of any Prepayment Event described in clause (a) of the definition of Prepayment Event, 100% of such Net Proceeds specified in such certificate, if applicable) except up to $100,000,000, and then 100% of such Net Proceeds to the extent of any such Net Proceeds therefrom that have not been so applied by the end of such 180-day (or, during a Senior Period, 45-day) period, at which time a prepayment shall be required in an amount equal to from all such events after the Sixth Amendment Effective Date exceed $115,000,000) and (y) in the case of any event described in clause (d) of the definition of the term Prepayment Event, the Equity Contribution Percentage of such Net Proceeds that have not been so applied. . Any required prepayments pursuant to this Section 2.11(c) as a result of a Prepayment Event described in clauses (a) thereof shall be without duplication of any repayment of the Loans made pursuant to Section 2.10(b) from the Net Proceeds of sales or dispositions permitted under Section 6.05(j).

(d)        Following the end of each fiscal year of the Borrower, commencing with the fiscal year ending December 31, 2017 (but excluding the fiscal year ending December 31, 2018) , the Borrower shall prepay Borrowings of Term B Loans in an aggregate amount equal to the excess of (i) the ECF Percentage of Excess Cash Flow for such fiscal year over (ii) the sum of (x)  aggregate amount of optional prepayments of Term Loans and purchases of Term Loans pursuant to Section 10.04(h) (other than optional prepayments or purchases made with the proceeds of Long-Term Indebtedness) made by the Borrower during such fiscal year ( provided that the aggregate amount of any such prepayment or purchase shall be the amount of the Borrower’s cash payment in respect of such purchase) and (y) the aggregate amount of optional prepayments of Pari Passu Alternative Incremental Debt in the form of loans and Pari Passu Permitted Term Loan Refinancing Indebtedness in the form of loans made by the Borrower during such fiscal year . Each prepayment pursuant to this paragraph Sectio n 2.11(d) shall be

 

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made within 95 days after the end of such fiscal year . ; provided that, in the case of the fiscal year ending December 31, 2019, if on such date for prepayment, after giving effect to such prepayment, the “Required Conditions” (as defined in the ABL Credit Agreement as in effect as of the Sixth Amendment Effective Date) would not be satisfied, then the prepayment for such fiscal year shall be made on the earlier to occur of (i) the first date that the Required Conditions can be satisfied after giving effect to such prepayment and (ii) July 1, 2020. Notwithstanding the foregoing requirements of this Section 2.11(d), (i) with respect to the fiscal year ending December 31, 2019, the Borrower shall not be required to make a prepayment of the Loans pursuant to this Section 2.11(d) for such fiscal year to the extent that after giving effect to such prepayment, Liquidity of the Borrower and its Subsidiaries would be less than $30,000,000, and (ii) with respect to the fiscal year ending fiscal year ending December 31, 2020, the Borrower shall not be required to make a prepayment of the Loans pursuant to this Section 2.11(d) for such fiscal year to the extent that after giving effect to such prepayment, Liquidity of the Borrower and its Subsidiaries would be less than $15,000,000 .

(e)        Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (f) of this Section.

(f)        The Borrower shall notify the Administrative Agent by (x) in the case of prepayment of a Eurocurrency Borrowing, not later than 12:00 noon, New York City time, three Business Days before the date of prepayment and (y) in the case of prepayment of an ABR Borrowing, not later than 12:00 noon, New York City time, one Business Day before the date of prepayment. Each such notice shall be irrevocable and shall specify (i) whether the prepayment is of Eurocurrency Loans or ABR Loans, (ii) the prepayment date, (iii) the principal amount of each Borrowing or portion thereof to be prepaid and (iv) in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

(g)        In the event of any mandatory prepayment of Term Loans made at a time when Term Loans of more than one Class remain outstanding, the Borrower shall select Term Loans to be prepaid so that the aggregate amount of such prepayment is allocated among each Class of the Term Loans pro rata based on the aggregate principal amounts of outstanding Borrowings of each such Class; provided that (x) the amounts so allocable to Incremental Term Loans of any Series may be applied to other Term Loan Borrowings if so provided in the applicable Incremental Facility Agreement and (y)  the amounts so allocable to any tranche of Extended Term Loans may be applied to other Term Loan Borrowings if so provided in the applicable Extension Offer. In the event of any optional prepayment of Term Loans made at a time when Term Loans of more than one Class remain, the Borrower shall select the Term Loans to be prepaid so that the aggregate amount of such prepayment is allocated among the Term Loans and each Series of Incremental Term Loans Class then outstanding based on the aggregate principal amount of outstanding Borrowings of each such Class; provided that (x) the amounts so allocable to Incremental Term Loans of any Series may be applied to other Borrowings of Term Loans if so provided in the applicable Incremental Facility Agreement and (y)  the amounts so allocable to any tranche of Extended Term Loans may be applied to other Borrowings of Term Loans if so provided in the applicable Extension Offer.

 

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(h)          Notwithstanding anything in this Section 2.11 to the contrary, during the Senior Period, (i) no mandatory prepayments of Term Loans that would otherwise be required to be made under Section 2.11(c) shall be required to be made, except with respect to the portion (if any) of any Net Proceeds exceeding the amount required to effect the Discharge of Senior Obligations.

SECTION 2.12 Fees .The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(b)        All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent. Fees paid shall not be refundable under any circumstances.

(c)          In the event that on or prior to September 30, 2019, the Borrower shall not have repaid the Loans pursuant to Section 2.10(b) in an aggregate principal amount of at least $100,000,000 from the Net Proceeds of sales or dispositions permitted under Section 6.05(j), the Borrower shall pay a fee to the Lenders in an aggregate amount equal to the product of (i) 5.0% multiplied by (ii) the lesser (such lesser amount, the “Shortfall Principal Repayment Amount”) of (A) $100,000,000 and (B) $100,000,000 minus the aggregate principal amount of prepayments of the Term Loans made by the Borrower pursuant to Section 2.10(b) from the Net Proceeds of sales or dispositions permitted under Section 6.05(j) (such fee, the “Late Payment Fee”). The Late Payment Fee shall be payable in kind on October 1, 2019 and shall be capitalized and added to the outstanding principal balance of the Loan of the Lenders on a pro rata basis and shall thereafter accrue interest (as principal) as provided herein. The Late Payment Fee together with (i) all PIK Amounts accrued on the Late Payment Fee and (ii) all PIK Amounts accrued on the Shortfall Principal Repayment Amount (collectively, together with the Late Payment Fee, the “Cash PIK Obligations”) shall in each case be due and payable in cash on the earlier of (i) March 31, 2020 and (B) the date on which the Borrower has made the repayment required by Section 2.10(b); provided that, if on such date for payment of such Cash PIK Obligations, after giving effect to payment of such Cash PIK Obligations, the Required Conditions would not be satisfied and Net Proceeds of sales or dispositions permitted under Section 6.05(j) (“Net Sale Proceeds”) are not sufficient to fund the full amount of required principal repayment plus the Cash PIK Obligations, then the payment of any such Cash PIK Obligations (less any amount paid from Net Sale Proceeds after satisfying all principal prepayment obligations) shall instead be due and payable on the earlier to occur of (i) the first date that the Required Conditions can be satisfied after giving effect to such payment and (ii) July 1, 2020 .

SECTION 2.13       Interest .The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.

(b)        The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c)        Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other overdue amount payable, 2% plus the rate applicable to ABR Term B Loans.

(d)        Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued

 

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interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and , (iii) in the event of any conversion of any Eurocurrency Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion . and (iv) the PIK Portion of accrued interest on such Loan (the “PIK Amount”) shall be payable in kind, with the PIK Amount as of such Interest Payment Date being added to the outstanding principal balance of such Loan on such Interest Payment Date and shall thereafter accrue interest hereunder (as principal) as provided herein .

(e)        All interest hereunder (including the PIK Amount) shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error. The Administrative Agent shall as soon as practicable notify the Borrower and the relevant Lenders of each determination of an Adjusted LIBO Rate.

SECTION 2.14       Alternate Rate of Interest . If prior to the commencement of any Interest Period for a Eurocurrency Borrowing of any Class:

(i)    the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means (including by means of an Interpolated Rate or because the Screen Rate is not available or published on a current basis) do not exist for ascertaining the LIBO Rate or the Adjusted LIBO Rate for such Interest Period; or

(ii)    the Administrative Agent is advised by a majority in interest of the Lenders of the applicable Class that the Adjusted LIBO Rate or LIBO Rate, as applicable for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loans) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders of the applicable Class by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and such Lenders that the circumstances giving rise to such notice no longer exist, then (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurocurrency Borrowing shall be ineffective, (ii) any Eurocurrency Borrowing that is requested to be continued, shall be converted to an ABR Borrowing on the last day of the then current Interest Period applicable thereto and (iii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.

(b)        If any Lender determines that any Applicable Law has made it unlawful, or if any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurocurrency Loans or to convert ABR Borrowings to Eurodollar Borrowings will be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, the Borrower will upon demand from such Lender (with a copy to the Administrative Agent), either convert or prepay all Eurodollar Borrowings of such Lender to ABR Borrowings, either on the last day of the Interest Period therefor, if such Lender may

 

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lawfully continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans. Upon any such conversion or prepayment, the Borrower will also pay accrued interest on the amount so converted or prepaid.

SECTION 2.15       Increased Costs .If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);

(ii) impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurocurrency Loans made by such Lender; or

(iii) subject any Lender to any Taxes on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other than (A) Indemnified Taxes otherwise indemnifiable under Section 2.17 and (B) Excluded Taxes);

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurocurrency Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b)        If any Lender determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy or liquidity), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c)        A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)        Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16       Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto

 

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(including as a result of an Event of Default), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Term Loan on the date specified in any notice delivered pursuant hereto, or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurocurrency Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the applicable currency of a comparable amount and period from other banks in the Eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

SECTION 2.17       Taxes .Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes; provided that if the Borrower or the Administrative Agent shall be required to deduct any Indemnified Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or the Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower or the Administrative Agent shall make such deductions and (iii) the Borrower or the Administrative Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with Applicable Law.

(b)        In addition, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law.

(c)        The Borrower shall indemnify the Administrative Agent and each Lender, within 10 Business Days after written demand therefor, for the full amount of any Indemnified Taxes paid by the Administrative Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower, hereunder or under any other Loan Document (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) 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 Lender or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d)        As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower 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.

 

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(e)        Each Lender shall severally indemnify the Administrative Agent for any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting or expanding the obligation of the Borrower to do so) attributable to such Lender that are paid or payable 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. The indemnity under this Section shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of Taxes so paid or payable by the Administrative Agent. Such certificate shall be conclusive of the amount so paid or payable absent manifest error.

(f)        Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law, such properly completed and executed documentation prescribed by Applicable Law or 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. If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall promptly (and in any event within 10 Business Days after such expiration, obsolescence or inaccuracy) notify the Borrower and the Administrative Agent in writing of such expiration, obsolescence or inaccuracy and update the form or certification if it is legally eligible to do so.

(i)    Without limiting the generality of the foregoing, any Lender shall, to the extent it is legally eligible to do so, deliver to the Borrower and the Administrative Agent (in such number of copies reasonably requested by the Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party hereto, duly completed and executed copies of whichever of the following is applicable:

(A)      in the case of a Lender that is a U.S. Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal backup withholding tax;

(B)       in the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States is a party (1) with respect to payments of interest under any Loan Document, IRS Form W-8BEN-E or W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN-E or W-8BEN establishing an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(C)      in the case of a Non-U.S. Lender for whom payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

(D)      in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (1) IRS Form W-8BEN-E or W-8BEN and (2) a certificate substantially in the form of Exhibit E (a “ U.S. Tax Certificate ”) to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code (c) a “controlled foreign corporation”

 

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described in Section 881(c)(3)(C) of the Code and (d) conducting a trade or business in the United States with which the relevant interest payments are effectively connected;

(E)       in the case of a Non-U.S. Lender that is not the beneficial owner of payments made under this Agreement (including a partnership or a participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this paragraph (g)(ii) that would be required of each such beneficial owner or partner of such partnership if such beneficial owner or partner were a Lender; provided , however , that if the Lender is a partnership and one or more of its partners are claiming the exemption for portfolio interest under Section 881(c) of the Code, such Lender may provide a U.S. Tax Certificate on behalf of such partners; or

(F)      any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. Federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the amount of Tax (if any) required by law to be withheld.

(ii) Each Lender shall deliver to 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 or the Administrative Agent, to comply with its obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this Section 2.17(f)(ii), “ FATCA ” shall include any amendments made to FATCA after the date of this Agreement.

(g)        If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes (including additional amounts paid pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, under this Section 2.17 with respect to the Indemnified Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided , however , that such indemnifying party, upon the request of such indemnified party, agrees to repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority. Nothing contained in this Section 2.17(g) shall require any indemnified party to make available its Tax returns or any other information relating to its Taxes which it deems confidential to the indemnifying party or any other Person.

(h)         For purposes of determining withholding Taxes imposed under FATCA, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Loan Documents as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

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SECTION 2.18       Payments Generally; Pro Rata Treatment; Sharing of Set-offs .The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest or fees, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise), on or before the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 12:00 noon, New York City time), on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at 383 Madison Avenue, New York, New York, except that payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments (including prepayments) to be made by the Borrower hereunder and under each other Loan Document, whether on account of principal, interest, fees or otherwise shall be made in dollars.

(b)        If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

(c)        If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Term B Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Term B Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Term B Loans of other Lenders to the extent necessary 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 Term B Loans; 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 any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(d)        Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment hereunder is due to the Administrative Agent for the account of the Lenders 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 amount due. In such event, if the Borrower has not in fact made

 

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such payment due to the Administrative Agent, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(e)        If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.06(b), 2.18(d) or 10.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.19       Mitigation Obligations; Replacement of Lenders .If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, 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)        If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender defaults in its obligation to fund Loans hereunder, 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 Section 10.04), all its interests, rights and obligations under this Agreement to an assignee selected by the Borrower that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent , which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, 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) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a material reduction in such compensation or payments. A Lender shall not be required to make any such assignment and 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. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee, and that the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective.

SECTION 2.20       [Reserved] .

SECTION 2.21 Incremental Facilities . [Reserved] (a)      The Borrower may on one or more occasions, by written notice to the Administrative Agent, request the establishment of Incremental

 

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Term Commitments; provided that the aggregate amount of all Incremental Term Loan Commitments established on any date shall not exceed (i) (together with the amount of Alternative Incremental Debt established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount on such date and (ii) an additional amount subject to the Maximum Incremental Amount as of such date. Each such notice shall specify (A) the date on which the Borrower proposes that the Incremental Term Commitments shall be effective, which shall be a date not less than 10 Business Days (or such shorter period as may be agreed to by the Administrative Agent) after the date on which such notice is delivered to the Administrative Agent, and (B) the amount of the Incremental Term Commitments being requested (it being agreed that (x) any Lender approached to provide any Incremental Term Commitment may elect or decline, in its sole discretion, to provide such Incremental Term Commitment and (y) any Person that the Borrower proposes to become an Incremental Term Lender, if such Person is not then a Lender, must be reasonably acceptable to the Administrative Agent). Notwithstanding anything to the contrary herein, no Incremental Term Commitments may be established during the Senior Period.

(b)         The terms and conditions of any Incremental Term Commitments and the Incremental Term Loans to be made thereunder shall be, except as otherwise set forth herein or in the applicable Incremental Facility Agreement, identical to those of the 2018 Term Loan Commitments and the Term B Loans; provided that (i) the interest rate margins with respect to any Incremental Term Loans shall be as agreed by the Borrower and the lenders in respect thereof; provided, that if the total yield (calculated, for both the Incremental Term Loans and the Term B Loans, to include upfront fees, any interest rate floors and any original issue discount (with original issue discount being equated to interest rate in a manner determined by the Administrative Agent based on an assumed four-year life to maturity) but to exclude any arrangement, underwriting or similar fee paid by the Borrower) in respect of any Incremental Term Loans exceeds the total yield for the existing Term B Loans by more than 0.50%, the Applicable Rate for the Term B Loans shall be increased so that the total yield in respect of such Incremental Term Loans is no higher than the total yield for the existing Term B Loans plus 0.50% (provided that if the Incremental Term Loans include an interest rate floor greater than the interest rate floor applicable to the Term B Loans, such increased amount shall be equated to the applicable interest rate margin for purposes of determining whether an increase to the Applicable Rate for the Term B Loans shall be required, to the extent an increase in the interest rate floor for the Term B Loans would cause an increase in the interest rate then in effect thereunder, and in such case the interest rate floor (but not the Applicable Rate) applicable to the Term B Loans shall be increased by such amount), (ii) any Incremental Term Loan shall have terms, in the Borrower’s reasonable judgment, customary for a term loan under then-existing market convention, (iii) the amortization schedule with respect to any Incremental Term Loans shall be as agreed by the Borrower and the lenders in respect thereof, provided that the weighted average life to maturity of any Incremental Term Loans shall be no shorter than the remaining weighted average life to maturity of the Latest Maturing Term Loans outstanding immediately prior to the establishment of such Incremental Term Loans (other than as necessary to make any such Incremental Term Loans fungible with such Latest Maturing Term Loans), (iv) no Incremental Term Maturity Date with respect to Incremental Term Loans shall be earlier than the Latest Maturity Date in effect immediately prior to the establishment of such Incremental Term Loans, (v) except as permitted by clause (i), the Incremental Term Loans shall be treated no more favorably than the Term B Loans (in each case, including with respect to mandatory and voluntary prepayments); provided that the foregoing shall not apply to covenants or other provisions applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such Incremental Term Loans; provided further that any Incremental Term Loans may add additional covenants or events of default not otherwise applicable to the Term B Loans or covenants more restrictive than the covenants applicable to the Term B Loans in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such Incremental Facility so long as this Agreement is amended to provide all of the Lenders with the benefits

 

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of such additional covenants, events of default or more restrictive covenants, (vi) to the extent the terms applicable to any Incremental Term Loans are inconsistent with the terms applicable to the Term B Loans (except, in each case, as otherwise permitted pursuant to this paragraph (b)), such terms shall be reasonably satisfactory to the Administrative Agent, and (vii) any Incremental Term Loans shall have the same Guarantees as, and shall rank pari passu with respect to the Liens on the Collateral and in right of payment with, the Term B Loans. Any Incremental Term Commitments established pursuant to an Incremental Facility Agreement that have identical terms and conditions, and any Incremental Term Loans made thereunder, shall be designated as a separate series (each a “ Series ”) of Incremental Term Commitments and Incremental Term Loans for all purposes of this Agreement. Notwithstanding the foregoing, in no event shall there be more than six maturity dates in respect of the Credit Facilities (including any Extended Term Loans or Replacement Term Loans).

(c)         The Incremental Term Commitments shall be effected pursuant to one or more Incremental Facility Agreements executed and delivered by the Borrower, each Incremental Term Lender providing such Incremental Term Commitments and the Administrative Agent; provided that (other than with respect to the incurrence of Incremental Term Loans the proceeds of which shall be used to consummate an acquisition permitted by this Agreement for which the Borrower has determined, in good faith, that limited conditionality is reasonably necessary (any such acquisition, a “ Limited Conditionality Acquisition ”) as to which conditions (i) through (iii) below shall not apply) no Incremental Term Commitments shall become effective unless (i) no Default or Event of Default shall have occurred and be continuing on the date of effectiveness thereof, both immediately prior to and immediately after giving effect to such Incremental Term Commitments and the making of Loans thereunder to be made on such date, (ii) on the date of effectiveness thereof, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date, (iii) the Borrower shall make any payments required to be made pursuant to Section 2.16 in connection with such Incremental Term Commitments and the related transactions under this Section, and (iv) the other conditions, if any, set forth in the applicable Incremental Facility Agreement are satisfied; provided further that no Incremental Term Loans in respect of a Limited Conditionality Acquisition shall become effective unless (i) no Default or Event of Default shall have occurred and be continuing as of the date of entry into the definitive acquisition documentation in respect of such Limited Conditionality Acquisition (the “ Limited Conditionality Acquisition Agreement ”) and (ii) on the date of effectiveness of the Limited Conditionality Acquisition Agreement, the representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date. Each Incremental Facility Agreement may, without the consent of any Lender, 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 give effect to the provisions of this Section.

(d)         Upon the effectiveness of an Incremental Term Commitment of any Incremental Term Lender, such Incremental Term Lender shall be deemed to be a “ Lender ” (and a Lender in respect of Commitments and Loans of the applicable Class) hereunder, and henceforth shall be entitled to all the rights of, and benefits accruing to, Lenders (or Lenders in respect of Commitments and Loans of the applicable Class) hereunder and shall be bound by all agreements, acknowledgements and other obligations of Lenders (or Lenders in respect of Commitments and Loans of the applicable Class) hereunder and under the other Loan Documents.

(e)         Subject to the terms and conditions set forth herein and in the applicable Incremental Facility Agreement, each Lender holding an Incremental Term Commitment of any Series

 

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shall make a loan to the Borrower in an amount equal to such Incremental Term Commitment on the date specified in such Incremental Facility Agreement.

(f)         The Administrative Agent shall notify the Lenders promptly upon receipt by the Administrative Agent of any notice from the Borrower referred to in paragraph (a) above and of the effectiveness of any Incremental Term Commitments, in each case advising the Lenders of the details thereof.

 

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[Reserved] Extensions. SECTION 2.23 Extensions .

(a)          Notwithstanding anything to the contrary in this Agreement, pursuant to one or more offers (each, an “ Extension Offer ”) made from time to time by the Borrower to all Lenders of Term B Loans with a like maturity date, in each case on a pro rata basis (based on the aggregate outstanding principal amount of the respective Term B Loans with a like maturity date) and on the same terms to each such Lender, the Borrower is hereby permitted to consummate from time to time transactions with individual Lenders that accept the terms contained in such Extension Offers to extend the maturity date of each such Lender’s Term B Loans and otherwise modify the terms of such Term B Loans pursuant to the terms of the relevant Extension Offer (including by increasing the interest rate or fees payable in respect of such Term B Loans and/or modifying the amortization schedule in respect of such Lender’s Term B Loans) (each, an “ Extension ,” and each group of Term B Loans as so extended, as well as the original Term B Loans (not so extended), being a “ tranche ”; any Extended Term Loans shall constitute a separate tranche of Term Loans from the tranche of Term Loans from which they were converted), so long as the following terms are satisfied: (i) no Default or Event of Default shall have occurred and be continuing at the time the offering document in respect of an Extension Offer is delivered to the Lenders, (ii) [reserved], (iii) except as to interest rates, fees, amortization, final maturity date, premium, required prepayment dates and participation in prepayments (which shall, subject to immediately succeeding clauses (iv), (v), and (vi), be determined between the Borrower and set forth in the relevant Extension Offer), the Term B Loans of any Term B Lender that agrees to an extension with respect to such Term B Loans extended pursuant to any Extension (the “ Extended Term Loans ”) shall have the same terms as the tranche of Term B Loans subject to such Extension Offer, (iv) the final maturity date of any Extended Term Loans shall be no earlier than the maturity date of the Term B Loans from which they were converted and the amortization schedule applicable to Term B Loans pursuant to Section 2.10(a) for periods prior to the Term Loan Maturity Date may not be increased, (v) the weighted average life of any Extended Term Loans shall be no shorter than the remaining weighted average life of the Term B Loans extended thereby, (vi) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any voluntary or mandatory repayments or prepayments of Term B Loans hereunder (except for repayments required upon the scheduled maturity date of the non-Extended Term Loans), in each case as specified in the respective Extension Offer, (vii) if the aggregate principal amount of Term B Loans (calculated on the face amount thereof) in respect of which Term B Lenders shall have accepted the relevant Extension Offer shall exceed the maximum aggregate principal amount of Term B Loans offered to be extended by the Borrower pursuant to such Extension Offer, then the Term B Loans of such Term B Lenders shall be extended ratably up to such maximum amount based on the respective principal amounts (but not to exceed actual holdings of record) with respect to which such Term B Lenders have accepted such Extension Offer, (viii) [reserved], (ix) all documentation in respect of such Extension shall be consistent with the foregoing, (x) any applicable Minimum Extension Condition shall be satisfied unless waived by the Borrower and (xi) the Minimum Tranche Amount shall be satisfied unless waived by the Administrative Agent. Notwithstanding the foregoing, in no event shall there be more than six maturity dates in respect of the Credit Facilities (including any Extended Term Loans or Replacement Term Loans). Notwithstanding anything to the contrary herein, no Extension Offers may be made, no Extensions may occur and no Extended Term Loans may be established during the Senior Period.

(b)         With respect to all Extensions consummated by the Borrower pursuant to this Section, (i) such Extensions shall not constitute voluntary or mandatory payments or prepayments for purposes of Section 2.11 and (ii) no Extension Offer is required to be in any minimum amount or any minimum increment, provided that (x) the Borrower may at its election specify as a condition (a “ Minimum Extension Condition ”) to consummating any such Extension that a minimum amount (to be determined and specified in the relevant Extension Offer in the Borrower’s sole discretion and may be

 

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waived by the Borrower) of Term B Loans of any or all applicable tranches be tendered and (y) no tranche of Extended Term Loans shall be in an amount of less than $50,000,000 (the “ Minimum Tranche Amount ”), unless such Minimum Tranche Amount is waived by the Administrative Agent. The Administrative Agent and the Lenders hereby consent to the transactions contemplated by this Section (including, for the avoidance of doubt, payment of any interest, fees or premium in respect of any Extended Term Loans on such terms as may be set forth in the relevant Extension Offer) and hereby waive the requirements of any provision of this Agreement (including Sections 2.11 and 2.18) or any other Loan Document that may otherwise prohibit any such Extension or any other transaction contemplated by this Section.

(c)        No consent of any Lender or the Administrative Agent shall be required to effectuate any Extension, other than the consent of each Lender agreeing to such Extension with respect to one or more of its Term Loans. All Extended Term Loans and all obligations in respect thereof shall be Obligations under this Agreement and the other Loan Documents that are secured by the Collateral on a pari passu basis with all other applicable Obligations under this Agreement and the other Loan Documents. The Lenders hereby irrevocably authorize the Administrative Agent to enter into amendments to this Agreement and the other Loan Documents with the Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of Term Loans so extended and such technical amendments as may be necessary or appropriate in the reasonable opinion of the Administrative Agent and the Borrower in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with this Section. Without limiting the foregoing, in connection with any Extensions the respective Loan Parties shall (at their expense) amend (and the Administrative Agent is hereby directed to amend) any Mortgage that has a maturity date prior to the then latest maturity date so that such maturity date is extended to the then latest maturity date (or such later date as may be advised by local counsel to the Administrative Agent).

(d)        In connection with any Extension, the Borrower shall provide the Administrative Agent at least five Business Days’ (or such shorter period as may be agreed by the Administrative Agent) prior written notice thereof, and shall agree to such procedures (including regarding timing, rounding and other adjustments and to ensure reasonable administrative management of the credit facilities hereunder after such Extension), if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section.

ARTICLE III

Representations and Warranties

The Borrower represents and warrants to the Lenders that:

SECTION 3.01       Organization; Powers . Each of the Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

SECTION 3.02       Authorization; Enforceability . The Transactions to be entered into by each Loan Party are within such Loan Party’s powers and have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such

 

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Loan Party, will constitute, a legal, valid and binding obligation of the Borrower or such Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03       Governmental Approvals; No Conflicts . The Transactions and the other transactions contemplated hereby (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of its Subsidiaries, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of its Subsidiaries, except Liens created under the Loan Documents and Liens permitted by Section 6.02, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect. Schedule 3.03 sets forth for the Borrower and each Subsidiary Loan Party a description of each license from a Governmental Authority which is material to the conduct of the business of such Loan Party as of the Closing Date.

SECTION 3.04       Financial Condition; No Material Adverse Change .The Borrower has heretofore furnished to the Administrative Agent its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal years ended December 31, 2013 and December 31, 2014, reported on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and for each fiscal quarter ended subsequent to December 31, 2014 and at least 45 days prior to the Closing Date, in each case certified by its chief financial officer (it being understood that the Borrower has furnished the foregoing referenced in clause (i) to the Administrative Agent by the filing with the Commission of the Borrower Registration Statement in connection with the Spin-Off). Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)        The Borrower has heretofore furnished to the Administrative Agent a pro forma consolidated balance sheet and related pro forma consolidated statement of income of the Borrower as of and for the 12-month period ending on the last day of the most recently completed four-fiscal quarter period for which financial statements were delivered under Section 3.04(a), prepared after giving effect to the Transactions and the other transactions contemplated hereby to be consummated on the Closing Date as if the Transactions and such other transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such income statements).

(c)        Except as disclosed in the financial statements referred to above or the notes thereto or in the Information Memorandum, except for the Disclosed Matters and except for liabilities

 

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arising as a result of the Transactions, after giving effect to the Transactions, none of the Borrower or the Subsidiaries has, as of the Closing Date, any contingent liabilities that would be material to the Borrower and the Subsidiaries, taken as a whole.

(d)        Since December 31, 2014, there has been no event, change or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.

SECTION 3.05       Properties .Each of the Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business (including its Mortgaged Properties), except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b)        Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and the use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c)        Schedule 3.05 sets forth the address of each real property that is owned or leased by the Borrower or any of its Subsidiaries as of the Closing Date after giving effect to the Transactions.

SECTION 3.06       Litigation and Environmental Matters .There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan Documents or the Transactions.

(b)        Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, none of the Borrower or any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c)        Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

(d)        No Borrower or Subsidiary Loan Party is in default with respect to any order, injunction or judgment of any Governmental Authority, except for such defaults which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07       Compliance with Laws and Agreements . Each of the Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing. Investment

 

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Company Status . None of the Borrower or any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940. Taxes . Each of the Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, there is no pending audit of the Borrower or any Subsidiary Loan Party with any federal, state, local or foreign tax authority, except as could not reasonably be expected to result in a Material Adverse Effect. ERISA . No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used for purposes of the Financial Accounting Standards Board Accounting Standards Codification Topic No. 715-30) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $10,000,000 5,000,000 the fair market value of the assets of all such underfunded Plans. Disclosure . The Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which the Borrower or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the Information Memorandum nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of 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, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time such projections were prepared. Subsidiaries . Schedule 3.12 sets forth the name of, and the ownership interest of the Borrower in each Subsidiary of the Borrower and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Closing Date. Insurance . Schedule 3.13 sets forth a description of all material insurance policies maintained by or on behalf of the Borrower and the Subsidiaries as of the Closing Date. As of the Closing Date, all premiums due in respect of such insurance have been paid. Labor Matters . As of the Closing Date, there are no strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower, threatened that could reasonably be expected to have a Material Adverse Effect. All payments due from the Borrower or any Subsidiary, or for which any claim may be made against the Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Borrower or such Subsidiary except for those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary is bound. Solvency . Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of each Loan made on the Closing Date and after giving effect to the application of the proceeds of such Loans, (a) the fair value of the assets of each Loan Party of the Borrower and the Borrower and its Subsidiaries, taken as a whole, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the property of each Loan Party of the Borrower and the Borrower and its Subsidiaries, taken as a whole , will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) each Loan Party of the Borrower and the Borrower and its Subsidiaries, taken as a whole , will

 

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be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured and (d) the Loan Parties, on a consolidated basis, will not have unreasonably small capital with which to conduct the business in which it is they are engaged as such business is now conducted and is proposed to be conducted following the Closing Date. Senior Indebtedness . The Obligations constitute “Senior Debt”, however defined, under the terms of any Indebtedness that is subordinated in right of payment to the Obligations. Security Documents . (a) The Guarantee and Collateral Agreement is effective to create in favor of the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the Collateral (as defined in the Guarantee and Collateral Agreement) and, when (i) in respect of Collateral in which a security interest can be perfected by control, such Collateral is delivered to the Collateral Agent and for so long as the Collateral Agent remains in possession of such Collateral, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected first priority security interest in all right, title and interest of the pledgor thereunder in such Collateral, in each case prior and superior in right to any other Person and (ii) in respect of Collateral in which a security interest can be perfected by the filing of UCC financing statements, financing statements in appropriate form are filed in the offices specified on Schedule 1.04 to the Perfection Certificate most recently delivered to the Collateral Agent, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest in all right, title and interest of the grantors thereunder in such Collateral (other than the Intellectual Property (as defined in the Guarantee and Collateral Agreement)), in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreement Agreements .

(b)        [Reserved]

(c)        When the Guarantee and Collateral Agreement (or a summary thereof) is filed in the United States Patent and Trademark Office and the United States Copyright Office and the financing statements referred to in Section 3.17(a) above are appropriately filed, the security interest created by the Guarantee and Collateral Agreement shall constitute a perfected security interest in all right, title and interest of the grantors thereunder in the Intellectual Property (as defined in the Guarantee and Collateral Agreement) in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the United States Patent and Trademark Office or the United States Copyright Office, as applicable, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office and subsequent UCC filings may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Loan Parties after the Closing Date), other than with respect to Liens permitted by Section 6.02 and subject to the Intercreditor Agreement Agreements .

(d)        Each Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to the Collateral Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Mortgaged Properties thereunder and the proceeds thereof, and when the Mortgages are filed in the appropriate offices, the Lien created by each Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Mortgaged Properties and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section 6.02 and subject to the Intercreditor Agreement Agreements .

 

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SECTION 3.18 Federal Reserve Regulations .None of the Borrower or any of the Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

(b)        No part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the Regulations of the Board, including Regulation U or X.

SECTION 3.19       Anti-Corruption Laws and Sanctions . The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti- Corruption Laws and applicable Sanctions, and the Borrower, its Subsidiaries and their respective officers and employees and, to the knowledge of the Borrower, its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Borrower, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing, use of proceeds or other transaction contemplated by this Agreement will violate Anti-Corruption Laws or applicable Sanctions. Material Contracts . Schedule 3.20 hereto sets forth for the Borrower and each Subsidiary Loan Party, as of the Closing Date, a list of all of the material contracts and agreements to which such Loan Party is a party, including all Specified Vendor Receivables Financing Documents (other than agreements disclosed to the Administrative Agent pursuant to Section 5.01(f), agreements relating to Indebtedness described on Schedule 6.01, real property leases identified on Schedule 2.03 to the Perfection Certificate delivered to the Administrative Agent on the Closing Date, and Licenses identified on Schedule 4.04 to the Perfection Certificate delivered to the Administrative Agent on the Closing Date). EEA Financial Institutions . No Loan Party is an EEA Financial Institution. Disclosure . As of the Fifth Sixth Amendment Effective Date, to the best knowledge of the Borrower, the information included in the Beneficial Ownership Certification provided on or prior to the Fifth Sixth Amendment Effective Date to any Lender in connection with this Agreement is true and correct in all respects.

ARTICLE IV

Conditions

SECTION 4.01       Closing Date . The obligations of the Lenders to make Loans hereunder is subject to the satisfaction of the following conditions:(a) The Agents shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Closing Date) of (i) Cahill Gordon & Reindel LLP and (ii) Jones Day LLP, in each case in form and substance reasonably satisfactory to the Administrative Agent. The Borrower hereby requests such counsel to deliver such opinions.

(b)        The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of the Transactions and any other legal matters relating to the Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.

 

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(c)        The Administrative Agent (or its counsel) shall have received the Intercreditor Agreement, executed and delivered by the Borrower, the other Loan Parties as of the Closing Date, the Collateral Agent and the ABL Agent.

(d)        The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Closing Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder or under any Loan Document.

(e)        The Collateral and Guarantee Requirement shall have been satisfied and the Administrative Agent shall have received a completed Perfection Certificate dated the Closing Date and signed by an executive officer or Financial Officer of the Borrower, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code (or equivalent) filings made with respect to the Loan Parties in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Administrative Agent that the Liens indicated by such financing statements (or similar documents) are permitted by Section 6.02 or have been released or will be released pursuant to UCC-3 financing statements or other release documentation delivered to the Collateral Agent.

(f)        The Administrative Agent shall have received evidence that the insurance required by Section 5.07 and the Security Documents is in effect, together with endorsements naming the Collateral Agent, for the benefit of the Secured Parties, as additional insured and loss payee thereunder, to the extent required by Section 5.07.

(g)        The terms of the Spin-Off Documentation shall be reasonably satisfactory to the Arrangers and the Spin-Off shall have been consummated (or shall be consummated substantially simultaneously with the initial funding of the Term B Loans on the Closing Date) in accordance with Applicable Law and the Spin-Off Agreement (without giving effect to any modification or waiver of any provision of, or any consent given in respect of, the Spin-Off Agreement not approved by the Administrative Agent).

(h)        After giving effect to the Transactions as of the Closing Date, none of the Borrower or any of its Subsidiaries shall have outstanding Indebtedness for borrowed money other than (i) Indebtedness incurred under this Agreement, (ii) Indebtedness incurred and outstanding under the ABL Credit Agreement and (iii) Indebtedness incurred and outstanding in compliance with Section 6.01 of this Agreement.

(i)        The Lenders shall have received the financial statements referred to in Section 3.04(a) and (b).

(j)        The Administrative Agent shall have received a certificate, in form and substance reasonably satisfactory to the Administrative Agent, dated the Closing Date and signed by the chief financial officer of each of the Borrower, certifying that its Subsidiaries, on a consolidated basis after giving effect to the Transactions, are solvent.

(k)        The Administrative Agent and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act.

 

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(l)        Since December 31, 2014, there has been no event, change or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.

(m)        The ABL Credit Agreement, and the commitments thereunder, shall be (or shall be substantially simultaneously with the initial funding of the Term B Loan on the Closing Date) effective.

(n)        The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (or in all respects if qualified as to materiality) on and as of the Closing Date.

(o)        No Default or Event of Default shall have occurred and be continuing on the Closing Date or after giving effect to the Loans requested to be made on such date.

(p)        The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.

(q)        The Administrative Agent shall have received a supplement to Schedule 3.13 setting forth a description of all material insurance policies maintained by or on behalf of the Borrower and its Subsidiaries as of the Closing Date, and to the extent deemed appropriate by the Borrower, supplements to Schedules 3.05, 3.12 and 6.01 reflecting any and all changes in the names of the Subsidiaries of the Borrower referred to therein made in connection with the Spin-Off to the extent necessary to make such schedules true, correct and complete on the Closing Date, in each case in form and substance reasonably acceptable to the Administrative Agent. Unless the Administrative Agent shall advise the Borrower in writing that any such proposed supplements are not reasonably acceptable to the Administrative Agent, Schedules 3.05, 3.12, 3.13, and/or 6.01 shall be deemed to be automatically amended on the Closing Date to reflect any applicable supplement to such Schedules delivered pursuant to this clause without the necessity of any further action.

The Administrative Agent shall notify the Borrower and the Lenders of the Closing Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 5:00 p.m., New York City time, on June 30, 2015 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

ARTICLE V

Affirmative Covenants

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 5.01         Financial Statements and Other Information . The Borrower will furnish to the Administrative Agent and each Lender:(a) within 90 days after the end of each fiscal year

 

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of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “ going concern ” or like qualification or exception (except for any such qualification or exception resulting from any the current maturity of Loans hereunder) and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied in respect of any fiscal year of the Borrower by the filing of the Borrower’s annual report on Form 10-K for such fiscal year with the Commission to the extent the foregoing are included therein);

(b)        within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied in respect of any fiscal quarter of the Borrower by the filing of the Borrower’s quarterly report on Form 10-Q for such fiscal quarter with the Commission to the extent the foregoing are included therein);

(c)        within 90 days after the end of each fiscal year of the Borrower (but in any event no later than two Business Days after any delivery of financial statements under clause (a) above), or within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower (but in any event no later than two Business Days after any delivery of financial statements under clause (b) above), a certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) stating whether any change in GAAP or in the application thereof has occurred since the date of the Borrower’s audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (iii) identifying all Subsidiaries existing on the date of such certificate and indicating, for each such Subsidiary, whether such Subsidiary is a Subsidiary Loan Party, a Foreign Subsidiary and/or an Immaterial Subsidiary and whether such Subsidiary was formed or acquired since the end of the previous fiscal quarter;

(d)        within 90 days after the end of each fiscal year of the Borrower, (i) a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines) and (ii) a certificate of a Financial Officer of the Borrower (A) identifying any parcels of real property or improvements thereto with a value exceeding $2,000,000 that have been acquired by any Loan Party since the end of the previous fiscal year, (B) identifying any changes of the type described in Section 5.03(a) that have not been previously reported by the Borrower, (C)  identifying any

 

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Permitted Acquisitions that have been consummated since the end of the previous fiscal year, including the date on which each such Permitted Acquisition was consummated and the consideration therefor [ reserved ], (D) identifying any Intellectual Property (as defined in the Guarantee and Collateral Agreement) with respect to which a notice is required to be delivered under the Guarantee and Collateral Agreement and has not been previously delivered, (E) identifying any Prepayment Events that have occurred since the end of the previous fiscal year and setting forth a reasonably detailed calculation of the Net Proceeds received from Prepayment Events since the end of such previous fiscal year and (F) if applicable, calculating Excess Cash Flow for the applicable Excess Cash Flow Period;

(e)        no later than February 15 of each fiscal year of the Borrower (commencing with the fiscal year ending December 31, 2015), a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flow as of the end of and for such fiscal year and setting forth the assumptions used for purposes of preparing such budget) and, promptly when available, any material revisions of such budget that have been approved by senior management of the Borrower;

(f)        promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the Commission or with any national securities exchange, as the case may be (it being understood that the obligation to furnish the foregoing to the Administrative Agent and the Lenders shall be deemed to be satisfied to the extent the foregoing are filed with the Commission);

(g)        promptly upon the Borrower’s receipt thereof, (A) copies of all material compliance reports filed and material correspondence regarding any active or pending investigation or enforcement action concerning the Borrower or any Subsidiary Loan Party with any state, federal, local or foreign regulatory agency and (B) all material correspondence, if any, alleging violation of or requesting compliance by the Borrower or any Subsidiary Loan Party with laws, regulations, etc. or requests for information pursuant to interstate commerce laws, antitrust laws, securities laws, worker safety laws (OSHA), etc.;

(h)        except to the extent already provided for in this Section 5.01, promptly after the sending thereof, copies of any proposed waiver, consent, or amendment concerning any of the ABL Loan Documents;

(i)        promptly upon the effectiveness thereof, (A) a description of each license from a Governmental Authority which becomes effective after the Closing Date and is material to the conduct of the business of the Borrower and its Subsidiaries, taken as a whole, and (B) a description of each material contract or agreement to which the Borrower or any Subsidiary Loan Party is a party, including each Specified Vendor Receivables Financing Document (other than contracts and agreements disclosed to the Administrative Agent pursuant to Section 5.01(f), agreements described on Schedule 3.20 or Schedule 6.01, and without duplication of real property leases identified on Schedule 2.03 to the Perfection Certificate most recently delivered to the Administrative Agent and Licenses identified on Schedule 4.04 to the Perfection Certificate most recently delivered to the Administrative Agent); and

(j)           by no later than 11:00 p.m. (New York time), in each case in a form reasonably acceptable to the Required Lenders (it being acknowledged and agreed by the Lenders that the Forecast for North America and Europe-Africa delivered by the Borrower to the Administrative Agent and the Lenders on February 16, 2019 is in an acceptable form), (i) on the last Wednesday

 

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of each fiscal month, an updated 13-week statement of projected receipts and disbursements (each such statement, a “Rolling 13-Week Cash Flow Forecast”), (ii) on each Wednesday, a report showing actual receipts and disbursements through the prior week for North America and Europe-Africa, including a variance report showing the variance to the immediately prior Rolling 13-Week Cash Flow Forecast with qualitative commentary explaining any material variations to such Rolling 13-Week Cash Flow Forecast, (iii) on the 15th day of each calendar month, a report detailing Liquidity for the last day of the previously ended fiscal month and indicating whether the Borrower is in compliance with Section 6.13(b), (iv) on each Wednesday, a flash report in a form reasonably acceptable to the Required Lenders providing estimated revenues by segment and those other key performance indicators by major location reasonably produced on a weekly basis for the prior week or those available monthly on a monthly basis for the prior month and (v) on the 15th day of each calendar month, an accounts payable aging report as of the prior fiscal month –end for Horizon Global Company LLC, Horizon Global Americas, Inc. and Westfalia- Automotive GmbH; provided that none of the documents, reports, or information delivered pursuant to this clause (j) shall be shared with or provided or distributed to any Public-Sider;

(k)           within 30 days after the end of each fiscal month of the Borrower, (i) its consolidated balance sheet and related statements of operations and cash flows as of the end of and for such fiscal month and the then elapsed portion of the fiscal year, and a statement of cash flows on a year to date basis setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal quarter- and year-end audit adjustments and the absence of footnotes, and (ii) a variance analysis to the budget for the P&L on a segment basis with qualitative commentary, each in a form reasonably acceptable to the Required Lenders; provided that none of the documents, reports, or information delivered pursuant to this clause (k) shall be shared with or provided or distributed to any Public-Sider; and

( j l )        promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request.

The Borrower represents and warrants that it and any of its Subsidiaries either (i) has no registered or publicly traded securities outstanding or (ii) files its financial statements with the Commission and/or makes its financial statements available to potential holders of its 144A securities, and, accordingly, the Borrower hereby (x) authorizes the Administrative Agent to make the financial statements to be provided under Section 5.01(a) and (b) above, along with the Loan Documents, available to all Lenders and (y) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Borrower will not request that any other material be posted to all Lenders without expressly representing and warranting to the Administrative Agent in writing that (A) such materials do not constitute material non-public information within the meaning of the federal securities laws (“MNPI”) or (B) (i) the Borrower and its Subsidiaries have no outstanding publicly traded securities, including 144A securities, and (ii) if at any time the Borrower or any of its Subsidiaries issues publicly traded securities, including 144A securities, then the Borrower will, upon the issuance of such securities, make such materials that do constitute MNPI at the time of issuance of such securities publicly available by press release or public filing with the Commission. In no event will the Administrative Agent post compliance certificates or budgets to Public-Siders.

 

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SECTION 5.02     Notices of Material Events . The Borrower will furnish to the Administrative Agent and each Lender prompt written notice of the following:(a) the occurrence of any Default;

(b)        the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Subsidiary thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;

(c)        the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding $ 10,000,000 5,000,000 ;

(d)        any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract;

(e)        any default under or termination of a Material Agreement;

(f)        any judgment for the payment of money in an aggregate amount exceeding $ 2,500,000 5,000,000 that remains undischarged for a period of 30 consecutive days, during which execution is not effectively stayed, or the occurrence of any action legally taken by a judgment creditor to attach or levy upon assets in order to enforce any such judgment;

(g)        the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect;

(h)        any violation or asserted violation of any Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have a Material Adverse Effect;

(i)        any Release by a Loan Party or with respect to any Real Estate owned, leased or occupied by a Loan Party; or receipt of any Environmental Notice, in each case where the expected remedial costs or liability is reasonably expected to exceed $2,500,000;

(j)        the discharge of or any withdrawal or resignation by the Borrower’s independent accountants; and

(k)         not later than two Business Days after the occurrence thereof, the occurrence of any default, event or default or cash dominion event under the ABL Credit Agreement; and

( k l )        any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

 

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SECTION 5.03     Information Regarding Collateral .The Borrower will furnish to the Administrative Agent prompt written notice of any change (i) in any Loan Party’s legal name, (ii) in the location of any Loan Party’s chief executive office or (iii) in any Loan Party’s jurisdiction of organization. The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless written notice has been delivered to the Collateral Agent, together with all applicable information to enable the Administrative Agent to make all filings under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent (on behalf of the Secured Parties) to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral.

(b)        Each year, within 90 days after the end of each fiscal year of the Borrower, the Borrower (on behalf of itself and the other Loan Parties) shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower (i) setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent certificate delivered pursuant to this Section and (ii) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period).

 

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SECTION 5.04         Existence; Conduct of Business . The Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names the loss of which would have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or disposition permitted under Section 6.05. Payment of Obligations . The Borrower will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except (a) those being contested in good faith by appropriate proceedings and for which the Borrower has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (b) to the extent the failure to make payment could not reasonably be expected to result in a Material Adverse Effect. Maintenance of Properties . The Borrower will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of their business, taken as a whole, in good working order and condition, ordinary wear and tear excepted; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or disposition permitted under Section 6.05. Insurance . The Borrower will, and will cause each of the Subsidiaries to, maintain insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. Such insurance shall be maintained with financially sound and reputable insurance companies, except that a portion of such insurance program (not to exceed that which is customary in the case of companies engaged in the same or similar business or having similar properties similarly situated) may be effected through self- insurance; provided adequate reserves therefor, in accordance with GAAP, are maintained. In addition, the Borrower will, and will cause each of its Subsidiaries to, maintain all insurance required to be maintained pursuant to the Security Documents. With respect to each Mortgaged Property that is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, the applicable Loan Party will maintain, with financially sound and reputable insurance companies, such flood insurance as is required under Applicable Law, including Regulation H of the Board of Governors. The Borrower will furnish to the Lenders, upon request of the Administrative Agent, information in reasonable detail as to the insurance so maintained. All insurance policies or certificates (or certified copies thereof) with respect to such insurance shall be endorsed to the Collateral Agent’s reasonable satisfaction for the benefit of the Lenders (including by naming the Collateral Agent as lender loss payee or additional insured, as appropriate). Casualty and Condemnation . The Borrower (a) will furnish to the Administrative Agent and the Lenders prompt written notice of casualty or other insured damage to any material portion of any Collateral having a book value or fair market value of $1,000,000 or more or the commencement of any action or proceeding for the taking of any Collateral having a book value or fair market value of $1,000,000 or more or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement and the Security Documents. Books and Records; Cooperation; Inspection and Audit Rights; Lender Calls . . The Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested.

(b)          The Borrower shall hold a telephone call (i) once per calendar month, for the benefit of the Administrative Agent and the Lenders that are not Public-Siders to discuss the Borrower’s

 

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and its Subsidiaries’ operational and financial performance, the status of strategic initiatives and any other items reasonably requested to be covered by any Lender and respond to questions that are raised on such call and (ii) in addition, once per calendar quarter, for the benefit of the Administrative Agent and Public- Siders to discuss the Borrower’s and its Subsidiaries’ operational and financial performance, the status of strategic initiatives and any other items reasonably requested to be covered by any Lender and respond to questions that are raised on such call.

(c)          The Borrower will, and will cause each of the Subsidiaries to, reasonably cooperate with one financial advisor acting on behalf of all of the Agents and the Lenders.

SECTION 5.10     Compliance with Laws . The Borrower will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Borrower will maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. Use of Proceeds . The Borrower will use the proceeds of the Term Loans on the Closing Date solely (i) to consummate the Transactions, (ii) to pay the fees and expenses in connection with the Transactions and (iii) for general corporate purposes. The Borrower will use the proceeds of the 2018 Incremental Term Loans solely (i) to pay the fees and expenses in connection with the Fourth Amendment, (ii) to repay the ABL Loans under the ABL Credit Agreement and (iii) for general corporate purposes. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. The Borrower shall use the proceeds of the Junior Credit Agreement on the Sixth Amendment Effective Date to repay in full in cash all obligations outstanding under the Senior Credit Agreement and otherwise for ordinary working capital purposes and accounts payable catch up consistent with the forecast delivered prior to the Sixth Amendment Effective Date. Additional Subsidiaries. If any additional Subsidiary is formed or acquired after the Closing Date (or any existing Subsidiary becomes a Subsidiary Loan Party after the Closing Date), the Borrower will, within five Business Days after such Subsidiary is formed or acquired (or becomes a Subsidiary Loan Party), notify the Administrative Agent and the Lenders thereof and, within 30 days (or such longer period as may be agreed to by the Administrative Agent) after such Subsidiary is formed or acquired (or becomes a Subsidiary Loan Party), cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary, including with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan Party. Further Assurances . (a)         The Borrower will, and will cause each Subsidiary Loan Party 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, fixture filings, mortgages, deeds of trust, landlord waivers and other documents), which may be required under any Applicable Law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

(b)        If any assets (including any real property or improvements thereto or any interest therein) having a book value or fair market value of $ 5,000,000 1,000,000 or more in the aggregate are acquired by the Borrower or any Subsidiary Loan Party after the Closing Date or through the acquisition of a Subsidiary Loan Party under Section 5.12 or through the conversion of a Subsidiary into a Subsidiary Loan Party under Section 5.12 (other than, in each case, assets constituting Collateral under the Guarantee and Collateral Agreement that become subject to the Lien of the Guarantee and Collateral Agreement

 

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upon acquisition thereof), the Borrower or, if applicable, the relevant Subsidiary Loan Party will notify the Administrative Agent and the Lenders thereof, and, if reasonably requested by the Administrative Agent or the Required Lenders, the Borrower will cause such assets to be subjected to a Lien securing the Obligations and will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Loan Parties.

(c)        The Borrower will, and will cause each Subsidiary Loan Party to, deposit the proceeds of any Term Priority Collateral in a Term Collateral Proceeds Account at any time (i) after the occurrence and during the continuance of an Event of Default under clauses (a), (h) or (i) of Article VII and (ii) after the occurrence and during the continuance of any other Event of Default after the Administrative Agent provides written notice to the Borrower to so deposit such proceeds.

(d)        The Borrower will, and will cause each Subsidiary Loan Party to, satisfy the post-closing conditions described in Exhibit E to the Fifth Sixth Amendment within the timelines set forth therein.

SECTION 5.14     Ratings . The Borrower will use commercially reasonable efforts to maintain (a) a long-term public corporate family and/or credit, as applicable, rating of the Borrower and (b) a credit rating for the Credit Facilities, in each case from each of Moody’s and S&P. It is understood and agreed that the foregoing is not an agreement to maintain any specific rating.

Negative Covenants

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, the Borrower covenants and agrees with the Lenders that:

SECTION 6.01      Indebtedness; Certain Equity Securities The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except (and provided, however, that during the Senior Period no Indebtedness described in clauses (i)(B), (ii), (iii)(B), (iv), (vii), (viii), (ix), (x), (xii), (xiii), (xx) (in excess of $99,000,000), (xxi) or (xxii) below may be incurred by the Borrower or any Subsidiary (other than Indebtedness existing on the Fifth Amendment Date and set forth in Schedule 6.01A and (B) extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount as specified on such Schedule 6.01A or result in an earlier maturity date or decreased weighted average life thereof)):

SECTIO N 6.01      Indebtedness; Certain Equity Securities. The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:

(i)      Indebtedness created under the Loan Documents;

(ii)      [Reserved];

( i iii ) (A) Indebtedness created under the Loan Documents, ( existing on the Sixth Amendment Effective Date (which Indebtedness shall, to the extent the principal amount thereof as of the Sixth Amendment Effective Date exceeds $500,000, be set forth on Schedule 6.01) and ( B) any Permitted Term Loan Refinancing Indebtedness , and (C) with respect t o such Indebtedness under the Senior Loan Documents ;

 

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(iv) any Specified Vendor Receivables Financings in existence on the Sixth Amendment Effective Date and Permitted Refinancings thereof ;

(ii)    (A) financings in respect of sales of accounts receivable by a Foreign Subsidiary permitted by Section 6.05(c), (B) the Specified Vendor Receivables Financing and (C) the Specified Vendor Payables Financing;

(iii)  (A) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and (B) extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount as specified on such Schedule 6.01 or result in an earlier maturity date or decreased weighted average life thereof;

(iv)    Permitted Unsecured Debt of the Borrower; provided that the Net Leverage Ratio (disregarding the proceeds of such Permitted Unsecured Debt in calculating Unrestricted Domestic Cash), on a pro forma basis after giving effect to the incurrence of such Permitted Unsecured Debt (and any related repayment of Indebtedness) and recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which financial statements are available, as if such incurrence (and any related repayment of Indebtedness) had occurred on the first day of the relevant period is no greater than 4.00 to 1.00;

(v)     Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; provided that Indebtedness of any Subsidiary that is not a Loan Party or any Subsidiary Loan Party for which the Collateral and Guarantee Requirement has not been satisfied to the Borrower or any Subsidiary Loan Party shall be subject to Section 6.04;

(vi)     Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary; provided that Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a Loan Party or any Subsidiary Loan Party for which the Collateral and Guarantee Requirement has not been satisfied shall be subject to Section 6.04;

(vii) Guarantees by the Borrower or any Subsidiary, as the case may be, in respect of (A) any Permitted Term Loan Refinancing Indebtedness, (B) any Alternative Incremental Debt or (C) any Permitted Unsecured Debt; provided that none of the Borrower or any Subsidiary, as the case may be, shall Guarantee such Indebtedness unless it also has Guaranteed the Obligations pursuant to the Guarantee and Collateral Agreement; [reserved];

(viii)     Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life thereof; provided that (A) such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Indebtedness permitted by this clause (viii)  after the Sixth Amendment Effective Date shall not exceed $ 20,000,000 10,000,000 at any time outstanding;

 

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(ix)   Indebtedness arising as a result of an Acquisition Lease Financing or any other sale and leaseback transaction permitted under Section 6.06; in connection with any retention of title arrangements ( verlängerter Eigentumsvorbehalt ) made in the ordinary course of business;

(x)     Indebtedness of any Person that becomes a Subsidiary after the Closing Date; provided that (A) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Indebtedness permitted by this clause (x) shall not exceed $25,000,000 at any time outstanding, less the liquidation value of any outstanding Assumed Preferred Stock; arising under a declaration of joint and several liability used for the purpose of section 2:403 of the Dutch Civil Code (and any residual liability under such declaration arising pursuant to section 2:404(2) of the Dutch Civil Code;

(xi)   Indebtedness of the Borrower or any Subsidiary in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety appeal or similar bonds and completion guarantees provided by the Borrower and the Subsidiaries in the ordinary course of their business;

(xii) other unsecured Indebtedness of the Borrower or any Subsidiary or other financings incurred by Foreign Subsidiaries in respect of accounts receivable and/or inventory in an aggregate principal amount not exceeding $ 15,000,000 10,000,000 at any time outstanding , less the liquidation value of any applicable Qualified Borrower Preferred Stock issued and outstanding pursuant to clause (b) of the definition of Qualified Borrower Preferred Stock ;

(xiii)             secured Indebtedness incurred by Foreign Subsidiaries that are not Loan Parties in an aggregate amount not exceeding $ 50,000,000 10,000,000 at any time outstanding , in each case in respect of Indebtedness of Foreign Subsidiaries ; provided that the Net Proceeds thereof are applied in accordance with Section 2.11(c) ;

(xiv) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided , however , that such Indebtedness is extinguished within 10 days of incurrence;

(xv) Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

(xvi) Indebtedness incurred in connection with the financing of insurance premiums in an aggregate amount at any time outstanding not to exceed the premiums owed under such policy, if applicable;

(xvii)             contingent obligations to financial institutions, in each case to the extent in the ordinary course of business and on terms and conditions which are within the general parameters customary in the banking industry, entered into to obtain cash management services or deposit account overdraft protection services (in an amount similar to those offered for comparable services in the financial industry) or other services in connection with the management or opening of deposit accounts or incurred as a result of endorsement of negotiable instruments for deposit or collection purposes and other customary, contingent obligations, including obligations under Bank Products (as defined in the ABL Credit Agreement as in effect

 

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on the date hereof) other than Hedging Agreements, of the Borrower and its Subsidiaries incurred in the ordinary course of business;

(xviii)         unsecured guarantees by the Borrower or any Subsidiary Loan Party of facility leases of any Loan Party;

(xix) payment obligations of or Guarantees by the Borrower or any Subsidiary Loan Party with respect to any Hedging Agreement permitted under Section 6.07 hereof; provided that if such Hedging Agreement is related to interest rates, (A) such Hedging Agreement shall relate to payment obligations on Indebtedness otherwise permitted to be incurred by the Loan Documents and (B) the notional amount of such Hedging Agreement shall not exceed the principal amount of the Indebtedness to which such Hedging Agreement relates;

(xx) Indebtedness of the Borrower, any Subsidiary Loan Party or any ABL Foreign Loan Party under the ABL Credit Agreement in an aggregate principal amount at any one time outstanding not to exceed the greater of (i) $150,000,000 and (ii) the Borrowing Base as of the date of such incurrence; $99,000,000, subject to Section 6.11, and any replacement or refinancing thereof; provided that the Borrower will not, and will not permit any Subsidiary to, create, grant or permit to exist any Lien on the ABL Priority Collateral that is contractually subordinated (including pursuant to a last-out facility for Indebtedness for borrowed money) or junior in priority to the Liens on the ABL Priority Collateral securing any of the “Loans” or any other “Obligations” (each as defined in the ABL Credit Agreement), unless such Lien on the ABL Priority Collateral is also contractually subordinated or junior in priority, in the same manner and to the same extent, to the Liens on ABL Priority Collateral securing the Obligations; it being understood and agreed that this proviso shall not restrict any refinancing or replacement of the ABL Credit Agreement (or replacement or refinancing thereof) being secured by a first priority lien on ABL Priority Collateral);

(xxi)Alternative Incremental Debt; provided that the aggregate principal amount of any Alternative Incremental Debt established on any date shall not exceed (i) (together with the aggregate amount of all Incremental Term Commitments established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount on such date and (ii) an additional amount subject to the Maximum Alternative Incremental Debt Amount as of such date;

(xxii)         any Capital Lease Obligations of a Person that becomes a Subsidiary pursuant to the Westfalia Acquisition; provided that (A) such Capital Lease Obligation exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Indebtedness permitted by this clause (xxii) shall not exceed $15,000,000 at any time outstanding; and

(xxiii)         Indebtedness of the Borrower under the Convertible Notes outstanding on the Fifth Amendment Date.

(xxi)[reserved];

(xxii)          Indebtedness of the Borrower in an amount not to exceed $15,000,000 at any time outstanding; provided that (a) such Indebtedness shall not mature prior to the date that is 91 days after the Latest Maturity Date in effect at the time of the issuance of such Indebtedness

 

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and shall not have any principal payments due prior to such date, except upon the occurrence of a change of control or similar event (including asset sales), in each case so long as the provisions relating to change of control or similar events (including asset sales) included in the governing instrument of such Indebtedness provide that the provisions of this Agreement must be satisfied prior to the satisfaction of such provisions of such Indebtedness, (b) such Indebtedness is not Guaranteed by any Subsidiary of the Borrower other than the Loan Parties (which Guarantees shall be permitted only to the extent permitted by Section 6.01(a)(vi)), (c) such Indebtedness shall not have any financial maintenance covenants, (d) such Indebtedness shall not have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the definition of Change in Control set forth herein, (e) such Indebtedness is subordinated to the Obligations on terms reasonably acceptable to the Required Lenders and (f) no such Indebtedness shall be, directly or indirectly, provided by any lender or agent or Affiliate of any lender or agent under the Junior Credit Agreement;

(xxiii)          (A) Indebtedness of the Borrower under the Convertible Notes outstanding on the Sixth Amendment Effective Date and (B) any Permitted Refinancing Indebtedness with respect thereto; provided that the interest rate, fees, or yield payable with respect to such Permitted Refinancing Indebtedness shall not be higher than the interest rate, fees, or yield payable under the Convertible Notes outstanding on the Sixth Amendment Effective Date; and

(xxiv)          Indebtedness of the Borrower and its Subsidiary Loan Parties incurred on the Sixth Amendment Effective Date under the Junior Credit Agreement in an aggregate principal amount not to exceed $52,000,00, plus an additional amount of Indebtedness incurred thereunder solely in connection with the “in-kind” payment of interest thereon pursuant to the terms of the Junior Credit Agreement as in effect on the Sixth Amendment Effective Date and any Permitted Refinancing Indebtedness thereof; and

(xxv)          Indebtedness of the Borrower, and Guarantees thereof by any Subsidiary Loan Party, incurred after the Sixth Amendment Effective Date in an aggregate principal amount not to exceed the lesser of (A) $100,000,000 and (B) $100,000,000 minus the aggregate principal amount of prepayments of the Term Loans made by the Borrower pursuant to Section 2.10(b) after the Sixth Amendment Effective Date and prior to the date such Indebtedness is incurred, provided that such Indebtedness matures at least 91 days after the Maturity Date, is subordinated in right of payment to the Term Loans (including any Guarantees thereof) and is subject to an intercreditor agreement reasonably acceptable to the Required Lenders and provided further that the net proceeds therefrom shall be used to prepay Term Loans pursuant to Section 2.10(b).

(b)        The Borrower will not, nor will it permit any Subsidiary to, issue any preferred stock or other preferred Equity Interests , except (i)   other than Qualified Borrower Preferred Stock , (ii) Assumed Preferred Stock and (iii) preferred stock or preferred Equity Interests held by the Borrower or any Subsidiary and; provided, however, that during the Senior Period no Qualified Borrower Preferred Stock or Assumed Preferred Stock may be issued by the Borrower or any Subsidiary. .

SECTION 6.02         Liens . The Borrower will not, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except (and provided, however, that during the Senior Period no Liens described in clauses (a)(ii), (c), (e), (f), (h), (i), (j), (n) or (r) below may be created, assumed or incurred by the Borrower or any Subsidiary (other than any Lien on any property or asset of the Borrower or any

 

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Subsidiary existing on the Fifth Amendment Date and set forth in Schedule 6.02A; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof)): :

(a)        (i) Liens created under the Loan Documents, and (ii ) Liens in respect of any Permitted Term Loan Refinancing Indebtedness, and (iii ) Liens created by the Senior Junior Loan Documents which are subject to the Term Intercreditor Agreement ;

(b)        Permitted Encumbrances;

(c)        Liens in respect of the Specified Vendor Receivables Financing Financings permitted under Section 6.01(a)(iv) ;

(d)        any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Sixth Amendment Effective Date (which Liens shall, to the extent securing Indebtedness with a principal amount in excess of $500,000 as of the Sixth Amendment Effective Date, be set forth on Schedule 6.02 ) ; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e)         any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Closing Date prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be; Liens securing Indebtedness permitted by Section 6.01(a)(ix) ;

(f)        Liens on fixed or capital assets acquired, constructed or improved by, or in respect of Capital Lease Obligations of, the Borrower or any Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (viii) of Section 6.01(a), (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Borrower or any Subsidiary;

(g)        Liens, with respect to any Mortgaged Property, described in the applicable schedule of the title policy covering such Mortgaged Property;

(h)        Liens in respect of sales or other financings of accounts receivable or inventory by Foreign Subsidiaries to the extent the Indebtedness is permitted by Section   6.05 6.01 ( c a ) ( xii );

(i)        other Liens securing liabilities permitted hereunder in an aggregate amount not exceeding (i) in respect of consensual Liens, not in excess of $5,000,000 and (ii) in respect of all such Liens, $10,000,000, in each case at any time outstanding ;

 

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(j)        Liens in respect of Indebtedness permitted by Section 6.01(a)(xiii) , provided that the assets subject to such Liens are not located in the United States;

(k)        Liens, rights of setoff and other similar Liens existing solely with respect to cash and Permitted Investments on deposit in one or more accounts maintained by any Lender, in each case granted in the ordinary course of business in favor of such Lender with which such accounts are maintained, securing amounts owing to such Lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness for borrowed money;

(l)        licenses or sublicenses of Intellectual Property (as defined in the Guarantee and Collateral Agreement) granted by any Company in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business of the Borrower;

(m)        the filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

(n)        Liens for the benefit of a seller deemed to attach solely to cash earnest money deposits in connection with a letter of intent or acquisition agreement with respect to a Permitted Acquisition; on Collateral securing Indebtedness permitted under Section 6.01(xxii) so long as such Liens rank junior in priority to the Liens securing the Obligations subject to intercreditor arrangements reasonably satisfactory to the Administrative Agent ;

(o)        Liens deemed to exist in connection with investments permitted under Section 6.04 that constitute repurchase obligations and in connection with related set-off rights;

(p)        Liens of a collection bank arising in the ordinary course of business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(q)        Liens of sellers of goods to the Borrower or any of its Subsidiaries arising under Article 2 of the UCC in effect in the relevant jurisdiction in the ordinary course of business, covering only the goods sold and covering only the unpaid purchase price for such goods and related expenses;

(r)        Liens on Collateral securing Alternative Incremental Debt, provided that such Alternative Incremental Debt shall be subject to a customary Indebtedness incurred pursuant to Section 6.01(a)(xxv), which Liens shall be junior in right of priority to the Obligations and shall be subject at all times to an intercreditor agreement in form and substance reasonably satisfactory acceptable to the Administrative Agent Required Lenders; and

(s)        Liens (i under the ABL Security Documents (as defined in the ABL/Term Loan Intercreditor Agreement) (i) that are subject to the ABL/Term Loan Intercreditor Agreement, or (ii)  on cash granted in favor of any Secured Party (as defined in the ABL Credit Agreement) created as a result of any requirement to provide cash collateral pursuant to the ABL Credit Agreement and (ii) subject to the Intercreditor Agreement and created under the ABL Security Documents (or any ABL Security Documents (as defined in the Intercreditor Agreement)) .

 

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SECTION 6.03 Fundamental Changes .The Borrower will not, nor will it permit any other Person to merge into or consolidate with any of them, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any Subsidiary may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (if any party to such merger is a Subsidiary Loan Party) is a Subsidiary Loan Party for which the Collateral and Guarantee Requirement has been satisfied and (iii) any Subsidiary (other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04. Notwithstanding the foregoing, this Section 6.03 shall not prohibit any Permitted Acquisition.

(b) The Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.

SECTION 6.04         Investments, Loans, Advances, Guarantees and Acquisitions . The Borrower will not, nor will it permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except (and provided, however, that during the Senior Period the Borrower or any Subsidiary may not make a purchase, acquisition, advance, or investment pursuant to any of the clauses (c), (d) (unless consistent with prior practice and in the ordinary course of business), (f), (g), (p), (q), (r), (s) or (t) below (other than investments existing on the Fifth Amendment Date and set forth on Schedule 6.04A)): :(a)        Permitted Investments;

(b)        investments existing on the date hereof and Sixth Amendment Effective Date (which investments shall, to the extent they exceed $500,000 as of the Sixth Amendment Effective Date, be set forth on Schedule 6.04 ) ;

(c)         Permitted Acquisitions [Reserved] ;

(d)        investments by the Borrower and the Subsidiaries in their respective Subsidiaries that exist immediately prior to any applicable transaction; provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Guarantee and Collateral Agreement to the extent required by this Agreement and (ii) the aggregate amount of investments (excluding any such investments, loans, advances and Guarantees to such Subsidiaries that are assumed and exist on the date any Permitted Acquisition is consummated and that are not made, incurred or created in contemplation of or in connection with such Permitted Acquisition) by Loan Parties in, and loans and advances by Loan Parties to, and Guarantees by Loan Parties of Indebtedness of, Subsidiaries that are not Loan Parties that have complied with the Collateral and Guarantee Requirement made after the Closing Date shall not at any time exceed $ 40,000,000 10,000,000 ;

 

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(e)        loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary; provided that (i) any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Guarantee and Collateral Agreement and (ii) the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (d) above;

(f)         Guarantees permitted by Section 6.01(a)(vii) [reserved] ;

(g)         Guarantees in respect of any Specified Vendor Payables Financing [reserved] ;

(h)        investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business;

(i)        any investments in or loans to any other Person received as noncash consideration for sales, transfers, leases and other dispositions permitted by Section 6.05;

(j)        Guarantees by the Borrower and the Subsidiaries of leases entered into by any Subsidiary as lessee; provided that the amount of such Guarantees made by Loan Parties to Subsidiaries that are not Loan Parties shall be subject to the limitation set forth in clause (d) above;

(k)        extensions of credit in the nature of accounts receivable or notes receivable in the ordinary course of business;

(l)        loans or advances to employees made in the ordinary course of business consistent with prudent business practice and not exceeding $ 2,500,000 50,000 in the aggregate outstanding at any one time;

(m)        investments in the form of Hedging Agreements permitted under Section 6.07;

(n)        [reserved];

(o)        payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

(p)         Permitted Joint Venture and Foreign Subsidiary Investments; [reserved]; and

(q)        investments, loans or advances in addition to those permitted by the other clauses of this Section 6.04 not exceeding in the aggregate $ 40,000,000 1,000,000 at any time outstanding, provided that no Default exists at the time that such investment, loan or advance is made or is caused thereby;.

(r)           investments made (i) in an amount not to exceed the Net Proceeds of any issuance of Equity Interests in the Borrower issued on or after the Closing Date or (ii) with Equity Interests in the Borrower;

 

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  (s)           investments by the Borrower or any Subsidiary in an aggregate amount not to exceed the Available Amount; and

   (t)          other investments by the Borrower or any Subsidiary so long as the Net Leverage Ratio (calculated on a pro forma basis after giving effect to such investment and any related incurrence or repayment of Indebtedness) is less than 2.50 to 1.00.

SECTION 6.05     Asset Sales . The Borrower will not, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will it permit any Subsidiary to issue any additional Equity Interest in such Subsidiary, except (and provided, however, that during the Senior Period the Borrower or any Subsidiary may not, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will the Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary pursuant to any of the clauses (c), (e), (f) or (j) below (other than sales, transfers and other dispositions of property identified on Schedule 6.05A)): : (a)             sales, transfers, leases and other dispositions of inventory, used or surplus equipment or other obsolete assets, Permitted Investments and investments referred to in Section 6.04(h) in the ordinary course of business;

  (b)        sales, transfers and dispositions to the Borrower or a Subsidiary; provided that any the book value and the fair market value (whichever is higher) of all property that is subject to such sales, transfers or dispositions involving from a Loan Party to a Subsidiary that is not a Loan Party shall be made in not exceed $10,000,000 in the aggregate for all such sales, transfers or dispositions made after the Sixth Amendment Effective Date and all such sales, transfers or dispositions shall be made in the ordinary course of business and in compliance with Section  6.04 and Section  6.09;

  (c)         (i) sales of accounts receivable and inventory and related assets by a Foreign Subsidiary pursuant to customary terms whereby recourse and exposure in respect thereof to any Foreign Subsidiary does not exceed at any time $35,000,000 and (ii) sales of accounts receivables and related assets pursuant to the Specified Vendor Receivables Financing; to the extent permitted by Section 6.01 (a) (xii);

  (d)        the creation of Liens permitted by Section 6.02 and dispositions as a result thereof;

  (e)        sales or transfers that are permitted sale and leaseback transactions of accounts receivable and related assets pursuant to the Specified Vendor Receivables Financings permitted under Section  6.06 6.01(a)(iv) ;

  (f)         sales and transfers that constitute part of an Acquisition Lease Financing [reserved] ;

  (g)        Restricted Payments permitted by Section 6.08;

  (h)        transfers and dispositions constituting investments permitted under Section 6.04;

  (i)          sales, transfers and other dispositions of property identified on Schedule 6.05; and [reserved]

 

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  (j)         so long as no Event of Default shall have occurred and then be continuing, sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary) that are not permitted by any other clause of this Section; provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this clause (j) shall not exceed (i) 15% of the aggregate fair market value of all assets of the Borrower (determined as of the end of its most recent fiscal year), including any Equity Interests owned by it, during any fiscal year of the Borrower; provided that such amount shall be increased, in respect of the fiscal year ending on December 31, 2016, and each fiscal year thereafter by an amount equal to the total unused amount of such permitted (i ) all sales, transfers and other dispositions for the immediately preceding fiscal year (without giving effect to the amount of any unused permitted by this clause (j) shall be made for fair market value, (ii) all sales, transfers and other dispositions that were carried forward to such preceding fiscal year) and (ii) 35% of the aggregate fair market value of all assets of the Borrower as of the Closing Date, including any Equity Interests owned by it, during the term of this Agreement subsequent to the Closing Date; permitted by this clause (j) above shall be for 100% cash consideration, and (iii) all Net Proceeds thereof shall be applied as follows: (A) up to the first $100,000,000 of such Net Proceeds shall be applied to repay the Loans pursuant to Section 2.10(b), (B) after $100,000,000 of such Net Proceeds have been applied to repay the Loans, the next $15,000,000 of such Net Proceeds may be retained by the Borrower, and (C) all other Net Proceeds shall be applied to prepay the Loans pursuant to Section 2.11(c);

provided that (x) all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by clauses (b) or (h) above) shall be made for fair value and (y) all sales, transfers, leases and other dispositions permitted by clauses (i), (j) and (k) above shall be for at least 75% cash consideration .

SECTION 6.06     Sale and Leaseback Transactions . The Borrower will not, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred , except, in each case, during the Senior Period, for (a) any such sale of any fixed or capital assets (other than any such transaction to which (b) or (c) below is applicable) that is made for cash consideration in an amount not less than the cost of such fixed or capital asset in an aggregate amount less than or equal to $10,000,000, so long as the Capital Lease Obligations associated therewith are permitted by Section 6.01(a)(viii), (b) in the case of property owned as of or after the Closing Date, any such sale of any fixed or capital assets that is made for cash consideration in an aggregate amount not less than the fair market value of such fixed or capital assets not to exceed $20,000,000 in the aggregate, in each case, so long as the Capital Lease Obligations (if any) associated therewith are permitted by Section 6.01(a)(viii) and (c) any Acquisition Lease Financing. .

SECTION 6.07     Hedging Agreements . The Borrower will not, nor will it permit any Subsidiary to, enter into any Hedging Agreement, other than (a) Hedging Agreements entered into in the ordinary course of business and which are not speculative in nature to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its assets or liabilities (including Hedging Agreements that effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)) (it being understood that the Borrower and its Foreign Subsidiaries may enter into Hedging Agreements consisting of cross- currency swaps related to intercompany loans between the Borrower and/or its Foreign Subsidiaries), (b) except during the Senior Period, Permitted Bond Hedge Transactions and (c)  except during the Senior Period, Permitted Warrant Transactions.

 

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SECTION 6.08     Restricted Payments; Certain Payments of Indebtedness .The Borrower will not, nor will it permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except (and provided, however, that the Borrower or any Subsidiary may not during the Senior Period declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment or incur any obligation (contingent or otherwise) to do so pursuant to any of the clauses (iii), (iv), (v), (vii), (viii), (ix) or (xi) below): :

  (i)   the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional common Equity Interests in the Borrower;

  (ii)  Subsidiaries may declare and pay dividends ratably with respect to their capital stock;

  (iii) the Borrower may make Restricted Payments, not exceeding $5,000,000 from and after the date hereof, pursuant to and in accordance with stock option plans, equity purchase programs or agreements or other benefit plans, in each case for management or employees or former employees of the Borrower and the Subsidiaries;

  (iv) the Borrower may pay the Closing Date Dividend;

  (v)   the Borrower may pay cash dividends in respect of Qualified Borrower Preferred Stock issued pursuant to clauses (b) and (c) of the definition thereof; provided that such dividends in respect of Qualified Borrower Preferred Stock issued pursuant to clause (c) of the definition thereof may only be made after the fiscal year ending December 31, 2016 and only with Excess Cash Flow not otherwise required to be used to prepay Term Loans pursuant to Section 2.11(d)) (without duplication of amounts used pursuant to Section 6.08(a)(vii) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii));

  (vi) [reserved];

  (vii) the Borrower may make payments in respect of the repurchase, retirement or other acquisition of Equity Interests of the Borrower or any Subsidiary using the portion of Excess Cash Flow not subject to mandatory prepayment pursuant to Section 2.11(d) (without duplication of amounts used pursuant to Section 6.08(a)(v) or amounts included in the Available Amount and used pursuant to Sections 6.04(s) or 6.08(b)(vii));

  (viii)              the Borrower may make Restricted Payments; provided that if after giving effect to such Restricted Payments (and any Indebtedness incurred in connection therewith (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash) and any related repayment of Indebtedness), the Net Leverage Ratio at the time of the making such payments (the date of the making of such payments, the “ RP Date ”) would be (1) less than or equal to 2.25 to 1.00, but greater than 2.00 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $40,000,000, (2) less than or equal to 2.75 to 1.00, but greater than 2.25 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $25,000,000, (3) less than or equal to 3.25 to 1.00 but greater than 2.75 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $15,000,000, (4) less than or equal to 4.00 to 1.00 but greater than 3.25 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $10,000,000

 

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and (5) greater than 4.00 to 1.00, such Restricted Payments shall not be permitted if the aggregate amount of such Restricted Payments would exceed $5,000,000; provided further that at the time of any payment pursuant to this clause (viii), no Default or Event of Default shall have occurred and be continuing;

  (ix)  the Borrower may make payments in respect of any purchase price adjustment required to be made under the Westfalia Purchase Agreement;

  (x)   the Borrower may make any Restricted Payments and/or payments or deliveries in shares of common stock (or other securities or property following a merger event or other change of the common stock of the Borrower) (and cash in lieu of fractional shares) and/or cash required by the terms of, and otherwise perform its obligations under, any Permitted Convertible Indebtedness (including, without limitation, making payments of interest and principal thereon, making payments due upon required repurchase thereof and/or making payments and deliveries due upon conversion thereof);

  ( xi iii )         the Borrower may pay the premium in respect of, and may otherwise perform its obligations under, any Permitted Bond Hedge Transaction; and

  ( xii iv )         the Borrower may make payments or deliveries in shares of common stock and cash in lieu of fractional shares required by the terms of, and otherwise perform its obligations under, the Convertible Notes Indenture (including, without limitation, making payments of interest and principal thereon and/or making deliveries (other than in cash) due upon conversion thereof) . ; and

   (v) the Sixth Amendment Transactions on the Sixth Amendment Effective Date (but not, for the avoidance, any Restricted Payments made in cash).

(b)         The Borrower will not, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except (and provided, however, that the Borrower or any Subsidiary may not during the Senior Period make, or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness pursuant to any of the clauses (vi), (vii) or (ix) (other than as required to comply with its obligations as in effect on the Fifth Amendment Effective Date) below): :

  (i)   payment of Indebtedness created under the Loan Documents;

  (ii)   payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness, other than payments in respect of subordinated Indebtedness prohibited by the subordination provisions thereof; provided that no cash interest payments under any Indebtedness under the Junior Credit Agreement or any refinancing thereof;

 

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  (iii) refinancings of Indebtedness to the extent permitted by Section 6.01;

  (iv) subject to the Term Intercreditor Agreement and the ABL/Term Loan Intercreditor Agreement, the payment of secured First Lien Secured Indebtedness out of the proceeds of any sale or transfer of the property or assets securing such Indebtedness;

  (v) payment of or in respect of (A) Indebtedness created under the ABL Loan Documents and (B) Indebtedness or obligations secured by the ABL Security Documents;

  (vi) payments payment of Indebtedness with the Net Proceeds of an issuance of Equity Interests in the Borrower create d under the Junior Loan Documents solely with the proceeds of mandatory prepayments declined or waived by the Lenders ;

  (vii) payments of Indebtedness in an amount equal to the Available Amount; provided that at the time of such payment and after giving effect thereto, (i) no Default or Event of Default shall have occurred and be continuing and (ii) at the time of such payment and after giving effect thereto and to the incurrence of any Indebtedness in connection therewith (but disregarding the proceeds of any such Indebtedness in calculating Unrestricted Domestic Cash), the Net Leverage Ratio is not greater than 2.00 to 1.00; [reserved]; and

  (viii)         the Borrower may make payments or deliveries in shares of common stock and cash in lieu of fractional shares required by the terms of, and otherwise perform its obligations under, the Convertible Notes Indenture (including, without limitation, making payments of interest and principal thereon and/or making deliveries (other than in cash) due upon conversion thereof) ; and .

   (ix) the purchase of any Permitted Bond Hedge Transaction by the Borrower and the performance of its obligations thereunder.

(c)         The Borrower will not, nor will it permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement unless, in each case except during the Senior Period, (i) in the case of any Synthetic Purchase Agreement related to any Equity Interests of the Borrower, the payments required to be made by the Borrower are limited to amounts permitted to be paid under Section 6.08(a) , (ii) in the case of any Synthetic Purchase Agreement related to any Restricted Indebtedness, the payments required to be made by the Borrower or the Subsidiaries thereunder are limited to the amount permitted under Section 6.08(b) and (iii) in the case of any Synthetic Purchase Agreement, the obligations of the Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders. .

SECTION 6.09     Transactions with Affiliates . The Borrower will not, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:

(a)         transactions that are at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties; provided that (i) in the case of any single transaction or series of transactions with a volume in excess of $500,000, the board of directors of the Borrower shall have made a determination in good faith that such transaction or series of transactions, as applicable, is on prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than

 

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could be obtained on an arm’s-length basis from unrelated third parties and (ii) in the case of any single transaction or series of transactions with a volume in excess of $1,000,000, the board of directors of the Borrower shall have engaged an independent financial advisor reasonably acceptable to the Required Lenders and such independent financial advisor shall have made a determination and delivered a customary fairness opinion stating that such transaction or series of transactions, as applicable, is on prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties;

(b)         transactions between or among the Borrower and the Subsidiaries an y othe r Loan Parties not involving any other Affiliate (to the extent not otherwise prohibited by other provisions of this Agreement);

(c)         any Restricted Payment permitted by Section 6.08; and

(d)          (i) transactions pursuant to agreements in effect on the Closing Date and listed on Schedule 6.09 ( provided that this clause (d) shall not apply to any extension, or renewal of, or any amendment or modification of such agreements that is less favorable to the Borrower or the applicable Subsidiaries, as the case may be) and (ii) the Sixth Amendment Transactions .

SECTION 6.10      Restrictive Agreements . The Borrower will not, nor will it permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, Specified Vendor Receivables Financing Document, Specified Vendor Payables Financing Document or any ABL Loan Document or any Junior Loan Document or that are customary, in the reasonable judgment of the board of directors thereof, for the market in which such Indebtedness is issued so long as such restrictions do not prevent, impede or impair (x) the creation of Liens and Guarantees in favor of the Lenders under the Loan Documents or (y) the satisfaction of the obligations of the Loan Parties under the Loan Documents, (ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof existin g on the Fifth Amendment Effective Date and identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), ( iii ii ) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale; provided , further , that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder and ( iv iii ) clause (a) of the foregoing shall not apply to (A) restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (B) customary provisions in leases and other agreements restricting the assignment thereof.

SECTION 6.11     Amendment of Material Documents . The Borrower will not, nor will it permit any Subsidiary to, amend, restate, modify or waive any of its rights under (a) its certificate of incorporation, by-laws or other organizational documents, and (b) (i) any Material Agreement (other than any ABL Loan Document and the Junior Loan Documents ), Spin-Off Documentation or other agreements (including joint venture agreements), in each case to the extent such amendment, restatement, modification or waiver is adverse to the Lenders in any material respect (it being agreed that the addition

 

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or removal of the Borrower or any Subsidiary from participation in a Specified Vendor Receivables Financing or Specified Vendor Payables Financing shall not constitute an amendment, modification or waiver of any Specified Vendor Receivables Financing Document or Specified Vendor Payables Financing Document, as applicable, that is adverse to the Lenders) , (ii) any ABL Loan Document that (w) expands or adds to the obligations secured under any ABL Security Documents (other than any obligations constituting Indebtedness created under the ABL Credit Agreement), (x) adds any mandatory prepayment provisions (only to the extent resulting in a corresponding permanent commitment reduction or requiring prepayment from the net cash proceeds of the sale, transfer or other disposition of Term Priority Collateral or any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any Term Priority Collateral) or changes any mandatory prepayment provisions in a manner that would increase the amount of any mandatory prepayment of the ABL Loans (only to the extent resulting in a corresponding permanent commitment reduction), (y) increases the “Applicable Margin” or similar component of interest thereunder by more than 3.0% (other than as a result of accrual of interest at the default rate) or (z) adds an additional covenant or event of default or makes any covenant or event of default in the ABL Loan Documents materially more restrictive or burdensome prior to the Latest Maturity Date then in effect (unless this Agreement is amended to provide all of the Lenders with the benefits of such covenants or events of default), in each case under this clause (z), other than covenants and events of default solely relating to the Borrowing Base (as defined in the ABL Credit Agreement), the ABL Priority Collateral or similar matters relating primarily to the asset based revolving nature of the ABL Credit Agreement or in respect of any Offshore Facilities Refinancing (as defined in the ABL/Ter m Loan Intercreditor Agreement) or (iii) any Junior Loan Document in a manner that is inconsistent with the Term Intercreditor Agreement .

SECTION 6.12     [ Reserved ]. Net Leverage Ratio Financial Covenants . (a)  The Borrower will not permit the maximum Net Firs t Lien Leverage Ratio as of the last day of any fiscal quarter ending after the Fourth Amendment Effective Date se t forth below (commencing with the fiscal quarter ending September 30, 2019 ) to exceed the ratio set forth below opposite such fiscal quarter:

 

   Net
Fiscal Quarter    First Lien Leverage Ratio
June September 30, 2018 2019    7.00 8.25 :1.00
September 30, 2018 December    7.00 6.25 :1.00
31 , 2019   
December March 31,    7.0 5.5 0:1.00
2018 2020   
  
March 31, 2019    6.50:1.00
June 30, 2019 2020    5.00:1.00
September 30, 2019 202 0 and    4.75:1.00
eac h fisca l quarte r ending   
thereafter   

 

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(b)          The Borrower will not permit Liquidity to be less than $15,000,000 as of the last day of any fiscal month end, commencing with the month ending March 31, 2019.

(c)          The Borrower will not permit the Fixed Charge Coverage Ratio as of the last day of any fiscal quarter set forth below (commencing with the fiscal quarter ending March 31, 2020) to be below the ratio set forth below opposite such fiscal quarter :

 

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Fisca l Quarter

   Fixed Charge Coverage Ratio
Fisca l quarter s ende d March    0.75:1.00
31 , 2020   
December 31, 2019 Jun e 30,    4.5 1.0 0:1.00
2020 and each fiscal quarter   
ending thereafter   

(d)          The Borrower will not permit Capital Expenditures in any fiscal year to exceed the amount set forth below opposite such fiscal year (it being understood that any unused amounts for any fiscal year may be used in the next succeeding fiscal year):

 

Fisca l Year   

    

Maximum Capita l Expenditures

2019    $15,000,000
202 0 an d eac h fisca l year    $25,000,000

thereafter

    

  

 

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SECTION 6.14      Use of Proceeds . The Borrower will not request any Borrowing, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a Person organized in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

ARTICLE VII

Events of Default

If any of the following events (“ Events of Default ”) shall occur:

  (a)         the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

  (b)         the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

  (c)         any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or

 

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other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)         the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.04 or , 5.11 or 5.13(d) or in Article VI;

(e)         any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 20 days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender) ;

(f)         the Borrower or any Subsidiary shall fail to make any payment (whether of principal, interest or other payment obligations) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable grace period with respect thereto;

(g)         any event or condition occurs (includin g a “Fundame nta l Change ” a s define d in th e Convertibl e Note s Indenture) that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; provided further that , this clause (g) shall not apply to any Indebtedness outstanding under the ABL Credit Agreement unless (i) such default shall continue unremedied for a period of 30 15 days (during which period such default is not waived or cured), (ii) the ABL Agent or the lenders under the ABL Credit Agreement cause the ABL Loans to become due prior to their stated maturity and/or the Commitments (as defined in the ABL Credit Agreement) to terminate prior to their stated termination date or (iii) the ABL Agent and/or the lenders under the ABL Credit Agreement exercise secured creditor remedies as a result of such default ) ; provided further that this clause (g) shall not apply to (A) secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and (B)  any Permitted Convertible Indebtedness to the extent such event or condition occurs as a result of (x) the satisfaction of a conversion contingency, (y) the exercise by a holder of Permitted Convertible Indebtedness of a conversion right resulting from the satisfaction of a conversion contingency or (z) a required repurchase under such Permitted Convertible Indebtedness ; in each case of this clause (B) solely to the extent that the obligation of the Borrower resulting from such event or condition is satisfied through the issuance of common Equity Interests of the Borrower other than the payment of cash in lieu of the issuance of fractional Equity Interests of the Company;

(h)         an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such

 

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proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)        the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)        the Borrower or any Subsidiary shall become unable, admit in writing in a court proceeding its inability or fail generally to pay its debts as they become due;

(k)        one or more judgments for the payment of money in an aggregate amount in excess of $ 5,000,000 1,000,000 shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;

(l)        an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m)        any Lien covering property having a book value or fair market value of $ 5,000,000 1,000,000 or more purported to be created under any Security Document shall cease to be, or shall be asserted in writing by any Loan Party not to be, a valid and perfected Lien on any Collateral, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of the Administrative Agent’s failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Guarantee and Collateral Agreement;

(n)        the Guarantee contained in Article II of the Guarantee and Collateral Agreement shall cease to be, or shall have been asserted in writing by a Loan Party not to be, in full force and effect;

(o)        the Borrower or any Subsidiary shall challenge the subordination provisions of the Subordinated Debt or assert that such provisions are invalid or unenforceable or that the Obligations of the Borrower, or the Obligations of any Subsidiary under the Guarantee and Collateral Agreement, are not senior Indebtedness under the subordination provisions of the Subordinated Debt, or any court, tribunal or government authority of competent jurisdiction shall judge the subordination provisions of the Subordinated Debt to be invalid or unenforceable or such Obligations to be not senior Indebtedness under such subordination provisions or otherwise cease to be, or shall be asserted not to be, legal, valid and binding obligations of the parties thereto, enforceable in accordance with their terms;

 

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(p)        a Change in Control shall occur;

(q)        a Loan Party denies or contests the validity or enforceability of any Loan Documents (including an y of the Intercreditor Agreement Agreements ) or Obligations, or any Loan Document (including an y of the Intercreditor Agreement Agreements ) ceases to be in full force or effect for any reason (other than a waiver or release by the Administrative Agent and Lenders);

(r)        a loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $ 5,000,000 1,000,000 ; or

(s)        any event occurs or condition exists that has a Material Adverse Effect;

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees , and including any fee payable pursuant to Section 2.11(b) that would be payable if the Loans had been repaid in full at such time , and other obligations of the Borrower, accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

Without limiting the generality of the foregoing, in the event the Loans are accelerated or otherwise become due, in each case, in respect of any Event of Default (including, but not limited to, upon the occurrence of an any event with respect to the Borrower described in clause (h) or (i) of this Article (including the acceleration of claims by operation of law)), the fee payable pursuant to Section 2.11(b) will also be due and payable as though the Loans were optionally prepaid at such time and shall constitute part of the Obligations, in view of the impracticability and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of each Lender’s lost profits as a result thereof. Any premium (including the fee payable pursuant to Section 2.11(b)) payable above shall be presumed to be the liquidated damages sustained by each Lender as the result of the prepayment and the Borrower agrees that it is reasonable under the circumstances currently existing. The premium (including the fee payable pursuant to Section 2.11(b)) shall also be payable in the event the Loans (and/or this Credit Agreement) are satisfied or released by foreclosure (whether by power of judicial proceeding), deed in lieu of foreclosure or by any other means. THE BORROWER EXPRESSLY WAIVES (TO THE FULLEST EXTENT IT MAY LAWFULLY DO SO) THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE COLLECTION OF THE FOREGOING PREMIUM (INCLUDING THE FEE PAYABLE PURSUANT TO SECTION 2.11(b)) IN CONNECTION WITH ANY SUCH ACCELERATION. The Borrower expressly agrees (to the fullest extent it may lawfully do so) that: (A) the premium (including the fee payable pursuant to Section 2.11(b)) is reasonable and is the product of an arm’s length transaction between sophisticated business people, ably represented by counsel; (B) the premium (including the fee

 

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payable pursuant to Section 2.11(b)) shall be payable notwithstanding the then prevailing market rates at the time payment is made; (C) there has been a course of conduct between Lenders and the Borrower giving specific consideration in this transaction for such agreement to pay the premium (including the fee payable pursuant to Section 2.11(b)); and (D) the Borrower shall be estopped hereafter from claiming differently than as agreed to in this paragraph. The Borrower expressly acknowledges that its agreement to pay the premium (including the fee payable pursuant to Section 2.11(b)) to Lenders as herein described is a material inducement to Lenders to consent to the Sixth Amendment.

ARTICLE VIII

The Agents

Each of the Lenders hereby irrevocably appoints the Administrative Agent (it being understood that references in this Article VIII to the Administrative Agent shall be deemed to include the Collateral Agent) as its agent and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.

The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.

The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02) and the Administrative Agent shall not be liable for any action taken or not taken by it in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

 

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The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel, independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.

Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders and the Borrower. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor from among the Lenders. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent’s resignation hereunder, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Administrative 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 it was acting as Administrative Agent.

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.

 

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ARTICLE IX

[Reserved]

ARTICLE X

Miscellaneous

SECTION 10.01     Notices . Except in the case of notices and other communications expressly permitted to be given by telephone, 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 telecopy, as follows:

(a)        if to the Borrower, to Horizon Global Corporation at 39400 Woodward Avenue, Suite 100, Bloomfield Hills 2600 West Big Beaver Rd., Suite 555, Troy , MI 48304 48084 , Attention of Jay Goldbaum, Legal Director (Telephone No. (248) 593-8838, Telecopy No. (248) 203-6434);

(b)        if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 10 South Dearborn, Floor 7, Chicago, Illinois 60603 Attention of Joyce King (Telecopy: 888-292-9533, Telephone: 312-385-7025); and

(c)        if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire.

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 10.02     Waivers; Amendments .

(a)        No failure or delay by the Administrative Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent or any Lender may have had notice or knowledge of such Default at the time.

(b)        Except as provided in Section  2.21 and Section  2.23, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan

 

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Parties that are parties thereto, in each case with the written consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the maturity of any Loan, or any scheduled date of payment of the principal amount of any Term Loan under Section 2.10, or any date for the payment of any interest or fees payable hereunder, or reduce or forgive the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.18(a), (b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change the percentage set forth in the definition of “ Required Lenders ” or any other provision of any Loan Document (including this Section) specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (or each Lender of such Class, as the case may be), (vi) release all or substantially all of the Subsidiary Loan Parties from their Guarantees under the Guarantee and Collateral Agreement (except as expressly provided in the Guarantee and Collateral Agreement), without the written consent of each Lender, (vii) release all or substantially all of the Collateral from the Liens of the Security Documents, without the written consent of each Lender (except as expressly provided in the Security Documents) or (viii) change the order of priority of payments set forth in Section 2.4 of the Guarantee and Collateral Agreement without the written consent of each Lender; provided , further , that (A) no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Collateral Agent, without the prior written consent of the Administrative Agent or the Collateral Agent, as applicable, and (B) any waiver, amendment or modification of this Agreement that by its terms affects the rights or duties under this Agreement of the Lenders of a particular Class (but not the Lenders of any other Class) may be effected by an agreement or agreements in writing entered into by the Borrower and requisite percentage in interest of the affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time. Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by the Borrower, the Required Lenders and the Administrative Agent if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement.

(c)        In connection with any proposed amendment, modification, waiver or termination (a “ Proposed Change ”) requiring the consent of all Lenders or all affected Lenders, if the consent of the Required Lenders (and, to the extent any Proposed Change requires the consent of Lenders holding Loans of any Class pursuant to clause (v) or (viii) of paragraph (b) of this Section, the consent of at least 50% in interest of the outstanding Loans and unused Commitments of such Class) to such Proposed Change is obtained, but the consent to such Proposed Change of other Lenders whose consent is required is not obtained (any such Lender whose consent is not obtained as described in paragraph (b) of this Section being referred to as a “ Non-Consenting Lender ”), then, so long as the Lender that is acting as Administrative Agent is not a Non-Consenting Lender, the Borrower may, at its sole expense and effort, upon notice to such Non-Consenting Lender and the Administrative Agent, require such Non-Consenting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (a) the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not be unreasonably withheld, (b) such Non-Consenting

 

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Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder 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), (c) the Borrower or such assignee shall have paid to the Administrative Agent the processing and recordation fee specified in Section 10.04(b), (d) such assignee shall consent to such Proposed Change and (e) if such Non-Consenting Lender is acting as the Administrative Agent, it will not be required to assign and delegate its interests, rights and obligations as Administrative Agent under this Agreement. Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee, and that the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective.

(d)        Notwithstanding the foregoing, (i) the Administrative Agent and the Borrower may amend, modify or supplement any Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document , and (ii) the Administrative Agent and the Borrower may amend this Agreement without the consent of any Lender or Required Lenders in order to provide the Lenders with the benefits of any additional covenants, more restrictive covenants or events of default that are included in any Alternative Incremental Debt or Permitted Term Loan Refinancing Indebtedness or that are added to the ABL Loan Documents and (iii) except during the Senior Period, this Agreement may be amended with the written consent of the Administrative Agent, the Borrower and the Lenders providing the relevant Replacement Term Loans (as defined below) to permit the refinancing, replacement or modification of all or any portion of the outstanding Term Loans or Incremental Term Loans (such Loans, the “ Replaced Term Loans ”) with a replacement term loan hereunder (“ Replacement Term Loans ”); provided , that (a) the aggregate principal amount of such Replacement Term Loans shall not exceed the aggregate principal amount of such Replaced Term Loans ( plus unpaid accrued interest and premium thereon at such time plus reasonable fees and expenses incurred in connection with such replacement), (b) the terms of the Replacement Term Loans (1) (excluding pricing, fees and rate floors and optional prepayment or redemption terms and subject to clause (2) below) reflect, in the Borrower’s reasonable judgment, then-existing market terms and conditions and (2) (excluding pricing, fees and rate floors) are no more favorable to the lenders providing such Replacement Term Loans than those applicable to the Replaced Term Loans (in each case, including with respect to mandatory and optional prepayments); provided that the foregoing shall not apply to covenants or other provisions applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such Replacement Term Loans; provided further that any Replacement Term Loans may add additional covenants or events of default not otherwise applicable to the Replaced Term Loans or covenants more restrictive than the covenants applicable to the Replaced Term Loans, in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such Replacement Term Loans so long as all Lenders receive the benefits of such additional covenants, events of default or more restrictive covenants, (c) the weighted average life to maturity of any Replacement Term Loans shall be no shorter than the remaining weighted average life to maturity of the Replaced Terms Loans, (d) the maturity date with respect to any Replacement Term Loans shall be no earlier than the maturity date with respect to the Replaced Term Loans, (e) no Subsidiary that is not originally obligated with respect to repayment of the Replaced Term Loans is obligated with respect to the Replacement Term Loans and (f) any Person that the Borrower proposes to become a lender in respect of the Replacement Term Loans, if such Person is not then a Lender, must be reasonably acceptable to the Administrative Agent. Notwithstanding the foregoing, in no event shall there be more than six maturity dates in respect of the Credit Facilities (including any Extended Term Loans or Replacement Term Loans). .

 

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SECTION 10.03     Expenses; Indemnity; Damage Waiver .

(a)        The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Agents and their Affiliates, including the reasonable fees, charges and disbursements of one counsel in each applicable jurisdiction for each of the Agents, in connection with the syndication provision, negotiation and documentation of the credit facilities facility provided for herein, due diligence investigation, the preparation and administration of the Loan Documents (including the Sixth Amendment), the monitoring of the performance of the Borrower and its Affiliates , or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and , (ii)  from and after the Sixth Amendment Effective Date, reasonable and documented fees, charges and disbursements of one counsel acting for all the Lenders and one financial advisor acting on behalf of all Lenders, provided that, unless an Event of Default has occurred and is continuing, the costs and expenses of the financial advisor for the Lenders in connection with the regular monitoring of the performance of the Borrower and its Affiliates with the Loan Documents reimbursable pursuant to this Section 10.03(a) shall not exceed $50,000 per month, and (iii ) all out-of-pocket expenses incurred by the Agents or any Lender th e Lenders, including the fees, charges and disbursements of any one counsel for the Agents or any Lender an d one counsel for all of the Lenders (but not for any financial advisor if there is a financial advisor already retained by the Lenders for which the Borrower is providing reimbursement pursuant to clause (ii)) , in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including (subject to the limitations provided above) all such out-of pocket out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans;.

(b)        The Borrower hereby indemnifies the Agents, the Arrangers and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous Materials on or from any Mortgaged Property or any other property currently or formerly owned or operated by the Borrower or any Subsidiary, or any Environmental Liability related in any way to the Borrower or any Subsidiary, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, and whether or not the same are brought by the Borrower, its equity holders, affiliates or creditors or any other Person and regardless of whether any Indemnitee is a party thereto; 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, bad faith or willful misconduct of such Indemnitee or (B) are determined by a court of competent jurisdiction by final and non-appealable judgment to have arisen out of a material breach in bad faith by such Indemnitee of its obligations under the Loan Documents or (C) result from a dispute solely among Indemnitees, other than any claims against an Indemnitee in its capacity or in fulfilling its role as an agent or arranger under the Loan Documents and other than any claims arising out of any act or omission of the Borrower or any of its Affiliates. This Section 10.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

 

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(c)        To the extent that any of the Borrower fails to pay any amount required to be paid by it to the Administrative Agent under paragraph (a) or (b) of this Section 10.03 (and without limiting such party’s obligation to do so), each Lender severally agrees to pay to the Administrative Agent such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided 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 in its capacity as such. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the outstanding Term Loans and unused Commitments at the time.

(d)        To the extent permitted by Applicable Law, the Borrower 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 or any agreement or instrument contemplated hereby, the Transactions, any Loan or the use of the proceeds thereof.

(e)        All amounts due under this Section 10.03 shall be payable promptly after written demand therefor.

(f)        No director, officer, employee, stockholder or member, as such, of any Loan Party shall have any liability for the Obligations or for any claim based on, in respect of or by reason of the Obligations or their creation; provided that the foregoing shall not be construed to relieve any Loan Party of its Obligations under any Loan Document.

(g)        For the avoidance of doubt, this Section 10.03 shall not apply to any Taxes, except to the extent any Taxes that represent losses, claims, damages or liabilities arising from any non-Tax claim.

SECTION 10.04     Successors and Assigns .

(a)        The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent 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 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)        Any Lender may assign to one or more assignees (other than a natural person) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund, each of the Borrower and the Administrative Agent must give their prior written consent to such assignment (which consent shall not be unreasonably withheld or delayed) ( provided that the Borrower shall be deemed to have consented to any assignment of Loans or Commitments unless it shall object thereto by written notice to the Administrative Agent within 10 Business Days after having received notice thereof), (ii) except in the case of an assignment to a Lender, a Lender Affiliate or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning

 

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Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, (iii) 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, except that this clause (iii) shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lender’s rights and obligations in respect of one Class of Commitments or Loans, (iv) 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 and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire; and provided , further , that any consent of the Borrower otherwise required under this paragraph shall not be required if an Event of Default under clauses (a), (h) or (i) of Article VII has occurred and is continuing. Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto 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 2.15, 2.16, 2.17 and 10.03). 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 (e) of this Section.

(c)        The Administrative Agent, acting for this purpose as an a non-fiduciary agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of 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, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d)        Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(e)        Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “ Participant ”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans); 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 and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any

 

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amendment, modification or waiver of any provision of the Loan Documents; 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 described in the first proviso to Section 10.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the limitations and requirements therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) 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 agrees to be subject to the provisions of Section 2.19 as if it were an assignee under paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender. With respect to any Loan made to the Borrower, each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or in connection with any income tax audit or other income tax proceeding of the Borrower. 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.

(f)        A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant unless the sale of the participation to such Participant is made with the prior written consent of the Borrower. A Participant that would be a Non-U.S. Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower to comply with Section 2.17(f) as though it were a Lender.

(g)        Any Lender may, without the consent of the Borrower or the Administrative Agent, 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 any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(h)        Notwithstanding anything to the contrary set forth in this Agreement or any other Loan Document, except during the Senior Period, any Lender may assign all or a portion of its Term Loans ( or Incremental Term Loans ) to the Borrower or any of its Subsidiaries at a price below the par value thereof; provided that any such assignment shall be subject to the following additional conditions: (1) no Default or Event of Default shall have occurred and be continuing immediately before and after giving effect to such assignment, (2) any such offer to purchase shall be offered to all Term Lenders of a particular Class on a pro rata basis, with mechanics to be agreed by the Administrative Agent and the Borrower, (3) any Loans so purchased shall be immediately cancelled and retired ( provided that any non- cash gain in respect of “cancellation of indebtedness” resulting from the cancellation of any Loans so purchased shall not increase Consolidated EBITDA), (4) the Borrower shall provide, as of the date of its

 

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offer to purchase and as of the date of the effectiveness of such purchase and assignment, a customary representation and warranty that neither it nor any of its affiliates is in possession of any material non-public information with respect to the Borrower, its Subsidiaries or their respective securities and (5) the Borrower and the applicable purchaser shall waive any right to bring any action against the Administrative Agent in connection with such purchase or the Term Loans so purchased. For the avoidance of doubt, in no event shall the Borrower or any of its Subsidiaries be deemed to be a Lender under this Agreement or any of the other Loan Documents as a result of an assignment made under this clause (h).

SECTION 10.05     Survival . All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Commitments or the termination of this Agreement or any provision hereof.

SECTION 10.06     Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent 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 4.01, this Agreement shall become effective when it shall have been executed by the 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, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 10.07     Severability . Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 10.08     Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such obligations may

 

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be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 10.09     Governing Law; Jurisdiction; Consent to Service of Process .

(a)        This Agreement shall be construed in accordance with and governed by the law of the State of New York.

(b)        The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court 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, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction.

(c)        The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)        Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 10.10     WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY 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, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

SECTION 10.11     Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.

 

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SECTION 10.12     Confidentiality . Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Lender Affiliates and to its and its Lender Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (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 pursuant to the terms hereof), (b) to the extent requested by any regulatory or quasi-regulatory authority, (c) to the extent required by Applicable Laws or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document 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 or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g) with the consent of the Borrower, (h) to the extent such Information (i) is publicly available at the time of disclosure or becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the Borrower or any Subsidiary or (i) to data service providers, including league table providers, that serve the lending industry, so long as such information consists of information customarily provided to such data service providers. For the purposes of this Section, “Information” means all information received from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary or its business, other than any such information that is available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower or any Subsidiary; provided that, in the case of information received from the Borrower or any Subsidiary after the Closing Date, 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 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 10.13     Interest Rate Limitation . Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under Applicable Law (collectively the “ Charges ”), shall exceed the maximum lawful rate (the “ Maximum Rate ”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with Applicable Law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

 

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SECTION 10.14     Intercreditor Agreements . Each Lender hereby authorizes and directs the Administrative Agent and/or the Collateral Agent (a) to enter into the Intercreditor Agreements on its behalf, perform the Intercreditor Agreements on its behalf and take any actions thereunder as determined by the Administrative Agent or the Collateral Agent to be necessary or advisable to protect the interest of the Lenders, and each Lender agrees to be bound by the terms of the Intercreditor Agreements and (b) to enter into any other intercreditor agreement reasonably satisfactory to the Administrative Agent on its behalf, perform such intercreditor agreement on its behalf and take any actions thereunder as determined by the Administrative Agent or the Collateral Agent to be necessary or advisable to protect the interests of the Lenders, and each Lender agrees to be bound by the terms of such intercreditor agreement. Each Lender acknowledges that (i) the ABL/Term Loan Intercreditor Agreement governs, among other things, Lien priorities and rights of the Lenders and the ABL Secured Parties (as defined in the ABL/Term Loan Intercreditor Agreement) with respect to the Collateral, including the ABL Priority Collateral and (ii) the Term Intercreditor Agreement governs, among other things, Lien priorities and rights of the Lenders and the Senior Junior Secured Parties (as defined in the Term Intercreditor Agreement) with respect to the Collateral, including the Term Priority Collateral. In the event of any inconsistency a conflict between any Loan Document and any Intercreditor Agreement and any other Loan Document , the provision provisions of the applicable Intercreditor Agreement shall prevail.

SECTION 10.15     Release of Liens and Guarantees . (a) Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Collateral Agent is hereby irrevocably authorized by each Lender (without requirement of notice to or consent of any Lender except as expressly required by Section 10.02) to take any action requested by the Borrower having the effect of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit consummation of any transaction not prohibited by any Loan Document or that has been consented to in accordance with Section 10.02 or (ii) under the circumstances described in paragraph (b) below.

(b)         (i) At such time as the Loans and the other obligations under the Loan Documents shall have been paid in full and the Commitments have been terminated, the Collateral shall be released from the Liens created by the Security Documents, and the Security Documents and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Loan Party under the Security Documents shall terminate, all without delivery of any instrument or performance of any act by any Person and (ii) upon any sale or other transfer by any Loan Party of any Collateral in a transaction permitted under Section 6.05(c)(ii) of this Agreement , the security interests in such Collateral created by the Security Documents shall be automatically released without delivery of any instrument or performance of any act by any Person ; provided that the Borrower shall, at any time upon request from the Administrative Agent, provide a certificate, in form and substance reasonably satisfactory to the Administrative Agent and signed by a Financial Officer of the Borrower, confirming that (x) such sale or transfer (i) is a “Specified Vendor Receivables Financing” transaction as defined herein, (ii) constitutes permitted Indebtedness under Section 6.01(a)(ii)(B), (iii) constitutes permitted Liens under Section 6.02(c) and (iv) such sale or transfer is a permitted sale or transfer of Collateral under Section 6.05(c)(ii) and (y) no Default or Event of Default has occurred or will occur, as applicable, after giving effect to such sale or transfer . The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, such certificate, believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person.

(c)        In connection with any termination or release pursuant to this Section, the Administrative Agent and the Collateral Agent shall execute and deliver to any Loan Party all documents that such Loan Party shall reasonably request to evidence such termination or release. Any execution and

 

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delivery of documents pursuant to this Section shall be without recourse to or warranty by the Administrative Agent or the Collateral Agent.

(d)          The Lenders irrevocably authorize the Administrative Agent and the Collateral Agent to release or subordinate any Lien on any property granted to or held by the Administrative Agent or the Collateral Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(c), 6.02(e) or 6.02(f) to the extent required by the terms of the obligations secured by such Liens pursuant to documents reasonably acceptable to the Administrative Agent.

SECTION 10.16     PATRIOT Act . Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ PATRIOT Act ”), it is required, or will be required in the future, to obtain, verify and record information that identifies the Borrower and the other Loan Parties, which information includes the name and address of the Borrower and the other Loan Parties and other information that will allow such Lender to identify the Borrower and the other Loan Parties in accordance with the PATRIOT Act.

SECTION 10.17     No Fiduciary Duty . Each Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “ Lenders ”), may have economic interests that conflict with those of the Borrower, its stockholders and/or its affiliates. The Borrower agrees that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and the Borrower, its stockholders or its affiliates, on the other. The Borrower acknowledges and agrees that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and there under) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Borrower, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of the Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise the Borrower, its stockholders or its Affiliates on other matters) or any other obligation to the Borrower except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of the Borrower, its management, stockholders, creditors or any other Person. The Borrower acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. The Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to such borrower, in connection with such transaction or the process leading thereto.

SECTION 10.18     Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)        the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

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(b)        the effects of any Bail-In Action on any such liability, including, if applicable:

(i)        a reduction in full or in part or cancellation of any such liability;

(ii)        a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)        the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

[ Signature Pages Follow ]

 

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

 

HORIZON GLOBAL CORPORATION,
By:  

 

  Name:
  Title:

 

[Signature Page to Credit Agreement]

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent,
By:  

 

  Name:
  Title:

 

[Signature Page to Credit Agreement]

LENDER SIGNATURE PAGE TO

THE CREDIT AGREEMENT

 

   Name of Lender,  
   By:   

 

 
        Name:  
        Title:  

For any Lender requiring a second signature line:

   By:     

 

 
        Name:  
        Title:  

 

[Signature Page to Credit Agreement]

LENDER SIGNATURE PAGE TO

THE CREDIT AGREEMENT

 

   Name of Lender,  
   By:   

 

 
        Name:  
        Title:  

For any Lender requiring a second signature line:

   By:     

 

 
        Name:  
        Title:  

 

[Signature Page to Credit Agreement]

EXHIBIT A-2

New Schedules to Credit Agreement

 

Schedule 6.01    –        Existing Indebtedness as of Sixth Amendment Effective Date
Schedule 6.02    –        Existing Liens as of Sixth Amendment Effective Date
Schedule 6.04    –        Existing Investments as of Sixth Amendment Effective Date

See attached.

 

SCHEDULE 6.01

EXISTING INDEBTEDNESS AS OF THE SIXTH AMENDMENT EFFECTIVE DATE

 

Company    Bank   

Facility

Details

  

 

Outstanding
Amount as of
2/24/2019

  

Secured/Unsecured

 

Westfalia-Automotive GmbH    N/A    Capital Lease with Portikus    $10,075,538    Secured
Cequent Industria E Comerico Ltda., Westfalia-Automotive GmBH, Terwa Romania Srl Unit 1, Teljs Automotive Srl Unit 2, Horizon Americas, Inc.    N/A    Capital Leases    $2,683,977    Secured
Horizon Global Corporation Pty Ltd.   

National Australia

Bank Ltd., Australia

   Multi Facility Agreement    $15,276,725    Secured
Terwa Romania Srl Unit 1    ING    Overdraft Credit Facility    $2,023,801    Secured

Terwa Romania Srl Unit 1

 

  

N/A

 

  

Other

 

  

$912,997

 

  

Secured

 

Note: the above schedule is subject to year-end audit adjustments

Intercompany Debt as listed below:

 

Borrower    Lender    Amount
Cequent Electrical Products de Mexico S. de R.L. de C.V.    Cequent Sales Company de Mexico,
S. de R.L. de C.V. 		   $1,481.19
Horizon Global (South Africa) (PPY) LTD.    Cequent Nederland Holdings B.V.    $212,463.40

C.P. Witter Limited    Cequent Nederland Holdings B.V.    $2,428,116.42
Trimotive Germany GmbH    Cequent Nederland Holdings B.V.    $974,950.00
Kovil Oy    Cequent Nederland Holdings B.V.    $297,187.70
HG Germany Holdings GmbH    Cequent Nederland Holdings B.V.    $126,170,000.00
AH Forgings Proprietary Limited    Cequent Nederland Holdings B.V.    $54,320.77
Westfalia – Automotive GmbH    Cequent Nederland Holdings B.V.    $1,720,498.85
Westfalia – Automotive SAS    Cequent Nederland Holdings B.V.    $277,011.97
Westfalia – Automotive Denmark ApS    Cequent Nederland Holdings B.V.    $1,270,557.13
Westfalia – Automotive Polska Sp. Zo.o    Cequent Nederland Holdings B.V.    $556,910.94
Westfalia – Automotive Italia S.r.l    Cequent Nederland Holdings B.V.    $300,166.46
Teljs Automotive Srl Unit 2    Cequent Nederland Holdings B.V.    $1,553,635.59
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holding LLC    $44,789,896.27
Horizon Global Corporation    Horizon International Holding LLC    $12,502,710.00
C.P. Witter Limited    Cequent UK Limited    $637,950.00
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97
Cequent Nederland Holdings B.V.    Horizon Global Company LLC    $117,280,750.00
Westfalia – Automotive GmbH    Horizon Global Company LLC    $1,147,000,00

SCHEDULE 6.02

EXISTING LIENS AS OF THE SIXTH AMENDMENT EFFECTIVE DATE

1.      Indebtedness set forth on Schedule 6.01 encumbering the assets described on Schedule 6.01, to the extent that such Indebtedness is described as secured Indebtedness on such Schedule 6.01.

2.      Lien evidenced by Initial Filing Number OH00161477063, filed on September 25, 2012, by Raymond Leasing Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in Equipment Master Lease No. 305351.

3.      Lien evidenced by Initial Filing Number 2009 0236023, filed on January 23, 2009, by Air Liquide Industrial U.S. LP against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting specific equipment, including a 13 ton CO2 tank, two gas vessels, and a vaporizer, located in Goshen, IN.

4.      Lien evidenced by Initial Filing Number 2012 0866626, filed on March 6, 2012, by Wells Fargo Bank, N.A. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in Master Lease Agreement No. 9679080.

5.      Lien evidenced by Initial Filing Number 2013 2487248, filed on June 27, 2013, by Wells Fargo Financial Leasing, Inc. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.) covering certain collateral constituting five Xerox Workcentre 5855 copiers.

6.      Lien evidenced by Initial Filing Number 2013 3798981, filed on September 19, 2013, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in the Lease Agreement #122662-003.

7.      Lien evidenced by Initial Filing Number 2013 4703188, filed on November 29, 2013, by Well Fargo Financial Leasing, Inc. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting two Xerox Workcentre 5855 copiers.

8.      Lien evidenced by Initial Filing Number 2015 5309983, filed on November 12, 2015, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting equipment specified in Lease Agreement No.122662-005.

9.      Lien evidenced by Initial Filing Number 2016 7591637, filed on December 7, 2016, by Well Fargo Bank, N.A. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting specific equipment.

10.    Lien evidenced by Initial Filing Number 2017 0850658, filed on February 7, 2017, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting equipment specified in Lease Agreement No.122662-06.

11.    Lien evidenced by Initial Filing Number 2016 1548856, filed on March 15, 2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Corporation, covering certain collateral constituting a Copystar CS 3051ci Copier.

12.    Lien evidenced by Initial Filing Number 2016 1812344, filed on March 28, 2016, by Leaf Capital Funding, LLC and/or its assigns against Horizon Global Corporation and Horizon Global Company LLC, as amended covering certain collateral constituting certain Herman Miller Furniture.

13.    Lien evidenced by Initial Filing Number 2016 3880422, filed on June 28, 2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Company LLC, covering certain collateral constituting a Copystar CS 4551ci Copier.

14.    Lien evidenced by Initial Filing Number 2017 3151500, filed on May 12, 2017, by Mitsubishi UFJ Lease & Finance (U.S.A.) Inc., against Horizon Global Company LLC and Horizon Global Americas Inc, covering certain collateral constituting equipment specified in Master Lease Agreement No. 105854.

15.    Lien evidenced by Initial Filing Number 2017 3151542, filed on May 12, 2017, by Corporation Service Company, as representative, against Horizon Global Company LLC, covering certain collateral constituting equipment specified in Master Lease Agreement No. 105854.

16.    Lien evidenced by Initial Filing Number 2017 5703415, filed on August 28, 2017, by Summit Funding Group, Inc. against Horizon Global Company LLC, covering certain collateral constituting certain equipment, goods, assets, and other tangible and intangible property specified in Master Lease Agreement No. 2677.

17.    Lien evidenced by Initial Filing Number 2017 5906034, filed on September 6, 2017, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 1 to Master Lease 300716.

18.    Lien evidenced by Initial Filing Number 2017 8278089, filed on December 14, 2017, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 2 to Master Lease 300716.

19.    Lien evidenced by Initial Filing Number 2018 2274419, filed on April 3, 2018, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 3 to Master Lease 300716.

20.    Lien evidenced by Initial Filing Number 2018 3737521, filed on June 1, 2018, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 4 to Master Lease 300716.

21.    Lien evidenced by Initial Filing Number 20172702832, filed on April 25, 2017, by MB Financial Bank, N.A. against Horizon Global Americas Inc., covering specific leased equipment.

22.    Lien evidenced by Initial Filing Number 20174044068, filed on June 20, 2017, by Wells Fargo Bank, N.A. against Horizon Global Americas Inc., covering specific equipment.

23.    Lien evidenced by Initial Filing Number 20174301955, filed on June 29, 2017, by the Bank of Tokyo-Mitsubishi UFJ, Ltd. against Horizon Global Americas Inc., covering certain collateral pursuant to Online Supplier Agreement, dated on or about March 20, 2017.

24.    Lien evidenced by Initial Filing Number 20175797631, filed on August 30, 2017, by Summit Funding Group, Inc. against Horizon Global Americas Inc., covering certain collateral identified in the Master Lease Agreement dated August 17, 2017.

25.    Lien evidenced by Initial Filing Number 20176070772, filed on September 13, 2017, by Bank of America, N.A. against Horizon Global Americas Inc. covering certain accounts receivables pursuant to Accounts Receivable Purchase Agreement.

26.    Lien evidenced by Initial Filing Number 20186000588, filed on August 30, 2018, by Crown Equipment Corporation against Horizon Global Americas Inc., covering certain equipment.

27.    Lien evidenced by Initial Filing Number 20189047487, filed on December 28, 2018, by Shi International Corp. against Horizon Global Americas Inc., covering certain equipment.

28.    Lien evidenced by Initial Filing Number 20190309851, filed on January 14, 2019, by Raymond Leasing Corporation against Horizon Global Americas Inc., covering certain equipment.

SCHEDULE 6.04

EXISTING INVESTMENTS AS OF THE SIXTH AMENDMENT EFFECTIVE DATE

A. Qualified Foreign Investments

 

  1.

Investments by Cequent Electrical Products de Mexico, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

 

  2.

Investments by Cequent Trailer Products, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

B. Other Investments

 

  1.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Juarez, Mexico facility; the aggregate amount of loans described in this clause (B)(1) and clause (B)(2) below do not exceed $5.0 million.

 

  2.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Reynosa, Mexico facility; the aggregate amount of loans described in this clause (B)(2) and clause (B)(1) above do not exceed $5.0 million.

 

  3.

Horizon Global Corporation’s investment in the Hong Kong Sourcing Office legal entity to provide legal restructuring and operational funding in an aggregate amount not exceeding $2.5 million.

 

  4.

Investments by Horizon Global Corporation in one or more wholly-owned foreign subsidiaries for the purpose of purchasing one or more foreign manufacturing facilities, including capital equipment and working capital, in an aggregate amount not exceeding $3.0 million.

 

  5.

Horizon Global Digital Limited’s investment in 20% of the issued share capital of Reckless Digital Group Holdings Limited in a total consideration of GBP 360,000 paid to Ellie Warriner (GBP 45,000) and Lindsay Reckless (GBP 315,000)

 

  6.

Horizon Global Digital Limited’s loan to Reckless Digital Group Holdings Limited to be used for growth initiatives and general working capital purposes, in an amount equal to GBP 300,000.

 

  7.

Cequent Industria e Comercio’s Ltda’s (fka Cequent Brazil Participacoes) purchase of Engetran Engenharia, Industria, Comercio de Pecas e Acessorios Veiculares Ltda from Jorge Correia Karan of which there remains about $100,000 outstanding.

  8.

Cequent Industria e Comercio Ltda’s purchase of Dhelfos Industria E Comercio De Acessorios Ltda from Ernani Mariano and Maria Luiza Gome De Goes, of which there remains about $2.5M outstanding.

 

  9.

Westfalia-Automotive GmbH owns 20% of EWV Management Consultancy Pty.

 

  10.

Vendor note from SISS Holding B.V. to Terwa Holding B.V. in connection with Terwa Holding B.V.’s divestiture of (i) all shares in Terwa B.V. to SISS Holding B.V; and (ii) construction-related assets of Terwa Romania Srl Unit 1 to Terwa Construction Systems Srl

Intercompany Debt as listed below:

 

Borrower    Lender    Amount
Cequent Electrical Products de Mexico S. de R.L. de C.V.    Cequent Sales Company de Mexico,
S. de R.L. de C.V. 		   $1,481.19
Horizon Global (South Africa) (PPY) LTD.    Cequent Nederland Holdings B.V.    $212,463.40
C.P. Witter Limited    Cequent Nederland Holdings B.V.    $2,428,116.42
Trimotive Germany GmbH    Cequent Nederland Holdings B.V.    $974,950.00
Kovil Oy    Cequent Nederland Holdings B.V.    $297,187.70
HG Germany Holdings GmbH    Cequent Nederland Holdings B.V.    $126,170,000.00
AH Forgings Proprietary Limited    Cequent Nederland Holdings B.V.    $54,320.77
Westfalia – Automotive GmbH    Cequent Nederland Holdings B.V.    $1,720,498.85
Westfalia – Automotive SAS    Cequent Nederland Holdings B.V.    $277,011.97
Westfalia – Automotive Denmark ApS    Cequent Nederland Holdings B.V.    $1,270,557.13
Westfalia – Automotive Polska Sp. Zo.o    Cequent Nederland Holdings B.V.    $556,910.94
Westfalia – Automotive Italia S.r.l    Cequent Nederland Holdings B.V.    $300,166.46
Teljs Automotive Srl Unit 2    Cequent Nederland Holdings B.V.    $1,553,635.59
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holding LLC    $44,789,896.27
Horizon Global Corporation    Horizon International Holding LLC    $12,502,710.00
C.P. Witter Limited    Cequent UK Limited    $637,950.00
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97
Cequent Nederland Holdings B.V.    Horizon Global Company LLC    $117,280,750.00
Westfalia – Automotive GmbH    Horizon Global Company LLC    $1,147,000,00

EXHIBIT A-2

New Schedules to Credit Agreement

 

Schedule 6.01   –      Existing Indebtedness as of Sixth Amendment Effective Date
Schedule 6.02      Existing Liens as of Sixth Amendment Effective Date
Schedule 6.04   –      Existing Investments as of Sixth Amendment Effective Date

See attached.

EXHIBIT A-2

New Schedules to Credit Agreement

 

Schedule 6.01         –    Existing Indebtedness as of Sixth Amendment Effective Date
Schedule 6.02         –    Existing Liens as of Sixth Amendment Effective Date
Schedule 6.04         –    Existing Investments as of Sixth Amendment Effective Date

See attached.

EXHIBIT B

Term Intercreditor Agreement

See attached.

Execution Version

 

TERM INTERCREDITOR AGREEMENT

Among

HORIZON GLOBAL CORPORATION,

as the Borrower,

the other Grantors from time to time party hereto,

JPMORGAN CHASE BANK, N.A.,

as the Senior Collateral Agent for the Senior Secured Parties,

CORTLAND CAPITAL MARKET SERVICES LLC,

as Junior Collateral Agent for the Junior Secured Parties,

and

each Additional Senior Agent and Additional Junior Agent from time to time party hereto

dated as of March 15, 2019

TERM INTERCREDITOR AGREEMENT dated as of March 15, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”), among Horizon Global Corporation, a Delaware limited liability company (the “ Borrower ”); the other Grantors (as defined below) party hereto; JPMORGAN CHASE BANK, N.A, as collateral agent for the Senior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Senior Collateral Agent ”); CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent for the Junior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Junior Collateral Agent ”); and each Additional Senior Agent (as defined below) and each Additional Junior Agent (as defined below) that from time to time becomes a party hereto pursuant to Section 8.09.

In consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Senior Collateral Agent (for itself and on behalf of the Senior Credit Agreement Secured Parties), the Junior Collateral Agent (for itself and on behalf of the Junior Secured Parties), each Additional Senior Agent (for itself and on behalf of the Additional Senior Secured Parties under the applicable Additional Senior Debt Facility) and each Additional Junior Agent (for itself and on behalf of the Additional Junior Secured Parties under the applicable Additional Junior Debt Facility) agree as follows:

ARTICLE I

Definitions

SECTION 1.01. Certain Defined Terms . Capitalized terms used but not otherwise defined herein have the meanings set forth in the Senior Credit Agreement as in effect on the date hereof or, if defined in the New York UCC, the meanings specified therein. As used in this Agreement, the following terms have the meanings specified below:

“ ABL Priority Collateral ” means the “ABL Priority Collateral” (as defined in the ABL/Term Loan Intercreditor Agreement).

“ ABL/Term Loan Intercreditor Agreement ” means the “ABL/Term Loan Intercreditor Agreement” (as defined in the Senior Credit Agreement).

“ Additional Junior Agent ” means the collateral agent, administrative agent and/or trustee (as applicable) or any other similar agent or Person under any Additional Junior Debt Documents, in each case, together with its successors in such capacity.

“ Additional Junior Debt ” means any Indebtedness of the Borrower or any other Grantor (other than Indebtedness constituting Junior Credit Agreement Obligations), which Indebtedness and any related Guarantees are secured by the Junior Collateral (or a portion thereof) on a junior basis to the Liens securing the Senior Credit Agreement Obligations; provided , however , that (i) such Indebtedness is permitted to be incurred, secured and guaranteed on such basis by each then extant Senior Debt Document and Junior Debt Document and (ii) the Representative for the holders of such Indebtedness shall have become party to this Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.09 hereof. Additional Junior Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Grantors issued in exchange therefor.

“ Additional Junior Debt Documents ” means, with respect to any Series of Additional Junior Debt Obligations, the notes, credit agreements, indentures, security documents and other operative

agreements evidencing or governing such Additional Junior Debt Obligations and each other agreement entered into for the purpose of securing such Additional Junior Debt Obligations.

“ Additional Junior Debt Facility ” means each debt facility, credit agreement, indenture or other governing agreement with respect to any Additional Junior Debt.

“ Additional Junior Debt Obligations ” means, with respect to any Series of Additional Junior Debt, (a) all principal, interest, fees and expenses (including, without limitation, any interest, fees and expenses which accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable as a claim in any such proceeding) payable with respect to such Additional Junior Debt, (b) all other amounts payable to the related Additional Junior Secured Parties under the related Additional Junior Debt Documents (including, without limitation, any other amounts which accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable as a claim in any such proceeding) and (c) any renewals or extensions of the foregoing.

“ Additional Junior Secured Parties ” means, with respect to any Series of Additional Junior Debt Obligations, the holders of such Additional Junior Debt Obligations, the Representative with respect thereto, any trustee or agent therefor under any related Additional Junior Debt Documents and the beneficiaries of each indemnification obligation undertaken by the Borrower or any Grantor under any related Additional Junior Debt Documents.

“ Additional Senior Agent ” means the collateral agent, administrative agent and/or trustee (as applicable) under any Additional Senior Debt Documents, in each case, together with its successors in such capacity.

“ Additional Senior Debt ” means any Indebtedness of the Borrower or any other Grantor (other than Indebtedness constituting Senior Credit Agreement Obligations), which Indebtedness and any related Guarantees are secured by the Senior Collateral (or a portion thereof) on a senior basis to the Liens securing Junior Credit Agreement Obligations; provided that (i) such Indebtedness is permitted to be incurred, secured and guaranteed on such basis by each other then extant Senior Debt Document, (ii) the principal amount of such Indebtedness shall not exceed $20,000,000, plus any additional amounts resulting from the payment of “in-kind” interest , and (iii) the Representative for the holders of such Indebtedness shall have become party to (A) this Agreement pursuant to, and by satisfying the conditions set forth in, Section 8.09 hereof and (B) an applicable Intercreditor Agreement. Additional Senior Debt shall include any Registered Equivalent Notes and Guarantees thereof by the Grantors issued in exchange therefor; provided , further , that if such Indebtedness will be the initial Additional Senior Debt incurred by the Borrower after the date hereof, then the Grantors, the Senior Collateral Agent and the Representative for such Indebtedness shall have executed and delivered an applicable Intercreditor Agreement.

“ Additional Senior Debt Documents ” means, with respect to any Series of Additional Senior Debt, the notes, credit agreements, indentures, security documents and other operative agreements evidencing or governing such Additional Senior Debt and each other agreement entered into for the purpose of securing such Additional Senior Debt Obligations.

“ Additional Senior Debt Facility ” means each debt facility, credit agreement, indenture or other governing agreement with respect to any Additional Senior Debt.

“ Additional Senior Debt Obligations ” means, with respect to any Series of Additional Senior Debt, (a) all principal, interest, fees and expenses (including, without limitation, any interest, fees and expenses which accrue after the commencement of any Insolvency or Liquidation Proceeding,

 

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whether or not allowed or allowable as a claim in any such proceeding) payable with respect to such Additional Senior Debt, (b) all other amounts payable to the related Additional Senior Secured Parties under the related Additional Senior Debt Documents (including, without limitation, any other amounts which accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not allowed or allowable as a claim in any such proceeding) and (c) any renewals or extensions of the foregoing.

“ Additional Senior Secured Parties ” means, with respect to any Series of Additional Senior Debt Obligations, the holders of such Additional Senior Debt Obligations, the Representative with respect thereto, any trustee or agent therefor under any related Additional Senior Debt Documents and the beneficiaries of each indemnification obligation undertaken by the Borrower or any Grantor under any related Additional Senior Debt Documents.

“ Agreement ” has the meaning assigned to such term in the preamble hereto.

“ Bankruptcy Code ” means Title 11 of the United States Code, as amended or any successor statute.

“ Bankruptcy Law ” means the Bankruptcy Code and any other federal, state, or foreign law for the relief of debtors, or any arrangement, reorganization, insolvency, moratorium, assignment for the benefit of creditors, any other marshalling of the assets or liabilities of the Borrower or any of its Subsidiaries, or similar law affecting creditors’ rights generally.

“ Borrower ” has the meaning assigned to such term in the introductory paragraph of this Agreement.

“ Class  Debt ” has the meaning assigned to such term in Section 8.09.

“ Class  Debt Parties ” has the meaning assigned to such term in Section 8.09.

“ Class  Debt Representatives ” has the meaning assigned to such term in Section 8.09.

“ Collateral ” means the Senior Collateral and the Junior Collateral.

“ Collateral Documents ” means the Senior Collateral Documents and the Junior Collateral Documents.

“ Debt Facility ” means any Senior Debt Facility and any Junior Debt Facility.

“ Designated Junior Representative ” means (i) the Junior Collateral Agent until such time as the Discharge of Junior Credit Agreement Obligations has occurred and (ii) thereafter, the Junior Representative designated by all then-existing Junior Representatives in a notice to the Designated Senior Representative and the Borrower.

“ Designated Senior Representative ” means (i) the “Controlling Collateral Agent” (or equivalent term) as defined in an applicable Intercreditor Agreement or any comparable designated entity under any successor agreement to such Intercreditor Agreement or (ii) in the case that no such Intercreditor Agreement or any successor thereto is then in effect, the remaining Senior Representative.

“ DIP Financing ” has the meaning assigned to such term in Section 6.01.

 

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“ Discharge of Junior Credit Agreement Obligations ” means notwithstanding any discharge of the Senior Obligations under any Debtor Relief Laws or in connection with any Insolvency or Liquidation Proceeding:

(a)        payment in full in cash of all Junior Credit Agreement Obligations (other than any indemnification obligations for which no claim or demand for payment, whether oral or written, has been made at such time); and

(b)        termination or expiration of all commitments, if any, to extend credit that would constitute Junior Credit Agreement Obligations;

provided that the Discharge of Junior Credit Agreement Obligations shall not be deemed to have occurred in connection with a Refinancing of such Junior Credit Agreement Obligations with an Additional Junior Debt Facility secured by the Shared Collateral which has been designated in writing by the Representative (under the Junior Debt Document so Refinanced) or by the Borrower, in each case, to each other Representative as the “Junior Credit Agreement” for purposes of this Agreement.

“ Discharge of Senior Obligations ” means notwithstanding any discharge of the Senior Obligations under any Debtor Relief Laws or in connection with any Insolvency or Liquidation Proceeding, except to the extent otherwise expressly provided in Section  5.6 :

(a)        payment in full in cash of all Senior Obligations (other than any indemnification for which no claim or demand for payment, whether oral or written, has been made at such time: provided that the Senior Secured Parties may, in their reasonable discretion, request the posting of cash collateral for any possible future indemnification obligations); and

(b)        termination or expiration of all commitments, if any, to extend credit that would constitute Senior Obligations;

provided that the Discharge of any Series of Senior Obligations shall not be deemed to have occurred in connection with a Refinancing of such Series of Senior Obligations with an Additional Senior Debt Facility secured by the Shared Collateral which has been designated in writing by the Representative (under the Senior Debt Document so Refinanced) or by the Borrower, in each case, to each other Representative as “Senior Obligations” for purposes of this Agreement.

“ Grantors ” means the Borrower and each other Subsidiary of the Borrower which has granted a security interest pursuant to any Collateral Document to secure any Secured Obligations. The Grantors existing on the date hereof are set forth in Annex I hereto.

“ Insolvency or Liquidation Proceeding ” means:

(1)        any case commenced by or against the Borrower or any other Grantor under any Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Borrower or any other Grantor, any receivership or assignment for the benefit of creditors relating to the Borrower or any other Grantor or any similar case or proceeding relative to the Borrower or any other Grantor or its creditors, as such, in each case whether or not voluntary;

(2)        any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Borrower or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

 

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(3)        any other proceeding of any type or nature in which substantially all claims of creditors of the Borrower or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.

“ Joinder Agreement ” means a supplement to this Agreement in the form of Annex III or Annex IV hereof required to be delivered by a Representative to the Designated Senior Representative and the Designated Junior Representative pursuant to Section 8.09 hereof in order to include an additional Debt Facility hereunder and to become the Representative hereunder for the Senior Secured Parties or Junior Secured Parties, as the case may be, under such Debt Facility.

“ Junior Class  Debt ” has the meaning assigned to such term in Section 8.09.

“ Junior Class  Debt Parties ” has the meaning assigned to such term in Section 8.09.

“ Junior Class  Debt Representative” has the meaning assigned to such term in Section 8.09.

“ Junior Collateral ” means any “Collateral” as defined in any Junior Debt Document or any other assets of the Borrower or any other Grantor or Subsidiary of any Grantor with respect to which a Lien is granted or purported or required to be granted pursuant to a Junior Collateral Document as security for any Junior Obligation.

“ Junior Collateral Agent ” has the meaning assigned to such term in the preamble hereto.

“ Junior Collateral Documents ” means the Junior Credit Agreement Security Agreement and the other “Security Documents” as defined in the Junior Credit Agreement, this Agreement and each of the security agreements and other instruments and documents executed and delivered by the Borrower or any Grantor for purposes of providing collateral security for any Junior Obligation.

“ Junior Credit Agreement ” means that certain Term Loan Credit Agreement dated as of March, 15, 2019, as amended, restated, amended and restated, supplemented, increased or otherwise modified, refinanced or replaced from time to time, the Borrower, the lenders party thereto, and Cortland Capital Market Services LLC, as administrative agent and as collateral agent.

“ Junior Credit Agreement Loan Documents ” means the Junior Credit Agreement and the other “Loan Documents” as defined in the Junior Credit Agreement.

“ Junior Credit Agreement Obligations ” means “Obligations” as defined in the Junior Credit Agreement (or any equivalent term in any Refinancing thereof).

“ Junior Credit Agreement Secured Parties ” means the “Secured Parties” as defined in the Junior Credit Agreement (or any equivalent term in any Refinancing thereof).

“ Junior Credit Agreement Security Agreement ” means the “Guarantee and Collateral Agreement” as defined in the Junior Credit Agreement (or any equivalent term in any Refinancing thereof).

“ Junior Debt Documents ” means (a) the Junior Credit Agreement Loan Documents and (b) any Additional Junior Debt Documents.

 

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“ Junior Debt Facility ” means the Junior Credit Agreement and any Additional Junior Debt Facilities.

“ Junior Obligations ” means (a) the Junior Credit Agreement Obligations and (b) any Additional Junior Debt Obligations.

“ Junior Representative ” means (i) in the case of the Junior Credit Agreement or the Junior Credit Agreement Secured Parties, the Junior Collateral Agent and (ii) in the case of any Additional Junior Debt Facility and the Additional Junior Secured Parties thereunder, each Additional Junior Agent in respect of such Additional Junior Debt Facility that is named as such in the applicable Joinder Agreement.

“ Junior Secured Parties ” means the Junior Credit Agreement Secured Parties and any Additional Junior Secured Parties.

“ Lien ” means with respect to any asset, any mortgage, lien, pledge, hypothecation, charge, security interest, preference, priority, or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction; provided that in no event shall an operating lease or a license of Intellectual Property be deemed to constitute a Lien.

“ Maximum DIP Amount” means an amount equal to (a) $50,000,000 less (b) the aggregate principal amount of any additional Senior Obligations (including, without limitation, Additional Senior Debt, but not including any increase of the principal amount of any Senior Obligations resulting from “in-kind” payments of interest) incurred after the date hereof.

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

“ Officer’s Certificate ” has the meaning assigned to such term in Section 8.08.

“ Person ” means any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust, or other enterprise or any Governmental Authority.

“ Plan of Reorganization ” means any plan of reorganization, plan of liquidation, plan of arrangement, agreement for composition, or other type of dispositive restructuring plan proposed in or in connection with any Insolvency or Liquidation Proceeding.

“ Pledged or Controlled Collateral ” has the meaning assigned to such term in Section 5.05(a).

“ Proceeds ” means the proceeds of any sale, collection or other liquidation of Shared Collateral, any payment or distribution made in respect of Shared Collateral in an Insolvency or Liquidation Proceeding and any amounts received by any Senior Representative or any Senior Secured Party from a Junior Secured Party in respect of Shared Collateral pursuant to this Agreement or any other intercreditor agreement.

“ Purchase Event ” has the meaning assigned to such term in Section 5.07.

 

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“ Purchase Right ” has the meaning assigned to such term in Section 5.07.

“ Recovery ” has the meaning assigned to such term in Section 6.04.

“ Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other Indebtedness or enter alternative financing arrangements, in exchange or replacement for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such Indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement. “ Refinanced ” and “ Refinancing ” have correlative meanings.

“ Registered Equivalent Notes ” means, with respect to any notes originally issued in a Rule 144A or other private placement transaction under the Securities Act of 1933, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the SEC.

“ Representatives ” means the Senior Representatives and the Junior Representatives.

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

“ Secured Obligations ” means the Senior Obligations and the Junior Obligations.

“ Secured Parties ” means the Senior Secured Parties and the Junior Secured Parties.

“ Senior Class  Debt ” has the meaning assigned to such term in Section 8.09.

“ Senior Class  Debt Parties ” has the meaning assigned to such term in Section 8.09.

“ Senior Class  Debt Representative ” has the meaning assigned to such term in Section 8.09.

“ Senior Collateral ” means any “Collateral” as defined in any Senior Credit Agreement Loan Document or any other Senior Debt Document or any other assets of the Borrower or any other Grantor or Subsidiary of any Grantor with respect to which a Lien is granted or purported or required to be granted pursuant to a Senior Collateral Document as security for any Senior Obligation.

“ Senior Collateral Agent ” has the meaning assigned to such term in the preamble hereto.

“ Senior Collateral Documents ” means the Senior Credit Agreement Security Agreement and the other “Security Documents” as defined in the Senior Credit Agreement, any applicable Intercreditor Agreement and each of the security agreements and other instruments and documents executed and delivered by the Borrower or any Grantor for purposes of providing collateral security for any Senior Obligation.

“ Senior Credit Agreement ” means that certain Term Loan Credit Agreement dated as of June 30, 2015, as amended, restated, amended and restated, supplemented, increased or otherwise

 

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modified, refinanced or replaced from time to time, including as amended by the Sixth Amendment thereto, dated as of the date hereof, among the Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent.

“ Senior Credit Agreement Loan Documents ” means the Senior Credit Agreement and the other “Loan Documents” as defined in the Senior Credit Agreement.

“ Senior Credit Agreement Obligations ” means the “Obligations” as defined in the Senior Credit Agreement.

“ Senior Credit Agreement Secured Parties ” means the “Secured Parties” as defined in the Senior Credit Agreement.

“ Senior Credit Agreement Security Agreement ” means the “Guarantee and Collateral Agreement” as defined in the Senior Credit Agreement.

“ Senior Debt Documents ” means (a) the Senior Credit Agreement Loan Documents and (b) any Additional Senior Debt Documents.

“ Senior Debt Facilities ” means the Senior Credit Agreement and any Additional Senior Debt Facilities.

“ Senior Lien ” means the Liens on the Senior Collateral in favor of the Senior Secured Parties under the Senior Collateral Documents.

“ Senior Obligations ” means the Senior Credit Agreement Obligations and any Additional Senior Debt Obligations. For the avoidance of doubt, “Senior Obligations” shall include any post-petition interest (including at the applicable default rate), whether or not such post-petition interest is permissible under applicable Bankruptcy Law.

“ Senior Representative ” means (i) in the case of any Senior Credit Agreement Obligations or the Senior Credit Agreement Secured Parties, the Senior Collateral Agent and (ii) in the case of any Additional Senior Debt Facility and the Additional Senior Secured Parties thereunder, each Additional Senior Agent in respect of such Additional Senior Debt Facility that is named as such in the applicable Joinder Agreement.

“ Senior Secured Parties ” means the Senior Credit Agreement Secured Parties and any Additional Senior Secured Parties.

“ Series ” means (a) (x) with respect to the Senior Secured Parties, each of (i) the Senior Credit Agreement Secured Parties (in their capacities as such) and (ii) the Additional Senior Secured Parties that become subject to this Agreement after the date hereof that are represented by a common Representative (in its capacity as such for such Additional Senior Secured Parties) and (y) with respect to the Junior Secured Parties, each of (i) the Junior Credit Agreement Secured Parties (in their capacity as such) and (ii) the Additional Junior Secured Parties that become subject to this Agreement after the date hereof that are represented by a common Representative (in its capacity as such for such Additional Junior Secured Parties) and (b) (x) with respect to any Senior Obligations, each of (i) the Senior Credit Agreement Obligations and (ii) the Additional Senior Debt Obligations incurred pursuant to any Additional Senior Debt Facility and or any Additional Senior Debt Documents, which pursuant to any Joinder Agreement, are to be represented hereunder by a common Representative (in its capacity as such for such Additional Senior Debt Obligations) and (y) with respect to any Junior Obligations, each of

 

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(i) the Junior Credit Agreement Obligations and (ii) the Additional Junior Debt Obligations incurred pursuant to any Additional Junior Debt Facility and the related Additional Junior Debt Documents, which pursuant to any Joinder Agreement, are to be represented hereunder by a common Representative (in its capacity as such for such Additional Junior Debt Obligations).

“ Shared Collateral ” means, at any time, Collateral which (i) constitutes Senior Collateral (or, in the case of the Senior Debt Facilities, the holders of such Senior Debt Facilities are deemed to hold a security interest pursuant to Section 2.04 hereof) and in which the holders of Junior Obligations (or their Representatives) hold a security interest at such time or (ii) constitutes Junior Collateral.

“Specified Event of Default” means (i) any Event of Default (as defined in the Senior Credit Agreement) pursuant to clauses (a), (b), (d) (solely in respect of Borrower’s failure to observe or perform the covenants contained in Section 6.13), (h), (i) or (j) of Article VII of the Senior Credit Agreement or (ii) following any Event of Default (as defined in the Senior Credit Agreement), any exercise of remedies under the Senior Debt Documents or any declaration of the loans then outstanding under the Senior Debt Documents to be immediately due and payable pursuant to Article VII of the Senior Credit Agreement.

“ Subsidiary ” with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

“ Uniform Commercial Code ” or “ UCC ” means the New York UCC, or the Uniform Commercial Code (or any similar or comparable legislation) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.

SECTION 1.02. Terms Generally . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument, other document, statute or regulation herein shall be construed as referring to such agreement, instrument, other document, statute or regulation as from time to time amended, restated, amended and restated, supplemented or otherwise modified, (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, but shall not be deemed to include the subsidiaries of such Person unless express reference is made to such subsidiaries, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Articles, Sections and Annexes shall be construed to refer to Articles, Sections and Annexes of this Agreement, (v) unless otherwise expressly qualified herein, the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all

 

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tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (vi) the term “or” is not exclusive.

ARTICLE II

Priorities and Agreements with Respect to Shared Collateral

SECTION 2.01. Subordination .

(a)         Lien Subordination . Notwithstanding the date, time, manner or order of filing or recordation of any document or instrument or grant, attachment or perfection of any Liens granted to any Junior Representative or any Junior Secured Parties on the Shared Collateral or of any Liens granted to any Senior Representative or the Senior Secured Parties on the Shared Collateral (or any actual or alleged defect in any of the foregoing) and notwithstanding any provision of the UCC, any applicable law, any Junior Debt Document or any Senior Debt Document or any other circumstance whatsoever, each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, hereby agrees that (i) any Lien on the Shared Collateral securing any Senior Obligations now or hereafter held (or purported to be held) by or on behalf of any Senior Secured Parties or any Senior Representative or other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall have priority over and be senior in all respects and prior to any Lien on the Shared Collateral securing any Junior Obligations; and (ii) any Lien on the Shared Collateral securing any Junior Obligations now or hereafter held (or purported to be held) by or on behalf of any Junior Secured Parties or any Junior Representative or other agent or trustee therefor, regardless of how acquired, whether by grant, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the Shared Collateral securing any Senior Obligations. All Liens on the Shared Collateral securing any Senior Obligations shall be and remain senior in all respects and prior to all Liens on the Shared Collateral securing any Junior Obligations for all purposes, whether or not such Liens securing any Senior Obligations are subordinated to any Lien securing any other obligation of the Borrower, any Grantor or any other Person or otherwise subordinated, voided, avoided, invalidated or lapsed.

(b)         Claim Subordination . Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, hereby agrees and acknowledges that, in addition to the other restrictions set forth in this Agreement, (i) the Junior Obligations shall in all respects be subordinate and junior in right of payment to all Senior Obligations as set forth in this Section 2.01(b), (ii) until the Discharge of Senior Obligations, no Junior Secured Party (x) shall be entitled at any time to receive or collect any payments in respect of principal, interest or any other amounts payable under the Junior Obligations by or on behalf of the Borrower or any Subsidiary of the Borrower (other than (i) to the extent permitted under the Senior Credit Agreement (as in effect on the date hereof), (ii) amendment or other consent fees and (iii) agency fees and the reimbursement of expenses that are payable pursuant to the Junior Credit Agreement Loan Documents (as in effect on the date hereof)), and (y) shall take, demand or receive from the Borrower, any Grantor or any of their Subsidiaries (and the Borrower, any Grantor or any of their Subsidiaries shall not make, give or permit) directly or indirectly, any payment of the whole or any portion of the Junior Obligations, including without limitation by way of deduction from or setoff against any amounts due to the Borrower, any Grantor or any of the Borrower’s other Subsidiaries from any Junior Secured Party (except as permitted by the parenthetical in the preceding clause (x)), (iii) in the event the Senior Obligations become due and payable in full, whether upon maturity, acceleration or otherwise, any payment or distribution of any kind or character, whether in cash, property or securities which, but for the provisions of this Agreement (including but not limited to this Section 2.01(b)), would otherwise be payable or deliverable upon or in respect of any Junior Obligations, shall instead be paid over and delivered until the Discharge of Senior Obligations, to the Senior Collateral

 

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Agent, for application on account of the Senior Obligations, with the result that the Junior Secured Parties shall not receive any such payment or distribution or any benefit therefrom, and (iv) under no circumstances shall any Junior Secured Party or other holder of Junior Obligations assert that it has any claim with respect to the Junior Obligations to any assets of the Borrower, any Grantor or any of their Subsidiaries on a parity with or prior to the claims of the Senior Secured Parties. The Junior Collateral Agent, for itself and on behalf of each other Junior Secured Party, hereby agrees that if, contrary to the preceding sentence, other than as expressly permitted by this Section 2.01(b), the Junior Collateral Agent or any other Junior Secured Party shall receive or collect any payment or distribution of any kind or character, whether in cash, property or securities, from the Borrower, any Grantor or any of their Subsidiaries at any time prior to the Discharge of Senior Obligations, then until the Discharge of Senior Obligations, it shall hold such amount in trust for the Senior Collateral Agent and the other Senior Secured Parties and transfer such amount to the Senior Collateral Agent as promptly as reasonably practicable, in the form received (with any necessary endorsements).

SECTION 2.02. Nature of Senior Lender Claims . Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, acknowledges that (a) the terms of the Senior Debt Documents and the Senior Obligations may be amended, restated, amended and restated, supplemented or otherwise modified, and the Senior Obligations, or a portion thereof, may be Refinanced from time to time and (b) the aggregate amount of the Senior Obligations may be increased in the manner permitted under the then extant Senior Debt Documents and the Junior Debt Documents, in each case without notice to or consent by the Junior Representatives or the Junior Secured Parties and without affecting the provisions hereof. The Lien and claim priorities provided for in Section 2.01 shall not be altered or otherwise affected by any amendment, restatement, amendment and restatement, supplement or other modification, or any Refinancing, of either the Senior Obligations or the Junior Obligations, or any portion thereof. As between the Borrower and the other Grantors and the Junior Secured Parties, the foregoing provisions will not limit or otherwise affect the obligations of the Borrower and the Grantors contained in any Junior Debt Document with respect to the incurrence of additional Senior Obligations.

SECTION 2.03. Prohibition on Contesting Liens . Each of the Junior Representatives, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that it shall not (and hereby waives any right to) challenge, contest or support any other Person in challenging or contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, allowability, priority or enforceability of any Lien securing, or claim asserted with respect to, any Senior Obligations held (or purported to be held) by or on behalf of any of the Senior Secured Parties or any Senior Representative or other agent or trustee therefor in any Senior Collateral, and each of the Designated Senior Representative and each other Senior Representative, for itself and on behalf of each Senior Secured Party under its Senior Debt Facility, agrees that it shall not (and hereby waives any right to) challenge, contest or support any other Person in challenging or contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the validity, extent, perfection, allowability, priority or enforceability of any Lien securing any Junior Obligations held (or purported to be held) by or on behalf of any Junior Representative or any of the Junior Secured Parties in the Junior Collateral. Notwithstanding the foregoing, no provision in this Agreement shall be construed to prevent or impair the rights of the Designated Senior Representative or any other Senior Representative to enforce this Agreement (including the priority of the Liens securing the Senior Obligations as provided in Section 2.01) or any of the Senior Debt Documents.

SECTION 2.04. No New Liens .

(a)        The parties hereto agree that, so long as the Discharge of Senior Obligations has not occurred, (i) none of the Grantors shall grant or permit any additional Liens on any asset or property of any Person (including any Grantor or any of its Subsidiaries) to secure any Junior Obligation unless it

 

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has also granted, or concurrently therewith grants (or offers to grant), a Lien on such asset or property of such Grantor to secure the Senior Obligations, (ii) none of the Grantors shall grant or permit any additional guarantees by any Person (including any Grantor or any of its Subsidiaries) for any Junior Obligation unless a guarantee is given (or offered to be given) by the same Grantor or Subsidiary for the Senior Obligations, and (iii) if any Junior Representative or any Junior Secured Party shall hold any Lien on any assets or property of any Grantor securing any Junior Obligations that are not also subject to the senior-priority Liens securing Senior Obligations under the Senior Collateral Documents, such Junior Representative or Junior Secured Party (1) shall notify the Designated Senior Representative promptly upon becoming aware thereof and, unless such Grantor shall promptly grant a similar Lien on such assets or property to the Senior Representatives as security for the Senior Obligations, shall assign such Lien to the Senior Representatives as security for the Senior Obligations (but may retain a junior lien on such assets or property subject to the terms hereof) and (2) until such assignment or such grant of a similar Lien to the Senior Representatives, shall be deemed to hold and have held such Lien for the benefit of the Senior Representatives as security for the Senior Obligations. If any Junior Representative or any Junior Secured Party shall, at any time, receive any proceeds or payment from or as a result of any Liens granted in contravention of this Section 2.04, it shall pay such proceeds or payments over to the Designated Senior Representative in accordance with the terms of Section 4.02.

(b)        The parties hereto agree that, so long as the Discharge of Junior Credit Agreement Obligations has not occurred (i) none of the Grantors shall grant or permit any additional Liens on any asset or property of any Person (including any Grantor or any of its Subsidiaries) to secure any Senior Obligation unless it has also granted, or concurrently therewith grants (or offers to grant), a Lien on such asset or property of such Grantor to secure the Junior Obligations, (ii) none of the Grantors shall grant or permit any additional guarantees by any Person (including any Grantor or any of its Subsidiaries) for any Senior Obligation unless a guarantee is given (or offered to be given) by the same Grantor or Subsidiary for the Junior Obligations, and (iii) if any Senior Representative or any Senior Secured Party shall hold any Lien on any assets or property of any Grantor securing any Senior Obligations that are not also subject to the junior-priority Liens securing Junior Obligations under the Junior Collateral Documents, such Senior Representative or Senior Secured Party (1) shall notify the Designated Junior Representative promptly upon becoming aware thereof and, unless such Grantor shall promptly grant a similar Lien on such assets or property to the Junior Representatives as security for the Junior Obligations, shall assign such Lien to the Junior Representatives as security for the Junior Obligations (but may retain a senior lien on such assets or property subject to the terms hereof) and (2) until such assignment or such grant of a similar Lien to the Junior Representatives, shall be deemed to hold and have held such Lien for the benefit of the Junior Representatives as security for the Junior Obligations.

SECTION 2.05. Perfection of Liens . Except for the agreements of the Designated Senior Representative pursuant to Section 5.05 hereof, none of the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties shall be responsible for perfecting and maintaining the perfection of Liens with respect to the Shared Collateral for the benefit of the Junior Representatives or the Junior Secured Parties. The provisions of this Agreement are intended solely to govern the respective Lien and claim priorities as between the Senior Secured Parties and the Junior Secured Parties and shall not impose on the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives, the Junior Secured Parties or any agent or trustee therefor any obligations in respect of the disposition of Proceeds of any Shared Collateral which would conflict with prior perfected claims therein in favor of any other Person or any order or decree of any court or governmental authority or any applicable law.

SECTION 2.06. Similar Liens . The parties hereto agree, subject to the provisions of this Agreement:

 

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(a)        To cooperate in order to determine, upon any request by any Senior Representative or Junior Representative, the specific items included in the Shared Collateral securing the Senior Obligations and the Shared Collateral securing the Junior Obligations, the steps taken to perfect the Liens thereon, and the identity of the respective parties obligated under the Senior Debt Documents and the Junior Debt Documents; and

(b)        To make the forms, documents and agreements creating or evidencing the Shared Collateral securing the Senior Obligations and the Junior Obligations and the Liens of the Senior Secured Parties and the Liens of the Junior Secured Parties substantially the same, other than with respect to the senior priority or junior priority lien nature of the Liens created or evidenced thereunder (as applicable), the identity of the parties thereto or secured thereby and other matters contemplated by this Agreement.

SECTION 2.07. Refinancings . The Senior Credit Agreement Obligations of any Series may be Refinanced, in whole or in part, in each case without notice to, or the consent (except to the extent a consent is otherwise required to permit the Refinancing transaction under any Senior Debt Document or Junior Debt Document) of any party hereto, all without affecting the priorities provided for herein or the other provisions hereof, subject to Section 5.03; provided that the collateral agent of the holders of any such Refinancing obligations shall have executed a Joinder Agreement on behalf of the holders of such Refinancing obligations and such collateral agent and Grantors shall have complied with Section 8.09 with respect to such obligations. The Junior Credit Agreement Obligations of any Series may be Refinanced, in whole or in part, in each case without notice to, or the consent (except to the extent a consent is otherwise required to permit the Refinancing transaction under any Senior Debt Document or Junior Debt Document) of any party hereto, all without affecting the priorities provided for herein or the other provisions hereof, subject to Section 5.03; provided that the collateral agent of the holders of any such Refinancing obligations shall have executed a Joinder Agreement on behalf of the holders of such Refinancing obligations and such collateral agent and Grantors shall have complied with Section 8.09 with respect to such obligations.

ARTICLE III

Enforcement

SECTION 3.01. Exercise of Remedies .

(a)        So long as the Discharge of Senior Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Borrower or any other Grantor, (i) neither any Junior Representative nor any Junior Secured Party will (v) file an involuntary petition for an Insolvency or Liquidation Proceeding against any Grantor or any Subsidiary of a Grantor, (w) exercise or seek to exercise any rights or remedies (including setoff or recoupment) with respect to any Shared Collateral in respect of any Junior Obligations, or institute any action or proceeding with respect to such rights or remedies (including any action of foreclosure), (x) contest, protest or object to any foreclosure proceeding or action brought with respect to the Shared Collateral or any other Senior Collateral by the Designated Senior Representative, any other Senior Representative or any Senior Secured Party in respect of the Senior Obligations, the exercise of any right by the Designated Senior Representative, any other Senior Representative or any Senior Secured Party (or any agent or sub-agent on their behalf) in respect of the Senior Obligations under any lockbox agreement, control agreement, landlord waiver or bailee’s letter or similar agreement or arrangement to which the Designated Senior Representative, any other Senior Representative or any Senior Secured Party either is a party or may have rights as a third party beneficiary, or any other exercise by any such party of any rights and remedies relating to the Shared Collateral under the Senior Debt Documents or otherwise in respect of the Senior Collateral or the Senior Obligations, (y) object to the forbearance by the Senior Secured Parties from

 

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bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies relating to the Shared Collateral in respect of Senior Obligations, or (z) assert any marshaling, appraisal, valuation or other similar right that may otherwise be available to junior secured creditors, (ii) except as otherwise provided herein, the Designated Senior Representative, the other Senior Representatives and the Senior Secured Parties shall have the exclusive right to enforce rights, exercise remedies (including setoff, recoupment, and the right to credit bid their debt) and make determinations regarding the release, disposition or restrictions with respect to the Shared Collateral without any consultation with or the consent of any Junior Representative or any Junior Secured Party, and (iii) notwithstanding anything contained in Section 8.01 or in the ABL/Term Loan Intercreditor Agreement, the Designated Senior Representative, the other Senior Representatives and the Senior Secured Parties shall have the exclusive right to exercise, in their sole discretion, all rights, powers and remedies of the “Term Lenders” under the ABL/Term Loan Intercreditor Agreement without the consent of or consultation with any Junior Secured Parties and the Designated Senior Representative shall at all times act as the “Designated Term Agent” under the ABL/Term Loan Intercreditor Agreement; provided , however , that (A) in any Insolvency or Liquidation Proceeding commenced by or against the Borrower or any other Grantor, any Junior Representative may file a claim, proof of claim, or statement of interest with respect to the Junior Obligations under its Junior Debt Facility in a manner consistent with this Agreement, (B) any Junior Representative may take any action (not adverse to the prior Liens on the Shared Collateral securing the Senior Obligations or the rights of the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties to exercise remedies in respect thereof) in order to create, prove, perfect, preserve or protect (but not enforce) its rights in, and perfection and priority of its Lien on, the Shared Collateral, (C) to the extent not otherwise inconsistent with or prohibited by any express provision of this Agreement, any Junior Representative and the Junior Secured Parties may exercise any rights and remedies available to unsecured creditors, to the extent provided in Section 5.04, (D) any Junior Representative may exercise the rights and remedies provided for in Section 6.03 and may vote on a proposed Plan of Reorganization in any Insolvency or Liquidation Proceeding of the Borrower or any other Grantor in accordance with the terms of this Agreement (including Section 6.12), (E) in any Insolvency or Liquidation Proceeding commenced by or against the Borrower or any other Grantor, any Junior Representative may credit bid its Junior Obligations, but only to the extent that such credit bid contains a cash component which results in the Discharge of Senior Obligations and (F) any Junior Representative and the Junior Secured Parties may file any necessary or appropriate responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance or, to the extent not inconsistent with this Agreement, subordination of the claims or Liens of the Junior Secured Parties, including any claims secured by the Junior Collateral, in each case in accordance with the terms of this Agreement. In exercising rights and remedies with respect to the Shared Collateral, the Designated Senior Representative, the other Senior Representatives and the Senior Secured Parties may enforce the provisions of the Senior Debt Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion in compliance with any applicable law. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Shared Collateral upon foreclosure, to incur expenses in connection with such sale or disposition and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

(b)        So long as the Discharge of Senior Obligations has not occurred, each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees that any Shared Collateral or any Proceeds of Shared Collateral or of any property of any Grantor or any Subsidiary of any Grantor that it receives in connection with the exercise of any right or remedy (including setoff or recoupment) with respect to any Shared Collateral in respect of Junior Obligations shall be delivered to the Designated Senior Representative for application to the Senior Obligations.

 

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Without limiting the generality of the foregoing, unless and until the Discharge of Senior Obligations has occurred, except as expressly provided in the proviso in Section 3.01(a) and Section 6.03, the sole right of the Junior Representatives and the Junior Secured Parties with respect to any Shared Collateral is to hold a Lien on such Shared Collateral in respect of Junior Obligations pursuant to the Junior Debt Documents for the period and to the extent granted therein and to receive a share of the Proceeds thereof, if any, after the Discharge of Senior Obligations has occurred.

(c)        Subject to the proviso in Section 3.01(a) and Section 6.03, (i) each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that neither such Junior Representative nor any such Junior Secured Party will take any action that would hinder, delay or interfere with any exercise of remedies undertaken by the Designated Senior Representative, any other Senior Representative or any Senior Secured Party with respect to the Shared Collateral under the Senior Debt Documents, including any sale, lease, exchange, transfer or other disposition of the Shared Collateral, whether by foreclosure or otherwise, and (ii) each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby waives any and all rights it or any such Junior Secured Party may have as a junior lien creditor to object to the manner in which the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties seek to enforce or collect the Senior Obligations or the Liens granted on any of the Senior Collateral, regardless of whether any action or failure to act by or on behalf of the Designated Senior Representative, any other Senior Representative or any other Senior Secured Party is adverse to the interests of the Junior Secured Parties.

(d)        Each Junior Representative hereby acknowledges and agrees that no covenant, agreement or restriction contained in any Junior Debt Document shall be deemed to restrict in any way the rights and remedies of the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties with respect to the Senior Collateral as set forth in this Agreement and the Senior Debt Documents.

(e)        Subject to the proviso in Section 3.01(a), until the Discharge of Senior Obligations, the Designated Senior Representative or any Person authorized by it shall have the exclusive right to exercise any right or remedy with respect to the Shared Collateral and shall have the exclusive right to determine and direct the time, method and place for exercising such right or remedy or conducting any proceeding with respect thereto. Following the Discharge of Senior Obligations, the Designated Junior Representative or any Person authorized by it shall have the exclusive right to exercise any right or remedy with respect to the Shared Collateral and shall have the exclusive right to direct the time, method and place of exercising or conducting any proceeding for the exercise of any right or remedy available to the Junior Secured Parties with respect to the Shared Collateral, or of exercising or directing the exercise of any trust or power conferred on the Junior Representatives, or for the taking of any other action authorized by the Junior Collateral Documents; provided , however , that nothing in this Section shall impair the right of any Junior Representative or other agent or trustee acting on behalf of the Junior Secured Parties to take such actions with respect to the Shared Collateral after the Discharge of Senior Obligations as may be otherwise required or authorized pursuant to any intercreditor agreement governing the Junior Secured Parties or the Junior Obligations.

SECTION 3.02. No Enforcement . Subject to the proviso in Section 3.01(a), each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees that, unless and until the Discharge of Senior Obligations has occurred, it will not commence, or join with any Person (other than with the consent of the Senior Secured Parties and the Designated Senior Representative) in commencing, any enforcement, collection, execution, levy or foreclosure action or proceeding with respect to any Lien held by it in the Shared Collateral under any of the Junior Debt Documents or otherwise in respect of the Junior Obligations.

 

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SECTION 3.03. Actions upon Breach . Should any Junior Representative or any Junior Secured Party, contrary to this Agreement, in any way take, attempt to take or threaten to take any action with respect to the Shared Collateral (including any attempt to realize upon or enforce any remedy with respect to this Agreement) or fail to take any action required by this Agreement, the Designated Senior Representative or any other Senior Representative or other Senior Secured Party may obtain relief against such Junior Representative or such Junior Secured Party by injunction, specific performance or other appropriate equitable relief. Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, hereby (i) agrees that the Senior Secured Parties’ damages from the actions of the Junior Representatives or any Junior Secured Party may at that time be difficult to ascertain and may be irreparable and waives any defense that the Borrower, any other Grantor or the Senior Secured Parties cannot demonstrate damage or be made whole by the awarding of damages and (ii) irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by the Designated Senior Representative, any other Senior Representative or any Senior Secured Party.

ARTICLE IV

Payments

SECTION 4.01. Application of Proceeds . Subject to the ABL/Term Loan Intercreditor Agreement with respect to ABL Priority Collateral, so long as the Discharge of Senior Obligations has not occurred, the Shared Collateral or any property of any Grantor or any Subsidiary of any Grantor or Proceeds thereof received in connection with the sale or other disposition of, or collection on, such Shared Collateral or of any property of any Grantor or any Subsidiary of any Grantor upon the exercise of remedies shall be applied by the Designated Senior Representative to the Senior Obligations in such order as specified in the relevant Senior Debt Documents (including any relevant Intercreditor Agreement) until the Discharge of Senior Obligations has occurred. Upon the Discharge of Senior Obligations, the Designated Senior Representative shall deliver promptly to the Designated Junior Representative any Shared Collateral or any property of any Grantor or any Subsidiary of any Grantor or Proceeds thereof held by it in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, to be applied by the Designated Junior Representative to the Junior Obligations in such order as specified in the relevant Junior Debt Documents.

SECTION 4.02. Payments Over . Subject to the ABL/Term Loan Intercreditor Agreement with respect to ABL Collateral, prior to the Discharge of Senior Obligations, any Shared Collateral, any other property of any Grantor or any Subsidiary of any Grantor or Proceeds of any of the foregoing received by any Junior Representative or any Junior Secured Party in connection with the exercise of any right or remedy (including setoff or recoupment) or otherwise relating to the Shared Collateral or such property in contravention of this Agreement shall be segregated and held in trust for the benefit of and forthwith paid over to the Designated Senior Representative for the benefit of the Senior Secured Parties in the same form as received, with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct. The Designated Senior Representative is hereby authorized to make any such endorsements as agent for each of the Junior Representatives or any such Junior Secured Party. This authorization is coupled with an interest and is irrevocable.

ARTICLE V

Other Agreements

SECTION 5.01. Releases .

 

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(a)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that, in the event of a sale, transfer or other disposition of any specified item of Shared Collateral (including all or substantially all of the equity interests of any Subsidiary of the Borrower) or the release of any Guarantee for any Secured Obligation that is either (x) following an Event of Default (as defined in the Senior Debt Documents) or in connection with any foreclosure or other exercise of remedies (or a disposition effected in lieu of such a foreclosure or exercise of remedies) with respect to the Guarantees or the Shared Collateral by the Designated Senior Representative or (y) pursuant to a transaction that is permitted under the Senior Debt Documents and the Junior Debt Documents, such Guarantees and the Liens granted to the Junior Representatives and the Junior Secured Parties upon such Shared Collateral to secure Junior Obligations (but not on the Proceeds thereof) (and any Guarantees provided by any Grantors in respect thereof) shall, in each case, terminate and be released, automatically and without any further action, concurrently with the termination and release of all Liens granted upon such Shared Collateral and Guarantees of the Grantors in respect thereof to secure Senior Obligations and to the same extent as such Liens granted upon such Shared Collateral and such Guarantees to secured Senior Obligations are released. Upon delivery to a Junior Representative of an Officer’s Certificate stating that any such termination and release of Liens securing the Senior Obligations has become effective (or shall become effective concurrently with such termination and release of the Liens granted to the Junior Secured Parties and the Junior Representatives) and any necessary or proper instruments of termination or release prepared by the Borrower or any other Grantor, such Junior Representative will promptly execute, deliver or acknowledge, at the Borrower’s or the other Grantor’s sole cost and expense, such instruments to evidence such termination and release of the Liens and Guarantees. Nothing in this Section 5.01(a) will be deemed to affect any agreement of a Junior Representative, for itself and on behalf of the Junior Secured Parties under its Junior Debt Facility, to release the Liens on the Junior Collateral as set forth in the relevant Junior Debt Documents.

(b)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby irrevocably constitutes and appoints each Senior Representative and any officer or agent of each Senior Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Junior Representative or such Junior Secured Party or in such Senior Representative’s own name, from time to time in such Senior Representative’s discretion, for the purpose of carrying out the terms of Section 5.01(a), to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or desirable to accomplish the purposes of Section 5.01(a), including any termination statements, endorsements or other instruments of transfer or release.

(c)        Unless and until the Discharge of Senior Obligations has occurred, each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby consents to the application, whether prior to or after an event of default under any Senior Debt Document of Proceeds of Shared Collateral to the repayment of Senior Obligations pursuant to the Senior Debt Documents, provided that nothing in this Section 5.01(c) shall be construed to prevent or impair the rights of the Junior Representatives or the Junior Secured Parties to enforce this Agreement or to receive payments in connection with the Junior Obligations not otherwise in contravention of this Agreement.

(d)        Notwithstanding anything to the contrary in any Junior Collateral Document, in the event the terms of a Senior Collateral Document and a Junior Collateral Document each require any Grantor (i) to make payment in respect of any item of Shared Collateral, (ii) to deliver or afford control over any item of Shared Collateral to, or deposit any item of Shared Collateral with, (iii) to register ownership of any item of Shared Collateral in the name of or make an assignment of ownership of any Shared Collateral or the rights thereunder, (iv) to cause any securities intermediary, commodity intermediary or other Person acting in a similar capacity to agree to comply, in respect of any item of Shared Collateral, with instructions or orders from, or to treat, in respect of any item of Shared Collateral,

 

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as the entitlement holder, (v) to hold any item of Shared Collateral in trust for (to the extent such item of Shared Collateral cannot be held in trust for multiple parties under applicable law), (vi) to obtain the agreement of a bailee or other third party to hold any item of Shared Collateral for the benefit of or subject to the control of or, in respect of any item of Shared Collateral, to follow the instructions of or (vii) to obtain the agreement of a landlord with respect to access to leased premises where any item of Shared Collateral is located or waivers or subordination of rights with respect to any item of Shared Collateral in favor of, in any case, both any Designated Senior Representative and any Junior Representative or Junior Secured Party, such Grantor may, to the extent such action cannot be taken with respect to both the Designated Senior Representative and the Designated Junior Representative after use of commercially reasonable efforts to do so, until the applicable Discharge of Senior Obligations has occurred, comply with such requirement under the Junior Collateral Document as it relates to such Shared Collateral by taking any of the actions set forth above only with respect to, or in favor of, the Designated Senior Representative.

SECTION 5.02. Insurance and Condemnation Awards . Unless and until the Discharge of Senior Obligations has occurred, the Designated Senior Representative and the Senior Secured Parties shall have the sole and exclusive right, subject to the rights of the Grantors under the Senior Debt Documents, (a) to adjust settlement for any insurance policy covering the Shared Collateral in the event of any loss thereunder and (b) to approve any award granted in any condemnation or similar proceeding affecting the Shared Collateral. Unless and until the Discharge of Senior Obligations has occurred, all proceeds of any such policy and any such award, if in respect of the Shared Collateral, shall be paid (i) first, prior to the occurrence of the Discharge of Senior Obligations, to the Designated Senior Representative for the benefit of Senior Secured Parties pursuant to the terms of the Senior Debt Documents, (ii) second, after the occurrence of the Discharge of Senior Obligations, to the Designated Junior Representative for the benefit of the Junior Secured Parties pursuant to the terms of the applicable Junior Debt Documents and (iii) third, if no Senior Obligations or Junior Obligations are outstanding, to the owner of the subject property, such other Person as may be entitled thereto or as a court of competent jurisdiction may otherwise direct. If any Junior Representative or any Junior Secured Party shall, at any time, receive any proceeds of any such insurance policy or any such award in contravention of this Agreement, it shall pay such proceeds over to the Designated Senior Representative in accordance with the terms of Section 4.02.

SECTION 5.03. Amendments to Senior Debt Documents and Junior Debt Documents .

(a)        The Junior Debt Documents and Junior Collateral Documents may be amended, amended and restated, restated, supplemented or otherwise modified in accordance with their terms without the consent of any Senior Secured Party; provided that, without the prior written consent of the Designated Senior Representative, no Junior Debt Document or Junior Collateral Document may be amended, restated, supplemented or otherwise modified or entered into to the extent such amendment, restatement, supplement or modification, or the terms of any new Junior Debt Document or Junior Collateral Document, would:

(i)        be prohibited by or inconsistent with any of the terms of this Agreement;

(ii)        increase any “Applicable Rate”, margin, LIBOR or base rate “floor”, or similar component of the interest rate (whether in cash or in kind) (excluding default interest) by more than 3.00% (in the aggregate for all such increases);

(iii)        add or increase any other fees (or any other monetary obligations which are the substantial equivalent of a fee) of the Borrower or any Grantor (other than amendment fees or as otherwise permitted by this Section 5.03(a));

 

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(iv)        increase the amount of any required principal or interest payment or modify any related amortization schedule in a manner which would have the effect of increasing the amount of any required principal or interest payment (other than as otherwise permitted by this Section 5.03(a)(ii));

(v)        change to an earlier date (A) the scheduled final maturity date or (B) the date of any regularly scheduled amortization or redemption payments of principal or interest; or

(vi)        add or change any other provision, including any negative covenant, financial maintenance covenant, or event of default in the Junior Debt Documents (as in effect on the date hereof) in a manner that is more restrictive or disadvantageous to the Borrower or any of its Subsidiaries unless the Senior Secured Parties shall have agreed with the Borrower to make such corresponding changes or additions in the Senior Debt Documents.

(b)        The Senior Debt Documents may be amended, amended and restated, restated, supplemented or otherwise modified in accordance with their terms without the consent of any Junior Secured Party; provided that, without the prior written consent of the Designated Junior Representative, no Senior Debt Document or Senior Collateral Document may be amended, restated, supplemented or otherwise modified or entered into to the extent such amendment, restatement, supplement or modification, or the terms of any new Senior Debt Document or Senior Collateral Document, would:

(i)        be prohibited by or inconsistent with any of the terms of this Agreement;

(ii)        increase any “Applicable Rate”, margin, LIBOR or base rate “floor”, or similar component of the interest rate (whether in cash or in kind) (excluding default interest) by more than 3.00% (in the aggregate for all such increases);

(iii)        modify any amortization schedule in a manner which would have the effect of increasing the amount of any required principal payment;

(iv)        change to an earlier date (A) the scheduled final maturity date or (B) the date of any regularly scheduled amortization or redemption payments of principal or interest; or

(v)        impose any new or additional restrictions on making payments under the Junior Debt Documents.

(c)        The Borrower agrees to deliver to the Designated Senior Representative copies of (i) any amendments, supplements or other modifications to the Junior Collateral Documents and (ii) any new Junior Collateral Documents, in each case promptly after effectiveness thereof. Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that each Junior Collateral Document under its Junior Debt Facility shall include the following language (or language to similar effect reasonably approved by the Designated Senior Representative):

“Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Junior Representative and the claims of the Junior Representative and the Junior Secured Parties pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted to and claims in favor of the Senior Secured Parties (as defined in the Intercreditor Agreement referred to below), including liens and security interests granted to, and claims of, JPMorgan Chase Bank, N.A., as collateral agent, and the lenders pursuant to or in connection with the Credit Agreement dated as of June 30, 2015 (as amended, restated, amended and restated, supplemented or otherwise

 

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modified from time to time), among the Borrower, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, and (ii) the exercise of any right or remedy by the Junior Representative hereunder is subject to the limitations and provisions of the Term Intercreditor Agreement dated as of March 15, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among the Borrower, the lenders party thereto, JPMorgan Chase Bank, N.A., as Senior Collateral Agent, and Cortland Capital Market Services LLC, as Junior Collateral Agent. In the event of any conflict between the terms of the Term Intercreditor Agreement and the terms of this Agreement, the terms of the Term Intercreditor Agreement shall govern.”

(d)        In the event that any Senior Representative enters into any amendment, waiver or consent in respect of any of the Senior Collateral Documents for the purpose of adding to or deleting from, or waiving or consenting to any departures from any provisions of, any Senior Collateral Document or changing in any manner the rights of the Designated Senior Representative, the Senior Secured Parties, the Borrower or any other Grantor thereunder (including the release of any Liens in Senior Collateral), then such amendment, waiver or consent shall apply automatically to any comparable provision of the comparable Junior Collateral Documents without the consent of any Junior Representative or any Junior Secured Party and without any action by any Junior Representative, the Borrower or any other Grantor; provided , however , no such amendment, waiver or consent shall have the effect of (i) removing assets subject to the Lien of the Junior Collateral Documents (or Guarantees thereunder), except (A) to the extent that a release of such Lien (or Guarantee) is permitted by Section 5.01 of this Agreement and provided that there is a corresponding release of the Lien securing the Senior Obligations, or (B) following an Event of Default (as defined in the Senior Debt Documents) or in connection with any exercise of remedies by the Senior Secured Parties so long as any proceeds are applied in a manner that is consistent with this Agreement, including Article IV hereof, (ii) imposing duties that are adverse on, or altering any rights, indemnities or immunities of, any Junior Representative without its consent, (iii) altering the terms of the Junior Debt Documents to permit other Liens on the Collateral not permitted under the terms of the Junior Debt Documents or (iv) being prejudicial to the interests of the Junior Secured Parties to a greater extent than the Senior Secured Parties (other than by virtue of their relative priority and the rights and obligations hereunder). To the extent practicable, the Borrower will give the Junior Representatives written notice of any such amendment, waiver or consent in advance of the effectiveness thereof, provided that the failure to give such advance notice shall not cause any such amendment, waiver or consent to be invalid.

SECTION 5.04. Rights as Unsecured Creditors . Each Junior Representatives and the Junior Secured Parties may exercise rights and remedies as unsecured creditors against the Borrower and any other Grantor in accordance with the terms of the Junior Debt Documents and applicable law so long as such rights and remedies do not violate, or are not otherwise inconsistent with, any express provision of this Agreement (including any provision prohibiting or restricting the Junior Secured Parties from taking various actions or making various objections). In the event any Junior Representative or any Junior Secured Party becomes a judgment lien creditor in respect of Shared Collateral as a result of its enforcement of its rights as an unsecured creditor in respect of Junior Obligations, such judgment lien shall be subordinated to the Liens securing Senior Obligations on the same basis as the other Liens securing the Junior Obligations are so subordinated to such Liens securing Senior Obligations under this Agreement. Nothing in this Agreement shall impair or otherwise adversely affect any rights or remedies the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties may have with respect to the Senior Collateral.

SECTION 5.05.         Gratuitous Bailee for Perfection .

 

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(a)        Each Representative acknowledges and agrees that if it shall at any time hold a Lien securing any Secured Obligations on any Shared Collateral that can be perfected by the possession or control of such Shared Collateral or of any account in which such Shared Collateral is held, and if such Shared Collateral or any such account is in fact in the possession or under the control of such Representative, or of agents or bailees of such Representative (such Shared Collateral being referred to herein as the “Pledged or Controlled Collateral” ), or if it shall at any time obtain any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, such Representative shall also hold such Pledged or Controlled Collateral, or take such actions with respect to such landlord waiver, bailee’s letter or similar agreement or arrangement, as sub-agent or gratuitous bailee for the benefit of the relevant other Representatives, in each case solely for the purpose of perfecting the Liens granted under the relevant Collateral Documents and subject to the terms and conditions of this Section 5.05.

(b)        Except as otherwise specifically provided herein, until the Discharge of Senior Obligations has occurred, each Senior Representative shall be entitled to deal with the Pledged or Controlled Collateral in accordance with the terms of the Senior Debt Documents as if the Liens under the Junior Collateral Documents did not exist. The rights of the Junior Representatives and the Junior Secured Parties with respect to the Pledged or Controlled Collateral shall at all times be subject to the terms of this Agreement.

(c)        No Senior Representative shall have any obligation whatsoever to the Junior Representatives or any Junior Secured Party to assure that any of the Pledged or Controlled Collateral is genuine or owned by the Grantors or to protect or preserve rights or benefits of any Person or any rights pertaining to the Shared Collateral, except as expressly set forth in this Section 5.05. The duties or responsibilities of any Representative under this Section 5.05 shall be limited solely to holding or controlling the Shared Collateral and the related Liens referred to in paragraph (a) of this Section 5.05 as sub-agent and gratuitous bailee for the relevant Representatives for purposes of perfecting the Lien held by such Representative.

(d)        No Senior Representative shall have by reason of the Junior Collateral Documents or this Agreement, or any other document, a fiduciary relationship in respect of any Junior Representative or any Junior Secured Party, and each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby waives and releases each Senior Representative from all claims and liabilities arising pursuant to such Senior Representative’s role under this Section 5.05 as sub-agent and gratuitous bailee with respect to the Shared Collateral. No Junior Representative shall have by reason of the Senior Collateral Documents or this Agreement, or any other document, a fiduciary relationship in respect of any Senior Representative or any Senior Secured Party, and each Senior Representative, for itself and on behalf of each Senior Secured Party under its Senior Debt Facility, hereby waives and releases each Junior Representative from all claims and liabilities arising pursuant to such Junior Representative’s role under this Section 5.05 as sub-agent and gratuitous bailee with respect to the Shared Collateral.

(e)        Upon the Discharge of Senior Obligations, each Senior Representative shall, at the Grantors’ sole cost and expense, (i) (A) deliver to the Designated Junior Representative, to the extent that it is legally permitted to do so, all Shared Collateral, including all proceeds thereof, held or controlled by such Senior Representative or any of its agents or bailees, including the transfer of possession and control, as applicable, of the Pledged or Controlled Collateral, together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and assign its rights under any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, or (B) direct and deliver such Shared Collateral as a court of competent jurisdiction may otherwise direct, (ii) notify any applicable insurance carrier that it is no longer

 

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entitled to be a loss payee or additional insured under the insurance policies of any Grantor issued by such insurance carrier and (iii) notify any governmental authority involved in any condemnation or similar proceeding involving any Grantor that the Designated Junior Representative is entitled to approve any awards granted in such proceeding. The Borrower and the other Grantors shall take such further action as is required to effectuate the transfer contemplated hereby and shall indemnify each Senior Representative for loss or damage suffered by such Senior Representative as a result of such transfer, except for loss or damage suffered by such Senior Representative as a result of its own willful misconduct or gross negligence as determined by a final non-appealable judgment by a court of competent of jurisdiction. No Senior Representative has any obligation to follow instructions from the Designated Junior Representative in contravention of this Agreement.

(f)        Neither the Designated Senior Representative nor any of the other Senior Representatives or Senior Secured Parties shall be required to marshal any present or future collateral security for any obligations of the Borrower or any other Grantor to the Designated Senior Representative, any other Senior Representative or any Senior Secured Party under the Senior Debt Documents or any assurance of payment in respect thereof, or to resort to such collateral security or other assurances of payment in any particular order, and all of their rights in respect of such collateral security or any assurance of payment in respect thereof shall be cumulative and in addition to all other rights, however existing or arising.

SECTION 5.06. When Discharge of Senior Obligations Deemed to Not Have Occurred . If, at any time substantially concurrently with or after the Discharge of Senior Obligations has occurred, the Borrower or any other Grantor incurs any Senior Obligations (other than in respect of the payment of indemnities surviving the Discharge of Senior Obligations), then the Discharge of Senior Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken prior to the date of such designation as a result of the occurrence of such first Discharge of Senior Obligations) and the applicable agreement governing such Senior Obligations shall automatically be treated as a Senior Debt Document for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Shared Collateral set forth herein and the granting by the Designated Senior Representative of amendments, waivers and consents hereunder, subject to Section 5.03, and the agent, representative or trustee for the holders of such Senior Obligations shall be a Senior Representative for all purposes of this Agreement. Upon receipt of notice of such incurrence (including the identity of the new Designated Senior Representative), each Junior Representative (including the Designated Junior Representative) shall promptly (a) enter into such documents and agreements (at the expense of the Borrower), including amendments or supplements to this Agreement, as the Borrower or such new Senior Representative shall reasonably request in writing in order to provide the new Senior Representative the rights of a Senior Representative contemplated hereby, (b) deliver to the Designated Senior Representative, to the extent that it is legally permitted to do so, all Shared Collateral, including all proceeds thereof, held or controlled by such Junior Representative or any of its agents or bailees, including the transfer of possession and control, as applicable, of the Pledged or Controlled Collateral, together with any necessary endorsements and notices to depositary banks, securities intermediaries and commodities intermediaries, and assign its rights under any landlord waiver or bailee’s letter or any similar agreement or arrangement granting it rights or access to Shared Collateral, (c) notify any applicable insurance carrier that it is no longer entitled to be a loss payee or additional insured under the insurance policies of any Grantor issued by such insurance carrier and (d) notify any governmental authority involved in any condemnation or similar proceeding involving a Grantor that the new Designated Senior Representative is entitled to approve any awards granted in such proceeding.

SECTION 5.07. Purchase Right . Without prejudice to the enforcement of the Senior Secured Parties’ remedies, the Senior Secured Parties agree that (a) at any time prior to the occurrence of a Specified Event of Default under the Senior Debt Documents and (b) on a one-time only basis following

 

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a Specified Event of Default under the Senior Debt Documents (a “ Purchase Event ”), one or more of the Junior Secured Parties may request in their sole discretion, and the Senior Secured Parties hereby offer the Junior Secured Parties the option, to purchase all, but not less than all, of the aggregate amount of Senior Obligations outstanding at the time of purchase at par plus any premium that would be applicable upon prepayment of the Senior Obligations and accrued and unpaid interest, fees, and expenses without warranty or representation or recourse (except for representations and warranties required to be made by assigning lenders pursuant to the Assignment and Assumption (as such term is defined in the Senior Credit Agreement)) (the “ Purchase Right ”). Solely in the case of clause (b) above, the Purchase Right must be exercised within 15 calendar days after the later of (i) the occurrence of such Specified Event of Default and (ii) except with respect to a Specified Event of Default pursuant to clauses (h) or (i) of Article VII of the Senior Credit Agreement, the date of receipt by the Junior Representative of written notice from the Senior Representative notifying the Junior Representative of the occurrence of such Specified Event of Default; it being understood that if the Purchase Right has not been exercised by the date that is the end of such period, the Purchase Right shall immediately expire and shall no longer apply, including upon the occurrence of any subsequent Specified Event of Default. If the Purchase Right is exercised, the parties shall endeavor to close promptly thereafter but in any event within ten (10) Business Days of the request. If one or more of the Junior Secured Parties exercises such purchase right, it shall be exercised pursuant to documentation mutually acceptable to each of the Designated Senior Representative and the Junior Representatives, it being understood that such documentation shall provide for the survival, on a first-lien secured basis, of any contingent and non-accrued indemnification and other obligations under the Senior Debt Documents that are expressly stated to survive the termination of such Senior Debt Documents and that relate to acts or omissions occurring prior to or in connection with such purchase.

ARTICLE VI

Insolvency or Liquidation Proceedings .

SECTION 6.01. Financing and Sale Issues .

(a)        Until the Discharge of Senior Obligations has occurred, if the Borrower or any other Grantor or any of their Subsidiaries shall be subject to any Insolvency or Liquidation Proceeding and the Designated Senior Representative shall desire to consent (or not object) to, as applicable, the sale, use or lease of cash or other collateral or to consent (or not object) to the Borrower’s or any other Grantor’s or applicable Subsidiary’s obtaining financing under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law to be secured by the Senior Collateral (“ DIP Financing ”), then each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that it will (as applicable) raise no objection to and will not otherwise contest (or support any person in objecting or otherwise contesting) such use of such cash or other collateral or such DIP Financing and, except to the extent permitted by the proviso in clause (ii) of Section 3.01(a) and Section 6.03, will not request adequate protection or any other relief in connection therewith and, to the extent the Liens securing the Senior Obligations under the Senior Credit Agreement or, if no Senior Credit Agreement then exists, under the other Senior Debt Documents are subordinated to or pari passu with such DIP Financing, will subordinate (and will be deemed hereunder to have subordinated) its Liens in the Shared Collateral to (x) the Liens securing such DIP Financing (and all obligations relating thereto) on the same basis as the Liens securing the Junior Obligations are so subordinated to Liens securing Senior Obligations under this Agreement, (y) any adequate protection Liens provided to the Senior Secured Parties and (z) any “carve-out” for professional and United States Trustee fees agreed to by the Designated Senior Representative, and the Designated Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that notice received two (2) Business Days prior to the entry of an order approving such usage of cash or other collateral or approving such DIP Financing shall be adequate notice; provided that (i) the principal

 

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amount of any such DIP Financing (not including any “roll-up” or other refinancing (in an amount not in excess of the then outstanding principal amount thereof) of Senior Obligations therein) does not exceed the Maximum DIP Amount and (ii) the terms of the DIP Financing do not compel the Borrower or any other Grantor to seek confirmation of a specific Plan of Reorganization (but may require the filing and consummation of a Plan of Reorganization that results in the Discharge of Senior Obligations). Without the prior written consent of the Designated Senior Representative, no Junior Secured Party may, directly or indirectly, provide DIP Financing to the Borrower, any Grantor or any of their Subsidiaries (it being understood that this sentence shall not limit the ability of any Junior Secured Party to enter into discussions with the Borrower, any Grantor or any of their Subsidiaries to propose or provide DIP Financing to the Borrower, any Grantor or any of their Subsidiaries), unless (i) the Senior Secured Parties shall not have made an offer to provide DIP Financing to the Borrower, any Grantor or any of their Subsidiaries, and (ii) the proceeds of such DIP Financing provided by such Junior Secured Party shall be sufficient to cause, and shall be applied, among other uses, to cause a Discharge of Senior Obligations.

(b)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, further agrees that it will not object to, contest, or support any other Person in objecting to or contesting (i) any motion for relief from the automatic stay or from any injunction against foreclosure or enforcement in respect of Senior Obligations with respect to the Senior Collateral made by the Designated Senior Representative, any other Senior Representative or any other Senior Secured Party, (ii) any lawful exercise by any Senior Secured Party of the right to credit bid Senior Obligations at any sale in foreclosure of Senior Collateral (including, without limitation, pursuant to Section 363(k) of the Bankruptcy Code or any similar provision under any other applicable Bankruptcy Law) or to exercise any rights under Section 1111(b) of the Bankruptcy Code or any similar provision under any other applicable Bankruptcy Law with respect to the Senior Collateral, (iii) any other request for judicial relief made in any court by any Senior Secured Party relating to the lawful enforcement of any Lien on Senior Collateral or (iv) any order relating to a sale or other disposition of any or all of the Senior Collateral for which the Designated Senior Representative has consented that provides, to the extent such sale or other disposition is to be free and clear of Liens, that the Liens securing the Senior Obligations and the Junior Obligations will attach to the proceeds of the sale on the same basis of priority as the Liens on the Shared Collateral securing the Senior Obligations rank to the Liens on the Shared Collateral securing the Junior Obligations pursuant to this Agreement.

SECTION 6.02. Relief from the Automatic Stay . Until the Discharge of Senior Obligations has occurred, each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that none of them shall seek relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding or take any action in derogation thereof, in each case in respect of any Shared Collateral, without the prior written consent of the Designated Senior Representative.

SECTION 6.03. Adequate Protection .

(a)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that none of them shall object, contest or support any other Person objecting to or contesting (a) any request by the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties for adequate protection in any form, (b) any objection by the Designated Senior Representative, the other Senior Representatives or the Senior Secured Parties to any motion, relief, action or proceeding based on the Designated Senior Representative’s or any other Senior Representative’s or Senior Secured Party’s claiming a lack of adequate protection or (c) the allowance and payment of interest, fees, expenses or other amounts of the Designated Senior Representative, any other Senior Representative or any other Senior Secured Party as adequate protection

 

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or otherwise under Section 506(b) or 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law.

(b)        Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, agrees that none of them may seek or request adequate protection in any form, except as set forth in this Section 6.03(b). In any Insolvency or Liquidation Proceeding, (i) if the Senior Secured Parties (or any subset thereof) are granted adequate protection in the form of a Lien on additional or replacement collateral and/or a superpriority administrative expense claim in connection with any DIP Financing or use of cash collateral under Section 363 or 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, then each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, may seek or request adequate protection in the form of a Lien on such additional or replacement collateral, which Lien is subordinated to the Liens securing and providing adequate protection for, and claims with respect to, the Senior Obligations and such DIP Financing (and all obligations relating thereto), in the case of any such Lien, on the same basis as the Liens securing the Junior Obligations are so subordinated to the Liens securing the Senior Obligations under this Agreement and (ii) in the event any Junior Representatives, for themselves and on behalf of the Junior Secured Parties under their Junior Debt Facilities, seek or request adequate protection and such adequate protection is granted in the form of a Lien on additional or replacement collateral, then such Junior Representatives, for themselves and on behalf of each Junior Secured Party under their Junior Debt Facilities, agree that the Senior Representatives shall also be granted (as applicable) a senior Lien on such additional or replacement collateral as security and adequate protection for the Senior Obligations, and that any Lien on such additional or replacement collateral securing or providing adequate protection for the Junior Obligations shall be subordinated to the Liens on such collateral securing and claims with respect to the Senior Obligations and any such DIP Financing (and all obligations relating thereto) and any other Liens and claims granted to the Senior Secured Parties as adequate protection, in the case of any such Lien, on the same basis as the other Liens securing the Junior Obligations are so subordinated to such Liens securing Senior Obligations under this Agreement.

SECTION 6.04. Preference Issues . If any Senior Secured Party is required in any Insolvency or Liquidation Proceeding or otherwise to disgorge, turn over or otherwise pay any amount to the estate of the Borrower or any other Grantor (or any trustee, receiver or similar Person therefor), because the payment of such amount was declared to be fraudulent or preferential in any respect or for any other reason, any amount (a “ Recovery ”), whether received as proceeds of security, enforcement of any right of setoff, recoupment or otherwise, then for all purposes of this Agreement, the Senior Obligations shall be reinstated to the extent of such Recovery and deemed to be outstanding as if such payment had not occurred. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto. Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby agrees that none of them shall be entitled to benefit from any avoidance action affecting or otherwise relating to any distribution or allocation made in accordance with this Agreement, whether by preference or otherwise, it being understood and agreed that the benefit of such avoidance action otherwise allocable to them shall instead be allocated and turned over for application in accordance with the priorities set forth in this Agreement.

SECTION 6.05. Separate Grants of Security and Separate Classifications . Each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, acknowledges and agrees that (a) the grants of Liens pursuant to the Senior Collateral Documents and the Junior Collateral Documents constitute separate and distinct grants of Liens, (b) the Junior Secured Parties’ claims against the Grantors in respect of their Liens on the Shared Collateral constitute junior claims separate and apart (and of a different class) from the senior claims of the Senior Secured Parties

 

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against the Grantors in respect of the Shared Collateral, and (c) because of, among other things, their differing rights in the Shared Collateral, the Junior Obligations are fundamentally different from the Senior Obligations and must be separately classified in any Plan of Reorganization proposed, confirmed, or adopted in an Insolvency or Liquidation Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the Senior Secured Parties and the Junior Secured Parties in respect of the Shared Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby acknowledges and agrees that all distributions from the Shared Collateral shall be made as if there were separate classes of senior and junior secured claims against the Grantors in respect of the Shared Collateral (with the effect being that, to the extent that the aggregate value of the Shared Collateral is sufficient (for this purpose ignoring all claims held by the Junior Secured Parties), the Senior Secured Parties shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest, fees, and expenses (whether or not allowed or allowable in such Insolvency or Liquidation Proceeding) before any distribution is made from the Shared Collateral in respect of the Junior Obligations, with each Junior Representative, for itself and on behalf of each Junior Secured Party under its Junior Debt Facility, hereby acknowledging and agreeing to turn over to the Designated Senior Representative amounts otherwise received or receivable by them from the Shared Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the claim or recovery of the Junior Secured Parties. This Section 6.05 is intended to govern the relationship between the classes of claims held by the Junior Secured Parties, on the one hand, and a collective class of claims comprised of the Senior Credit Agreement Secured Parties and any Additional Senior Secured Parties (as opposed to separate classes of each such series of claims), on the other hand, and, for the avoidance of doubt, nothing set forth herein shall in any way alter or modify the relationship of each series of such separate claims held by the Senior Secured Parties or otherwise cause such different claims to be combined into one or more classes or otherwise classified in a manner that violates any relevant Intercreditor Agreement.

SECTION 6.06. No Waivers of Rights of Senior Secured Parties . Nothing contained herein shall, except as expressly provided herein, prohibit or in any way limit the Designated Senior Representative, any other Senior Representative or any other Senior Secured Party from objecting in any Insolvency or Liquidation Proceeding or otherwise to any action taken by any Junior Secured Party, including the seeking by any Junior Secured Party of adequate protection or the asserting by any Junior Secured Party of any of its rights and remedies under the Junior Debt Documents or otherwise.

SECTION 6.07. Application . This Agreement, which the parties hereto expressly acknowledge is a “subordination agreement” under Section 510(a) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, shall be effective before, during and after the commencement of any Insolvency or Liquidation Proceeding. The relative rights as to the Shared Collateral and proceeds thereof shall continue after the commencement of any Insolvency or Liquidation Proceeding on the same basis as prior to the date of the petition therefor, subject to any court order approving the financing of, or use of cash collateral by, any Grantor. All references herein to any Grantor shall include such Grantor as a debtor-in-possession and any receiver or trustee for such Grantor.

SECTION 6.08. Other Matters . To the extent that any Junior Representative or any Junior Secured Party has or acquires rights under Section 363 or Section 364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law with respect to any of the Shared Collateral, such Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees not to assert any such rights without the prior written consent of the Designated Senior Representative, provided that if requested by the Designated Senior Representative, such Junior

 

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Representative shall timely exercise such rights in the manner requested by the Designated Senior Representative, including any rights to payments in respect of such rights.

SECTION 6.09. 506(c) Claims . Until the Discharge of Senior Obligations has occurred, each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees that it will not assert or enforce any claim under Section 506(c) of the Bankruptcy Code or any similar provision of any other Bankruptcy Law senior to or on a parity with the Liens securing the Senior Obligations for costs or expenses of preserving or disposing of any Shared Collateral.

SECTION 6.10. Reorganization Securities . If, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed, pursuant to a Plan of Reorganization on account of both the Senior Obligations and the Junior Obligations, then, to the extent the debt obligations distributed on account of the Senior Obligations and on account of the Junior Obligations are secured by Liens upon the same assets or property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

SECTION 6.11. Post-Petition Interest . None of the Junior Representatives or any other Junior Secured Party shall oppose or seek to challenge any claim by any Senior Representative or any Senior Secured Party for allowance in any Insolvency or Liquidation Proceeding of Senior Obligations consisting of claims for post-petition interest, fees, costs, expenses, and/or other charges, under Section 506(b) of the Bankruptcy Code or otherwise (for this purpose ignoring all claims and Liens held by the Junior Secured Parties on the Shared Collateral).

SECTION 6.12. Voting . No Junior Secured Party shall, without the consent of the Designated Senior Representative, propose, vote in favor of, or otherwise directly or indirectly support any Plan of Reorganization unless such Plan of Reorganization (a) provides for the Discharge of Senior Obligations in full in cash (including any amounts owing in respect of post-petition interest, fees, and expenses) or (b) is accepted by the class of holders of Senior Obligations voting thereon in accordance with Section 1126(c) of the Bankruptcy Code.

ARTICLE VII

Reliance; etc .

SECTION 7.01. Reliance . The consent by the Senior Secured Parties to the execution and delivery of the Junior Debt Documents to which the Senior Secured Parties have consented and all loans and other extensions of credit made or deemed made on and after the date hereof by the Senior Secured Parties to the Borrower or any Subsidiary have been given and made in reliance upon this Agreement. Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, acknowledges that it and such Junior Secured Parties have, independently and without reliance on the Designated Senior Representative or any other Senior Representative or other Senior Secured Party, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into the Junior Debt Documents to which they are party or by which they are bound, this Agreement and the transactions contemplated hereby and thereby, and they will continue to make their own credit decision in taking or not taking any action under the Junior Debt Documents or this Agreement.

SECTION 7.02. No Warranties or Liability . Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, acknowledges and agrees that neither the Designated Senior Representative nor any other Senior Representative or other Secured Party has

 

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made any express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Senior Debt Documents, the ownership of any Shared Collateral or the perfection or priority of any Liens thereon. The Senior Secured Parties will be entitled to manage and supervise their respective loans and extensions of credit under the Senior Debt Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate, and the Senior Secured Parties may manage their loans and extensions of credit without regard to any rights or interests that the Junior Representatives and the Junior Secured Parties have in the Shared Collateral or otherwise, except as otherwise provided in this Agreement. Neither the Designated Senior Representative nor any other Senior Representative or other Senior Secured Party shall have any duty to any Junior Representative or Junior Secured Party to act in a manner that will prevent, or refrain from acting in a manner that allows or results in, the occurrence or continuance of an event of default or default under any agreement with the Borrower or any Subsidiary of the Borrower (including the Junior Debt Documents), regardless of any knowledge thereof that they may have or be charged with. Except as expressly set forth in this Agreement, the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties have not otherwise made to each other, nor do they hereby make to each other, any warranties, express or implied, nor do they assume any liability to each other with respect to (a) the enforceability, validity, value or collectability of any of the Senior Obligations, the Junior Obligations or any guarantee or security which may have been granted to any of them in connection therewith, (b) any Grantor’s title to or right to transfer any of the Shared Collateral or (c) any other matter except as expressly set forth in this Agreement.

SECTION 7.03. Obligations Unconditional . All rights, interests, agreements and obligations of the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties hereunder shall remain in full force and effect irrespective of:

(a)        any lack of validity or enforceability of any Senior Debt Document or any Junior Debt Document;

(b)        any change in the time, manner or place of payment of, or in any other terms of, all or any of the Senior Obligations or Junior Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any Senior Debt Document or of the terms of any Junior Debt Document;

(c)        any exchange of any security interest in any Shared Collateral or any other collateral or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the Senior Obligations or Junior Obligations or any guarantee thereof;

(d)        the commencement of any Insolvency or Liquidation Proceeding in respect of the Borrower or any other Grantor; or

(e)        any other circumstances that otherwise might constitute a defense available to, or a discharge of, (i) the Borrower or any other Grantor in respect of the Senior Obligations (other than the Discharge of Senior Obligations subject to Sections 5.06 and 6.04) or (ii) any Junior Representative or Junior Secured Party in respect of this Agreement.

ARTICLE VIII

Miscellaneous

 

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SECTION 8.01. Conflicts; ABL/Term Loan Intercreditor Agreement . In the event of any conflict or inconsistency between (x) the provisions of this Agreement and the provisions of any Senior Debt Document or any Junior Debt Document, the provisions of this Agreement shall govern and (y) the provisions of this Agreement and the provisions of the ABL/Term Loan Intercreditor Agreement with respect to the ABL Priority Collateral, the ABL/Term Loan Intercreditor Agreement shall govern. Notwithstanding anything herein to the contrary, the exercise of any right or remedy by any Representative or Secured Party hereunder with respect to ABL Priority Collateral is subject to the terms of the ABL/Term Loan Intercreditor Agreement.

SECTION 8.02. Continuing Nature of this Agreement; Severability . Subject to Section 6.04, this Agreement shall continue to be effective until the Discharge of Senior Obligations shall have occurred. This is a continuing agreement of Lien subordination, and the Senior Secured Parties may continue, at any time and without notice to the Junior Representatives or any Junior Secured Party, to extend credit and other financial accommodations and lend monies to or for the benefit of the Borrower or any other Grantor constituting Senior Obligations in reliance hereon. The terms of this Agreement shall survive and continue in full force and effect in any Insolvency or Liquidation Proceeding. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 8.03. Amendments; Waivers .

(a)        No failure or delay on the part of any party hereto in exercising any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereto are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any party hereto in any case shall entitle such party to any other or further notice or demand in similar or other circumstances.

(b)        Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified (other than pursuant to any Joinder Agreement) except pursuant to an agreement or agreements in writing entered into by each Representative (and with respect to any such termination, waiver, amendment or modification which by the terms of this Agreement requires the Borrower’s consent or which affects the Borrower or any other Grantor, with the consent of the Borrower).

(c)        Notwithstanding the foregoing, without the consent of any Secured Party, any Representative may become a party hereto by execution and delivery of a Joinder Agreement in accordance with Section 8.09 of this Agreement and upon such execution and delivery, such Representative and the Secured Parties and Senior Obligations or Junior Obligations of the Debt Facility for which such Representative is acting shall be subject to the terms hereof.

(d)        Notwithstanding the foregoing, without the consent of any other Representative or Secured Party, the Designated Senior Representative may effect amendments and modifications to this

 

29

Agreement to the extent necessary to reflect any incurrence of any Additional Junior Debt Obligations or Additional Senior Debt Obligations in compliance with the Senior Credit Agreement, the Junior Credit Agreement, any Additional Senior Debt Documents and any Additional Junior Debt Documents.

SECTION 8.04. Information Concerning Financial Condition of the Borrower and the other Grantors . The Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties shall each be responsible for keeping themselves informed of (a) the financial condition of the Borrower and the other Grantors and all endorsers or guarantors of the Senior Obligations or the Junior Obligations and (b) all other circumstances bearing upon the risk of nonpayment of the Senior Obligations or the Junior Obligations. The Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties shall have no duty to advise any other party hereunder of information known to it or them regarding such condition or any such circumstances or otherwise. In the event that the Designated Senior Representative, any other Senior Representative, any Senior Secured Party, any Junior Representative or any Junior Secured Party, in its sole discretion, undertakes at any time or from time to time to provide any such information to any other party, it shall be under no obligation to (i) make, and the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties shall not make or be deemed to have made, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided, (ii) provide any additional information or to provide any such information on any subsequent occasion, (iii) undertake any investigation or (iv) disclose any information that, pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

SECTION 8.05. Subrogation . Each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, hereby agrees not to assert any rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Senior Obligations has occurred.

SECTION 8.06. Application of Payments . Except as otherwise provided herein, all payments received by the Senior Secured Parties may be applied, reversed and reapplied, in whole or in part, to such part of the Senior Obligations as the Senior Secured Parties, in their sole discretion, deem appropriate, consistent with the terms of the Senior Debt Documents. Except as otherwise provided herein, each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, assents to any such extension or postponement of the time of payment of the Senior Obligations or any part thereof and to any other indulgence with respect thereto, to any substitution, exchange or release of any security that may at any time secure any part of the Senior Obligations and to the addition or release of any other Person primarily or secondarily liable therefor.

SECTION 8.07. Additional Grantors . The Borrower agrees that, if any Subsidiary of the Borrower shall become a Grantor after the date hereof, it will promptly cause such Subsidiary to become party hereto by executing and delivering an instrument in the form of Annex II. Upon such execution and delivery, such Subsidiary will become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of such instrument shall not require the consent of any other party hereunder, and will be acknowledged by the Designated Senior Representative. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement.

SECTION 8.08. Dealings with Grantors . Upon any application or demand by the Borrower or any other Grantor to the Designated Senior Representative or the Designated Junior Representative to take or permit any action under any of the provisions of this Agreement or under any Collateral Document (if such action is subject to the provisions hereof), at the request of such

 

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Representative, such Borrower or such Grantor, as appropriate, shall furnish to the Designated Junior Representative or the Designated Senior Representative a certificate of an appropriate officer ( an “ Officer’s Certificate ”) stating that all conditions precedent, if any, provided for in this Agreement or such Collateral Document, as the case may be, relating to the proposed action have been complied with, except that in the case of any such application or demand as to which the furnishing of such documents is specifically required by any provision of this Agreement or any Collateral Document relating to such particular application or demand, no additional certificate or opinion need be furnished.

SECTION 8.09. Additional Debt Facilities . To the extent, but only to the extent, permitted by the provisions of the then extant Senior Debt Documents and the Junior Debt Documents and this Agreement, the Borrower may incur or issue and sell one or more series or classes of Additional Junior Debt and one or more series or classes of Additional Senior Debt. Any such additional class or series of Additional Junior Debt (the “ Junior Class  Debt ”) may be secured by a junior priority, subordinated Lien on Shared Collateral, in each case under and pursuant to the Junior Collateral Documents for such Junior Class Debt, if and subject to the condition that the Representative of any such Junior Class Debt (each, a “ Junior Class  Debt Representative ”), acting on behalf of the holders of such Junior Class Debt (such Representative and holders in respect of any such Junior Class Debt being referred to as the “ Junior Class  Debt Parties ”), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (v), as applicable, of the immediately succeeding paragraph. Any such additional class or series of Additional Senior Debt (the “ Senior Class  Debt ”; and the Senior Class Debt and Junior Class Debt, collectively, the “ Class  Debt ”) may be secured by a senior Lien on Shared Collateral, in each case under and pursuant to the Senior Collateral Documents, if and subject to the condition that the Representative of any such Senior Class Debt (each, a “ Senior Class  Debt Representative ”; and the Senior Class Debt Representatives and Junior Class Debt Representatives, collectively, the “ Class  Debt Representatives ”), acting on behalf of the holders of such Senior Class Debt (such Representative and holders in respect of any such Senior Class Debt being referred to as the “ Senior Class  Debt Parties ”; and the Senior Class Debt Parties and Junior Class Debt Parties, collectively, the “ Class  Debt Parties ”), becomes a party to this Agreement by satisfying the conditions set forth in clauses (i) through (v), as applicable, of the immediately succeeding paragraph. In order for a Class Debt Representative to become a party to this Agreement:

(i)        such Class Debt Representative shall have executed and delivered a Joinder Agreement to the Designated Senior Representative and the Designated Junior Representative substantially in the form of Annex III (if such Representative is a Junior Class Debt Representative) or Annex IV (if such Representative is a Senior Class Debt Representative) (with such changes as may be reasonably approved by the Designated Senior Representative and such Class Debt Representative) pursuant to which it becomes a Representative hereunder, and the Class Debt in respect of which such Class Debt Representative is the Representative and the related Class Debt Parties become subject hereto and bound hereby;

(ii)        the Borrower shall have delivered to the Designated Senior Representative and the Designated Junior Representative true and complete copies of each of the Junior Debt Documents or Senior Debt Documents, as applicable, relating to such Class Debt, certified as being true and correct by a Responsible Officer of the Borrower;

(iii)        in the case of any Junior Class Debt, all filings, recordations and/or amendments or supplements to the Junior Collateral Documents necessary to confirm and perfect the junior priority Liens securing the relevant Junior Obligations relating to such Class Debt shall have been made, executed and/or delivered (or, with respect to any such filings or recordations, acceptable provisions to perform such filings or recordings have been taken in the reasonable judgment of the Designated Junior Representative), and all fees and taxes in connection therewith

 

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shall have been paid (or acceptable provisions to make such payments have been taken in the reasonable judgment of the Designated Senior Representative);

(iv)        the Borrower shall have delivered to the Designated Senior Representative and the Designated Junior Representative an Officer’s Certificate stating that such Additional Senior Debt Obligations or Additional Junior Debt Obligations are permitted by each applicable Senior Debt Document and Junior Debt Document to be incurred, or to the extent a consent is otherwise required to permit the incurrence of such Additional Senior Debt Obligations or Additional Junior Debt Obligations under any applicable Senior Debt Document and Junior Debt Document, each Grantor has obtained the requisite consent; and

(v)        the Junior Debt Documents or Senior Debt Documents, as applicable, relating to such Class Debt shall provide, in a manner reasonably satisfactory to the Designated Senior Representative, that each Class Debt Party with respect to such Class Debt will be subject to and bound by the provisions of this Agreement in its capacity as a holder of such Class Debt.

SECTION 8.10. Consent to Jurisdiction; Waivers . The Designated Senior Representative and each other Representative, on behalf of itself and the Secured Parties of the Debt Facility for which it is acting, irrevocably and unconditionally:

(a)        submits for itself and its property in any legal action or proceeding relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the courts of the State of New York sitting in New York County, the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof;

(b)        consents that any such action or proceeding may be brought in such courts and waives any objection that it may now or hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient court and agrees not to plead or claim the same;

(c)        agrees that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such Person (or its Representative) at the address referred to in Section 8.11;

(d)        agrees that nothing herein shall affect the right of any other party hereto (or any Secured Party) to effect service of process in any other manner permitted by law or shall limit the right of any party hereto (or any Secured Party) to enforce any judgment obtained in a court referred to in the preceding clause (a) in any other jurisdiction; and

(e)        waives, to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 8.10 any special, exemplary, punitive or consequential damages.

SECTION 8.11. Notices . All notices, requests, demands and other communications provided for or permitted hereunder shall be in writing and shall be sent:

(i)        if to the Borrower or any other Grantor, to Horizon Global Corporation at 2600 West Big Beaver Rd., Suite 555, Troy, MI 48084, Attention of Jay Goldbaum, Legal Director (Telephone No. (248) 593-8838, Telecopy No. (248) 203-6434);

 

32

(ii)        if to the Senior Collateral Agent, to JPMorgan Chase Bank, N.A., 10 South Dearborn, Floor 7, Chicago, Illinois 60603, Attention: Joyce King, Telecopy: 888-292-9533, with a copy to Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, NY 10017, Attention: Jessica Tchinsky; and Email:  jtuchinsky@stblaw.com ;

(iii)        if to the Junior Collateral Agent, to: Cortland Capital Market Services LLC, 225 W. Washington St., 9th Floor, Chicago, Illinois 60606 Attention of Legal Department and Frances Real (Telecopy: (312) 376-0751, Telephone: (312) 564-5100, Email: legal@cortlandglobal.com and CPCAgency@cortlandglobal.com), with a copy (which shall not constitute notice) to Holland & Knight LLP, 131 South Dearborn Street, 30th Floor, Chicago, IL 60603 Attention of Joshua M. Spencer (Telecopy: (312) 578-6666, Telephone: (312) 928-6033, Email: Joshua.Spencer@hklaw.com); and

(iv)        if to any other Representative, to it at the address specified by it in the Joinder Agreement delivered by it pursuant to Section 8.09.

Any party hereto may change its address, fax number or email address for notices and other communications hereunder by notice to the other parties hereto. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing, may be personally served, telecopied or sent by courier service or U.S. mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or upon receipt via U.S. mail (registered or certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto shall be as set forth above or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties. If and to the extent agreed to in writing among the Designated Senior Representative any other Representative from time to time, notices and other communications may also be delivered to any person so agreeing by e-mail to the e-mail address provided from time to time by such person.

SECTION 8.12. Further Assurances . Each Senior Representative, on behalf of itself and each Senior Secured Party under its Senior Debt Facility, and each Junior Representative, on behalf of itself and each Junior Secured Party under its Junior Debt Facility, agrees that it will take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the other parties hereto may reasonably request to effectuate the terms of, and the Lien priorities contemplated by, this Agreement.

SECTION 8.13. GOVERNING LAW; WAIVER OF JURY TRIAL .

(a)        THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS, EXCEPT AS REQUIRED BY MANDATORY PROVISIONS OF LAW.

(b)        EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

SECTION 8.14. Parties in Interest . This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, as well as the other Secured Parties, all of whom are intended to be bound by, and to be third party beneficiaries of, this Agreement. No other Person shall have or be entitled to assert rights or benefits hereunder.

 

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SECTION 8.15. Headings . Article, Section and Annex headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement.

SECTION 8.16. Counterparts . This Agreement may be executed in counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission shall be as effective as delivery of a manually signed counterpart of this Agreement.

SECTION 8.17. Authorization . By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement. The Senior Collateral Agent represents and warrants that this Agreement is binding upon the Senior Credit Agreement Secured Parties. The Junior Collateral Agent represents and warrants that this Agreement is binding upon the Junior Credit Agreement Secured Parties. Each Additional Senior Agent and Additional Junior Agent represents and warrants that this Agreement is binding upon the Additional Senior Secured Parties or Additional Junior Secured Parties for which it is acting as an agent.

SECTION 8.18. Provisions Solely to Define Relative Rights . The lien priorities set forth in this Agreement and the rights and benefits hereunder in respect of such lien priorities shall inure solely to the benefit of the Designated Senior Representative, the other Senior Representatives, the Senior Secured Parties, the Junior Representatives and the Junior Secured Parties, and their respective permitted successors and assigns, and no other Person (including the Grantors, or any trustee, receiver, debtor in possession or bankruptcy estate in a bankruptcy or like proceeding) shall have or be entitled to assert such rights. Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional, to pay the Secured Obligations as and when the same shall become due and payable in accordance with their terms.

SECTION 8.19. Effectiveness . This Agreement shall become effective when executed and delivered by the parties hereto.

SECTION 8.20. Senior Collateral Agent and Junior Collateral Agent . It is understood and agreed that (a) the Senior Collateral Agent is entering into this Agreement in (i) its capacities as administrative agent and collateral agent under the Senior Credit Agreement and the provisions of Article VIII of the Senior Credit Agreement applicable to it as administrative agent and collateral agent thereunder shall also apply to it as Designated Senior Representative hereunder and (ii) its capacity as Senior Collateral Agent under any relevant Intercreditor Agreement (if applicable) and (b) the Junior Collateral Agent is entering in this Agreement in its capacity as administrative agent and collateral agent under the Junior Credit Agreement Loan Documents and the provisions of Article VIII of the Junior Credit Agreement applicable to the administrative agent and collateral agent thereunder shall also apply to the Junior Collateral Agent hereunder.

For the avoidance of doubt, the parties hereto acknowledge that in no event shall the Senior Collateral Agent or the Junior Collateral Agent be responsible or liable for special, indirect, or consequential damages of any kind whatsoever (including, but not limited to, damages for loss of profit) irrespective of whether any such party has been advised of the likelihood of such damages and regardless of the form of action.

SECTION 8.21. Relative Rights . Except to the extent expressly contemplated herein, nothing in this Agreement is intended to or will (a) amend, waive or otherwise modify the provisions of any Senior Debt Documents or any Junior Debt Documents, or permit the Borrower or any other Grantor

 

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to take any action, or fail to take any action, to the extent such action or failure would otherwise constitute a breach of, or default under, any Senior Debt Documents or any Junior Debt Documents, (b) change the relative priorities of the Senior Obligations or the Liens granted under the Senior Collateral Documents on the Shared Collateral (or any other assets) as among the Senior Secured Parties, (c) otherwise change the relative rights of the Senior Secured Parties in respect of the Shared Collateral as among such Senior Secured Parties or (d) obligate the Borrower or any other Grantor to take any action, or fail to take any action, that would otherwise constitute a breach of, or default under, any Senior Debt Document or any Junior Debt Document.

SECTION 8.22. Survival of Agreement . All covenants, agreements, representations and warranties made by any party in this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement.

SECTION 8.23. Integration . This Agreement together with the other Senior Debt Documents and Junior Debt Documents represents the entire agreement of each of the Grantors and the Senior Secured Parties with respect to the subject matter hereof and there are no promises, undertakings, representations or warranties by any Grantor, any Representative or any other Secured Party relative to the subject matter hereof not expressly set forth or referred to herein or in the other Senior Debt Documents or Junior Debt Documents.

[ Remainder of page intentionally left blank ]

 

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

 

       JPMORGAN CHASE BANK, N.A.,
 

    as Senior Collateral Agent and Designated Senior

    Representative

  By:  

/s/ Krys Szremski

   
    Name:   Krys Szremski
    Title:     Executive Director

  CORTLAND CAPITAL MARKET SERVICES LLC, as Junior Collateral Agent and Designated Junior Representative,
  By:  

/s/ Emily Ergang Pappas

            
    Name: Emily Ergang Pappas
    Title: Associate Counsel

 

[Signature Page to Term Intercreditor Agreement]

 

HORIZON GLOBAL CORPORATION,  as Borrower

 

By:

  

/s/ Brian Whittman                                                           

    

Name: Brian Whittman

    

Title: Vice President, Finance

 

HORIZON GLOBAL COMPANY LLC, as a Grantor

 

By:

  

/s/ Brian Whittman

    

Name: Brian Whittman

    

Title: Vice President, Finance

 

HORIZON GLOBAL AMERICAS INC., as a Grantor

 

By:

  

/s/ Brian Whittman

    

Name: Brian Whittman

    

Title: Vice President, Finance

 

HORIZON INTERNATIONAL HOLDINGS LLC, as a Grantor

 

By:

  

/s/ Brian Whittman

    

Name: Brian Whittman

    

Title: Vice President, Finance

 

CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641, as a Grantor

 

By:

  

/s/ Jay Goldbaum                                                     

 

Name:  Jay Goldbaum

 

Title:  Director

 

[Signature Page to Term Intercreditor Agreement]

 

CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario, as a Grantor

 

By:

  

/s/ Jay Goldbaum                                        

 

Name:  Jay Goldbaum

 

Title:  Vice President and Secretary

 

CEQUENT NEDERLAND HOLDINGS B.V., a company formed under the laws of the Netherlands, as a Grantor

 

By:

  

/s/ Jay Goldbaum                                        

 

Name:  Jay Goldbaum

 

Title:  Director

 

CEQUENT MEXICO HOLDINGS B.V.,

 

a company formed under the laws of the Netherlands, as a Grantor

 

By:

  

/s/ Jay Goldbaum                                        

 

Name:  Jay Goldbaum

 

Title:  Director

 

CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico, as a Grantor

 

By:

  

/s/ Jay Goldbaum                                        

 

Name:  Jay Goldbaum

 

Title:  Vice President and Director

 

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico, as a Grantor

 

By:

  

/s/ Jay Goldbaum                                        

 

Name:  Jay Goldbaum

 

Title:  Vice President and Director

 

[Signature Page to Term Intercreditor Agreement]

ANNEX I

Grantors

 

   

Name

 

 

Jurisdiction of Organization

 

     
   

Horizon Global Corporation

  Delaware
   

Horizon Global Company LLC

  Delaware
   

Horizon Global Americas Inc.

  Delaware
   

Horizon International Holdings LLC

  Delaware

ANNEX II

SUPPLEMENT NO. [    ] dated as of [            ], 20[    ], to the TERM INTERCREDITOR AGREEMENT dated as of March 15, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Term Intercreditor Agreement ”), among Horizon Global Corporation, a Delaware limited liability company (the “ Borrower ”); the other Grantors (as defined below) party hereto; JPMorgan Chase Bank, N.A., as collateral agent for the Senior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Senior Collateral Agent ”); CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent for the Junior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Junior Collateral Agent ”); and each Additional Senior Agent (as defined below) and each Additional Junior Agent (as defined below) that from time to time becomes a party thereto.

Capitalized terms used and not otherwise defined herein have the meanings assigned to them in the Term Intercreditor Agreement.

The Grantors have entered into the Term Intercreditor Agreement. Pursuant to certain Senior Debt Documents and certain Junior Debt Documents, certain newly acquired or organized Restricted Subsidiaries of Holdings are required to enter into the Term Intercreditor Agreement. Section 8.07 of the Term Intercreditor Agreement provides that such Restricted Subsidiaries may become parties to the Term Intercreditor Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Restricted Subsidiary (the “ New Grantor ”) is executing this Supplement in accordance with the requirements of the Senior Credit Agreement, the Junior Credit Agreement, the Additional Junior Debt Documents and the Additional Senior Debt Documents.

Accordingly, the Designated Senior Representative and the New Grantor agree as follows:

SECTION 1.    In accordance with Section 8.07 of the Term Intercreditor Agreement, the New Grantor by its signature below becomes a Grantor under the Term Intercreditor Agreement with the same force and effect as if originally named therein as a Grantor, and the New Grantor hereby agrees to all the terms and provisions of the Term Intercreditor Agreement applicable to it as a Grantor thereunder. Each reference to a “Grantor” in the Term Intercreditor Agreement shall be deemed to include the New Grantor. The Term Intercreditor Agreement is hereby incorporated herein by reference.

SECTION 2.    The New Grantor represents and warrants to the Designated Senior Representative and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as such enforceability may be limited by Bankruptcy Laws and by general principles of equity.

SECTION 3.    This Supplement may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Designated Senior Representative shall have received a counterpart of this Supplement that bears the signature of the New Grantor. Delivery of an executed signature page to this Supplement by facsimile transmission or other electronic method shall be as effective as delivery of a manually signed counterpart of this Supplement.

SECTION 4.    Except as expressly supplemented hereby, the Term Intercreditor Agreement shall remain in full force and effect.

SECTION 5.    THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6.    In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Term Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 8.11 of the Term Intercreditor Agreement. All communications and notices hereunder to the New Grantor shall be given to it in care of the Borrower as specified in the Term Intercreditor Agreement.

SECTION 8.    The Borrower agrees to reimburse the Designated Senior Representative for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Designated Senior Representative as required by the applicable Senior Debt Documents.

IN WITNESS WHEREOF, the New Grantor, and the Designated Senior Representative have duly executed this Supplement to the Term Intercreditor Agreement as of the day and year first above written.

 

[NAME OF NEW GRANTOR],
By:  

 

  Name:
  Title:

 

Acknowledged by:
[                      ], as Designated Senior Representative,
By:                                                                          
  Name:
  Title:

ANNEX III

[FORM OF] JOINDER NO. [    ] dated as of [            ], 20[    ] to the TERM INTERCREDITOR AGREEMENT dated as of March 15, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Term Intercreditor Agreement ”), among Horizon Global Corporation, a Delaware limited liability company (the “ Borrower ”); the other Grantors (as defined below) party hereto; JPMORGAN CHASE BANK, N.A., as collateral agent for the Senior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Senior Collateral Agent ”); CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent for the Junior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Junior Collateral Agent ”); and each Additional Senior Agent (as defined below) and each Additional Junior Agent (as defined below) that from time to time becomes a party thereto.

Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Term Intercreditor Agreement.

As a condition to the ability of the Borrower to incur Junior Class Debt after the date of the First Lien/Secured Lien Intercreditor Agreement and to secure such Junior Class Debt with a Lien pari passu with the Lien securing the existing Junior Debt Facilities and to have such Junior Class Debt guaranteed by the Grantors, in each case under and pursuant to the Junior Collateral Documents, the Junior Class Representative in respect of such Junior Class Debt is required to become a Representative under, and such Junior Class Debt and the Junior Class Debt Parties in respect thereof are required to become subject to and bound by, the Term Intercreditor Agreement. Section 8.09 of the Term Intercreditor Agreement provides that such Junior Class Debt Representative may become a Representative under, and such Junior Class Debt and such Junior Class Debt Parties may become subject to and bound by, the Term Intercreditor Agreement pursuant to the execution and delivery by the Junior Class Debt Representative of an instrument in the form of this Joinder and the satisfaction of the other conditions set forth in Section 8.09 of the Term Intercreditor Agreement. The undersigned Junior Class Debt Representative (the “ New Representative ”) is executing this Joinder in accordance with the requirements of the Senior Debt Documents and the Junior Debt Documents.

Accordingly, the Designated Senior Representative and the New Representative agree as follows:

SECTION 1.    In accordance with Section 8.09 of the Term Intercreditor Agreement, the New Representative by its signature below becomes a Representative under, and the related Junior Class Debt and Junior Class Debt Parties become subject to and bound by, the Term Intercreditor Agreement with the same force and effect as if the New Representative had originally been named therein as a Representative, and the New Representative, on behalf of itself and such Junior Class Debt Parties, hereby agrees to all the terms and provisions of the Term Intercreditor Agreement applicable to it as a Junior Representative and to the Junior Class Debt Parties that it represents as Junior Secured Parties. Each reference to a “ Representative ,” “ Junior Representative ” or “ Additional Junior Agent ” in the Term Intercreditor Agreement shall be deemed to include the New Representative. The Term Intercreditor Agreement is hereby incorporated herein by reference.

SECTION 2.    The New Representative represents and warrants to the Designated Senior Representative and the other Secured Parties that (i) it has full power and authority to enter into this Joinder, in its capacity as [agent] [trustee] under [describe new Junior Debt Facility], (ii) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding

obligation, enforceable against it in accordance with the terms of such Agreement and (iii) the Junior Debt Documents relating to such Junior Class Debt provide that, upon the New Representative’s entry into this Agreement, the Junior Class Debt Parties in respect of such Junior Class Debt will be subject to and bound by the provisions of the Term Intercreditor Agreement as Junior Secured Parties.

SECTION 3.    This Joinder may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when the Designated Senior Representative shall have received a counterpart of this Joinder that bears the signature of the New Representative. Delivery of an executed signature page to this Joinder by facsimile transmission (or other electronic method) shall be effective as delivery of a manually signed counterpart of this Joinder.

SECTION 4.    Except as expressly supplemented hereby, the Term Intercreditor Agreement shall remain in full force and effect.

SECTION 5.    THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6.    In case any one or more of the provisions contained in this Joinder should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Term Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 8.11 of the Term Intercreditor Agreement. All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.

SECTION 8.    The Borrower agrees to reimburse the Designated Senior Representative for its reasonable out-of-pocket expenses in connection with this Joinder, including the reasonable fees, other charges and disbursements of counsel for the Designated Senior Representative as required by the applicable Senior Debt Documents.

IN WITNESS WHEREOF, the New Representative and the Designated Senior Representative have duly executed this Joinder to the Term Intercreditor Agreement as of the day and year first above written.

 

[NAME OF NEW REPRESENTATIVE], as
[                      ] for the holders of
[                              ],
By:  

                                                              

  Name:
  Title:
Address for notices:

 

 

attention of:                                                                       
Telecopy:                                                                           
[                              ],
as Designated Senior Representative,
By:  

                                                              

  Name:
  Title:

Acknowledged by:

 

  HORIZON GLOBAL CORPORATION, as Borrower
  By:  

                                          

    Name:
    Title:
  HORIZON GLOBAL COMPANY LLC, as a Grantor
  By:  

                                          

    Name:
    Title:
  HORIZON GLOBAL AMERICAS INC., as a Grantor
  By:  

                                          

    Name:
    Title:
  HORIZON INTERNATIONAL HOLDINGS LLC, as a Grantor
  By:  

                                          

    Name:
    Title:

Schedule I to the

Joinder to the

Term Intercreditor Agreement

Grantors

[                    ]

ANNEX IV

[FORM OF] JOINDER NO. [    ] dated as of [            ], 20[    ] to the TERM INTERCREDITOR AGREEMENT dated as of March 15, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Term Intercreditor Agreement ”), among Horizon Global Corporation, a Delaware limited liability company (the “ Borrower ”); the other Grantors (as defined below) party hereto; JPMorgan Chase Bank, N.A., as collateral agent for the Senior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Senior Collateral Agent ”); CORTLAND CAPITAL MARKET SERVICES LLC, as collateral agent for the Junior Credit Agreement Secured Parties (as defined below) (in such capacity and together with its successors in such capacity, the “ Junior Collateral Agent ”); and each Additional Senior Agent (as defined below) and each Additional Junior Agent (as defined below) that from time to time becomes a party thereto.

Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Term Intercreditor Agreement.

As a condition to the ability of the Borrower to incur Senior Class Debt after the date of the Second Lien Intercreditor Agreement and to secure such Senior Class Debt with the Senior Lien and to have such Senior Class Debt guaranteed by the Grantors, in each case under and pursuant to the Senior Collateral Documents, the Senior Class Debt Representative in respect of such Senior Class Debt is required to become a Representative under, and such Senior Class Debt and the Senior Class Debt Parties in respect thereof are required to become subject to and bound by, the Term Intercreditor Agreement. Section 8.09 of the Term Intercreditor Agreement provides that such Senior Class Debt Representative may become a Representative under, and such Senior Class Debt and such Senior Class Debt Parties may become subject to and bound by, the Term Intercreditor Agreement, pursuant to the execution and delivery by the Senior Class Debt Representative of an instrument in the form of this Joinder and the satisfaction of the other conditions set forth in Section 8.09 of the Term Intercreditor Agreement. The undersigned Senior Class Debt Representative (the “ New Representative ”) is executing this Supplement in accordance with the requirements of the Senior Debt Documents and the Junior Debt Documents.

Accordingly, the Designated Senior Representative and the New Representative agree as follows:

SECTION 1.    In accordance with Section 8.09 of the Term Intercreditor Agreement, the New Representative by its signature below becomes a Representative under, and the related Senior Class Debt and Senior Class Debt Parties become subject to and bound by, the Term Intercreditor Agreement with the same force and effect as if the New Representative had originally been named therein as a Representative, and the New Representative, on behalf of itself and such Senior Class Debt Parties, hereby agrees to all the terms and provisions of the Term Intercreditor Agreement applicable to it as a Senior Representative and to the Senior Class Debt Parties that it represents as Senior Debt Parties. Each reference to a “ Representative ,” “ Senior Representative ” or “ Additional Senior Agent ” in the Term Intercreditor Agreement shall be deemed to include the New Representative. The Term Intercreditor Agreement is hereby incorporated herein by reference.

SECTION 2.    The New Representative represents and warrants to the Designated Senior Representative and the other Secured Parties that (i) it has full power and authority to enter into this Joinder, in its capacity as [agent] [trustee] under [describe new Senior Debt Facility], (ii) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of such Agreement and (iii) the Senior

Debt Documents relating to such Senior Class Debt provide that, upon the New Representative’s entry into this Agreement, the Senior Class Debt Parties in respect of such Senior Class Debt will be subject to and bound by the provisions of the Term Intercreditor Agreement as Senior Secured Parties.

SECTION 3.    This Joinder may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when the Designated Senior Representative shall have received a counterpart of this Joinder that bears the signature of the New Representative. Delivery of an executed signature page to this Joinder by facsimile transmission shall be effective as delivery of a manually signed counterpart of this Joinder.

SECTION 4.    Except as expressly supplemented hereby, the Term Intercreditor Agreement shall remain in full force and effect.

SECTION 5.    THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6.    In case any one or more of the provisions contained in this Joinder should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Term Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 7.    All communications and notices hereunder shall be in writing and given as provided in Section 8.11 of the Term Intercreditor Agreement. All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.

SECTION 8.    The Borrower agrees to reimburse the Designated Senior Representative for its reasonable out-of-pocket expenses in connection with this Joinder, including the reasonable fees, other charges and disbursements of counsel for the Designated Senior Representative.

IN WITNESS WHEREOF, the New Representative and the Designated Senior Representative have duly executed this Joinder to the Term Intercreditor Agreement as of the day and year first above written.

 

[NAME OF NEW REPRESENTATIVE], as
[                ] for the holders of
[                        ],
By:  

 

  Name:
  Title:
Address for notices:

 

 

attention of:  

 

Telecopy:  

 

[                                ],
as Designated Senior Representative,
By:  

 

  Name:
  Title:

Acknowledged by:
[    ],
By:  

 

  Name:
  Title:
[    ],
By:  

 

  Name:
  Title:
THE GRANTORS
LISTED ON SCHEDULE I HERETO,
By:  

 

  Name:
  Title:

Schedule I to the

Joinder to the

Term Intercreditor Agreement

Grantors

[                        ]

EXHIBIT C

Amendment to ABL/Term Loan Intercreditor Agreement

See attached.

 

 

  EXECUTION  

  VERSION  

 

AMENDED AND RESTATED

INTERCREDITOR AGREEMENT

by and between

BANK OF AMERICA, N.A.,

as ABL Agent,

JPMORGAN CHASE BANK, N.A.,

as First Lien Term Agent

and

CORTLAND CAPITAL MARKET SERVICES LLC,

as Second Lien Term Agent

Dated as of March 15, 2019

Relating to:

Horizon Global Corporation and Affiliates

TABLE OF CONTENTS

 

     Page No.  

ARTICLE 1 DEFINITIONS

     3  

Section 1.1

    

Certain Definitions

     3  

Section 1.2

    

Other Definitions

     3  

Section 1.3

    

Rules of Construction

     16  

ARTICLE 2 LIEN PRIORITY

     16  

Section 2.1

    

Priority of Liens

     16  

Section 2.2

    

Waiver of Right to Contest Liens

     17  

Section 2.3

    

Remedies Standstill

     18  

Section 2.4

    

Exercise of Rights

     19  

Section 2.5

    

No New Liens

     21  

Section 2.6

    

Waiver of Marshalling

     21  

ARTICLE 3 ACTIONS OF THE PARTIES

     22  

Section 3.1

    

Certain Actions Permitted

     22  

Section 3.2

    

Agent for Perfection

     22  

Section 3.3

    

Insurance

     23  

Section 3.4

    

No Additional Rights For the Loan Parties Hereunder

     23  

Section 3.5

    

Inspection and Access Rights

     23  

Section 3.6

    

Tracing of and Priorities in Proceeds

     25  

Section 3.7

    

Payments Over

     25  

Section 3.8

    

Rights as Unsecured Creditors

     26  

ARTICLE 4 APPLICATION OF PROCEEDS

     26  

Section 4.1

    

Application of Proceeds

     26  

Section 4.2

    

Specific Performance

     28  

ARTICLE 5 INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS

     29  

Section 5.1

    

Notice of Acceptance and Other Waivers

     29  

Section 5.2

    

Modifications to ABL Documents and Term Documents

     30  

Section 5.3

    

Reinstatement and Continuation of Agreement

     31  

Section 5.4

    

Purchase Right

     32  

ARTICLE 6 INSOLVENCY PROCEEDINGS

     33  

Section 6.1

    

DIP Financing

     33  

Section 6.2

    

Relief From Stay

     36  

Section 6.3

    

No Contest; Adequate Protection

     36  

Section 6.4

    

Asset Sales

     37  

Section 6.5

    

Separate Grants of Security and Separate Classification

     39  

Section 6.6

    

Reorganization Securities

     39  

Section 6.7

    

[Reserved]

     39  

Section 6.8

    

ABL Obligations Unconditional

     39  

Section 6.9

    

Term Obligations Unconditional

     40  

Section 6.10

    

Claims

     40  

Section 6.11

    

Bankruptcy – Plan Support

     40  

Section 6.12

    

Applicability

     40  

Section 6.13

    

Other Bankruptcy Laws

     41  

 

i

ARTICLE 7 MISCELLANEOUS

     41  

Section 7.1

    

Rights of Subrogation

     41  

Section 7.2

    

Further Assurances

     41  

Section 7.3

    

Representations

     42  

Section 7.4

    

Amendments

     42  

Section 7.5

    

Addresses for Notices

     42  

Section 7.6

    

No Waiver; Remedies

     43  

Section 7.7

    

Continuing Agreement, Transfer of Secured Obligations

     43  

Section 7.8

    

Governing Law; Entire Agreement

     44  

Section 7.9

    

Counterparts

     44  

Section 7.10

    

No Third Party Beneficiaries

     44  

Section 7.11

    

Headings

     44  

Section 7.12

    

Severability

     44  

Section 7.13

    

[Reserved]

     44  

Section 7.14

    

VENUE; JURY TRIAL WAIVER

     44  

Section 7.15

    

Intercreditor Agreement

     45  

Section 7.16

    

No Warranties or Liability

     45  

Section 7.17

    

Conflicts

     45  

Section 7.18

    

Information Concerning Financial Condition of the Loan Parties

     46  

Section 7.19

    

Additional Loan Parties

     46  

Section 7.20

    

Amendment and Restatement

     46  

Section 7.21

    

Additional Intercreditor Agreements

     46  

 

ii

AMENDED AND RESTATED INTERCREDITOR AGREEMENT

THIS AMENDED AND RESTATED INTERCREDITOR AGREEMENT (as amended, supplemented, restated or otherwise modified from time to time pursuant to the terms hereof, this “ Agreement ”) is entered into as of March 15, 2019 between

(a) BANK OF AMERICA, N.A. , in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ ABL Agent ”) for (i) the financial institutions, Issuing Banks (as defined below) and other entities party from time to time to the ABL Credit Agreement referred to below (such financial institutions, Issuing Banks and other entities, together with their respective successors, assigns and transferees, the “ ABL Lenders ”) and (ii) any ABL Bank Product Providers (as defined below) (such ABL Bank Product Providers, together with the ABL Agent and the ABL Lenders, the “ ABL Secured Parties ”),

(b) JPMORGAN CHASE BANK, N.A ., in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ First Lien Term Agent ”) for the financial institutions and other entities party from time to time to the First Lien Term Loan Credit Agreement referred to below (such financial institutions and other entities, together with their respective successors, assigns and transferees, the “ First Lien Term Lenders ”) and

(c)         CORTLAND CAPITAL MARKET SERVICES LLC , in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ Second Lien Term Agent ”) for the financial institutions and other entities party from time to time to the Second Lien Term Loan Credit Agreement referred to below (such financial institutions and other entities, together with their respective successors, assigns and transferees, the “ Second Lien Term Lenders ”).

The First Lien Term Agent and the Second Lien Term Agent are referred to collectively herein as the “ Term Agents ” and the First Lien Term Lenders and the Second Lien Term Lenders are referred to collectively herein as the “ Term Lenders ”).

RECITALS

A.           Pursuant to that certain Amended and Restated Loan Agreement dated on or about December 22, 2015 by and among Horizon Global Corporation, a Delaware corporation (“ Company ”), Horizon Global Americas Inc., a Delaware corporation (f/k/a Cequent Performance Products, Inc., a Delaware corporation and successor by merger with Cequent Consumer Products, Inc., an Ohio corporation) (“ Horizon Americas ”), Cequent UK Limited, a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), Cequent Towing Products of Canada Ltd., a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with the Company, Horizon Americas and Cequent UK, collectively, “ ABL Borrowers ”), the ABL Lenders and the ABL Agent (as amended through the Seventh Amendment thereto and as such agreement may be further Amended or Refinanced or otherwise further modified from time to time in accordance with the terms hereof and thereof, the “ ABL Credit Agreement ”), the ABL Lenders have agreed to make certain loans and provide other financial accommodations in an initial aggregate principal amount of up to $90,000,000 to or for the benefit of the ABL Borrowers.

B.        Pursuant to the ABL Credit Agreement, the ABL Guarantors (as defined below) have guaranteed the payment and performance of the ABL Obligations of the ABL Borrowers under the ABL Documents (as defined below).

C.        As a condition of the ABL Credit Agreement and to secure the ABL Obligations, the ABL Borrowers and the ABL Guarantors (together with the ABL Borrowers, collectively, the “ ABL Loan Parties ”) under and in connection with the ABL Documents have granted to the ABL Agent for the benefit of the ABL Secured Parties (as defined below) Liens on the Collateral (as defined below).

D.        Pursuant to that certain Term Loan Credit Agreement dated on or about June 30, 2015 by and among Company (the “ Term Loan Borrower ”), the First Lien Term Lenders and the First Lien Term Agent (as amended by the Sixth Amendment thereto and as such agreement may be Amended or Refinanced or otherwise further modified from time to time in accordance with the terms hereof and thereof, the “ First Lien Term Loan Credit Agreement ”), the First Lien Term Lenders have made a term loan to the Term Loan Borrower having a principal balance as of the date hereof of $190,524,141.07.

E.        Pursuant to the First Lien Term Loan Credit Agreement, the Term Guarantors (as defined below) have guaranteed the payment and performance of the First Lien Term Obligations (as defined below) of the Company under the First Lien Term Documents (as defined below).

F.        As a condition of the First Lien Term Loan Credit Agreement and to secure the First Lien Term Obligations, the Term Loan Borrower and the Term Guarantors (together with the Term Loan Borrowers, collectively, the “ Term Loan Parties ”) under and in connection with the First Lien Term Documents have granted to the First Lien Term Agent for the benefit of the applicable First Lien Term Secured Parties (as defined below) Liens on the Collateral (as defined below).

G.        Pursuant to that certain Term Loan Credit Agreement dated on or about the date hereof by and among the Term Loan Borrower, the Second Lien Term Lenders and the Second Lien Term Agent (as such agreement may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof, the “ Second Lien Term Loan Credit Agreement ”), the Second Lien Term Lenders have agreed to make a term loan in the original principal amount of $51,020,408 to the Term Loan Borrower.

E.        Pursuant to the Second Lien Term Loan Credit Agreement, the Term Guarantors have guaranteed the payment and performance of the Second Lien Term Obligations (as defined below) of the Company under the Second Lien Term Documents (as defined below).

F.        As a condition to the effectiveness of the Second Lien Term Loan Credit Agreement and to secure the Second Lien Term Obligations, the Term Loan Parties under and in connection with the Second Lien Term Documents have granted to the Second Lien Term Agent for the benefit of the applicable Second Lien Term Secured Parties (as defined below) Liens on the Collateral (as defined below).

G.        ABL Agent, First Lien Agent, the Company, and certain of Company’s subsidiaries party thereto have entered into that certain Intercreditor Agreement dated as of June 30, 2015 (as amended from time to time prior to the date of this Agreement, the “ Prior Intercreditor Agreement ”)

H.        Each of the ABL Agent (on behalf of the ABL Secured Parties), the First Lien Term Agent (on behalf of the First Lien Term Secured Parties) and the Second Lien Term Agent (on behalf of the Second Lien Term Secured Parties) desires to agree to the relative priority of Liens on the Collateral and certain other rights, priorities and interests as provided herein and to amend and restate the Prior Intercreditor Agreement in its entirety to read as provided in this Agreement.

 

2

NOW THEREFORE , in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1          Certain Definitions . Unless otherwise defined herein, all capitalized terms used herein shall have the same meaning herein as in the Uniform Commercial Code.

Section 1.2         Other Definitions . Subject to Section 1.1, as used in this Agreement, the following terms shall have the meanings set forth below:

“ ABL Agent ” shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successors thereto as well as any Person designated as the “Agent”, “Administrative Agent”, “Collateral Agent”, “Trustee”, “Security Trustee”, “Collateral Trustee” or similar term under any ABL Credit Agreement.

“ ABL Bank Product Provider ” shall mean any ABL Lender or any Affiliate (or any Person that was an ABL Lender or an Affiliate of an ABL Lender at the time it entered into a Bank Product with an ABL Loan Party) of any ABL Lender that has entered into a Bank Product or agreement relating to any Bank Products with an ABL Loan Party with the obligations of such ABL Loan Party thereunder being secured by one or more ABL Collateral Documents, together with their respective successors, assigns and transferees.

“ ABL Borrowers ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ ABL Collateral Documents ” shall mean the Security Documents (as defined in the ABL Credit Agreement) and all security agreements, pledge agreements, hypothecs, charges, debentures, account control agreements, bailment agreements, freight forwarder and/or customs broker’s agreements, collateral access agreements, mortgages, deeds of trust, and other collateral documents executed and delivered in connection with the ABL Credit Agreement, in each case as Amended or Refinanced or otherwise modified from time to time, in accordance with the terms hereof.

“ ABL Credit Agreement ” shall have the meaning assigned to such term in the recitals to this Agreement and any other agreements or facilities which Amend or Refinance all or any portion of the ABL Obligations under any then extant ABL Credit Agreement (including without limitation under any agreement with respect to ABL DIP Financing provided by any or all of the ABL Secured Parties, including any use, whether consensual or non-consensual, of cash collateral constituting the Proceeds of the ABL Priority Collateral); provided that at the time of any refinancing or replacement of the then extant ABL Credit Agreement (other than the Non-US Loan Parties Restructuring), the Company shall have delivered to each Term Agent an officer’s certificate certifying that such refinancing or replacement ABL Credit Agreement is permitted to be incurred under the Term Loan Credit Agreement and each Additional Term Debt Facility.

“ ABL Deposit and Security Accounts ” shall mean any and all deposit accounts and securities accounts of the ABL Loan Parties subject to a control agreement in favor of or otherwise controlled by the ABL Agent.

“ ABL DIP Financing ” shall have the meaning set forth in Section 6.1(a).

 

3

“ ABL Documents ” shall mean the ABL Credit Agreement, ABL Guaranty, the ABL Collateral Documents, those other ancillary agreements to which any ABL Secured Party is a party or beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any ABL Loan Party and delivered to the ABL Agent or any other ABL Secured Party, in connection with any of the foregoing or with the ABL Credit Agreement, ABL Guaranty or the ABL Collateral Documents, in each case, as the same may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ ABL Guarantors ” shall mean the collective reference to any direct or indirect Subsidiary or direct or indirect parent of the ABL Borrowers who is or becomes a guarantor under the ABL Guaranty with respect to the ABL Borrowers’ ABL Obligations.

“ ABL Guaranty ” shall mean the collective reference to the “Guaranties” (as defined in the ABL Credit Agreement”) entered into by the ABL Guarantors and any other guarantee of the ABL Obligations entered into in connection with an Amendment or Refinancing of the ABL Credit Agreement, whether by the same or any other agent, lender or group of lenders.

“ ABL Lenders ” shall have the meaning assigned to that term in the introduction to this Agreement, as well as any Person which is a “lender” or “issuing bank” under any ABL Credit Agreement.

“ ABL Loan Parties ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ ABL Obligations ” shall mean all obligations of every nature of each ABL Loan Party from time to time owed to the ABL Secured Parties, or any of them, under any ABL Document or in respect of any “Secured Bank Product Obligations” (as defined in the ABL Credit Agreement), including, without limitation, all “Obligations” of each ABL Loan Party or similar term as defined in any ABL Credit Agreement, whether for principal, interest, reimbursement of amounts drawn under Letters of Credit, fees, expenses, indemnification, or otherwise, and all other amounts owing or due under the terms of the ABL Documents (including interest, fees, indemnification payments, expense reimbursements and other amounts which, but for the commencement of an Insolvency Proceeding with respect to such ABL Loan Party, would have accrued on or been payable with respect to the ABL Obligations, whether or not a claim is allowed or allowable against such ABL Loan Party for such interest, fees, indemnification payments, expense reimbursements and other amounts in the related Insolvency Proceeding), as the same may be Amended or Refinanced in whole or in part or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ ABL Priority Collateral ” shall mean all Collateral consisting of the following:

(1)        all Accounts (and including for this purpose all amounts payable by the issuer or processor thereof in connection with the use of a credit card, debit card or similar instrument, whether deemed to be an Account or a Payment Intangible) and other receivables (other than Accounts and other receivables arising from the sale or other Disposition of Term Priority Collateral);

(2)        cash, money and cash equivalents, other than identifiable cash Proceeds from the sale or Disposition of Term Priority Collateral;

(3)        all (i) Deposit Accounts (other than the Term Collateral Proceeds Account), (ii) Securities Accounts (other than the Term Collateral Proceeds Account), Security Entitlements and Securities credited to such a Securities Account (other than Equity Interests in any Loan Party or its Subsidiaries), or (iii) all Commodity Accounts (other than the Term Collateral Proceeds

 

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Account) and commodity contracts and, in each case, all cash, money, cash equivalents, checks and other property held therein or credited thereto, other than identifiable Proceeds of Term Priority Collateral;

(4)        all Inventory;

(5)        all proceeds of business interruption insurance (which, for the avoidance of doubt, shall not include proceeds of any casualty insurance relating to Term Priority Collateral);

(6)        to the extent relating to or arising from, evidencing or governing any of the items referred to in the preceding clauses (1) through (5) constituting ABL Priority Collateral, all Documents, General Intangibles (including all rights under contracts but excluding any Intellectual Property and any Equity Interests in any Loan Party or its Subsidiaries), Instruments (including Promissory Notes other than any Promissory Notes constituting Term Priority Collateral), Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper), and Commercial Tort Claims, insurance proceeds, Supporting Obligations and Letter-of-Credit Rights relating thereto; provided that to the extent any of the foregoing also relates to Term Priority Collateral only that portion related to the items referred to in the preceding clauses (1) through (5) shall be included in the ABL Priority Collateral;

(7)        all books and Records relating to the items referred to in the preceding clauses (1) through (6) constituting ABL Priority Collateral (including all books, databases, customer lists, engineer drawings, and Records, whether tangible or electronic, which contain any information relating to any of the items referred to in the preceding clauses (1) through (6) constituting ABL Priority Collateral but, in each case, excluding any Intellectual Property); and

(8)        to the extent not otherwise included, all Proceeds (including all insurance proceeds) of any and all of the foregoing described in clauses (1) through (7) and all collateral security and guarantees with respect to any of the foregoing.

“ ABL Recovery ” shall have the meaning set forth in Section 5.3(a).

“ ABL Secured Parties ” shall have the meaning to that term in the introduction to this Agreement.

“ ABL Standstill Period ” has the meaning set forth in Section 2.3(b).

“ Additional Term Joinder ” means a Joinder Agreement substantially in the form of Exhibit I hereto or such other form as agreed by the ABL Agent and each Term Agent.

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

“ Agent(s) ” means individually the ABL Agent or any Term Agent and collectively means both the ABL Agent and each Term Agent.

“ Agreement ” shall have the meaning assigned to that term in the introduction to this Agreement.

“ Amended or Refinanced ” shall mean, in respect of any obligation, or the agreement or contract pursuant to which such obligation is incurred, (a) such obligation (or any portion thereof) or related agreement or contract as extended, renewed, defeased, amended, amended and restated, supplemented,

 

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modified, restructured, consolidated, refinanced, replaced, refunded or repaid from time to time and (b) any other obligation issued in exchange or replacement for or to refinance such obligation, in whole or in part, whether with same or different lenders, arrangers and/or agents and whether with a larger or smaller aggregate principal amount, in each case to the extent not prohibited under the terms of this Agreement and the ABL Documents or the Term Documents, as applicable, then in effect. “ Amend or Refinance ” and “ Amendment or Refinancing ” shall have correlative meanings and, for the avoidance of doubt, the parties hereto agree that “Amended or Refinanced”, when applicable to any ABL Document shall include such ABL Document as amended, amended and restated, supplemented, modified or restructured by, and after giving effect to, any Non-US Loan Parties Restructuring.

“ Bank Products ” shall have the meaning assigned to such term in the ABL Credit Agreement.

“ Bankruptcy Code ” shall mean Title 11 of the United States Code, as now or hereafter in effect or any successor thereto.

“ Borrower ” shall mean the ABL Borrowers and the Term Loan Borrower.

“ Business Day ” shall mean any day other than (a) Saturday or Sunday; (b) any day on which banks in Chicago, Illinois or New York City, New York, generally are not open to the general public for the purpose of conducting commercial banking business; or (c) a day on which the principal office of any Term Agent or any ABL Agent is not open to the general public to conduct business.

“ Collateral ” shall mean (a) with respect to any Term Agent or any Term Secured Party, all Property now owned or hereafter acquired by any Term Loan Party in or upon which a Lien is granted or purported to be granted to any Term Agent under any of the Term Collateral Documents, together with all substitutions, additions, products and Proceeds thereof and (b) with respect to the ABL Agent or any ABL Secured Party, all Property now owned or hereafter acquired by any ABL Loan Party in or upon which a Lien is granted or purported to be granted to the ABL Agent under any of the ABL Collateral Documents, together with all substitutions, additions, products and Proceeds thereof.

“ Company ” shall have the meaning assigned to that term in the introduction to this Agreement.

“ Control Collateral ” shall mean any Collateral consisting of any Deposit Account, Securities Account, Commodities Accounts, Instruments, Equity Interests and any other Collateral as to which a Lien may be perfected through possession or control by the secured party, or any agent therefor.

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Credit Documents ” shall mean the ABL Documents and the Term Documents.

“ Debtor Relief Laws ” shall mean the Bankruptcy Code, as now or hereafter in effect or any successors thereto, as well as all other liquidation, conservatorship, bankruptcy, assignment for benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or any state law or of any applicable foreign law from time to time in effect affecting the rights of creditors generally.

 

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“ Designated Term Agent ” means (i) the First Lien Term Agent, until such time as (A) the Discharge of First Lien Term Obligations with respect to the First Lien Term Loan Credit Agreement has occurred (which occurrence shall be confirmed in writing by a Term Agent) or (B) the First Lien Term Agent has notified other parties hereto in writing that the Second Lien Term Agent shall be the Designated Term Agent, pursuant to the Term Lender Intercreditor Agreement or otherwise, and (ii) thereafter, the Second Lien Term Agent.

“ Discharge of ABL Obligations ” shall mean (a) the termination of all commitments to extend credit under the ABL Documents, and (b) the payment in full in cash or immediately available funds of all outstanding ABL Obligations (excluding contingent indemnification obligations for which a claim or demand for payment has not then been asserted) including, with respect to (i) amounts available to be drawn under outstanding Letters of Credit (or indemnities or other undertakings issued in respect of outstanding Letters of Credit), the cancellation of such Letters of Credit or the Cash Collateralization (as defined in the ABL Credit Agreement) thereof or the delivery and provision of backstop letters of credit in respect thereof in compliance with the terms of any ABL Credit Agreement (which shall not exceed an amount equal to 105% of the aggregate undrawn amount of such Letters of Credit), (other than Letters of Credit denominated in a currency other than Dollars, in which case shall not exceed 110% of the aggregate undrawn amount of such Letters of Credit) and (ii) outstanding ABL Obligations with respect to Bank Products (or indemnities or other undertakings issued pursuant thereto in respect of outstanding Bank Products), the delivery or provision of cash collateral or backstop letters of credit in respect thereof, other than (x) unasserted contingent indemnification obligations, and (y) any ABL Obligations relating to Bank Products that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or collateralized.

“ Discharge of First Lien Term Obligations ” shall mean the payment in full in cash of all outstanding First Lien Term Obligations (excluding contingent indemnification obligations for which a claim or demand for payment has not then been asserted).

“ Discharge of Second Lien Term Obligations ” shall mean the payment in full in cash of all outstanding Second Lien Term Obligations (excluding contingent indemnification obligations for which a claim or demand for payment has not then been asserted).

“ Discharge of Term Obligations ” shall mean the Discharge of First Lien Term Obligations and the Discharge of Second Lien Term Obligations shall have both occurred.

“ Disposition ” shall mean the sale, transfer, license, lease or other disposition of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. As used herein, “Dispose” and “Disposed” shall have correlative meanings.

“ Enforcement Notice ” shall mean a written notice delivered by either the ABL Agent or the Designated Term Agent to the other applicable party announcing that an Enforcement Period has commenced.

“ Enforcement Period ” shall mean the period of time following the receipt by either the ABL Agent or any Term Agent of an Enforcement Notice from the other and continuing until the earliest of (a) in case of an Enforcement Period commenced by any Term Agent, the Discharge of Term Obligations (or the written termination of, or agreement in writing to terminate, the Enforcement Period by the applicable Term Agent) or (b) in the case of an Enforcement Period commenced by the ABL Agent, the Discharge of

 

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ABL Obligations (or the written termination of, or agreement in writing to terminate, the Enforcement Period by the ABL Agent).

“ Equity Interests ” shall mean as to any Person, the stock (common, preferred or in any other manner designated), limited liability company membership or other interest or any other right or interest (or right to acquire such interest) however designated, evidencing ownership interests in such Person.

“ Event of Default ” shall mean an Event of Default as defined in the ABL Credit Agreement or any Term Document, as applicable.

“ Exercise of Any Secured Creditor Remedies ” or “ Exercise of Secured Creditor Remedies ” shall mean, except as otherwise provided in the final sentence of this definition:

(a)        the taking by any Secured Party of any action to enforce or realize upon any Lien, including the institution of any foreclosure proceedings or the noticing of any public or private sale pursuant to Article 9 of the Uniform Commercial Code or other applicable law;

(b)        the exercise by any Secured Party of any right or remedy provided to a secured creditor on account of a Lien under any of the Credit Documents, under applicable law, in an Insolvency Proceeding or otherwise, including the election to retain any of the Collateral in satisfaction of a Lien;

(c)        the taking of any action by any Secured Party or the exercise of any right or remedy by any Secured Party in respect of the collection on, set off against, marshaling of, injunction respecting or foreclosure on the Collateral or the Proceeds thereof;

(d)        the appointment on the application of a Secured Party, of a receiver, receiver and manager or interim receiver of all or part of the Collateral;

(e)        the sale, lease, license, or other Disposition of all or any portion of the Collateral by private or public sale conducted by a Secured Party or any other means at the direction of a Secured Party permissible under applicable law (including without limitation the solicitation of any bids from third persons to conduct liquidation or Disposition of Collateral or engage any agents for purposes of valuing, marketing, promoting or selling Collateral);

(f)        the exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code or under provisions of similar effect under other applicable law the exercise by a Secured Party of any voting rights relating to any Pledged Shares; and

(g)        instituting any action or proceeding to effect any of the foregoing.

For the avoidance of doubt, none of the following shall be deemed to constitute an Exercise of Secured Creditor Remedies: (i) the filing of a proof of claim in any Insolvency Proceeding or seeking adequate protection (subject to and in accordance with Section 6.3 below), (ii) the exercise of rights by the ABL Agent during the continuance of a Dominion Trigger Period (as defined in the ABL Credit Agreement), including, without limitation, with respect to Deposit Accounts and Securities Accounts and the notification of account debtors, depository institutions, securities intermediaries, or any other Person to deliver Proceeds of ABL Priority Collateral to the ABL Agent, (iii) the consent by the ABL Agent to any Disposition by any ABL Loan Party of any of the ABL Priority Collateral (other than any such sale conducted at the direction of the ABL Agent in connection with any Exercise of Secured Creditor Remedies after the occurrence of an Event of Default under the ABL Credit Agreement), (iv) the modification of advance rates or sub-limits,

 

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or the addition or modification of eligibility criteria, by the ABL Agent, (v) the imposition or modification of any component of the Availability Reserve (as defined in the ABL Credit Agreement) by the ABL Agent, (vi) any collection, adjustment or settlement of insurance claims, or any application to a court of competent jurisdiction to make a determination as to the collection, adjustment or settlement of an insurance claim, in each case in accordance with Section 3.3, (vii) the exercise of rights by the ABL Agent under the ABL Documents to require any ABL Loan Party to take actions in the nature of “further assurances” with respect to the Collateral permitted by the ABL Documents and not inconsistent with this Agreement, (viii) the consent by any Term Agent to any Disposition by the Borrower or any Term Guarantor of any of the Term Priority Collateral (other than any such sale conducted at the direction of any Term Agent in connection with any Exercise of Secured Creditor Remedies after the occurrence of an Event of Default under the applicable Term Documents), (ix) the exercise of rights by any Term Agent under the applicable Term Documents to require any Term Loan Party to take actions in the nature of “further assurances” with respect to the Collateral permitted by the Term Documents and not inconsistent with this Agreement, (x) the exercise of any rights or remedies by the ABL Agent against any ABL Loan Party which is not a Term Loan Party or (xi) the exercise of any rights or remedies by any Term Loan Agent against any Term Loan Party which is not an ABL Loan Party.

“ First Lien Term Agent ” shall have the meaning set forth in the Preamble hereto.

“ First Lien Term Collateral Documents ” shall mean the Security Documents (as defined in the First Lien Term Loan Credit Agreement) and all security agreements, pledge agreements, hypothecs, charges, debentures, bailment agreements, account control agreements, freight forwarder and/or customs broker’s agreements, collateral access agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with the First Lien Term Loan Credit Agreement, in each case as Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ First Lien Term Documents ” shall mean the First Lien Term Loan Credit Agreement, the First Lien Term Guaranty, the First Lien Term Collateral Documents and those other ancillary agreements to which any First Lien Term Secured Party is a party or beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Term Loan Party or any of its respective Affiliates, and delivered to the applicable First Lien Term Agent or any other First Lien Term Secured Party, in connection with any of the foregoing or any First Lien Term Loan Credit Agreement, First Lien Term Guaranty or the First Lien Term Collateral Documents, in each case as the same may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ First Lien Term Guaranty ” shall mean the collective reference to the guaranty agreements, if any, entered into by the Term Guarantors and any other guarantee of the First Lien Term Obligations entered into in connection with an Amendment or Refinancing of the First Lien Term Loan Credit Agreement.

“ First Lien Term Loan Credit Agreement ” shall have the meaning assigned to such term in the recitals to this Agreement and any other agreements, indentures or facilities which Amend or Refinance all or any portion of the First Lien Term Obligations under any then extant First Lien Term Loan Credit Agreement (including, without limitation, under any agreement with respect to Term DIP Financing provided by any or all of the Term Secured Parties, including any use, whether consensual or non-consensual, of cash collateral constituting the Proceeds of the Term Priority Collateral), whether by the same or any other agent, lender or group of lenders; provided that at the time of any refinancing or replacement of the then extant First Lien Term Loan Credit Agreement, the Company shall have delivered to the ABL Agent an officer’s certificate certifying that such refinancing or replacement First Lien Term

 

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Loan Credit Agreement is permitted to be incurred under the ABL Credit Agreement and the First Lien Term Loan Agreement.

“ First Lien Term Obligations ” shall mean all obligations of every nature of each Term Loan Party from time to time owed to the First Lien Term Secured Parties, or any of them, under any First Lien Term Document, including, without limitation, all “Obligations” of each Term Loan Party or similar term as defined in any First Lien Term Document, whether for principal, prepayment premium, interest, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the First Lien Term Documents (including interest, fees, indemnification payments, expense reimbursements and other amounts which, but for the filing of an Insolvency Proceeding with respect to such Term Loan Party, would have accrued on or been payable with respect to any First Lien Term Obligation, whether or not a claim is allowed or allowable against such Term Loan Party for such interest, fees, indemnification payments, expense reimbursements and other amounts in the related Insolvency Proceeding), as the same may be Amended or Refinanced in whole or in part or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ First Lien Term Secured Parties ” shall mean each First Lien Term Agent and all First Lien Term Lenders.

“ Foreign Borrower ” means any Foreign Subsidiary that may become a party to the ABL Credit Agreement as a “Borrower” from time to time.

“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

“ Governmental Authority ” shall mean the government of the United States or any other nation, or any political subdivision thereof, whether state, local, provincial, territorial or municipal and any agency, authority, instrumentality, regulatory body, court, tribunal, 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).

“ Indebtedness ” shall mean (i) “Debt” as defined in the ABL Credit Agreement and (ii) “Indebtedness” as defined in the Term Loan Credit Agreement, respectively and as applicable.

“ Insolvency Proceeding ” shall mean, with respect to any Loan Party, (a) any case, action, proposal, or proceeding before any court or other Governmental Authority relating to (or any corporate action or other procedure or step being taken in relation to) such Loan Party’s bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors (whether voluntary or involuntary), or (b) any general assignment for the benefit of its creditors, composition, marshalling of assets for its creditors or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case covered by clauses (a) and (b) undertaken under any Debtor Relief Laws.

“ Intellectual Property ” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“ Issuing Bank ” shall have the meaning assigned to such term in the ABL Credit Agreement.

 

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“ Lender(s) ” means individually, the ABL Lenders or the Term Lenders and collectively means all of the ABL Lenders and the Term Lenders.

“ Letter of Credit ” shall mean “Letter of Credit” as defined in the ABL Credit Agreement.

“ Licenses ” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“ Lien ” shall mean any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien (statutory or other), charge or other security interest or any other security agreement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“ Lien Priority ” shall mean with respect to any Lien of the ABL Secured Parties or the Term Secured Parties in the Collateral, the order of priority of such Lien as specified in Section 2.1.

“ Loan Parties ” shall mean the ABL Loan Parties and the Term Loan Parties.

“ Non-US Loan Parties ” any Foreign Borrower and/or any Foreign Subsidiary that may from time to time guaranty the obligations under the ABL Credit Agreement.

“ Non-US Loan Parties (Existing) ” shall mean (a) CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641 (b) CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario, (c) CEQUENT NEDERLAND HOLDINGS B.V., a company formed under the laws of the Netherlands, (d) CEQUENT MEXICO HOLDINGS B.V., a company formed under the laws of the Netherlands, (e) CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico, and (f) CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico.

“ Non-US Loan Parties Restructuring ” shall mean the amendment, amendment and restatement, and/or other modification of the ABL Documents solely to implement (a) the addition of certain Non-US Loan Parties and (b) the granting of Liens in favor of the ABL Secured Parties on certain assets of the Non-US Obligors and/or the ABL Loan Parties as security for the ABL Obligations as contemplated by the ABL Credit Agreement, such restructuring to include the addition of terms and provisions and additional loan documentation for the Non-US Obligors as contemplated by the ABL Credit Agreement.

“ Patents ” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Person ” shall mean an individual, partnership, corporation, limited liability company, unlimited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

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“ Pledged Shares ” shall mean any Equity Interests of, or other equity interests in, any Loan Party, any Subsidiary thereof or any other Person, to the extent, in each case, constituting part of the Collateral.

“ Priority Collateral ” shall mean the ABL Priority Collateral or the Term Priority Collateral, as applicable.

“ Proceeds ” shall mean (a) all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

“ Property ” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“ Purchasing ABL Secured Parties ” shall have the meaning set forth in Section 5.4(a)(ii).

“ Purchasing Term Secured Parties ” shall have the meaning set forth in Section 5.4(a)(i).

“ Real Property ” means any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license and any other right to use or occupy real property, including any right arising by contract.

“ Second Lien Term Agent ” shall have the meaning set forth in the Preamble hereto.

“ Second Lien Term Collateral Documents ” shall mean the Security Documents (as defined in the Second Lien Term Loan Credit Agreement) and all security agreements, pledge agreements, hypothecs, charges, debentures, bailment agreements, account control agreements, freight forwarder and/or customs broker’s agreements, collateral access agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with the Second Lien Term Loan Credit Agreement, in each case as Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Second Lien Term Documents ” shall mean the Second Lien Term Loan Credit Agreement, the Second Lien Term Guaranty, the Second Lien Term Collateral Documents and those other ancillary agreements to which any Second Lien Term Secured Party is a party or beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Term Loan Party or any of its respective Affiliates, and delivered to the applicable Second Lien Term Agent or any other Second Lien Term Secured Party, in connection with any of the foregoing or any Second Lien Term Loan Credit Agreement, Second Lien Term Guaranty or the Second Lien Term Collateral Documents, in each case as the same may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Second Lien Term Guaranty ” shall mean the collective reference to the guaranty agreements, if any, entered into by the Term Guarantors and any other guarantee of the Second Lien Term Obligations entered into in connection with an Amendment or Refinancing of the Second Lien Term Loan Credit Agreement.

“ Second Lien Term Loan Credit Agreement ” shall have the meaning assigned to such term in the recitals to this Agreement and any other agreements, indentures or facilities which Amend or Refinance all or any portion of the Second Lien Term Obligations under any then extant Second Lien Term Loan Credit Agreement (including, without limitation, under any agreement with respect to Term DIP Financing provided by any or all of the Term Secured Parties, including any use, whether consensual or

 

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non-consensual, of cash collateral constituting the Proceeds of the Term Priority Collateral), whether by the same or any other agent, lender or group of lenders; provided that at the time of any refinancing or replacement of the then extant Second Lien Term Loan Credit Agreement, the Company shall have delivered to the ABL Agent an officer’s certificate certifying that such refinancing or replacement Second Lien Term Loan Credit Agreement is permitted to be incurred under the ABL Credit Agreement and the First Lien Term Loan Agreement.

“ Second Lien Term Obligations ” shall mean all obligations of every nature of each Term Loan Party from time to time owed to the Second Lien Term Secured Parties, or any of them, under any Second Lien Term Document, including, without limitation, all “Obligations” of each Term Loan Party or similar term as defined in any Second Lien Term Document, whether for principal, prepayment premium, interest, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Second Lien Term Documents (including interest, fees, indemnification payments, expense reimbursements and other amounts which, but for the filing of an Insolvency Proceeding with respect to such Term Loan Party, would have accrued on or been payable with respect to any Second Lien Term Obligation, whether or not a claim is allowed or allowable against such Term Loan Party for such interest, fees, indemnification payments, expense reimbursements and other amounts in the related Insolvency Proceeding), as the same may be Amended or Refinanced in whole or in part or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Second Lien Term Secured Parties ” shall mean each Second Lien Term Agent and all Second Lien Term Lenders.

“ Secured Bank Product Obligations ” shall have the meaning assigned to such term in the ABL Credit Agreement.

“ Secured Parties ” shall mean the ABL Secured Parties and the Term Secured Parties.

“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company, unlimited liability company or other business entity of which a majority of the shares of Equity Interests having ordinary voting power for the election of directors or other governing body are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of a Loan Party.

“ Term Agents ” shall have the meaning set forth in the Preamble hereto.

“ Term Collateral Documents ” shall mean the First Lien Term Collateral Document and the Second Lien Term Collateral Documents.

“ Term Collateral Proceeds Account ” shall mean the deposit account identified in writing to the ABL Agent from time to time in the name of any Designated Term Agent or the Company which contains (or was established to contain) only Proceeds of Term Priority Collateral.

“ Term DIP Financing ” shall have the meaning set forth in Section 6.1(b).

“ Term Documents ” shall mean the First Lien Term Loan Documents and the Second Lien Term Loan Documents.

 

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“ Term Guarantors ” shall mean the collective reference to each direct or indirect Subsidiary or direct or indirect parent of the Term Loan Borrower who is or becomes a guarantor under any Term Guaranty with respect to the Term Loan Borrowers’ Term Obligations.

“ Term Guaranty ” shall mean the First Lien Term Guaranty and the Second Lien Term Guaranty.

“ Term Lender Intercreditor Agreement ” shall mean that certain Term Lender Intercreditor Agreement dated as of the date hereof by and between the First Lien Term Agent and the Second Lien Term Agent, as amended, supplemented or replaced from time to time.

“ Term Lenders ” shall mean the First Lien Term Lenders and the Second Lien Term Lenders.

“ Term Loan Credit Agreements ” shall mean the First Lien Term Loan Credit Agreement and the Second Lien Term Loan Credit Agreement.

“ Term Loan Borrower ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ Term Loan Parties ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ Term Obligations ” shall mean the First Lien Term Obligations and the Second Lien Term Obligations.

“ Term Priority Collateral ” shall mean all Collateral, other than ABL Priority Collateral, including the following:

(1)        Pledged Shares;

(2)        Equipment;

(3)        Intellectual Property;

(4)        Real Property;

(5)        Payment intangibles of, and promissory notes in favor of, any Term Loan Party (other than payments in respect of business interruption insurance constituting ABL Priority Collateral);

(6)        all Goods other than Inventory;

(7)        General intangibles, including goodwill, not constituting ABL Priority Collateral;

(8)        the Term Collateral Proceeds Account; provided, however, that to the extent that identifiable Proceeds of ABL Priority Collateral are deposited into such account, any such identifiable Proceeds shall be treated as ABL Priority Collateral;

(9)        all specifically identifiable Proceeds of Term Priority Collateral contained in any Deposit Account (other than the Term Collateral Proceeds Account), Securities Account or Commodity Account;

 

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(10)        tax refunds or rebates;

(11)        all Documents, Instruments, Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper), Letters of Credit Rights, Commercial Tort Claims, and books and Records, in each case relating to the items referred to in the preceding clauses (including all books, databases, and Records, whether tangible or electronic, which contain any information relating to any of the items referred to in the preceding clauses);

(12)        to the extent not otherwise included, all Proceeds (including all insurance proceeds), Supporting Obligations and products of any of the foregoing described in clauses (1) through (11) and all collateral security and guarantees with respect to any of the foregoing; and

(13)        all other Collateral other than ABL Priority Collateral.

“ Term Recovery ” shall have the meaning set forth in Section 5.3(b).

“ Term Standstill Period ” shall have the meaning set forth in Section 2.3(a).

“ Term Secured Parties ” means, collectively, the First Lien Term Secured Parties and the Second Lien Term Secured Parties.

“ Trademarks ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Uniform Commercial Code ” shall mean the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided that to the extent that the Uniform Commercial Code is used to define any term in any security document and such term is defined differently in differing Articles of the Uniform Commercial Code, the definition of such term contained in Article 9 shall govern; provided further that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, publication or priority of, or remedies with respect to, Liens of any party is governed by the Uniform Commercial Code or foreign personal property security laws as enacted and in effect in a jurisdiction other than the State of New York, the term “Uniform Commercial Code” will mean the Uniform Commercial Code or such foreign personal property security laws as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

“ Use Period ” means, with respect to each parcel or item of Term Priority Collateral, the period, following the commencement of any Exercise of Any Secured Creditor Remedies, which begins on the earlier of (a) the day on which the ABL Agent provides the Designated Term Agent with the notice of its election to request access to such parcel or item of Term Priority Collateral pursuant to Section 3.5(b) and (b) the fifth Business Day after the Designated Term Agent provides the ABL Agent with notice that the any Term Agent (or its agent) has obtained possession or control of such parcel or item of Term Priority Collateral and ends on the earliest of (i) the day which is 180 days after the date on which the ABL Agent initially obtains the ability to take physical possession of, remove or otherwise control physical access to,

 

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or actually uses, such parcel or item of Term Priority Collateral, plus such number of days, if any, during such 180 day period that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to associated ABL Priority Collateral, (ii) the date on which (A) all or substantially all of the ABL Priority Collateral associated with such parcel or item of Term Priority Collateral is sold, collected or liquidated or (B) the ABL Agent has abandoned the ABL Priority Collateral at such parcel or permanently ceases efforts to liquidate, complete, sell, prepare for sale, store or otherwise exercise the rights provided under Section 3.5(b) with respect to the ABL Priority Collateral with respect to any item or parcel of Term Priority Collateral and confirms in writing such facts to the Designated Term Agent (or fails to respond within ten (10) Business Days to a written request from the Designated Term Agent to so confirm) or, (iii) the Discharge of ABL Obligations and (iv) the date on which the default which resulted in such Exercise of Any Secured Creditor Remedies has been waived in writing.

Section 1.3         Rules of Construction . Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting and shall be deemed to be followed by the phrase “without limitation,” and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, schedule and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, Amendments or Refinancings, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, Amendments and Refinancings, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any reference herein to the repayment in full of an obligation shall mean the payment in full in cash of such obligation, or in such other manner as may be approved in writing by the requisite holders or representatives in respect of such obligation. Any reference herein to a time of day means Eastern time. Any term referenced herein by cross-reference to a defined term in the ABL Credit Agreement shall be deemed to be a cross-reference to a defined term in the ABL Credit Agreement or the same or comparable term in any other ABL Credit Agreement. Any term referenced herein by cross-reference to a defined term in the Term Loan Credit Agreement shall be deemed to be a cross-reference to a defined term in the Term Loan Credit Agreement or the same or comparable term in any other Term Loan Credit Agreement.

ARTICLE 2

LIEN PRIORITY

Section 2.1         Priority of Liens .

(a)        Notwithstanding (i) the date, time, method, manner, or order of grant, attachment, or perfection of, or any defect or deficiency in, or failure to perfect, any Liens granted to the ABL Secured Parties in respect of all or any portion of the Collateral or any Liens granted to the Term Secured Parties in respect of all or any portion of the Collateral and regardless of how any such Lien was acquired (whether by grant, statute, operation of law, subrogation or otherwise), (ii) the order or time of filing or recordation of any document or instrument for perfecting the Liens in favor of the ABL Agent for the benefit of the ABL Secured Parties or any Term Agent for the benefit of the Term Secured Parties in any Collateral, (iii) any provision of the Uniform Commercial Code, Debtor Relief Laws or any other applicable law, or of the ABL Documents or the Term Documents, (iv) whether the ABL Agent or any Term Agent, in each case, either directly or through agents, holds possession of, or has control over, all or any part of the Collateral, (v) the date on which the ABL Obligations or the Term Obligations are advanced or made available to the

 

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Loan Parties, or (vi) any failure of the ABL Agent or any Term Agent to perfect its Lien in the Collateral, the subordination of any Lien on the Collateral securing any ABL Obligations or Term Obligations, as applicable, to any Lien securing any other obligation of any Borrower or Term Guarantor, or the avoidance, invalidation or lapse of any Lien on the Collateral securing any ABL Obligations or Term Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, and each Term Agent, on behalf of itself and the applicable Term Secured Parties, hereby agree that the following priorities apply to the Liens upon and right to payment from Proceeds of the ABL Priority Collateral and the Term Priority Collateral:

(1)        any Lien on the ABL Priority Collateral securing any ABL Obligations now or hereafter held by or on behalf of the ABL Agent or any ABL Secured Party or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien now or hereafter held by any Term Secured Party on the ABL Priority Collateral securing any Term Obligations; and

(2)        any Lien on the Term Priority Collateral securing any Term Obligations now or hereafter held by or on behalf of any Term Agent, any Term Secured Party or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Liens now or hereafter held by the ABL Secured Parties on the Term Priority Collateral securing any ABL Obligations.

(b)        Each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, acknowledges and agrees that, concurrently herewith, the ABL Agent, for the benefit of itself and the other ABL Secured Parties, has been, or may be, granted Liens upon all of the Term Priority Collateral and each Term Agent hereby consents thereto. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, acknowledges and agrees that, concurrently herewith, each Term Agent, for the benefit of itself and the other Term Secured Parties represented by it, has been, or may be, granted Liens upon all of the ABL Priority Collateral and the ABL Agent hereby consents thereto. The subordination of Liens by each Term Agent and the ABL Agent in favor of one another as set forth herein shall not be deemed to subordinate any Term Agent’s Liens or the ABL Agent’s Liens to the Liens of any other Person.

Section 2.2         Waiver of Right to Contest Liens .

(a)        Each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the ABL Agent and the ABL Secured Parties in respect of the Collateral or the provisions of this Agreement. Each Term Agent, for itself and on behalf of the applicable Term Secured Parties, agrees that none of the Term Agents or the Term Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent or any ABL Secured Party under the ABL Documents with respect to the ABL Priority Collateral. Each Term Agent, for itself and on behalf of the applicable Term Secured Parties, hereby waives any and all rights it or the Term Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the ABL Agent or any ABL Lender seeks to enforce its Liens in any ABL Priority Collateral. The foregoing shall not be construed to prohibit any Term Agent from enforcing the provisions of this Agreement or otherwise acting in accordance with this Agreement.

 

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(b)        The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of any Term Agent or any Term Secured Parties in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in Section 3.5 of this Agreement, the ABL Agent, for itself and on behalf of the ABL Secured Parties, agrees that none of the ABL Agent or the ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Term Agent under the Term Documents with respect to the Term Priority Collateral. The ABL Agent, for itself and on behalf of the ABL Secured Parties, hereby waives any and all rights it or the ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Term Agent seeks to enforce its Liens in any Term Priority Collateral. The foregoing shall not be construed to prohibit the ABL Agent from enforcing the provisions of this Agreement or otherwise acting in accordance with this Agreement.

Section 2.3         Remedies Standstill .

(a)        Each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees that, from the date hereof until the date upon which the Discharge of ABL Obligations shall have occurred, no Term Agent nor any Term Secured Party will Exercise Any Secured Creditor Remedies with respect to any of the ABL Priority Collateral; provided , however , that the Designated Term Agent or any person authorized by it may Exercise Any Secured Creditor Remedies with respect to any ABL Priority Collateral (but not rights the exercise of which is otherwise prohibited by this Agreement including Article 6 hereof) after a period (the “ Term Standstill Period ”) of 180 consecutive days has elapsed from the date of delivery of written notice from the Designated Term Agent to the ABL Agent stating that (i) an Event of Default (as defined under the applicable Term Documents) has occurred and is continuing thereunder, (ii) the Term Obligations under the Term Documents are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of such Term Documents, and (iii) the Designated Term Agent intends to exercise its rights to the Exercise of Secured Creditor Remedies; provided , further , that the Term Agents shall not be entitled to Exercise Any Secured Creditor Remedies with respect to any ABL Priority Collateral in the event (x) the ABL Agent or any ABL Secured Parties are then diligently pursuing their rights and remedies with respect to all or a material portion of the ABL Priority Collateral or diligently attempting to vacate any stay or prohibition against such exercise or (y) a Loan Party is then a debtor under or with respect to (or otherwise subject to) any Insolvency Proceeding. From and after the date that is the earlier of (x) the date upon which the Discharge of ABL Obligations shall have occurred and (y) the date the Term Standstill Period shall have expired (subject to the second proviso in the preceding sentence), any Term Agent may Exercise Any Secured Creditor Remedies under the Term Documents or applicable law as to any ABL Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any ABL Priority Collateral by any Term Agent is at all times subject to the provisions of this Agreement, including the provisions of Section 4.1.

(b)        The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, from the date hereof until the date upon which the Discharge of Term Obligations shall have occurred, neither the ABL Agent nor any ABL Secured Party will Exercise Any Secured Creditor Remedies with respect to any of the Term Priority Collateral; provided , however , that the ABL Agent may Exercise Any Secured Creditor Remedies with respect to any Term Priority Collateral (but not rights the exercise of which is otherwise prohibited by this Agreement including Article 6 hereof) after a period (the “ ABL Standstill Period ”) of 180 consecutive days has elapsed from the date of delivery of written notice from the ABL Agent to each Term Agent stating that (i) an Event of Default (as defined under the applicable ABL Documents) has occurred and is continuing thereunder, (ii) the ABL Obligations under such ABL

 

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Documents are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of such ABL Documents, and (iii) the ABL Agent intends to exercise its rights to the Exercise of Secured Creditor Remedies; provided , further , that the ABL Agent shall not be entitled to Exercise Any Secured Creditor Remedies with respect to any Term Priority Collateral in the event (x) any Term Agent or any Term Secured Parties are then diligently pursuing their rights and remedies with respect to all or a material portion of the Term Priority Collateral or diligently attempting to vacate any stay or prohibition against such exercise or (y) a Loan Party is then a debtor under or with respect to (or otherwise subject to ) any Insolvency Proceeding. From and after the date that is the earlier of (A) the date upon which the Discharge of Term Obligations shall have occurred and (B) the date the ABL Standstill Period shall have expired (subject to the second proviso in the preceding sentence), the ABL Agent or any ABL Secured Party may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any Term Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Term Priority Collateral by the ABL Agent or the ABL Secured Parties is at all times subject to the provisions of this Agreement, including the provisions of Section 4.1.

(c)        Notwithstanding the provisions of Sections 2.3(a), 2.3(b) or any other provision of this Agreement, nothing contained herein shall be construed to prevent any Agent or any Secured Party from (i) filing a claim or statement of interest with respect to the ABL Obligations or Term Obligations owed to it in any Insolvency Proceeding commenced by or against any Loan Party, (ii) taking any action (not adverse to the Lien Priority of the Liens of the other Agent or other Secured Parties on the Collateral in which such other Agent or other Secured Party has a priority Lien or the rights of the other Agent or any of the other Secured Parties to Exercise Any Secured Creditor Remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce) its Lien on any Collateral, (iii) filing any necessary or responsive pleadings in opposition to any motion, adversary proceeding or other pleading filed by any Person objecting to or otherwise seeking disallowance of the claim or Lien of such Agent or Secured Party, (iv) filing any pleadings, objections, motions, or agreements which assert rights available to unsecured creditors of the Loan Parties arising under any Insolvency Proceeding or applicable non-bankruptcy law to the extent not inconsistent with the terms of this Agreement, (v) Subject to Section  6.11 , voting on any plan of reorganization or filing any proof of claim in any Insolvency Proceeding of any Loan Party, or (vi) bidding for and purchasing Collateral at any private or judicial foreclosure sale of such Collateral initiated by the applicable Agent (so long as such bid is subject to the limitations on credit bidding set forth in Section  6.4(a) and Section  6.4(b) ), in each case (i) through (vi) above to the extent not inconsistent with the terms of this Agreement.

Section 2.4         Exercise of Rights .

(a)         No Other Restrictions . The ABL Agent may enforce the provisions of the ABL Documents, each Term Agent may enforce the provisions of the applicable Term Documents and each may Exercise Any Secured Creditor Remedies, all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of this Agreement; provided , however , that each of the ABL Agent and each Term Agent agrees to provide to the other (x) an Enforcement Notice prior to the commencement of an Exercise of Secured Creditor Remedies and (y) copies of any notices that it is required under applicable law to deliver to any Loan Party; provided further , however , that the ABL Agent’s failure to provide any such copies to each Term Agent shall not impair any of the ABL Agent’s rights hereunder or under any of the ABL Documents and any Term Agent’s failure to provide any such copies to the ABL Agent shall not impair any of such Term Agent’s rights hereunder or under any of the applicable Term Documents. Each of the Term Agents (on behalf of itself and the applicable Term Secured Parties) and the ABL Agent (on behalf of itself and the ABL Secured Parties) agrees (i) that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim, in the case of each of the Term Agents and the applicable Term Secured Parties, against the ABL Agent or any

 

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other ABL Secured Party, and in the case of the ABL Agent and each other ABL Secured Party, against the Term Agents or any other Term Secured Party, seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral which is consistent with the terms of this Agreement, and none of such parties shall be liable for any such action taken or omitted to be taken, or (ii) without the other Agent’s prior written consent, it will not be a petitioning creditor or otherwise assist in the filing of an involuntary Insolvency Proceeding.

(b)         Release of Liens .

(i)        In the event of (A) any private or public sale of all or any portion of the ABL Priority Collateral in connection with any Exercise of Secured Creditor Remedies by the ABL Agent or any Disposition by the ABL Loan Parties with the consent of the ABL Agent while an Event of Default under the ABL Documents has occurred and is continuing (so long as the proceeds of such sale or Disposition are applied in accordance with Section  4.1(b) ), or (B) any sale, transfer or other Disposition of all or any portion of the ABL Priority Collateral (other than in connection with an Amendment or Refinancing as described in Section  5.2(c) ), so long as such sale, transfer or other Disposition is then permitted by the ABL Documents and the Term Documents or consented to by the requisite ABL Lenders and the requisite Term Lenders, as applicable, each Term Agent agrees, on behalf of itself and the applicable Term Secured Parties that such sale, transfer or other Disposition will be free and clear of the Liens on such ABL Priority Collateral securing the applicable Term Obligations, and such Term Agent’s and the applicable Term Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, or disposed shall terminate and be automatically released without further action concurrently with, and to the same extent as, the release of the ABL Secured Parties’ Liens on such ABL Priority Collateral; provided , that the Liens of the parties shall attach to the Proceeds of any such Disposition of the ABL Priority Collateral with the same relative priority as the Liens which attached to the ABL Priority Collateral so released. In furtherance of, and subject to, the foregoing, each Term Agent agrees that it will promptly execute and deliver any and all Lien releases or other documents reasonably requested by the ABL Agent in connection therewith.

(ii)        In the event of (A) any private or public sale of all or any portion of the Term Priority Collateral in connection with any Exercise of Secured Creditor Remedies by any Term Agent or any Disposition by the Term Loan Parties with the consent of the applicable Term Agent while an Event of Default under the Term Documents has occurred and is continuing (so long as the proceeds of such sale or Disposition are applied in accordance with Section  4.1(c) ), or (B) any sale, transfer or other Disposition of all or any portion of the Term Priority Collateral (other than in connection with an Amendment or Refinancing as described in Section  5.2(c) ), so long as such sale, transfer or other Disposition is then permitted by the applicable Term Documents and the ABL Documents or consented to by the requisite applicable Term Lenders and the requisite ABL Lenders, as applicable, the ABL Agent agrees, on behalf of itself and the ABL Lenders, that such sale, transfer or Disposition will be free and clear of the Liens on such Term Priority Collateral securing the ABL Obligations and the ABL Agent’s and the ABL Secured Parties’ Liens with respect to the Term Priority Collateral so sold, transferred, or disposed shall terminate and be automatically released without further action concurrently with, and to the same extent as, the release of the applicable Term Secured Parties’ Liens on such Term Priority Collateral; provided , that the Liens of the parties shall attach to the Proceeds of any such Disposition of the Term Priority Collateral with the same relative priority as the Liens which attached to the Term Priority Collateral so released. In furtherance of, and subject to, the foregoing, the ABL Agent agrees that it will promptly execute and deliver any and all Lien releases or other documents reasonably requested by the applicable Term Agent in connection therewith.

 

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Section 2.5         No New Liens .

(a)        Subject to Article 6, until the Discharge of ABL Obligations, and for so long as the Term Obligations are secured by any ABL Priority Collateral, the parties hereto agree that no Loan Party shall grant any Lien on any assets of any Loan Party securing any Term Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents. If any Term Secured Party shall nonetheless acquire or hold any Lien on any assets of any Loan Party securing any Term Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, then the applicable Term Agent (or the relevant Term Secured Party) shall, without the need for any further consent of any other Term Secured Party or any Term Loan Party and notwithstanding anything to the contrary in any other Term Document, be deemed to also hold and have held such Lien as agent or bailee for the benefit of the ABL Agent as security for the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of the existence of such Lien.

(b)        Subject to Article 6 and the proviso at the end of this sentence, until the Discharge of Term Obligations, and for so long as the ABL Obligations are secured by any Term Priority Collateral, the parties hereto agree that no Loan Party shall grant any Lien on any of its assets securing any ABL Obligation which assets are not also subject to the Lien of each Term Agent under the applicable Term Documents; provided , that , the parties acknowledge and agree that prior to the date of this agreement, Non-US Loan Parties (Existing) previously granted Liens on assets of such Non-US Loan Parties (Existing) to secure the ABL Obligations and such prior grant of Liens shall not be deemed to be a violation of this Section 2.5(a). If any ABL Secured Party shall nonetheless acquire or hold any Lien on any assets of any such Loan Party (other than Non-US Loan Parties (Existing)) securing any ABL Obligation which assets are not also subject to the Lien of each Term Agent under the applicable Term Documents, then the ABL Agent (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party or any ABL Loan Party and notwithstanding anything to the contrary in any other ABL Document, be deemed to also hold and have held such Lien as agent or bailee for the benefit of each Term Agent as security for the Term Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Term Agent in writing of the existence of such Lien.

(c)        Each of the Secured Parties acknowledges and agrees that the Agents and Secured Parties may obtain Liens on certain of the assets of Non-US Loan Parties (including Equity Interests owned by such Non-US Loan Parties) which assets will not constitute Collateral for purposes of this Agreement if the applicable Loan Party is not both an ABL Loan Party and a Term Loan Party.

Section 2.6         Waiver of Marshalling .

(a)        Until the Discharge of ABL Obligations, each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the ABL Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.

(b)        Until the Discharge of Term Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Term Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.

 

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ARTICLE 3

ACTIONS OF THE PARTIES

Section 3.1         Certain Actions Permitted . Each Term Agent and the ABL Agent may make such demands or file such claims in respect of the Term Obligations or the ABL Obligations, as applicable, as are necessary to prevent the waiver or bar of such claims under applicable statutes of limitations or other statutes, court orders, or rules of procedure at any time; provided that any judgment lien obtained in connection with such action shall be subject to the terms of this Agreement.

Section 3.2         Agent for Perfection .

(a)        The ABL Agent, for and on behalf of itself and each ABL Secured Party, and each Term Agent, for and on behalf of itself and each applicable Term Secured Party, as applicable, each agrees to hold all Collateral in its respective possession, custody, or control (including as defined in Sections 9-104, 9-105, 9-106, 9-107 and 8-106 of the UCC) (or in the possession, custody, or control of agents or bailees for either) as agent for each other Agent solely for the purpose of perfecting the security interest granted to each in such Collateral, subject to the terms and conditions of this Section 3.2. The ABL Agent agrees to act as agent of each Term Agent for and on behalf of itself and each applicable Term Secured Party under each ABL Deposit and Security Account solely for the purpose of perfection of each applicable Term Secured Parties’ security interest therein. In furtherance thereof, (i) each Term Agent and the Term Secured Parties hereby appoint the ABL Agent as their agent for the purposes of perfecting their security interest in all ABL Deposit and Security Accounts of any ABL Loan Party and the ABL Agent hereby accepts such appointment and acknowledges and agrees that it shall act for the benefit of each Term Agent and the other Term Secured Parties under each control agreement and (ii) each ABL Loan Party hereby grants a security interest to the ABL Agent for the benefit of the Term Secured Parties in all ABL Deposit and Security Accounts as security for the Term Obligations. Each Term Agent agrees to act as agent of the ABL Agent for and on behalf of itself and each ABL Secured Party under the Term Collateral Proceeds Account solely for the purpose of perfection of each applicable ABL Secured Parties’ security interest therein. In furtherance thereof, (i) the ABL Agent and the ABL Secured Parties hereby appoint each Term Agent as their agent for the purposes of perfecting their security interest in the Term Collateral Proceeds Account and each Term Agent hereby accepts such appointment and acknowledges and agrees that it shall act for the benefit of the ABL Agent and the other ABL Secured Parties under each control agreement and (ii) each Term Loan Party hereby grants a security interest to each Term Agent for the benefit of the ABL Secured Parties in the Term Collateral Proceeds Account as security for the ABL Obligations. None of the ABL Agent, the other ABL Secured Parties, the Term Agents, or the other Term Secured Parties, as applicable, shall have any obligation whatsoever to the others to assure that the Collateral is genuine or owned by any Loan Party or any other Person or to preserve rights or benefits of any Person. The duties or responsibilities of the ABL Agent and each Term Agent under this Section 3.2 are and shall be limited solely to holding or maintaining control of the Control Collateral as agent for the other party for purposes of perfecting the Lien held by each Term Agent or the ABL Agent, as applicable. The ABL Agent is not and shall not be deemed to be a fiduciary of any kind for the Term Secured Parties or any other Person. Each Term Agent is not and shall not be deemed to be a fiduciary of any kind for the ABL Secured Parties, or any other Person. Each Agent, for itself and on behalf of each Secured Party represented by it, hereby waives and releases each other Agent from all claims and liabilities arising pursuant to its role under this Section 3.2 as agent and bailee with respect to the Collateral. Without limiting the generality of the foregoing, (A) other than as set forth in Section 3.6(b), the ABL Secured Parties shall not be obligated to ensure or otherwise see to the application of any Proceeds of the Term Priority Collateral deposited into any ABL Deposit and Security Account or be answerable in any way for the misapplication thereof and (B) other than as set forth in Section 3.6(c), the Term Secured Parties shall not be obligated to ensure or

 

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otherwise see to the application of any Proceeds of the ABL Priority Collateral deposited into the Term Collateral Proceeds Account or be answerable in any way for the misapplication thereof.

(b)        The ABL Agent agrees on behalf of itself and the other ABL Secured Parties that all mortgages, deeds of trust, deeds and similar instruments (collectively, “mortgages”) now or thereafter filed against Real Property in favor of or for the benefit of the ABL Agent shall contain the following notation: “The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to JPMorgan Chase Bank, N.A., as First Lien Term Agent, or Cortland Capital Market Services LLC, as Second Lien Term Agent, in accordance with the provisions of the Amended and Restated Intercreditor Agreement dated as of March 15, 2019, as amended from time to time.”

Section 3.3         Insurance . Proceeds of Collateral include insurance proceeds and, therefore, the Lien Priority shall govern the ultimate disposition of casualty insurance proceeds. The ABL Agent and each Term Agent shall each be named as additional insured or lender loss payee, as applicable, with respect to all insurance policies relating to the Collateral as set forth in the ABL Credit Agreement or any Term Loan Credit Agreement, as applicable. Until Discharge of ABL Obligations, the ABL Agent shall have the sole and exclusive right, as against each Term Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ABL Priority Collateral and take other such actions with respect to insurance covering the ABL Priority Collateral as set forth in the ABL Credit Agreement. Until Discharge of the Term Obligations, the Term Agents shall have the sole and exclusive right, as against the ABL Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of Term Priority Collateral and take other such actions with respect to insurance covering the Term Priority Collateral as set forth in the Term Documents. To the extent that an insured claim covers both ABL Priority Collateral and Term Priority Collateral, then the ABL Agent and each Term Agent will work jointly and in good faith to collect, adjust and/or settle under the insurance policy, as applicable. If the parties are unable after negotiating in good faith to agree on the collection, adjustment or settlement for such claim and the insurer will not settle such claim separately with respect to ABL Priority Collateral and Term Priority Collateral, either party may apply to a court of competent jurisdiction to make a determination as to the settlement of such claim, and the court’s determination shall be binding upon the parties. All proceeds of such insurance shall be remitted to the ABL Agent or the Designated Term Agent, as the case may be, and each of the Term Agents and ABL Agent shall cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1 hereof.

Section 3.4         No Additional Rights For the Loan Parties Hereunder . If any ABL Secured Party or Term Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, the Loan Parties shall not be entitled to use such violation as a defense to any action by any ABL Secured Party or Term Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any ABL Secured Party or Term Secured Party.

Section 3.5         Inspection and Access Rights .

(a)        In the event that the ABL Agent shall, in the exercise of its rights under the ABL Documents or otherwise, receive possession or control of any books and Records of any Loan Party which contain information identifying or pertaining to the Term Priority Collateral, the ABL Agent shall, upon request from any Term Agent and as promptly as practicable thereafter, either make available to such Term Agent such books and records for inspection and duplication or provide to such Term Agent copies thereof. In the event that any Term Agent shall, in the exercise of its rights under the Term Documents or otherwise, receive possession or control of any books and records of any Loan Party which contain information identifying or pertaining to any of the ABL Priority Collateral, such Term Agent shall, upon request from

 

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the ABL Agent and as promptly as practicable thereafter, either make available to the ABL Agent such books and records for inspection and duplication or provide the ABL Agent copies thereof. Each Term Agent hereby irrevocably grants the ABL Agent a non-exclusive worldwide license and/or right, to the maximum extent permitted by applicable law, exercisable without payment of royalty or other compensation, to use, license or sublicense any of the Intellectual Property (including the right to access to all media in which any of the Intellectual Property may be recorded or stored and to all computer software and programs used for the compilation or printout thereof) now or hereafter owned by, licensed to, or otherwise used by the Loan Parties in order for ABL Agent and ABL Secured Parties to purchase, use, market, repossess, possess, store, assemble, manufacture, process, sell, transfer, distribute or otherwise Dispose of any asset included in the ABL Priority Collateral in connection with liquidation, Disposition or Realization upon the ABL Priority Collateral in accordance with the terms of this Agreement. Each Term Agent agrees that any sale, transfer or other disposition of any of the Loan Parties’ Intellectual Property (whether by foreclosure or otherwise) will be subject to the ABL Agent’s rights as set forth in this Section  3.5 .

(b)        If any Term Agent, or any agent or representative of any Term Agent, or any receiver, shall, after the commencement of any Exercise of Any Secured Creditor Remedies, obtain possession or physical control of any of the Term Priority Collateral, such Term Agent shall promptly notify the ABL Agent in writing of that fact, and the ABL Agent shall, within ten Business Days thereafter, notify such Term Agent in writing as to whether the ABL Agent desires to exercise access rights under this Agreement. In addition, the ABL Agent shall promptly notify such Term Agent that the ABL Agent is exercising its access rights under this Agreement and its rights under Section  3.5 under either circumstance. Upon delivery of such notice by the ABL Agent to such Term Agent, ABL Agent shall have (i) an irrevocable, non-exclusive right to have access to, and a rent-free right to use, the relevant parcel or item the Term Priority Collateral and (ii) the right during normal business hours during the Use Period, and with reasonable prior notice, to use the Term Priority Collateral in order to assemble, inspect, copy or download information stored on, take action to perfect its Liens on, complete a production run of inventory, take possession of, move, prepare and advertise for sale, sell (by public auction, private sale or a “going out of business” or similar sale, whether in bulk, in lots or to customers in the ordinary course of business or otherwise and which sale may include augmented Inventory of the same type sold in any ABL Loan Party’s business), store or otherwise deal with the ABL Priority Collateral, in each case without liability to any Term Secured Party, except as set forth herein. Consistent with the definition of “ Use Period ,” access rights will apply to differing parcels or items of Term Priority Collateral at differing times, in which case, a differing Use Period will apply to each such parcel or items. The Term Agents may not sell, assign or otherwise transfer the related Term Priority Collateral prior to the expiration of the Use Period applicable thereto unless such sale, assignment or transfer is subject to the ABL Agent’s rights of access pursuant to the terms of this Agreement (including the Use Period afforded to the ABL Agent hereunder).

(c)        The ABL Agent shall take proper and reasonable care under the circumstances of any Term Priority Collateral that is used by the ABL Agent during the Use Period and repair and replace any damage (ordinary wear-and-tear excepted) caused by the ABL Agent or its agents, representatives or designees and the ABL Agent shall comply with all applicable laws in all material respects in connection with its use or occupancy or possession of the Term Priority Collateral. The ABL Agent shall indemnify and hold harmless the Term Agents and the Term Secured Parties for any injury or damage to Persons or property (ordinary wear-and-tear excepted) caused directly by the acts or omissions of Persons under its control and except for injury or damage arising from the gross negligence or willful misconduct of any Term Secured Party as determined by a final non-appealable judgment by a court of competent jurisdiction; provided , however , that the ABL Agent and the ABL Secured Parties will not be liable for any diminution in the value of Term Priority Collateral caused by the absence of the ABL Priority Collateral therefrom. Notwithstanding the foregoing, in no event shall the ABL Secured Parties or the ABL Agent have any

 

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liability to the Term Secured Parties and/or to any Term Agent pursuant to this Section 3.5 as a result of any condition (including any environmental condition, claim or liability) on or with respect to the Term Priority Collateral existing prior to the date of the exercise by the ABL Secured Parties (or the ABL Agent, as the case may be) of their rights under this Section 3.5 and the ABL Secured Parties shall have no duty or liability to maintain the Term Priority Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by the ABL Secured Parties. The ABL Agent and each Term Agent shall cooperate and use reasonable efforts to ensure that their activities during the Use Period as described in this Section 3.5 do not interfere materially with the activities of the other as described in this Section 3.5, including the right of the Term Agents to show the Term Priority Collateral to prospective purchasers and to ready the Term Priority Collateral for sale.

Section 3.6         Tracing of and Priorities in Proceeds .

(a)        The ABL Agent, for itself and on behalf of the ABL Secured Parties, and each Term Agent, for itself and on behalf of the applicable Term Secured Parties, agree that prior to an issuance of any Enforcement Notice by such Secured Party, any Proceeds of Collateral, whether or not deposited under control agreements, which are used by any Loan Party to acquire other property which is Collateral shall not (solely as between the Agents and the Lenders) be treated as Proceeds of Collateral for purposes of determining the relative priorities in the Collateral which was so acquired.

(b)        Notwithstanding anything to the contrary in this Agreement, each Term Agent on behalf of the Term Secured Parties agrees that, unless (and only to the extent that) the ABL Agent has prior actual knowledge (as a result of written notice from a Term Agent or otherwise) that any deposit in, funds credited to or other payment into, any of the ABL Deposit and Security Accounts (other than the Term Collateral Proceeds Account) include Term Priority Collateral or Proceeds thereof, such deposits or payments may be treated as ABL Priority Collateral and swept, applied and otherwise dealt with in accordance with the terms of the ABL Documents. In accordance with the foregoing and the other terms of this Agreement, each ABL Secured Party shall segregate and pay over to the Term Agents upon written request after delivery of an Enforcement Notice by any Term Agent, in the same form as received and with any necessary endorsements, all Term Priority Collateral and/or identifiable Proceeds of Term Priority Collateral contained in any ABL Deposit and Security Account (and the ABL Loan Parties hereby authorize and direct the ABL Agent to pay over to the applicable Term Agent such amounts to the extent required hereunder).

(c)        Notwithstanding anything to the contrary in this Agreement, the ABL Agent on behalf of the ABL Secured Parties agrees that, unless (and only to the extent that) a Term Agent has prior actual knowledge (as a result of written notice from the ABL Agent or otherwise) that any deposit in, funds credited to or other payment into, the Term Collateral Proceeds Account include ABL Priority Collateral or Proceeds thereof, such deposits or payments may be treated as Term Priority Collateral and swept, applied and otherwise dealt with in accordance with the terms of the Term Documents. In accordance with the foregoing and the other terms of this Agreement, each Term Secured Party shall segregate and pay over to the ABL Agent upon written request after delivery of an Enforcement Notice by the ABL Agent, in the same form as received and with any necessary endorsements, all ABL Priority Collateral and/or identifiable Proceeds of ABL Priority Collateral contained in the Term Collateral Proceeds Account (and the Term Loan Parties hereby authorize and direct the Term ABL Agents to pay over to the ABL Agent such amounts to the extent required hereunder).

Section 3.7         Payments Over .

 

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(a)        So long as the Discharge of ABL Obligations has not occurred, any ABL Priority Collateral or Proceeds thereof not constituting Term Priority Collateral received by any Term Agent or any Term Secured Parties in connection with any Exercise of Secured Creditor Remedies relating to the ABL Priority Collateral shall be segregated and held in trust and forthwith paid over to the ABL Agent for the benefit of the ABL Secured Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The ABL Agent is hereby authorized to make any such endorsements as agent for any Term Agent or any such Term Secured Parties. This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

(b)        So long as the Discharge of Term Obligations has not occurred, any Term Priority Collateral or Proceeds thereof not constituting ABL Priority Collateral received by the ABL Agent or any other ABL Secured Party in connection with any Exercise of Secured Creditor Remedies relating to the Term Priority Collateral shall be segregated and held in trust and forthwith paid over to the Designated Term Agent for the benefit of the Term Secured Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The Designated Term Agent is hereby authorized to make any such endorsements as agent for the ABL Agent or any such other ABL Secured Parties. This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

(c)        Nothing in this Agreement shall prohibit the receipt by the ABL Agent or any Term Agent or any Secured Party of payments of interest, principal and other amounts owed in respect of the ABL Obligations or the Term Obligations so long as such receipt is not the direct or indirect result of the Exercise of Any Secured Creditor Remedies by the ABL Agent or any Term Agent or any Secured Party in contravention of this Agreement.

Section 3.8          Rights as Unsecured Creditors . The Secured Parties may, in accordance with the terms of the Term Documents or the ABL Documents (as applicable) and applicable law, enforce rights and exercise remedies against the Company and any other Loan Party as unsecured creditors so long as such action is not prohibited by or inconsistent with the terms of this Agreement (including the limitations set forth in Article 6) or any other provisions prohibiting, limiting or restricting certain actions or objections by the Term Secured Parties or the ABL Secured Parties, as applicable; provided further that in the event any Secured Party becomes a judgment Lien creditor in respect of any Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to any of its obligations, such judgment Lien shall be subject to the terms of this Agreement, including the relative Lien priorities set forth in Section 2.1 and Section 4.1.

ARTICLE 4

APPLICATION OF PROCEEDS

Section 4.1         Application of Proceeds .

(a)         Revolving Nature of ABL Obligations . Each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, expressly acknowledges and agrees that (i) the ABL Credit Agreement includes a revolving commitment, that in the ordinary course of business the ABL Agent and the ABL Lenders will apply payments and make advances thereunder, and that no application of any Collateral or the release of any Lien by the ABL Agent upon any portion of the Collateral in connection with a permitted Disposition by the ABL Loan Parties under any ABL Credit Agreement shall constitute the Exercise of Secured Creditor Remedies under this Agreement; (ii) the amount of the ABL Obligations that may be outstanding at any time or from time to time may be increased or reduced and subsequently

 

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reborrowed; and (iii) all Collateral or Proceeds thereof received by the ABL Agent may be applied, reversed, reapplied, reborrowed or credited, in whole or in part, to the ABL Obligations at any time; provided , however , that from and after the date on which the ABL Agent (or any ABL Secured Party) or any Term Agent (or any Term Secured Party) commences the Exercise of Any Secured Creditor Remedies, all amounts received by the ABL Agent or any ABL Lender or any Term Agent or any Term Secured Party as a result of such enforcement shall be applied as specified in Sections 4.1(b) and (c). The Lien Priority shall not be altered or otherwise affected by any such Amendment or Refinancing, repayment, reborrowing, or increase of either the ABL Obligations or the Term Obligations, or any portion thereof.

(b)         Application of Proceeds of ABL Priority Collateral . The ABL Agent and each Term Agent hereby agree that all ABL Priority Collateral and all Proceeds thereof, received by any of them in connection with any Exercise of Secured Creditor Remedies with respect to the ABL Priority Collateral shall be applied,

first , (i) to the payment of costs and expenses of the ABL Agent in connection with such Exercise of Secured Creditor Remedies to the extent provided in the ABL Documents and (ii) in an Insolvency Proceeding and in connection with ABL DIP Financing that otherwise complies with Section 6.1(a) hereof, to the payment of any reasonable administrative claim, professional fee and U.S. trustee or clerk of the court fee “carveouts”, in each case under this clause (ii), consented to in writing by the ABL Agent to be paid prior to the Discharge of ABL Obligations,

second , to the payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred,

third , to the Designated Term Agent to be applied to the payment of the Term Obligations in accordance with the Term Documents and the Term Lender Intercreditor Agreement until the Discharge of Term Obligations shall have occurred, and

fourth , the balance, if any, to the Loan Parties or as a court of competent jurisdiction may direct.

(c)         Application of Proceeds of Term Priority Collateral . The ABL Agent and each Term Agent hereby agree that all Term Priority Collateral and all Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor Remedies with respect to the Term Priority Collateral shall be applied,

first , (i) to the payment of costs and expenses of each Term Agent in connection with such Exercise of Secured Creditor Remedies to the extent provided in the Term Documents and (ii) in an Insolvency Proceeding and in connection with Term DIP Financing that otherwise complies with Section 6.1(b) hereof, to the payment of any reasonable administrative claim, professional fee and U.S. trustee or clerk of the court fee “carveouts”, in each case under this clause (ii), consented to in writing by the Designated Term Agent to be paid prior to the Discharge of Term Obligations,

second , to the payment of the Term Obligations in accordance with the Term Documents and the Term Lender Intercreditor Agreement until the Discharge of Term Obligations shall have occurred,

third , to the payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred, and

 

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fourth , the balance, if any, to the Loan Parties or as a court of competent jurisdiction may direct.

(d)         Limited Obligation or Liability . In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent shall have no obligation or liability to any Term Agent or to any Term Secured Party, and no Term Agent shall have any obligation or liability to the ABL Agent or any ABL Secured Party, regarding the adequacy of any Proceeds or for any action or omission, except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement.

(e)         Turnover of Collateral after Discharge . Upon the Discharge of ABL Obligations, the ABL Agent shall deliver to the Designated Term Agent or shall execute such documents as any Term Agent may reasonably request (at the expense of the ABL Borrowers) to enable each Term Agent to have control over, any Control Collateral of the Term Loan Parties still in the ABL Agent’s possession, custody, or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, subject to the reinstatement provisions of Section 5.3 below. The ABL Agent also agrees to deliver notices to landlords, bailees, warehousemen, credit card processors, shippers and other third parties that the ABL Agent is no longer a “secured party” and, if applicable, the “controlling party” (or comparable concepts) under the applicable landlord agreement, collateral access agreement, credit card processor agreement, shipper waiver or other third party document. Upon the Discharge of Term Obligations, each Term Agent shall deliver to the ABL Agent or shall execute such documents as the ABL Agent may reasonably request (at the expense of the Term Loan Borrower) to enable the ABL Agent to have control over any Control Collateral still in such Term Agent’s possession, custody or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, subject to the reinstatement provisions of Section 5.3 below. Each Term Agent also agrees to deliver notices to landlords, bailees, warehousemen, credit card processors, shippers and other third parties that such Term Agent is no longer a “secured party” or, if applicable, the “controlling party” (or comparable concepts) under the applicable landlord agreement, collateral access agreement, credit card processor agreement, shipper waiver or other third party document.

(f)        Notwithstanding anything to the contrary contained above or in the definition of the ABL Priority Collateral or Term Loan Priority Collateral, in the event that Proceeds of Collateral are received from (or are otherwise attributable to the value of) any collection, sale, foreclosure or other realization upon or any other Enforcement Action that involves a combination of ABL Priority Collateral and Term Loan Priority Collateral, the ABL Agent and the Designated Term Agent shall use commercially reasonable efforts in good faith to allocate such Proceeds to the ABL Priority Collateral and the Term Loan Priority Collateral. If the ABL Agent and the Designated Term Agent are unable to agree on such allocation within five (5) Business Days (or such other period of time as the ABL Agent and the Designated Term Agent agree) of the consummation of such collection, sale, foreclosure or other realization upon or any other Enforcement Action, the portion of such Proceeds that shall be allocated as Proceeds of ABL Priority Collateral for purposes of this Agreement shall be an amount equal to (i) the net book value of such ABL Priority Collateral consisting of Accounts, (ii) the orderly liquidation value of such ABL Priority Collateral consisting of Inventory based on and consistent with the then most current appraisal thereof received by the ABL Agent with respect thereto, and (iii) to the extent the Proceeds of ABL Priority Collateral include Proceeds of Collateral other than Accounts and Inventory, the appraised value of such other Collateral based on and consistent with the then most current satisfactory appraisal received by the ABL Agent with respect thereto

Section  4.2          Reinstatement .

 

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(a)        The ABL Agent agrees that if at any time all or part of any payment with respect to any Term Loan Obligation secured by any Term Priority Collateral previously received by any Term Secured Party shall be rescinded or required to be repaid or turned over to any Term Loan Party for any reason whatsoever, the ABL Agent will upon request promptly pay over to the Designated Term Agent any payment received by it in respect of any such Term Priority Collateral and shall promptly turn over to the Designated Term Agent any such Term Priority Collateral then held by it and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of such Term Loan Obligation.

(b)        Each Term Agent agrees that if at any time all or part of any payment with respect to any ABL Obligation secured by any ABL Priority Collateral previously received by any ABL Secured Party shall be rescinded or required to be repaid or turned over to any ABL Loan Party for any reason whatsoever, the applicable Term Agent will upon request promptly pay over to the ABL Agent any payment received by it in respect of any such ABL Priority Collateral and shall promptly turn over to the ABL Agent any such ABL Priority Collateral then held by it and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of such ABL Obligation.

Section 4.3         Specific Performance . Each of the ABL Agent and each Term Agent is hereby authorized to demand specific performance of this Agreement, whether or not any Loan Party shall have complied with any of the provisions of any of the Credit Documents, at any time when the other party shall have failed to comply with any of the provisions of this Agreement applicable to it. Each of the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, hereby irrevocably waives any defense based on the adequacy of a remedy at law that might be asserted as a bar to such remedy of specific performance.

ARTICLE 5

INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS

Section 5.1         Notice of Acceptance and Other Waivers .

(a)        All ABL Obligations at any time made or incurred by any ABL Borrower or ABL Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and any Term Agent, on behalf of itself and the applicable Term Secured Parties, hereby waives notice of acceptance, or proof of reliance by the ABL Agent or any ABL Secured Party of this Agreement and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the ABL Obligations. All Term Obligations at any time made or incurred by the Term Loan Borrower or any Term Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and the ABL Agent, on behalf of itself and the ABL Secured Parties, hereby waives notice of acceptance, or proof of reliance, by any Term Agent or any Term Secured Party of this Agreement and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the Term Obligations.

(b)        None of the ABL Agent, any ABL Secured Party, or any of their respective Affiliates, directors, officers, employees, or agents shall be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If the ABL Agent or any ABL Secured Party honors (or fails to honor) a request by any ABL Borrower for an extension of credit pursuant to any ABL Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL Secured Party have knowledge that the honoring of (or failure to honor) any

 

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such request would constitute or result in a default under the terms of any Term Loan Credit Agreement or any other Term Document or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute or result in such a default, or if the ABL Agent or any ABL Secured Party otherwise should exercise any of its contractual rights or remedies under any ABL Documents (subject to the express terms and conditions hereof), neither the ABL Agent nor any ABL Secured Party shall have any liability whatsoever to any Term Agent or any Term Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The ABL Agent and the ABL Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under any ABL Credit Agreement and any of the other ABL Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that any Term Agent or any of the Term Secured Parties have in the Collateral, except as otherwise expressly set forth in this Agreement. Each Term Agent, on behalf of itself and the Term Secured Parties, agrees that neither the ABL Agent nor any ABL Secured Party shall incur any liability as a result of a sale, lease, license, application, or other Disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so long as such Disposition does not breach the provisions of this Agreement.

(c)        None of the Term Agents, any Term Secured Party or any of their respective Affiliates, directors, officers, employees, or agents shall be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute or result in a default under any ABL Document, or if any Term Agent or any Term Secured Party otherwise should exercise any of its contractual rights or remedies under the Term Documents (subject to the express terms and conditions hereof), neither the Term Agents nor any Term Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The Term Agents and the Term Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Term Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that the ABL Agent or any ABL Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement. The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that none of the Term Agents or the Term Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other Disposition of the Collateral or any part or Proceeds thereof, pursuant to the Term Documents, so long as such Disposition does not breach the provisions of this Agreement.

Section 5.2         Modifications to ABL Documents and Term Documents .

(a)        Each Term Agent, on behalf of itself and the applicable Term Secured Parties, hereby agrees that, without affecting the obligations of such Term Agent and the applicable Term Secured Parties hereunder, the ABL Agent and the ABL Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to any Term Agent or any Term Secured Party, and without incurring any liability to any Term Agent or any Term Secured Party or impairing or modifying the Lien Priority provided for herein, Amend or Refinance any of the ABL Documents in any manner whatsoever, other than in a manner which would have the effect of contravening the terms of this Agreement.

(b)        The ABL Agent, on behalf of itself and the ABL Secured Parties, hereby agrees that, without affecting the obligations of the ABL Agent and the ABL Secured Parties hereunder, each Term

 

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Agent and the Term Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to the ABL Agent or any ABL Secured Party, and without incurring any liability to the ABL Agent or any ABL Secured Party or impairing or modifying the Lien Priority provided for herein, Amend or Refinance any of the Term Documents other than in a manner which would have the effect of contravening the terms of this Agreement.

(c)        Subject to (i) Section 5.2(a) and (b) above and (ii) the applicable requirements set forth in the defined terms “ABL Credit Agreement” and “Term Loan Credit Agreement,” the ABL Obligations and the Term Obligations may be Amended or Refinanced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is required under any ABL Document or any Term Document to permit the Amendment or Refinancing transaction) of the ABL Agent, the ABL Secured Parties, the Term Agents or the Term Secured Parties, as the case may be, all without affecting the Lien Priority provided for herein or the other provisions hereof, provided , however , such amendment or refinancing transaction shall be in accordance with any applicable provisions of both the ABL Documents and the Term Documents (to the extent such documents survive the amendment or refinancing and, unless the agent, trustee or other representative with respect to such Amended or Refinanced facility is already a party to this Agreement, such agent, trustee or other representative shall have executed and delivered an Additional Term Joinder (with such changes as may be reasonably approved by such agent, trustee or other representative and each other party hereto).

Section 5.3         Reinstatement and Continuation of Agreement .

(a)        If the ABL Agent or any ABL Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Loan Party, or any other Person any payment made in satisfaction of all or any portion of the ABL Obligations (an “ ABL Recovery ”), then the ABL Obligations shall be reinstated to the extent of such ABL Recovery. If this Agreement shall have been terminated prior to such ABL Recovery, this Agreement shall be reinstated in full force and effect in the event of such ABL Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties from such date of reinstatement. All rights, interests, agreements, and obligations of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Loan Party or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Loan Party in respect of the ABL Obligations or the Term Obligations. No priority or right of the ABL Agent or any ABL Secured Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Loan Party or by the noncompliance by any Person with the terms, provisions, or covenants of any of the ABL Documents, regardless of any knowledge thereof which the ABL Agent or any ABL Secured Party may have.

(b)        If any Term Agent or any Term Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Borrower, any Term Guarantor, or any other Person any payment made in satisfaction of all or any portion of the Term Obligations (a “ Term Recovery ”), then the Term Obligations shall be reinstated to the extent of such Term Recovery. If this Agreement shall have been terminated prior to such Term Recovery, this Agreement shall be reinstated in full force and effect in the event of such Term Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties from such date of reinstatement. All rights, interests, agreements, and obligations of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Borrower or any Term Guarantor or any other circumstance

 

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which otherwise might constitute a defense available to, or a discharge of any Borrower or any Term Guarantor in respect of the ABL Obligations or the Term Obligations. No priority or right of any Term Agent or any Term Secured Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Borrower or any Term Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of any of the Term Documents, regardless of any knowledge thereof which any Term Agent or any Term Secured Party may have.

Section 5.4             Purchase Right .

(a)              Notice of Exercise .

(i)        On or after the occurrence and during the continuance of (A) the acceleration of all of the ABL Debt, (B) the commencement of an Insolvency Proceeding as to any ABL Loan Party or (C) the termination of any ABL Standstill Period (unless the ABL Agent or any ABL Secured Party shall have commenced and be diligently pursuing the exercise of their rights or remedies with respect to substantially all or any material portion of the ABL Priority Collateral) (the events listed in subparts (A) through (C) hereof, each being a “ Term Purchase Option Trigger Event ”), all or a portion of the Term Secured Parties, acting as a single group (the “ Purchasing Term Secured Parties ”), shall have the option, which must be exercised within thirty (30) days of the occurrence of a Term Purchase Option Trigger Event by delivery of notice to the ABL Agent and the Company, to purchase all of the ABL Obligations from the ABL Secured Parties. Such notice from such Term Secured Parties to the ABL Agent shall be irrevocable.

(ii)        On or after the occurrence and during the continuance of (A) the acceleration of all of the First Lien Term Debt and/or Second Lien Term Debt, (B) the commencement of an Insolvency Proceeding as to any Term Loan Party or (C) the termination of any Term Standstill Period (unless a Term Agent or any Term Secured Party shall have commenced and be diligently pursuing the exercise of their rights or remedies with respect to substantially all or any material portion of the Term Priority Collateral) (the events listed in subparts (A) through (C) hereof, each being an “ ABL Purchase Option Trigger Event ”), all or a portion of the ABL Secured Parties, acting as a single group (the “ Purchasing ABL Secured Parties ”), shall have the option, which must be exercised within thirty (30) days of the occurrence of an ABL Purchase Option Trigger Event by delivery of notice to the applicable Term Agent(s) and the Company, to purchase all of the First Lien Term Obligations or Second Lien Term Obligations , as applicable, from the applicable Term Secured Parties. Such notice from such ABL Secured Parties to Designated Term Agent shall be irrevocable.

(b)              Purchase and Sale .

(i)        On the date specified by the Purchasing Term Secured Parties in the notice contemplated by Section 5.4(a)(i) above (which shall not be less than five (5) Business Days, nor more than ten (10) Business Days, after the receipt by the ABL Agent of the notice of the relevant Term Secured Parties’ election to exercise such option), the ABL Secured Parties shall sell (which obligation shall be several and not joint) to the Purchasing Term Secured Parties, and the relevant Term Secured Parties shall purchase from the ABL Secured Parties, the ABL Obligations, provided that, the ABL Agent and the ABL Secured Parties shall retain all rights to be indemnified or held harmless by the Loan Parties in accordance with the terms of the ABL Documents but shall not retain any rights to the security therefor.

(ii)        On the date specified by the Purchasing ABL Secured Parties in the notice contemplated by Section 5.4(a)(ii) above (which shall not be less than five (5) Business Days, nor more than ten (10) Business Days, after the receipt by the applicable Term Agent(s) of the notice of the relevant ABL Secured Party’s election to exercise such option), the Term Secured Parties shall sell (which obligation

 

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shall be several and not joint) to the relevant ABL Secured Parties, and the relevant ABL Secured Parties shall purchase from the Term Secured Parties, the Term Obligations, provided that, the Term Agents and the Term Secured Parties shall retain all rights to be indemnified or held harmless by the Loan Parties in accordance with the terms of the Term Documents but shall not retain any rights to the security therefor.

(c)         [Reserved.]

(d)         Payment of Purchase Price . Upon the date of such purchase and sale, the relevant Term Secured Parties or the relevant ABL Secured Parties, as applicable, shall (i) pay to the ABL Agent for the benefit of the ABL Secured Parties (with respect to a purchase of the ABL Obligations) or to the applicable Term Agent(s) for the benefit of the applicable Term Secured Parties (with respect to a purchase of the Term Obligations) as the purchase price therefor the full amount of all the ABL Obligations or Term Obligations, as applicable, then outstanding and unpaid (including principal, interest, fees and expenses, including reasonable attorneys’ fees and legal expenses but specifically excluding any prepayment premium, termination or similar fees), (ii) with respect to a purchase of the ABL Obligations, furnish cash collateral to the ABL Agent in a manner and in such amounts as the ABL Agent determines is reasonably necessary to secure the ABL Agent and the ABL Secured Parties with respect to issued and outstanding letters of credit and Secured Bank Product Obligations, (iii) with respect to a purchase of the ABL Obligations, agree to reimburse the ABL Agent, the ABL Secured Parties for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit as described above and any checks or other payments provisionally credited to the ABL Obligations, and/or as to which the ABL Agent has not yet received final payment, (iv) agree to reimburse the ABL Secured Parties or the Term Secured Parties, as applicable, in respect of indemnification obligations of the Loan Parties under the ABL Documents or the Term Documents, as applicable, as to matters or circumstances known to the ABL Agent or the applicable Term Agent(s), as applicable, at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the ABL Secured Parties, the Term Secured Parties or letter of credit issuing banks, as applicable, and (v) agree to indemnify and hold harmless the ABL Secured Parties or the Term Secured Parties, as applicable, from and against any loss, liability, claim, damage or expense (including reasonable fees and expenses of legal counsel) arising out of any claim asserted by a third party in respect of the ABL Obligations or the Term Obligations, as applicable, as a direct result of any acts by any Purchasing Term Secured Party or any Purchasing ABL Secured Party, as applicable, occurring after the date of such purchase. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account in New York, New York as the ABL Agent or the applicable Term Agent(s), as applicable, may designate in writing for such purpose.

(e)         Limitation on Representations and Warranties . Such purchase shall be expressly made without representation or warranty of any kind by any selling party (or the applicable representative or the Term Agent) and without recourse of any kind, except that the selling party shall represent and warrant: (i) the amount of the ABL Obligations or Term Obligations, as applicable, being purchased from it, (ii) that such ABL Secured Party or Term Secured Party, as applicable, owns the ABL Obligations or Term Obligations, as applicable, free and clear of any Liens or encumbrances and (iii) that such ABL Secured Party or Term Secured Party, as applicable, has the right to assign such ABL Obligations or Term Obligations, as applicable, and the assignment is duly authorized.

ARTICLE 6

INSOLVENCY PROCEEDINGS

Section 6.1         DIP Financing.

 

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(a)        If any Loan Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of ABL Obligations, and the ABL Agent or any of the ABL Secured Parties shall seek to provide any Loan Party with, or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code or consent to any order for the use of cash collateral constituting ABL Priority Collateral under Section 363 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws or under a court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws, (which may include a “roll-up” or “roll-over” of all or any of the ABL Obligations), whether provided by any ABL Secured Party or any other Person (each, including any such order for the use of cash collateral, an “ ABL DIP Financing ”), with such ABL DIP Financing to be secured by all or any portion of the Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code would be ABL Priority Collateral), then each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees that (i) it will raise no objection and will not support any objection to such ABL DIP Financing or use of cash collateral or to the Liens securing the same on any basis, including, without limitation, on the grounds of a failure to provide “adequate protection” for the Liens of such Term Agent securing the Term Obligations (and will not request any adequate protection solely as a result of such ABL DIP Financing or use of cash collateral that is ABL Priority Collateral, and will not offer or support any debtor-in-possession financing which would compete with such ABL DIP Financing), and (ii) it will subordinate (and will be deemed hereunder to have subordinated) the Liens of such applicable Term Agent or any other Term Secured Parties on the ABL Priority Collateral (but not the Term Priority Collateral) to (1) the Liens on the ABL Priority Collateral pursuant to such ABL DIP Financing (to the extent the Liens securing the ABL DIP Financing are pari passu or senior in priority to the ABL Obligations), (2) any adequate protection provided to the ABL Secured Parties and (3) any reasonable administrative claim, professional fee and U.S. trustee or clerk of the court fee “carve-outs”, in each case, consented to in writing by the ABL Agent to be paid prior to the Discharge of ABL Obligations, in each case, on the same terms as the Liens of the Term Secured Parties are subordinated to the Liens granted with respect to such ABL DIP Financing (and such subordination will not alter in any manner the terms of this Agreement); provided that (A) each Term Agent retains its Lien on the ABL Priority Collateral to secure the Term Obligations (in each case, including Proceeds thereof arising after the commencement of the case under any Debtor Relief Laws), (B) unless it shall otherwise consent, each Term Agent shall retain its Lien on the Term Priority Collateral with the same priority as existed prior to the commencement of the case under the subject Debtor Relief Laws and any Lien of the ABL Agent (or other provider of ABL DIP Financing) on the Term Priority Collateral securing such ABL DIP Financing shall be junior and subordinate to the Lien of each Term Agent on the Term Priority Collateral, (C) all Liens on ABL Priority Collateral securing any such ABL DIP Financing, shall be senior to or on a parity with the Liens of the ABL Agent and the ABL Secured Parties securing the ABL Obligations on ABL Priority Collateral and (D) the foregoing provisions of this Section 6.1(a) shall not prevent any Term Agent or the other Term Secured Parties from objecting to any provision in any ABL DIP Financing (x) relating to any provision or content of a plan of reorganization or other plan of similar effect under any Debtor Relief Laws or (y) that provides for the use of any Term Priority Collateral or Proceeds thereof other than for the payment of the Term Obligations.

(b)        If any Loan Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of Term Obligations, and any Term Agent or any of the Term Secured Parties shall seek to provide any Loan Party with, or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code or consent to any order for the use of cash collateral constituting Term Priority Collateral under Section 363 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws or under a court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws, (which may include a “roll-up” or “roll-over” of all or any of the Term Obligations), whether provided by any Term Secured Party or any other Person (each, including any such order for the use of cash collateral, a “ Term DIP Financing ”), with such Term DIP Financing to be secured by all or any portion of the Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code would

 

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be Term Priority Collateral), then the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that (i) it will raise no objection and will not support any objection to such Term DIP Financing or use of cash collateral or to the Liens securing the same on any basis, including, without limitation, on the grounds of a failure to provide “adequate protection” for the Liens of the ABL Agent securing the ABL Obligations (and will not request any adequate protection solely as a result of such Term DIP Financing or use of cash collateral that is Term Priority Collateral, and will not offer or support any debtor-in-possession financing which would compete with such Term DIP Financing), and (ii) it will subordinate (and will be deemed hereunder to have subordinated) the Liens of the ABL Agent or any other ABL Secured Parties on the Term Priority Collateral (but not the ABL Priority Collateral) to (1) the Liens on the Term Priority Collateral pursuant to such Term DIP Financing (to the extent the Liens securing the Term DIP Financing are pari passu or senior in priority to the Term Obligations), (2) any adequate protection provided to the Term Secured Parties and (3) any reasonable administrative claim, professional fee and U.S. trustee or clerk of the court fee “carve-outs”, in each case, consented to in writing by any Term Agent to be paid prior to the Discharge of Term Obligations, in each case, on the same terms as the Liens of the ABL Secured Parties are subordinated to the Liens granted with respect to such Term DIP Financing (and such subordination will not alter in any manner the terms of this Agreement); provided that (A) the ABL Agent retains its Lien on the Term Priority Collateral to secure the ABL Obligations (in each case, including Proceeds thereof arising after the commencement of the case under any Debtor Relief Laws), (B) unless it shall otherwise consent, the ABL Agent shall retain its Lien on the ABL Priority Collateral with the same priority as existed prior to the commencement of the case under the subject Debtor Relief Laws and any Lien of any Term Agent (or other provider of Term DIP Financing) on the ABL Priority Collateral securing such Term DIP Financing shall be junior and subordinate to the Lien of the ABL Agent on the ABL Priority Collateral, (C) all Liens on Term Priority Collateral securing any such Term DIP Financing, shall be senior to or on a parity with the Liens of each Term Agent and the Term Secured Parties securing the Term Obligations on Term Priority Collateral and (D) the foregoing provisions of this Section 6.1(b) shall not prevent the ABL Agent or the other ABL Secured Parties from objecting to any provision in any Term DIP Financing (x) relating to any provision or content of a plan of reorganization or other plan of similar effect under any Debtor Relief Laws or (y) that provides for the use of any ABL Priority Collateral or Proceeds thereof other than for the payment of the ABL Obligations.

(c)        All Liens granted to the ABL Agent or any Term Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended by the parties to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this Agreement. For clarity, none of the Term Agents or the Term Secured Parties shall seek to “prime” the Lien of the ABL Agent and the ABL Secured Parties on the ABL Priority Collateral or request, seek or receive a Lien on the ABL Priority Collateral pursuant to Section 364(d) or 363(c)(4) of the Bankruptcy Code on the ABL Priority Collateral. For clarity, the ABL Agent and the ABL Secured Parties shall not seek to “prime” the Liens of the Term Agents or the Term Secured Parties on the Term Priority Collateral or request, seek or receive a Lien on the Term Priority Collateral pursuant to Section 364(d) or 363(c)(4) of the Bankruptcy Code on the Term Priority Collateral.

(d)        No ABL Secured Party shall, directly or indirectly, provide, or seek to provide, or support any other Person providing or seeking to provide, any ABL DIP Financing secured by Liens on the Term Priority Collateral equal or senior in priority to the Liens on the Term Priority Collateral (including any assets or property arising after the commencement of a case under the Bankruptcy Code) of any Term Agent, without the prior written consent of such Term Agent. No Term Secured Party shall, directly or indirectly, provide, or seek to provide, or support any other Person providing or seeking to provide, any Term DIP Financing secured by Liens on the ABL Priority Collateral equal or senior in priority to the Liens on the ABL Priority Collateral (including any assets or property arising after the commencement of a case under the Bankruptcy Code) of the ABL Agent, without the prior written consent of the ABL Agent. For

 

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purposes hereof, all references to Collateral shall include any assets or property of Loan Parties arising after the commencement of any Insolvency Proceeding that are subject to the Liens of Agents.

Section 6.2         Relief From Stay . Until the Discharge of ABL Obligations has occurred, each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the ABL Priority Collateral without the ABL Agent’s express written consent. Until the Discharge of Term Obligations has occurred, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the Term Priority Collateral without each Term Agent’s express written consent. In addition, none of the Term Agents nor the ABL Agent shall seek any relief from the automatic stay with respect to any Collateral without providing three (3) days’ prior written notice to the other, unless such period is agreed by both the ABL Agent and each Term Agent to be modified or unless the ABL Agent or any Term Agent, as applicable, makes a good faith determination that either (A) the ABL Priority Collateral or the Term Priority Collateral, as applicable, will decline speedily in value or (B) the failure to take any action will have a reasonable likelihood of endangering the ABL Agent’s or any Term Agent’s ability to realize upon its Collateral.

Section 6.3         No Contest; Adequate Protection .

(a)        Each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees that, prior to the Discharge of ABL Obligations, none of them shall contest (or support any other Person contesting) (i) any request by the ABL Agent or any ABL Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(b) or Section 6.3(b) or if the adequate protection sought is in the form of a cash payment, periodic cash payments or otherwise, in each case to the extent such payments are made from the Proceeds of the Term Priority Collateral), (ii) subject to Section 6.1(a) above, any proposed provision of ABL DIP Financing, including any consensual use of cash collateral constituting ABL Priority Collateral, by the ABL Agent and the ABL Secured Parties (or any other Person proposing to provide ABL DIP Financing with the consent of the ABL Agent), (iii) any objection by the ABL Agent or any ABL Secured Party to any motion, relief, action, or proceeding based on a claim by the ABL Agent or any ABL Secured Party that its interests in the Collateral are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the ABL Agent as adequate protection of its interests are subject to this Agreement (unless in contravention of Section 6.1(b) or Section 6.3(b)), or (iv) any request by the ABL Agent or any ABL Secured Party for payment of interest (including post-petition interest), fees, expenses or other amounts to any ABL Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or other applicable law (unless in contravention of Section 6.1(b) or Section 6.3(b) or to the extent such payments are to be made from the Proceeds of the Term Priority Collateral or from the proceeds of Term DIP Financing).

(b)        The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them shall contest (or support any other Person contesting) (i) any request by any Term Agent or any Term Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(a) or 6.3(a) or if the adequate protection sought is in the form of a cash payment, periodic cash payments or otherwise, in each case to the extent such payments are made from the Proceeds of the ABL Priority Collateral), (ii) subject to Section 6.1(b) above, any proposed provision of Term DIP Financing, including any consensual use of cash collateral constituting Term Priority Collateral, by any Term Agent and the applicable Term Secured Parties (or any other Person proposing to provide Term DIP Financing with the consent of any Term Agent), (iii) any objection by any Term Agent or any Term Secured Party to any motion, relief, action or proceeding based on a claim by any Term Agent

 

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or any Term Secured Party that its interests in the Collateral are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to any Term Agent as adequate protection of its interests are subject to this Agreement (unless in contravention of Section 6.1(a) or Section 6.3(a)), or (iv) any request by any Term Agent or any Term Secured Party for payment of interest (including post-petition interest), fees, expenses or other amounts to any Term Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or other applicable law (unless in contravention of Section 6.1(a) or Section 6.3(a) or to the extent such payments are to be made from the Proceeds of the ABL Priority Collateral or from the proceeds of ABL DIP Financing).

(c)        Notwithstanding the foregoing provisions in this Section 6.3, in any Insolvency Proceeding:

(i)        if the ABL Secured Parties (or any subset thereof) are granted adequate protection with respect to the ABL Priority Collateral in the form of additional or replacement collateral (even if such collateral is not of a type which would otherwise have constituted ABL Priority Collateral) and/or a superpriority claim, then the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that each Term Agent, on behalf of itself or any of the applicable Term Secured Parties, may seek or request (and the ABL Secured Parties will not oppose such request), as applicable, adequate protection with respect to its interests in such Collateral in the form of a Lien on the same additional or replacement collateral, which Lien will be subordinated to the Liens securing the ABL Obligations on the same basis as the other Liens of each Term Agent on ABL Priority Collateral or a superpriority claim junior in all respects to such superpriority claim granted to the ABL Secured Parties; and

(ii)        if any Term Secured Parties (or any subset thereof), are granted adequate protection in respect of Term Priority Collateral in the form of additional or replacement collateral (even if such collateral is not of a type which would otherwise have constituted Term Priority Collateral) and/or a superpriority claim, then each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees that the ABL Agent on behalf of itself or any of the ABL Secured Parties, may seek or request (and the Term Secured Parties will not oppose such request), as applicable, adequate protection with respect to its interests in such Collateral in the form of a Lien on the same additional or replacement collateral, which Lien will be subordinated to the Liens securing the Term Obligations on the same basis as the other Liens of the ABL Agent on Term Priority Collateral or a superpriority claim junior in all respects to such superpriority claim granted to the Term Secured Parties

(d)        The Term Loan Parties shall not be entitled to, and shall not seek, adequate protection in the form of cash payment to the extent such payment is sought to be paid from an ABL DIP Financing or the ABL Priority Collateral or the Proceeds (or advances) in respect thereof. The ABL Secured Parties shall not be entitled to, and shall not seek, adequate protection in the form of cash payment to the extent such payment is sought to be paid from a Term Loan DIP Financing or the Term Priority Collateral or the Proceeds (or advances) in respect thereof.

Section 6.4         Asset Sales .

(a)        Until the Discharge of ABL Obligations has occurred, each Term Agent, for itself and on behalf of the other Term Secured Parties agrees that in the event of any Insolvency Proceeding, the Term Secured Parties will not object or oppose (or support any Person in objecting or opposing), and will be deemed to have consented to pursuant to Section 363(f) of the Bankruptcy Code or any other applicable law, (i) a motion to sell or otherwise Dispose of any ABL Priority Collateral under Sections 363, 365 or 1129 of the Bankruptcy Code or any similar provisions under any other applicable Debtor Relief Laws, free and clear of any Liens or other claims, (ii) a motion establishing notice, sale or bidding procedures for such

 

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Disposition (including any break-up fee or other bidder protections) or (iii) a motion to permit a credit bid on all or any portion of the claims of the ABL Secured Parties against ABL Priority Collateral under Section 363(k) of the Bankruptcy Code, in each case, if the ABL Agent has consented to such sale or other Disposition of such ABL Priority Collateral; provided, that, (A) the terms of any proposed order approving such transaction provide for the parties’ respective Liens to attach to the proceeds of the ABL Priority Collateral that is the subject of such sale or Disposition, subject to the Lien Priorities in Section  2.1 and the other terms and conditions of this Agreement; (B) such proceeds are applied among the ABL Obligations or the Term Obligations in accordance with Section  4.1 ; and (C) such motion to sell or otherwise Dispose of any ABL Priority Collateral does not impair the rights of the Term Secured Parties under Section 363(k) of the Bankruptcy Code (except that (1) the Term Secured Parties will be permitted to “credit bid” their claims against ABL Priority Collateral (including under Section 363, 365 or 1129 of the Bankruptcy Code, or any comparable provision of other applicable Debtor Relief Laws) in such sale only if the cash proceeds of such bid result in Discharge of ABL Obligations on the closing date of such sale, including all principal of and accrued and unpaid interest and fees on and all prepayment or acceleration penalties and premiums in respect of all ABL Obligations outstanding at the time of any Disposition, and (2) the Term Secured Parties will be permitted to “credit bid” their claims against Term Priority Collateral (including under Section 363, 365 or 1129 of the Bankruptcy Code, or any comparable provision of other applicable Debtor Relief Laws) in such sale and in accordance with the terms of the Term Documents and the Term Lender Intercreditor Agreement. Each Term Agent for itself and the applicable Term Secured Parties further agree that they will not object to or oppose, or support any party in opposing, the right of the ABL Secured Parties to credit bid under Section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Debtor Relief Laws) with respect to the ABL Priority Collateral, subject to the provision of the immediately preceding sentence; provided, that, the Term Secured Parties shall not be deemed to have agreed to any credit bid in connection with a single sale or other Disposition of both Term Priority Collateral and ABL Priority Collateral unless such credit bid would result in the Discharge of Term Obligations on the closing date of such sale.

(b)        Until the Discharge of all Term Obligations has occurred, the ABL Agent, for itself and on behalf of the other ABL Secured Parties agrees that in the event of any Insolvency Proceeding, the ABL Secured Parties will not object or oppose (or support any Person in objecting or opposing), and will be deemed to have consented to pursuant to Section 363(f) of the Bankruptcy Code or any other applicable law, (i) a motion to sell or otherwise Dispose of any Term Priority Collateral under Sections 363, 365 or 1129 of the Bankruptcy Code or any similar provisions under any other applicable Debtor Relief Laws, free and clear of any Liens or other claims, (ii) a motion establishing notice, sale or bidding procedures for such Disposition (including any break-up fee or other bidder protections) or (iii) a motion to permit a credit bid all or any portion of the claims of the Term Secured Parties against Term Priority Collateral under Section 363(k) of the Bankruptcy Code, in each case, if Term Agents have consented to such sale or Disposition of such Term Priority Collateral; provided, that, (A) the terms of any proposed order approving such transaction provide for the parties’ respective Liens to attach to the proceeds of the Term Priority Collateral that is the subject of such sale or Disposition, subject to the Lien Priorities in Section  2.1 and the other terms and conditions of this Agreement, (B) such proceeds are applied among the ABL Obligations and the Term Obligations in accordance with Section  4.1 ; and (C) such motion to sell or otherwise Dispose of any Term Priority Collateral does not impair the rights of the ABL Secured Parties under Section 363(k) of the Bankruptcy Code (except that (1) the ABL Secured Parties will be permitted to “credit bid” their claims against Term Priority Collateral (including under Section 363, 365 or 1129 of the Bankruptcy Code, or any comparable provision of other applicable Debtor Relief Laws) in such sale only if such bid results in a Discharge of Term Obligations in cash on the closing date of such sale, including all principal of and accrued and unpaid interest and fees on and all prepayment or acceleration penalties and premiums in respect of all Term Obligations outstanding at the time of any Disposition, and (2) the ABL Secured Parties will be permitted to “credit bid” their claims against ABL Priority Collateral (including under Section 363,

 

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365 or 1129 of the Bankruptcy Code, or any comparable provision of other applicable Debtor Relief Laws) in such sale and in accordance with the terms of the ABL Documents. The ABL Agent for itself and the other ABL Secured Parties further agree that it will not object to or oppose, or support any party in opposing, the right of the Term Secured Parties to credit bid under Section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Debtor Relief Laws) with respect to the Term Priority Collateral, subject to the provision of the immediately preceding sentence; provided, that, the ABL Secured Parties shall not be deemed to have agreed to any credit bid in connection with a single sale or other Disposition of both ABL Priority Collateral and Term Priority Collateral unless such credit bid would result in the Discharge of ABL Obligations on the closing date of such sale.

Section 6.5         Separate Grants of Security and Separate Classification . Each Term Secured Party and each ABL Secured Party acknowledges and agrees that (i) the grants of Liens pursuant to the ABL Collateral Documents and the Term Collateral Documents constitute at least two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Term Obligations are fundamentally different from the ABL Obligations and must be separately classified in any plan of reorganization (or other plan of similar effect under any Debtor Relief Laws) proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the ABL Secured Parties and the Term Secured Parties in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the ABL Secured Parties and the Term Secured Parties hereby acknowledge and agree that all distributions from the Collateral shall be made as if there were separate classes of ABL Obligation claims and Term Obligation claims against the Loan Parties, with the effect being that, to the extent that the aggregate value of the ABL Priority Collateral or Term Priority Collateral is sufficient (for this purpose ignoring all claims held by the other Secured Parties), the ABL Secured Parties or the Term Secured Parties, respectively, shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest, fees and expenses that is available from each pool of Priority Collateral for each of the ABL Secured Parties and the Term Secured Parties, respectively, (whether or not allowed or allowable in any such Insolvency Proceeding) before any distribution is made in respect of the claims held by the other Secured Parties from such Priority Collateral, with the other Secured Parties hereby acknowledging and agreeing to turn over to the respective other Secured Parties amounts otherwise received or receivable by them from such Priority Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries of the Secured Parties turning over such amounts.

Section 6.6         Reorganization Securities . If, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens on any property of the reorganized debtor are distributed pursuant to a plan of reorganization or a similar dispositive restructuring plan, both on account of the ABL Obligations and on account of the Term Obligations, then to the extent that the debt obligations distributed on account of the ABL Obligations and on account of the Term Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

Section 6.7         [Reserved] .

Section 6.8         ABL Obligations Unconditional . All rights of the ABL Agent hereunder, and all agreements and obligations of each Term Agent hereunder, shall, except as otherwise specifically provided herein, remain in full force and effect irrespective of:

(i)        any lack of validity or enforceability of any ABL Document;

 

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(ii)        any change in the time, place or manner of payment of, or in any other term of, all or any portion of the ABL Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any ABL Document (but solely to the extent permitted pursuant to Section 5.2(a) hereof);

(iii)        any exchange, release, voiding, avoidance or nonperfection of any security interest in any Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the ABL Obligations or any guarantee or guaranty thereof; or

(iv)        any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the ABL Obligations, or of any Term Agent or any Loan Party, to the extent applicable, in respect of this Agreement.

Section 6.9         Term Obligations Unconditional . All rights of each Term Agent hereunder, all agreements and obligations of the ABL Agent hereunder, shall, except as otherwise specifically provided herein, remain in full force and effect irrespective of:

(i)        any lack of validity or enforceability of any Term Document;

(ii)        any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Term Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Term Document (but solely to the extent permitted pursuant to Section 5.2(b) hereof);

(iii)        any exchange, release, voiding, avoidance or nonperfection of any security interest in any Collateral, or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the Term Obligations or any guarantee or guaranty thereof; or

(iv)        any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the Term Obligations, or of the ABL Agent or any Loan Party, to the extent applicable, in respect of this Agreement.

Section 6.10         Claims . Each Agent, for itself and on behalf of the respective applicable Secured Parties, agrees not to object to (or support any other Person objecting) and hereby waives any objection to any election under Section 1111(b)(2) of the Bankruptcy Code by any ABL Secured Party (to any claims of such ABL Secured Party in respect of the ABL Priority Collateral) or Term Secured Party (to any claims of such Term Secured Party in respect of the Term Priority Collateral), as applicable, in or from such Insolvency or Liquidation Proceeding.

Section 6.11         Bankruptcy – Plan Support . Without the consent of the ABL Secured Parties prior to the Discharge of ABL Obligations, the Term Secured Parties will not propose, support or vote, directly or indirectly (including by any restructuring plan support agreement) for any Plan that is inconsistent with this Agreement. Without the consent of the Term Secured Parties prior to the Discharge of Term Obligations, the ABL Secured Parties will not propose, support or vote, directly or indirectly (including by any restructuring plan support agreement) for any Plan that is inconsistent with this Agreement.

Section 6.12         Applicability . This Agreement shall be applicable both before and after the institution of any Insolvency Proceeding involving any Borrower or any other Loan Party, including,

 

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without limitation, the filing of any petition by or against any Borrower or any other Loan Party under any Debtor Relief Laws and all converted or subsequent cases in respect thereof, and all references herein to any Loan Party shall be deemed to apply to the trustee for such Loan Party and such Loan Party as debtor-in- possession. The relative rights of the ABL Secured Parties and the Term Secured Parties in or to any distributions from or in respect of any Collateral or Proceeds shall continue after the institution of any Insolvency Proceeding involving any Borrower or any other Loan Party, including, without limitation, the filing of any petition by or against any Borrower or any other Loan Party under any Debtor Relief Laws and all converted cases and subsequent cases, on the same basis as prior to the date of such institution, subject to any court order approving the financing of, or use of cash collateral by any Borrower or other Loan Party as debtor-in-possession, or any other court order affecting the rights and interests of the parties hereto not inconsistent with this Agreement. This Agreement shall constitute a subordination agreement for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency Proceeding in accordance with its terms.

Section 6.13         Other Bankruptcy Laws . In the event that an Insolvency Proceeding is filed in a jurisdiction other than the United States or is governed by any Debtor Relief Laws other than the Bankruptcy Code, each reference in this Agreement to a section of the Bankruptcy Code shall be deemed to refer to the substantially similar or corresponding provision of the Debtor Relief Laws applicable to such Insolvency Proceeding, or, in the absence of any specific similar or corresponding provision of such Debtor Relief Laws, such other general Debtor Relief Law as may be applied in order to achieve substantially the same result as would be achieved under each applicable section of the Bankruptcy Code.

ARTICLE 7

MISCELLANEOUS

Section 7.1         Rights of Subrogation . Each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, agrees that no payment to the ABL Agent or any ABL Secured Party pursuant to the provisions of this Agreement shall entitle any Term Agent or any Term Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations. Thereafter, the ABL Agent agrees to execute such documents, agreements, and instruments as any Term Agent or any Term Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the ABL Obligations resulting from payments to the ABL Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the ABL Agent are paid by such Person upon request for payment thereof. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that no payment to any Term Agent or any Term Secured Party pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of Term Obligations. Thereafter, each Term Agent agrees to execute such documents, agreements, and instruments as the ABL Agent or any ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Term Obligations resulting from payments to any Term Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Term Agent are paid by such Person upon request for payment thereof.

Section 7.2         Further Assurances . The parties will, at their own expense and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that either party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable the ABL Agent or any Term Agent to exercise and enforce their rights and remedies hereunder; provided , however , that no party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any

 

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other action referred to in this Section 7.2, to the extent that such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 7.2.

Section 7.3         Representations . Each Term Agent represents and warrants to the ABL Agent that it has the requisite power and authority under the applicable Term Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the applicable Term Secured Parties and that this Agreement shall be binding obligations of such Term Agent and the applicable Term Secured Parties, enforceable against each Term Agent and the applicable Term Secured Parties in accordance with its terms. The ABL Agent represents and warrants to each Term Agent that it has the requisite power and authority under the ABL Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the ABL Secured Parties and that this Agreement shall be binding obligations of the ABL Agent and the ABL Secured Parties, enforceable against the ABL Agent and the ABL Secured Parties in accordance with its terms.

Section 7.4         Amendments . No amendment or waiver of any provision of this Agreement nor consent to any departure by any party hereto shall be effective unless it is in a written agreement executed by each Term Agent and the ABL Agent and, in the case of any amendment adversely affecting the rights or obligations of any Loan Party, the applicable Loan Party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. It is understood that the ABL Agent and each Term Agent, without the consent of any other ABL Secured Party or Term Secured Party, may in their discretion determine that a supplemental agreement (which may take the form of an amendment and restatement of this Agreement) is necessary or appropriate to facilitate having additional Indebtedness or other obligations of any of the Loan Parties become ABL Obligations or Term Obligations, as the case may be, under this Agreement, which supplemental agreement shall specify whether such additional Indebtedness constitutes ABL Obligations or Term Obligations; provided that such additional Indebtedness is permitted to be incurred under any ABL Credit Agreement and any Term Loan Credit Agreement then extant in accordance with the terms thereof and the Company shall have delivered an officer’s certificate to the ABL Agent and each Term Agent certifying to such and the holders of such additional Indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to such documents as shall be reasonably requested by, and in a form reasonably acceptable to, the ABL Agent and each Term Agent.

Section 7.5         Addresses for Notices . Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or three (3) days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) shall be as set forth below or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

 

ABL Agent:      Bank of America, N.A.
     Business Capital
     2600 West Big Beaver Road
     Troy, Michigan 48084
     Attn: Kindra Mullarky
     Telecopy: 248-631-0515

 

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     With a copy to:
     McGuireWoods LLP
     77 West Wacker Drive, Suite 4100
     Chicago, Illinois 60601
     Attention: Philip J. Perzek
     Email: pperzek@mcguirewoods.com
First Lien     
Term Agent:      JPMorgan Chase Bank, N.A.
     10 South Dearborn, Floor 7
     Chicago, Illinois 60603
     Attention: Joyce King
     Telecopy: 888-292-9533
     With a copy to:
                                              
                                     
                                          
     Attention:                             
     Email:                             
Second Lien     
Term Agent:      Cortland Capital Market Services LLC
     225 W. Washington St., 9th Floor
     Chicago, Illinois 60606
     Attention: Legal Department and Frances Real
     Email: legal@cortlandglobal.com and CPCAgency@cortlandglobal.com
     Telecopy: (312) 376-0751
     With a copy to (which shall not constitute notice):
     Holland & Knight LLP
     131 South Dearborn Street, 30th Floor
     Chicago, IL 60603
     Attention: Joshua M. Spencer
     Email: Joshua.Spencer@hklaw.com

Section 7.6         No Waiver; Remedies . No failure on the part of any Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Section 7.7         Continuing Agreement, Transfer of Secured Obligations . This Agreement is a continuing agreement and shall (a) remain in full force and effect until the earlier of the Discharge of ABL Obligations or the Discharge of Term Obligations, (b) be binding upon the parties and their successors and

 

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assigns, and (c) inure to the benefit of and be enforceable by the parties and their respective successors, transferees and assigns. Nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral. All references to any Loan Party shall include any Loan Party as debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding. Without limiting the generality of the foregoing clause (c), the ABL Agent or any Term Agent may resign as ABL Agent or Term Agent, as applicable, and any ABL Secured Party or any Term Secured Party may assign or otherwise transfer all or any portion of the ABL Obligations or the Term Obligations, as applicable, to any other Person (other than any Loan Party or any Subsidiary or Affiliate of any Loan Party), and such successor ABL Agent or successor Term Agent, or other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to the ABL Agent, any Term Agent, any ABL Secured Party, or any Term Secured Party, as the case may be, herein or otherwise. The ABL Secured Parties and the Term Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide Indebtedness to, or for the benefit of, any Loan Party on the faith hereof.

Section  7.8          Governing Law; Entire Agreement . The validity, performance, and enforcement of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of laws principles thereof but including Section 5-1401 and 5-1402 of the New York General Obligations Law. This Agreement constitutes the entire agreement and understanding among the parties with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.

Section  7.9          Counterparts . This Agreement may be executed in any number of counterparts, and it is not necessary that the signatures of all parties be contained on any one counterpart hereof, each counterpart will be deemed to be an original, and all together shall constitute one and the same document. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission (in .pdf or similar format) shall be as effective as delivery of a manually signed counterpart of this Agreement.

Section  7.10          No Third Party Beneficiaries . This Agreement is solely for the benefit of the ABL Agent, ABL Secured Parties, each Term Agent and Term Secured Parties. Except as set forth in Section 7.4, no other Person (including any Loan Party or any Subsidiary or Affiliate of any Loan Party) shall be deemed to be a third party beneficiary of this Agreement; provided that the Loan Parties and their respective Subsidiaries are intended beneficiaries and third party beneficiaries with respect to Sections 7.4 and 7.20 hereof.

Section  7.11          Headings . The headings of the articles and sections of this Agreement are inserted for purposes of convenience only and shall not be construed to affect the meaning or construction of any of the provisions hereof.

Section 7.12          Severability . If any of the provisions in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement and shall not invalidate the Lien Priority or the application of Proceeds and other priorities set forth in this Agreement.

Section  7.13          [Reserved] .

Section  7.14          VENUE; JURY TRIAL WAIVER .

(a)        EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW

 

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YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. 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 ANY ABL SECURED PARTY OR ANY TERM SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY TERM DOCUMENTS, OR ANY ABL DOCUMENTS AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(b)        EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION 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 PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND IT 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.

(c)        EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 7.5. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

Section  7.15          Intercreditor Agreement . This Agreement is the Intercreditor Agreement referred to in the ABL Credit Agreement and the Term Loan Credit Agreement. Nothing in this Agreement shall be deemed to subordinate the obligations due to (i) any ABL Secured Party to the obligations due to any Term Secured Party or (ii) any Term Secured Party to the obligations due to any ABL Secured Party (in each case, whether before or after the occurrence of an Insolvency Proceeding), it being the intent of the Parties that this Agreement shall effectuate a subordination of Liens but not a subordination of Indebtedness.

Section  7.16          No Warranties or Liability . Each Term Agent and the ABL Agent acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other ABL Document or any Term Document. Except as otherwise provided in this Agreement, each Term Agent and the ABL Agent will be entitled to manage and supervise their respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.

Section  7.17          Conflicts . In the event of any conflict between the provisions of this Agreement and the provisions of any ABL Document or any Term Document, the provisions of this Agreement shall govern; provided that nothing in this Agreement shall permit any Loan Party to incur Indebtedness or Liens not otherwise permitted by the ABL Documents and Term Documents.

 

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Section  7.18          Information Concerning Financial Condition of the Loan Parties .

(a)        Each of the Term Agent, any other Term Agent and the ABL Agent hereby assumes responsibility for keeping itself informed of the financial condition of the Loan Parties and all other circumstances bearing upon the risk of nonpayment of the ABL Obligations or the Term Obligations. Each Term Agent and the ABL Agent hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances. In the event any Term Agent or the ABL Agent, in their sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, (a) they shall be under no obligation (i) to provide any such information to such other party or any other party on any subsequent occasion, (ii) to undertake any investigation not a part of its regular business routine, or (iii) to disclose any other information, (b) they make no representation as to the accuracy or completeness of any such information and shall not be liable for any information contained therein, and (c) the party receiving such information hereby agrees to hold the providing party harmless from any action the receiving party may take or conclusion the receiving party may reach or draw from any such information, as well as from and against any and all losses, claims, damages, liabilities, and expenses to which such receiving party may become subject arising out of or in connection with the use of such information.

(b)        The Loan Parties agree that any information provided to the ABL Agent, any Term Agent, any ABL Secured Party or any Term Secured Party may be shared by such Person with any ABL Secured Party, any Term Secured Party, the ABL Agent or any Term Agent notwithstanding a request or demand by such Loan Party that such information be kept confidential; provided that such information shall otherwise be subject to the respective confidentiality provisions in the ABL Credit Agreement and the Term Loan Credit Agreement, as applicable.

Section  7.19          Additional Loan Parties . The Company agrees that if any Subsidiary shall become both an ABL Loan Party and a Term Loan Party after the date hereof, it will promptly cause such Subsidiary to execute and deliver to the ABL Agent and each Term Agent an instrument in the form of the Acknowledgement attached hereto. The execution and delivery of such Acknowledgement shall not require the consent of any other party hereunder.

Section  7.20          Amendment and Restatement . This Agreement amends and restates the Prior Intercreditor Agreement in its entirety. This Agreement shall supersede the Prior Intercreditor Agreement. The parties acknowledge and agree that this Agreement does not constitute a termination of the rights and obligations under the Prior Intercreditor Agreement, all of which are in all respects continuing under this Agreement with only the terms being modified from and after the date hereof as provided in this Agreement.

Section  7.21          Additional Term Lender Intercreditor Agreements ; ABL Agent Reliance .

(a)        Notwithstanding anything to the contrary contained in this Agreement, each party hereto agrees that the Term Secured Parties (as among themselves) may enter into the Term Lender Intercreditor Agreement or other intercreditor agreements (or similar arrangements) with the Term Agents governing the rights, benefits and privileges of Term Secured Parties with respect to the Term Obligations or a portion thereof (as among themselves), in respect of any or all of the Collateral and the applicable Term Documents, including as to the application of Proceeds of any Collateral, voting rights, control of any Collateral and waivers with respect to any Collateral, in each case so long as the terms thereof do not violate or conflict with the provisions of this Agreement.

(b)        Except with respect to instructions or notices which this Agreement expressly provides may only be issued to the ABL Agent by the Designated Term Agent (with respect to which the

 

46

terms of this Section 7.21(b) shall not apply), each of the Loan Parties and the Secured Parties agree that ABL Agent (i) will have no obligation to determine the validity or propriety (including under the Term Lender Intercreditor Agreement or otherwise) of any Enforcement Notice or other notice or instruction it reasonably believes delivered by the Designated Term Agent or other Term Agent, as applicable, (ii) shall have no liability to any Secured Party for action based upon or in response to any such notice or instruction and (iii) if the ABL Agent receives notices or instructions from the Term Agents that it reasonably believes to be contradictory or inconsistent with other notices or instructions from any Term Agent or the terms of this Agreement, it may refuse to take any action or refuse to treat such notice or instruction as effective until and unless (1) it receives separate indemnification from a Term Agent on terms acceptable to ABL Agent or (2) a court of competent jurisdiction otherwise directs the ABL Agent to take action based upon such notice or instruction. None of the foregoing provisions of this clause (b) will limit the obligation of ABL Agent to deliver notices to any Term Agent otherwise specifically required under this Agreement.

[SIGNATURE PAGES FOLLOW]

 

47

IN WITNESS WHEREOF, the ABL Agent, for and on behalf of itself and the ABL Lenders, and each Term Agent, for and on behalf of itself and the Term Lenders, have caused this Agreement to be duly executed and delivered as of the date first above written.

 

  BANK OF AMERICA, N.A. , in its capacity as the ABL Agent
  By:      

/s/ Kindra S. Mullarky

    Name: Kindra M. Mullarky
    Title: SVP
  JPMORGAN CHASE BANK, N.A. , in its capacity as the First Lien Term Agent
  By:  

/s/ Krys Szremski

    Name: Krys Szremski
    Title: Executive Director
  CORTLAND CAPITAL MARKET SERVICES LLC , in its capacity as the Second Lien Term Agent
  By:  

/s/ Matthew Trybula

    Name: Matthew Trybula
    Title: Associate Counsel

 

[Signature Page to Amended and Restated Intercreditor Agreement]

  The undersigned acknowledges and agrees by its signature below that concurrent with the delivery of this counterpart that Discharge of the Term Obligations owing in respect of the Bridge Credit Agreement (as such terms are defined in the Prior Intercreditor Agreement) has occurred, it is no longer the Designated Term Agent and no longer party to the Intercreditor Agreement.
  CORTLAND CAPITAL MARKET SERVICES LLC , as a Term Agent
  By:  

/s/ Matthew Trybula

    Name: Matthew Trybula
    Title: Associate Counsel

 

[Signature Page to Amended and Restated Intercreditor A.greement]

ACKNOWLEDGMENT

Each Borrower, each ABL Guarantor and each Term Guarantor hereby acknowledges that it has received a copy of this Agreement and consents thereto, agrees to recognize all rights granted thereby to the ABL Agent and each Term Agent, and will not do any act or perform any obligation which is not in accordance with the agreements set forth in this Agreement. Each Borrower, each ABL Guarantor and each Term Guarantor further acknowledges and agrees that, except as set forth in Section 7.10, it is not an intended beneficiary or third party beneficiary under this Agreement and (i) as between the ABL Secured Parties and the ABL Loan Parties, the ABL Documents remain in full force and effect as written and are in no way modified hereby, and (ii) as between the Term Secured Parties, the Company and Term Guarantors, the Term Documents remain in full force and effect as written and are in no way modified hereby. For the avoidance of doubt, the consent and acknowledgement of the Borrowers, the ABL Guarantors and the Term Guarantors herein, shall not constitute a waiver of any of their rights available under the Loan Documents, at law or in equity.

 

  HORIZON GLOBAL CORPORATION,
  a Delaware corporation
                                                                                                             By:   /s/ Brian Whittman                                        
  Name: Brian Whittman
  Title: Vice President, Finance
  HORIZON GLOBAL AMERICAS INC.,
  a Delaware corporation
  By:   /s/ Brian Whittman                                        
  Name: Brian Whittman
  Title: Vice President, Finance
  CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641
  By:   /s/ Jay Goldbaum                                           
  Name: Jay Goldbaum
  Title: Director
  CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario
  By:   /s/ Jay Goldbaum                                           
  Name: Jay Goldbaum
  Title: Vice President and Secretary

 

[Signature Page to Acknowledgment to Amended and Restated Intercreditor Agreement]

HORIZON GLOBAL COMPANY LLC,
a Delaware limited liability company
By:   /s/ Brian Whittman                                
Name: Brian Whittman
Title: Vice President, Finance
HORIZON INTERNATIONAL HOLDINGS LLC,
a Delaware limited liability company
By:   /s/ Brian Whittman                                
Name: Brian Whittman
Title: Vice President, Finance
CEQUENT NEDERLAND HOLDINGS B.V.,
a company formed under the laws of the Netherlands
By:   /s/ Jay Goldbaum                                
Name: Jay Goldbaum
Title: Director
CEQUENT MEXICO HOLDINGS B.V.,
a company formed under the laws of the Netherlands
By:   /s/ Jay Goldbaum                                
Name: Jay Goldbaum
Title: Director
CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V.,
a limited liability company formed under the laws of Mexico
By:   /s/ Jay Goldbaum                                
Name: Jay Goldbaum
Title: Vice President and Director

 

[Signature Page to Acknowledgment to Amended and Restated Intercreditor Agreement]

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V.,
a limited liability company formed under the laws of Mexico
By:   /s/ Jay Goldbaum                                
Name: Jay Goldbaum
Title: Vice President and Director

 

[Signature Page to Acknowledgment to Amended and Restated Intercreditor Agreement]

EXHIBIT I

[FORM OF] JOINDER AGREEMENT

JOINDER AGREEMENT dated as of [            ], 20[    ] to the AMENDED AND RESTATED INTERCREDITOR AGREEMENT dated as of March 15, 2019 (the “ Intercreditor Agreement ”), among (I)  BANK OF AMERICA, N.A. , in its capacity as agent and collateral agent (together with its successors and assigns in such capacities, the “ ABL Agent ”), (II) JPMORGAN CHASE BANK, N.A. , in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “First Lien Term Agent ”) and (III)  CORTLAND CAPITAL MARKET SERVICES LLC , in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ Second Lien Term Agent ” and together with the First Lien Term Agent, collectively, the “ Term Agents ”)).

A.        Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.

B.        As a condition to the ability of [      ] to [refinance the ABL Credit Agreement, First Lien Term Loan Credit Agreement, Second Lien Term Loan Credit Agreement or [      ]] after the date of the Intercreditor Agreement and to secure [ABL Credit Agreement, Term Loan Credit Agreement, Second Lien Term Loan Credit Agreement or [      ]] with a Lien on the Collateral, in each case under and pursuant to the collateral documents relating thereto, [the agent, trustee or other representative in respect of such [      ]] is required, unless such agent, trustee or other representative is already a party to the Intercreditor Agreement, to become a party under, and such Indebtedness and holders of such Indebtedness in respect thereof are required to become subject to and bound by, the Intercreditor Agreement. The undersigned (the “ New Representative ”) is executing this Joinder in accordance with the requirements of the ABL Documents and the Term Documents.

Accordingly, the ABL Agent, each Term Agent and each New Representative agree as follows:

Section 1. In accordance with the Intercreditor Agreement, the New Representative by its signature below becomes a party under, and the related Indebtedness and holders of such Indebtedness become subject to and bound by, the Intercreditor Agreement as [ABL Obligations and ABL Secured Parties][ First Lien Term Obligations and First Lien Term Secured Parties][Second Lien Term Obligations and Second Lien Term Secured Parties], respectively, with the same force and effect as if the New Representative had originally been named therein as a party thereto, and the New Representative, on behalf of itself and such holders of such Indebtedness, hereby agrees to all the terms and provisions of the Intercreditor Agreement applicable to it. Each reference to a [“Term Agent”] [“ABL Agent”] in the Intercreditor Agreement shall be deemed to include the New Representative. The Intercreditor Agreement is hereby incorporated herein by reference.

Section 2. The New Representative represents and warrants that (a) it has full power and authority to enter into this Joinder, in its capacity as [agent] [trustee] [representative] under [describe new facility] and (b) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of such Joinder.

Section 3.    This Joinder may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when executed and delivered by the parties hereto. Delivery of an executed signature page to this Joinder by facsimile transmission or other electronic method shall be effective as delivery of a manually signed counterpart of this Joinder.

Section 4.  Except as expressly supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.

SECTION 5.    THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 6.    In case any one or more of the provisions contained in this Joinder should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 7.  All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.

 

2

IN WITNESS WHEREOF, the ABL Agent, each Term Agent and each New Representative have duly executed this Joinder to the Intercreditor Agreement as of the day and year first above written.

 

 

[NAME  OF  NEW  REPRESENTATIVE] ,

       as [                     ] for the holders of

      [                                         ],

  
  By:                                                                                  
     Name:      
     Title:                       
       Address for notices:   
                                                                                    
                                                                                    
         Attention of:                                                     
         Telecopy:                                                 

 

[Signature Page to Joinder to Amended and Restated Intercreditor Agreement]

  BANK OF AMERICA, N.A., in its capacity as the
  ABL Agent
  By:                                                                    
    Name:
    Title:
  JPMORGAN CHASE BANK, N.A., in its capacity as the First Lien Term Agent
  By:                                                                
    Name:
    Title:
  CORTLAND CAPITAL MARKET SERVICES LLC, in its capacity as the Second Lien Term Agent
  By:                                                                
    Name:
    Title:

 

[Signature Page to Joinder to Amended and Restated Intercreditor Agreement]

EXHIBIT D

Amendment to Guarantee and Collateral Agreement

See attached.

Execution Version

THIRD AMENDMENT AND JOINDER TO

TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

This Third Amendment and Joinder to Term Loan Guarantee and Collateral Agreement (this “ Amendment ”) is dated as of March 15, 2019, and is by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (the “ Borrower ”), certain of its Subsidiaries party to the Guarantee and Collateral Agreement as of the date hereof (the Borrower and each such Subsidiary an “ Existing Grantor ”), the entities that are becoming a party to the Guarantee and Collateral Agreement pursuant to this Agreement (each, an “ Additional Grantor ” and, together with the Existing Grantors, collectively, the “ Grantors ”) and JPMORGAN CHASE BANK, N.A. (the “ Collateral Agent ”), as collateral agent for the Secured Parties.

RECITALS:

WHEREAS, the Borrower, the Collateral Agent and certain other financial institutions are party to that certain Term Loan Credit Agreement, dated as of June 30, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”);

WHEREAS, in connection with the Credit Agreement, the Collateral Agent and the Existing Grantors entered into a Term Loan Guarantee and Collateral Agreement dated as of June 30, 2015 (as amended, restated, supplemented, or otherwise modified before the date of this Amendment, the “ Guarantee and Collateral Agreement ”), in favor of the Collateral Agent for itself and for the benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires each Additional Grantor to become a party to the Guarantee and Collateral Agreement;

WHEREAS, each Additional Grantor has agreed to execute and deliver this Amendment in order to become a party to the Guarantee and Collateral Agreement;

WHEREAS, the parties desire to make such other modifications and amendments to the Guarantee and Collateral Agreement more particularly set forth herein;

NOW, THEREFORE, in consideration of the premises, the parties agree as follows:

1.          Definitions . Defined terms used but not defined in this Amendment are as defined in the Guarantee and Collateral Agreement or the Credit Agreement referenced therein, as applicable.

2.          Amendments to Guarantee and Collateral Agreement . With effect as of the Effective Date, the Guarantee and Collateral Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Guarantee and Collateral Agreement attached as

 

1

Exhibit A hereto.

3.          Representations. To induce the Collateral Agent to enter into this Amendment, each Grantor hereby represents to the Collateral Agent and the Lenders as follows:

 

(1)

that such Grantor (A) is duly authorized to execute and deliver this Amendment; and (B) is and will continue to be duly authorized to perform its obligations under the Guarantee and Collateral Agreement, as amended by this Amendment;

 

(2)

that the execution and delivery of this Amendment and the performance by such Grantor of its obligations under the Guarantee and Collateral Agreement, as amended by this Amendment, will not (A) violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of such Grantor or any order of any Governmental Authority or (B) violate or result in a default under any indenture, agreement or other instrument binding upon such Grantor or its assets, or give rise to a right thereunder to require any payment to be made by such Grantor, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect;

 

(3)

that each of this Amendment and the Guarantee and Collateral Agreement, as amended by this Amendment, is a legal, valid, and binding obligation of such Grantor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;

 

(4)

that the representations and warranties set forth in Article IV of the Guarantee and Collateral Agreement, as amended by this Amendment, are true and correct in all material respects (but if any such representation or warranty is by its terms qualified or modified by materiality in the text thereof, that representation or warranty is true and correct in all respects), on and as of the date of this Amendment, as though made on and as of such date (except to the extent that any such representation or warranty relates solely to an earlier date, in which case that representation or warranty is true and correct in all material respects as of such earlier date (but if any such representation or warranty is by its terms qualified or modified by materiality in the text thereof, that representation or warranty is true and correct in all respects as of such earlier date));

 

(5)

that such Grantor has complied with and is in compliance with all of the covenants set forth in the Guarantee and Collateral Agreement, as amended by this Amendment, in all material respects, including those set forth in Article V of the Guarantee and Collateral Agreement; and

 

(6)

that as of the date of this Amendment, no Default or Event of Default has occurred and is continuing.

4.          Conditions . This Amendment shall be effective upon the Collateral Agent’s receipt of this Amendment executed by the Collateral Agent and the Grantors.

5.          Joinder . By executing and delivering this Amendment, each Additional Grantor hereby becomes a party to the Guarantee and Collateral Agreement as a Guarantor and Grantor thereunder solely for the purposes of Article I (Definitions), Article II (Guarantee), Article III (Grant of

 

2

Security Interest) and Article IX (General Provisions) with the same force and effect as if originally named therein as a Guarantor and Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor and Grantor under Article II (Guarantee) and Article III (Grant of Security Interest) of the Guarantee and Collateral Agreement. The undersigned hereby agrees to be bound as a Guarantor and Grantor for the purposes of Article I (Definitions), Article II (Guarantee), Article III (Grant of Security Interest) and Article IX (General Provisions) of the Guarantee and Collateral Agreement. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Exhibits A, C (with respect to all registered or applied for Patents, Trademarks or Copyrights owned by an Additional Grantor, regardless of in which jurisdiction such Intellectual Property has been registered or applied for) and D (solely with respect to any pledged Instruments). The Additional Grantor makes no representations or warranties and does not agree to any covenants, in each case, set forth in any Loan Document. Any representation, warranty or affirmative covenant made under any Loan Document with respect to a “guarantor,” “Loan Party,” or “Subsidiary Loan Party,” shall exclude each Additional Grantor. The Guarantee and grant of the security interest by the Additional Grantors under the Guarantee and Collateral Agreement shall be subject to the Agreed Security Principles. If the grant of the security interest in any of an Additional Grantor’s assets conflicts with the Agreed Security Principles, such assets shall be deemed to be Excluded Property.

6.        Miscellaneous .

 

(1)

This Amendment is governed by, and is to be construed in accordance with laws of the State of New York, without giving effect to any conflict of law principles except federal laws relating to national banks. Each provision of this Amendment is severable from every other provision of this Amendment for the purpose of determining the legal enforceability of any specific provision.

 

(2)

This Amendment binds the Collateral Agent and each Grantor and their respective successors and assigns, and will inure to the benefit of the Collateral Agent, the Lenders, and each Grantor and the successors and assigns of the Collateral Agent and each Lender.

 

(3)

Except as specifically modified or amended by the terms of this Amendment, all other terms and provisions of the Guarantee and Collateral Agreement are incorporated by reference in this Amendment and in all respects continue in full force and effect. Each Grantor, by execution of this Amendment, hereby reaffirms, assumes, and binds itself to all of the obligations, duties, rights, covenants, terms, and conditions that are contained in the Guarantee and Collateral Agreement.

 

(4)

Each reference in the Guarantee and Collateral Agreement to “this Agreement,” “hereunder,” “hereof,” or words of like import, and each reference to the Guarantee and Collateral Agreement in any and all instruments or documents delivered in connection therewith, will be deemed to refer to the Guarantee and Collateral Agreement, as amended by this Amendment.

 

(5)

This Amendment is a Loan Document. Each Grantor hereby acknowledges that the Collateral Agent’s reasonable costs and expenses (including reasonable documented attorneys’ fees and expenses) incurred in drafting this Amendment and in amending the Guarantee and Collateral Agreement as provided in this Amendment constitute Obligations owing pursuant to Section 10.03(a) of the Credit Agreement.

 

(6)

The parties may sign this Amendment in several counterparts, each of which will be deemed to

 

3

be an original but all of which together will constitute one instrument.

[Signature pages to follow]

 

4

IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this Amendment as of the date first above written.

 

EXISTING GRANTORS :
HORIZON GLOBAL CORPORATION, as the Borrower
By: /s/ Brian Whittman
Name:   Brian Whittman
Title:   Vice President, Finance
HORIZON GLOBAL AMERICAS, INC., as a Guarantor
By: /s/ Brian Whittman
Name:   Brian Whittman
Title:   Vice President, Finance
HORIZON INTERNATIONAL HOLDINGS LLC, as a Guarantor
By: /s/ Brian Whittman
Name:   Brian Whittman
Title:   Vice President, Finance
HORIZON GLOBAL COMPANY LLC, as a Guarantor
By: /s/ Brian Whittman
Name:   Brian Whittman
Title:   Vice President, Finance

ADDITIONAL GRANTORS :

CEQUENT UK LIMITED, a company

incorporated in England and Wales with

company number 08081641

By: /s/ Jay Goldbaum                            
Name:  Jay Goldbaum
Title:   Director

CEQUENT TOWING PRODUCTS OF

CANADA LTD., a company formed

under the laws of the Province of Ontario

By: /s/ Jay Goldbaum                            
Name:  Jay Goldbaum
Title:   Vice President and Secretary
CEQUENT NEDERLAND HOLDINGS B.V., a company formed under the laws of the Netherlands
By: /s/ Jay Goldbaum                                    
Name:  Jay Goldbaum
Title:   Director
CEQUENT MEXICO HOLDINGS B.V.,
a company formed under the laws of the Netherlands
By: /s/ Jay Goldbaum                                    
Name:   Jay Goldbaum
Title:   Director
CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico
By: /s/ Jay Goldbaum                                    
Name:  Jay Goldbaum
Title:   Vice President and Director

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico
By:   /s/ Jay Goldbaum                                  
Name:  Jay Goldbaum
Title:   Vice President and Director

COLLATERAL AGENT :

JPMORGAN CHASE BANK, N.A., as

Collateral Agent

By:   /s/ Krys Szremski            
Name:   Krys Szremski
Title:   Executive Director

EXHIBIT A

Amendments to Guarantee and Collateral Agreement

See attached.

Execution Copy Version

 

 

TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

made by

HORIZON GLOBAL CORPORATION

and certain of its Subsidiaries

in favor of

JPMORGAN CHASE BANK, N.A.,

as Collateral Agent

Dated as of June 30, 2015

 

 

TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT

THIS TERM LOAN GUARANTEE AND COLLATERAL AGREEMENT (as it may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “ Agreement ”) is entered into as of June 30, 2015 by and among HORIZON GLOBAL CORPORATION, a Delaware corporation (the “ Borrower ”), certain of its Subsidiaries signatories hereto (the Borrower and each such Subsidiary a “ Grantor ”, and collectively, the “ Grantors ”) and JPMORGAN CHASE BANK, N.A., as collateral agent (in such capacity, the “ Collateral Agent ”) for the banks and other financial institutions or entities (the “ Lenders ”) from time to time parties to the Term Loan Credit Agreement, dated as of June 30, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”) among the Borrower, the Lenders, the Collateral Agent, and the other agents party thereto.

PRELIMINARY STATEMENT

WHEREAS, pursuant to the Credit Agreement, the Lenders have severally agreed to make extensions of credit to the Borrower upon the terms and subject to the conditions set forth therein;

WHEREAS, the Borrower is a member of an affiliated group of companies that includes each other Grantor;

WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; and

WHEREAS, it is a condition precedent to the obligation of the Lenders to make their respective extensions of credit to the Borrower under the Credit Agreement that the Grantors shall have executed and delivered this Agreement to the Collateral Agent for the ratable benefit of the Secured Parties;

NOW, THEREFORE, in consideration of the premises and to induce the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor hereby agrees with the Collateral Agent, for the ratable benefit of the Secured Parties, as follows:

ARTICLE I

DEFINITIONS

1.1         Terms Defined in Credit Agreement . All capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

1.2         Terms Defined in UCC or PPSA . Terms defined in the UCC or the PPSA which are not otherwise defined in this Agreement are used herein as defined in Articles 8 or 9 of the UCC shall have the meanings set forth in the UCC or the PPSA, as applicable and as the context requires .

1.3         Definitions and Rules of Construction . Whenever the words “include”, “including”, or “includes” appear in this Agreement, they shall be read to be followed by the words “without limitation” or words having similar import.

1.4         Definitions of Certain Terms Used Herein . As used in this Agreement, in addition to the terms defined in the Preliminary Statement, the following terms shall have the following meanings:

“ ABL Priority Collateral ” has the meaning set forth in the ABL/Term Loan Intercreditor Agreement.

“ Account Debtor ” shall mean any person who is or who may become obligated to any Grantor under, with respect to or on account of an Account.

“Agreed Security Principles” shall mean, with respect to the Foreign Domiciled Grantors, principles in recognition of certain legal and practical difficulties in obtaining effective guarantees and security from such Foreign Domiciled Grantors in jurisdictions in which it has been agreed that a Lien on Collateral will be granted in order to secure the Obligations, and the agreement that in such jurisdictions or with respect to the Obligations of such Foreign Domiciled Grantors:

(a)          general statutory limitations, financial assistance, capital maintenance, corporate benefit, corporate interest (vennootschappelijk belang), fraudulent preference, “thin capitalization” rules, tax restrictions or costs, retention of title claims, liquidity maintenance and similar principles may limit the ability of any such Foreign Domiciled Grantors to provide a guarantee or security or may require that the guarantee or security be limited by an amount or otherwise;

(b)         the consent of certain supervisory boards, works councils or other external bodies or persons may be required under Applicable Law in such jurisdiction to enable any such Foreign Domiciled Grantors to provide a guarantee or security, and such Foreign Domiciled Grantors shall use best efforts to obtain such consent, but such guarantee and/or security shall not be required unless such consent has been received;

(c)         any such Foreign Domiciled Grantor will not be required to give guarantees or enter into Security Documents if it would conflict with the fiduciary duties of the directors, officers, managers (or equivalent) of such Foreign Domiciled Grantor or contravene any legal prohibition or would result in (or in a material risk of) the contravention of the fiduciary duties of, or in civil, personal or criminal liability on the part of any directors, officers, managers (or equivalent) of any such Foreign Domiciled Grantor;

(d)         the Liens (including, for the avoidance of doubt, the maximum amount secured thereunder to the extent required by any Applicable Law) securing the Obligations and the extent of their perfection will be agreed by the Lender Representative and the Borrower, taking into account the cost (including material adverse tax consequences or material adverse effects on interest deductibility and stamp duty, notarization and registration fees) to such Foreign Domiciled Grantor of providing such Liens so as to ensure that it is not excessive in light of the benefit accruing to the Secured Parties;

(e)         in certain jurisdictions it may be either legally impossible or impractical (such impossibility or impracticality to be agreed by the Lender Representative and the Borrower) to grant guarantees or create Liens over certain categories of assets in which event such guarantees will not be granted and Liens will not be taken over such assets; provided that, to the extent a change in law makes it possible or practical to grant a Lien where it was previously considered impossible or impractical, such Foreign Domiciled Grantors will provide such guarantees and/or Liens subject to these Agreed Security Principles as soon as reasonably practicable;

(f)         no such Foreign Domiciled Grantors shall be required to guarantee or grant Liens to secure the Obligations to the extent that providing such guarantee or Liens would result in material

adverse tax consequences to a Grantor or a Subsidiary of a Grantor, as reasonably determined by Borrower in consultation with the Lender Representative; and

(g)         perfection of Liens, when required, and other legal formalities will be completed as soon as reasonably practicable and, in any event, within the time periods specified in the relevant Security Documents or this Agreement (as such times may be extended by Lender Representative in its reasonable discretion if the relevant provision so allows).

As of the Sixth Amendment Effective Date, the Grantors agree that no condition of any of the types described in the foregoing clauses (a) through (g) exists, and that the Agreed Security Principles shall not, as of the Sixth Amendment Effective Date, limit the guarantees provided (or to be provided) and Liens granted (or to be granted) by the Foreign Domiciled Grantors party to this Agreement on the Sixth Amendment Effective Date.

“Applicable Law” all laws, rules, regulations and governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law, common law and equitable principles (including, without limitation, any banking, exchange control, financial assistance, minimum capitalization, fraudulent conveyance, mandatory labor advice or similar rules or regulations), and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.

“ Article ” means a numbered article of this Agreement, unless another document is specifically referenced.

“Canadian Domiciled Grantor” each Grantor that is incorporated or organized under the laws of Canada or any province or territory of Canada.

“ Civil Code” the Civil Code of Québec, or any successor statute, as amended from time to time, and includes all regulations thereunder.

“ Collateral ” has the meaning set forth in Article III.

“ Collateral Deposit Account ” means each Deposit Account of a Grantor other than an Excluded Account.

“ Collection Account ” has the meaning set forth in Section 8.1(b).

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“Dutch Domiciled Grantor” each Grantor that is incorporated or organized under the laws of the Netherlands or any jurisdiction of the Netherlands.

“ Excluded Accounts ” means (a) Excluded Trust Accounts, (b) Deposit Accounts and Securities Accounts of the Loan Parties containing not more than $50,000 individually or $250,000 in the aggregate at any time, and (c) zero-balance accounts that sweep on a daily basis to an account

maintained with the ABL Collateral Agent or subject to a Deposit Account control agreement for the benefit of the ABL Collateral Agent pursuant to the terms of the ABL Loan Documents.

“ Excluded Contract ” means any contract or agreement to which a Grantor is a party or any governmental permit held by a Grantor to the extent that (a) the terms of such contract, agreement or permit prohibit or restrict the creation, incurrence or existence of the security interest granted hereunder therein or the assignment thereof without the consent of any party thereto other than the Borrower or any Subsidiary and (b) such prohibition or restriction is permitted under Section 6.10 of the Credit Agreement (other than to the extent that any such term would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the New York UCC or any other applicable law , pursuant to the PPSA, pursuant to the Civil Code or pursuant to any other Applicable Law or principles of equity); provided that (i) the term “Excluded Contract” shall not include any rights for any amounts due or to become due pursuant to any Excluded Contract and (ii) the Liens in favor of the Secured Parties shall attach immediately at such time as the condition causing such unenforceability shall be remedied and, to the extent severable, shall attach immediately to any portion of such contract or agreement in which the creation, incurrence or existence of the security interest granted hereunder, or the assignment thereof, as the case may be, is not so prohibited or restricted; provided , further , that such Grantor shall use commercially reasonable efforts to obtain all consents or waivers necessary to permit the grant of Liens in favor of the Secured Parties in such Excluded Contract.

“ Excluded Property ” means (a) any asset, including, without limitation, Accounts and proceeds of Inventory, of any kind, to the extent that (i) such asset is sold pursuant to any Specified Vendor Receivables Financing and in accordance with the applicable Specified Vendor Receivables Financing Documents and (ii) such sale or intended sale is permitted by Section 6.05(c)(ii) of the Credit Agreement, (b) any asset acquired, constructed or improved pursuant to a capital lease or purchase money indebtedness permitted by Section 6.01(a)(viii) of the Credit Agreement, (c) Excluded Contracts, (d) any Trademark applications and/or registrations with the Mexican Trademark Office by a Grantor (other than a Mexican Domiciled Grantor) filed in the United States Patent and Trademark Office in each case on the basis of such Grantor’s “intent-to-use” such trademark solely to the extent that, and solely during the period in which, granting a security interest in such Trademark application prior to such filing would adversely affect the enforceability or validity or result in the voiding thereof, unless and until acceptable evidence of use of the Trademark has been filed with and accepted by the United States Patent and Trademark Office pursuant to Section 1(c) or Section 1(d) of the Lanham Act (15 U.S.C. 1051, et seq.), whereupon such trademark application will, without any further action taken on the part of such Grantor or the Collateral Agent, be deemed to constitute Collateral, (e) any shares of Voting Stock of any Foreign Subsidiary or CFC in excess of 65% of the issued and outstanding shares of Voting Stock of such Foreign Subsidiary or CFC (other than any CFC or Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands), (f) any property or assets for which the creation or perfection of pledges of, or security interests in, pursuant to the Security Documents would result in material adverse tax consequences to the any Loan Parties Party or any Subsidiary of Loan Party , as reasonably determined by the Borrower in consultation with the Collateral Agent, ( g f ) assets in circumstances where the cost of obtaining a security interest in such assets, including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary) would be excessive in light of the practical benefit to the Secured Parties afforded thereby as reasonably determined by the Borrower and the Collateral Agent, ( h g ) any asset subject to a purchase money security interest, capital lease obligations or similar arrangement, in each case, to the extent the grant of a security interest therein would violate or invalidate such purchase money or similar arrangement or create a right of termination in favor of any other party thereto after giving effect to the applicable anti-assignment provisions of the New York UCC , the PPSA, the Civil Code or other applicable law Applicable Law, other than proceeds and receivables thereof, the assignment of which is expressly deemed effective under the New York UCC or other applicable law Applicable Law notwithstanding such

prohibition, ( i h ) any property of a person Person existing at the time such person Person is acquired or , merged or amalgamated with or into or consolidated with any Loan Party that is subject to a Lien permitted by Section 6.02(e) of the Credit Agreement to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of any other Lien on such property, ( j i ) any Excluded Trust Accounts and , ( k j ) E q uity Interests in any non-wholly owned Subsidiaries, but only to the extent that (x) the organizational documents or other agreements with equity holders of such non-wholly owned Subsidiaries do not permit or restrict the pledge of such Equity Interests, or (y) the pledge of such Equity Interests (including any exercise of remedies) would result in a change of control, repurchase obligation or other adverse consequence to any of the Loan Parties or such Subsidiary and (k) any assets excluded from constituting Collateral in accordance with Section 9.26 .

“ Excluded Trust Accounts ” means Deposit Accounts or Securities Accounts used exclusively (a) for payroll, taxes or employee benefits, (b) to receive proceeds of Accounts sold to third parties pursuant to Specified Vendor Receivables Financings permitted under the Loan Documents, (c) to hold cash and/or cash equivalents pledged to secure other obligations of the Borrower or any Subsidiary thereof pursuant to Liens permitted under the Loan Documents, (d) as escrow accounts, (e) as fiduciary or trust accounts, and accounts otherwise held exclusively for the benefit of third parties, other than a Grantor and (f) that contain solely deposits permitted by clauses (c) and (d) of the definition of “Permitted Encumbrances” in the Credit Agreement, including in connection with any letters of credit issued pursuant to such clauses, if the documents governing such deposits prohibit the granting of a Lien on such deposits.

“ Exhibit ” refers to a specific exhibit to this Agreement, unless another document is specifically referenced.

“Foreign Domiciled Grantor” any Grantor that is not a U.S. Domiciled Grantor.

“German Domiciled Grantor” means any Grantor which is formed or organized under the laws of Germany.

“ Guarantor Obligations ” means with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with this Agreement (including, without limitation, Article II), whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Collateral Agent or to the Secured Parties that are required to be paid by such Guarantor pursuant to the terms of this Agreement).

“ Guarantors ” means the Grantors; provided that each Grantor shall be considered a Guarantor only with respect to the Primary Obligations of any other Loan Party.

“ Intellectual Property ” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement, misappropriation or violation thereof, including the right to receive all proceeds and damages therefrom.

“ Licenses ” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable

under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“Mexican Domiciled Grantors” means each Grantor organized or incorporated under the laws of Mexico or any jurisdiction thereof.

“ Obligations ” means, with respect to any Grantor, the collective reference to its Primary Obligations and its Guarantor Obligations.

“ Patents ” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisionals, continuations, renewals, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Pledged Chattel Paper ” means all Chattel Paper, but only to the extent not constituting Excluded Property.

“ Pledged Collateral ” means all Instruments, Securities and other Investment Property of the Grantors (other than Excluded Property), whether or not physically delivered to the Collateral Agent pursuant to this Agreement.

“ Pledged Securities ” means any promissory notes, stock certificates or other securities now or hereafter included in the Pledged Collateral, including all certificates, instruments or other documents representing or evidencing any Pledged Collateral.

“PPSA” means the Personal Property Security Act (Ontario), as amended from time to time, (or any successor statute) and the regulations thereunder; provided, however, if validity, perfection and effect of perfection and non-perfection and opposability of the Collateral Agent’s security interest in and Lien on any Collateral of any Canadian Domiciled Grantor are governed by the personal property security laws of any jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code) in such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.

“ Primary Obligations ” means, with respect to any Loan Party, the unpaid principal of and interest on (including interest accruing after the maturity of the Loans and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Loan Party, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) the Loans and all other obligations and liabilities of such Loan Party to the Administrative Agent, the Collateral Agent or any other Secured Party, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Credit Agreement, any other Loan Documents (other than this Agreement) or any other document made, delivered or given in connection herewith or therewith (other than this Agreement), whether on account of principal, interest, premium (including the Prepayment Premium) reimbursement obligations, fees, indemnities, costs, expenses (including all fees, charges and disbursements of counsel to the Administrative Agent, the Collateral Agent or to any other Secured Party

that are required to be paid by such Loan Party pursuant to the terms of any of the foregoing agreements) or otherwise.

“ Proceeds ” means all “proceeds” as such term is defined in Section 9-102(a)(64) of the New York UCC or in any other Applicable Law, as applicable , and, in any event, shall include, without limitation, all dividends or other income from the Investment Property, collections thereon or distributions or payments with respect thereto.

“ Receivables ” means the Accounts, Chattel Paper, Documents, Investment Property, Instruments and any other rights or claims to receive money which are General Intangibles or which are otherwise included as Collateral.

“ Section ” means a numbered section of this Agreement, unless another document is specifically referenced.

“ Secured Parties ” means the collective reference to the Administrative Agent, the Collateral Agent and the Lenders.

“ Specified Permitted Liens ” means the Liens permitted under Sections 6.02(a) and 6.02(r) of the Credit Agreement, provided that such Liens on the Collateral securing the obligations of the Loan Parties under the ABL Loan Documents remain subject to the ABL/Term Loan Intercreditor Agreement.

“STA” means the Securities Transfer Act, 2006 (Ontario) (or any successor statute), as amended from time to time, and the regulations thereunder .

“ Stock Rights ” means all dividends, instruments or other distributions and any other right or property which the Grantors shall receive or shall become entitled to receive for any reason whatsoever with respect to, in substitution for or in exchange for any Equity Interests constituting Collateral, any right to receive Equity Interests and any right to receive earnings, in which the Grantors now have or hereafter acquire any right, issued by an issuer of such Equity Interests.

“ Trademarks ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (d) all rights to sue for past, present, and future infringements of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“U.S. Domiciled Grantor” means each Grantor that is organized under the laws of a jurisdiction of the United States of America or any State thereof or the District of Columbia .

“ UCC ” means the Uniform Commercial Code, as in effect from time to time, of the State of New York or of any other state the laws of which are required as a result thereof to be applied in connection with the attachment, perfection or priority of, or remedies with respect to, Collateral Agent’s or any Lender’s Lien on any Collateral.

“UK Domiciled Grantor” means each Grantor that is incorporated or organized under the laws of any legal jurisdiction of the United Kingdom .

“ Voting Stock ” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even where the right so to vote has been suspended by the happening of such a contingency.

The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.

ARTICLE II

GUARANTEE

2.1     Guarantee . (a) Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the ratable benefit of the Secured Parties and their respective successors, indorsees, transferees and assigns, the prompt and complete payment and performance by the Loan Parties when due (whether at the stated maturity, by acceleration or otherwise) of the Primary Obligations of the Loan Parties.

(b) Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal and state laws relating to fraudulent conveyances or transfers or the insolvency of debtors (after giving effect to the right of contribution established in Section 2.2).

(c) Each Guarantor agrees that the Primary Obligations of the Loan Parties may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing the guarantee contained in this Article II or affecting the rights and remedies of the Administrative Agent or any Lender hereunder.

(d) The guarantee contained in this Article II shall remain in full force and effect until all the Primary Obligations of the Loan Parties (other than contingent obligations, indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) and the obligations of each Guarantor under the guarantee contained in this Article II shall have been satisfied by payment in full and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement the Loan Parties may be free from any Primary Obligations.

(e) No payment made by the Borrower, any other Loan Party, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent, the Collateral Agent or any Lender from the Borrower, any other Loan Party, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Primary Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any such payment (other than any payment made by such Guarantor in respect of the Primary Obligations of the Loan Parties or any payment received or collected from such Guarantor in respect of the Primary Obligations of the Loan Parties), remain liable for the Primary Obligations of the Loan Parties up to the maximum liability of such Guarantor hereunder until the Primary Obligations of the Loan Parties (other than contingent obligations, indemnification, expense reimbursement, tax gross-up or yield protection in each case as to which no claim has been made) are paid in full and the Commitments are terminated.

2.2      Right of Contribution . Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share of any payment made hereunder, such Guarantor shall

be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Section 2.3. The provisions of this Section 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Secured Parties, and each Guarantor shall remain liable to the Secured Parties for the full amount guaranteed by such Guarantor hereunder.

2.3         No Subrogation . Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Collateral Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Collateral Agent or any other Secured Party against the Borrower, any other Loan Party or any other Guarantor or any collateral security or guarantee or right of offset held by the Collateral Agent or any other Secured Party for the payment of the Primary Obligations of the Loan Parties, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower, any other Loan Party or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Collateral Agent and the other Secured Parties by the Loan Parties on account of the Primary Obligations (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) are paid in full and the Commitments are terminated. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Primary Obligations of the Loan Parties (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Collateral Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Collateral Agent, if required), to be applied against the Primary Obligations of the Loan Parties, whether matured or unmatured, in such order as the Collateral Agent may determine.

2.4         Amendments, etc. with respect to the Primary Obligations . Each Guarantor shall remain obligated hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for payment of any of the Primary Obligations of the Loan Parties made by the Collateral Agent or any other Secured Party may be rescinded by the Collateral Agent or such other Secured Party and any of the Primary Obligations of the Loan Parties continued, and the Primary Obligations of the Loan Parties, or the liability of any other Person upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by the Collateral Agent or any other Secured Party, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as the Collateral Agent (or the Required Lenders or all Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right of offset at any time held by the Collateral Agent or any other Secured Party for the payment of the Primary Obligations of the Loan Parties may be sold, exchanged, waived, surrendered or released. Neither the Collateral Agent nor any other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Primary Obligations of the Loan Parties or for the guarantee contained in this Article II or any property subject thereto.

2.5         Guarantee Absolute and Unconditional . Each Guarantor waives any and all notice of the creation, renewal, extension or accrual of any of the Primary Obligations of the Loan Parties and notice of or proof of reliance by the Collateral Agent or any other Secured Party upon the guarantee contained in this Article II or acceptance of the guarantee contained in this Article II; the Primary Obligations of the Loan Parties, and any of them, shall conclusively be deemed to have been created, contracted or

incurred, or renewed, extended, amended or waived, in reliance upon the guarantee contained in this Article; and all dealings between the Loan Parties, on the one hand, and the Collateral Agent and the other Secured Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the guarantee contained in this Article II. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower, any other Loan Party or any of the Guarantors with respect to the Primary Obligations of the Loan Parties. Each Guarantor understands and agrees that the guarantee contained in this Article II shall be construed as a continuing, absolute and unconditional guarantee of payment without regard to (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Primary Obligations of the Loan Parties or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Collateral Agent or any other Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) which may at any time be available to or be asserted by the Borrower or any other Person against the Collateral Agent or any other Secured Party, or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrower, any other Loan Party or such Guarantor) which constitutes, or might be construed to constitute, an equitable or legal discharge of the Loan Parties for the Primary Obligations, or of such Guarantor under the guarantee contained in this Article II, in bankruptcy or in any other instance. When making any demand hereunder or otherwise pursuing its rights and remedies hereunder against any Guarantor, the Collateral Agent or any other Secured Party may, but shall be under no obligation to, make a similar demand on or otherwise pursue such rights and remedies as it may have against the Borrower, any other Loan Party, any other Guarantor or any other Person or against any collateral security or guarantee for the Primary Obligations of the Loan Parties or any right of offset with respect thereto, and any failure by the Collateral Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from the Borrower, any other Loan Party, any other Guarantor or any other Person or to realize upon any such collateral security or guarantee or to exercise any such right of offset, or any release of the Borrower, any other Loan Party with Primary Obligations, any other Guarantor or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Collateral Agent or any other Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.

2.6         Reinstatement . The guarantee contained in this Article II shall continue to be effective, or be reinstated, as the case may be, if at any time payment, or any part thereof, of any of the Primary Obligations of the Loan Parties is rescinded or must otherwise be restored or returned by the Collateral Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower, any other Loan Party or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar officer for, the Borrower, any other Loan Party or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.

2.7         Payments . Each Guarantor hereby guarantees that payments hereunder will be paid to the Collateral Agent without set-off or counterclaim in Dollars at its offices at 383 Madison Avenue, New York, New York 10017 or such other office designated by the Collateral Agent in writing to the Borrower.

2.8             Mexican Domiciled Grantors. Each Mexican Domiciled Grantor hereby expressly acknowledges and agrees that this Agreement is governed by the laws of the State of New York as set forth in Section 9.16 and expressly agrees that any rights and privileges that it might otherwise have under the laws of Mexico shall not be applicable to this Agreement, indemnities and other assurances contained herein or any guarantee granted by such Mexican Domiciled Grantor, on the date hereof or in

the future, pursuant to this Agreement. For such purposes, each Mexican Domiciled Grantor hereby unconditionally and irrevocably waives any rights to which it may be entitled (including the rights to excusión, orden, división and subrogación), to the extent applicable, under Articles 2813, 2814, 2815, 2816, 2817, 2818, 2819, 2820, 2821, 2822, 2823, 2824, 2826, 2827, 2828, 2830, 2835, 2836, 2837, 2838, 2839, 2840, 2842, 2844, 2846, 2847, 2848 and 2849 of the Federal Civil Code (Código Civil Federal) and the corresponding provisions of the Civil Codes of the States of Mexico and the Federal District of Mexico (or any successor provisions). Each Mexican Domiciled Grantor represents that (a) it is familiar with the contents of the articles referred to above; (b) it will receive valuable direct and indirect benefits as a result of the entering into this Agreement and any other Loan Document to which it is a party; (c) it is solvent pursuant to the terms of the Mexican Bankruptcy Law; (d) it has not been declared in concurso mercantil or bankruptcy (quiebra) or other similar insolvency procedure; and (e) there is no pending and, to the best of its knowledge, threatened action, claim, requirement or proceeding before any court, governmental agency, arbitrator or jurisdictional entity that affects or could affect the legality, validity or enforceability of this Agreement.

2.9 German Domiciled Grantors.

(a) German Guarantor. For the purpose of this Agreement, a “German Guarantor” means any Grantor that is established in Germany as (i) a limited liability company ( Gesellschaft mit beschr ä nkter Haftung ) or (ii) a limited partnership ( Kommanditgesellschaft ) or a general partnership ( offene Handelsgesellschaft ) with, in each case, a limited liability company ( Gesellschaft mit beschr ä nkter Haftung ) as personally liable partner ( pers ö nlich haftender Gesellschafter ) (the “PLP”).

(b) German Guaranty and Collateral Limitation. If a German Guarantor guarantees or secures otherwise obligations or liabilities (including guarantees, letters of credit or similar instruments) of any of its affiliated companies ( verbundene Unternehmen ) within the meaning of section 15 et seq. of the German Stock Corporation Act ( AktG ) that is not a direct or indirect subsidiary of the German Guarantor, the secured parties under this Agreement agree to enforce the guarantee granted in Article II of this Agreement (the “Guaranty”) and the Collateral granted in Article III of this Agreement against the German Guarantor or its PLP only to the extent that such enforcement would not:

(i) result in a negative balance ( Unterbilanz ) of the German Guarantor or its PLP, i.e. reducing the net assets ( Reinverm ö gen ) of the Grantor or its PLP to an amount less than its registered share capital ( Stammkapital ), or

(ii) if the net assets of the German Guarantor or its PLP are already less than the registered share capital result in its net assets ( Reinverm ö gen ) to be further reduced ( Vertiefung einer Unterbilanz )

and would thus in each case constitute a violation of the German capital maintenance rules pursuant to sections 30 and 31 of the German Limited Liability Company’s Act ( GmbHG ).

(c) Net Assets. For the purposes of paragraph (b) above, “net assets” means the assets calculated on the basis of the balance sheet items listed in sections 266 para. 2 A, B (in deviation from section 272 para. 1 of the German Commercial Code ( HGB ) including not yet called outstanding contributions ( nicht eingeforderte ausstehende Einlagen )), C, D and E of the German Commercial Code ( HGB ) less all liabilities listed in section 266 para. 3 B, C, D and E HGB and less such amounts being subject to a distribution barrier pursuant to section 268 para. 8 HGB, section 253 para. 6 HGB or section 272 para. 5 HGB, always provided that for the purpose of calculating the enforceable amount (if any) the following balance sheet items shall be disregarded:

(i)          the amount of any increase of the registered share capital of the German Guarantor or its PLP other than as permitted pursuant to the Loan Documents and/or that has been effected without the prior written consent of the Agent;

(ii)          liabilities incurred by the German Guarantor or its PLP not permitted pursuant to the Loan Documents;

(iii)          liabilities of the German Guarantor or its PLP owed to any group member; and

(iv)          liabilities of the German Guarantor or its PLP owed to shareholders to the extent that such liabilities are subordinated pursuant to section 39 para. 1 no. 5 or section 39 para. 2 of the German Insolvency Code ( InsO ).

Unless deviations are required by mandatory law, the relevant net assets are to be determined in accordance with generally accepted accounting principles observing the accountings principles applied in the previous years for the creation of the non-consolidated financial statement.

(d)         Management Calculation.    The enforcement of the Guarantee and of the Collateral against the German Guarantor shall initially only be excluded if and to the extent that no later than ten (10) Business Days following a written notice of the Collateral Agent to enforce the Guaranty and/or the Collateral (the “Enforcement Notice”), the managing directors of the German Guarantor or its PLP have submitted to the Agent an updated balance sheet of that German Guarantor or its PLP derived from the latest annual financial statement together with a detailed written calculation based on the date of receipt of the Enforcement Notice (the “Management Calculation”) confirming to their best knowledge which amount cannot be enforced as this would cause the net assets of the relevant German Guarantor or its PLP being less than (or to fall further below) its registered share capital.

(e)          Auditors’ Determination.    The Collateral Agent is entitled to enforce the Guarantee and the Collateral in such an amount that is undisputed according to the Management Calculation and the German Guarantor is obliged to pay such undisputed amount to the Agent.

With regard to the disputed amount, the German Guarantor shall submit to the Collateral Agent within thirty (30) Business Days after the Collateral Agent has partly or totally rejected the calculation in the Management Calculation a determination prepared by auditors of international standard and reputation (or otherwise accepted by the Collateral Agent) appointed (in coordination with the Collateral Agent) by and at the costs of the German Guarantor confirming to which extent the Guaranty and Collateral can be enforced against the German Guarantor on the date of receipt of the Enforcement Notice (the “Auditors’ Determination”). The Auditors’ Determination has to refer to a recent balance sheet of the German Guarantor or its PLP. The calculation of the Auditors’ Determination is final and binding upon the parties, safe for obvious mistakes. In case the Auditors’ Determination will not be submitted within the stipulated time period, the Agent is entitled to enforce the Guaranty and Collateral against the German Guarantor in full.

(f)          Required Actions. Provided that the Guarantee cannot be fully enforced against the German Guarantor due to the aforementioned provisions the German Guarantor or its PLP is obliged (to the extent legally permitted and necessary to enable the Collateral Agent to enforce the Guarantee and Collateral in full or with less limitations) to:

(i)          immediately dispose of any of its assets that are not required for the German Guarantor’s or its PLP’s business and the book value of which is significantly lower than it s m arke t value;

(ii)          otherwise realize all hidden reserves in relation to assets that are required for the German Guarantor’s or its PLP’s business; and

(iii)         adopt all other reasonable measures which are necessary to allow the Collateral Agent to fully enforce the Guarantee and the Collateral.

The German Guarantor will notify the Collateral Agent about the sale proceeds and the book value of its respective assets and of the realized hidden reserves.

(g)         No restrictions. The restrictions pursuant to Section 2.2 do not apply to the extent that:

(i)         the Guarantee is enforced against the German Guarantor or its PLP with regard to an amount that the German Guarantor or its PLP or any of their subsidiaries has utilized under or in connection with the Loan Documents;

(ii)         the Guarantee and/or Collateral is granted (i) in relation to amounts (not yet repaid) being on-lent or otherwise passed on to the German Guarantor or its PLP or its subsidiaries or otherwise be used for their purposes or (ii) in relation to liabilities deriving from letters of credit issued in order to secure liabilities of the German Guarantor or its PLP or their subsidiaries;

(iii)         insolvency proceedings against the German Guarantor’s assets are opened, unless the Federal High Court ( BGH ) has confirmed that section 30 of the German Limited Liability Company’s Act (GmbHG) remains applicable in such event;

(iv)         according to statutory law or according to case law of the Federal High Court it has been established that the restrictions pursuant to paragraph (b) above are not (or not anymore) necessary in order to avoid that the managing directors of the German Guarantor or its PLP become personal liable, in particular pursuant to section 43 para. 2 and 3 of the German Limited Liability Company’s Act ( GmbHG ); or

(v)         the German Guarantor or its PLP is a dependent ( abhängig ) and/or profit pooling ( gewinnabf ü hrend ) company subject to a domination and/or a profit and loss pooling agreement rendering section 30 para. 1 of the German Limited Liability Company’s Act ( GmbHG ) inapplicable.

(h)         No prejudice. No limitation of enforcement will prejudice the right of the Collateral Agent to enforce the Guarantee and the Collateral pursuant to the provisions set forth above again at a later time.

2.10 Dutch Guaranty Limitations. Any guaranty pursuant to this Agreement given by a guarantor incorporated under the laws of the Netherlands (a “Dutch Guarantor”) is subject to the limitations on unlawful financial assistance within the meaning of section 2:98c of the Dutch Civil Code.

2.11         Guarantor Intent. Without prejudice to the generality of Sections 2.4 and 2.5, each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Loan Documents and/or any facility or amount made available under any of the Loan Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or

extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

2.12     Additional Security. This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Secured Party or its respective successors, indorsees, transferees and assigns.

ARTICLE III

GRANT OF SECURITY INTEREST

Each Grantor hereby pledges, assigns and grants to the Collateral Agent, on behalf of and for the benefit of the Secured Parties, to secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of such Grantor’s Obligations, a security interest in all of its right, title and interest in, to and under all personal property and other assets, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade name or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which will be collectively referred to as the “ Collateral ”), including:

 

  (a)

all Accounts;

 

  (b)

all Chattel Paper;

 

  (c)

all Deposit Accounts;

 

  (d)

all Documents (other than title documents with respect to Vehicles);

 

  (e)

all Equipment;

 

  (f)

all Fixtures;

 

  (g)

all General Intangibles;

 

  (h)

all Goods;

 

  (i)

all Instruments;

 

  (j)

all Intellectual Property;

 

  (k)

all Inventory;

 

  (l)

all Investment Property;

 

  (m)

all cash or cash equivalents;

 

  (n)

all letters of credit, Letter-of-Credit Rights and Supporting Obligations;

 

  (o)

all Commercial Tort Claims;

(p)         all accessions to, substitutions for and replacements, proceeds (including Stock Rights), insurance proceeds and products of the foregoing, together with all books and records, customer

lists, credit files, computer files, programs, printouts and other computer materials and records related thereto and any General Intangibles at any time evidencing or relating to any of the foregoing;

(q) all other property not otherwise described above (except for any property specifically excluded from any clause in this section above, and any property specifically excluded from any defined term used in any clause of this section above);

(r) all books and records pertaining to the Collateral; and

(s)    to the extent not otherwise included in the foregoing, all Proceeds, Supporting Obligations and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing;

provided , however , that notwithstanding any of the other provisions set forth in this Agreement or the other Loan Documents, no Excluded Property shall constitute Collateral under this Agreement. In addition, in no event shall perfection by control or similar arrangements be required with respect to any Deposit Account (other than the Term Collateral Proceeds Account) or Securities Account; provided that, to the extent any Deposit Accounts and Securities Accounts are under the control of the ABL Collateral Agent at any time pursuant to the terms of the ABL/Term Loan Intercreditor Agreement, the ABL Collateral Agent shall act as agent and gratuitous bailee for the Collateral Agent for the purpose of perfecting the Collateral Agent’s Liens in such Deposit Account and Securities Account.

Each Grantor acknowledges that (i) value has been given, (ii) it has rights in the Collateral (other than after-acquired collateral), (iii) it has not agreed to postpone the time of attachment of the security interest, and (iv) it has received a copy of this Agreement. In addition, the security interest granted herein does not attach to consumer goods (as defined in the PPSA) or extend to the last day of the term of any lease or agreement for lease of real property .

The Collateral Agent and the Lenders acknowledge that the granting of any Collateral pursuant to this Article III by any German Domiciled Grantor may not be valid, effective or enforceable in the jurisdiction (other than the U.S.) where such Collateral is located.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

To induce the Collateral Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrower thereunder, each Grantor other than any German Domiciled Grantor hereby represents and warrants to the Collateral Agent and each Lender that:

4.1 Title, Perfection and Priority . Such Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a security interest hereunder and has full power and authority to grant to the Collateral Agent the security interest in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other person other than any consent or approval that has been obtained. When financing statements naming such Grantor as debtor and the Collateral Agent as secured party and providing a description of the Collateral with respect to which such Grantor has purported to grant a security interest hereunder have been filed in the appropriate offices against such Grantor in the locations listed on Schedule 1.04 to the Perfection Certificate delivered on the Closing Date (or specified by notice from the Borrower to the Collateral Agent after the Closing Date in the case of filings, recordings or registrations required by Section 5.12 or 5.13 of the Credit Agreement) and at Companies House in

England and Wales with respect to UK Domiciled Grantors, and in the RUG with respect to Mexican Domiciled Grantors, the Collateral Agent will have a fully perfected first priority security interest (or such other priority as required by the Intercreditor Agreements), subject only to Liens permitted under Section 5.1(e), in that Collateral of the such Grantor and in which a security interest may be perfected by filing of an initial financing statement in the appropriate office against such Grantor; provided (a) with respect to all Grantors, that the filing of this Agreement (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent) with the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof (collectively, the “U.S. IP Filing Offices”) is necessary to perfect the security interest of the Collateral Agent in respect of any United States issued and applied for Patents, United States federally registered and applied for Trademarks and United States registered and applied for Copyrights ( the “U.S. IP Filing Collateral”) acquired by such Grantor after the date hereof; (b) with respect to Canadian Domiciled Grantors, that the filing of this Agreement (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Agent) with the Canadian Intellectual Property Office or any successor office thereof (the “Canadian IP Filing Office”) is necessary to perfect the security interest of the Agent in respect of any Canadian issued and applied for Patents, Canadian federally registered and applied for Trademarks and Canadian registered and applied for Copyrights (the “Canadian IP Filing Collateral”) acquired by such Grantor after the date hereof, (c) with respect to Mexican Domiciled Grantors, that the filing of the corresponding Mexican Asset Pledge (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Agent) with the Mexican Institute of Intellectual Property (Instituto Mexicano de la Propiedad Intelectual) or any successor office thereof (the “Mexican IP Filing Office” and, together with the U.S. IP Filing Office and the Canadian IP Filing Office, the “IP Filing Offices”) is necessary to perfect the security interest of the Agent in respect of any Mexican issued and applied for Patents, Mexican federally registered and applied for Trademarks and Mexican registered and applied for Copyrights (the “Mexican IP Filing Collateral” and, together with the U.S. IP Filing Collateral, the Canadian IP Filing Collateral and the Mexican IP Filing Collateral, the “IP Filing Collateral”) acquired by such Grantor after the date hereof. When the Collateral Agent (or its agent or designee) takes possession or Control of all Collateral with respect to which a security interest may only be perfected by possession or Control under all Applicable Laws , the Collateral Agent will have a fully perfected first priority (or such other priority required by any of the Intercreditor Agreements) security interest, subject only to Liens permitted under Section 5.1(e), in such Collateral.

Such Grantor represents and warrants that fully executed security agreements in the form hereof (or a fully executed short-form agreement in form and substance reasonably satisfactory to the Collateral Agent) and containing a description of all applicable Collateral consisting of Intellectual Property with respect to United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights IP Filing Collateral have been delivered to the Collateral Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof applicabl e IP Filing Offices, with respect to the U.S. IP Filing Collateral pursuant to 35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.S.C. § 205 and the regulations thereunder, as applicable, and, with respect to the other IP Filing Collateral, pursuant to Applicable Law , to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) in respect of all Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights in which a security interest may be perfected by filing or recording in the United States Patent and Trademark Office and the United States Copyright Office or any successor office thereof IP Filing Collateral. When such security agreements or short-form agreements have been filed in the United States Patent and Trademark Office and the United States Copyright Office applicable IP Filing Offices against such

Grantor, the Collateral Agent will have a fully perfected first priority security interest, subject only to Liens permitted under Section 5.1(e), in respect of all Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights in which a security interest may be perfected by filing or recording in such offices, I P Filing Collateral, and no further or subsequent filing or recording will be necessary (other than the financing statements referred to in the paragraph above and such actions as are necessary to perfect the security interest in favor of the Collateral Agent (for the benefit of the Secured Parties) with respect to any IP Filing Collateral consisting of United States issued Patents and Patent applications and United States federally registered Trademarks (and Trademarks for which United States registration applications are pending) and United States registered (and applied for) Copyrights acquired by such Grantor after the date hereof). Within the time period set forth in Exhibit E to the Fifth Amendment (or such later date as the Collateral Agent may agree in its sole discretion), each Grantor party to this Agreement as of the Fifth Amendment Effective Date shall provide a perfected security interest over substantially all material intellectual property owned by such Grantor but registered or licensed in a foreign country other than the U.S. where such a perfected security interest can readily be provided, omitting only that material intellectual property the pledge and/or perfection of which would, in such Grantor’s good faith reasonable judgment, would impose upon the Grantor or applicable Subsidiary material costs or material operational issues, or which the cost of doing do would, as reasonably agreed between such Grantor and the Administrative Agent, exceed the benefit thereof..

None of the U.S. Domiciled Grantors shall be required, nor is the Collateral Agent authorized, to perfect the security interests granted by this Agreement with respect to Intellectual Property arising out of or located outside of the United States. None of the Foreign Domiciled Grantors shall be required, nor is the Collateral Agent authorized, to perfect the security interests granted by this Agreement with respect to Collateral arising out of or located outside of both the United States and the country under the laws of which such Foreign Domiciled Grantor is organized, incorporated or formed.

4.2    Type a nd Jurisd iction of Organization . The state of organization of such Grantor ; Organizational and Identification Numbers. The (a) type of entity of such Grantor, (b) its jurisdiction or country and state or province of organization, incorporation or formation, (c) the organizational number issued to it by the competent authority or by its jurisdiction, state or province of organization , incorporation or formation and (d) its federal taxpayer identification number, VAT number or equivalent, i n eac h case as of the Closing Date is set forth on Exhibit A .

4.3     Principal Location . The address of such Grantor’s chief executive office or corporate domicile (and if different, its registered office) as of the Closing Date and each other location where such Grantor maintains its books and records relating to any material portion of the Collateral, including accounts receivable and General Intangibles, are disclosed in Exhibit B .

4.4   Absence of Other Liens . The Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such Grantor has not filed or consented to the filing of (a) any financing statement or analogous document under the Uniform Commercial Code UCC, the PPSA or any other applicable laws Applicable Laws covering any Collateral, (b) any assignment in which such Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office or the United States Copyright Office any IP Filing Office or in the records of the appropriate governmental office in such Grantor’s country of organization (or incorporation or formation, as applicable), if different, or (c) any assignment in which such Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security

agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the Credit Agreement. Such Grantor does not hold any commercial tort claim with a value in excess of $500,000 as of the Closing Date except as indicated on the Perfection Certificate.

4.5       Deposit Accounts . All of such Grantor’s Deposit Accounts and Securities Accounts in existence on the Closing Date are listed on Exhibit E.

4.6       [Reserved] .

4.7     Chattel Paper . Such Grantor’s Pledged Chattel Paper is maintained at its chief executive office set forth in Exhibit B. None of the Pledged Chattel Paper has any marks or notations indicating that it has been pledged, assigned or otherwise conveyed to any Person, other than those that have been terminated. The names of the obligors, amounts owing, due dates and other information with respect to its Pledged Chattel Paper are and will be correctly stated in all material respects in all records of such Grantor relating thereto.

4.8       [Reserved] .

4.9 Intellectual Property . Exhibit C sets forth a true and complete list of (i) each registered or applied for United States Patent, Trademark or Copyright owned by each Grantor as of the Closing Date (other than expired, abandoned or lapsed properties) and (ii) all Licenses under which a Grantor is an exclusive licensee of a registered or applied for Patent, Trademark or Copyright as of the Closing Date. All Intellectual Property listed on Exhibit C is subsisting and unexpired, and to the knowledge of such Grantor, valid and enforceable.

4.10       [Reserved] .

4.11   Pledged Collateral . (a) Exhibit D sets forth a complete and accurate list of all Pledged Securities (provided that, with respect to Pledged Securities constituting promissory notes and debt securities, Exhibit D only sets forth such Pledged Securities evidencing Indebtedness having an aggregate principal amount in excess of $500,000, payable or due to such Grantor by or from any other Person (including any other Grantor)) owned by such Grantor as of the Closing Date. As of the Closing Date, such Grantor is the direct, sole beneficial owner and sole holder of record of the Pledged Securities listed on Exhibit D as being owned by it, free and clear of any Liens, except for the security interest granted to the Collateral Agent for the benefit of the Lenders hereunder, Permitted Encumbrances and Specified Permitted Liens. Such Grantor further represents and warrants that (i) all Pledged Collateral (solely with respect to Pledged Collateral issued by a Person other than a wholly owned Subsidiary of a Grantor, to the best of the Grantors’ knowledge) owned by it constituting Equity Interests has been (to the extent such concepts are relevant with respect to such Pledged Collateral) duly authorized and validly issued and are fully paid and non-assessable; (ii) with respect to any certificates delivered to the Collateral Agent (or its agent or designee) representing Equity Interests, either such certificates are Securities as defined in Article 8 of the UCC (or with respect to the Equity Interests owned by Foreign Domiciled Grantors, as defined in any other Applicable Law, as applicable) as a result of actions by the issuer or otherwise, or, if such certificates are not Securities, such Grantor has so informed the Collateral Agent so that the Collateral Agent may take steps to perfect its security interest therein as a General Intangible; (iii) all such Pledged Collateral held by a securities intermediary (other than in an Excluded Account) is covered by a control agreement among such Grantor, the securities intermediary and the ABL Collateral Agent pursuant to which the ABL Collateral Agent has Control; provided that no such control agreements shall be required prior to the date that is 60 days after the Closing Date (or such later date as may be agreed by the ABL Collateral Agent in its reasonable discretion) and (iv) all Pledged

Collateral which represents Indebtedness owed to such Grantor (solely with respect to Pledged Collateral issued by a Person other than a wholly owned Subsidiary of a Grantor, to the best of the Grantors’ knowledge) has been duly authorized, authenticated or issued and delivered by the issuer of such Indebtedness, is the legal, valid and binding obligation of such issuer and such issuer is not in default thereunder.

(b) In addition, (i) the pledge of the Pledged Collateral pursuant to this Agreement does not violate Regulation T, U or X of the Federal Reserve Board or any successor thereto, (ii) to the best of such Grantor’s knowledge, none of the Pledged Collateral owned by it has been issued or transferred in material violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject, (iii) as of the Closing Date there are existing no options, warrants, calls or commitments of any character whatsoever (A) relating to such Pledged Collateral or (B) which obligate the issuer of any Equity Interests included in the Pledged Collateral that is a direct or indirect subsidiary of any Borrower to issue additional Equity Interests, and (iv) no consent, approval, authorization, or other action by, and no giving of notice, filing with, any governmental authority or any other Person is required for the pledge by such Grantor of such Pledged Collateral pursuant to this Agreement or for the execution, delivery and performance of this Agreement by such Grantor, or for the exercise by the Collateral Agent of the voting or other rights provided for in this Agreement in accordance with the Intercreditor Agreements or for the remedies in respect of the Pledged Collateral pursuant to this Agreement, except as may be required in connection with such disposition by laws affecting the offering and sale of securities generally or where the absence of which could not reasonably be expected to have a Material Adverse Effect.

ARTICLE V

COVENANTS

From the date of this Agreement, and thereafter until this Agreement is terminated, each Grantor agrees that:

5.1 General.

(a) Col lateral Records.     Such Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the Collateral Agent a duly certified schedule or schedules in form and detail satisfactory to the Collateral Agent showing the identity, amount and location of any and all Collateral.

(b) Authorization to File Financing Statements; Ratification . Such Grantor hereby authorizes the Collateral Agent to file, and if requested will deliver to the Collateral Agent, all financing statements and other documents and take such other actions as may from time to time be reasonably requested by the Collateral Agent in order to maintain a first priority perfected security interest (subject to the Intercreditor Agreements) in and, if applicable, Control of, the Collateral owned by such Grantor. Any financing statement filed by the Collateral Agent may be filed in any filing office in any applicable UCC , PPSA or other jurisdiction and that the Collateral Agent determines to be applicable (which shall include, with respect to the UK Domiciled Grantors, at Companies House in England and Wales, and may (i) indicate such Grantor’s Collateral (1) as “all assets of the Grantor” or words of similar effect,

regardless of whether any particular asset included in the Collateral falls within the scope of Article 9 of the UCC of such jurisdiction, or (2) by any other description which reasonably approximates the description contained in this Agreement, and (ii) contain any other information required by part 5 of Article 9 of the UCC or any other Applicable Law for the sufficiency or filing office acceptance of any financing statement or amendment, including whether such Grantor is an organization, the type of organization and any organization organizational identification number (or equivalent) issued to such Grantor. Such Grantor also agrees to furnish any such information described in the foregoing sentence to the Collateral Agent promptly upon request.

(c)     Further Assurances .    Such Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as the Collateral Agent may from time to time reasonably request to better assure, preserve, protect and perfect the security interest of the Secured Parties in the Collateral and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Liens hereunder and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount in excess of $500,000 payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument, such note or instrument shall be immediately pledged and promptly delivered to the Collateral Agent (or its agent or designee) , duly endorsed in a manner satisfactory to the Collateral Agent.

(d) Disposition of Collateral . Such Grantor shall not make or permit to be made an assignment for security, pledge or hypothecation of the Collateral or grant any other Lien in respect of the Collateral, except as expressly permitted by the Credit Agreement. Such Grantor shall not make or permit to be made any transfer of the Collateral and such Grantor shall remain at all times in possession of the Collateral owned by it, except that (a) Inventory may be sold in the ordinary course of business and (b) unless and until the Collateral Agent shall notify the Borrower that an Event of Default shall have occurred and be continuing and that during the continuance thereof the Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of any Collateral (which notice may be given by telephone if promptly confirmed in writing), such Grantor may use and dispose of the Collateral in any lawful manner not prohibited by this Agreement, the Credit Agreement or any other Loan Document.

(e)     Liens . Such Grantor will not create, incur, or suffer to exist any Lien on the Collateral owned by it except for the Specified Permitted Liens and Liens otherwise permitted by the Credit Agreement.

(f)     Other Financing Statements .    Such Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement naming the Collateral Agent as secured party without the prior written consent of the Collateral Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the UCC or other similar Applicable Law.

(g) Protection of Security . Such Grantor shall, at its own cost and expense and at the request of the Collateral Agent, take any and all commercially reasonable actions necessary to defend title to the Collateral against all persons and to defend the security interest of the Collateral Agent in the Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the Credit Agreement.

(h) Compliance with Terms . Such Grantor shall remain liable, as between itself and any relevant counterparty, to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Collateral, all in accordance

with the terms and conditions thereof, and such Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance.

5.2 Receivables .

(a)   Certain Agreements on Receivables . Except with respect to Excluded Property, during the continuance of an Event of Default, such Grantor will not, without the Collateral Agent’s prior written consent, grant any extension of the time of payment of any of the Accounts, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts, compromises or settlements granted or made in the ordinary course of business and consistent with its current practices and in accordance with such prudent and standard practices used in industries that are the same as or similar to those in which such Grantor is engaged.

(b)        [Reserved].

(c)        [Reserved].

(d)   Assignment of Security Interest . If at any time such Grantor shall take a security interest in any property of an Account Debtor or any other person to secure payment and performance of an Account (except with respect to Excluded Property), such Grantor shall promptly assign such security interest to the Collateral Agent to the extent legally permissible . Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other person granting the security interest.

(e)   Electronic Chattel Paper and Transferable Records . If such Grantor at any time holds or acquires an interest with a value in excess of $500,000 in any Electronic Chattel Paper or any “transferable record,” as that term is defined in Section 201 of the Federal Electronic Signatures in Global and National Commerce Act, or in §16 of the Uniform Electronic Transactions Act as in effect in any relevant jurisdiction that constitutes Collateral , such Grantor shall promptly notify the Collateral Agent thereof and, at the request of the Collateral Agent, shall take , to the extent legally permissible, such action as the Collateral Agent may reasonably request to vest in the Collateral Agent control under UCC §9-105 of such Electronic Chattel Paper or control under Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or, as the case may be, §16 of the Uniform Electronic Transactions Act, as so in effect in such jurisdiction, of such transferable record. The Collateral Agent agrees with such Grantor that the Collateral Agent will arrange, pursuant to procedures satisfactory to the Collateral Agent and so long as such procedures will not result in the Collateral Agent’s loss of control, for the Grantor to make alterations to the Electronic Chattel Paper or transferable record permitted under UCC §9-105 or, as the case may be, Section 201 of the Federal Electronic Signatures in Global and National Commerce Act or §16 of the Uniform Electronic Transactions Act for a party in control to allow without loss of control, unless an Event of Default has occurred and is continuing or would occur after taking into account any action by such Grantor with respect to such Electronic Chattel Paper or transferable record.

5.3 [Reserved] .

5.4 Delivery of Tangible Chattel Paper . If such Grantor shall at any time hold or acquire any Tangible Chattel Paper with a value in excess of $500,000 that constitutes Collateral , such Grantor shall promptly endorse, assign and deliver the same to the Collateral Agent, accompanied by such

instruments of transfer or assignment duly executed in blank as the Collateral Agent may from time to time reasonably request (which may take the form of Exhibit F hereto).

5.5 Uncertificated Securities . If any securities now or hereafter acquired by any Grantor are uncertificated and are issued to such Grantor or its nominee directly by the issuer thereof, such Grantor shall promptly notify the Collateral Agent thereof and, at the Collateral Agent’s reasonable request and option (with respect to a German Domiciled Grantor or a Dutch Domiciled Grantor, in a manner consistent with the Agreed Security Principles) , pursuant to an agreement in form and substance satisfactory to the Collateral Agent, either (i) cause the issuer to agree to comply with instructions from the Collateral Agent as to such securities, without further consent of any Grantor or such nominee, or (ii) arrange for the Collateral Agent to become the registered owner of the securities. Such Grantor further agrees to promptly delivery to the Agent such documents, agreements and other material as may be reasonably necessary or advisable from time to time to provide the Collateral Agent with control over such uncertificated Collateral in the manner provided under section 24 of the STA (and, for purposes of section 27(1) of the STA, this Agreement shall constitute each Grantor’s irrevocable consent to entry into an agreement of the kind referred to in clause 24(1)(b) of the STA); provided however, that such consent shall be automatically revoked upon termination of this Agreement as set forth in Section 9.24 of this Agreement.

5.6          Pledged Collateral .

(a)     Registration of Pledged Collateral . Such Grantor will permit any registerable Pledged Collateral owned by it to be registered in the name of the Collateral Agent or its nominee at any time at the request of the Collateral Agent during the continuance of an Event of Default. Such Grantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Collateral registered in the name of such Grantor during the continuance of an Event of Default. The Collateral Agent shall at all times during the continuance of an Event of Default have the right to exchange the certificates representing Pledged Collateral for certificates of smaller or larger denominations for any purpose consistent with this Agreement.

(a)       Exercise of Rights in Pledged Collateral .

(i)     Without in any way limiting the foregoing and subject to clause (ii) below, such Grantor shall have the right to exercise all voting rights or other rights relating to the Pledged Collateral owned by it for all purposes not inconsistent with this Agreement, the Credit Agreement or any other Loan Document; provided , however , that each Grantor agrees that it shall not exercise any such right for any purpose prohibited by the terms of, or if the result thereof could materially and adversely affect the rights inuring to a holder of the Pledged Collateral or the rights and remedies of any of the Secured Parties under, this Agreement or the Credit Agreement or any other Loan Document or the ability of the Secured Parties to exercise the same.

(ii)    Such Grantor will , to the extent legally permissible, permit the Collateral Agent or its nominee at any time after the occurrence and during the continuation of an Event of Default, without notice, to exercise all voting rights or other rights relating to the Pledged Collateral owned by it, including, without limitation, exchange, subscription or any other rights, privileges, or options pertaining to any Equity Interests or Investment Property constituting such Pledged Collateral as if it were the absolute owner thereof.

(iii)     Unless an Event of Default shall have occurred and be continuing, such Grantor shall be entitled to collect and receive for its own use all cash dividends and interest paid

in respect of the Pledged Collateral owned by it to the extent not in violation of the Credit Agreement. If an Event of Default shall occur and be continuing and the Collateral Agent shall give notice of its intent to exercise such rights to the relevant Grantor or Grantors, the Collateral Agent shall have the right to receive all such cash dividends, interest, payments and other Proceeds paid in respect of the Pledged Collateral.

5.7     Intellectual Property .

(a)        Such Grantor shall notify the Collateral Agent immediately if it knows or has reason to know that any application or registration relating to any material Patent, Trademark or Copyright (now or hereafter existing) may become abandoned or dedicated, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark any IP Filing Office, the United States Copyright Office any governmental office in such Grantor’s country of organization or any court, but excluding routine matters during the course of any prosecution of applications before the United States Patent and Trademark any IP Filing Office, the United States Copyright Office any successor office thereof or any similar authority or successor office thereof ) regarding such Grantor’s ownership of any material Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same.

(b)        Whenever such Grantor, either by itself or through any agent, employee, licensee or designee, shall (i) file an application for the registration of any Patent, Trademark or Copyright with the United States Patent and Trademark Office or the United States Copyright Office or any successor office thereof that constitutes Collateral with any IP Filing Office or any other governmental office in such Grantor’s country of organization or (ii) acquire any United States issued Patents or Patent applications, United States federally registered Trademarks (or Trademarks for which United States registration applications are pending) or United States registered (or applied for) Copyrights Intellectual Property that constitutes Collateral , such Grantor shall report such filing or acquisition to the Collateral Agent within 45 days after the end of each of the first three fiscal quarters of each fiscal year of such Grantor and within 90 days after the end of each fiscal year of such Grantor. Promptly after the provision of such reports, such Grantor shall execute and deliver to the Collateral Agent, and have recorded with the United States Patent and Trademark Office or the United States Copyright Office or any successor office thereof applicable IP Filing Office or the applicabl e governmental office in such Grantor’s country of organization, if different , one or more security agreements or short-form agreements, as applicable, as described in Section 4.1 of this Agreement and any and all other agreements, instruments, documents, and papers as the Collateral Agent may reasonably request to evidence the Collateral Agent’s and the Secured Parties’ first priority (or such other priority as required by the Intercreditor Agreement) security interest in any Copyright, Patent or Trademark and the goodwill of such Grantor relating thereto or represented thereby , but only to the extent that the same constitut e Collateral .

(c)        Such Grantor shall take all actions necessary to maintain and pursue each application, to obtain the relevant registration and to maintain the registration of each of its Patents, Trademarks and Copyrights (now or hereafter existing), including the filing of applications for renewal, affidavits of use, affidavits of noncontestability and opposition and interference and cancellation proceedings, unless such Grantor (in its reasonable business judgment) or the Collateral Agent shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of such Grantor’s business.

(d)        Such Grantor shall, unless it shall reasonably determine that such Patent, Trademark or Copyright is in no way material to the conduct of its business or operations, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement,

misappropriation or dilution and shall take such other actions as the Collateral Agent shall reasonably deem appropriate under the circumstances to protect such Patent, Trademark or Copyright. In the event that such Grantor institutes suit because any of its Patents, Trademarks or Copyrights constituting Collateral is infringed upon, or misappropriated or diluted by a third party, such Grantor shall comply with Section 5.8.

(e)        Notwithstanding the foregoing provisions of this Section 5.7 or elsewhere in this Agreement, nothing in this Agreement shall prevent any Grantor from abandoning or discontinuing the use or maintenance of any Intellectual Property that is immaterial to the conduct of its business, or from failing to take action to enforce license agreements or pursue actions against infringers or take any other actions with respect to such Intellectual Property, if such Grantor determines in its reasonable business judgment that such abandonment, discontinuance, or failure to take action is desirable in the conduct of its business.

5.8         Commercial Tort Claims . If such Grantor shall at any time hold or acquire a Commercial Tort Claim having a value in excess of $500,000, the Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor, including a summary description of such claim, and enter into an amendment to this Agreement, in the form of Exhibit F hereto, granting to the Collateral Agent a first priority (or such other priority required by any of the Intercreditor Agreements) security interest therein and in the proceeds thereof.

5.9         Letter-of-Credit Rights . If such Grantor is at any time a beneficiary under a letter of credit now or hereafter issued in favor of such Grantor with a value in excess of $500,000, such Grantor shall promptly notify the Collateral Agent thereof and, at the request and option of the Collateral Agent, such Grantor shall, pursuant to an agreement in form and substance reasonably satisfactory to the Collateral Agent, either (i) arrange for the issuer and any confirmer of such letter of credit to consent to an assignment to the Collateral Agent of the proceeds of any drawing under the letter of credit or (ii) arrange for the Collateral Agent to become the transferee beneficiary of the letter of credit, with the Collateral Agent agreeing, in each case, that the proceeds of any drawing under the letter of credit are to be paid to the applicable Grantor unless an Event of Default has occurred or is continuing.

5.10     [Reserved] .

5.11     [Reserved] .

5.12         No Interference . Such Grantor agrees that it will not interfere with any right, power and remedy of the Collateral Agent provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise, or the exercise or beginning of the exercise by the Collateral Agent of any one or more of such rights, powers or remedies.

5.13         Insurance . Such Grantor, at its own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with Section 5.07 of the Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor’s true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto, in each case, upon prior notice from the Collateral Agent to the Grantors of its intention to exercise such rights. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto,

the Collateral Agent may, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its sole discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 5.13, including reasonable attorneys’ fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Obligations secured hereby.

5.14       Change of Name; Location of Collateral; Place of Business . Such Grantor agrees promptly to notify the Collateral Agent in writing of any change (i) in its corporate name, (ii) in the location of its chief executive office, or (iii) in its such Grantor’s type of organization, identity or structure or (iv) in such Grantor’s jurisdiction of organization or incorporation . Such Grantor agrees not to effect or permit any change referred to in the preceding sentence unless written notice has been delivered to the Collateral Agent and all filings have been made under the Uniform Commercial Code UCC, PPSA or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority (or such other priority required by the Intercreditor Agreements) Lien upon all the Collateral. Such Grantor agrees promptly to notify the Collateral Agent if any material portion of the Collateral owned or held by such Grantor is damaged or destroyed.

5.15         Credit Agreement Covenants . Such Except to the extent prohibited by an Applicable Law, such Grantor shall take, or shall refrain from taking, as the case may be, each action that is necessary to be taken or not taken, as the case may be, so that no Default or Event of Default is caused by the failure to take such action or to refrain from taking such action by such Grantor or any of its Subsidiaries.

5.16       Delivery of the Pledged Equity .

(a)        Each Grantor agrees promptly to deliver or cause to be delivered to the Collateral Agent, for the benefit of the Secured Parties, any and all Pledged Securities if and to the extent such Pledged Securities are certificated ; provided that the Grantors shall only be required to deliver Pledged Securities evidencing Indebtedness to the extent the principal amount thereof exceeds $500,000.

(b)        Each Grantor will cause any Indebtedness for borrowed money having an aggregate principal amount in excess of $500,000 owed to such Grantor by any Person to be evidenced by a duly executed promissory note that is , if legally capable of being pledged, pledged and delivered to the Collateral Agent (or its agent or designee) , for the benefit of the Secured Parties, pursuant to the terms hereof.

(c)         Upon delivery to the Collateral Agent (or its agent or designee) , any Pledged Securities shall be accompanied by stock or security powers duly executed in blank or other instruments of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request (subject to the Collateral and Guarantee Requirement). Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities, which schedule shall be deemed to supplement Exhibit D and made a part thereof; provided that failure to supplement Exhibit D shall not affect the validity of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.

(d)         Notwithstanding anything to the contrary in this Section 5.16, if the actions described in this Section 5.16 have been taken in favor of the Senio r Junior Agent or the ABL Agent and, pursuant to the Term Intercreditor Agreement or the ABL/Term Intercreditor Agreement, as applicable,

the Senior Junior Agent or the ABL Agent, as applicable, acts as agent and gratuitous bailee for the Collateral Agent for the purpose of perfecting the Collateral Agent’s Liens hereunder, the requirement to take any sduch such action shall be deemed to be satisfied.

ARTICLE VI

EVENTS OF DEFAULT AND REMEDIES

6.1         Remedies . (a) Subject to the terms of the Term Intercreditor Agreement Agreements , upon the occurrence and during the occurrence and continuance of an Event of Default, the Collateral Agent may exercise any or all of the following rights and remedies:

(i)         those rights and remedies provided in this Agreement, the Credit Agreement, or any other Loan Document; provided that this Section 6.1(a) shall not be understood to limit any rights or remedies available to the Collateral Agent and the Secured Parties prior to an Event of Default;

(ii)         those rights and remedies available to a secured party under the UCC (whether or not the UCC applies to the affected Collateral), the PPSA (whether or not the PPSA applies to the affected Collateral) or under any other applicable law Applicable Law (including, without limitation, any law governing the exercise of a bank’s right of setoff or bankers’ lien) when a debtor is in default under a security agreement;

(iii)         without notice (except as specifically provided in Section 9.1 or elsewhere herein), demand or advertisement of any kind to any Grantor or any other Person, enter the premises of any Grantor where any Collateral is located (through self-help and without judicial process) to collect, receive, assemble, process, appropriate, sell, lease, assign, grant an option or options to purchase or otherwise dispose of, deliver, or realize upon, the Collateral or any part thereof in one or more parcels at public or private sale or sales (which sales may be adjourned or continued from time to time with or without notice and may take place at any Grantor’s premises or elsewhere), for cash, on credit or for future delivery without assumption of any credit risk, and upon such other terms as the Collateral Agent may deem commercially reasonable; and

(iv)         concurrently with written notice to the applicable Grantor, transfer and register in its name or in the name of its nominee the whole or any part of the Pledged Collateral, exchange certificates or instruments representing or evidencing Pledged Collateral for certificates or instruments of smaller or larger denominations, exercise the voting and all other rights as a holder with respect thereto, collect and receive all cash dividends, interest, principal and other distributions made thereon and otherwise act with respect to the Pledged Collateral as though the Collateral Agent was the outright owner thereof.

(b)         The Collateral Agent, on behalf of the Secured Parties, may comply with any applicable state , provincia l or federal law or other Applicable Law requirements in connection with a disposition of the Collateral and compliance will not be considered to adversely affect the commercial reasonableness of any sale of the Collateral.

(c)         The Collateral Agent shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase (including by credit bidding) for the benefit of the Collateral Agent and the Secured Parties, the whole or any part of the

Collateral so sold, free of any right of equity redemption, which equity redemption the each Grantor hereby expressly releases.

(d)        Until the Collateral Agent is able to effect a sale, lease, or other disposition of Collateral, the Collateral Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by the Collateral Agent. The Collateral Agent may, if it so elects, seek the appointment of a receiver , trustee or keeper to take possession of Collateral and to enforce any of the Collateral Agent’s remedies (for the benefit of the Collateral Agent and Secured Parties), with respect to such appointment without prior notice or hearing as to such appointment.

(e)        [Reserved].

(f)        Notwithstanding the foregoing, neither the Collateral Agent nor any other Secured Party shall be required to (i) make any demand upon, or pursue or exhaust any of its rights or remedies against, any Grantor, any other obligor, guarantor, pledgor or any other Person with respect to the payment of the Obligations or to pursue or exhaust any of its rights or remedies with respect to any Collateral therefor or any direct or indirect guarantee thereof, (ii) marshal the Collateral or any guarantee of the Obligations or to resort to the Collateral or any such guarantee in any particular order, or (iii) effect a public sale of any Collateral.

(g)        Each Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all the Pledged Collateral and may be compelled to resort to one or more private sales thereof in accordance with clause (a) above. Each Grantor also acknowledges that any private sale may result in prices and other terms less favorable to the seller than if such sale were a public sale and, notwithstanding such circumstances, agrees that any such private sale shall not be deemed to have been made in a commercially unreasonable manner solely by virtue of such sale being private. The Collateral Agent shall be under no obligation to delay a sale of any of the Pledged Collateral for the period of time necessary to permit any Grantor or the issuer of the Pledged Collateral to register such securities for public sale under the Securities Act of 1933, as amended, or under applicable state or provincial securities laws, or under other Applicable Law, even if the applicable Grantor and the issuer would agree to do so.

6.2         Grantor’s Obligations Upon Default . Upon the request of the Collateral Agent after the occurrence and during the occurrence and continuance of an Event of Default, each Grantor will:

(a)        assemble and make available to the Collateral Agent the Collateral and all books and records relating thereto at any place or places reasonably specified by the Collateral Agent, whether at a Grantor’s premises or elsewhere;

(b)        permit the Collateral Agent, by the Collateral Agent’s representatives and agents, to enter, occupy and use any premises where all or any part of the Collateral, or the books and records relating thereto, or both, are located, to take possession of all or any part of the Collateral or the books and records relating thereto, or both, to remove all or any part of the Collateral or the books and records relating thereto, or both, and to conduct sales of the Collateral, without any obligation to pay the Grantor for such use and occupancy;

(c)        prepare and file, or cause an issuer of Pledged Collateral to prepare and file, with the Securities and Exchange Commission or any other applicable government agency, registration statements, a prospectus and such other documentation in connection with the Pledged Collateral as the Collateral Agent may request, all in form and substance satisfactory to the Collateral Agent, and furnish

to the Collateral Agent, or cause an issuer of Pledged Collateral to furnish to the Collateral Agent, any information regarding the Pledged Collateral in such detail as the Collateral Agent may specify;

(d)        take, or cause an issuer of Pledged Collateral to take, any and all actions necessary to register or qualify the Pledged Collateral to enable the Collateral Agent to consummate a public sale or other disposition of the Pledged Collateral; and

(e)        at its own expense, cause the independent certified public accountants then engaged by each Grantor to prepare and deliver to the Collateral Agent, at any time, and from time to time, promptly upon the Collateral Agent’s request, the following reports with respect to the applicable Grantor: (i) a reconciliation of all Accounts; (ii) an aging of all Accounts; (iii) trial balances; and (iv) a test verification of such Accounts.

6.3         Grant of Intellectual Property License . For the exclusive purpose of enabling the Collateral Agent to exercise rights and remedies under this Agreement at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies at any time upon the occurrence and during the continuance of an Event of Default, each Grantor hereby (a) grants to the Collateral Agent a non-exclusive, irrevocable (until the termination of this Agreement) license (exercisable without payment of royalty or other compensation to any Grantor) to use, license or sublicense any rights in, to or under any or all Intellectual Property now owned or hereafter acquired by such Grantor, wherever such Intellectual Property may be located, and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof and (b) irrevocably agrees that the Collateral Agent may, upon the occurrence and during the continuation of an Event of Default, sell any of such Grantor’s Inventory directly to any Person, including, without limitation, Persons who have previously purchased such Grantor’s Inventory from any Grantor and in connection with any such sale or other enforcement of the Collateral Agent’s rights under this Agreement, may sell Inventory which bears any Trademark owned by or licensed to any Grantor and any Inventory that is covered by any Copyright owned by or licensed to any Grantor and the Collateral Agent may finish any work in process and affix any Trademark owned by or licensed to any Grantor and sell such Inventory as provided herein (it being understood that the Trademarks and Copyrights licensed to any such Grantor shall be subject to, and as permitted by, the terms of licenses governing such licensed Trademarks and Copyrights); provided, however, that nothing in this Section 6.3 shall require any Grantor to grant any license that is prohibited by any rule of law, statute or regulation, or is prohibited by, or constitutes a breach or default under or results in the termination of any contract, license, agreement, instrument or other document. With respect to Trademarks included in the foregoing license, such license shall be subject to the requirement that the quality of goods and services offered under the Trademarks by the Collateral Agent be substantially consistent with the quality of the goods and services offered thereunder by such Grantor prior to the Collateral Agent’s exercise of such license. Any license, sublicense or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the applicable Grantor notwithstanding any subsequent cure of an Event of Default. Upon the occurrence and during the continuance of an Event of Default, upon the Collateral Agent’s request, such Grantor will use its commercially reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to the Collateral Agent of any material License held by such Grantor and to enforce the security interests granted hereunder.

6.4         Application of Proceeds. The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows:

FIRST, to the payment of all reasonable costs and expenses incurred by the Collateral Agent (in its capacity as the Collateral Agent or Administrative Agent hereunder or under any

other Loan Document) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent (or the Administrative Agent) hereunder or under any other Loan Document on behalf of any Grantor and any other reasonable costs or expenses incurred by the Collateral Agent (or the Administrative Agent) in connection with the exercise of any right or remedy hereunder or under any other Loan Document;

SECOND, to the payment in full of the Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Obligations owed to them on the date of any such distribution); and

THIRD, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct.

The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof.

6.6         Proceeds to be Turned Over or Received by the Collateral Agent . In addition to the rights of the Collateral Agent and the Secured Parties specified in Section 7.2 with respect to payments of Accounts, if an Event of Default shall occur and be continuing, upon the request of the Collateral Agent, all Proceeds received by any Grantor consisting of cash, checks and other near-cash items shall be held by such Grantor in trust for the Collateral Agent and the Secured Parties, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, if required). All Proceeds received by the Collateral Agent hereunder shall be held by the Collateral Agent in a collateral account established by the Collateral Agent maintained under its sole dominion and control. All such Proceeds while held by the Collateral Agent in such a collateral account (or by such Grantor in trust for the Collateral Agent and the Secured Parties) shall continue to be held as collateral security for all the Obligations and shall not constitute payment thereof until applied as provided in the Intercreditor Agreements.

ARTICLE VII

ACCOUNT VERIFICATION; ATTORNEY IN FACT; PROXY

7.1         Account Verification . The Collateral Agent may at any time after the occurrence and during the occurrence and continuance of an Event of Default, in the Collateral Agent’s own name, in the name of a nominee of the Collateral Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of any such Grantor, parties to contracts with any such Grantor and obligors in respect of Instruments of any such Grantor to verify with such Persons, to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments, Chattel Paper, payment intangibles and/or other Receivables.

7.2         Authorization for Collateral Agent to Take Certain Action . (a) Each Grantor irrevocably authorizes the Collateral Agent at any time and from time to time in the sole discretion of the

Collateral Agent and appoints the Collateral Agent as its attorney in fact (i) to execute on behalf of such Grantor as debtor and to file financing statements necessary or desirable in the Collateral Agent’s sole discretion to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (ii) to endorse and collect any cash proceeds of the Collateral, (iii) to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Collateral as a financing statement and to file any other financing statement or amendment of a financing statement in such offices as the Collateral Agent in its sole discretion deems necessary or desirable to perfect and to maintain the perfection and priority of the Collateral Agent’s security interest in the Collateral, (iv) to contact and enter into one or more agreements with the issuers of uncertificated securities which are Pledged Collateral or with securities intermediaries holding Pledged Collateral as may be necessary or advisable to give the Collateral Agent Control over such Pledged Collateral, (v) to apply the proceeds of any Collateral received by the Collateral Agent to the Obligations as provided in the Credit Agreement, (vi) to discharge past due taxes, assessments, charges, fees or Liens on the Collateral (except for such Liens that are permitted by the Credit Agreement), (vii) to contact Account Debtors for any reason, (viii) to demand payment or enforce payment of the Receivables in the name of the Collateral Agent or such Grantor and to endorse any and all checks, drafts, and other instruments for the payment of money relating to the Receivables, (ix) to sign such Grantor’s name on any invoice or bill of lading relating to the Receivables, drafts against any Account Debtor of the Grantor, assignments and verifications of Receivables, (x) to exercise all of such Grantor’s rights and remedies with respect to the collection of the Receivables and any other Collateral, (xi) to settle, adjust, compromise, extend or renew the Receivables, (xii) to settle, adjust or compromise any legal proceedings brought to collect Receivables, (xiii) to prepare, file and sign such Grantor’s name on a proof of claim in bankruptcy or similar document against any Account Debtor of such Grantor, (xiv) to prepare, file and sign such Grantor’s name on any notice of Lien, assignment or satisfaction of Lien or similar document in connection with the Collateral, (xv) to change the address for delivery of mail addressed to such Grantor to such address as the Collateral Agent may designate and to receive, open and dispose of all mail addressed to such Grantor, and (xvi) to do all other acts and things necessary to carry out this Agreement; and such Grantor agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent in connection with any of the foregoing; provided that (a) this authorization shall not relieve such Grantor of any of its obligations under this Agreement or under the Credit Agreement and (b) the Collateral Agent shall exercise the foregoing rights in accordance with the Intercreditor Agreements, if effective and only after the occurrence and during the continuation of an Event of Default. All acts of said attorney or designee are hereby ratified and approved. The powers conferred on the Collateral Agent, for the benefit of the Collateral Agent and Lenders, under this Section 7.2 are solely to protect the Collateral Agent’s interests in the Collateral and shall not be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct.

7.3         Proxy .    EACH GRANTOR HEREBY IRREVOCABLY CONSTITUTES AND APPOINTS THE COLLATERAL AGENT AS ITS PROXY AND ATTORNEY-IN-FACT (AS SET FORTH IN SECTION 7.2 ABOVE) WITH RESPECT TO ITS PLEDGED COLLATERAL, INCLUDING THE RIGHT TO VOTE ANY OF THE PLEDGED COLLATERAL OR TO EXERCISE SUCH GRANTOR’S VOTING RIGHTS IN RESPECT OF THE PLEDGED COLLATERAL, WITH FULL POWER OF SUBSTITUTION TO DO SO AFTER THE OCCURRENCE AND DURING THE CONTINUATION OF AN EVENT OF DEFAULT. IN ADDITION TO THE RIGHT TO VOTE ANY

OF THE PLEDGED COLLATERAL, THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL INCLUDE THE RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A HOLDER OF ANY OF THE PLEDGED COLLATERAL WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS AND VOTING AT SUCH MEETINGS). SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF ANY OF THE PLEDGED COLLATERAL ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER OF THE PLEDGED COLLATERAL OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND DURING THE OCCURRENCE AND CONTINUANCE OF AN EVENT OF DEFAULT.

7.4         Nature of Appointment; Limitation of Duty . THE APPOINTMENT OF THE COLLATERAL AGENT AS PROXY AND ATTORNEY-IN-FACT IN THIS ARTICLE VII IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE UNTIL THE DATE ON WHICH THIS AGREEMENT IS TERMINATED IN ACCORDANCE WITH SECTION 9.23. NOTWITHSTANDING ANYTHING CONTAINED HEREIN, NEITHER THE COLLATERAL AGENT, NOR ANY SECURED PARTY, NOR ANY OF THEIR RESPECTIVE AFFILIATES, NOR ANY OF THEIR OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL HAVE ANY DUTY TO EXERCISE ANY RIGHT OR POWER GRANTED HEREUNDER OR OTHERWISE OR TO PRESERVE THE SAME AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE SOLELY TO ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION; PROVIDED THAT, IN NO EVENT SHALL THEY BE LIABLE FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

ARTICLE VIII

[Reserved].

ARTICLE IX

GENERAL PROVISIONS

9.1         Waivers . Each Grantor hereby waives notice of the time and place of any public sale or the time after which any private sale or other disposition of all or any part of the Collateral may be made. To the extent such notice may not be waived under applicable law Applicable Law , any notice made shall be deemed reasonable if sent to the Grantors, addressed as set forth in Article X, at least ten days prior to (i) the date of any such public sale or (ii) the time after which any such private sale or other disposition may be made. To the maximum extent permitted by applicable law Applicable Law , each Grantor waives all claims, damages, and demands against the Collateral Agent or any Secured Party arising out of the repossession, retention or sale of the Collateral, except such as arise solely out of the gross negligence or willful misconduct of the Collateral Agent or such Secured Party as finally determined by a court of competent jurisdiction. To the extent it may lawfully do so, each Grantor absolutely and irrevocably waives and relinquishes the benefit and advantage of, and covenants not to assert against the Collateral Agent or any Secured Party, any valuation, stay, appraisal, extension, moratorium, redemption or similar laws and any and all rights or defenses it may have as a surety now or hereafter existing which, but for this provision, might be applicable to the sale of any Collateral made under the judgment, order or decree of any court, or privately under the power of sale conferred by this Agreement, or otherwise. Except as otherwise specifically provided herein, each Grantor hereby waives

presentment, demand, protest or any notice (to the maximum extent permitted by applicable law Applicabl e Law ) of any kind in connection with this Agreement or any Collateral.

9.2         Limitation on Collateral Agent’s and Secured Parties’ Duty with Respect to the Collateral . The Collateral Agent shall have no obligation to clean-up or otherwise prepare the Collateral for sale. The Collateral Agent and each Secured Party shall use reasonable care with respect to the Collateral in its possession or under its control. Neither the Collateral Agent nor any Secured Party shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of the Collateral Agent or such Secured Party, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. To the extent that applicable law Applicable Law imposes duties on the Collateral Agent to exercise remedies in a commercially reasonable manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as such Grantor, for expressions of interest in acquiring all or any portion of the Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties, such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of other brokers, investment bankers, consultants and other professionals to assist the Collateral Agent in the collection or disposition of any of the Collateral. Each Grantor acknowledges that the purpose of this Section 9.2 is to provide non-exhaustive indications of what actions or omissions by the Collateral Agent would be commercially reasonable in the Collateral Agent’s exercise of remedies against the Collateral and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being indicated in this Section 9.2. Without limitation upon the foregoing, nothing contained in this Section 9.2 shall be construed to grant any rights to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable law Applicabl e Law in the absence of this Section 9.2.

9.3         Compromises and Collection of Collateral . The Grantors and the Collateral Agent recognize that setoffs, counterclaims, defenses and other claims may be asserted by obligors with respect to certain of the Receivables, that certain of the Receivables may be or become uncollectible in whole or in part and that the expense and probability of success in litigating a disputed Receivable may exceed the amount that reasonably may be expected to be recovered with respect to a Receivable. In view of the foregoing, each Grantor agrees that the Collateral Agent may at any time and from time to time, if an Event of Default has occurred and is continuing, compromise with the obligor on any Receivable, accept in full payment of any Receivable such amount as the Collateral Agent in its sole discretion shall determine or abandon any Receivable, and any such action by the Collateral Agent shall be commercially

reasonable so long as the Collateral Agent acts in good faith based on information known to it at the time it takes any such action.

9.4         Secured Party Performance of Debtor Obligations. Without having any obligation to do so, the Collateral Agent may perform or pay any obligation which any Grantor has agreed to perform or pay in this Agreement and the Grantors shall reimburse the Collateral Agent for any amounts paid by the Collateral Agent pursuant to this Section 9.4. The Grantors’ obligation to reimburse the Collateral Agent pursuant to the preceding sentence shall be an Obligation payable on demand.

9.5         Specific Performance of Certain Covenants . Each Grantor acknowledges and agrees that a breach of any of the covenants contained in Sections 5.1(d), 5.1(e), 5.4, 5.5, 5.6, 5.7, 5.8, 5.10, 5.11, 5.13, 5.14, 5.16, 6.2, or 9.7 or in Article VIII will cause irreparable injury to the Collateral Agent and the Secured Parties, that the Collateral Agent and the Secured Parties have no adequate remedy at law in respect of such breaches and therefore agrees, without limiting the right of the Collateral Agent or the Secured Parties to seek and obtain specific performance of other obligations of the Grantors contained in this Agreement, that the covenants of the Grantors contained in the Sections referred to in this Section 9.5 shall be specifically enforceable against the Grantors.

9.6         Dispositions Not Authorized . No Grantor is authorized to sell or otherwise dispose of the Collateral except as set forth in Section 5.1(d) and notwithstanding any course of dealing between any Grantor and the Collateral Agent or other conduct of the Collateral Agent, no authorization to sell, transfer or otherwise dispose of the Collateral (except as set forth in Section 5.1(d)) shall be binding upon the Collateral Agent or the Secured Parties unless such authorization is in writing signed by the Collateral Agent with the consent or at the direction of the Required Lenders.

9.7         No Waiver; Amendments; Cumulative Remedies . No delay or omission of the Collateral Agent or any Secured Party to exercise any right or remedy granted under this Agreement shall impair such right or remedy or be construed to be a waiver of any Default or an acquiescence therein, and any single or partial exercise of any such right or remedy shall not preclude any other or further exercise thereof or the exercise of any other right or remedy. No waiver, amendment or other variation of the terms, conditions or provisions of this Agreement whatsoever shall be valid unless in writing signed by the Collateral Agent with the concurrence or at the direction of the Lenders required under Section 10.02 of the Credit Agreement and then only to the extent in such writing specifically set forth. All rights and remedies contained in this Agreement or by law afforded shall be cumulative and all shall be available to the Collateral Agent and the Secured Parties until the Obligations have been paid in full.

9.8         Limitation by Law; Severability of Provisions . All rights, remedies and powers provided in this Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law or the Intercreditor Agreements (if effective), and all the provisions of this Agreement are intended to be subject to all applicable mandatory provisions of law and the Intercreditor Agreements (if effective) that may be controlling and to be limited to the extent necessary so that they shall not render this Agreement invalid, unenforceable or not entitled to be recorded or registered, in whole or in part. Any provision in any this Agreement that is held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or invalid without affecting the remaining provisions in that jurisdiction or the operation, enforceability, or validity of that provision in any other jurisdiction, and to this end the provisions of this Agreement are declared to be severable.

9.9         Reinstatement . This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for insolvency, administration, liquidation or reorganization, should any Grantor become insolvent or make an assignment for the

benefit of any creditor or creditors or should a receiver , administrator or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law Applicable Law , rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

9.10         Benefit of Agreement . The terms and provisions of this Agreement shall be binding upon and inure to the benefit of the Grantors, the Collateral Agent and the Secured Parties and their respective successors and assigns (including all persons who become bound as a debtor to this Agreement), except that no Grantor shall have the right to assign its rights or delegate its obligations under this Agreement or any interest herein, without the prior written consent of the Collateral Agent. No sales of participations, assignments, transfers, or other dispositions of any agreement governing the Obligations or any portion thereof or interest therein shall in any manner impair the Lien granted to the Collateral Agent, for the benefit of the Collateral Agent and the Secured Parties, hereunder or under any of the other Security Documents.

9.11         Survival of Representations . All representations and warranties of the Grantors contained in this Agreement shall survive the execution and delivery of this Agreement.

9.12         [Reserved] .

9.13         Headings . All headings used herein are for the purpose of reference only, are not part of this Agreement and are not to affect the construction of, or be taken into consideration in interpreting, this Agreement.

9.14         Security Interest Absolute . All rights of the Collateral Agent hereunder, the security interest granted hereunder and all obligations of the Grantors hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Credit Agreement, any other Loan Document, any agreement with respect to any of the Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Obligations or this Agreement.

9.15         Entire Agreement . This Agreement and the other Security Documents embody the entire agreement and understanding between the Grantors and the Collateral Agent relating to the Collateral and supersede all prior agreements and understandings between the Grantors and the Collateral Agent relating to the Collateral.

9.16              GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS .

(a)         UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT , THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE CONSTRUED

IN ACCORDANCE WITH AND GOVERNED BY THE LAW LAWS OF THE STATE OF NEW YORK , WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS . Each of the Grantors hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the courts of the State of New York, the courts of the United States District Court of the Southern District of New York, and any appellate court from any thereof (and, to the extent necessary to enforce the Secured Parties’ rights under the Loan Documents, courts where Collateral may be located or deemed to be located and any appellate court thereof), in any legal action or proceeding arising out of or relating to any Loan Document, or for recognition and enforcement of any judgment in respect thereof, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court; provided, that nothing contained herein or in any other Loan Document will prevent any Lender, the Administrative Agent or the Collateral Agent from bringing any action to enforce any award or judgment or exercise any right under the Security Documents or against any Collateral or any other property of any Grantor in any other forum in which jurisdiction can be established. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Collateral Agent, the Administrative Agent or the Lenders may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Grantors or their respective properties in the courts of any jurisdiction.

(c)        Each Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)        Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.1. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

(e)          Nothing herein shall limit the right of Collateral Agent or any Lender to bring proceedings against any Grantor (other than a Mexican Domiciled Grantor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Grantor). Nothing in this Agreement shall be deemed to preclude enforcement by the Collateral Agent of any judgment or order obtained in any forum or jurisdiction. Final judgment against a Grantor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Grantor is domiciled, by suit on the judgment. If any party incorporated under the laws of the Netherlands, is represented by an attorney (pursuant to a power of attorney governed by the laws of the Netherlands) in connection with the signing and/or execution of this Agreement or any other agreement, deed or document referred to in or made pursuant to this Agreement, it is hereby expressly acknowledged and accepted by the other parties to this Agreement that the existence and extent of the attorney’s authority and the effects of the attorney’s exercise or purported exercise of his or her authority shall be governed by the laws of the Netherlands,

(f)          Notwithstanding anything on the contrary set forth above, with respect to any action or proceeding arising out of or relating to this Agreement involving any party incorporated or organized under the laws of Mexico, each of the parties hereto (a) irrevocably submits to the exclusive

jurisdiction of the Supreme Court of the State of New York sitting in New York City and of the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (b) waives any other jurisdiction to which it may be entitled by reason of its present or future domicil e or otherwise.

9.17         WAIVER OF JURY TRIAL . TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY (WHICH AGENT HEREBY ALSO WAIVES) IN ANY LEGAL ACTION OR PROCEEDING OR DISPUTE OF ANY KIND RELATING IN ANY WAY TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. ANY LOAN DOCUMENTS, OBLIGATIONS OR COLLATERAL. EACH GRANTOR HAS REVIEWED THE FOREGOING WAIVER WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL AND OTHER RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT. Notwithstanding the above, each Mexican Domiciled Grantor further waives any right to any jurisdiction (other than as provided under Section  9.16 above) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Grantors, and waives any objection to those courts on the ground of venue or forum non conveniens .

9.18         Indemnity . Each Grantor jointly and severally agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Collateral Agent may incur in connection with (i) the administration of this Agreement (including the customary fees and charges of the Collateral Agent for any monitoring or audits conducted by it or on its behalf with respect to the Accounts or Inventory), (ii) the custody or preservation of, or the sale of, collection from or other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform or observe any of the provisions hereof.

Without limitation of its indemnification obligations under the other Loan Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related 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 Indemnitee or any of its Affiliates.

Any such amounts payable as provided hereunder shall be additional Obligations secured hereby and by the other Security Documents. The provisions of this Section 9.18 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any Lender. All amounts due under this Section 9.18 shall be payable on written demand therefor.

9.19         Counterparts . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts) , each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective when Agent has received counterparts bearing the signatures of all parties hereto. Agent may (but shall have no obligation to) accept any signature, contract formation or record-keeping through electronic means, which shall have the same legal validity and enforceability as manual or paper-based methods, to the fullest extent permitted by Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act.

9.20          Judgment Currency Conversion. If, for the purposes of enforcing judgment in any court or for any other purpose hereunder or in connection herewith, it is necessary to convert a sum due hereunder in any currency into another currency, such conversion should be carried out to the extent and in the manner provided in the Credit Agreement.

9.20 9.21         Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction) of this Agreement shall remain in full force and effect . The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

9.22               Intercreditor Agreements .

(a)        The terms of this Agreement, any Lien granted to the Collateral Agent (for the benefit of the Secured Parties) pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the Intercreditor Agreements (if effective). In the event of any inconsistency between the provisions of this Agreement and the Intercreditor Agreements (if effective), the provisions of the Intercreditor Agreements shall supersede the provisions of this Agreement.

(b)        Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, all rights and remedies of the Collateral Agent (and the Secured Parties) shall be subject to the terms of the ABL/Term Loan Intercreditor Agreement (if effective), and until the Discharge of ABL Obligations (as defined in the ABL/ Term Loan Intercreditor Agreement), (i) no Grantor shall be required hereunder or under any other Loan Document to take any action with respect to ABL Priority Collateral that is inconsistent with such Grantor’s obligations under the applicable ABL Loan Documents and (ii) any obligation of any Grantor hereunder or under any other Loan Document with respect to the delivery or control of any ABL Priority Collateral, bill of lading or other document, the giving of any notice to any bailee or other Person, the provision of voting rights or the obtaining of any consent of any Person shall be deemed to be satisfied if such Grantor complies with the requirements of the similar provision of the applicable ABL Loan Document. Until the Discharge of ABL Obligations (as defined in the ABL/Term Loan Intercreditor Agreement), the Collateral Agent may not require any

Grantor to take any action with respect to the creation, perfection or priority of its security interest in the ABL Priority Collateral, whether pursuant to the express terms hereof or of any other Loan Document or pursuant to the further assurances provisions hereof or any other Loan Document, unless the ABL Collateral Agent (as defined in the ABL/Term Loan Intercreditor Agreement) shall have required such Grantor to take similar action pursuant to the terms of the applicable Loan Documents, and delivery of any ABL Priority Collateral to the ABL Collateral Agent (as defined in the ABL/Term Loan Intercreditor Agreement) pursuant to the applicable ABL Loan Documents and the ABL/Term Loan Intercreditor Agreement shall satisfy any delivery requirement hereunder or under any other Loan Document.

(c)          Notwithstanding anything herein to the contrary, (i) the liens and security interests granted to the Collateral Agent pursuant to this Agreement are expressly subject and subordinate to the liens and security interests granted in favor of the Senior Secured Parties (as defined in the Term Intercreditor Agreement referred to below), including liens and security interests granted to Cortland Capital Market Services LLC, as collateral agent, pursuant to or in connection with the Credit Agreement dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time), among the Borrower, the lenders party thereto, and Cortland Capital Market Services LLC, as administrative agent and collateral agent and (ii) the exercise of any right or remedy by the Junior Representative hereunder is subject to the limitations and provisions of the Term Intercreditor Agreement dated as of February 20, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Term Intercreditor Agreement”), among the Borrower, the lenders party thereto and Cortland Capital Market Services LLC, as administrative agent and collateral agent. In the event of any conflict between the terms of the Term Intercreditor Agreement and the terms of this Agreement, the terms of the Term Intercreditor Agreement shall govern.

9.22 9.23          Additional Grantors . Each Subsidiary of a Borrower that is required to become a party to this Agreement pursuant to Section 5.12 of the Credit Agreement shall become a Grantor for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement in the form of Annex 1 hereto. Each Grantor expressly agrees that its obligations arising hereunder shall not be discharged, diminished or otherwise affected (a) by the addition or release of any other Grantor hereunder, (b) by any failure by the Borrower or any Grantor to cause any Subsidiary of the Borrower to become a Grantor hereunder or (c) by reason of the Collateral Agent’s or any of the other Secured Party’s actions in effecting, or failure to effect, any such joinder, or in releasing any Grantor hereunder, in each case, whether or not notice is given or consent is obtained from any Grantor. This Agreement shall be fully effective as to any Grantor that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Grantor hereunder.

9.23 9.24          Releases . (a) This Agreement and the security interest of the Secured Parties on the Collateral provided hereunder shall terminate when all the Obligations (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection as to which no claim has been made) have been paid in full and the Lenders have no further commitment to lend, at which time the Collateral Agent shall execute and deliver to the Grantors or the Grantors’ designee, at the Grantors’ expense, all Uniform Commercial Code termination statements and similar documents which the Grantors shall reasonably request from time to time to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section 9.23(a) shall be without recourse to or warranty by the Collateral Agent.

(b)        A Guarantor shall automatically be released from its obligations hereunder and the security interest of the Secured Parties in the Collateral of such Guarantor shall be automatically released in the event that all the Equity Interests of such Guarantor shall be sold, transferred or otherwise disposed of to a person that is not an Affiliate of the Borrower in accordance with the terms of the Credit

Agreement; provided that the Required Lenders (or, if required by the terms of the Credit Agreement, such greater percentage of the Lenders specified in the Credit Agreement) shall have consented to such sale, transfer or other disposition (to the extent required by the Credit Agreement) and the terms of such consent did not provide otherwise. The security interest of the Secured Parties in any Collateral that is sold, transferred or otherwise disposed of in accordance with this Agreement, the Credit Agreement and the other Loan Documents (including pursuant to a waiver or amendment of the terms thereof) shall automatically terminate and be released, and such Collateral shall be sold free and clear of the security interest created hereby. In connection with any of the foregoing, the Collateral Agent shall execute and deliver to the Grantors or the Grantors’ designee, at the Grantors’ expense, all Uniform Commercial Code termination statements and similar documents (including any such documents as may be reasonably necessary in connection with the entry into by any Grantor of a Specified Vendor Receivables Financing) that the Grantors shall reasonably request from time to time to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section 9.23(b) shall be without recourse to or warranty by the Collateral Agent.

9.24 9.25          Right of Setoff . If an Event of Default shall have occurred and be continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Secured Party to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor now or hereafter existing under this Agreement and the other Loan Documents held by such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Loan Document and although such obligations may be unmatured. The rights of each Secured Party under this Section 9.24 are in addition to other rights and remedies (including other rights of setoff) which such Secured Party may have.

9.26           Agreed Security Principles; Excluded Property. Notwithstanding anything to the contrary in this Agreement, (a)  the guaranty and grant of the security interest by the Grantors hereunder that are Foreign Domiciled Grantors and the Collateral of the Grantors hereunder that are Foreign Domiciled Grantors shall be subject to Agreed Security Principles and all representations, warranties, covenants and other provisions hereof shall be subject to the Agreed Security Principles, (b)  with respect to any property or asset of any Foreign Domiciled Grantor, in the event of any irreconcilable conflict between this Agreement and any other Security Document with respect to such property or asset, the terms of such other Security Document shall govern and control and (c)  to the extent any provision of the Credit Agreement, this Agreement or any of the other Security Documents excludes assets from the scope of the Collateral (including any Excluded Property), or from any requirement to take any action to perfect any security interest in favor of the Collateral Agent in the Collateral, the representations, warranties and covenants made by any relevant Grantor in this Agreement with respect to the creation, perfection or priority (as applicable) of the security interest granted in favor of the Agent shall be deemed not to apply to such excluded assets .

9.27               Parallel Debt Undertaking .

(a)           Purpose of the Parallel Debt Undertaking. The parallel debt undertaking created hereunder ( “ Parallel Debt Undertaking ” ) ( abstraktes Schuldanerkenntnis ) is constituted in order to secure the prompt and complete satisfaction of any Obligations. The Parallel Debt Undertaking shall also cover any future extension, prolongation, increase or novation of the Obligations .

(b)           Parallel Debt Undertaking. For the purposes of taking and ensuring the continuing validity of Liens under those Security Documents subject to the laws of (or to the extent affecting assets situated in) Germany, the Netherlands and such other jurisdictions as the Secured Parties

and the Grantors (each acting reasonably) agree, notwithstanding any contrary provision in this Agreement:

(i)      each Grantor undertakes (such undertakings, the “Parallel Obligations”) to pay to the Collateral Agent amounts equal to all present and future amounts owing by it to the Secured Parties under the Loan Documents (“Original Obligations”);

(ii)      the Agent shall have its own independent right to demand and receive payment of the Parallel Obligations;

(iii)      the Parallel Obligations shall, subject to subsection (iv)  below, not limit or affect the existence of the Original Obligations for which the Secured Parties shall have an independent right to demand payment ;

(iv)      notwithstanding subsections (ii)  and (iii) above, payment by a Grantor of its Parallel Obligations shall to the same extent decrease and be a good discharge of the corresponding Original Obligations owing to the relevant Secured Parties and payment by a Grantor of its Original Obligations to the relevant Secured Parties shall to the same extent decrease and be a good discharge of the Parallel Obligations owing by it to the Collateral Agent ;

(v)      the Parallel Obligations are owed to the Collateral Agent in its own name on behalf of itself and not as agent or representative of any other person nor as trustee and the Parallel Debt Security shall secure the Parallel Obligations so owing;

(vi)      without limiting or affecting the Agent ’ s right to protect, preserve or enforce its rights under any Security Document, the Agent undertakes to each Secured Parties not to exercise its rights in respect of the Parallel Obligations without the consent of the relevant Secured Parties; and

(vii)      the Agent shall distribute any amount so received to the Secured Parties in accordance with the terms of this Agreement and the Loan Agreement (subject, in each case, to the terms of the Intercreditor Agreement) as if such amounts had been received in respect of the Original Obligations .

(c)           Release (Sicherheitenfreigabe). Upon complete and irrevocable satisfaction of the Secured Obligations, the Agent shall as soon as reasonably practical at the cost and expense of the Grantors releas e th e Paralle l Deb t Undertaking.

ARTICLE X

NOTICES

10.1         Sending Notices . Any notice required or permitted to be given under this Agreement shall be sent in accordance with Section 10.01 of the Credit Agreement (with any notice to a Grantor (other than the Borrower) being sent care of the Borrower).

10.2         Change in Address for Notices . Each of the Grantors, the Collateral Agent and the Lenders may change the address for service of notice upon it by a notice in writing to the other parties.

ARTICLE XI

THE COLLATERAL AGENT

JPMorgan Chase Bank, N.A. has been appointed Collateral Agent for the Lenders hereunder pursuant to Article VIII of the Credit Agreement. It is expressly understood and agreed by the parties to this Agreement that any authority conferred upon the Collateral Agent hereunder is subject to the terms of the delegation of authority made by the Lenders to the Collateral Agent pursuant to the Credit Agreement, and that the Collateral Agent has agreed to act (and any successor Collateral Agent shall act) as such hereunder only on the express conditions contained in such Section 1 Article VIII . Any successor Collateral Agent appointed pursuant to Article VIII of the Credit Agreement shall be entitled to all the rights, interests and benefits of the Collateral Agent hereunder.

[Signature Page Follows]

IN WITNESS WHEREOF, the Grantors and the Collateral Agent have executed this Agreement as of the date first above written.

 

GRANTORS:
HORIZON GLOBAL CORPORATION, as the
    Borrower
By:                                                                      
  Name:
   Title:
[●], as a Guarantor
By:                                                                          
  Name:
   Title:

    

JPMORGAN CHASE BANK, N.A., as Collateral Agent

By:                                                                          
  Name:
   Title:

EXHIBIT A

GRANTORS; IDENTIFYING INFORMATION

 

 

Grantor

  

 

Jurisdiction of

Organization &

Type of

Organization

 

  

 

Organizational

Identification

Number

 

  

 

Federal Tax

Identification

Number

 

EXHIBIT B

COLLATERAL RECORD LOCATIONS

 

 

Grantor

 

  

 

Location of Chief Executive Office

 

  

 

Location of Books and Records

 

EXHIBIT C

INTELLECTUAL PROPERTY RIGHTS

PATENTS

PATENTS OWNED BY EACH GRANTOR

[For each Grantor state if no patents are owned. List in numerical order by Patent No./Patent Application No.]

U.S. Patent Registrations

 

     

Grantor

 

  

Patent Numbers

 

  

Issue Date

 

U.S. Patent Applications

 

     

Grantor

 

  

Patent Application No.

 

  

Filing Date

 

Non-U.S. Patent Registrations

 

       

Grantor

 

  

Country

 

  

Issue Date

 

  

Patent No.

 

Non-U.S. Patent Applications

 

       

Grantor

 

  

Country

 

  

Filing Date

 

  

Patent Application No.

 

Patent Licenses; Grantor as Licensor

U.S. Patents

 

         

Grantor/Licensor

  

Licensee Name

and Address

 

  

Date of License/ Sublicense

 

   Issue Date    Patent No.

U.S. Patent Applications

 

 

         

Grantor/Licensor

  

Licensee Name

and Address

 

  

Date of License/ Sublicense

 

   Date Filed    Application No.

Non-U.S. Patents

 

 

Grantor/Licensor    Country   

Licensee Name

and Address

 

   Date of License/ Sublicense   

Issue

Date

  

Non-U.S.

Patent No.

Non-U.S. Patent Applications

 

 

Grantor/Licensor    Country   

Licensee Name

and Address

 

   Date of License/ Sublicense   

Date

Filed

  

Application

No.

Patent; Licenses; Grantor as Licensee

U.S. Patents

 

         

Grantor/Licensee

  

Licensor Name

and Address

 

  

Date of

License/ Sublicense

 

   Issue Date    Patent No.

U.S. Patent Applications

 

         

Grantor/Licensee

  

Licensor Name

and Address

 

  

Date of

License/ Sublicense

 

   Date Filed    Application No.

Non-U.S. Patents

 

           

Grantor/Licensee

   Country   

Licensor Name

and Address

 

  

Date of License/    

Sublicense

 

  

Issue

Date

  

Non-U.S.

Patent No.

Non-U.S. Patent Applications

 

           

Grantor/Licensee

   Country   

Licensor Name

and Address

 

  

Date of License/    

Sublicense

 

  

Date

Filed

  

Application

No.

TRADEMARKS

OWNED TRADEMARK/TRADE NAMES

[For each Grantor state if no trademarks/trade names are owned. List in numerical order by trademark registration/application no.]

U.S. Trademark Registrations

 

       

Grantor

 

  

Mark

 

  

Reg. Date

 

  

Reg. No.

 

U.S. Trademark Applications

 

       

Grantor

 

  

Mark

 

  

Filing Date

 

  

Application No.

 

                

State Trademark Registrations

 

Grantor

 

 

State

 

  

Mark

 

  

Reg. Date

 

  

Reg. No.

 

   

    

              

State Trademark Applications

 

Grantor

 

 

State

 

  

Mark

 

  

Filing Date

 

  

Application No.

 

   

    

              

Non-U.S. Trademark Registrations

 

Grantor

 

  

Country

 

  

Mark

 

  

Reg. Date

 

  

Reg. No.

 

                     

Non-U.S. Trademark Applications

 

Grantor

 

  

Country

 

  

Mark

 

  

Date Filed

 

  

Application No.

 

                     

Trade Names

 

Grantor   

Country(s) Where Used

   Trade Name

Trademark Licenses; Grantor as Licensor

U.S. Trademarks

 

Grantor/Licensor

  

Licensee Name

and Address

  

Date of

License/Sublicense

   U.S. Mark    Reg. Date    Reg. No.
                          

U.S. Trademark Applications

 

Grantor/Licensor

   Country    Licensee Name and Address    Date of License/ Sublicense   

Date

Filed

  

Application

No.

                          

Non-U.S. Trademarks

 

Grantor/Licensor     

   Country      Licensee Name     and Address           Date of License/   Sublicense          Non-U.S. Mark       Reg. Date    Reg. No.
                               

Non-U.S. Trademark Applications

 

Grantor/Licensor     

   Country   

  Licensee Name  

and Address   

 

  

    Date of License/    

Sublicense

        Non-U.S. Mark              Date Filed       

Application

No.

D. Others

 

Grantor/Licensor

  

Licensee Name

and Address

  

Date of License/

Sublicense

  

Subject

Matter

Trademark Licenses; Grantor as Licensee

U.S. Trademarks

 

Grantor/Licensee         

 

Licensor Name

and Address

 

Date of Licensee/

Sublicensee

 

  U.S. Mark   Reg. Date   Reg. No.

U.S. Trademark Applications

 

Grantor/Licensee         

 

Licensor Name

and Address

 

Date of Licensee/

Sublicensee

 

  U.S. Mark  

Date

Filed

 

Application

No.

Non-U.S. Trademarks

 

Grantor/Licensee         

  Country  

Licensor Name

and Address

 

Date of License/

Sublicense

 

 

Non-U.S.

Mark

  Reg. Date   Reg. No.

Non-U.S. Trademark Applications

 

Grantor/Licensee     

  Country  

Licensor Name

and Address

 

 

Date of License/

Sublicense

 

Non-U.S.

Mark

  Date Filed  

Application

No.

D. Others

 

Grantor/Licensee         

 

Licensor Name

and Address

 

Date of License/

Sublicense

 

Subject

Matter

COPYRIGHTS

COPYRIGHTS OWNED BY EACH GRANTOR

[State for each Grantor if no copyrights are owned. List in numerical order by Registration No.]

U.S. Copyright Registrations

 

       

Grantor

 

Title

 

  Reg. No.   Author

Pending U.S. Copyright Applications for Registration

 

Grantor

 

Title

 

  Author   Class   Date Filed

Non-U.S. Copyright Registrations

 

Grantor

 

Title

 

  Author   Class   Date Filed

Non-U.S. Pending Copyright Applications for Registration

 

           

Grantor

 

  

Country

 

  

Title

 

  

Author

 

  

Class

 

  

Date Filed

 

[State for each Grantor whether such Grantor is not a party to a license/sublicense.]

Copyright Licenses; Grantor as Licensor

U.S. Copyrights

 

Grantor/Licensor             Licensee Name        

And Address         

   Date of Licensee/
         Sublicense          		   Title of        

U.S.        

Copyright         

 

 

   Author             

Non-U.S. Copyrights

 

Grantor/Licensor             Licensee Name        

And Address         

   Date of Licensee/        
Sublicense           		   Title of        

U.S.        

Copyright         

 

 

   Author             

Copyright Licenses; Grantor as Licensee

U.S. Copyrights

 

Grantor/Licensor             Licensee Name        

And Address         

   Date of Licensee/        
Sublicense           		   Title of        

U.S.        

Copyright         

 

 

   Author             

Non-U.S. Copyrights

 

Grantor/Licensor             Licensee Name        

And Address         

   Country            

Date of        

License/        

Sublicense         

  

Title of Non-U.S.        

Copyright         

 

 

EXHIBIT D

PLEDGED EQUITY

 

Owner         Issuer             Type of            Equity          Interests            

Issued and Outstanding          Equity Interests of each          class;         

Options, Warrants and         

Similar Rights         

 

 

  

Number (and          percentage)          of Pledged         

Equity Interests         

   Certificate No.          (if any)         

PLEDGED DEBT

 

   Grantor            Issuer/Borrower       

Original Amount; Principal

Amount Outstanding

   Date of Note           

EXHIBIT E

DEPOSIT ACCOUNTS

 

Grantor

  

Name of Institution and     

Address         

  

Pledged Account Name     

  

Pledged Account Number     

SECURITIES ACCOUNTS

 

Grantor

  

Name of Institution and     

  Address         

  

Pledged Account Name     

  

Pledged Account Number     

EXHIBIT F

AMENDMENT

This Amendment, dated                      ,      is delivered pursuant to [Section 5.4] [Section 5.8] of the Agreement referred to below. All defined terms herein shall have the meanings ascribed thereto or incorporated by reference in the Agreement. The undersigned hereby certifies that the representations and warranties in Article IV of the Agreement are and continue to be true and correct. The undersigned further agrees that this Amendment may be attached to that certain Term Loan Guarantee and Collateral Agreement, dated as of June 30, 2015, between the undersigned, as the Grantors, and JPMorgan Chase Bank, N.A., as the Collateral Agent (as amended, restated, amended and restatement, supplemented or otherwise modified from time to time prior to the date hereof, the “ Agreement ”) and that the Collateral listed on Schedule I to this Amendment shall be and become a part of the Collateral referred to in said Agreement and shall secure all Obligations referred to in the Agreement.

 

 

 

 

By:

   
Name:  

 

 
Title:  

 

 

SCHEDULE I TO AMENDMENT

STOCKS

 

Name of        

Grantor        

   Issuer            Certificate        
Number(s)          		   Number of        
Shares          		   Class of Stock            Percentage of        
Outstanding         
  Shares        
                          
                          
                          
                          

BONDS

 

Name of        

Grantor        

   Issuer            Number            Face Amount        Coupon Rate            Maturity        
                          
                          
                          
                          

GOVERNMENT SECURITIES

 

Name of        

Grantor        

   Issuer            Number            Type            Face Amount            Coupon Rate            Maturity        
                               
                               
                               
                               

OTHER SECURITIES OR OTHER INVESTMENT PROPERTY

(CERTIFICATED AND UNCERTIFICATED)

 

        Name of Grantor         

           Issuer                         Description of Collateral                 Percentage Ownership        
         Interest        
                
                
                
                

[ Add description of custody accounts or arrangements with securities intermediary, if applicable ]

COMMERCIAL TORT CLAIMS

 

Name of Grantor            Description of Claim                        Parties                 Case Number; Name of        
Court where Case was        

Filed    

                
                

Annex 1 to

Term Loan Guarantee and Collateral Agreement

ASSUMPTION AGREEMENT, dated as of          , 20      , made by                  (the “ Additional Grantor ”), in favor of JPMORGAN CHASE BANK, N.A., as Collateral Agent (in such capacity, the “ Collateral Agent ”) for the banks and other financial institutions or entities (the “ Lenders ”) parties to the Credit Agreement referred to below. All capitalized terms not defined herein shall have the meaning ascribed to them in such Credit Agreement.

W I T N E S S E T H :

WHEREAS, HORIZON GLOBAL CORPORATION (the “ Borrower ”), the Lenders, the Collateral Agent and the other agents party thereto have entered into a Term Loan Credit Agreement, dated as of June 30, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”);

WHEREAS, in connection with the Credit Agreement, the Borrower and certain of its Affiliates (other than the Additional Grantor) have entered into the Term Loan Guarantee and Collateral Agreement, dated as of June 30, 2015 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Guarantee and Collateral Agreement ”) in favor of the Collateral Agent for itself and for the benefit of the Secured Parties;

WHEREAS, the Credit Agreement requires the Additional Grantor to become a party to the Guarantee and Collateral Agreement; and

WHEREAS, the Additional Grantor has agreed to execute and deliver this Assumption Agreement in order to become a party to the Guarantee and Collateral Agreement;

NOW, THEREFORE, IT IS AGREED:

1.   Guarantee and Collateral Agreement . By executing and delivering this Assumption Agreement, the Additional Grantor, as provided in Section 9.22 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Guarantor and Grantor thereunder with the same force and effect as if originally named therein as a Guarantor and Grantor and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a Guarantor and Grantor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Exhibits A through E to the Guarantee and Collateral Agreement and hereby grants to the Collateral Agent, for the benefit of the Secured Parties, as collateral security for the prompt and complete payment or performance when due of the Obligations, a security interest in all of the Collateral (it being understood that, as provided in the Guarantee and Collateral Agreement, “Collateral” does not include any Excluded Property). The Additional Grantor hereby represents and warrants that each of the representations and warranties contained in Article IV of the Guarantee and Collateral Agreement with respect to itself is true and correct in all material respects (other than in the case of representations qualified by materiality, in which case such representations

shall be true and correct) on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. 1

2.     Governing Law . THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written.

 

  [ADDITIONAL GRANTOR]
  By:   Name:   
    Title:   

 

 

1 To the extent applicable, such Additional Grantor shall also provide an Amendment in the form of Exhibit F

Annex 1-A to

Assumption Agreement

Supplement to Exhibit A

Supplement to Exhibit B

Supplement to Exhibit C

Supplement to Exhibit D

Supplement to Exhibit E

ANNEX 1-A

See attached.

EXHIBIT A

GRANTORS; IDENTIFYING INFORMATION

 

       
Grantor   

Jurisdiction of

Organization &

Type of

Organization

 

  

Organizational
Identification

Number or

Equivalent

  

Federal Tax
Identification

Number or

Equivalent

       

Cequent UK Limited            

  

UK Company

limited by

shares

   8081641    98-1055665
       

Cequent Towing Products of

Canada Ltd.

  

Ontario

Corporation

   1635725    10444 5614
       

Cequent Nederland Holdings B.V.

  

Netherlands

Private Limited

Company

   820987384    98-1057837
       

Cequent Mexico Holdings B.V.

  

Netherlands

Private Limited

Company

   851710591    98-105656
       

Cequent Sales Company de

Mexico, S. de R.L. de C.V.

  

Mexico Limited

Liability

Company

   3672*2    CSM150325QK4
       

Cequent Electrical Products de

Mexico, S. de R.L. de C.V.

  

Mexico Limited

Liability

Company

   21743*3    CEP050203BUI

Exhibit A / Page 1

EXHIBIT C

PATENTS

[See attached]

Owner     Status     Title     Case Type       Country         App. No.         Filing Date     Patent No.             Issue Date  

Horizon Global Americas

Inc.

  Pending   BRACKET   DES   AU   201616204   04-Nov-2016        

Horizon Global Americas

Inc.

  Granted   HITCH STEP   DES   BR   BR302013004585-4   11-Sep-2013   BR302013004585-4   08-Dec-2015

Horizon Global Americas

Inc.

  Granted   HANDLE   DES   BR   3020130046893   13-Sep-2013   BR302013004689-3   21-Feb-2017

Horizon Global Americas

Inc.

  Granted   POINT OF
SALE
PACKAGING 		  DES   BR   BR302014000738-6   20-Feb-2014   BR302014000738-6   22-Apr-2015

Horizon Global Americas

Inc.

  Granted   GOOSENECK
COUPLER 		  DDV   CA   167890   06-Aug-2015   167890   21-Apr-2016

Horizon Global Americas

Inc.

  Granted   GOOSENECK
COUPLER 		  DDV   CA   167891   06-Aug-2015   167891   21-Apr-2016

Horizon Global Americas

Inc.

  Granted   GOOSENECK
COUPLER 		  DES   CA   163716   06-Aug-2015   163716   21-Apr-2016

Horizon Global Americas

Inc.

  Granted   LARGE
POWERED
JACK 		  DES   CA   165986   16-Dec-2015   165986   08-Nov-2016

Horizon Global Americas

Inc.

  Granted   LARGE
POWERED
JACK 		  DDV   CA   170066   16-Dec-2015   170066   08-Nov-2016

Horizon Global Americas

Inc.

  Granted   HITCH STEP   DES   CA   153007   06-Sep-2013   153007   13-Feb-2015

Horizon Global Americas

Inc.

  Granted   TRAILER JACK   DES   CA   152707   30-Aug-2013   152707   29-Jul-2014

Horizon Global Americas

Inc.

  Granted   TRAILER JACK   DDV   CA   157636   14-Jul-2014   157636   29-Jul-2014

Horizon Global Americas

Inc.

  Granted   HANDLE   DDV   CA   157788   06-Sep-2013   157788   03-Sep-2014

Horizon Global Americas

Inc.

  Granted   HANDLE   DES   CA   153006   06-Sep-2013   153006   03-Sep-2014

Horizon Global Americas

Inc.

  Granted   WING STYLE
SINGLE BIKE
RACK 		  DES   CA   153763   06-Nov-2013   153763   27-Jun-2014

Horizon Global Americas

Inc.

  Granted   ECONOMY
CAST
ALUMINUM
RATCHET
FOR 1” WIDE
WEBBING 		  DES   CA   153560   23-Oct-2013   153560   23-May-2014

Horizon Global Americas

Inc.

  Granted   HITCH STEP
WITH LIGHT 		  DES   CA   156196   17-Apr-2014   156196   13-Feb-2015

Horizon Global Americas

Inc.

  Granted   COUPLER
LOCK 		  DES   CA   155468   04-Mar-2014   155468   04-Mar-2015

Horizon Global Americas

Inc.

  Granted   COUPLER
LOCK 		  DDV   CA   160696   04-Mar-2014   160696   04-Mar-2015

Owner     Status     Title     Case Type       Country         App. No.         Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   CA   165751   19-Feb-2015   165751   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   CA   165752   19-Feb-2014   165752   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   CA   165753   19-Feb-2014   165753   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   CA   165754   19-Feb-2014   165754   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   CA   165755   19-Feb-2014   165755   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   CA   165756   19-Feb-2014   165756   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   CA   165757   19-Feb-2014   165757   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DES   CA   155208   19-Feb-2014   155208   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   CA   161046   18-Feb-2015   161046   21-Dec-2015

Horizon Global Americas

Inc.

  Granted   ACCESSORY ATTACHMENT DEVICE   DES   CA   158387   26-Aug-2014   158387   19-Aug-2015

Horizon Global Americas

Inc.

  Granted   ACCESSORY ATTACHMENT DEVICE   DDV   CA   163069   26-Aug-2014   163069   19-Aug-2015

Horizon Global Americas

Inc.

  Granted   ACCESSORY ATTACHMENT DEVICE   DDV   CA   163337   26-Aug-2014   163337   19-Aug-2015

Horizon Global Americas

Inc.

  Granted   ONE-PIECE RAMP   DDV   CA   163846   27-Nov-2014   163846   08-Sep-2015

Horizon Global Americas

Inc.

  Granted   ONE-PIECE RAMP   DES   CA   159768   27-Nov-2014   159768   08-Sep-2015

Horizon Global Americas

Inc.

  Granted   IMPLEMENT HANDLE CONNECTOR   DES   CA   159461   07-Nov-2014   159461   13-Jun-2016

Horizon Global Americas

Inc.

  Granted   IMPLEMENT HANDLE CONNECTOR   DDV   CA   163070   19-Jun-2015   163070   13-Jun-2016

Horizon Global Americas

Inc.

  Granted   IMPLEMENT HANDLE   DES   CA   159462   07-Nov-2014   159462   25-Sep-2015

Horizon Global Americas

Inc.

  Granted   RATCHET   DES   CA   173932   31-Mar-2017   173932   29-May-2018

Horizon Global Americas

Inc.

  Granted   RATCHET   DES   CA   179191   31-Mar-2017   179191   29-May-2018

Owner     Status     Title     Case Type       Country         App. No.         Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Granted   HITCH STEP   DES   CN   1330438745.2   12-Sep-2013   ZL201330438745.2   16-Apr-2014

Horizon Global Americas

Inc.

  Granted   TRAILER JACK   DES   CN   1330423982.1   03-Sep-2013   ZL201330423982.1   12-Mar-2014

Horizon Global Americas

Inc.

  Granted   HANDLE   DES   CN   1330440993.0   13-Sep-2013   ZL201330440993.0   12-Mar-2014

Horizon Global Americas

Inc.

  Granted   ECONOMY CAST ALUMINUM RATCHET FOR 1” WIDE WEBBING   DES   CN   1330515662.9   30-Oct-2013   ZL201330515662.9   07-May-2014

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DES   CN   201430031079.5   20-Feb-2014   ZL201430031079.5   30-Jul-2014

Horizon Global Americas

Inc.

  Granted   ONE-PIECE RAMP   DES   CN   201430489618.X   01-Dec-2014   ZL201430489618.X   28-Oct-2015

Horizon Global Americas

Inc.

  Granted   STORMPROOF SHIELDED CARGO BAG   DES   CN   201630043414.2   05-Feb-2016   ZL201630043414.2   30-Nov-2016

Horizon Global Americas

Inc.

  Granted   T-HANDLE RATCHET   DES   CN   201730111959.7   07-Apr-2017   ZL201730111959.7   19-Jan-2018

Horizon Global Americas

Inc.

  Granted   TRAILER JACK   DES   EM   002301093   02-Sep-2013   002301093   02-Sep-2013

Horizon Global Americas

Inc.

  Granted   HANDLE   DES   EM   001383293   13-Sep-2013   001383293   13-Sep-2013

Horizon Global Americas

Inc.

  Granted   HITCH STEP   DES   MX   2013/002711   11-Sep-2013   42694   16-Oct-2014

Horizon Global Americas

Inc.

  Granted   TRAILER JACK   DES   MX   2013/002571   29-Aug-2013   43336   30-Jan-2015

Horizon Global Americas

Inc.

  Granted   TRAILER JACK   DDV   MX   2015/000299   29-Jan-2015   44730   05-Aug-2015

Horizon Global Americas

Inc.

  Granted   HANDLE   DDV   MX   2014/001098   07-Apr-2014   43067   16-Dec-2014

Horizon Global Americas

Inc.

  Granted   WING STYLE SINGLE BIKE RACK   DES   MX   MX/f/2013/003414   07-Nov-2013   44680   29-Jul-2015

Horizon Global Americas

Inc.

  Granted   ECONOMY CAST ALUMINUM RATCHET FOR 1” WIDE WEBBING   DES   MX   2013/003305   24-Oct-2013   43947   06-May-2015

Horizon Global Americas

Inc.

  Pending   HITCH STEP WITH LIGHT   DES   MX   2014/001229   21-Apr-2014   43326    

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   MX   MX/f/2015/002956   01-Oct-2015   47683   24-Aug-2016

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   MX   MX/f/2014/000722   03-Mar-2014   45619   19-Nov-2015

Owner     Status     Title     Case Type       Country         App. No.           Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DES   MX   MX/f/2016/000443   20-Feb-2014   49331   31-Mar-2017

Horizon Global Americas

Inc.

  Pending   MODELO INDUSTRIAL DE EMBALAJE DE PUNTO DE VENTA   DES   MX   MX/f/2016/000443   12-Feb-2016        

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   MX   MX/f/2016/003959   20-Feb-2014   51679   08-Jan-2018

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DES   MX   2014/000591   20-Feb-2014   44806   19-Aug-2015

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   MX   2015/001257   16-Apr-2015   47047   09-Jun-2016

Horizon Global Americas

Inc.

  Granted   ACCESSORY ATTACHMENT DEVICE   DDV   MX   2016/000227   21-Jan-2016   48035   12-Oct-2016

Horizon Global Americas

Inc.

  Granted   ACCESSORY ATTACHMENT DEVICE   DES   MX   2014/002611   26-Aug-2014   46674   07-Apr-2016

Horizon Global Americas

Inc.

  Granted   ONE-PIECE RAMP   DDV   MX   MX/f/2017/004161   19-Dec-2017   53898   24-Oct-2018

Horizon Global Americas

Inc.

  Granted   ONE-PIECE RAMP   DES   MX   2014/003665   27-Nov-2014   51671   20-Dec-2017

Horizon Global Americas

Inc.

  Granted   FOLDING WRENCH   DES   MX   MX/f/2017/001474   25-May-2017   54425   17-Dec-2018

Horizon Global Americas

Inc.

  Granted   POD LIGHT FIXTURE   DES   MX   MX/f/2018/000114   11-Jan-2018   53995   07-Nov-2018

Horizon Global Americas

Inc.

  Pending   T-HANDLE RATCHET   DDV   MX   MX/f/2018/002387   16-Aug-2018        

Horizon Global Americas

Inc.

  Granted   T-HANDLE RATCHET   DES   MX   MX/f/2017/001009   06-Apr-2017   54212   21-Nov-2018

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   NZ   418566   04-Mar-2014   418566   04-Jun-2014

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   NZ   418565   04-Mar-2014   418565   04-Jun-2014

Horizon Global Americas

Inc.

  Pending   FOLDING WRENCH ASSEMBLY   ORD   AU   2016203808   08-Jun-2016        

Horizon Global Americas

Inc.

  Published   DUAL WIND JACK   PCT   BR   BR112015018513-4   28-Feb-2014        

Horizon Global Americas

Inc.

  Published   ONE-PIECE RAMP   ORD   BR   BR102014013323-2   02-Jun-2014        

Horizon Global Americas

Inc.

  Published   FOLDING WRENCH ASSEMBLY   ORD   BR   BR102016013191-0   08-Jun-2016        

Owner     Status     Title     Case Type       Country         App. No.         Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Published   DUAL WIND JACK   PCT   CA   2,897,213   28-Feb-2014        

Horizon Global Americas

Inc.

  Published   ONE-PIECE RAMP   ORD   CA   2,852,782   30-May-2014        

Horizon Global Americas

Inc.

  Published   FOLDING WRENCH ASSEMBLY   ORD   CA   2,932,382   08-Jun-2016        

Horizon Global Americas

Inc.

  Published   HITCH MOUNT ASSEMBLY   PCT   CN   201680033149.7   15-Apr-2016        

Horizon Global Americas

Inc.

  Pending   DUAL WIND JACK   DIV   MX   MX/a/2018/009146   26-Jul-2018        

Horizon Global Americas

Inc.

  Pending   DUAL WIND JACK   PCT   MX   2015/011136   28-Feb-2014        

Horizon Global Americas

Inc.

  Granted   ONE-PIECE RAMP   ORD   MX   2014/006576   02-Jun-2014   349880   16-Aug-2017

Horizon Global Americas

Inc.

  Pending   FOLDING WRENCH ASSEMBLY   ORD   MX   MX/a/2016/007428   07-Jun-2016        

Horizon Global Americas

Inc.

  Granted   ECONOMY CAST ALUMINUM RATCHET FOR 1” WIDE WEBBING   DES   AR   86.243   31-Oct-2013   86243   31-Oct-2013

Horizon Global Americas

Inc.

  Granted   UNIVERSAL JACK MOUNTS   DES   CA   170059   19-Aug-2016   170059   20-Oct-2017

Horizon Global Americas

Inc.

  Granted   JUMBO DEBRIS PAN   DES   CA   134721   26-Mar-2010   134721   08-Nov-2010

Horizon Global Americas

Inc.

  Granted   RATCHET   DES   CA   174087   07-Apr-2017   174087   29-May-2018

Horizon Global Americas

Inc.

  Granted   RATCHET   DDV   CA   178894   07-Apr-2017   178894   29-May-2018

Horizon Global Americas

Inc.

  Granted   RATCHET   DDV   CA   179194   07-Apr-2017   179194   29-May-2018

Horizon Global Americas

Inc.

  Granted   RATCHET   DDV   CA   179195   07-Apr-2017   179195   29-May-2018

Horizon Global Americas

Inc.

  Granted   RATCHET   DES   CA   179192   31-Mar-2017   179192   29-May-2018

Horizon Global Americas

Inc.

  Granted   RATCHET   DDV   CA   179193   07-Apr-2017   179193   29-May-2018

Horizon Global Americas

Inc.

  Granted   RATCHET   DES   CA   178893   31-Mar-2017   178893   29-May-2018

Horizon Global Americas

Inc.

  Granted   UNIVERSAL HITCH MOUNT BRACKET   DES   CN   201630046230.1   17-Feb-2016   ZL201630046230.1   23-Nov-2016

Owner   Status   Title   Case Type   Country   App. No.   Filing Date   Patent No.   Issue Date

Horizon Global Americas

Inc.

  Granted   UNIVERSAL JACK MOUNTS   DES   CN   201630475970.7   20-Sep-2016   ZL201630475970.7   07-Jul-2017

Horizon Global Americas

Inc.

  Granted   RATCHET   DES   CN   201730111878.7   07-Apr-2017   ZL201730111878.7   23-Jan-2018

Horizon Global Americas

Inc.

  Granted   UNIVERSAL JACK MOUNTS   DES   MX   MX/f/2016/002880   20-Sep-2016   53950   31-Oct-2018

Horizon Global Americas

Inc.

  Pending   RATCHET   DDV   MX   MX/f/2018/002388   16-Aug-2018        

Horizon Global Americas

Inc.

  Granted   RATCHET   DES   MX   MX/f/2017/001030   07-Apr-2017   54211   21-Nov-2018

Horizon Global Americas

Inc.

  Published   ARTICULATING COUPLER   ORD   CA   2,951,861   16-Dec-2016        

Horizon Global Americas

Inc.

  Published   ARTICULATING COUPLER   ORD   MX   2016/016759   15-Dec-2016        

Horizon Global Americas

Inc.

  Granted   ONE PIECE FORMED HITCH BALL MOUNT   PCT   AU   2012238262   09-Oct-2012   2012238262   25-Aug-2016

Horizon Global Americas

Inc.

  Granted   HITCH STEP ASSEMBLY   PCT   AU   2013202600   03-Apr-2013   2013202600   03-Apr-2013

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   AU   201410987   04-Mar-2014   AU 354445   20-Mar-2014

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   AU   201410986   04-Mar-2014   AU 354444   20-Mar-2014

Horizon Global Americas

Inc.

  Granted   HITCH ADAPTER   ORD   BR   BR302015005036-5   04-Nov-2015   BR302015005036-5   16-May-2017

Horizon Global Americas

Inc.

  Granted   HITCH ADAPTER   DDV   BR   BR322017000351-9   27-Jan-2017   BR322017000351-9   23-Jan-2018

Horizon Global Americas

Inc.

  Granted   HITCH ADAPTER   DDV   BR   BR322017000335-7   27-Jan-2017   BR322017000335-7   21-Nov-2017

Horizon Global Americas

Inc.

  Published   ONE PIECE FORMED HITCH BALL MOUNT   PCT   BR   BR112014008937-0   11-Oct-2012        

Horizon Global Americas

Inc.

  Published   HITCH STEP ASSEMBLY   PCT   BR   BR112014025467-2   03-Apr-2013        

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DES   BR   3020120067006   21-Dec-2012   BR302012006700-6   14-Nov-2017

Horizon Global Americas

Inc.

  Published   HITCH STEP   DDV   BR   BR322015000748-9   18-Feb-2015        

Horizon Global Americas

Inc.

  Pending   HITCH STEP WITH LIGHT   DES   BR   BR302014001815-9   24-Apr-2014        

Owner     Status     Title     Case Type       Country         App. No.         Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Granted   MOUNTING BRACKET FOR TRAILER WIRING CONNECTOR   ORD   CA   2,687,855   08-Dec-2009   2687855   02-May-2017

Horizon Global Americas

Inc.

  Granted   ADJUSTABLE TARP STRAP   ORD   CA   2,709,666   13-Jul-2010   2,709,666   30-May-2017

Horizon Global Americas

Inc.

  Granted   ADAPTER 7-WAY BLADE TO 7-WAY ROUND   DES   CA   143995   12-Jan-2012   143995   24-Oct-2012

Horizon Global Americas

Inc.

  Granted  

HITCH BALL MOUNT AND METHOD OF FORMING THE HITCH BALL

MOUNT

  PCT   CA   2,852,040   11-Oct-2012   2852040   13-Dec-2016

Horizon Global Americas

Inc.

  Granted   ANCHOR POINT CLAMPING SYSTEM   DES   CA   145306   16-Apr-2012   145306   29-Apr-2013

Horizon Global Americas

Inc.

  Granted   ANCHOR POINT CLAMPING SYSTEM   DDV   CA   149424   16-Apr-2012   149424   29-Apr-2013

Horizon Global Americas

Inc.

  Published   HITCH STEP ASSEMBLY   PCT   CA   2,870,277   03-Apr-2013        

Horizon Global Americas

Inc.

  Granted   RATCHET HANDLE ASSEMBLY   DES   CA   148409   08-Nov-2012   148409   15-Jul-2014

Horizon Global Americas

Inc.

  Granted   RATCHET HANDLE ASSEMBLY   DDV   CA   157402   26-Jun-2014   157402   15-Jul-2014

Horizon Global Americas

Inc.

  Granted   RATCHET HANDLE ASSEMBLY   DDV   CA   155223   19-Feb-2014   155223   15-Jul-2014

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DDV   CA   154493   21-Dec-2012   154493   16-Jan-2015

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DDV   CA   157406   27-Jun-2014   157406   16-Jan-2015

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DDV   CA   160177   21-Dec-2012   160177   16-Jan-2015

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DDV   CA   160178   21-Dec-2012   160178   16-Jan-2015

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DES   CA   149169   21-Dec-2012   149169   16-Jan-2015

Horizon Global Americas

Inc.

  Published   ADJUSTABLE FLEXIBLE CARGO STRAP   ORD   CA   2,819,914   03-Jul-2013        

Horizon Global Americas

Inc.

  Published   POINT OF SALE PACKAGING   PCT   CA   2,922,103   22-Aug-2014        

Horizon Global Americas

Inc.

  Granted   CARABINEER TOW HOOK   DES   CA   169735   29-Jul-2016   169735   24-May-2017

Horizon Global Americas

Inc.

  Granted   CARABINEER TOW HOOK   DDV   CA   172786   29-Jul-2016   172786   24-May-2017

Owner   Status   Title   Case Type   Country   App. No.   Filing Date   Patent No.   Issue Date

Horizon Global Americas

Inc.

  Granted   SELF ADJUSTING RAMP TOP PLATE   ORD   CN   1210388712.6   15-Oct-2012   ZL201210388712.6   21-Dec-2016

Horizon Global Americas

Inc.

  Granted   SELF ADJUSTING RAMP TOP PLATE   UTM   CN   201220525155.3   15-Oct-2012   1220525155.   04-Sep-2013

Horizon Global Americas

Inc.

  Granted   ONE PIECE FORMED HITCH BALL MOUNT   PCT   CN   201280060747.5   09-Jun-2014   ZL201280060747.5   19-Jan-2018

Horizon Global Americas

Inc.

  Granted   HITCH STEP ASSEMBLY   PCT   CN   201390000548.5   03-Apr-2013   ZL201390000548.5   23-Dec-2015

Horizon Global Americas

Inc.

  Granted   RATCHET HANDLE ASSEMBLY   DES   CN   1230541043.2   08-Nov-2012   1230541043.   11-Sep-2013

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DES   CN   1230649636.0   24-Dec-2012   1230649636   05-Jun-2013

Horizon Global Americas

Inc.

  Granted   ADJUSTABLE FLEXIBLE CARGO STRAP   ORD   CN   1310276553.5   03-Jul-2013   ZL 201310276553.5   28-Nov-2017

Horizon Global Americas

Inc.

  Published   DUAL WIND JACK   PCT   CN   201480011613.3   28-Feb-2014        

Horizon Global Americas

Inc.

  Published   POINT OF SALE PACKAGING   PCT   CN   201480058410.X   22-Aug-2014        

Horizon Global Americas

Inc.

  Granted   CARABINEER TOW HOOK   DES   CN   201630497529.9   10-Oct-2016   ZL201630497529.9   12-Apr-2017

Horizon Global Americas

Inc.

  Granted   ADAPTER 7-WAY BLADE TO 7-WAY ROUND   DES   MX   2012/000136   12-Jan-2012   37876   09-Jan-2013

Horizon Global Americas

Inc.

  Pending   ONE PIECE FORMED HITCH BALL MOUNT   DIV   MX   2016/010438   11-Aug-2016        

Horizon Global Americas

Inc.

  Granted   ONE PIECE FORMED HITCH BALL MOUNT   PCT   MX   2014/004431   11-Oct-2012   341242   12-Aug-2016

Horizon Global Americas

Inc.

  Granted   HITCH STEP ASSEMBLY   PCT   MX   2014/012220   03-Apr-2013   348157   31-May-2017

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DDV   MX   MX/f/2016/001128   12-Apr-2016   48389   23-Nov-2016

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DDV   MX   2015/001025   07-Jan-2013   46694   13-Apr-2016

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DDV   MX   2014/000582   20-Feb-2014   43684   27-Mar-2015

Horizon Global Americas

Inc.

  Granted   HITCH BALL MOUNT   DES   MX   2013/000012   07-Jan-2013   41101   21-Feb-2014

Horizon Global Americas

Inc.

  Pending   POINT OF SALE PACKAGING   PCT   MX   MX/a/2016/002316   22-Feb-2016        

Owner     Status     Title     Case Type       Country       App. No.       Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Pending   POINT OF SALE PACKAGING   DDV   MX   MX/f/2017/002819   25-Sep-2017        

Horizon Global Americas

Inc.

  Granted   POINT OF SALE PACKAGING   DDV   MX   MX/f/2017/000968   30-Mar-2017   53996   07-Nov-2018

Horizon Global Americas

Inc.

  Granted   CARABINEER TOW HOOK   DES   MX   2016/003937   07-Dec-2016   50917   29-Sep-2017

Horizon Global Americas

Inc.

  Granted   BASKET FOR A VEHICLE   DES   MX   MX/f/2017/000543   22-Feb-2017   53004   11-Jun-2018

Horizon Global Americas

Inc.

  Granted   ONE PIECE FORMED HITCH BALL MOUNT   PCT   NZ   621975   11-Oct-2012   621975   01-Jul-2016

Horizon Global Americas

Inc.

  Published   CURRENT SENSING ELECTRICAL CONVERTER   PCT   BR   BR112014009068-8   12-Oct-2012        

Horizon Global Americas

Inc.

  Published   CURRENT SENSING ELECTRICAL CONVERTER   PCT   CA   2,852,076   12-Oct-2012        

Horizon Global Americas

Inc.

  Published   CURRENT SENSING ELECTRICAL CONVERTER   PCT   EP   12839659.5   12-Oct-2012        

Horizon Global Americas

Inc.

  Granted   CURRENT SENSING ELECTRICAL CONVERTER   PCT   MX   2014/004430   12-Oct-2012   334595   05-Nov-2015

Horizon Global Americas

Inc.

  Granted   AUTO-ROLL FIFTH WHEEL HITCH   ORD   AU   2014201538   14-Mar-2014   2014201538   24-Aug-2017

Horizon Global Americas

Inc.

  Published   SNUG-TITE LOCKING HITCH PIN   ORD   BR   BR102014010878-5   06-May-2014        

Horizon Global Americas

Inc.

  Published   JACK WITH SELF-LOCATING ENGAGEMENT DEVICE   ORD   CA   2,873,590   05-Dec-2014        

Horizon Global Americas

Inc.

  Published   ADJUSTABLE CHANNEL TRAILER MOUNT   ORD   CA   2,891,729   15-May-2015        

Horizon Global Americas

Inc.

  Published   HEAVY DUTY 3” BALL ADJUSTABLE GOOSENECK COUPLER   ORD   CA   2,881,298   06-Feb-2015        

Horizon Global Americas

Inc.

  Published   LARGE POWERED JACK   ORD   CA   2,920,659   11-Feb-2016        

Horizon Global Americas

Inc.

  Published   STEADI-FLEX WEIGHT DISTRIBUTION SYSTEM   ORD   CA   2,845,715   13-Mar-2014        

Horizon Global Americas

Inc.

  Published   ANTI-RATTLE DEVICE WITH HITCH COVER   ORD   CA   2,863,945   17-Sep-2014        

Horizon Global Americas

Inc.

  Published   SAFETY CHAIN TIE DOWN APPARATUS   ORD   CA   2,866,442   02-Oct-2014        

Horizon Global Americas

Inc.

  Published   BIKE CARRIER   PCT   CN   201580060183.9   08-Sep-2015        

Owner     Status     Title     Case Type       Country       App. No.       Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Published   BIKE CARRIER   PCT   EP   15767385.6   08-Sep-2015        

Horizon Global Americas

Inc.

  Pending  

COMMUNICATION DEVICE, SYSTEM, AND METHOD FOR ACTIVE

CONTROL OF EXTERNAL VEHICLE COMPONENTS

  PCT   CN       17-Jan-2019        

Horizon Global Americas

Inc.

  Pending  

COMMUNICATION DEVICE, SYSTEM, AND METHOD FOR ACTIVE

CONTROL OF EXTERNAL VEHICLE COMPONENTS

  PCT   NZ   749090   07-Dec-2018        

Horizon Global Americas

Inc.

  Granted   2-SPEED WINCH ASSEMBLY   ORD   AU   2011202191   11-May-2011   2011202191   30-Apr-2015

Horizon Global Americas

Inc.

  Granted   INTEGRATED WINCHHEAD   DES   AU   14855/2010   11-Nov-2010   335,053   11-Feb-2011

Horizon Global Americas

Inc.

  Granted   INTEGRATED WINCHHEAD   DES   AU   10119/2011   11-Nov-2010   335,069   11-Feb-2011

Horizon Global Americas

Inc.

  Granted   INTEGRATED WINCHHEAD   DES   AU   10120/2011   11-Nov-2010   335,070   11-Feb-2011

Horizon Global Americas

Inc.

  Granted   GOOSENECK COUPLER WITH SLIDEABLE STYLE LOCKING PLATES   ORD   AU   2012200969   20-Feb-2012   2012200969   20-Feb-2015

Horizon Global Americas

Inc.

  Granted   GOOSENECK COUPLER WITH SLIDEABLE STYLE LOCKING PLATES   ORD   AU   2012200972   20-Feb-2012   2012200972   09-Feb-2015

Horizon Global Americas

Inc.

  Granted   LARGE POWERED JACK   DES   AU   201516917   18-Dec-2015   367,863   23-Mar-2016

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH ISOLATION SYSTEM   ORD   AU   2011205000   26-Jul-2011   2011205000   14-May-2015

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH RETENTION SYSTEM   ORD   AU   2011205003   26-Jul-2011   2011205003   07-May-2015

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   AU   11290/2011   27-Jan-2011   335,722   31-Mar-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH SKID PLATE COVER   DES   AU   11439/2011   27-Jan-2011   335,887   06-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH SKID PLATE COVER   DES   AU   11440/2011   27-Jan-2011   335,888   06-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH SKID PLATE COVER   DES   AU   10187/2011   27-Jan-2011   335,886   06-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH SKID PLATE COVER   ORD   AU   2011205001   26-Jul-2011   2011205001   07-May-2015

Horizon Global Americas

Inc.

  Granted   TRAILER SIGNAL CONVERTER   ORD   AU   2014224016   03-Mar-2014   2014224016   10-May-2018

Horizon Global Americas

Inc.

  Pending   TRAILER SIGNAL CONVERTER   DIV   AU   2018202829   24-Apr-2018        

Owner     Status     Title     Case Type       Country       App. No.       Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Published   TRUNK MOUNTED BIKE CARRIER   PCT   BR   1120120120891   19-Nov-2010        

Horizon Global Americas

Inc.

  Pending   BIKE RACK   PCT   BR   112012033654   01-Jul-2011        

Horizon Global Americas

Inc.

  Published   PIN BOX ASSEMBLY WITH GOOSENECK COUPLER   PCT   BR   BR112013008637-8   21-Sep-2011        

Horizon Global Americas

Inc.

  Published   CARGO ACCESSORY FOLDING MECHANISM   PCT   BR   BR112014002833-8   01-Aug-2012        

Horizon Global Americas

Inc.

  Pending   CARGO ACCESSORY FOLDING MECHANISM   DIV   BR   BR122015018573-4   03-Aug-2015        

Horizon Global Americas

Inc.

  Published   TRAILER SIGNAL CONVERTER   ORD   BR   102013011957   14-May-2013        

Horizon Global Americas

Inc.

  Published   TRAILER SIGNAL CONVERTER (2015)   ORD   BR   BR112015021241-7   03-Mar-2014        

Horizon Global Americas

Inc.

  Granted   GOOSENECK COUPLER   ORD   CA   2,762,449   16-Dec-2011   2762449   22-Jan-2019

Horizon Global Americas

Inc.

  Granted   INTEGRATED WINCHHEAD   DES   CA   137887   12-Nov-2010   137887   25-Jul-2011

Horizon Global Americas

Inc.

  Published   GOOSENECK COUPLER WITH SLIDEABLE STYLE LOCKING PLATES   DIV   CA   3,025,861   29-Nov-2018        

Horizon Global Americas

Inc.

  Granted   GOOSENECK COUPLER WITH SLIDEABLE STYLE LOCKING PLATES   ORD   CA   2,768,230   16-Feb-2012   2768230   15-Jan-2019

Horizon Global Americas

Inc.

  Published   UNIVERSAL MOUNTING BRACKET FOR AN ADAPTABLE HITCH COVER   ORD   CA   2,820,301   05-Jul-2013        

Horizon Global Americas

Inc.

  Published   TRAILER SIGNAL CONVERTER   ORD   CA   2,815,743   14-May-2013        

Horizon Global Americas

Inc.

  Published   TRAILER SIGNAL CONVERTER (2015)   ORD   CA   2,903,371   03-Mar-2014        

Horizon Global Americas

Inc.

  Granted   INTEGRATED WINCHHEAD   DES   CN   1030612530.4   11-Nov-2010   301793986S   11-Jan-2012

Horizon Global Americas

Inc.

  Published   WINCH ASSEMBLY   PCT   CN   201180066639.4   01-Dec-2011        

Horizon Global Americas

Inc.

  Pending   XLT JACK   DIV   CN   201811628701.4   28-Dec-2018        

Horizon Global Americas

Inc.

  Granted   XLT JACK   ORD   CN   201410273596.2   18-Jun-2014   104228784   15-Jan-2019

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   CN   1130015695.8   26-Jan-2011   301785050S   04-Jan-2012

Owner   Status   Title   Case Type   Country   App. No.   Filing Date   Patent No.   Issue Date

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH SKID PLATE COVER   DES   CN   1130015701.X   26-Jan-2011   301727919S   16-Nov-2011

Horizon Global Americas

Inc.

  Granted   TRAILER SIGNAL CONVERTER   ORD   MX   2013/005355   13-May-2013   332008   29-Jul-2015

Horizon Global Americas

Inc.

  Granted   TRAILER SIGNAL CONVERTER (2015)   PCT   MX   2015/011439   03-Mar-2014   347769   12-May-2017

Horizon Global Americas

Inc.

  Pending   TRAILER SIGNAL CONVERTER (2015)   DIV   MX   MX/a/2017/006199   11-May-2017        

Horizon Global Americas

Inc.

  Granted   TOWING ASSEMBLY   ORD   AU   2004205079   17-Aug-2004   2004205079   17-Feb-2011

Horizon Global Americas

Inc.

  Granted   TOWING ASSEMBLY   DIV   AU   2011200486   17-Aug-2004   2011200486   10-Oct-2013

Horizon Global Americas

Inc.

  Granted   ADJUSTABLE TOWING HITCH ASSEMBLY   ORD   CA   2,324,774   31-Oct-2000   2,324,774   15-Sep-2009

Horizon Global Americas

Inc.

  Granted   UNDERBED HITCH MOUNTING SYSTEM   ORD   CA   2,684,201   30-Oct-2009   2684201   25-Apr-2017

Horizon Global Americas

Inc.

  Granted   PIN BOX ASSEMBLY FOR TRAILER   EPP   DE   07754617.4   30-Mar-2007   2032422   14-Sep-2011

Horizon Global Americas

Inc.

  Granted   PIN BOX ASSEMBLY FOR TRAILER   PCT   EP   07754617.4   12-Jan-2009   2032422   14-Sep-2011
Horizon Global Americas Inc.   Granted   PIN BOX ASSEMBLY FOR TRAILER   EPP   FR   07754617.4   30-Mar-2007   2032422   14-Sep-2011

Horizon Global Americas

Inc.

  Granted   PIN BOX ASSEMBLY FOR TRAILER   EPP   GB   07754617.4   30-Mar-2007   2032422   14-Sep-2011

Horizon Global Americas

Inc.

  Granted   MULTI-SPEED DROP LEG MECHANICAL JACK FOR USE WITH A TRAILER   ORD   CA   2,531,272   21-Dec-2005   2,531,272   16-Mar-2010

Horizon Global Americas

Inc.

  Granted   GOOSENECK COUPLER HAVING AN ANTI-RATTLE DEVICE   ORD   CA   2,590,448   30-May-2007   2,590,448   26-Apr-2011

Horizon Global Americas

Inc.

  Granted   WINCH HANDLE   DES   EM   001072839   20-Jan-2009   001072839-1   20-Jan-2009

Horizon Global Americas

Inc.

  Granted   WINCH HANDLE   DES   EM   001072839   20-Jan-2009   001072839-2   20-Jan-2009

Horizon Global Americas

Inc.

  Granted   2 SPEED XLT (WINCH COVER)   DES   EM   001072847   20-Jan-2009   001072847-1   20-Jan-2009

Horizon Global Americas

Inc.

  Pending   CREEPER ASSEMBLY   PCT   AU   2017281899   15-Jan-2019        

Horizon Global Americas

Inc.

  Pending   ANTI-RATTLE DEVICE FOR TRAILER HITCH   PCT   AU       07-Feb-2019        

Owner   Status   Title   Case Type   Country   App. No.   Filing Date   Patent No.   Issue Date

Horizon Global Americas

Inc.

  Pending   CARGO CARRIER ASSEMBLY WITH HINGE MECHANISM   PCT   CN       08-Jan-2019        

Horizon Global Americas

Inc.

  Pending   VEHICLE ROOF BOX WITH CENTRAL, EXTERNAL ATTACHMENT SYSTEM   PCT   EP   17739814.6   09-Jan-2019        

Horizon Global Americas

Inc.

  Pending   UNDERBED HITCH MOUNTING SYSTEM   PCT   MX   MX/a/2018/013079   25-Oct-2018        

Horizon Global Americas

Inc.

  Pending   CREEPER ASSEMBLY   PCT   MX   MX/a/2019/000041   07-Jan-2019        

Horizon Global Americas

Inc.

  Granted   WINCH HOUSING   DES   AU   201810159   10-Jan-2018   201810159   05-Feb-2018

Horizon Global Americas

Inc.

  Pending   ROOF RACK CROSSBAR ASSEMBLY   PCT   AU   2016275156   13-Jun-2016        

Horizon Global Americas

Inc.

  Pending  

COMMUNICATION DEVICE, SYSTEM, AND METHOD FOR ACTIVE

CONTROL OF EXTERNAL VEHICLE COMPONENTS

  PCT   AU   2017268129   06-Dec-2018        

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DDV   AU   201811853   27-Mar-2018   201811853   27-Apr-2018

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   AU   201810444   29-Jan-2018   201810444   27-Mar-2018

Horizon Global Americas

Inc.

  Granted   POD LIGHT FIXTURE   DES   AU   201715278   05-Sep-2017   2017 15 278   04-Dec-2017

Horizon Global Americas

Inc.

  Granted   POD LIGHT FIXTURE   DDV   AU   201717379   04-Dec-2017   2017 17 379   03-Jan-2018

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   AU   201717337   30-Nov-2017   201717337   30-Nov-2017

Horizon Global Americas

Inc.

  Granted   WINCH HOUSING   DES   CA   175082   26-May-2017   175082   19-Feb-2018

Horizon Global Americas

Inc.

  Granted   WINCH HOUSING   DES   CA   179200   26-May-2017   179200   19-Feb-2018

Horizon Global Americas

Inc.

  Granted   WINCH HOUSING   DES   CA   179201   26-May-2017   179201   19-Feb-2018

Horizon Global Americas

Inc.

  Granted  

HITCH BALL MOUNT AND METHOD OF FORMING THE HITCH BALL

MOUNT

  DIV   CA   2,946,979   11-Oct-2012   2,946,979   11-Jun-2018

Horizon Global Americas

Inc.

  Granted   FOLDING WRENCH   DES   CA   175083   26-May-2017   175083   24-Apr-2018

Horizon Global Americas

Inc.

  Pending   POD LIGHT FIXTURE   DES   CA   177145   19-Sep-2017        

Horizon Global Americas

Inc.

  Granted   POD LIGHT FIXTURE   DDV   CA   182019   21-Jun-2018   182019   05-Dec-2018

Owner     Status     Title     Case Type       Country       App. No.       Filing Date         Patent No.         Issue Date  

Horizon Global Americas

Inc.

  Granted   ORB LIGHT FIXTURE   DES   CA   179196   28-Apr-2017   179196   05-Mar-2018

Horizon Global Americas

Inc.

  Granted   ORB LIGHT FIXTURE   DES   CA   179197   28-Apr-2017   179197   05-Mar-2018

Horizon Global Americas

Inc.

  Granted   ORB LIGHT FIXTURE   DES   CA   179198   28-Apr-2017   179198   05-Mar-2018

Horizon Global Americas

Inc.

  Granted   ORB LIGHT FIXTURE   DES   CA   179199   28-Apr-2017   179199   05-Mar-2018

Horizon Global Americas

Inc.

  Granted   ORB LIGHT FIXTURE   DES   CA   174510   28-Apr-2017   174510   05-Mar-2018

Horizon Global Americas

Inc.

  Granted   LOADING RAMP   DES   CA   175221   05-Jun-2017   175221   27-Apr-2018

Horizon Global Americas

Inc.

  Granted   LOADING RAMP   DDV   CA   180426   05-Jun-2017   180426   27-Apr-2018

Horizon Global Americas

Inc.

  Pending   COUPLER LOCK   DES   CA   178438   30-Nov-2017        

Horizon Global Americas

Inc.

  Pending   PACKAGING WITH ENGAGING DEVICE   DES   CA   178895   22-Dec-2017        

Horizon Global Americas

Inc.

  Pending   PACKAGING WITH ENGAGING DEVICE   DDV   CA   185007   30-Nov-2018        

Horizon Global Americas

Inc.

  Pending   RETRACTABLE TOW STRAP REEL   DES   CA   178896   22-Dec-2017        

Horizon Global Americas

Inc.

  Pending   RETRACTABLE TOW STRAP CASING   DES   CA   178897   22-Dec-2017        

Horizon Global Americas

Inc.

  Pending   ROTATING HITCH ASSEMBLY   DES   CA   179886   21-Feb-2018        

Horizon Global Americas

Inc.

  Pending   ROTATING HITCH ASSEMBLY   DES   CA       23-Jan-2019        

Horizon Global Americas

Inc.

  Pending   CLEVIS AND HITCH BALL MOUNT ASSEMBLY   DES   CA   179880   21-Feb-2018        

Horizon Global Americas

Inc.

  Pending   COMBINED CLEVIS AND HITCH BALL MOUNT ASSEMBLY   DDV   CA       31-Jan-2019        

Horizon Global Americas

Inc.

  Pending   HOOK AND SHACKLE MOUNT ASSEMBLY   DES   CA   179881   21-Feb-2018        

Horizon Global Americas

Inc.

  Pending   ADJUSTABLE BALL AND CLEVIS MOUNT ASSEMBLY   DES   CA   179882   21-Feb-2018        

Horizon Global Americas

Inc.

  Pending   COMBINED ADJUSTABLE BALL AND CLEVIS MOUNT ASSEMBLY   DDV   CA       31-Jan-2019        

Owner   Status   Title   Case Type   Country   App. No.   Filing Date   Patent No.   Issue Date

Horizon Global Americas

Inc.

  Pending   TACTICAL PIN   DES   CA   179884   21-Feb-2018        

Horizon Global Americas

Inc.

  Pending   HITCH BALL   DES   CA   179885   21-Feb-2018        

Horizon Global Americas

Inc.

  Pending   HITCH BALL   DDV   CA       31-Jan-2019        

Horizon Global Americas

Inc.

  Granted   CLEVIS SLEEVE   DES   CA   179883   21-Feb-2018   179883   07-Jan-2019

Horizon Global Americas

Inc.

  Granted   FOLDING WRENCH   DES   CN   201730215200.3   31-May-2017   ZL 201730215200.3   01-May-2018

Horizon Global Americas

Inc.

  Granted   POD LIGHT FIXTURE   DES   CN   201730579090.9   22-Nov-2017   ZL 201730579090.9   05-Jun-2018

Horizon Global Americas

Inc.

  Granted   LIGHT FIXTURE   DES   CN   201730157068.5   03-May-2017   ZL201730157068.5   13-Feb-2018

Horizon Global Americas

Inc.

  Granted   RAMP WITH TREADS   DES   CN   201730223690.1   05-Jun-2017   ZL 201730223690.1   01-May-2018

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   CN   201730603424.1   30-Nov-2017   ZL 201730603424.1   02-Oct-2018

Horizon Global Americas

Inc.

  Granted   PACKAGING WITH ENGAGING DEVICE   DES   CN   201730662859.3   22-Dec-2017   ZL201730662859.3   01-Jan-2019

Horizon Global Americas

Inc.

  Granted   PACKAGING WITH ENGAGING DEVICE   DDV   CN   201830506320.3   10-Sep-2018   ZL 201830506320.3   01-Jan-2019

Horizon Global Americas

Inc.

  Pending   RETRACTABLE TOW STRAP REEL   DES   CN   2017306626333   22-Dec-2017        

Horizon Global Americas

Inc.

  Granted   RETRACTABLE TOW STRAP CASING   DES   CN   201730661959.4   22-Dec-2017   ZL 201730661959.4   18-Dec-2018

Horizon Global Americas

Inc.

  Pending   HITCH WITH KNURLED TONGUE ASSEMBLY   DES   CN   201830352343.3   03-Jul-2018        

Horizon Global Americas

Inc.

  Pending   CARRYING HANDLE FOR JACK   DES   CN   201830460986.X   20-Aug-2018        

Horizon Global Americas

Inc.

  Granted   WINCH HOUSING   DES   EM   004660306-0001   10-Jan-2018   004660306-0001   10-Jan-2018

Horizon Global Americas

Inc.

  Granted   WINCH HOUSING   DES   EM   004660306-0002   10-Jan-2018   004660306-0002   10-Jan-2018

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   EM   001811431-0003   26-Jan-2011   001811431   04-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   EM   001811431-0004   26-Jan-2011   001811431   04-Apr-2011

Owner   Status   Title   Case Type   Country   App. No.   Filing Date   Patent No.   Issue Date

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   EM   001811431-0005   26-Jan-2011   001811431   04-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   EM   001811431-0006   26-Jan-2011   001811431   04-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   EM   001811431-0007   26-Jan-2011   001811431   04-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   EM   001811431-0002   26-Jan-2011   001811431   04-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH SKID PLATE COVER   DES   EM   001811431-0001   26-Jan-2011   001811431   04-Apr-2011

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   EM   004684272-0002   29-Jan-2018   004684272-0002   29-Jan-2018

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   EM   004684272-0001   29-Jan-2018   004684272-0001   29-Jan-2018

Horizon Global Americas

Inc.

  Granted   COUPLING FOR VEHICLE   DES   EM   005268570   15-May-2018   005268570-0001   15-May-2018

Horizon Global Americas

Inc.

  Pending  

COMMUNICATION DEVICE, SYSTEM, AND METHOD FOR ACTIVE

CONTROL OF EXTERNAL VEHICLE COMPONENTS

  PCT   EP   17725064.4   20-Nov-2018        

Horizon Global Americas

Inc.

  Pending   LIGHT FIXTURE ASSEMBLY FOR CREEPER ASSEMBLY   PCT   EP   17735736.5   09-Jan-2019        

Horizon Global Americas

Inc.

  Pending   ANTI-RATTLE DEVICE FOR TRAILER HITCH   PCT   EP   17840035.4   12-Feb-2019        

Horizon Global Americas

Inc.

  Published   LOAD SUPPORT SYSTEM FOR VEHICLE ROOF (WITTER)   PCT   EP   16860741.4   07-May-2018        

Horizon Global Americas

Inc.

  Pending   ORB LIGHT FIXTURE   DES   MX   MX/f/2017/001261   02-May-2017        

Horizon Global Americas

Inc.

  Granted   RAMP WITH TREADS   DES   MX   MX/f/2017/001533   05-Jun-2017   54426   17-Dec-2018

Horizon Global Americas

Inc.

  Pending   RAMP WITH TREADS   DDV   MX   MX/f/2018/002402   16-Aug-2018        

Horizon Global Americas

Inc.

  Pending   COUPLER LOCK   DES   MX   MX/f/2017/003738   29-Nov-2017        

Horizon Global Americas

Inc.

  Pending   PACKAGING WITH ENGAGING DEVICE   DES   MX   MX/f/2017/004221   20-Dec-2017        

Horizon Global Americas

Inc.

  Pending   RETRACTABLE TOW STRAP REEL   DES   MX   MX/f/2017/004222   20-Dec-2017        

Horizon Global Americas

Inc.

  Pending   RETRACTABLE TOW STRAP CASING   DES   MX   MX/f/2017/004220   20-Dec-2017        

Owner   Status   Title   Case Type   Country   App. No.   Filing Date   Patent No.   Issue Date

Horizon Global Americas

Inc.

  Granted   WINCH HOUSING   DES   NZ   423917   10-Jan-2018   423917   28-Feb-2018

Horizon Global Americas

Inc.

  Pending   ROOF RACK CROSSBAR ASSEMBLY   PCT   NZ   739034   13-Jun-2016        

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DDV   NZ   424003   29-Jan-2018   424003   28-Feb-2018

Horizon Global Americas

Inc.

  Granted   FIFTH WHEEL HITCH   DES   NZ   424002   29-Jan-2018   424002   28-Feb-2018

Horizon Global Americas

Inc.

  Granted   POD LIGHT FIXTURE   DES   NZ   423,447   05-Sep-2017   423,447   13-Jul-2017

Horizon Global Americas

Inc.

  Granted   POD LIGHT FIXTURE   DDV   NZ   424,589   19-Jun-2018   424,589   13-Jul-2017

Horizon Global Americas

Inc.

  Granted   COUPLER LOCK   DES   NZ   423781   30-Nov-2017   423781   01-Feb-2018
HORIZON GLOBAL CORP   Pending   LOAD SUPPORT SYSTEM FOR VEHICLE ROOF (WITTER)   PCT   AU   2016344069   22-May-2018        
HORIZON GLOBAL CORP   Pending   LOAD SUPPORT SYSTEM FOR VEHICLE ROOF (WITTER)   PCT   NZ   742795            

Horizon Global Americas

Inc.

  Published   XLT JACK   ORD   CA   2,854,616   17-Jun-2014        

Horizon Global Americas

Inc.

  Granted   LOCKING HITCH BALL   DES   FR   971223   27-Feb-1997   971223   27-Feb-1997

TRADEMARKS

[See attached].

Owner   Status   Trademark   Country   App. No.   Filing Date   Reg. No.   Reg. Date

Horizon Global Americas Inc.

 

Registered

  CARBON FORGED  

BR

  908390700   03-Oct-2014   908390700  

11-Apr-2017

Horizon Global Americas Inc.

 

Registered

  CARBON FORGED  

CA

  1696194   01-Oct-2014   TMA960045  

12-Jan-2017

Horizon Global Americas Inc.

 

Registered

  FAT STRAP  

CA

  1715297   13-Feb-2015   TMA941310  

20-Jun-2016

Horizon Global Americas Inc.

 

Registered

  FAT STRAP  

CN

  16382055   13-Feb-2015   16382055  

21-Apr-2016

Horizon Global Americas Inc.

 

Registered

  FAT STRAP  

MX

  1577566   12-Feb-2015   1636867  

09-May-2016

Horizon Global Americas Inc.

 

Registered

  HIGHLAND  

TW

  97051884   10-Nov-2008   1450764  

16-Jan-2011

Horizon Global Americas Inc.

 

Registered

  HIGHLAND (in Chinese Characters)  

TW

  97051889   10-Nov-2008   1433985  

01-Oct-2010

Horizon Global Americas Inc.

 

Registered

  IFIT  

IN

  2349169   15-Jun-2012   2349169  

22-Nov-2016

Horizon Global Americas Inc.

 

Registered

  ROLA (in Chinese Characters)  

TW

  97051891   10-Nov-2008   1393417  

01-Jan-2010

Horizon Global Americas Inc.

 

Registered

  WASHDROPS  

BR

  909236399   10-Apr-2015   909236399  

14-Nov-2017

Horizon Global Americas Inc.

 

Registered

  AQUA-CLEAR  

MX

  1218666   10-Oct-2011   1272272  

07-Mar-2012

Horizon Global Americas Inc.

 

Registered

  CARBON FORGED  

MX

  1532760   30-Sep-2014   1594357  

30-Nov-2015

Horizon Global Americas Inc.

 

Registered

  FROG Design  

CN

  10272414   06-Dec-2011   10272414  

14-Feb-2013

Horizon Global Americas Inc.

 

Registered

  HIGHLAND  

TW

  100005941   01-Feb-2011   1506064  

16-Feb-2012

Horizon Global Americas Inc.

 

Registered

  HIGHLAND  

EM

  10057412   17-Jun-2011   10057412  

20-Dec-2011

Horizon Global Americas Inc.

 

Registered

  HIGHLAND  

IN

  2300800   16-Mar-2012   2300800  

16-Mar-2012

Horizon Global Americas Inc.

 

Registered

  HIGHLAND  

CN

  7069975   21-Nov-2008   7069975  

14-Sep-2010

Horizon Global Americas Inc.

 

Registered

  HIGHLAND  

CN

  7069976   21-Nov-2008   7069976  

07-Jul-2010

Horizon Global Americas Inc.

 

Registered

  HIGHLAND  

CN

  7069979   21-Nov-2008   7069979  

28-Dec-2010

Horizon Global Americas Inc.

 

Registered

  HIGHLAND (in Chinese Characters)  

CN

  7069973   21-Nov-2008   7069973  

28-Jun-2010

Horizon Global Americas Inc.

 

Registered

  HIGHLAND (in Chinese Characters)  

CN

  7069974   21-Nov-2008   7069974  

07-Jul-2010

Horizon Global Americas Inc.

 

Registered

  HIGHLAND (in Chinese Characters)  

CN

  7069972   21-Nov-2008   7069972  

28-Jun-2010

Horizon Global Americas Inc.

 

Registered

  HIGHLAND (in Chinese Characters)  

CN

  7069971   21-Nov-2008   7069971  

07-Jul-2010

Horizon Global Americas Inc.

 

Registered

  HIGHLAND (in Chinese Characters)  

CN

  7069970   21-Nov-2008   7069970  

14-Sep-2010

Horizon Global Americas Inc.

 

Registered

  MICROTUBE  

CA

  1456873   27-Oct-2009   TMA779694  

13-Oct-2010

Horizon Global Americas Inc.

 

Registered

  REESE  

CN

  7069987   21-Nov-2008   7069987  

28-Jun-2010

Horizon Global Americas Inc.

 

Registered

  REESE  

TW

  97051894   10-Nov-2008   1399215  

01-Mar-2010

Horizon Global Americas Inc.

 

Registered

  REESE  

CN

  7069989   21-Nov-2008   7069989  

21-Jul-2010

Horizon Global Americas Inc.

 

Registered

  REESE  

CN

  7069988   21-Nov-2008   7069988  

14-Nov-2010

Horizon Global Americas Inc.

 

Registered

  REESE (in Chinese Characters)  

CN

  7069985   21-Nov-2008   7069985  

14-Nov-2010

Horizon Global Americas Inc.

 

Registered

  REESE (in Chinese Characters)  

TW

  97051895   10-Nov-2008   1399216  

01-Mar-2010

Horizon Global Americas Inc.

 

Registered

  REESE (in Chinese Characters)  

CN

  7069986   21-Nov-2008   7069986  

07-Jul-2010

Horizon Global Americas Inc.

 

Registered

  REESE TOWPOWER  

CN

  7069983   21-Nov-2008   7069983  

07-Oct-2010

Horizon Global Americas Inc.

 

Registered

  REESE TOWPOWER  

CN

  7069982   21-Nov-2008   7069982  

28-Jun-2010

Horizon Global Americas Inc.

 

Registered

  REESE TOWPOWER  

TW

  97051892   10-Nov-2008   1399213  

01-Mar-2010

Horizon Global Americas Inc.

 

Registered

  REESE TOWPOWER (in Chinese Characters)  

CN

  7069981   21-Nov-2008   7069981  

07-Oct-2010

Horizon Global Americas Inc.

 

Registered

  REESE TOWPOWER (in Chinese Characters)  

CN

  7069980   21-Nov-2008   7069980  

28-Jun-2010

Horizon Global Americas Inc.

 

Registered

  REESE TOWPOWER (in Chinese Characters)  

TW

  97051893   10-Nov-2008   1399214  

01-Mar-2010

Horizon Global Americas Inc.

 

Registered

  ROLA  

CN

  7069968   21-Nov-2008   7069968  

28-Jun-2010

Horizon Global Americas Inc.

 

Registered

 

ROLA

 

TW

  97051890   10-Nov-2008   1393416  

01-Jan-2010

Horizon Global Americas Inc.    Registered    ROLA   MX    710472    05-Apr-2005    908278    18-Nov-2005
Horizon Global Americas Inc.    Registered    ROLA (in
Chinese
Characters) 		  CN    7069966    21-Nov-2008    7069966    28-Jun-2010
Horizon Global Americas Inc.    Registered    W and Design   BR    909236402    10-Apr-2015    909236402    14-Nov-2017
Horizon Global Americas Inc.    Registered    W and Design   KR    40-2014-0021990    02-Apr-2014    40-2014-0021990    06-Feb-2015
Horizon Global Americas Inc.    Registered    W and Design   CN    11675817    31-Oct-2012    11675817    07-Apr-2014
Horizon Global Americas Inc.    Registered    WASHDROPS   CN    8702945    27-Sep-2010    8702945    14-Oct-2011
Horizon Global Americas Inc.    Registered    WASHDROPS   TW    99046544    17-Sep-2010    1462510    01-Jul-2011
Horizon Global Americas Inc.    Registered    WASHDROPS   EM    9462755    20-Oct-2010    9462755    01-Apr-2011
Horizon Global Americas Inc.    Registered    WASHDROPS   MX    1243676    24-Jan-2012    1291257    14-Jun-2012
Horizon Global Americas Inc.    Registered    WASHDROPS   ZA    2011/13654    07-Jul-2011    2011/13654    28-Jun-2013
Horizon Global Americas Inc.    Registered    WASHDROPS   KR    40-2014-0021987    02-Apr-2014    40-2014-0021987    06-Feb-2015
Horizon Global Americas Inc.    Registered    WASHDROPS
(in Chinese
Characters) 		  CN    10210704    21-Nov-2011    10210704    21-Jan-2013
Horizon Global Americas Inc.    Registered    ZCI ZERO
CONTACT
INTERFACE
and Design 		  AU    1587265    23-Oct-2013    1587265    12-Feb-2014
Horizon Global Americas Inc.    Registered    ENVOY   MX    359461    07-Jan-1999    658878    16-Jun-2000
Horizon Global Americas Inc.    Registered    ACTIVATOR   CA    799137    06-Dec-1995    TMA466360    26-Nov-1996
Horizon Global Americas Inc.    Registered    ACTIVATOR   MX    0249854    07-Dec-1995    528518    26-Aug-1996
Horizon Global Americas Inc.    Registered    ACTIVATOR II   MX    0249855    07-Dec-1995    528519    26-Aug-1996
Horizon Global Americas Inc.    Registered    ACTIVATOR II   CA    0799138    06-Dec-1995    TMA466357    26-Nov-1996
Horizon Global Americas Inc.    Registered    BARGMAN   CA    1072367    23-Aug-2000    TMA569753    28-Oct-2002
Horizon Global Americas Inc.    Registered    BUILT FOR
EXTREMES,
DESIGNED
FOR
EVERYDAY
LIFE 		  CA    1247068    14-Feb-2005    TMA727339    29-Oct-2008
Horizon Global Americas Inc.    Registered    BUILT FOR
EXTREMES,
DESIGNED
FOR
EVERYDAY
LIFE 		  FR    3341070    14-Feb-2005    3341070    14-Feb-2005
Horizon Global Americas Inc.    Registered    BULLDOG   CA    0857396    26-Sep-1997    TMA558952    11-Mar-2002
Horizon Global Americas Inc.    Registered    BULLDOG   BR    840569777    05-Jul-2013    840569777    05-Apr-2016
Horizon Global Americas Inc.    Registered    BULLDOG   BR    840569785    05-Jul-2013    840569785    05-Apr-2016
Horizon Global Americas Inc.    Registered    BX1   AU    1605490    12-Feb-2014    1605490    20-May-2014
Horizon Global Americas Inc.    Registered    BX1   CA    1663984    14-Feb-2014    TMA917166    15-Oct-2015
Horizon Global Americas Inc.    Registered    DRAW-TITE   MX    0249857    07-Dec-1995    528520    26-Aug-1996
Horizon Global Americas Inc.    Registered    DRAW-TITE   CA    799135    06-Dec-1995    TMA493208    20-Apr-1998
Horizon Global Americas Inc.    Registered    DRAW-TITE   MX    0249852    07-Dec-1995    528516    26-Aug-1996
Horizon Global Americas Inc.    Registered    DRAW-TITE
and Design 		  CA    516329    07-Feb-1984    TMA293920    10-Aug-1984
Horizon Global Americas Inc.    Registered    DRAW-TITE/
HITCH-PRO 		  CA    0583622    07-May-1987    TMA380214    22-Feb-1991
Horizon Global Americas Inc.    Registered    DRAW-TITE/
TOW-PAK 		  CA    586040    15-Jun-1987    TMA373552    21-Sep-1990
Horizon Global Americas Inc.    Registered    FULTON   CA    159090    01-Sep-1932    TMDA56006    29-Dec-1932
Horizon Global Americas Inc.    Registered    FULTON   BR    840569823    05-Jul-2013    840569823    12-Apr-2016
Horizon Global Americas Inc.    Registered    FULTON   BR    840569807    05-Jul-2013    840569807    05-Apr-2016
Horizon Global Americas Inc.    Registered    HIDDEN
HITCH 		  CA    0652253    02-Mar-1990    TMA390183    15-Nov-1991
Horizon Global Americas Inc.    Registered    HIDDEN
HITCH 		  CA    1372617    19-Nov-2007    TMA774702    17-Aug-2010
Horizon Global Americas Inc.    Registered    HIDDEN
HITCH and
Design 		  CA    1059987    23-May-2000    TMA582876    30-May-2003
Horizon Global Americas Inc.    Registered    HITCHMATCH   AU    1538203    31-Jan-2013    1538203    12-Jul-2013
Horizon Global Americas Inc.    Registered    HITCHMATCH   NZ    972138    21-Aug-2012    972138    03-Sep-2013
Horizon Global Americas Inc.    Registered    HITCH-PRO   CA    583621    07-May-1987    TMA379445    08-Feb-1991

Horizon Global Americas Inc.   Registered   INTELLA-STOP   CA   1400001   17-Jun-2008   751203   27-Oct-2009
Horizon Global Americas Inc.   Registered   LIFT-LOCK   CA   0613231   16-Aug-1988   TMA366914   16-Mar-1990
Horizon Global Americas Inc.   Registered   M.O.V.E. and Design   CA   1251925   24-Mar-2005   TMA714670   16-May-2008
Horizon Global Americas Inc.   Registered  

M.O.V.E. MOBILE ORGANIZATIONAL VEHICLE EQUIPMENT

with Design

  CA   1251923   24-Mar-2005   TMA714649   16-May-2008
Horizon Global Americas Inc.   Registered   MODULITE   MX   0249853   07-Dec-1995   528517   26-Aug-1996
Horizon Global Americas Inc.   Registered   MODULITE   CA   0799136   06-Dec-1995   TMA467620   13-Dec-1996
Horizon Global Americas Inc.   Registered   P3   AU   1166098   07-Mar-2007   1166098   26-Mar-2008
Horizon Global Americas Inc.   Registered   P3   CA   1338109   06-Mar-2007   TMA768629   03-Jun-2010
Horizon Global Americas Inc.   Registered   P3 and Design   AU   1166099   07-Mar-2007   1166099   28-Mar-2008
Horizon Global Americas Inc.   Registered   P3 and Design   CA   1338116   06-Mar-2007   TMA762345   24-Mar-2010
Horizon Global Americas Inc.   Registered   PLATYPUS   CA   1251924   24-Mar-2005   TMA714646   14-May-2008
Horizon Global Americas Inc.   Registered   PLATYPUS   AU   1047677   23-Mar-2005   1047677   01-Aug-2005
Horizon Global Americas Inc.   Registered   PRO SERIES   CA   1459120   13-Nov-2009   TMA850085   02-May-2013
Horizon Global Americas Inc.   Registered   PRO SERIES   BR   840569840   05-Jul-2013   840569840   05-Apr-2016
Horizon Global Americas Inc.   Registered   PRO SERIES   BR   840569882   05-Jul-2013   840569882   05-Apr-2016
Horizon Global Americas Inc.   Registered   PRO SERIES   BR   840569874   05-Jul-2013   840569874   05-Apr-2016
Horizon Global Americas Inc.   Registered   REESE   CA   776295   22-Feb-1995   TMA464317   18-Oct-1996
Horizon Global Americas Inc.   Registered   REESE TOWPOWER   IN   2300794   16-Mar-2012   2300794   16-Mar-2012
Horizon Global Americas Inc.   Registered   ROLA   CA   1233000   06-Oct-2004   TMA673142   22-Sep-2006
Horizon Global Americas Inc.   Registered   SPORTFRAME   CA   0613237   16-Aug-1988   TMA366175   02-Mar-1990
Horizon Global Americas Inc.   Registered   SPORTFRAME   CA   613237   16-Aug-1988   TMA366175   02-Mar-1990
Horizon Global Americas Inc.   Registered   STEADI-FLEX   CA   1660461   22-Jan-2014   TMA922782   08-Dec-2015
Horizon Global Americas Inc.   Registered   SUREPULL   CA   1072365   23-Aug-2000   TMA569754   28-Oct-2002
Horizon Global Americas Inc.   Registered   TEKONSHA   AU   644632   06-Dec-1990   644632   03-Nov-1994
Horizon Global Americas Inc.   Registered   TEKONSHA   CA   1366189   03-Oct-2007   TMA731740   06-Jan-2009
Horizon Global Americas Inc.   Registered   THE GOOSE! BY REESE and Design   AU   626492   05-Apr-1994   626492   01-Nov-1995
Horizon Global Americas Inc.   Registered   T-ONE   MX   0249856   07-Dec-1995   854640   08-Oct-2004
Horizon Global Americas Inc.   Registered   T-ONE   CA   0799134   06-Dec-1995   TMA466356   26-Nov-1996
Horizon Global Americas Inc.   Registered   TOW READY   CA   1314231   24-Aug-2006   TMA762837   29-Mar-2010
Horizon Global Americas Inc.   Registered   TOW-PAK   CA   586039   15-Jun-1987   TMA367579   13-Apr-1990
Horizon Global Americas Inc.   Registered   TRUTURN 360   CA   1765146   27-Jan-2016   TMA983552   25-Oct-2017
Horizon Global Americas Inc.   Registered   VELOCITY SERIES   CA   1695258   24-Sep-2014   TMA982004   03-Oct-2017
Horizon Global Americas Inc.   Registered   VOYAGER   AU   644540   02-Nov-1994   644540   26-Sep-1997
Horizon Global Americas Inc.   Registered   VOYAGER   CA   1072366   23-Aug-2000   TMA569760   28-Oct-2002
Horizon Global Americas Inc.   Registered   WESBARG   MX   1582627   25-Feb-2015   1542374   28-May-2015
Horizon Global Americas Inc.   Registered   WESBARG   MX   1582625   25-Feb-2015   1530887   20-Apr-2015
Horizon Global Americas Inc.   Registered   WESBARG and Design   MX   1582629   25-Feb-2015   1542375   28-May-2015
Horizon Global Americas Inc.   Registered   WESBARG and Design   MX   1582628   25-Feb-2015   1536301   08-May-2015
Horizon Global Americas Inc.   Registered   ZCI   BR   840687893   24-Oct-2013   840687893   23-Aug-2016
Horizon Global Americas Inc.   Registered   ZCI   CA   1648999   23-Oct-2013   TMA982808   13-Oct-2017

Horizon Global Americas Inc.   Registered   ZCI   AU   1587264   23-Oct-2013   1587264   12-Feb-2014
Horizon Global Americas Inc.   Registered   ZCI   ZA   2013/29652   23-Oct-2013   2013/29652   07-Sep-2015
Horizon Global Americas Inc.   Registered   ZCI   NZ   986694   23-Oct-2013   986694   24-Apr-2014
Horizon Global Americas Inc.   Registered   ZCI   MX   1425521   23-Oct-2013   1472553   28-Jul-2014
Horizon Global Americas Inc.   Registered   ZCI ZERO CONTACT INTERFACE and Design   BR   840700644   06-Nov-2013   840700644   30-Aug-2016
Horizon Global Americas Inc.   Registered   ZCI ZERO CONTACT INTERFACE and Design   CA   1649005   23-Oct-2013   TMA982807   13-Oct-2017
Horizon Global Americas Inc.   Registered   ZCI ZERO CONTACT INTERFACE and Design   ZA   2013/29582   23-Oct-2013   2013/29582   24-Dec-2015
Horizon Global Americas Inc.   Registered   ZCI ZERO CONTACT INTERFACE and Design   MX   1425520   23-Oct-2013   1473315   30-Jul-2014
Horizon Global Americas Inc.   Registered   ZCI ZERO CONTACT INTERFACE and Design   NZ   986695   23-Oct-2013   986695   24-Apr-2014
Horizon Global Americas Inc.   Registered   BULLDOG   CN   7069963   21-Nov-2008   7069963   28-Jun-2010
Horizon Global Americas Inc.   Registered   BULLDOG   MX   309142   29-Sep-1997   569267   30-Jan-1998
Horizon Global Americas Inc.   Registered   FULTON   CN   7069965   21-Nov-2008   7069965   28-Jun-2010
Horizon Global Americas Inc.   Registered   BULLDOG   EM   640037   27-Sep-1997   640037   28-Jun-1999
Horizon Global Americas Inc.   Registered   F2   EM   007583735   05-Feb-2009   007583735   15-Sep-2009
Horizon Global Americas Inc.   Published   HIGHLAND   BR   915812789   04-Sep-2018        
Horizon Global Americas Inc.   Published   HIGHLAND   BR   915812797   04-Sep-2018        
Horizon Global Americas Inc.   Published   HIGHLAND   BR   915812800   04-Sep-2018        
Horizon Global Americas Inc.   Published   NORTH AMERICA’S FAVORITE HITCH   CA   1815039   20-Dec-2016        
Horizon Global Americas Inc.   Published   REESE   BR   914155490   08-Feb-2018        
Horizon Global Americas Inc.   Published   REESE   BR   914155440   08-Feb-2018        
Horizon Global Americas Inc.   Published   REESE   BR   914155474   08-Feb-2018        
Horizon Global Americas Inc.   Published   REESE   BR   914155555   08-Feb-2018        
Horizon Global Americas Inc.   Pending   REESE   MX   2155007   21-Jan-2019        
Horizon Global Americas Inc.   Pending   REESE   MX   2155009   21-Jan-2019        
Horizon Global Americas Inc.   Pending   REESE   MX   2155011   21-Jan-2019        
Horizon Global Americas Inc.   Pending   REESE   MX   2155018   21-Jan-2019        
Horizon Global Americas Inc.   Pending   REESE   MX   2155021   21-Jan-2019        
Horizon Global Americas Inc.   Registered   ROLA   DE   30519392.9   04-Apr-2005   30519392   19-Jul-2005
Horizon Global Americas Inc.   Registered   ROLA   EM   13702527   29-Jan-2015   13702527   15-Jul-2015
Horizon Global Americas Inc.   Registered   ROLA   ES   2644932   05-Apr-2005   2,644,932   15-Dec-2005
Horizon Global Americas Inc.   Registered   ROLA   GB   2388607   05-Apr-2005   2388607   18-Nov-2005
Horizon Global Americas Inc.   Registered   ROLA   IT   RM2005C001772   06-Apr-2005   302015902339089   02-Oct-2008
Horizon Global Americas Inc.   Registered   ROLA and Design   EM   1165019   10-Apr-2013   1165019   10-Apr-2013
Horizon Global Americas Inc.   Published   TEKONSHA   BR   914679856   14-May-2018        
Horizon Global Americas Inc.   Published   TOW READY   BR   914851837   13-Jun-2018        
Horizon Global Americas Inc.   Published   TOYLOC   BR   914679864   14-May-2018        
Horizon Global Americas Inc.   Pending   XLT   CA   1765672   29-Jan-2016        
Horizon Global Americas Inc.   Registered   ZCI   EM   12248779   23-Oct-2013   12248779   19-Mar-2014
Horizon Global Americas Inc.   Registered   ZCI ZERO CONTACT INTERFACE and Design   EM   12248721   23-Oct-2013   12248721   14-Mar-2014
Horizon Global Company LLC   Registered   H (Stylized)   AU   1737457   26-Nov-2015   1737457   26-Nov-2015
Horizon Global Company LLC   Registered   H (Stylized)   CN   18362089   18-Nov-2015   18362089   28-Dec-2016

Horizon Global Company LLC   Registered   H (Stylized)   EM   14800593   17-Nov-2015   14800593   26-Apr-2016
Horizon Global Company LLC   Registered   HORIZON GLOBAL   CN   22195656   09-Dec-2016   22195656   28-Jan-2018
Horizon Global Company LLC   Registered   HORIZON GLOBAL (Stylized)   AU   1735239   17-Nov-2015   1735239   21-Jul-2016
Horizon Global Company LLC   Registered   HORIZON GLOBAL (Stylized)   EM   14793087   16-Nov-2015   14793087   26-Apr-2016

COPYRIGHTS

None.

 

 

 

 

 

Exhibit C / Copyrights

EXHIBIT D

PLEDGED EQUITY

 

Corporate Name

 

  

Owner / Type of Equity Interest

 

  

Percentage

Pledged

 

 

Is the

Subsidiary

an Obligor?

  

Issued

Certificate

(Class &

No.)

Cequent Electrical Products de México, S. de R.L. de C.V.   

99.97% owned by Cequent Mexico Holdings B.V. and approx. 0.03% owned by Cequent Sales Company de México, S. de

R.L. de C.V. (such ownership totaling 100%)

   100%   Yes   

1,000 shares of Common Stock Certificate

No. 009

Cequent Mexico Holdings B.V.    100% owned by Cequent UK Limited    100%   Yes    N/A
Cequent Nederland Holdings B.V.    100% owned by Horizon International Holdings LLC    100%   Yes    N/A
Horizon Global Americas Inc.    100% owned by Horizon Global Company LLC    100%   Yes    N/A
Cequent Sales Company de México, S. de R.L. de C.V.    99.97% owned by Cequent Nederland Holdings B.V. and approx. 0.03% owned by Cequent Mexico Holdings B.V. (such ownership totaling 100%)    100%   Yes    N/A
Cequent Towing Products of Canada, Ltd.    100% owned by Cequent Nederland Holdings B.V.    100%   Yes    N/A
Cequent UK Limited    100% owned by Cequent Nederland Holdings B.V.    100%   Yes    N/A
HG Germany Holdings GmbH    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
HZN FinCo IRL Holdings Limited    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
HZN Sourcing Oy    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
Horizon Euro Finance LLC***    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
Horizon Global Company LLC    100% owned by Horizon Global Corporation    100%   Yes   

Membership Interest 2,500 Units Certificate

No. 002

Horizon Global Digital Limited    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
Horizon Global European Holdings Limited    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
Horizon Global Hong Kong Holdings Limited    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
Horizon Global (South Africa) (PTY) LTD.    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
Horizon International Holdings LLC    100% owned by Horizon Global Americas Inc.    100%   Yes   

Membership Interest 2,500 Units Certificate

No. 005

Horizon Sourcing B.V.    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A
Teljs Holding B.V.    100% owned by Cequent Nederland Holdings B.V.    100%   No    N/A

Exhibit D / Page 1

PLEDGED DEBT

 

Borrower    Lender    Amount
Horizon Global South Africa Pty Ltd.    Cequent Nederland Holdings B.V.    $212,463.40
C.P. Witter   

Cequent Nederland Holdings

B.V.

   $2,428,116.42
Horizon Global Germany GmbH    Cequent Nederland Holdings B.V.    $974,950.00
Kovil Oy   

Cequent Nederland Holdings

B.V.

   $297,187.70
HG Germany Holdings GmbH    Cequent Nederland Holdings B.V.    $126,170,000.00
AH Forgings Proprietary Limited   

Cequent Nederland Holdings

B.V.

   $54,320.77
Westfalia-Automotive GmbH    Cequent Nederland Holdings B.V.    $1,720,498.85
Westfalia-Automotive SAS   

Cequent Nederland Holdings

B.V.

   $277,011,97
Westfalia-Automotive Denmark ApS    Cequent Nederland Holdings B.V.    $1,270,557.13

Westfalia-Automotive Polska Sp.

Zo.o.

  

Cequent Nederland Holdings

B.V.

   $556,910.94
Westfalia-Automotive Italia S.r.l.    Cequent Nederland Holdings B.V.    $300,166.46
Teljs Automotive Srl Unit 2   

Cequent Nederland Holdings

B.V.

   $1,553,635.59
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holding LLC    $44,789,896.27
Horizon Global Corporation   

Horizon International Holding

LLC

   $12,502,710.00
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97
Cequent Nederland Holdings B.V.    Horizon Global Company LLC    $117,280,750.00

Exhibit D / Page 2

EXHIBIT E

POST CLOSING OBLIGATIONS

Post-Closing Schedule

1.

The Loan Parties shall take all necessary actions (subject to the Agreed Security Principles (as defined in the ABL Credit Agreement) to satisfy the items described below within sixty (60) days after the Closing Date (or, in each case, such longer periods as the Administrative Agent, acting at the direction of the Required Lenders, may agree):

  (a)

For each Subsidiary domiciled or organized in England, to the extent applicable:

 

  (i)

an English law guarantee and debenture over substantially all of its assets;

 

  (ii)

an English law share pledge agreement entered into by its shareholder relating to the pledge over its shares;

 

  (iii)

such perfection actions as are necessary under English law to perfect the security interests contemplated by this clause (a); and

 

  (iv)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in England to create a first priority perfected security interest therein, subject to the Intercreditor Agreements.

 

  (b)

For each Subsidiary domiciled or organized in Germany, to the extent applicable:

 

  (i)

a German law guarantee;

 

  (ii)

a German law share pledge agreement entered into by its shareholder relating to the pledge over its shares;

 

  (iii)

security over substantially all of its assets located in Germany including but not limited to the following security documents, if applicable:

 

  (A)

a German law account pledge agreement relating to all accounts held by it with banks in Germany;

 

  (B)

a German law global assignment agreement relating to the assignment of accounts receivable from the selling of goods and the provision of services as well as other accounts receivable agreed to be assigned by it (including, but not limited to, insurance claims and intercompany loan receivables);

 

  (C)

a German law security transfer agreement relating to the security transfer of all moveable (including stock and inventory) and fixed assets over which security shall be granted;

 

  (D)

if it has any such rights, an Intellectual Property pledge agreement relating to the pledge of its intellectual property rights (including, but not limited to, patents, designs, utility models, trademarks, know-how and other IP rights);

  (E)

if it owns any real estate, a German law land charge over the real estate held by it;

 

  (F)

if it owns any real estate, a German law security purpose agreement relating to the land charge granted by it; and

 

  (G)

if it is party to any relevant intercompany agreements, a subordination agreement in relation to any shareholder and intercompany loans and any other applicable, if any, intercompany claims; and

 

  (iv)

such perfection actions as are necessary under German law to perfect the security interests contemplated by this clause (b); and

 

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in Germany to create a first priority perfected security interest therein.

 

  (c)

For each Subsidiary domiciled or organized in the Netherlands, to the extent applicable:

 

  (i)

a Dutch law guarantee;

 

  (ii)

a Dutch law omnibus pledge;

 

  (iii)

a Dutch share pledge agreement entered into by its shareholder relating to the pledge over its shares;

 

  (iv)

such perfection actions as are necessary under Dutch law to perfect the security interests contemplated by this clause (c); and

 

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in the Netherlands to create a first priority perfected security interest therein.

 

  (d)

For each Subsidiary domiciled or organized in Canada, to the extent applicable:

 

  (i)

a security agreement governed by the laws of the applicable Canadian province and the laws of Canada applicable therein;

 

  (ii)

such perfection actions as are necessary under Canadian law to perfect the security interests contemplated by this clause (d); and

 

  (iii)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in Canada to create a first priority perfected security interest therein.

 

  (e)

For each Subsidiary domiciled or organized in Mexico, to the extent applicable:

 

  (i)

an equity interest pledge agreement governed by the laws of the applicable pledgor;

 

  (ii)

a non-possessory pledge agreement governed by the laws of the applicable pledgor;

  (iii)

a certificate from the applicable Subsidiary domiciled in Mexico evidencing (a) an applicable pledge set forth in clause (i) or (ii) above, (b) a confirmation of the pledge created thereby and (c) a power of attorney granted by the applicable pledgor to the Collateral Agent;

 

  (iv)

such perfection actions as are necessary under Mexican law to perfect the security interests contemplated by this clause (e); and

 

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in Mexico to create a first priority perfected security interest therein.

 

2.

All agreements, instruments, documents and legal opinion delivered pursuant to this Post-Closing Schedule shall be in form and substance reasonably satisfactory to the Administrative Agent (acting at the direction of the Required Lenders).

 

3.

Each Subsidiary domiciled in the United Kingdom, Germany, the Netherlands, Mexico or Canada (or any political subdivision) that is not already party to the Guarantee and Collateral Agreement shall deliver a joinder to the Guarantee and Collateral Agreement in form and substance satisfactory to the Collateral Agent within twenty (20) days after the Sixth Amendment Effective Date (or such longer period as the Administrative Agent, acting at the direction of the Required Lenders, may agree).

 

4.

Subject to the Intercreditor Agreements, each Loan Party shall have delivered to the Collateral Agent original stock certificates and executed stock powers in blank representing 100% of the Equity Interests of each wholly-owned and direct Subsidiary of such Loan Party within thirty (30) days after the Sixth Amendment Effective Date (or such longer period as the Administrative Agent, acting at the direction of the Required Lenders, may agree), in each case to the extent, (a) such Subsidiary is domiciled or organized in the United Kingdom, Germany, Canada or the Netherlands, and (b) such Equity Interests are certificated.

EXHIBIT F

PROFESSIONAL FEES

1. Simpson Thacher & Bartlett LLP

2. Davis Polk & Wardwell LLP

3. Paul, Weiss, Rifkind, Wharton & Garrison LLP

4. FTI Consulting, Inc.

5. Milbank LLP

Exhibit 10.11

Execution Version

SEVENTH AMENDMENT TO

AMENDED AND RESTATED LOAN AGREEMENT

This SEVENTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (this “ Amendment ”) is dated as of March 15, 2019, and is entered into by and among HORIZON GLOBAL CORPORATION, a Delaware corporation (“ Parent Borrower ”), HORIZON GLOBAL AMERICAS INC., a Delaware corporation (“ Horizon Americas ”) (f/k/a Cequent Performance Products, Inc., a Delaware corporation and successor by merger with Cequent Consumer Products, Inc., an Ohio corporation), CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Horizon Americas and Cequent UK, collectively, “ Borrowers ”), HORIZON GLOBAL COMPANY LLC, a Delaware limited liability company (“ Horizon Global ”), the other Persons party to this Amendment as Obligors, the financial institutions party to this Amendment as Lenders, and BANK OF AMERICA, N.A., a national banking association, in its capacity as agent for itself and the other Secured Parties (“ Agent ”).

WHEREAS, the Borrowers, the other Obligors party hereto, the Agent and the Lenders have entered into that certain Amended and Restated Loan Agreement dated as of December 22, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”);

WHEREAS, Parent Borrower, the other Obligors party thereto and Agent entered into that certain ABL Guarantee and Collateral Agreement dated as of June 30, 2015 (the “ ABL Guarantee ”) in order to secure the Obligations;

WHEREAS, certain Borrowers, Horizon International Holdings LLC, a Delaware limited liability company, Cequent UK, Cequent Canada, Cequent Nederland Holdings B.V., a company formed under the laws of the Netherlands, Cequent Mexico Holdings B.V., a company formed under the laws of the Netherlands, Cequent Sales Company de Mexico, S. de R.L. de C.V., a limited liability company formed under the laws of Mexico, Cequent Electrical Products de Mexico, S. de R.L. de C.V., a limited liability company formed under the laws of Mexico, and Agent entered into that certain Foreign Facility Guarantee and Collateral Agreement dated as of December 22, 2015 in order to secure the Foreign Facility Obligations; and

WHEREAS, the Borrowers and the other Obligors have requested that the Agent and the Required Lenders agree to enter into certain amendments to the Loan Agreement described below.

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth in the Loan Documents and this Amendment, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

Initially capitalized terms used but not otherwise defined in this Amendment have the respective meanings set forth in the Loan Agreement, as amended hereby.

 

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ARTICLE II

AMENDMENTS TO LOAN AGREEMENT AND GUARANTEE AND COLLATERAL

AGREEMENT

2.01         Loan Agreement Amendments .

On the Amendment Effective Date (as defined below), the Loan Agreement is hereby amended with the stricken text deleted (indicated textually in the same manner as the following example: stricken text ) and with the double-underlined text added (indicated textually in the same manner as the following example: double-underlined text ) as set forth in the pages of the Loan Agreement attached as Exhibit A-1 hereto.

With effect as of the Amendment Effective Date, the Loan Agreement is hereby further amended by replacing the below described Schedules to the Loan Agreement with the following Schedules attached as Exhibit A-2 hereto:

Schedule 10.2.1    –     Existing Indebtedness as of Seventh Amendment Effective Date

Schedule 10.2.2    –     Existing Liens as of Seventh Amendment Effective Date

Schedule 10.2.4    –     Existing Investments as of Seventh Amendment Effective Date

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Obligor hereby represents and warrants to each Lender and the Agent, as of the date hereof, as of the Amendment Effective Date, and at each time that the following representations and warranties are made or deemed to be made thereafter, as follows:

3.01         Authority . The execution, delivery and performance by such Obligor of each Loan Document described in Section 5.01 hereof, and the transactions contemplated hereby or thereby, have been duly authorized by all necessary action, and this Amendment is a legal, valid and binding obligation of such Obligor enforceable against such Obligor in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

3.02         Representations and Warranties . Each representation and warranty of such Obligor in the Loan Documents is true and correct as of the date hereof, after giving effect to this Amendment (except for representations and warranties that expressly relate to an earlier date and except for the representations and warranties set forth in Section 9.1.4(d) {No Material Adverse Change} of the Loan Agreement).

3.03         Governmental Approvals; No Conflicts . The execution, delivery, and performance by such Obligor of the Loan Documents described in Section 5.01 hereof (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of any Obligor or any Subsidiary of any Obligor or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, or give rise to a right thereunder to require any payment to be made by any Obligor or any Subsidiary of any Obligor, except for violations, defaults or the creation of such rights that

 

2

could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of any Obligor or any Subsidiary of any Obligor, except Liens created under the Loan Documents and Liens permitted by Section 10.2.2 of the Loan Agreement, and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect.

3.04         No Defaults . No Default or Event of Default has occurred and is continuing.

3.05         Beneficial Ownership Certification . As of the Amendment Effective Date, the information included in the Beneficial Ownership Certification (as defined in the Loan Agreement after giving effect to this Amendment), if applicable, is true and correct in all respects.

ARTICLE IV

CERTIFICATIONS

The Obligors hereby certify to Agent and Lenders that (a) (i) the Sixth Amendment to Credit Agreement (the “ Term Loan Agreement Amendment ”), dated on or about the date hereof, by and among Parent Borrower, the First Lien Term Loan Lenders party thereto, and the First Lien Term Loan Agent and (ii) the Second Lien Term Loan Agreement dated on or about the date hereof, by and among the Parent Borrower, the Second Lien Term Loan Lenders (as defined in the Loan Agreement after giving effect to this Amendment) party thereto and the Second Lien Term Loan Agent (as defined in the Loan Agreement after giving effect to this Amendment), are not prohibited by Section 10.2.11 of the Loan Agreement, as amended by this Amendment, and (b) neither the execution or performance of this Amendment nor the incurrence of any Obligations by Obligors pursuant to the Loan Documents violates the Term Loan Documents (as defined in the Loan Agreement after giving effect to this Amendment).

THE PARTIES HERETO AGREE THAT THE TERMS OF THE SECOND PARAGRAPH OF ARTICLE IV OF THE SIXTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT DATED AS OF MARCH 7, 2019 AMONG THE PARTIES HERETO SHALL BE DEEMED TO BE OF NO FURTHER FORCE OR EFFECT FROM AND AFTER THE AMENDMENT EFFECTIVE DATE.

ARTICLE V

CONDITIONS PRECEDENT AND FURTHER ACTIONS

5.01         Conditions Precedent .    This Amendment shall be deemed effective as of the date first set forth above when each of the following conditions precedent have been satisfied in form and substance satisfactory to the Agent and its counsel (such date, the “ Amendment Effective Date ”):

(a)        The Agent shall have received duly executed counterparts of this Amendment which, when taken together, bear the authorized signatures of the Obligors, the Agent and the Required Lenders;

(b)        The Agent shall have received duly executed counterparts to the Amended and Restated ABL Guarantee and Collateral Agreement from each Obligor party to this Amendment together with updated disclosure schedules thereto, each in form and substance satisfactory to the Agent;

 

3

(c)        The Agent shall have received fully executed copies of Term Loan Agreement Amendment (along with any other amendments to the First Lien Term Loan Documents executed in connection therewith), which shall be on terms and conditions satisfactory to Agent and in full force and effect, and all conditions precedent set forth in Section 4 of the Term Loan Agreement Amendment shall have been met or waived by the First Lien Term Loan Agent and/or the First Lien Term Loan Lenders in accordance with the terms of the First Lien Term Loan Documents ;

(d)        (i) The Agent shall have received fully executed copies (certified by an officer of Parent Borrower) of the Second Lien Term Credit Agreement (as defined in the Loan Agreement after giving effect to this Amendment) and the other Second Lien Term Loan Documents delivered on or about the Amendment Effective Date, which shall be on terms and conditions satisfactory to Agent and in full force and effect, and all conditions precedent set forth in Section 4.01 of the Second Lien Term Credit Agreement shall have been met or waived by the Second Lien Term Loan Agent and/or the applicable lenders thereunder in accordance with the terms of the Second Lien Term Loan Documents; and (ii) the Parent Borrower shall have received (or will receive concurrently with the effectiveness of the Amendment) the net proceeds of a borrowing of not less than $50,000,000 of Second Lien Term Loan Debt (as defined in the Loan Agreement after giving effect to this Amendment);

(e)        The Agent shall have received an executed payoff and release letter from Cortland Capital Market Services LLC, as administrative agent (the “ Senior Term Agent ”) under the Credit Agreement dated as of February 20, 2019 (the “ Senior Term Credit Agreement ”), by and among the Parent Borrower, the lenders from time to time party, and the Senior Term Agent, on terms acceptable to the Agent together with evidence of the payment in full of the Loans (as defined in the Senior Term Credit Agreement, the “ Senior Term Loans ”) and cancellation of the Loan Documents (as defined in the Senior Term Credit Agreement), including terminations of Uniform Commercial Code financing statements filed in connection with the Senior Term Loans and other evidence of lien releases and other related matters on terms acceptable to the Agent;

(f)            The Agent shall have received a fully executed copy of the Intercreditor Agreement dated on or about the date hereof between the Term Loan Agents (as defined in the Loan Agreement after giving effect to this Amendment) and the Agent in the form of Exhibit B hereto, which shall be on terms and conditions satisfactory to Agent and in full force and effect;

(g)        Upon the reasonable request of any Lender made at least five days prior to the Amendment Effective Date, the Obligors shall have provided to such Lender, and such Lender shall be reasonably satisfied with, the documentation and other information so requested in connection with the AML Legislation, including, without limitation, the PATRIOT Act, in each case at least five days prior to the Amendment Effective Date;

(h)        At least five days prior to the Amendment Effective Date, any Obligor that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall deliver, to each Lender that so requests, a Beneficial Ownership Certification in relation to such Obligor;

(i)        The Agent shall be satisfied that after giving effect to consummation of the transactions contemplated hereby and payment of all fees and expenses in connection herewith and therewith (i) Total Availability shall be at least $25,000,000 immediately after the repayment of Loans as set forth in sub-clause (ii), and (ii) Loans shall be repaid in an amount not less than $20,000,000 with the proceeds of the term loans being advanced in connection therewith;

 

4

(j)        The Parent Borrower shall have executed and delivered a new Perfection Certificate with respect to the Obligors as of the date hereof and the Schedules identified in Section 2.01 in form and substance satisfactory to the Agent and the Required Lenders.

(k)        The Parent Borrower shall have executed and delivered a solvency certificate in form and substance satisfactory to the Agent and the Required Lenders.

(l)        The Agent shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligor’s Organic Documents (including, without limitation, charter documents of such Obligor that are, except with respect to a Canadian Domiciled Obligor, a UK Domiciled Obligor, or a Dutch Domiciled Obligor, certified by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization) are true and complete, and in full force and effect, without amendment except as shown; (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and (together with the resolutions delivered pursuant to Section 6 of the Original Loan Agreement or the Loan Agreement) constitute all resolutions adopted with respect to this credit facility; and (iii) to the title, name and signature of each Person authorized to sign the Loan Documents. Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.

(m)        The Agent shall have received a favorable written opinion (addressed to the Agent and the Lenders and dated the Amendment Effective Date) of Jones Day, with respect to the Parent Borrower and its Domestic Subsidiaries in form and substance reasonably satisfactory to the Agent and the Required Lenders.

(n)        The Borrowers shall have paid to the Agent, for the benefit of each Lender providing their written consent to this Amendment, an amendment fee equal to 50 basis points in respect of the aggregate Commitments of such Lender immediately after giving effect to this Amendment; and

(o)    The Borrowers shall have paid all fees and expenses (provided that legal fees required to be paid as a condition precedent to the occurrence of the Amendment Effective Date shall be limited to such legal fees as to which Borrowers have received a summary invoice) owed to and/or incurred by the Agent and the respective Lenders in connection with this Amendment.

5.02         Further Actions . Each of the parties to this Amendment agrees that at any time and from time to time upon the written request of any other party, it will execute and deliver such further documents and do such further acts and things as such other party may reasonably request in order to effect the purposes of this Amendment.

ARTICLE VI

REAFFIRMATION

Each Obligor hereby (i) acknowledges and consents to this Amendment; (ii) reaffirms its obligations under the Guaranties, the Security Documents and the other Loan Documents; (iii) reaffirms the Liens granted by it pursuant to the Security Documents; and (iv) confirms that the Guaranties, the Security Documents and the other Loan Documents remain in full force and effect, without defense, offset or counterclaim. Although each Guarantor has been informed of the terms of the Amendment, such Guarantor hereby confirms that it understands and agrees that the Agent and the Lenders have no duty to so notify such Guarantor or any other guarantor or to seek this or any future acknowledgment, consent or reaffirmation, and nothing contained herein shall create or imply any such duty as to any transaction, past or future.

 

5

ARTICLE VII

MISCELLANEOUS

7.01         Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective successors and assigns. The successors and assigns of the Obligors include, without limitation, their respective receivers, trustees, and debtors-in-possession.

7.02         Further Assurances . Each Obligor party hereto hereby agrees from time to time, as and when requested by the Agent or any Lender, to execute and deliver or cause to be executed and delivered all such documents, instruments and agreements and to take or cause to be taken such further or other action as the Agent or such Lender may reasonably deem necessary or desirable in order to carry out the intent and purposes of this Amendment and the other Loan Documents.

7.03         Loan Document . This Amendment shall be deemed to be a “Loan Document” for all purposes under the Loan Agreement.

7.04         Governing Law . THIS AMENDMENT AND, UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

7.05         Consent to Forum .

(a)         Forum . EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 OF THE LOAN AGREEMENT. A FINAL JUDGMENT IN ANY PROCEEDING OF ANY SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR ANY OTHER MANNER PROVIDED BY APPLICABLE LAW.

(b)         Other Jurisdictions . Nothing herein shall limit the right of Agent, any Security Trustee or any Lender to bring proceedings against any Obligor (other than a Mexican Domiciled Obligor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Obligors). Nothing in this Amendment shall be deemed to preclude enforcement by Agent or any Security Trustee of any judgment or order obtained in any forum or jurisdiction. Final judgment against an Obligor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Obligor is domiciled, by suit on the judgment.

 

6

(c)        Each Mexican Domiciled Obligor waives any right to any jurisdiction (other than as provided under Section 7.04 above and this Section 7.05) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Obligors, and waives any objection to those courts on the ground of venue or forum non conveniens .

7.06         Severability . Wherever possible, each provision of this Amendment shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Amendment shall remain in full force and effect.

7.07         Entire Agreement . Time is of the essence of this Amendment. This Amendment constitutes 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.

7.08         Execution in Counterparts . This Amendment may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment shall become effective on the Amendment Effective Date. Delivery of a signature page of this Amendment by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of such agreement.

7.09         Costs and Expenses . The Borrowers agree to reimburse Agent and the respective Lenders for all fees, costs and expenses, including the reasonable fees, costs and expenses of counsel or other advisors for advice, assistance, or other representation in connection with this Amendment.

7.10         Reference to and Effect upon the Loan Documents . The amendments and modifications described in this Amendment shall apply and be effective only with respect to the provisions of the Loan Agreement, Master Intercompany Note, Note Power and ABL Guarantee specifically identified in this Amendment. Except as expressly amended herein, the Loan Agreement and the other Loan Documents shall continue in full force and effect in accordance with the provisions thereof, and are hereby ratified and confirmed. In each case except as expressly provided in this Amendment, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of Agent or any Lender under any of the Loan Documents, nor constitute a waiver or amendment of any provision of any of the Loan Documents. Upon the effectiveness of this Amendment, each reference in the Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import shall mean and be a reference to the Loan Agreement as amended hereby.

7.11         Authorizations and Instructions . The Lenders party hereto, which collectively constitute the Required Lenders, hereby instruct and authorize the Agent, solely in its capacity as the Administrative Agent, to execute and deliver on the Amendment Effective Date the Intercreditor Agreement in the form of Exhibit B hereto.

7.12         Section Headings . The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

7.13         Release 7.14. Each of the Obligors (on behalf of itself and its Subsidiaries) for itself and for its successors in title and assignees and, to the extent the same is claimed by right of, through or under any of the Obligors, for its past, present and future employees, agents, representatives (other than legal representatives), officers, directors, shareholders, and trustees (each, a “Releasing Party” and collectively, the “Releasing Parties”), does hereby remise, release and discharge, and shall be deemed to have forever remised, released and discharged, the Agent, each of the Lenders and each of the other Secured Parties in their respective capacities

 

7

as such under the Loan Documents, and the Agent’s, each Lender’s and each other Secured Party’s respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals and all other persons and entities to whom the Agent, each of the Lenders and each of the other Secured Parties or any of their respective successors-in-title, legal representatives and assignees, past, present and future officers, directors, affiliates, shareholders, trustees, agents, employees, consultants, experts, advisors, attorneys and other professionals would be liable if such persons or entities were found to be liable to any Releasing Party or any of them (collectively, hereinafter the “ Releasees ”), from any and all manner of action and actions, cause and causes of action, claims, charges, demands, counterclaims, crossclaims, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, rights of setoff and recoupment, controversies, damages, judgments, expenses, executions, liens, claims of liens, claims of costs, penalties, attorneys’ fees, or any other compensation, recovery or relief on account of any liability, obligation, demand or cause of action of whatever nature, whether in law, equity or otherwise (including, without limitation, any claims relating to (i) the making or administration of the Loans, including, without limitation, any such claims and defenses based on fraud, mistake, duress, usury or misrepresentation, or any other claim based on so-called “lender liability” theories, (ii) any covenants, agreements, duties or obligations set forth in the Loan Documents, (iii) increased financing costs, interest or other carrying costs, (iv) penalties, (v) lost profits or loss of business opportunity, (vi) legal, accounting and other administrative or professional fees and expenses and incidental, consequential and punitive damages payable to third parties, (vii) damages to business reputation, or (viii) any claims arising under 11 U.S.C. §§ 541-550 or any claims for avoidance or recovery under any other federal, state or foreign law equivalent), whether known or unknown, fixed or contingent, joint and/or several, secured or unsecured, due or not due, primary or secondary, liquidated or unliquidated, contractual or tortious, direct, indirect, or derivative, asserted or unasserted, foreseen or unforeseen, suspected or unsuspected, now existing or heretofore existing against any of the Releasees, and which are, in each case, based on any act, fact, event or omission or other matter, cause or thing occurring at any time prior to or on the date hereof, directly or indirectly arising out of, connected with or relating to this Amendment, the Credit Agreement or any other Loan Document and the transactions contemplated hereby or thereby, and all other agreements, certificates, instruments and other documents and statements (whether written or oral) related to any of the foregoing (each, a “Claim” and collectively, the “Claims”); provided, that, no Releasing Party shall have any obligation with respect to Claims to the extent such Claims are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or bad faith of any Releasee. Each Releasing Party further stipulates and agrees with respect to all Claims, that it hereby waives, to the fullest extent permitted by applicable law, any and all provisions, rights, and benefits conferred by any applicable U.S. federal or state law, any applicable foreign law, or any principle of common law, that would otherwise limit a release or discharge of any unknown Claims pursuant to this Section 7.13. Each of the Borrowers and the other Obligors, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably, covenants and agrees with and in favor of each Releasee that it will not sue (at law, in equity, in any regulatory proceeding or otherwise) any Releasee on the basis of any Claim released, remised and discharged by the Borrowers or any other Obligors pursuant to this Section 7.13. If the Borrowers, any other Loan Party or any of their successors, assigns or other legal representatives violates the foregoing covenant, each of the Borrowers and other Obligors, each for itself and its successors, assigns and legal representatives, agrees to pay, in addition to such other damages as any Releasee may sustain as a result of such violation, all reasonable and documented attorneys’ fees and costs incurred by any Releasee as a result of such violation. Each of the Releasing Parties hereby acknowledges that this release constitutes a material inducement to enter into this Amendment, that each Releasee has already relied on this release in entering into this Amendment, and that each Releasee will continue to rely on this release in its related future dealings. Each of the Releasing Parties hereby further warrants and represents that it has reviewed the terms of this Section 7.13 with its legal counsel and that it knowingly and voluntarily enters into the release contained in this Section 7.13 following consultation with legal counsel. This release is irrevocable, meaning that it may not be modified either orally or in writing

 

8

(other than by a mutual written waiver specifically referring to this Section 7.13 and executed by each of the parties hereto).

Balance of Page Intentionally Left Blank

Signature Pages Follow

 

9

IN WITNESS WHEREOF, duly authorized representatives of the parties have executed this Amendment and the parties have delivered this Amendment, each as of the day and year first written above.

 

OBLIGORS :

HORIZON GLOBAL CORPORATION,

a Delaware corporation, as a U.S. Borrower, an Obligor and the Borrower Agent

By:  /s/ Brian Whittman                                    
Name:   Brian Whittman
Title:   Vice President, Finance
HORIZON GLOBAL AMERICAS INC.,

a Delaware corporation, as a U.S. Borrower and an Obligor

By:   /s/ Brian Whittman                                    
Name:   Brian Whittman
Title:   Vice President, Finance

CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641, as UK Borrower and an Obligor

By:   /s/ Jay Goldbaum                                      
Name:   Jay Goldbaum
Title:   Director

CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario, as Canadian Borrower and an Obligor

By:   /s/ Jay Goldbaum                                      
Name:   Jay Goldbaum
Title:   Vice President and Secretary

 

[Signatures continue on next page.]

HORIZON GLOBAL COMPANY LLC,
a Delaware limited liability company, as an Obligor
By: /s/ Brian Whittman                                        
Name:   Brian Whittman
Title:   Vice President, Finance
HORIZON INTERNATIONAL HOLDINGS LLC,
a Delaware limited liability company, as an Obligor
By: /s/ Brian Whittman                                        
Name:   Brian Whittman
Title:   Vice President, Finance
CEQUENT NEDERLAND HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as an Obligor

By: /s/ Jay Goldbaum                                           
Name:   Jay Goldbaum
Title:   Director
CEQUENT MEXICO HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as an Obligor

By: /s/ Jay Goldbaum                                           
Name:   Jay Goldbaum
Title:   Director

 

[Signatures continue on next page.]

CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V.,

a limited liability company formed under the laws of Mexico, as an Obligor

By:   /s/ Jay Goldbaum                                        
Name:   Jay Goldbaum
Title:   Vice President and Director

CEQUENT ELECTRICAL PRODUCTS DE

MEXICO, S. DE R.L. de C.V.,

a limited liability company formed under the laws of Mexico, as an Obligor

By:   /s/ Jay Goldbaum                                        
Name:   Jay Goldbaum
Title:   Vice President and Director

 

[Signatures continue on next page.]

AGENT AND REQUIRED LENDERS :

 

BANK OF AMERICA, N.A.,

as Agent, a U.S. Lender, a UK Lender and UK Swingline Lender

By:   /s/ Kindra M. Mullarky                            
Name:   Kindra M. Mullarky
Title:   SVP

BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender and Canadian Swingline Lender

By:   /s/ Medina Sales de Andrade                    
Name:   Medina Sales de Andrade
Title:   Vice President

BANK OF AMERICA, N.A. (acting through its London branch), as UK Security Trustee

By:   /s/ Kindra M. Mullarky                            
Name:   Kindra M. Mullarky
Title:   SVP

 

[Signatures continue on next page.]

WELLS FARGO BANK, NATIONAL ASSOCIATION, as a U.S. Lender
By:   /s/ Nykole Hanna                                        
Name:   Nykole Hanna
Title:   Authorized Signatory
WELLS FARGO CAPITAL FINANCE CORPORATION CANADA, as a Canadian Lender
By:    /s/ Trevor Tysick                                        
Name:   Trevor Tysick
Title:   Vice President
WELLS FARGO BANK, NATIONAL ASSOCIATION, (London branch), as a UK Lender
By:   /s/ S. J. Chait                                               
Name:   S. J. Chait
Title:   Authorized Signatory

 

[Signatures continue on next page.]

BANK OF MONTREAL, as a U.S. Lender and a UK

Lender

By:   /s/ Elizabeth Mitchell                                 
Name:   Elizabeth Mitchell
Title:   Vice President

BANK OF MONTREAL, Toronto Branch, as a Canadian Lender

By:   /s/ Helen Alvarez-Hernandez                      
Name:   Helen Alvarez-Hernandez
Title:   Managing Director

EXHIBIT A-1

Amendments to Loan Agreement

{see attached}

Exhibit A

Conformed to Sixth Seventh Amendment dated as of March 7, 15, 2019

 

 

AMENDED AND RESTATED LOAN AGREEMENT

Dated as of December 22, 2015

 

 

HORIZON GLOBAL CORPORATION,

CEQUENT PERFORMANCE PRODUCTS, INC., and

CEQUENT CONSUMER PRODUCTS, INC.,

as the U.S. Borrowers,

CEQUENT UK LIMITED,

as the UK Borrower,

CEQUENT TOWING PRODUCTS OF CANADA LTD.,

as the Canadian Borrower,

and the other Obligors party hereto from time to time

 

 

BANK OF AMERICA, N.A.,

as Agent

 

 

BANK OF AMERICA, N.A.,

as Sole Lead Arranger and Sole Bookrunner

 

 

SECTION 1  

     DEFINITIONS; RULES OF CONSTRUCTION      5  

1.1  

     Definitions      5  

1.2  

     Accounting Terms      81  

1.3  

     Uniform Commercial Code/PPSA      81  

1.4  

     Certain Matters of Construction      81  

1.5  

     Currency Equivalents      82  

1.6  

     Interpretation (Québec)      82  

SECTION 2  

     CREDIT FACILITIES      83  

2.1  

     Revolver Commitment      83  

2.2  

     Canadian Letter of Credit Facility      88  

2.3  

     UK Letter of Credit Facility      91  

2.4  

     U.S. Letter of Credit Facility      94  

2.5  

     Resignation of Issuing Banks      97  

2.6  

     Effect of Amendment and Restatement      97  

SECTION 3  

     INTEREST, FEES AND CHARGES      97  

3.1  

     Interest      97  

3.2  

     Fees      100  

3.3  

     Computation of Interest, Fees, Yield Protection      101  

3.4  

     Reimbursement Obligations      101  

3.5  

     Illegality      102  

3.6  

     Inability to Determine Rates      102  

3.7  

     Increased Costs; Capital Adequacy      102  

3.8  

     Mitigation      104  

3.9  

     Funding Losses      104  

3.10

     Maximum Interest      104  

SECTION 4  

     LOAN ADMINISTRATION      105  

4.1  

     Manner of Borrowing and Funding Revolver Loans      105  

4.2  

     Defaulting Lender      107  

4.3  

     Number and Amount of Interest Period Loans; Determination of Rate      108  

4.4  

     Borrower Agent      108  

4.5  

     One Obligation      109  

4.6  

     Effect of Termination      109  

4.7  

     Limitation on Borrowings      110  

SECTION 5  

     PAYMENTS      110  

5.1  

     General Payment Provisions      110  

5.2  

     Repayment of Revolver Loans      110  

5.3  

     Payment of Other Obligations      111  

5.4  

     Marshaling; Payments Set Aside      111  

5.5  

     Application and Allocation of Payments      111  

5.6  

     Dominion Account      115  

5.7  

     Account Stated      116  

5.8  

     Taxes      116  

5.9  

     Lender Tax Information      125  

5.10

     Nature and Extent of Each Borrower’s Liability      126  

 

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5.11  

     Currency Matters      132  

SECTION 6  

     CONDITIONS PRECEDENT      133  

6.1    

     Conditions Precedent to Closing Date      133  

6.2    

     Conditions Precedent to All Credit Extensions      136  

SECTION 7  

     COLLATERAL      136  

7.1    

     Grant of Security Interest      136  

7.2    

     Cash Collateral      136  

7.3    

     Collateral Assignment of Leases      137  

7.4    

     Limitations      137  

SECTION 8  

     COLLATERAL ADMINISTRATION      137  

8.1    

     Borrowing Base Reports; Reallocation of U.S. Availability      137  

8.2    

     Accounts      138  

8.3    

     Inventory      139  

8.4    

     [Reserved.]      139  

8.5    

     Deposit Accounts      139  

8.6    

     General Provisions      139  

SECTION 9  

     REPRESENTATIONS AND WARRANTIES      140  

9.1    

     General Representations and Warranties      140  

SECTION 10

     COVENANTS AND CONTINUING AGREEMENTS      150  

10.1  

     Affirmative Covenants      150  

10.2  

     Negative Covenants      163  

10.3  

     Financial Covenant      179  

SECTION 11

     EVENTS OF DEFAULT; REMEDIES ON DEFAULT      180  

11.1  

     Events of Default      180  

11.2  

     Remedies upon Default      183  

11.3  

     License      184  

11.4  

     Setoff      184  

11.5  

     Remedies Cumulative; No Waiver      184  

SECTION 12

     AGENT      185  

12.1  

     Appointment, Authority and Duties of Agent      185  

12.2  

     Security Trustees      186  

12.3  

     Agreements Regarding Collateral and Borrower Materials      191  

12.4  

     Reliance By Agent      193  

12.5  

     Action Upon Default      193  

12.6  

     Ratable Sharing      193  

12.7  

     Indemnification      193  

12.8  

     Successor Agent and Co-Agents      194  

12.9  

     Limitation on Responsibilities of Agent      194  

12.10

     Due Diligence and Non-Reliance      195  

12.11

     Remittance of Payments and Collections      195  

 

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12.12

     Individual Capacities      196  

12.13

     Titles      196  

12.14

     Bank Product Providers      196  

12.15

     No Third Party Beneficiaries      196  

12.16

     Authorization Regarding Intercreditor Agreement      196  

12.17

     Withholding Taxes      196  

SECTION 13

     BENEFIT OF AGREEMENT; ASSIGNMENTS      199  

13.1  

     Successors and Assigns      199  

13.2  

     Participations      199  

13.3  

     Assignments      200  

13.4  

     Replacement of Certain Lenders      200  

SECTION 14

     MISCELLANEOUS      201  

14.1  

     Consents, Amendments and Waivers      201  

14.2  

     Indemnity      202  

14.3  

     Notices and Communications      202  

14.4  

     Performance of Obligors’ Obligations      204  

14.5  

     Credit Inquiries      204  

14.6  

     Severability      204  

14.7  

     Cumulative Effect; Conflict of Terms      204  

14.8  

     Counterparts; Execution      204  

14.9  

     Entire Agreement      204  

14.10

     Relationship with Lenders      204  

14.11

     No Advisory or Fiduciary Responsibility      205  

14.12

     Confidentiality      205  

14.13

     Certifications Regarding Senior Term Loan Documents and Term Loan Documents      205  

14.14

     GOVERNING LAW      206  

14.15

     Consent to Forum      206  

14.16

     Waivers by Obligors      206  

14.17

     Patriot Act Notice and “Know Your Client/Customer” Checks      207  

14.18

     Canadian Anti-Money Laundering Legislation      207  

14.19

     NO ORAL AGREEMENT      207  

14.20

     Process Agent      207  

LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A

 

Assignment

Exhibit B

 

Assignment Notice

Exhibit C-1

 

Form of In-Transit Inventory Lien Waiver

Exhibit C-2

 

Form of Vendor Lien Waiver

Exhibit D

 

Form of Perfection Certificate

Exhibit E

 

Form of Special Irrevocable Power of Attorney

Exhibit F

 

Form of Notice of Borrowing

Exhibit G

 

Form of Amended and Restated ABL Guarantee and Collateral Agreement

Schedule 1.1(A)

 

            Existing Letters of Credit

 

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Schedule 1.1(B)

 

            Commitments of Lenders

Schedule 9.1.3

 

            Governmental Licenses

Schedule 9.1.5

 

            Real Property

Schedule 9.1.6

 

            Disclosed Matters

Schedule 9.1.12

 

            Subsidiaries

Schedule 9.1.13

 

            Insurance

Schedule 9.1.23

 

            Material Contracts

Schedule 10.2.1

 

            Existing Debt as of the Seventh Amendment Effective Date

Schedule 10.2.2

 

            Existing Liens as of the Seventh Amendment Effective Date

Schedule 10.2.4

 

            Existing Investments as of the Seventh Amendment Effective Date

Schedule 10.2.5

 

            Permitted Asset Dispositions

Schedule 10.2.9

 

            Existing Affiliate Transactions

Schedule 10.2.10

 

            Existing Restrictive Agreements

AMENDED AND RESTATED LOAN AGREEMENT

THIS AMENDED AND RESTATED LOAN AGREEMENT is dated as of December 22, 2015 (as amended, restated, supplemented or otherwise modified from time to time, this “ Agreement ”), and is by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (“ Parent Borrower ”), CEQUENT PERFORMANCE PRODUCTS, INC. , a Delaware corporation (“ Cequent Performance ”), CEQUENT CONSUMER PRODUCTS, INC. , an Ohio corporation (“ Cequent Consumer ”), CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Cequent Performance, Cequent Consumer, and Cequent UK, collectively, “ Borrowers ”), the other Persons from time to time party to this Agreement as Obligors (as defined herein), the financial institutions party to this Agreement from time to time as Lenders, and BANK OF AMERICA, N.A. , a national banking association, in its capacity as agent for itself and the other Secured Parties (“ Agent ”).

R E C I T A L S :

Parent Borrower, Cequent Performance, Cequent Consumer, certain Lenders, and Agent are party to that certain Loan Agreement dated as of June 30, 2015 (as amended, restated or otherwise modified prior to the date hereof, the “ Original Loan Agreement ”), pursuant to which Agent and such Lenders made certain loans and other financial accommodations to such Borrowers;

Borrowers and Lenders have elected to exercise their rights under Section  2.1.7 of the Original Loan Agreement to seek an increase in agreed to reduce the Commitments up to an aggregate principal amount of $ 99,000,000 90,000,000 and, subject to the terms and conditions set forth in this Agreement, the Lenders party hereto have agreed to modify their respective Commitments to the levels described on Schedule 1.1(B) hereto;

Borrowers, Lenders and Agent desire to amend in certain respects and restate in its entirety the Original Loan Agreement as set forth herein; and

Borrowers have requested that Lenders provide credit facilities to Borrowers to finance their mutual and collective business enterprise. Lenders are willing to provide the credit facilities on the terms and conditions set forth in this Agreement.

 

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NOW, THEREFORE , for valuable consideration hereby acknowledged, the parties agree that the Original Loan Agreement shall be amended and restated to read in its entirety as set forth herein, and the parties further agree as follows:

SECTION 1

DEFINITIONS; RULES OF CONSTRUCTION

1.1          Definitions . As used herein, the following terms have the meanings set forth below:

“ Account ” as defined in the UCC or the PPSA, as applicable, and in any event shall include all rights to payment for goods sold or leased, or for services rendered, whether or not they have been earned by performance.

“ Account Debtor ” a Person obligated under an Account, Chattel Paper or General Intangible.

“ Accounts Formula Amount ” the Canadian Accounts Formula Amount or the U.S. Accounts Formula Amount, as the context requires.

“ Acquisition ” a transaction or series of transactions resulting in (a) acquisition of a business, division or substantially all assets of a Person; (b) record or beneficial ownership of 50% or more of the Equity Interests of a Person; or (c) merger, consolidation or combination of a Borrower or Subsidiary with another Person.

“ Acquisition Lease Financing ” any sale or transfer by the Parent Borrower or any Subsidiary of any property, real or personal, that is acquired pursuant to a Permitted Acquisition, in an aggregate amount not to exceed $20,000,000 at any time after the Original Closing Date, which property is rented or leased by the Parent Borrower or such Subsidiary from the purchaser or transferee of such property, so long as the proceeds from such transaction consist solely of cash.

“ Affiliate ” 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.

“ Agent Indemnitees ” Agent and its officers, directors, employees, Affiliates, branches, agents and attorneys, including, without limitation, the Security Trustees.

“ Agent Professionals ” attorneys, accountants, appraisers, auditors, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals and experts retained by Agent.

“ Agreed Security Principles ” shall mean, with respect to only the Foreign Facility Obligations and the Foreign Obligors that are not U.S. Obligors, principles in recognition of certain legal and practical difficulties in obtaining effective guarantees and security from such Foreign Obligors in jurisdictions in which it has been agreed that a Lien on Collateral will be granted in order to secure the Foreign Facility Obligations, and the agreement that in such jurisdictions or with respect to the Foreign Facility Obligations of such Foreign Obligors:

(a)        general statutory limitations, financial assistance, capital maintenance, corporate benefit, corporate interest ( vennootschappelijk belang ), fraudulent preference, “thin capitalization” rules, tax restrictions or costs, retention of title claims, liquidity maintenance and

 

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similar principles may limit the ability of any such Foreign Obligor to provide a guarantee or security or may require that the guarantee or security be limited by an amount or otherwise;

(b)        the consent of certain supervisory boards, works councils or other external bodies or persons may be required under Applicable Law in such jurisdiction to enable any such Foreign Obligor to provide a guarantee or security, and such Foreign Obligor shall use best efforts to obtain such consent, but such guarantee and/or security shall not be required unless such consent has been received;

(c)        any such Foreign Obligor will not be required to give guarantees or enter into Security Documents if it would conflict with the fiduciary duties of the directors, officers, managers (or equivalent) of such Foreign Obligor or contravene any legal prohibition or would result in (or in a material risk of) the contravention of the fiduciary duties of, or in civil, personal or criminal liability on the part of any directors, officers, managers (or equivalent) of any such Foreign Obligor;

(d)        the Liens (including, for the avoidance of doubt, the maximum amount secured thereunder to the extent required by any Applicable Law) securing the Foreign Facility Obligations and the extent of their perfection will be agreed by Agent and the Borrower Agent, taking into account the cost (including material adverse tax consequences or material adverse effects on interest deductibility and stamp duty, notarization and registration fees) to such Foreign Obligors of providing such Liens so as to ensure that it is not excessive in light of the benefit accruing to the Foreign Facility Secured Parties;

(e)        in certain jurisdictions it may be either legally impossible or impractical (such impossibility or impracticality to be agreed by Agent and the Borrower Agent) to grant guarantees or create Liens over certain categories of assets in which event such guarantees will not be granted and Liens will not be taken over such assets; provided that, to the extent a change in law makes it possible or practical to grant a Lien where it was previously considered impossible or impractical, such Foreign Obligors will provide such guarantees and/or Liens subject to these Agreed Security Principles as soon as reasonably practicable;

(f)        no such Foreign Obligor shall be required to guarantee or grant Liens to secure the Foreign Facility Obligations to the extent that providing such guarantee or Liens would result in material adverse tax consequences (including creation of any investment in United States property under Section  956 of the Code) to an Obligor or a Subsidiary of an Obligor, as reasonably determined by Borrower Agent in consultation with Agent; and

(g)        perfection of Liens, when required, and other legal formalities will be completed as soon as reasonably practicable and, in any event, within the time periods specified in the relevant Security Documents or this Agreement (as such times may be extended by Agent in its reasonable discretion if the relevant provision so allows).

As of the Closing Seventh Amendment Effective Date, the Obligors agree that no condition of any of the types described in the foregoing clauses (a) through (g) exists, and that the Agreed Security Principles shall not, as of the Closing Seventh Amendment Effective Date, limit the guarantees provided (or to be provided pursuant to Section 10.1.15) and Liens granted (or to be granted pursuant to Section   10.1.15) by the Foreign Obligors party to this Agreement on the Closing Seventh Amendment Effective Date.

“ Agreement Currency ” as defined in Section  1.5 .

“ Allocable Amount ” as defined in Section  5.10.3 .

“ Alternative Incremental Debt ” any Debt incurred by a U.S. Obligor in the form of one or more series of secured or unsecured bonds, debentures, notes or similar instruments or in the form of loans;

 

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provided that Amended and Restated ABL Guarantee and Collateral Agreement ” Amended and Restated ABL Guarantee and Collateral Agreement, in the form attached as Exhibit G hereto, dated as of the Seventh Amendment Effective Date, by and among the Agent and the Obligors party thereto (which amends and restates (i) that certain Foreign Facility Guarantee and Collateral Agreement, dated as of the Closing Date, by and among Cequent Performance, Horizon International Holdings LLC, a Delaware limited liability company, the Canadian Domiciled Obligors, the UK Domiciled Obligors, the Mexican Domiciled Obligors, Cequent Nederland Holdings B.V., certain other Obligors and Agent and (ii)  that certain ABL Guarantee and Collateral Agreement, dated as of June  30, 2015, by and among the U.S. Obligors and Agent ), as amended, restated, supplemented or otherwise modified from time to time .

(a)         if such Debt is secured, (i) such Debt shall be secured only by a Lien on the Collateral securing the Term Loan Debt having the same priorities in the Term Priority Collateral and the Revolver Priority Collateral as the Term Loan Debt (or on a junior basis) and shall not be secured by any properties or assets of any Obligor other than the Collateral securing the Term Loan Debt ( provided that if such Debt is in the form of loans, it may be secured by Liens on the Collateral only on a junior basis to the Liens on the Collateral securing the Obligations), (ii) the security agreements relating to such Debt shall be substantially similar to the Term Loan Security Documents (with such differences as are reasonably satisfactory to Agent and other than, in the case of Debt secured on a junior basis, with respect to priority) and (iii) such Debt shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to Agent,

(b)        such Debt does not mature earlier than the date that is 91 days after the Latest Maturity Date in effect hereunder at the time of incurrence thereof and has a weighted average life to maturity no shorter than the Term Loan Debt with the Latest Maturity Date in effect at the time of incurrence of such Debt,

(c)         the definitive documentation in respect of such Debt (i) contains covenants, events of default and other terms that are customary for similar Debt in light of then-prevailing market conditions and (ii)  shall not contain additional covenants or events of default not otherwise applicable to the Term Loan Debt or the Loans or covenants more restrictive than the covenants applicable to the Term Loan Debt or the Loans; provided that the foregoing clause (ii)  shall not apply to covenants or events of default applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such Debt; provided further that any such Debt may include additional covenants or events of default not otherwise applicable to the Term Loan Debt or the Loans or covenants more restrictive than the covenants applicable to the Term Loan Debt or the Loans in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such Debt so long as this Agreement is amended to provide all of the Lenders with the benefits of such additional covenants, events of default or more restrictive covenants,

(d)         such Debt does not provide for any mandatory prepayment, redemption or repurchase (other than upon a change of control, fundamental change, conversion or exchange in the case of convertible or exchangeable Debt, customary asset sale or event of loss mandatory offers to purchase, and customary acceleration rights after an event of default) prior to the date that is 91 days after the Latest Maturity Date in effect hereunder at the time of incurrence of such Debt; provided that any such Debt secured by Liens on a pari passu basis with the Liens on the Collateral securing the Term Loan Debt (any such Debt, “ Pari Passu Alternative Incremental Debt ” ) may be subject to a mandatory prepayment offer from the Net Proceeds of any event that triggers a mandatory prepayment of the Term Loan Debt so long as the holders of such Debt receive no more than their ratable share of such prepayment (such ratable share to be calculated

 

-7-

by reference to the outstanding amount of such Debt, the outstanding amount of the Term Loan Debt and the outstanding amount of Pari Passu Permitted Term Loan Refinancing Debt, in each case immediately prior to such prepayment),

(e)        at the time of incurrence of such Alternative Incremental Debt, (i) no Default shall have occurred and be continuing hereunder nor any “ Default ” under and as defined in the Term Loan Agreement, both immediately prior to and immediately after giving effect to the incurrence of such Alternative Incremental Debt and (ii)  the representations and warranties of each Obligor set forth in the Loan Documents and the Term Loan Documents shall be true and correct in all material respects (or in all respects if qualified by materiality) on and as of such date; and

(f)         such Debt is not guaranteed by any Person other than U.S. Obligors.

Alternative Incremental Debt will include any Registered Equivalent Notes issued in exchange therefor.

“ AML Legislation ” as defined in Section  14.17 .

“ Anti-Corruption Laws ” all laws, rules, and regulations of any jurisdiction applicable to any Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.

“ Applicable Law ” all laws, rules, regulations and governmental guidelines applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law, common law and equitable principles (including, without limitation, any banking, exchange control, financial assistance, minimum capitalization, fraudulent conveyance, mandatory labor advice or similar rules or regulations), and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.

“ Applicable Lenders ” (a) with respect to the Canadian Borrower, the Canadian Lenders, (b) with respect to the UK Borrower, the UK Lenders, and (c) with respect to the U.S. Borrowers, the U.S. Lenders.

“ Applicable Margin ” the margin set forth below, as determined by the average daily Total Availability for the last Fiscal Quarter:

 

    

Level

    
Average Daily
Availability 		 
  		    












U.S. Base
Rate
Loans,
Canadian
Base Rate
Loans and
Canadian
Prime Rate
Loans, UK
Base Rate
Loans

(other than
the FILO
Loans)

 
 
 
 
 
 
 
 
 
 
 

 
 
 

   







Canadian
BA Rate
Loans,
LIBOR
Revolver
Loans
(other than
the FILO
Loans) 		 
 
 
 
 
 
 
 
  		   
Base Rate
FILO Loans 		 
  		    
LIBOR
FILO  Loans 		 
 

I

   ³ $75,000,00        0.25 1.25 %      1.25 2.25 %      1.00%        2.00%  

 

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II

   ³  $50,000,000

and <

$75,000,000

   0.50 1.50 %    1.50 2.50 %    1.25%      2.25%  

III

   ³  $25,000,000
and <
$50,000,000 		   0.75 1.75 %    1.75 2.75 %    1.50%      2.50%  

IV

   < $25,000,000    1.00 2.00 %    2.00 3.00 %    1.75%      2.75%  

Until the six three -month anniversary of the Original Closing Seventh Amendment Effective Date, margins shall be determined as if Level  III IV were applicable. Thereafter, margins shall be subject to increase or decrease by Agent on the first day of the calendar month following each Fiscal Quarter end. If Agent is unable to calculate average daily Total Availability for a Fiscal Quarter due to Borrowers’ failure to deliver any Borrowing Base Report when required hereunder, then, at the option of Agent or Required Lenders, margins shall be determined as if Level IV were applicable until the first day of the calendar month following its receipt.

“ Approved Fund ” any Person (other than a natural Person) engaged in making, purchasing, holding or otherwise investing in commercial loans in its ordinary course of activities.

“ Asset Disposition ” a sale, lease, license, consignment, transfer or other disposition of Property of an Obligor, including any disposition in connection with a sale-leaseback transaction or synthetic lease.

“Assignment ” an assignment agreement between a Lender and an Eligible Assignee, in the form of Exhibit A or otherwise satisfactory to Agent.

“ Assumed Preferred Stock ” any preferred stock or preferred equity interests of any Person that becomes a Subsidiary after the Original Closing Date; provided that (a)  such preferred stock or preferred equity interests exist at the time such Person becomes a Subsidiary and are not created in contemplation of or in connection with such Person becoming a Subsidiary and (b)  the aggregate liquidation value of all such outstanding preferred stock and preferred equity interests shall not exceed $10,000,000 at any time outstanding, less the aggregate principal amount of Debt incurred and outstanding pursuant to Section   10.2.1(a)(x) .

“ Availability Reserve ” the Canadian Availability Reserve, the UK Availability Reserve and/or the U.S. Availability Reserve, as the context requires.

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

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

“ Bank of America ” Bank of America, N.A., a national banking association, and its successors and assigns.

“ Bank of America (Canada) ” Bank of America (acting through its Canada branch).

“ Bank of America (London) ” Bank of America (acting through its London branch).

 

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“ Bank of America Indemnitees ” Bank of America, Bank of America (Canada), Bank of America (London), and their respective officers, directors, employees, Affiliates, branches, agents and attorneys.

“ Bank Product ” any of the following products, services or facilities extended to any Borrower or Affiliate of a Borrower by a Lender or any of its Affiliates or branches: (a) Cash Management Services; (b) products under Hedging Agreements; (c) commercial credit card and merchant card services; (d) Supply Chain Finance Arrangements; and (e) other banking products or services, other than Letters of Credit.

“ Bank Product Reserve ” the Canadian Bank Product Reserve, the UK Bank Product Reserve and/or the U.S. Bank Product Reserve, as the context requires.

“Base Incremental Amount” as of any date, an amount equal to (a) $45,000,000 less (b) the aggregate principal amount of Incremental Term Commitments established prior to such date under the Term Loan Agreement in reliance on the Base Incremental Amount less (c) the aggregate principal amount of Alternative Incremental Debt established prior to such date in reliance on the Base Incremental Amount.

“ Base Rate ” Canadian Base Rate and/or U.S. Base Rate, as the context requires.

“ Base Rate Loan ” a Canadian Base Rate Loan, UK Base Rate Loan and/or U.S. Base Rate Loan, as the context requires.

“ Beneficial Ownership Certification ” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.

“ Beneficial Ownership Regulation ” means 31 C.F.R. § 1010.230.

“ Benefit Plan ” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“ Board ” the Board of Governors of the Federal Reserve System of the United States of America.

“ Borrowed Money ” with respect to any Obligor, without duplication, its (a) Debt that (i) arises from the lending of money by any Person to such Obligor, (ii) is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments or (iii) accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables owing in the Ordinary Course of Business); (b) Capital Lease Obligations and (c) reimbursement obligations with respect to letters of credit.

“ Borrower Agent ” as defined in Section  4.4 .

“ Borrower Group ” a group consisting of (a) the Canadian Borrower, (b) the UK Borrower, or (c) the U.S. Borrowers, as the context requires.

“ Borrower Group Commitment ” with respect to the commitment of (a) a Canadian Lender, its Canadian Revolver Commitment, (b) a UK Lender, its UK Revolver Commitment and (c) a U.S. Lender, its U.S. Revolver Commitment. The term “ Borrower Group Commitments ” means (i) the Borrower Group Commitment of all Canadian Lenders, (ii) the Borrower Group Commitment of all UK Lenders, or

 

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(iii) the Borrower Group Commitment of all U.S. Lenders, as the context requires. To the extent any Lender has more than one Borrower Group Commitment, each such Commitment shall be considered as a separate Commitment for purposes of this definition.

“ Borrower Materials ” Borrowing Base Reports, Compliance Certificates and other information, reports, financial statements and other materials delivered by Borrowers hereunder, as well as other Reports and information provided by Agent to Lenders.

“ Borrowing ” a group of Loans that are made or converted together on the same day and have the same interest option and, if applicable, Interest Period.

“ Borrowing Base ” (a) the Canadian Borrowing Base, (b) the UK Borrowing Base, and/or (c) the U.S. Borrowing Base, as the context requires.

“ Borrowing Base Report ” a report of each Borrowing Base and the Total Borrowing Base by Borrower Agent, on behalf of Borrowers, together with information regarding any retention of title from vendors to UK Borrower, all in form and substance satisfactory to Agent.

“ Borrowing Base Trigger Period ” the period (a) commencing on the day that an Event of Default occurs or U.S. Adjusted Availability is less than or equal to, for 2 consecutive Business Days, the lesser of (i) 15% of the U.S. Borrowing Base (computed without regard to the U.S. Special Availability Block) or (ii) 15% of the aggregate amount of all U.S. Revolver Commitments; and (b) continuing until no Event of Default exists and, during each of the preceding 30 consecutive days, U.S. Adjusted Availability has been greater than the lesser of (i) 15% of the U.S. Borrowing Base (computed without regard to the U.S. Special Availability Block) or (ii) 15% of the aggregate amount of all U.S. Revolver Commitments.

“ Business Day ” any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, New York City, North Carolina or Illinois, and when used in reference to (a) a LIBOR Loan, the term shall also exclude any day on which dealings in Dollar deposits are not conducted in the London interbank market, (b) a UK Revolver Loan, the term shall also exclude any day (i) on which banks are not open for the transaction of banking business in London, England and (ii) in respect of any such UK Revolver Loan denominated in Euros, any day that is not a TARGET Day, and (c) a Canadian Revolver Loan, the term shall also exclude a day on which banks in Toronto, Ontario, Canada are not open for the transaction of banking business.

“ Canadian Accounts Formula Amount ” 85% of the Value of Canadian Eligible Accounts; provided , however, that such percentage shall be reduced by 1.0% for each percentage point (or portion thereof) that the Dilution Percent of the Canadian Borrower exceeds 5%.

“ Canadian Allocated U.S. Availability ” U.S. Availability designated by the Borrower Agent for application to the Canadian Borrowing Base.

“ Canadian Availability ” the Canadian Borrowing Base minus the Canadian Revolver Usage.

“ Canadian Availability Reserve ” the sum (without duplication) of (a) the Canadian Inventory Reserve; (b) the Canadian Rent and Charges Reserve; (c) the Canadian Bank Product Reserve; (d) the aggregate amount of liabilities secured by Liens upon Canadian Facility Collateral that are (or, in the opinion of Agent in the exercise of its Permitted Discretion, may be) senior to Agent’s Liens or that Agent in its Permitted Discretion determines may be required to be paid to permit or facilitate exercise of rights or remedies with respect to Canadian Facility Collateral (but imposition of any such reserve shall not waive an Event of Default arising therefrom), including, without limitation, any such amounts due

 

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and not paid for wages or vacation pay (including amounts protected by the Wage Earner Protection Program Act (Canada) ), amounts due and not paid under any legislation relating to workers’ compensation or to employment insurance, all amounts deducted or withheld and not paid and remitted when due under the Income Tax Act (Canada) , amounts currently or past due and not paid for realty, municipal or similar Taxes (to the extent impacting any Canadian Facility Collateral), all amounts currently or past due and not contributed, remitted or paid to any Canadian Pension Plan or under the Canada Pension Plan or the PBA, and any amounts representing any unfunded liability, solvency deficiency or wind up deficiency with respect to any Canadian Pension Plan or Canadian Multi-Employer Plan and (e) such additional reserves, in such amounts and with respect to such matters, as Agent in its Permitted Discretion may elect to impose from time to time ; provided the imposition of any such reserves or change in a reserve after the Closing Date shall not be effective until two (2)  Business Days after notice thereof (which may be oral notice, promptly confirmed in writing) to the Borrower Agent unless (i)  a Default has occurred and is then continuing, (ii)  the reserve or change in reserve is the result of a Lien, senior in priority to Agent ’ s or the applicable Security Trustee ’ s Lien, attached to any Canadian Facility Collateral included in the Canadian Borrowing Base and/or (iii)  the changes to any such reserve results solely from mathematical calculations of the amount of such reserve in accordance with the methodology of calculation previously utilized (in the case of each of which such reserve or change in reserve shall be effective immediately); and provided further that during any such two (2)  Business Day notice period, Lenders shall have no obligations to fund any Canadian Revolver Loan or cause to be issued any Canadian Letter of Credit to the extent that, after giving pro forma effect to the making of such Canadian Revolver Loan or issuance of such Canadian Letter of Credit and to the establishment of any such new reserve or change in such reserve, a Canadian Overadvance would exist .

“ Canadian BA Rate ” with respect to each Interest Period for a Canadian BA Rate Loan, the a per annum rate of interest per annum equal to the average rate applicable to Canadian Dollar bankers ’ acceptances having an identical or comparable term as the proposed Canadian BA Rate Loan displayed and identified as such on the display referred to as the “ CDOR Page ” (or any display substituted therefor) of Reuter Monitor Money Rates Service as at approximately Canadian Dollar bankers’ acceptance rate, or comparable or successor rate approved by Agent, determined by it at or about 10:00 a.m. ( T o ronto time on such ) on the applicable day (or the preceding Business Day , if such the applicable day is not a Business Day , as of 10:00 a.m. Toronto time on the immediately preceding Business Day), provided that if such rate does not appear on the CDOR Page at such time on such date, the rate for such date will be the annual discount rate (rounded upward to the nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. Local Time on such day at which a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) as selected by Agent is then offering to purchase Canadian Dollar bankers ’ acceptances accepted by it having such specified term (or a term as closely as possible comparable to such specified term). In ) for a term comparable to the Canadian BA Rate Loan, as published on the CDOR or other applicable Reuters screen page (or other commercially available source designated by Agent from time to time); provided, that in no event shall the Canadian BA Rate be less than zero.

“ Canadian BA Rate Loan ” a Canadian Revolver Loan, or portion thereof, funded in Canadian Dollars and bearing interest calculated by reference to the Canadian BA Rate.

“ Canadian Bank Product Reserve ” the aggregate amount of reserves established by Agent from time to time in its Permitted Discretion in respect of Secured Bank Product Obligations for the account of the Canadian Domiciled Obligors and any Affiliate thereof domiciled in Canada.

“ Canadian Base Rate ” on any date, the highest of (a) a fluctuating rate of interest per annum equal to the rate of interest in effect for such day as publicly announced from time to time by Bank of America (Canada) as its “Base Rate”, (b) the sum of 0.50% plus the Federal Funds Rate for such day, and

 

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(c) the sum of 1.00% plus the LIBOR rate for a thirty (30) day Interest Period as of such day. The “Base Rate” is a rate set by Bank of America (Canada) based upon various factors including Bank of America (Canada)’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans made in Dollars in Canada, which may be priced at, above, or below such announced rate. Any change in such rate shall take effect at the opening of business on the day of such change. In the event Bank of America (Canada) (including any successor or assignee) does not at any time announce a “Base Rate”, clause (a) of Canadian Base Rate shall mean the “Base Rate” (being the rate for loans made in Dollars in Canada) publicly announced by a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) selected by Agent. In no event shall the Canadian Base Rate be less than zero.

“ Canadian Base Rate Loan ” a Canadian Revolver Loan, or portion thereof, funded in Dollars and bearing interest calculated by reference to the Canadian Base Rate.

“ Canadian Borrower ” Cequent Canada (as defined in the preamble to this Agreement).

“ Canadian Borrowing Base ” on any date of determination, an amount (expressed in Dollars, based on the Dollar Equivalent thereof) equal to the lesser of (a) the aggregate Canadian Revolver Commitments and (b) the sum of the Canadian Accounts Formula Amount, plus the Canadian Inventory Formula Amount, plus Canadian Allocated U.S. Availability, minus the Canadian Availability Reserve; provided, however, that no Accounts, Inventory or other Property acquired in a Permitted Acquisition or otherwise outside the Ordinary Course of Business shall be included in the calculation of the Canadian Borrowing Base until completion of a customary due diligence investigation by Agent, which may in Agent’s sole discretion include applicable field examinations and appraisals (which shall not be included in the limits on the number of field examinations or appraisals provided in Section  10.1.1 ) satisfactory to Agent.

“ Canadian Commitment Termination Date ” the earliest to occur of (a) the Revolver Termination Date; (b) the date on which U.S. Borrowers terminate the U.S. Revolver Commitments pursuant to Section  2.1.4 ; (c) the date on which the U.S. Revolver Commitments are terminated pursuant to Section  11.2 ; (d) the date on which Canadian Borrower terminates the Canadian Revolver Commitments pursuant to Section  2.1.4 ; and (e) the date on which the Canadian Revolver Commitments are terminated pursuant to Section  11.2 .

“ Canadian Deposit Account Control Agreement ” a control agreement (whether in the form of an agreement, notice and acknowledgement or like instrument) satisfactory to Agent executed by an institution maintaining a Deposit Account for an Obligor in favor of Agent or Security Trustee as security for the Canadian Facility Obligations of such Obligor.

“ Canadian Dollars or Cdn$ ” the lawful currency of Canada.

“ Canadian Domiciled Obligor ” Canadian Borrower and each Canadian Subsidiary that is or is required to be liable for payment of any Foreign Facility Obligations or that has granted a Lien on its assets in favor of Agent to secure any Foreign Facility Obligations, and “ Canadian Domiciled Obligors ” means all such Persons, collectively.

“ Canadian Dominion Account(s) ” one or more special accounts established by the Canadian Borrower at Bank of America (Canada) or another bank reasonably acceptable to Agent, and, as required under Section  8.2.4 , with respect to which Agent has the right to issue a notice of exclusive control for withdrawal purposes during a Dominion Trigger Period.

 

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“ Canadian Eligible Account ” an Account owing to Canadian Borrower that arises in the Ordinary Course of Business from the sale of goods, is payable in Dollars or Canadian Dollars and is deemed by Agent, in its Permitted Discretion, to be a Canadian Eligible Account. Without limiting the foregoing, no Account shall be a Canadian Eligible Account if (a) it is unpaid for more than 60 days after the original due date, or more than 120 days after the original invoice date; (b) 50% or more of the Accounts owing by the Account Debtor are not Canadian Eligible Accounts under the foregoing clause; (c) when aggregated with other Accounts owing by the Account Debtor, it exceeds (but solely to the extent of such excess) 15% of the aggregate Canadian Eligible Accounts (or such higher percentage as Agent may establish for the Account Debtor from time to time); (d) it does not conform with a covenant or representation herein; (e) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); (f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or is subject to any Sanction or on any specially designated nationals list maintained by OFAC or any other Governmental Authority; or Canadian Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) from a financial institution reasonably acceptable to Agent and on terms reasonably satisfactory to Agent; (g) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) from a financial institution reasonably acceptable to Agent and on terms reasonably satisfactory to Agent; (h) it is owing by a Governmental Authority, unless (i) the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in compliance with the United States federal Assignment of Claims Act or (ii) the Account Debtor is the government of Canada or a province or territory thereof, or any department, agency or instrumentality of any such government, and the Account has been assigned to Agent in compliance with the Financial Administration Act (Canada) (or similar Applicable Law of such province or territory), and any other steps necessary to perfect or render opposable the Lien of Agent on such Account have been complied with to Agent’s satisfaction; (i) it is not subject to a duly perfected, first priority Lien in favor of Agent, or is subject to any other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section  10.2.2(a) or Section  10.2.2(r) is prior to the Lien of Agent, unless a Canadian Availability Reserve is in effect with respect thereto)); (j) the goods giving rise to it have not been delivered to the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (l) its payment has been extended or the Account Debtor has made a partial payment; (m) it arises from a sale to an Affiliate, from a sale on a cash-on-delivery, bill-and-hold, sale-or-return, sale-on-approval, consignment, or other repurchase or return basis, or from a sale for personal, family or household purposes; (n) it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued; or (o) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof. In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than 120 days old will be excluded.

“ Canadian Eligible Inventory ” Inventory owned by Canadian Borrower that Agent, in its Permitted Discretion, deems to be Canadian Eligible Inventory. Without limiting the foregoing, no Inventory shall be Canadian Eligible Inventory unless it (a) is finished goods or raw materials or work-in-process and not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise

 

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unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, has not been acquired from a Person subject to any Sanction or on any specially designated nationals list maintained by OFAC or any other Governmental Authority, and does not constitute Hazardous Materials under any Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section  10.2.2(a) or Section  10.2.2(r) is prior to the Lien of Agent, unless a Canadian Availability Reserve is in effect with respect thereto)); (h) is within the continental United States or Canada, is not in transit except between locations of Canadian Borrower, and is not consigned to any Person; (i) is not subject to any negotiable document; (j) is not subject to any License or other arrangement that restricts Canadian Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or an appropriate Canadian Rent and Charges Reserve has been established; and (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate Canadian Rent and Charges Reserve has been established; and (l) is reflected in the details of a current perpetual inventory report.

“ Canadian Employee Plan ” any employee benefit plan, policy, program, agreement or arrangement, including retirement, pension, profit sharing, employment, bonus or other incentive compensation, retention, stock purchase, equity or equity-based compensation, deferred compensation, change in control, severance, sick leave, vacation, loans, salary continuation, hospitalization, health, life insurance, educational assistance or other fringe benefit or perquisite plan, policy, agreement which is or was sponsored, maintained or contributed to by, or required to be contributed to by, a Canadian Domiciled Obligor, or with respect to which a Canadian Domiciled Obligor has, or could reasonably be expected to have, any obligation or liability, contingent or otherwise, but excluding the Canada Pension Plan and any provincial or federal program providing health benefits, employment insurance or workers’ compensation benefits.

“ Canadian Facility Collateral ” Collateral granted by any Canadian Domiciled Obligor that now or hereafter secures (or is intended to secure) any of the Canadian Facility Obligations.

“ Canadian Facility Guarantor ” each Dutch Domiciled Obligor, each U.S. Domiciled Obligor, each UK Domiciled Obligor, each Mexican Domiciled Obligor, each Canadian Subsidiary Obligor, each German Domiciled Obligor and each other Person that guarantees or is required to guarantee payment or performance of the Canadian Facility Obligations (including pursuant to a Foreign Cross-Guarantee) pursuant to Section  10.1.9 and/or the Collateral and Guarantee Requirement.

“ Canadian Facility Obligations ” all Obligations of the Canadian Facility Obligors owed to the Canadian Facility Secured Parties, and the other Foreign Facility Obligations that are the subject of a cross-Guarantee (including, without limitation, the Foreign Cross-Guarantee) made by the Canadian Facility Obligors. (a)  principal of and premium, if any, on the Canadian Revolving Loans, (b)  Canadian LC Obligations and other obligations with respect to Canadian Letters of Credit, (c)  interest, expenses, fees, indemnification obligations, Extraordinary Expenses and other amounts payable in connection with the Canadian Revolving Loans under Loan Documents, (d)  Secured Bank Product Obligations for the account of the Canadian Borrower and any Canadian Subsidiary or Affiliate domiciled in Canada, and (e)  other Debts, obligations and liabilities of any kind owing with respect to the Canadian Revolving Loans pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of

 

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credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several.

“ Canadian Facility Obligor ” Canadian Borrower , and each Canadian Facility Guarantor and each other Person that has or is required pursuant to Section  10.1.9 and/or the Collateral and Guarantee Requirement to grant a Lien on its assets in favor of Agent to secure any Canadian Facility Obligations .

“ Canadian Facility Secured Parties ” Agent, Canadian Issuing Bank, Canadian Lenders, any Security Trustee with respect to the Canadian Facility Obligations and Secured Bank Product Providers of Bank Products for the account of Canadian Domiciled Obligors and their Affiliates domiciled in Canada , and the other Foreign Facility Secured Parties that are the beneficiaries of a Foreign Cross-Guarantee made by the Canadian Facility Obligors .

“ Canadian Guaranties ” each guaranty agreement executed by a Canadian Facility Guarantor in favor of Agent in order to guaranty the payment and/or performance of the Canadian Facility Obligations (including without limitation this Agreement and the Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement).

“ Canadian Inventory Formula Amount ” (a) the lesser of (i) 70% of the Value of Canadian Eligible Inventory or (ii) 85% of the NOLV Percentage of the Value of Canadian Eligible Inventory; plus (b) the lesser of (i) 70% of the Value of Eligible In-Transit Inventory owned by Canadian Borrower, or (ii) 85% of the NOLV Percentage of the Value of Eligible In-Transit Inventory owned by Canadian Borrower; provided that (i) prior to the date that the conditions set forth in clause (b) of the definition of “Eligible In-Transit Inventory” are met, whether or not an Eligible In-Transit Inventory Trigger Period has occurred and is continuing, the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Borrowers shall not exceed an aggregate amount of $10,000,000 at any time and (ii) the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Foreign Borrowers that is in transit to Mexico shall not exceed an aggregate amount of $2,000,000 at any time.

“ Canadian Inventory Reserve ” reserves established by Agent to reflect factors that may negatively impact the Value of Inventory of Canadian Borrower, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

“ Canadian IP Assignment ” a collateral assignment or security agreement pursuant to which a Canadian Facility Obligor grants a Lien on its Intellectual Property to Agent, as security for (or given with the intent to secure) the Canadian Facility Obligations.

“ Canadian Issuing Bank ” Bank of America (Canada) (including any Lending Office of Bank of America), any Affiliate thereof, or any replacement issuer appointed pursuant to Section  2.5 that agrees to issue Canadian Letters of Credit.

“ Canadian Issuing Bank Indemnitees ” Canadian Issuing Bank and its officers, directors, employees, Affiliates, branches, agents and attorneys.

“ Canadian LC Application ” an application by Borrower Agent or Canadian Borrower to Canadian Issuing Bank for issuance of a Canadian Letter of Credit, in form and substance satisfactory to Canadian Issuing Bank and Agent.

“ Canadian LC Conditions ” the following conditions necessary for issuance of a Canadian Letter of Credit: (a) each of the conditions set forth in Section  6 ; (b) after giving effect to such issuance, total

 

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Canadian LC Obligations do not exceed the Canadian Letter of Credit Subline, no Canadian Overadvance exists and Canadian Revolver Usage does not exceed the Canadian Borrowing Base; (c) the Canadian Letter of Credit and payments thereunder are denominated in Canadian Dollars, Dollars or other currency satisfactory to Agent and Canadian Issuing Bank; and (d) the purpose and form of the proposed Canadian Letter of Credit are satisfactory to Agent and Canadian Issuing Bank in their Permitted Discretion.

“ Canadian LC Documents ” all documents, instruments and agreements (including Canadian LC Requests and Canadian LC Applications) delivered by Canadian Borrower or any other Person to Canadian Issuing Bank or Agent in connection with any Canadian Letter of Credit.

“ Canadian LC Obligations ” the Dollar Equivalent of the sum of (a) all amounts owing by Canadian Borrower for drawings under Canadian Letters of Credit; and (b) the Stated Amount of all outstanding Canadian Letters of Credit.

“ Canadian LC Request ” a request for issuance of a Canadian Letter of Credit, to be provided by Borrower Agent or Canadian Borrower to Canadian Issuing Bank, in form satisfactory to Agent and Canadian Issuing Bank.

“ Canadian Lenders ” Bank of America (Canada), each other lender party to this Agreement that has issued a Canadian Revolver Commitment, the Canadian Swingline Lender, and any Person who hereafter becomes a “Lender” with a Canadian Revolver Commitment pursuant to an Assignment, including any Lending Office of the foregoing. Unless an Event of Default shall have occurred and be continuing, each Canadian Lender shall be a financial institution that is listed on Schedule I, II or III of the Bank Act (Canada), has received an approval to have a financial establishment in Canada pursuant to Section 522.21 of the Bank Act (Canada) or is not a foreign bank for purposes of the Bank Act (Canada) or is not prohibited by Applicable Law, including the Bank Act (Canada), from having a Canadian Revolver Commitment, or making any Canadian Revolver Loans or having any Canadian LC Obligations under this Agreement, and if such financial institution is not resident in Canada and is not deemed to be resident in Canada for purposes of the Income Tax Act (Canada), then such financial institution is not a “specified shareholder” of a Canadian Domiciled Obligor and deals at arm’s length with each Canadian Domiciled Obligor and each “specified shareholder” of each Canadian Domiciled Obligor for purposes of the Income Tax Act (Canada).

“ Canadian Letter of Credit ” any standby or documentary letter of credit, foreign guaranty, documentary bankers acceptance or similar instrument issued by Canadian Issuing Bank for the account or benefit of Canadian Borrower or an Affiliate of Canadian Borrower.

“ Canadian Letter of Credit Subline ” the lesser of (a) $0 and (b) the Canadian Revolver Commitments.

“ Canadian Mortgage ” a mortgage, deed of immovable hypothec, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure (or given with the intent to secure) the Canadian Facility Obligations. Each Canadian Mortgage shall be in form and substance reasonably satisfactory to Agent.

“ Canadian Multi-Employer Plan ” each multi-employer plan, within the meaning of the regulations under the Income Tax Act (Canada) .

“ Canadian Overadvance ” as defined in Section  2.1.5 .

 

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“ Canadian Overadvance Loan ” a Canadian Base Rate Loan and/or a Canadian Prime Rate Loan made to Canadian Borrower when a Canadian Overadvance exists or is caused by the funding thereof.

“ Canadian Overadvance Loan Balance ” on any date, the Dollar Equivalent of the amount by which the aggregate Canadian Revolver Loans of Canadian Borrower exceed the amount of the Canadian Borrowing Base on such date.

“ Canadian Pension Plan ” a “registered pension plan,” as defined in the Income Tax Act (Canada) and any other pension plan maintained or contributed to by, or to which there is or may be an obligation to contribute by, any Canadian Domiciled Obligor in respect of its Canadian employees or former employees, excluding, for greater certainty, a Canadian Multi-Employer Plan.

“ Canadian Prime Rate ” on for any date day , the highest of (i)  a fluctuating rate of interest greater of (a)  the per annum equal to the rate of interest in effect for such day as publicly announced from time to time by Bank of America (Canada) as its “ Prime Rate ” , (ii) the sum of 0.50% plus the Bank of Canada overnight rate designated by Bank of America (Canada) from time to time as its prime rate for commercial loans made by it in Canada in Canadian Dollars , which rate is the rate of interest charged by the Bank of Canada on one-day loans to financial institutions, for such day, and (iii) the sum of 1.00% plus the Canadian BA Rate for a 30 day Interest Period as of such day. The “ Prime Rate ” is a rate set by Bank of America (Canada) based upon based on various factors , including the its cos t s and desired return of Bank of America (Canada) , general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above , or below such announced rate ; or (b) the Canadian BA Rate for a one month interest period as of such day, plus 1.00%; provided, that in no event shall the Canadian Prime Rate be less than zero . Any change in such rate shall take effect at the opening of business on the day specified in the public announcement of such change. Each interest rate based on the Canadian Prime Rate hereunder shall be adjusted simultaneously with any change in the Canadian Prime Rate. In the event Bank of America (Canada) (including any successor or assignee) does not at any time announce a “Prime Rate”, clause (i) of Canadian Prime Rate shall mean the “Prime Rate” (being the rate for loans made in Canadian Dollars in Canada) publicly announced by a Canadian chartered bank listed on Schedule I of the Bank Act (Canada) selected by Agent. In no event shall the Canadian Prime Rate be less than zero .

“ Canadian Prime Rate Loan ” a Canadian Revolver Loan, or portion thereof, funded in Canadian Dollars and bearing interest calculated by reference to the Canadian Prime Rate.

“ Canadian Protective Advances ” as defined in Section  2.1.6 .

“ Canadian Reimbursement Date ” as defined in Section  2.2.2 .

“ Canadian Rent and Charges Reserve ” the aggregate of (a) all past due rent and other amounts owing by Canadian Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Canadian Facility Collateral or could assert a Lien on any Canadian Facility Collateral; and (b) a reserve at least equal to two months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

“ Canadian Revolver Commitment ” for any Canadian Lender, its obligation to make Canadian Revolver Loans and to participate in Canadian LC Obligations up to the maximum principal amount shown on Schedule 1.1(B) , as hereafter modified pursuant to Section  2.1.4 , Section  2.1.7 or an Assignment to which it is a party. “ Canadian Revolver Commitments ” means the aggregate amount of such commitments of all Canadian Lenders.

 

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“ Canadian Revolver Loan ” a loan made by a Canadian Lender to Canadian Borrower pursuant to Section  2.1 , which loan shall, if denominated in Canadian Dollars, be either a Canadian BA Rate Loan or a Canadian Prime Rate Loan and, if denominated in Dollars, shall be either a Canadian Base Rate Loan or a LIBOR Loan, in each case as selected by the Borrower Agent on behalf of the Canadian Borrower, and any Canadian Swingline Loan, Canadian Overadvance Loan or Canadian Protective Advance.

“ Canadian Revolver Usage ” the Dollar Equivalent of an amount equal to (a) the aggregate amount of outstanding Canadian Revolver Loans; plus (b) the aggregate Stated Amount of outstanding Canadian Letters of Credit, except to the extent Cash Collateralized by any Obligor.

“ Canadian Security Agreement ” that certain Canadian Security Agreement, dated as of the Closing Date, by and between Canadian Borrower and Agent, as amended, restated, supplemented or otherwise modified from time to time . , including by the Amended and Restated Canadian Security Agreement by and between the Canadian Borrower and Agent to be delivered after the Seventh Amendment Effective Date pursuant to Section  10.1.15 .

“ Canadian Security Documents ” the Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement, the Canadian Security Agreement, each Deed of Movable Hypothec, if any, among any of the Canadian Facility Obligors and Agent in order to secure any of the Canadian Facility Obligations, the Canadian Guaranties, the Canadian Mortgages, the Canadian IP Assignments, the Canadian Deposit Account Control Agreements, the Dutch Security Documents, the Mexican Security Documents, the UK Security Documents, the U.S. Security Documents , the German Security Documents and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Canadian Facility Obligations.

“ Canadian Subsidiary ” each Subsidiary that is incorporated or organized under the laws of Canada or any province or territory of Canada.

“ Canadian Subsidiary Obligor ” any Subsidiary directly owned by a Canadian Domiciled Obligor that is not an Immaterial Subsidiary, if any .

“ Canadian Swingline Lender ” Bank of America (Canada) in its capacity as provider of Canadian Swingline Loans.

“ Canadian Swingline Loan ” any Borrowing of Canadian Revolver Loans funded with Canadian Swingline Lender’s funds, until such Borrowing is settled among Canadian Lenders or repaid by Canadian Borrower, which Canadian Revolver Loan shall, if denominated in Canadian Dollars, be a Canadian Prime Rate Loan and shall, if denominated in Dollars, be a Canadian Base Rate Loan, in each case as selected by the Borrower Agent on behalf of Canadian Borrower.

“ Capital Expenditures ” for any period, without duplication, (a) the additions to property, plant and equipment and other capital expenditures of the Parent Borrower and its consolidated Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Parent Borrower for such period prepared in accordance with GAAP other than (x)  such additions and expenditures classified as Permitted Acquisitions and (y)  such additions and expenditures made with Net Proceeds from any casualty or other insured damage or condemnation or similar awards and (b) Capital Lease Obligations incurred by the Parent Borrower and its consolidated Subsidiaries during such period.

“ 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

 

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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; provided that any change in GAAP after the Original Closing Date that would require lease obligations that would have been characterized and accounted for as operating leases in accordance with GAAP as in effect on the Original Closing Date to be characterized and accounted for as Capital Lease Obligations shall be disregarded for purposes hereof.

“ Cash Collateral ” cash, and any interest or other income earned thereon, that is delivered to Agent or a Security Trustee to Cash Collateralize any Obligations.

“ Cash Collateral Account ” a Foreign Cash Collateral Account or a U.S. Cash Collateral Account, as the context requires. demand deposit, money market or other account established by Agent at such financial institution as Agent may select in its Permitted Discretion, which account shall be subject to a Lien in favor of Agent for the benefit of the Secured Parties .

“ Cash Collateralize ” the delivery of cash to Agent or a Security Trustee, as security for the payment of Obligations, in an amount equal to (a) with respect to any LC Obligations, 103% of the aggregate of such LC Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including Secured Bank Product Obligations), Agent’s good faith estimate of the amount due or to become due, including fees, expenses and indemnification hereunder.

“ Cash Collateralization ” has a correlative meaning.

“ Cash Management Services ” services relating to operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.

“ CCAA ” the Companies’ Creditors Arrangement Act (Canada) (or any successor statute), as amended from time to time, and includes all regulations thereunder.

“ Cequent Mexico Holdings Share Pledge ” (a) a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Mexico Holdings B.V., made between UK Borrower as pledgor and Agent as pledgee , dated 22  December 2015 and (b)  a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Mexico Holdings B.V., made between UK Borrower as pledgor and Agent as pledgee to be delivered after the Seventh Amendment Effective Date pursuant to Section  10.1.15, in each case as such agreement is amended, restated, supplemented or otherwise modified from time to time.

“ Cequent Nederland Holdings Share Pledge ” (a) a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Nederland Holdings B.V., made between Horizon International Holdings LLC as pledgor and Agent as pledgee dated 22  December 2015 and (b)  a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Nederland Holdings B.V., made between Horizon International Holdings LLC as pledgor and Agent as pledgee to be delivered after the Seventh Amendment Effective Date pursuant to Section  10.1.15, in each case , as such agreement is amended, restated, supplemented or otherwise modified from time to time.

“ CFC ” a “controlled foreign corporation” within the meaning of Section 957 of the Code.

“ CFC Holdco ” any Subsidiary, other than Foreign Subsidiaries, substantially all the assets of which consist of Equity Interests of one or more Foreign Subsidiaries.

 

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“ Change in Control ” (a) the acquisition of beneficial ownership, directly or indirectly, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Commission thereunder), of Equity Interests representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests in the Parent Borrower, (b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Parent Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i)  above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i)  and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body, or (c) the occurrence of any change in control (or similar event, however denominated) with respect to the Parent Borrower under (i) any indenture or other agreement in respect of Material Debt to which the Parent Borrower or any Subsidiary is a party or (ii) any instrument governing any preferred stock of the Parent Borrower or any Subsidiary having a liquidation value or redemption value in excess of $5,000,000.

“ Change in Law ” the occurrence, after the Original Closing Date, of (a) the adoption, taking effect or phasing in of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof; or (c) the making, issuance or application of any request, guideline, requirement or directive (whether or not having the force of law) by any Governmental Authority; provided , however , that “Change in Law” shall include, regardless of the date enacted, adopted or issued, all requests, rules, guidelines, requirements or directives (i) under or relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or (ii) promulgated pursuant to Basel III by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any similar authority) or any other Governmental Authority.

“ Civil Code ” the Civil Code of Québec , or any successor statute, as amended from time to time, and includes all regulations thereunder.

“ Claims ” all claims, liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations or replacement of Agent or any Lender) incurred by any Indemnitee or asserted against any Indemnitee by any Obligor or other Person, in any way relating to (a) any Loans, Letters of Credit, Loan Documents, Borrower Materials, or the use thereof or transactions relating thereto, (b) any action taken or omitted in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, or (e) failure by any Obligor to perform or observe any terms of any Loan Document, in each case including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.

“ Closing Date ” as defined in Section  6.1 .

“ Code ” the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” all Property described in any Security Documents as security for any Obligations and all other Property that now or hereafter secures (or is intended to secure) any Obligations.

“ Collateral and Guarantee Requirement ” the Foreign Facility Collateral and Guarantee Requirement and/or the U.S. Facility Collateral and Guarantee Requirement, as the context requires. with

 

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respect to any and all Obligors, the requirement that, subject to any applicable limitations set forth in the Security Documents (and with respect to any Foreign Obligor, the Agreed Security Principles):

(a)         Agent shall have received from each Obligor party thereto either (i)  a counterpart of each applicable Security Document, duly executed and delivered on behalf of such Obligor, or (ii)  in the case of any Person that becomes an Obligor after the Original Closing Date, a joinder to this Agreement and a supplement or deed of accession, as applicable, to each applicable Security Document and the Intercreditor Agreement, in each case in the form specified therein, duly executed and delivered on behalf of such Obligor;

(b)         all outstanding Equity Interests of the Parent Borrower and each Subsidiary owned by or on behalf of any Obligor shall have been pledged pursuant to the Amended and Restated ABL Guarantee and Collateral Agreement, or other appropriate Security Document (except that the U.S. Facility Obligors shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary or any CFC (other than any Foreign Subsidiary or CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), the Netherlands, Mexico or Canada (or any province or territory thereof) and shall pledge 100% of the Equity Interests of any Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), Mexico, Canada (or any province or territory thereof) or the Netherlands shall have been pledged); provided, however, that if one or more of the Term Loan Documents would require a greater pledge, the limitation in this parenthetical shall be automatically deemed to be modified to require a pledge equivalent to that required by the Term Loan Documents) and, subject to the Intercreditor Agreement, Agent or the Controlling Term Loan Agent, as applicable, shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c)         all Debt for borrowed money having an aggregate principal amount in excess of $500,000 that is owing to any Obligor shall be evidenced by a promissory note and shall have been pledged pursuant to the Amended and Restated ABL Guarantee and Collateral Agreement (and/or any other applicable Security Document) and subject to the Intercreditor Agreement, Agent and/or the Controlling Term Loan Agent, as applicable, shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(d)         all documents and instruments, including UCC and PPSA financing statements, required by Applicable Law or reasonably requested by Agent to be filed, registered or recorded to create the Liens intended to be created by the Security Documents and perfect such Liens to the extent required by, and with the priority required by, the Security Documents (in each case subject to the Intercreditor Agreement), shall have been filed, registered or recorded or delivered to Agent for filing, registration or recording;

(e)        Agent shall have received, with respect to any Mortgaged Property , (i)  counterparts of a Mortgage with respect to such Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii)  a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section  10.2.2 , together with such endorsements, coinsurance and reinsurance as Agent or the Required Lenders may reasonably request, but only to the extent such endorsements are (A) available in the relevant jurisdiction (provided in no event shall Agent request a creditors’ rights endorsement) and (B) available at commercially reasonable rates, (iii) if any such Mortgaged Property is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, evidence of such flood insurance as may be required under Applicable Law, including Regulation H of the Board of Governors,

 

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and an acknowledged notice to the applicable Obligors, (iv) if reasonably requested by Agent, a current appraisal of any such Mortgaged Property, prepared by an appraiser acceptable to Agent, and in form and substance satisfactory to Required Lenders (it being understood that if such appraisal is required in order to comply with Agent’s internal policies, such request shall be deemed to be reasonable), (v) if reasonably requested by Agent, an environmental assessment with respect to any such Mortgaged Property, prepared by environmental engineers reasonably acceptable to Agent, and such other reports, certificates, studies or data with respect to such Mortgaged Property as Agent may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with Agent’s internal policies, such request shall be deemed to be reasonable), and (vi) such abstracts, legal opinions and other documents as Agent or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property; provided, however, in no event shall surveys be required to be obtained with respect to any such Mortgaged Property;

(f)        each Obligor shall have obtained all consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the Loan Documents;

(g)         with respect to each Dutch Domiciled Obligor only, (i)  each Dutch Domiciled Obligor shall have validly executed the notarial power of attorney for the purpose of executing the Dutch Security Document to which it is a party; (ii )  each Dutch Security Document shall have been executed before a Dutch law civil notary (notaris); (iii) Agent shall have received certified copies of each of the Dutch Security Documents; and (iv) each Lien which is granted by means of the Dutch Security Documents shall have been registered in the relevant shareholders register; and

(h)         with respect to each Mexican Domiciled Obligor only, (i)  a copy of the mercantile folio (folio mercantil) of each Mexican Domiciled Obligor, issued by the corresponding Public Registry of the Property and Commerce (Registro Público de la Propiedad y del Comercio) evidencing the absence of any Insolvency Proceedings, (ii) notarized copies of the partner’s resolutions of the Mexican Domiciled Obligors: (1) authorizing the execution, delivery and performance of the Loan Documents to which such Mexican Domiciled Obligors are party; (2) authorizing a specific person or persons to execute the Loan Documents to which each such Mexican Domiciled Obligor is a party on behalf of such Mexican Domiciled Obligor; (3) authorizing a specific person or persons, on behalf of each Mexican Domiciled Obligor, to sign and/or dispatch all documents and notices to be signed or dispatched by such Mexican Domiciled Obligor under or in connection with the Loan Documents to which it is a party; (4) authorizing the appointment of the Borrower Agent as each Mexican Domiciled Obligor’s agent for service of process in New York; (5) waiving the pre-emptive rights of each Mexican Domiciled Obligor in respect of any pledged Equity Interests, authorizing the division of such Equity Interests and approving any sale of such Equity Interests conducted in the context of foreclosures under the Security Documents; (6) a certificate of a member of the board of managers or an authorized officer of each Mexican Domiciled Obligor as to the Solvency of such Mexican Domiciled Obligor; (7) a ratified notarial instrument by a Mexican notary public of the Mexican Asset Pledges and Mexican Equity Pledges;

provided, that, (i)  with respect to any Obligor that is a Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), the Netherlands, Mexico or Canada (or any province or territory thereof), the Collateral and Guarantee Requirement shall require the provision of the documents and satisfaction of the requirements set forth in Schedule I to the Seventh Amendment and (ii)  with respect to any Obligor that is a Foreign Subsidiary organized under the laws of any other jurisdiction, the Collateral and Guarantee Requirement shall be modified as reasonably

 

 

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requested by the Required Lenders to reflect the requirements and limitations of the jurisdiction in which such Foreign Subsidiary is organized.

“ Commission ” the Securities and Exchange Commission or any Governmental Authority succeeding to any or all of the functions of said Commission.

“ Commitment ” for any Lender, the aggregate amount of such Lender’s Borrower Group Commitments. “ Commitments ” means the aggregate amount of all Borrower Group Commitments (not to exceed the Maximum Facility Amount), which on the Closing Date consist of (a) $2,000,000 in respect of the Canadian Revolver Commitments, (b) $3,000,000 in respect of the UK Revolver Commitments, and (c) $ 94,000,000 85,000,000 in respect of the U.S. Revolver Commitments.

“ Commitment Termination Date ” (a) with respect to the Canadian Revolver Commitments, the Canadian Commitment Termination Date, (b) with respect to the UK Revolver Commitments, the UK Commitment Termination Date and (c) with respect to the U.S. Revolver Commitments, the U.S. Commitment Termination Date.

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

“ Compliance Certificate ” a certificate, in form and substance satisfactory to Agent, by which Borrower Agent certifies compliance with Section  10.3 .

“ Consolidated EBITDA ” for any period, Consolidated Net Income for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated cash interest expense for such period, (ii) consolidated income tax expense for such period (including all single business tax expenses imposed by state law), (iii) all amounts attributable to depreciation and amortization for such period, (iv) any extraordinary noncash charges for such period, (v) interest-equivalent costs associated with any Specified Vendor Receivables Financing for such period, whether accounted for as interest expense or loss on the sale of receivables, and all Preferred Dividends, (vi) all losses during such period that relate to the retirement of Debt, (vii) noncash expenses during such period resulting from the grant of Equity Interests to management and employees of the Parent Borrower or any of the Subsidiaries, (viii) the aggregate amount of deferred financing expenses for such period, (ix)  fees, costs and expenses in connection with the Seventh Amendment Transactions to the extent incurred within 90 days of the Seventh Amendment Effective Date, (x)  all other noncash expenses or losses of the Parent Borrower or any of the Subsidiaries for such period (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), ( x) any nonrecurring xi) fees, and expenses in connection with the issuance or charges realized by the Parent Borrower or any of the Subsidiaries for such period related to any offering of Equity Interests or incurrence of Debt any Indebtedness (in each case , whether or not consummated , (xi)  fees and expenses in connection with the Original Closing Date Transactions, (xii)  any nonrecurring costs and expenses arising from the integration of any business acquired pursuant to any Permitted Acquisition consummated after the Original Closing Date, (xiii)  the amount of reasonably identifiable and factually supportable “ run rate ” cost savings, operating expense reductions, and other synergies not to exceed $12,500,000 resulting from the Westfalia Acquisition that are projected by the Parent Borrower in good faith and certified by a Financial Officer of the Parent Borrower in writing to the Agent to result from actions either taken or expected to be taken within eighteen (18)  months of the Westfalia Acquisition Closing Date, net of the amount of actual benefits realized prior to or during such period from such actions (which cost savings, operating expense reductions, and synergies shall be calculated on a pro forma basis as though such cost savings, operating expense reductions, or synergies had been realized on the first day of such period), (xiv) any ) provided that the aggregate amount added to Consolidated EBITDA pursuant to this clause (xi), when combined

 

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with amounts added under clause (xiii)  below, shall not exceed $5,000,000 for any trailing twelve month period, (xii)  costs and expenses of professional fees of the Parent Borrower and its Subsidiaries or of any Agent or Lender to the extent the Parent Borrower is required to reimburse such Agent or Lender therefore, and (xiii)  unusual or nonrecurring expenses or similar costs relating to cost savings projects , including restructuring , moving and severance expenses, (xv)  net losses from discontinued operations, (xvi)   losses associated with the prepayment of leases (whether operating leases or capital leases) outstanding on January 1, 2015 from discontinued operations, and (xvii)  losses or charges associated with asset sales otherwise permitted hereunder provided that the aggregate amount added to Consolidated EBITDA pursuant to this clause (xiii), when combined with amounts added under clause (xi)  above, shall not exceed $5,000,000 for any trailing twelve month period , minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) any non-cash income, profits or gains for such period and (iii) any gains realized from the retirement of Debt after the Original Closing Date, all determined on a consolidated basis in accordance with GAAP ; provided, however that the amounts added to Consolidated Net Income pursuant to clauses (xii)  through (xvii) above for any period shall not exceed twenty percent (20%) of Consolidated EBITDA for such period (determined without including amounts added to Consolidated Net Income pursuant to clauses (xii)  through (xvii) above for such period) . If any Borrower or any Subsidiary has made any Permitted Acquisition or Significant Investment or any sale, transfer, lease or other disposition of assets outside of the ordinary course of business Ordinary Course of Business permitted by Section 10.2.5 during the relevant period for determining any leverage ratio hereunder, Consolidated EBITDA for the relevant period shall be calculated only for purposes of determining such leverage ratio after giving pro forma effect thereto, as if such Permitted Acquisition or Significant Investment or sale, transfer, lease or other disposition of assets had occurred on the first day of the relevant period for determining Consolidated EBITDA; provided that with respect to any Significant Investment, (x) any pro forma adjustment made to Consolidated EBITDA shall be in proportion to the percentage ownership of such Borrower or such Subsidiary, as applicable, in the Subject Person (e.g. if such Borrower acquires 70% of the Equity Interests of the Subject Person, a pro forma adjustment to Consolidated EBITDA shall be made with respect to no more than 70% of the EBITDA of the Subject Person) and (y) pro forma effect shall only be given to such Significant Investment if the Debt of the Subject Person is included in Total Debt for purposes of calculating the applicable leverage ratio in proportion to the percentage ownership of such Borrower or such Subsidiary, as applicable, in such Subject Person. Any such pro forma calculations may include operating and other expense reductions and other adjustments for such period resulting from any Permitted Acquisition, or sale, transfer, lease or other disposition of assets that is being given pro forma effect to the extent that such operating and other expense reductions and other adjustments (a)  would be permitted pursuant to Article XI of Regulation S-X under the Securities Act of 1933 (“Regulation S-X”) or (b)  are reasonably consistent with the purpose of Regulation S-X as determined in good faith by the Borrowers in consultation with Agent .

“ Consolidated Net Income ” for any period, the net income or loss of the Parent Borrower and the Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income of any Person (other than the Parent Borrower or a Significant Investment) in which any other Person (other than the Parent Borrower or any Subsidiary or any director holding qualifying shares in compliance with Applicable Law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Parent Borrower or any of the Subsidiaries during such period, (b) the income or loss of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Parent Borrower or any Subsidiary or the date that such Person’s assets are acquired by the Parent Borrower or any Subsidiary and (c) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income.

 

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“ Contingent Obligation ” any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance of any Debt, lease, dividend or other obligation (“ primary obligations ”) of another obligor (“ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless of nonperformance by any other party to an agreement; and (c) arrangement (i) to purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation, or (v) otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.

“ Control ” 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 Accounts ” each Deposit Account and Securities Account required to be subject to the Lien and control of Agent or a Security Trustee pursuant to the Loan Documents.

“ Controlling Term Loan Agent ” means (a)   Senior the First Lien Term Loan Agent until the end of the Senior Term Period and (b)  Term Loan Agent at all times thereafter .

“ Convertible Notes Indenture ” means the First Supplemental Indenture between the Parent Borrower and Wells Fargo Bank, National Association, dated as of February  1, 2017 .

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Credit Party ” Agent, a Lender or any Issuing Bank; and “ Credit Parties ” means Agent, Lenders and Issuing Banks.

“ Creditor Representative ” under any Applicable Law, a receiver, manager, controller, interim receiver, receiver and manager, trustee (including any trustee in bankruptcy), custodian, conservator, administrator, examiner, sheriff, monitor, assignee, liquidator, provisional liquidator, sequestrator, administrative receiver, judicial manager, statutory manager or similar officer or fiduciary.

“ CTA ” the Corporation Tax Act 2009 (UK), as amended from time to time.

“ Debt ” of any Person means, without duplication, (a) all obligations of such Person for Borrowed Money or with respect to advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of

 

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the deferred purchase price of property or services (excluding current accounts payable incurred in the Ordinary Course of Business), (f) all Debt of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Debt secured thereby has been assumed, (g) all Guarantees by such Person of Debt of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances. The Debt of any Person shall include the Debt of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Debt provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term “ Debt ” shall not include (a) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or Equity Interests and (b) trade payables and accrued expenses in each case arising in the Ordinary Course of Business.

“ Deed of Movable Hypothec ” a deed of hypothec charging the movable (personal) property of an Obligor pursuant to the Civil Code, in the event that any of the Canadian Facility Obligors own movable (personal) property in Quebec.

“ Default ” any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“ Default Rate ” for any Obligation (including, to the extent permitted by law, interest not paid when due), 2% plus the interest rate otherwise applicable thereto.

“ Defaulting Lender ” any Lender that (a) has failed to comply with its funding obligations hereunder, and such failure is not cured within two Business Days; (b) has notified Agent or any Borrower that such Lender does not intend to comply with its funding obligations hereunder or under any other credit facility, or has made a public statement to that effect; (c) has failed, within three Business Days following request by Agent or any Borrower, to confirm in a manner satisfactory to Agent and Borrowers that such Lender will comply with its funding obligations hereunder; or (d) has, or has a direct or indirect parent company that has, (i) become the subject of an Insolvency Proceeding (including reorganization, liquidation, or appointment of a receiver, custodian, administrator or similar Person by the Federal Deposit Insurance Corporation or any other regulatory authority) or (ii) become the subject of a Bail-in Action; provided, however, that a Lender shall not be a Defaulting Lender solely by virtue of a Governmental Authority’s ownership of an equity interest in such Lender or parent company unless the ownership provides immunity for such Lender from jurisdiction of courts within the United States or from enforcement of judgments or writs of attachment on its assets, or permits such Lender or Governmental Authority to repudiate or otherwise to reject such Lender’s agreements; and provided further, that a Lender shall not be deemed to be a Defaulting Lender under clauses (a), (b) or (c) if it has notified Agent and Borrowers in writing that it will not make a funding because a condition to funding (specifically identified in the notice) is not or cannot be satisfied.

“ Deposit Account ” (a) any “deposit account” as such term is defined in Article 9 of the UCC and in any event shall include all accounts and sub-accounts relating to any of the foregoing and (b) with respect to any such Deposit Account located outside of the U.S., any bank account with a deposit function.

“ Deposit Account Control Agreements ” the Canadian Deposit Account Control Agreements, the UK Deposit Account Control Agreements and/or the U.S. Deposit Account Control Agreements, as the

 

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context requires control agreements reasonably satisfactory to Agent executed by each institution maintaining a Deposit Account for an Obligor, to perfect or better evidence Agent ’ s Lien on such account, as security for (or given with the intent to secure) the Obligations of such Obligor or as otherwise required by the terms of the Loan Documents .

“ Dilution Percent ” the percent, determined for each Borrower Group for the most recently ended twelve-month period, equal to (a) bad debt write-downs or write-offs, discounts, returns, promotions, credits, credit memos and other dilutive items with respect to the Accounts of the Borrower(s) in the applicable Borrower Group, divided by (b) gross sales of the Borrower(s) in the applicable Borrower Group.

“ Discharge of Senior Obligations ” shall have the meaning as defined in the Term Intercreditor Agreement.

“ Disclosed Matters ” the actions, suits and proceedings and the environmental matters disclosed in Schedule 9.1.6 .

“ Disqualified Equity Interests ” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior Full Payment of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provide for the scheduled payments of dividends in cash, 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 with respect to the Obligations.

“ Distribution ” any declaration or payment of a distribution, interest or dividend on any Equity Interest (other than payment-in-kind); distribution, advance or repayment of Debt to a holder of Equity Interests; or purchase, redemption, or other acquisition or retirement for value of any Equity Interest.

“ Document ” as defined in the UCC (and/or with respect to any Document of a Canadian Domiciled Obligor, a “document of title” as defined in the PPSA) or any other Applicable Law, as applicable.

“ Dollar Equivalent ” on any date, with respect to any amount denominated in Dollars, such amount in Dollars, and with respect to any stated amount in a currency other than Dollars, the amount of Dollars that Agent determines (which determination shall be conclusive and binding absent manifest error) would be necessary to be sold on such date at the applicable Spot Rate to obtain the stated amount of the other currency.

“ Dollars ” lawful money of the United States.

“ Domestic Subsidiary ” any Subsidiary, other than the Foreign Subsidiaries.

“ Dominion Account ” with respect to (a) the Canadian Borrower, each Canadian Dominion Account, (b) the UK Borrower, each UK Dominion Account, and (c) the U.S. Borrowers, each U.S. Dominion Account.

 

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“ Dominion Trigger Period ” (I) prior to March 7, 2019, the period (a)  commencing on the day that an Event of Default occurs, or U.S. Availability is less than or equal to $6,700,000 (computed without reference to the U.S. Special Availability Block), and (b)  continuing until the earlier of (x)  March 7, 2019 and (y)  no Event of Default having existed and U.S. Availability having been greater than $6,700,000 (computed without reference to the U.S. Special Availability Block) during each of the preceding 30 consecutive days; or (II)  from and after March 7, 2019 the period (a) commencing on the day that an Event of Default occurs, or U.S. Availability is less than the Dominion Trigger Threshold and (b) continuing until no Event of Default exists and, during each of the previous 30 consecutive days, U.S. Adjusted Availability has been not less than the Dominion Trigger Threshold.

“ Dominion Trigger Threshold ” the greater of (a) 10% of the U.S. Revolver Commitments and (b) $10,000,000.

“ Dutch Collateral and Guarantee Requirement ” subject to any applicable limitations set forth in the Security Documents and the Agreed Security Principles, with respect to any and all Dutch Domiciled Obligors (provided that the scope of the Lien granted by the Netherland Holdcos (as defined in the Foreign Facility Guarantee and Collateral Agreement) shall exclude the Netherland Holdco Excluded Property (as defined in the Foreign Facility Guarantee and Collateral Agreement)), the requirement that:

(a) each Dutch Domiciled Obligor shall have obtained all consents and approvals required to be obtained by it in accordance with Dutch law and its articles of association in connection with the execution of all Dutch Security Documents to which it is a party, the performance of its obligations thereunder and the granting of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the terms of the Loan Documents;

(b) each Dutch Domiciled Obligor shall have validly executed the notarial power of attorney for the purpose of executing the Dutch Security Document to which it is a party;

(c) each Dutch Security Document shall have been executed before a Dutch law civil notary ( notaris );

(d) Agent shall have received certified copies of each of the Dutch Security Documents; and

(e) each Lien which is granted by means of the Dutch Security Documents shall have been registered in the relevant shareholders register .

“ Dutch Domiciled Obligors ” Cequent Nederland Holdings B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ), incorporated under the laws of the Netherlands, having its registered office ( statutaire zetel ) in Amsterdam, the Netherlands and registered with the trade register of the chamber of commerce, under number 34347776, Cequent Mexico Holdings B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ), incorporated under the laws of the Netherlands, having its registered office ( statutaire zetel ) in Amsterdam, the Netherlands and registered with the trade register of the chamber of commerce, under number 55435637, and each other Obligor organized under the laws of the Netherlands or any jurisdiction thereof.

“ Dutch Security Documents ” the Cequent Nederland Holdings Share Pledge and the Cequent Mexico Holdings Share Pledge and all other documents, instruments and agreements now or hereafter executed by any Dutch Domiciled Obligor securing (or given with the intent to secure) any Obligations .

 

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

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

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

“ Eligible Accounts ” the (a) Canadian Eligible Accounts and/or (b) U.S. Eligible Accounts, as the context requires.

“ Eligible Assignee ” a Person that is (a) a Lender, Affiliate or branch of a Lender or Approved Fund; (b) an assignee approved by Borrower Agent (which approval shall not be unreasonably withheld or delayed, and shall be deemed given if no objection is made within two Business Days after notice of the proposed assignment) and Agent; and (c) during an Event of Default under Section  11.1(a) , (b) , (h) or (i) (without regard to any waiting period) or any other Event of Default that has occurred and remains continuing for a period equal to or exceeding 30 days, any Person acceptable to Agent in its Permitted Discretion.

“ Eligible Inventory ” the (a) Canadian Eligible Inventory, (b) UK Eligible Inventory, and/or (c) U.S. Eligible Inventory, as the context requires.

“ Eligible In-Transit Inventory ” Inventory owned by a Borrower that would be Eligible Inventory of such Borrower if it were not of a type subject to a Document and/or in transit from a foreign location to a location of (x) the Canadian Borrower within the United States or Canada, (y) the UK Borrower within the United States or Mexico or (z) a U.S. Borrower within the United States, and that Agent, in its Permitted Discretion, deems to be Eligible In-Transit Inventory. Without limiting the foregoing, (a) no Inventory shall be Eligible In-Transit Inventory unless (i) it is insured in an amount and manner reasonably satisfactory to Agent; (ii) it is not sold by a vendor that has asserted any right to reclaim, divert shipment of, repossess, stop delivery, claim any reservation of title or otherwise assert Lien rights against the Inventory, or with respect to whom any Borrower is in default of any obligations; (iii) it is subject to purchase orders and other sale documentation satisfactory to Agent, and title has passed to such Borrower; (iv) it is shipped by a common carrier that is not affiliated with the vendor and is not subject to any Sanction or on any specially designated nationals list maintained by OFAC or any other Governmental Authority; (v) it is being handled by a customs broker, freight-forwarder or other handler that has delivered a Lien Waiver in the form of Exhibit C-1 (with appropriate modifications to remove the references to the Senior Term Agent, the Senior Term Loan Documents, the Term Loan Agent Loan Agents and the Term Loan Documents if such Lien Waiver is delivered with respect to an Obligor that is not a U.S. Obligor) or on terms acceptable to Agent in its Permitted Discretion; and (vi) if purchased from any Affiliate of a Borrower (including without limitation, TriMas Sourcing B.V. and any successor thereof) or any Affiliate of TriMas Corporation, such Affiliate shall have executed a Lien Waiver in the form of Exhibit C-2 (with appropriate modifications to remove the references to the Senior Term Agent, the Senior Term Loan Documents, the Term Loan Agent Term Loan Agents and the Term Loan Documents if such Lien Waiver is delivered with respect to an Obligor that is not a U.S. Obligor) or on terms acceptable to Agent in its Permitted Discretion; and (b) no Inventory shall be Eligible In-Transit

 

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Inventory during an Eligible In-Transit Inventory Trigger Period unless it (i) satisfies all of the conditions set forth in the foregoing clause (a) and (ii) is subject to a negotiable Document showing Agent or a Security Trustee (or, with the consent of Agent, the applicable Borrower) as consignee, which Document is in the possession of Agent or such other Person as Agent shall approve.

“ Eligible In-Transit Inventory Trigger Period ” the period (a) commencing on the day that (i) an Event of Default occurs, (ii) U.S. Adjusted Availability is less than or equal to, for 3 consecutive Business Days, the lesser of (A) 30% of the U.S. Borrowing Base (computed without regard to the U.S. Special Availability Block) or (B) 30% of the aggregate amount of all U.S. Revolver Commitments, or (iii) U.S. Adjusted Availability is at any time less than or equal to the lesser of (A) 25% of the U.S. Borrowing Base (computed without regard to the U.S. Special Availability Block) or (B) 25% of the aggregate amount of all U.S. Revolver Commitments; and (b) continuing until no Event of Default exists and, during each of the preceding 30 consecutive days, U.S. Adjusted Availability has been greater than the lesser of (i) 30% of the U.S. Borrowing Base (computed without regard to the U.S. Special Availability Block) or (ii) 30% of the aggregate amount of all U.S. Revolver Commitments.

“ Enforcement Action ” any action to enforce any Obligations (other than Secured Bank Product Obligations) or Loan Documents or to exercise any rights or remedies relating to any Collateral (whether by judicial action, self-help, notification of Account Debtors, setoff or recoupment, credit bid, action in an Obligor’s Insolvency Proceeding or otherwise).

“ Environmental Laws ” all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, Release or threatened Release of any Hazardous Material or to health and safety matters.

“ Environmental Liability ” any liabilities, obligations, damages, losses, claims, actions, suits, judgments, or orders, contingent or otherwise (including any liability for damages, costs of environmental remediation, costs of administrative oversight, fines, natural resource damages, penalties or indemnities), directly or indirectly resulting from or relating to (a) compliance or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any actual or alleged exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Environmental Notice ” a notice (whether written or oral) from any Governmental Authority or other Person of any possible noncompliance with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental Law, or with respect to any Release, environmental pollution or Hazardous Materials, including any complaint, summons, citation, order, claim, demand or request for correction, remediation or otherwise.

“ Equity Interest ” shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person or any warrants, options or other rights to acquire such interests, but excluding any debt securities convertible into or referencing any of the foregoing.

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

“ ERISA Affiliate ” any trade or business (whether or not incorporated) that, together with the Parent Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for

 

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purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

“ ERISA Event ” (a) any “ reportable event ,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a U.S. Pension Plan (other than an event for which the 30 day notice period is waived); (b) a failure by any U.S. Pension Plan to satisfy the minimum funding standards (as defined in Section 412 of the Code or Section 302 of ERISA) applicable to such U.S. Pension Plan in each instance, whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any U.S. Pension Plan; (d) a determination that any U.S. Pension Plan is, or is expected to be, in “ at risk ” status (as defined in Section 430(i)(4) of the Code or Section 303(i)(4) of ERISA; (e) the incurrence by the Parent Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any U.S. Pension Plan; (f) the receipt by the Parent Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any U.S. Pension Plan or U.S. Pension Plans or to appoint a trustee to administer any U.S. Pension Plan;

(g) the incurrence by the Parent Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any U.S. Pension Plan or Multiemployer Plan; or (h) the receipt by the Parent Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Parent Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, within the meaning of Title IV of ERISA or in “ endangered ” or “ critical ” status (within the meaning of Section 432 of the Code or Section 305 of ERISA).

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

“ Euro ” the single currency of the Participating Member States.

“ Event of Default ” as defined in Section  11 .

“ Excluded Account ” (a) Excluded Trust Accounts, (b) Deposit Accounts and Securities Accounts of the Obligors located in the United States, Canada or the United Kingdom and containing not more than $50,000 individually or $250,000 in the aggregate at any time, (c) zero-balance accounts that sweep on a daily basis to an account maintained with Agent or subject to a Deposit Account Control Agreement and (d) Deposit Accounts and Securities Accounts of the Foreign Domiciled Obligors not located in the United States, Canada or the United Kingdom and containing not more than $300,000 individually or $1,000,000 in the aggregate for any period of time exceeding three (3) consecutive Business Days.

“ Excluded Swap Obligation ” with respect to any Obligor, any Swap Obligation if, and to the extent that, and only for so long as, all or a portion of the guarantee of such Obligor of, or the grant by such Obligor of a security interest to secure, as applicable, such Swap Obligation (or any 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 interpretation of any thereof) by virtue of such Obligor’s failure to constitute an “eligible contract participant,” as defined in the Commodity Exchange Act and the regulations thereunder, at the time the guarantee of (or grant of such security interest by, as applicable) such Obligor becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one Swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swaps for which such guarantee or security interest is or becomes illegal.

 

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“ Excluded Taxes ” (a) Taxes imposed on or measured by a Recipient’s net or overall gross income or net worth or similar Taxes (however denominated), capital Taxes within the meaning of Section 190.1 of the Income Tax Act (Canada) (or similar Taxes imposed by Canada or any political subdivision thereof), franchise Taxes and branch profits Taxes (i) as a result of such Recipient being organized under the laws of, or having its principal office or applicable Lending Office located in, the jurisdiction imposing such Tax, or (ii) constituting Other Connection Taxes; (b) in the case of a Lender, any U.S. withholding Taxes imposed on amounts payable to or for the account of a Lender with respect to its interest in a Loan or Commitment pursuant to a law in effect when the Lender (i) acquires such interest in the Loan or Commitment (except any assignee pursuant to an assignment request by Borrower Agent under Section  13.4 ) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section  5.8.1 , amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender become a party hereto or to such Lender immediately before it changed its Lending Office; (c) Taxes attributable to a Recipient’s failure to comply with Section  5.9 ; (d) U.S. withholding Taxes imposed pursuant to FATCA; and (e) any Canadian withholding Taxes resulting from (i) a Lender not dealing at arm’s length within the meaning of the Income Tax Act (Canada) with a Credit Party or (ii) a Lender being, or not dealing at arm’s length with, a “Specified Shareholder” within the meaning of Section 18(5) of the Income Tax Act (Canada) of a Credit Party.

“ Excluded Trust Accounts ” means Deposit Accounts or Securities Accounts used exclusively (a) for payroll, taxes or employee benefits, (b) to receive proceeds of Accounts sold to third parties pursuant to Specified Vendor Receivables Financings permitted under the Loan Documents, (c) to hold cash and/or cash equivalents pledged to secure other obligations of the Parent Borrower or any Subsidiary thereof pursuant to Liens permitted under the Loan Documents, (d) as escrow accounts, (e) as fiduciary or trust accounts held exclusively for the benefit of third parties, other than an Obligor and (f) that contain solely deposits permitted by clauses (c) and (d) of the definition of “Permitted Encumbrances”, including in connection with any letters of credit issued pursuant to such clauses, if the documents governing such deposits prohibit the granting of a Lien on such deposits.

“ Existing Letters of Credit ” those letters of credit existing on the Closing Date and identified on Schedule 1.1(A) .

“Existing Senior Agreement” that certain Credit Agreement, dated as of February 20, 2019, by and among the Parent Borrower , the several banks and other financial institutions or entities from time to time party thereto and Cortland Capital Market Services LLC, as administrative agent, as amended, restated, supplemented or otherwise modified from time to time.

“ Extraordinary Expenses ” all costs, expenses or advances that Agent or any Security Trustee may incur during an Event of Default, or during the pendency of an Insolvency Proceeding of an Obligor, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against Agent, any Security Trustee, any Lender, any Obligor, any representative of creditors of an Obligor or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of Agent’s and/or Security Trustee’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) the exercise of any rights or remedies of Agent and/or Security Trustee in, or the monitoring of, any Insolvency Proceeding;

(d) settlement or satisfaction of taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; and (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility

 

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reservation and standby fees, legal fees, appraisal fees, brokers’ and auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Obligor or independent contractors in liquidating any Collateral, and travel expenses.

“ FATCA ” (a) Sections 1471 through 1474 of the Code as of the Original Closing Date or any amended or successor provision that is substantively comparable and not materially more onerous to comply with, and, in each case, any regulations or official interpretations thereof, (b) any agreements entered into pursuant to Section 1471(b)(1) of the Code as of the Original Closing Date or any amended or successor provision as described in clause (a) above and (c) any law, regulation, rule, promulgation or official agreement implementing an official government agreement with respect to the foregoing.

“ Federal Funds Rate ” (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on the applicable Business Day (or on the preceding Business Day, if the applicable day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded up, if necessary, to the nearest 1/8 of 1%) charged to Bank of America on the applicable day on such transactions, as determined by Agent.

“ FILO Amount ” from and after the FILO Commencement Date, as of any date of determination, the Dollar-equivalent result of: Fifth Amendment ” means that certain Fifth Amendment to this Agreement, dated as of February  26, 2019 among the Borrowers, the other Obligors party thereto, the Agent and the Lenders party thereto .

(a)         the sum of (i) (a) 5% of the Value of U.S. Eligible Accounts, plus (b) 10% of the NOLV Percentage of the Value of U.S. Eligible Inventory at such time, multiplied by

(b)        (i) one (1), during the 21 month period following the FILO Commencement Date and (ii) at all times thereafter (up to the FILO Termination Date), a fraction, the numerator of which shall be the number of full fiscal quarterly periods remaining prior to FILO Termination Date and the denominator of which shall be 6; provided that from and after the FILO Termination Date, the FILO Amount shall be zero ($0). For purposes of clarity, the first “full fiscal quarterly period” shall mean a fiscal quarterly period commencing on the same calendar day that corresponds to the 21 month anniversary of the FILO Commencement Date with reductions in the FILO Amount being effective on the first day of each applicable full fiscal quarterly period.

“ FILO Commencement Date ” June 30, 2015.

“ FILO Loan ” a U.S. Revolver Loan constituting a FILO Loan that is borrowed and deemed outstanding pursuant to Section   4.1.1(a) .

“ FILO Termination Date ” June 30, 2018.

“ Financial Covenant Trigger Period ” any the period from and after March 14, 2019, (a) commencing on the day that an Event of Default occurs, or U.S. Availability is less than or equal to the greater of (x) $7,500,000, and (y)  the lesser of (A) 10% of the U.S. Borrowing Base or (computed without regard to the U.S. Special Availability Block) and (B) 10% of the aggregate amount of all U.S. Revolver Commitments, and (b) continuing until, during each of the preceding 30 consecutive days, no Event of Default has existed and U.S. Availability has been greater than the greater of (x) $7,500,000 and (y)   the lesser of (A) 10% of the U.S. Borrowing Base (computed without regard to the U.S. Special Availability Block) or (B) 10% of the aggregate amount of all U.S. Revolver Commitments.

 

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“ Financial Officer ” the chief financial officer, principal accounting officer, treasurer or controller of the Parent Borrower.

“ First Lien Net Leverage Ratio ” on any date, the ratio of (a)  First Lien Secured Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b)  Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

“ First Lien Secured Debt ” Total Debt that is secured by a first priority Lien on any asset of the Parent Borrower or any of its Subsidiaries (it being understood that any Debt outstanding under this Agreement and any Debt outstanding under the Senior Term Loan Agreement and the First Lien Term Loan Agreement is First Lien Secured Debt).

“ First Lien Term Loan Agent” JPMorgan Chase Bank, N.A. in its capacity as agent for the lenders under the First Lien Term Loan Agreement, and its successors and assigns including under any replacement or refinancing with respect thereto.

“ First Lien Term Loan Agreement” that certain Term Loan Credit Agreement dated as of June 30, 2015 among First Lien Term Loan Agent, the First Lien Term Loan Lenders, the Parent Borrower, and the other parties thereto, as amended, restated, supplemented, replaced refinanced or otherwise modified from time to time up to and including as amended by the First Lien Term Loan Agreement Sixth Amendment in accordance with the requirements thereof and this Agreement.

“First Lien Term Loan Agreement Fourth Amendment” that certain Fourth Amendment to Credit Agreement, dated as of July 31, 2018, among First Lien Term Loan Agent, the First Lien Term Loan Lenders party thereto, the Parent Borrower, Horizon Global Americas Inc., a Delaware corporation, Horizon Global Company LLC, a Delaware limited liability company, and the other parties thereto.

“ First Lien Term Loan Agreement Sixth Amendment ” that certain Sixth Amendment to Credit Agreement, dated as of Seventh Amendment Effective Date, among First Lien Term Loan Agent, the First Lien Term Loan Lenders party thereto, the Parent Borrower, Horizon Global Americas Inc., a Delaware corporation, Horizon Global Company LLC, a Delaware limited liability company, and the other parties thereto.

“ First Lien Term Loan Debt ” the Debt and “ Obligations ” (as defined under the First Lien Term Loan Agreement) evidenced by the First Lien Term Loan Documents, in aggregate principal amount (in the case of loans) not to exceed $191,000,000 plus an additional amount of Debt incurred under the Second Lien Term Loan Documents solely in connection with the “ in-kind ” payment of interest thereon and fees pursuant to the terms of the First Lien Term Loan Agreement as in effect as of the Seventh Amendment Effective Date.

“ First Lien Term Loan Documents ” collectively (a)  the First Lien Term Loan Agreement and (b)  all other agreements, instruments, documents and certificates executed and delivered to, or in favor of, the First Lien Term Loan Agent or the First Lien Term Loan Lenders in connection therewith.

“ First Lien Term Loan Lenders ” the lenders party to the First Lien Term Loan Agreement.

“ First Lien Term Loan Security Documents ” collectively, the Guarantee and Collateral Agreement (as defined in the First Lien Term Loan Agreement), the Mortgages (as defined in the First

 

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Lien Term Loan Agreement) and all other security documents delivered to the First Lien Term Loan Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Obligor under the First Lien Term Loan Agreement or the Guarantee and Collateral Agreement (as defined in the First Lien Term Loan Agreement), as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ Fiscal Quarter ” each period of three months, commencing on the first day of a Fiscal Year.

“ Fiscal Year ” the fiscal year of Borrowers and Subsidiaries for accounting and tax purposes, ending on December 31 of each year.

“ Fixed Charge Coverage Ratio ” the ratio, determined on a consolidated basis for Borrowers and Subsidiaries for the most recent 12 months, of (a) Consolidated EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Revolver Loans) and cash taxes paid, to (b) Fixed Charges. For purposes of calculating the Fixed Charge Coverage Ratio for the 12-month periods ending December 31, 2015, January 31, 2016, February 29, 2016, March 31, 2016, April 30, 2016, and May 31, 2016, cash taxes paid for each such 12-month period shall be calculated by using the amount of cash taxes paid for the period from July 1, 2015 through the last day of the applicable 12-month period and multiplying such amount by (i) 2, in the case of the 12-month period ending December 31, 2015, (ii) 12/7, in the case of the 12-month period ending January 31, 2016, (iii) 3/2, in the case of the 12-month period ending February 29, 2016, (iv) 4/3, in the case of the 12-month period ending March 31, 2016, (v) 6/5, in the case of the12-month period ending April 30, 2016, and (vi) 12/11, in the case of the 12-month period ending May 31, 2016.

“ Fixed Charges ” the sum of interest expense (other than payment-in-kind , but including interest-equivalent costs associated with any Specified Vendor Receivables Financing, whether accounted for as interest expense or loss on the sale of receivables ), scheduled principal payments made on Borrowed Money, and cash Distributions made by the Parent Borrower.

“ Floating Rate Loan ” a Base Rate Loan or a Canadian Prime Rate Loan.

“ FLSA ” the Fair Labor Standards Act of 1938, as amended from time to time.

“ Foreign Allocated U.S. Availability ” Canadian Allocated U.S. Availability and UK Allocated U.S. Availability.

“ Foreign Allocated U.S. Availability Reserve ” the aggregate amount of U.S. Availability allocated by Borrower Agent for inclusion in the Borrowing Bases of the Foreign Borrowers.

“ Foreign Borrowers ” the Canadian Borrower and the UK Borrower.

“ Foreign Cash Collateral Account ” a demand deposit, money market or other account established by Agent at such financial institution as Agent may select in its Permitted Discretion, which account shall be held in the United States and shall be subject to a Lien in favor of Agent for the benefit of the Foreign Facility Secured Parties.

“ Foreign Cross-Guarantee ” as defined in Section   5.10.4 .

“ Foreign Domiciled Obligor ” any Obligor that is not a U.S. Domiciled Obligor.

 

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“ Foreign Facility Collateral and Guarantee Requirement ” subject to any applicable limitations set forth in the Security Documents and the Agreed Security Principles:

(a)         with respect to any and all Canadian Facility Obligors, the requirement that:

(i)          Agent shall have received from each party thereto (other than Agent) either (A) a counterpart of the Foreign Facility Guarantee and Collateral Agreement (with respect to Foreign Domiciled Obligors and, to the extent requested by Agent, U.S. Domiciled Obligors) and each of the other Canadian Security Documents to which such Person is a party, duly executed and delivered on behalf of such Canadian Facility Obligor, as applicable, or (B) in the case of any Person that becomes a Canadian Facility Obligor after the Closing Date, a joinder to this Agreement and a supplement or a counterpart to the Foreign Facility Guarantee and Collateral Agreement (with respect to Foreign Domiciled Obligors and, to the extent requested by Agent, U.S. Domiciled Obligors) and each other applicable Canadian Security Document, in each case in the form specified therein, duly executed and delivered on behalf of such Canadian Facility Obligor, as applicable;

(ii)          all outstanding Equity Interests of each Subsidiary Obligor owned by or on behalf of any Canadian Facility Obligor shall have been pledged pursuant to an appropriate Canadian Security Document and, subject to the Intercreditor Agreement, Agent or Controlling Term Loan Agent, as applicable, shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(iii)          all Debt for borrowed money having an aggregate principal amount in excess of $500,000 that is owing to any Canadian Facility Obligor shall be evidenced by a promissory note and shall have been pledged pursuant to an appropriate Canadian Security Document, and, subject to the Intercreditor Agreement, Agent and/or Controlling Term Loan Agent, as applicable, shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(iv)          all documents and instruments, including UCC and PPSA financing statements, required by Applicable Law or reasonably requested by Agent to be filed, registered or recorded to create the Liens on the assets of such Canadian Facility Obligor intended to be created by the Canadian Security Documents and perfect such Liens to the extent required by, and with the priority required by, the Canadian Security Documents (with respect to U.S. Obligors that are also Canadian Facility Obligors, in each case subject to the Intercreditor Agreement), shall have been filed, registered or recorded;

(v)          Agent shall have received, with respect to any Mortgaged Property of any Canadian Facility Obligor (A) counterparts of a Canadian Mortgage with respect to such Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (B) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such Canadian Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section  10.2.2 , together with such endorsements, coinsurance and reinsurance as Agent or the Required Lenders may reasonably request, but only to the extent such endorsements are (1) available in the relevant jurisdiction (provided in no event shall Agent request a creditors’ rights endorsement) and (2) available at commercially reasonable rates, (C) if reasonably requested by Agent, a current appraisal of any such Mortgaged Property, prepared by an appraiser acceptable to Agent, and in form and substance satisfactory to Required Lenders (it being understood that if

 

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such appraisal is required in order to comply with Agent ’ s internal policies, such request shall be deemed to be reasonable), (D) if reasonably requested by Agent, an environmental assessment with respect to any such Mortgaged Property, prepared by environmental engineers reasonably acceptable to Agent, and such other reports, certificates, studies or data with respect to such Mortgaged Property as Agent may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with Agent ’ s internal policies, such request shall be deemed to be reasonable), and (E)  such abstracts, legal opinions and other documents as Agent or the Required Lenders may reasonably request with respect to any such Canadian Mortgage or Mortgaged Property; provided, however, in no event shall surveys be required to be obtained with respect to any such Mortgaged Property;

(vi)          each Canadian Facility Obligor shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Canadian Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the terms of the Loan Documents; and

(vii)          the U.S. Facility Collateral and Guarantee Requirement (with respect to U.S. Obligors only), the Mexican Collateral and Guarantee Requirement (with respect to Mexican Domiciled Obligors only), and the Dutch Collateral and Guarantee Requirement (with respect to Dutch Domiciled Obligors only) shall be met; and

(b)      with respect to any and all UK Facility Obligors, the requirement that:

(i) Agent shall have received from each party thereto (other than Agent) either (A) a counterpart of the Foreign Facility Guarantee and Collateral Agreement (with respect to Foreign Domiciled Obligors and, to the extent requested by Agent, U.S. Domiciled Obligors) and each of the other UK Security Document to which such Person is a party, duly executed and delivered on behalf of such UK Facility Obligor, as applicable, or (B)  in the case of any Person that becomes a UK Facility Obligor after the Closing Date, a joinder to this Agreement and deeds of accession or supplements to the Foreign Facility Guarantee and Collateral Agreement (with respect to Foreign Domiciled Obligors and, to the extent requested by Agent, U.S. Domiciled Obligors) and each other applicable UK Security Document, in each case in the form specified therein, duly executed and delivered on behalf of such UK Facility Obligor, as applicable;

(ii)          all outstanding Equity Interests of each Subsidiary Obligor owned by or on behalf of any UK Facility Obligor shall have been pledged pursuant to an appropriate UK Security Document (such as the Mexican Equity Pledges) and, subject to the Intercreditor Agreement, Agent or Controlling Term Loan Agent, as applicable, shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(iii)          each UK Facility Obligor shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all UK Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the terms of the Loan Documents;

(iv)          Agent shall have received all documents and instruments required by law or reasonably requested by Agent to be filed, registered or recorded to create the Liens intended to

 

 

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be created by the UK Security Documents and perfect such Liens to the extent required by the UK Security Documents shall have been filed, registered, recorded or delivered to Agent for filing, registration or recording (including without limitation, with respect to the UK Borrower, the ratified notarial instrument corresponding to the Mexican Asset Pledge); and

        (v)          the U.S. Facility Collateral and Guarantee Requirement (with respect to U.S. Obligors only), the Mexican Collateral and Guarantee Requirement (with respect to Mexican Domiciled Obligors only), and the Dutch Collateral and Guarantee Requirement (with respect to Dutch Domiciled Obligors only) shall be met.

   “ Foreign Facility Guarantee and Collateral Agreement ” that certain Foreign Facility Guarantee and Collateral Agreement, dated as of the Closing Date, by and among Cequent Performance, Horizon International Holdings LLC, a Delaware limited liability company, the Canadian Domiciled Obligors, the UK Domiciled Obligors, the Mexican Domiciled Obligors, Cequent Nederland Holdings B.V., certain other Obligors and Agent , as amended, restated, supplemented or otherwise modified from time to time.

“ Foreign Facility Obligations ” the Canadian Facility Obligations and the UK Facility Obligations.

“ Foreign Facility Secured Parties ” Canadian Facility Secured Parties and/or UK Facility Secured Parties, as the context requires.

“ Foreign Lender ” (a) with respect to each Borrower that is a U.S. Person, each Lender or Issuing Bank that is not a U.S. Person, and (b) with respect to each Borrower that is not a U.S. Person, each Lender or Issuing Bank that is resident or organized under the laws of a jurisdiction other than that in which such Borrower is resident for Tax purposes.

“ Foreign Obligor ” each Obligor that is not a U.S. Obligor. For the avoidance of confusion, “Foreign Obligors” shall include all U.S. Domiciled Obligors that are not U.S. Facility Obligors, including, without limitation, CFC Holdcos and U.S. Holdcos.

“ Foreign Plan ” any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by Parent Borrower or any of its Subsidiaries with respect to employees employed outside of the U.S. or Canada, other than any state social security arrangements.

“ Foreign Revolver Commitments ” the Canadian Revolver Commitment and/or the UK Revolver Commitment, as the context requires.

“ Foreign Subsidiary ” any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

“ Fourth Amendment ” means that certain Fourth Amendment to this Agreement, dated as of February 20, 2019 among the Borrowers, the other Obligors party thereto, the Agent and the Lenders party thereto.

“ Fourth Amendment Effective Date ” means the “ Amendment Effective Date ” as set forth in the Fourth Amendment.

“ Fronting Exposure ” a Defaulting Lender’s interest in LC Obligations, Swingline Loans and Protective Advances, except to the extent Cash Collateralized by the Defaulting Lender or allocated to other Lenders hereunder.

 

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“ FSCO ” The Financial Services Commission of Ontario or like body in Canada or in any other province or territory or jurisdiction of Canada with whom a Canadian Pension Plan is required to be registered in accordance with Applicable Law and any other Governmental Authority succeeding to the functions thereof.

“ Full Payment ” with respect to any Obligations, (a) the full cash payment thereof, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding) (other than contingent indemnification obligations for which no claim has been asserted or is reasonably expected to be asserted); (b) if such Obligations are LC Obligations or inchoate or contingent in nature, Cash Collateralization thereof (or delivery of a standby letter of credit acceptable to Agent in its Permitted Discretion, in the amount of required Cash Collateral); and (c) the release of any and all claims of the Obligors against Agent, Lenders and their Affiliates arising on or before the payment date. “ Fully Paid ” has a correlative meaning. No Loans shall be deemed to have been paid in full unless all Commitments related to such Loans have terminated.

“ GAAP ” generally accepted accounting principles in effect in the United States from time to time.

“ General Intangibles ” as defined in the UCC (and/or with respect to any General Intangible of a Canadian Domiciled Obligor, an “intangible” as defined in the PPSA) or any other Applicable Law, as applicable.

“ German Domiciled Obligor ” means any Obligor which is formed or organized under the laws of Germany.

“ German Security Documents ” all pledge, security or similar documents executed from time to time in favor of Security Trustee and/or Agent by any German Domiciled Obligor with respect to any assets of such German Domiciled Obligor or by any other Obligor with respect to assets of such Obligor located in Germany.

“ Governmental Approvals ” all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, and required reports to, all Governmental Authorities.

“ Governmental Authority ” the government of the United States of America, any other nation or 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, without limitation, the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national body exercising such powers or functions, such as the European Union or the European Central Bank), in each case whether it is or is not associated with Canada, the United Kingdom, the U.S. or any state, province, district or territory thereof, or any other foreign entity or government.

“ 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 Debt 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 Debt 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 Debt 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 Debt or other obligation or (d) as an

 

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account party in respect of any letter of credit or letter of guaranty issued to support such Debt or obligation; provided , that the term “ Guarantee ” shall not include endorsements for collection or deposit in the Ordinary Course of Business.

“ Guarantee and Collateral Agreement ” that certain ABL Guarantee and Collateral Agreement, dated as of June 30, 2015, by and among the U.S. Obligors and Agent , as amended, restated, supplemented or otherwise modified from time to time.

“ Guarantor Payment ” as defined in Section  5.10.3 .

“ Guarantors ” Canadian Facility Guarantors, UK Facility Guarantors, U.S. Facility Guarantors, and each other Person that guarantees payment or performance of Obligations, in each case as the context requires.

“ Guaranties ” the Canadian Guaranties, the UK Guaranties and/or the U.S. Guaranties, as the context requires.

“ Hazardous Materials ” all explosive, radioactive, hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Hedging Agreement ” any (i) interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement, (ii) Permitted Bond Hedge Transactions and (iii) Permitted Warrant Transactions.

“ Immaterial Subsidiary ” at any date, any Subsidiary of the Parent Borrower that, together with its consolidated Subsidiaries (i)  does not, as of the last day of the Fiscal Quarter of the Parent Borrower most recently ended on or prior to such date for which financial statements are available, have assets with a value in excess of 2.5% of the consolidated total assets of the Parent Borrower and its consolidated Subsidiaries and (ii)  did not, during the period of four consecutive Fiscal Quarters of the Parent Borrower most recently ended on or prior to such date for which financial statements are available, have revenues exceeding 2.5% of the total revenues of the Parent Borrower and its consolidated Subsidiaries; provided that, the aggregate assets or revenues of all Immaterial Subsidiaries, determined in accordance with GAAP, may not exceed 5.0% of consolidated assets or consolidated revenues, respectively, of the Parent Borrower and its consolidated Subsidiaries, collectively, at any time (and the Parent Borrower will promptly designate in writing to Agent the Subsidiaries which will cease to be treated as “ Immaterial Subsidiaries ” in order to comply with the foregoing limitation).

“ IMPI ” the Mexican Institute of Intellectual Property (Instituto Mexicano de la Propiedad Industrial).

“ Incremental Facility Agreement ” an Incremental Facility Agreement, in form and substance reasonably satisfactory to Agent, among the Parent Borrower, the Term Loan Agent and one or more Term Loan Lenders and effecting such other amendments to the Term Loan Documents as are contemplated by Section  2.21 of the Term Loan Agreement.

“ Incremental Term Commitment ” with respect to any Term Loan Lender, the commitment, if any, of such Term Loan Lender, established pursuant to an Incremental Facility Agreement and Section  2.21 of the Term Loan Agreement, to make Incremental Term Loans of any series under the Term Loan

 

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Agreement, expressed as an amount representing the maximum principal amount of the Incremental Term Loans of such series to be made by such Term Loan Lender.

“ Incremental Term Loans ” any term loans made pursuant to Section  2.21(a) of the Term Loan Agreement.

“ Indemnified Taxes ” (a) Taxes, other than Excluded Taxes, imposed on or relating to any payment of an Obligation; and (b) to the extent not otherwise described in clause (a), Other Taxes.

“ Indemnitees ” Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America Indemnitees.

“ Insolvency Proceeding ” any case or proceeding, application, meeting convened, resolution passed, proposal, corporate action or any other proceeding commenced by or against a Person under any state, provincial, federal or foreign law for, including without limitation the Mexican Bankruptcy Law, or any agreement of such Person to, (a) the entry of an order for relief under the U.S. Bankruptcy Code, or any other insolvency, debtor relief, bankruptcy, receivership, debt adjustment law or other similar law (whether state, provincial, federal or foreign), including the Bankruptcy and Insolvency Act (Canada) and the CCAA; (b) the appointment of a Creditor Representative or other custodian for such Person or any part of its Property; (c) an assignment or trust mortgage for the benefit of creditors; (d) the winding up or strike off of the Person (other than in connection with a solvent reorganization permitted by Section  10.2.3 ); (e) the proposal or implementation of a scheme of arrangement; (f) a suspension of payment, moratorium of any debts, official assignment, composition or arrangement with a Person’s creditors; or (g) in the case of a UK Domiciled Obligor, any corporate action, legal proceedings or other procedure commenced or other step taken (including the making of an application, the presentation of a petition, the filing or service of a notice or the passing of a resolution) in relation to (i) such UK Domiciled Obligor being adjudicated or found insolvent, (ii) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganization (by way of voluntary arrangement, scheme of arrangement or otherwise) of such UK Domiciled Obligor other than a solvent liquidation or reorganization of such UK Domiciled Obligor permitted by Section  10.2.3 , (iii) a composition, assignment or arrangement with any class of creditors of such UK Domiciled Obligor or (iv) the appointment of a liquidator, supervisor, receiver, administrator, administrative receiver, compulsory manager, trustee or other similar officer in respect of such UK Domiciled Obligor or any of its assets.

“ Intellectual Property ” the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement, misappropriation or violation thereof, including the right to receive all proceeds and damages therefrom.

“ Intellectual Property Claim ” any claim or assertion (whether in writing, by suit or otherwise) that a Borrower’s or Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual Property.

“ Intercreditor Agreement ” the Amended and Restated Intercreditor Agreement , dated as of June 30, 2015, on or about the Seventh Amendment Effective Date between the Term Loan Agent Agents and the Agent, acknowledged by the U.S. Domiciled Obligors and relating to the Term Loan Debt , as amended by that certain First Amendment to Intercreditor Agreement, dated as of October 3, 2016, and by that certain Second Amendment to Intercreditor Agreement, dated on or about the Fourth Amendment Effective Date and supplemented by that certain Joinder Agreement to Intercreditor Agreement dated on

 

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or about the Fourth Amendment Effective Date and as further amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof .

“ Interest Period ” as defined in Section  3.1.4 .

“ Interest Period Loan ” a Canadian BA Rate Loan or a LIBOR Loan.

“ Inventory ” as defined in the UCC, the PPSA or any other Applicable Law, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding Equipment).

“ Inventory Formula Amount ” the Canadian Inventory Formula Amount, the UK Inventory Formula Amount and/or the U.S. Inventory Formula Amount, as the context requires.

“ Inventory Reserve ” the Canadian Inventory Reserve, the UK Inventory Reserve and/or the U.S. Inventory Reserve, as the context requires.

“ IRS ” the United States Internal Revenue Service.

“ Issuing Bank Indemnitees ” the Canadian Issuing Bank Indemnitees, the UK Issuing Bank Indemnitees and the U.S. Issuing Bank Indemnitees.

“ Issuing Banks ” the Canadian Issuing Banks, the UK Issuing Banks and/or the U.S. Issuing Banks, as the context requires.

“ ITA ” the Income Tax Act 2007 (United Kingdom), as amended from time to time.

“ Judgment Currency ” as defined in Section  1.5 .

“ Latest Maturity Date ” as of any date of determination, the latest maturity date applicable to any Loans outstanding or Commitments in effect hereunder and/or any Term Loan Debt or Incremental Term Commitment .

“ LC Document ” any of the Canadian LC Documents, UK LC Documents, and/or the U.S. LC Documents, as the context requires.

“ LC Obligations ” the Canadian LC Obligations, the UK LC Obligations and/or the U.S. LC Obligations, as the context requires.

“ LC Request ” a Canadian LC Request, a UK LC Request or a U.S. LC Request, as the context requires.

“ Lender Indemnitees ” Lenders and Secured Bank Product Providers, and their officers, directors, employees, Affiliates, branches, agents and attorneys.

“ Lenders ” lenders party to this Agreement, including (a) Bank of America and its Affiliates and branches in their respective capacities as the Canadian Swingline Lender, the UK Swingline Lender and the U.S. Swingline Lender, (b) the Canadian Lenders, (c) the UK Lenders, (d) the U.S. Lenders and (e) their respective permitted successors and assigns and, where applicable, any Issuing Bank, and any other

 

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Person who hereafter becomes a “Lender” pursuant to an Assignment, including any Lending Office of the foregoing.

“ Lending Office ” the office (including any domestic or foreign Affiliate or branch) designated as such by a Lender or Issuing Bank by notice to Agent and Borrower Agent.

“ Letters of Credit ” the Canadian Letters of Credit, the UK Letters of Credit and/or the U.S. Letters of Credit, as the context requires.

“ LIBOR ” the per annum rate of interest (rounded up to the nearest 1/8th of 1% and in no event less than zero) determined by Agent at or about 11:00 a.m. (London time) two Business Days prior to an interest period, for a term equivalent to such period, equal to the London Interbank Offered Rate, or comparable or successor rate approved by Agent, as published on the applicable Reuters screen page (or other commercially available source designated by Agent from time to time); provided , that any comparable or successor rate shall be applied by Agent, if administratively feasible, in a manner consistent with market practice.

“ LIBOR Loan ” each set of LIBOR Revolver Loans having a common length and commencement of Interest Period.

“ LIBOR Revolver Loan ” a Revolver Loan that bears interest based on LIBOR; provided , however , that a Canadian Base Rate Loan bearing interest as set forth in clause (c) of the definition of Canadian Base Rate, or a U.S. Base Rate Loan bearing interest as set forth in clause (c) of the definition of U.S. Base Rate, shall not constitute a LIBOR Revolver Loan.

“ License ” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“ Licensor ” any Person from whom an Obligor obtains the right to use any Intellectual Property.

“ Lien ” with respect to any asset, (a) any mortgage ( hypotheek ), deed of trust, lien and in general any right in rem ( beperkte recht ), pledge ( pandrecht ), hypothecation, encumbrance, charge, trust (deemed, constructive, statutory or otherwise) or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“ Lien Waiver ” documents in the form of Exhibits C-1 and C-2 (in each case with appropriate modifications to remove the references to the Term Loan Agent, the Term Loan Documents, the Term Loan Agent Agents and the Term Loan Documents if such Lien Waiver is delivered with respect to an Obligor that is not a U.S. Obligor) and each other landlord waiver, bailee letter, or acknowledgement agreement of any lessor, mortgagee, warehouseman, processor, shipper, customs broker, freight forwarder, repairman, mechanic, bailee, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in any Obligor’s books and records, Equipment, or Inventory, or, with respect to any Collateral subject to a Licensor’s Intellectual Property rights, an agreement of such Licensor, in each case, in form and substance reasonably satisfactory to Agent.

 

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“ Loan ” a Revolver Loan.

“ Loan Documents ” this Agreement, Other Agreements and Security Documents the Security Documents, the Intercreditor Agreement and each LC Document, fee letter, Lien Waiver, Borrowing Base Report, Compliance Certificate, Perfection Certificate, Borrower Materials, or other note, document, instrument or agreement (other than this Agreement or a Security Document) now or hereafter delivered by an Obligor or other Person to Agent, a Security Trustee or a Lender in connection with any transactions relating hereto .

“ Loan Year ” each 12 month period commencing on the Original Closing Date and on each anniversary of the Original Closing Date.

“ Local Time ” with respect to (a) Canadian Revolver Loans, prevailing time in Toronto, Ontario, Canada, (b) UK Revolver Loans, prevailing time at Agent’s notice address under Section  14.3.1 and (c) U.S. Revolver Loans, prevailing time at Agent’s notice address under Section  14.3.1 .

“ Margin Stock ” as defined in Regulation U of the Board.

“ Material Adverse Effect ” a material adverse effect on (a) the business, operations, properties, assets, financial condition, or material agreements of the Parent Borrower and the Subsidiaries, taken as a whole, (b) the ability of any Obligor in any material respect to perform any of its obligations under any Loan Document or (c) the rights of or benefits available to the Lenders under any Loan Document or the validity or priority of Agent’s or any Security Trustee’s Liens on any Collateral.

“ Material Agreements ” any agreements or instruments relating to Material Debt.

“ Material Debt ” (a) the First Lien Term Loan Debt, (b) the Debt outstanding in respect of the Senior Second Lien Term Loan Documents Debt and (c) any other Debt (other than the Loans and Letters of Credit), or obligations in respect of one or more Hedging Agreements, of any one or more of the Parent Borrower and its Subsidiaries in an aggregate principal amount exceeding $ 25,000,000. 5,000,000. For purposes of determining Material Debt, the “ principal amount ” of the obligations of the Parent Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Parent Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. For the avoidance of doubt, the term “Material Debt” shall not include any obligations under any Permitted Warrant Transaction.

“ Maximum Alternative Incremental Debt Amount ” an aggregate principal amount of Alternative Incremental Debt that would not, immediately after giving effect to the establishment thereof and any other Debt incurred substantially simultaneously therewith (and any related repayment of Debt), cause (a)  with respect to any Pari Passu Alternative Incremental Debt, the First Lien Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Debt (but disregarding the proceeds of any such Debt in calculating Unrestricted Domestic Cash), to exceed 3.25 to 1.00, (b) with respect to any Alternative Incremental Debt secured by Liens that are junior to the Liens on the Collateral securing the Term Loan Debt, the Secured Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Debt (but disregarding the proceeds of any such Debt in calculating Unrestricted Domestic Cash), to exceed 3.50 to 1.00 and (c)  with respect to any unsecured Alternative Incremental Debt, the Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Debt (but disregarding the proceeds of any such Debt in calculating Unrestricted Domestic Cash), to exceed 4.00 to 1.00.

“ Maximum Facility Amount ” $ 99,000,000. 90,000,000.

 

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“ Mexican Asset Pledges ” (i) three two ( 3 2 )  non-possessory pledge agreements (contratos de prenda sin transmisi ó n de posesi ó n) dated on or about the Closing Date and satisfactory to Agent, pursuant to which the Mexican Domiciled Obligors have pledged and granted a first priority Lien in favor of Agent over all or substantially all of the present and future movable assets ( bienes muebles ) and/or equipment owned by each Mexican Domiciled Obligor located in Mexico, including but not limited to Inventory, Equipment, Intellectual Property, among others; and (ii) one (1) pledge agreement dated on or about the Closing Date and satisfactory to Agent, pursuant to which the UK Borrower has pledged and granted a first priority Lien in favor of Agent over all present and future assets and/or equipment owned by the UK Borrower located in Mexico, including but not limited to Inventory, Equipment, Intellectual Property, among others, in each case as amended, restated, supplemented or otherwise modified from time to time.

“ Mexican Bankruptcy Law ” the Mexican Ley de Concursos Mercantiles, as amended, implemented and/or supplemented from time to time.

“ Mexican Collateral and Guarantee Requirement ” subject to any applicable limitations set forth in the Security Documents and the Agreed Security Principles, with respect to all Mexican Domiciled Obligors, the requirement that Agent shall have received evidence of the following documents:

(a) a copy of the mercantile folio (folio mercantil) of each Mexican Domiciled Obligor, issued by the corresponding Public Registry of the Property and Commerce (Registro P ú blico de la Propiedad y del Comercio) evidencing the absence of any Insolvency Proceedings ;

(b) notarized copies of the partner’s resolutions of the Mexican Domiciled Obligors: ( i ) authorizing the execution, delivery and performance of the Loan Documents to which such Mexican Domiciled Obligors are party; ( ii ) authorizing a specific person or persons to execute the Loan Documents to which each such Mexican Domiciled Obligor is a party on behalf of such Mexican Domiciled Obligor; ( iii ) authorizing a specific person or persons, on behalf of each Mexican Domiciled Obligor, to sign and/or dispatch all documents and notices to be signed or dispatched by such Mexican Domiciled Obligor under or in connection with the Loan Documents to which it is a party; ( iv ) authorizing the appointment of the Borrower Agent as each Mexican Domiciled Obligor’s agent for service of process in New York; and (v) waiving the pre- emptive rights of each Mexican Domiciled Obligor in respect of any pledged Equity Interests, authorizing the division of such Equity Interests and approving any sale of such Equity Interests conducted in the context of foreclosures under the Security Documents;

(c) a certificate of a member of the board of managers or an authorized officer of each Mexican Domiciled Obligor as to the Solvency of such Mexican Domiciled Obligor;

(d) a ratified notarial instrument by a Mexican notary public of the Mexican Asset Pledges and Mexican Equity Pledges;

(e) all documents and instruments, required by law or reasonably requested by Agent to be filed, registered or recorded to create the Liens intended to be created by the Foreign Facility Guarantee and Collateral Agreement and by the Mexican Security Documents and to perfect such Liens to the extent required by, and with the priority required by, the Foreign Facility Guarantee and Collateral Agreement and by the Mexican Security Documents, shall have been filed, registered or recorded or delivered to Agent for filing, registration or recording; and

(f) duly executed Canadian Guaranties and UK Guaranties.

 

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“ Mexican Domiciled Obligors ” Cequent Sales Company de Mexico, S. de R.L. de C.V., a limited liability company organized under the laws of Mexico, Cequent Trailer Products, S. de R.L. de C.V., a limited liability company organized under the laws of Mexico, and Cequent Electrical Products de Mexico, S. de R.L. de C.V., a limited liability company organized under the laws of Mexico, and each other Obligor organized or incorporated under the laws of Mexico or any jurisdiction thereof.

“ Mexican Equity Pledges ” three two ( 3 2 ) non- possessory pledge agreements (contratos de prenda sin transmisi ó n de posesi ó n) , dated on or about the Closing Date and satisfactory to Agent, pursuant to which the interest holders of the Mexican Domiciled Obligors have pledged and granted a first priority Lien in favor of Agent over all of the Equity Interests in each of the Mexican Domiciled Obligors, in each case as amended, restated, supplemented or otherwise modified from time to time.

“ Mexican Security Documents ” the Mexican Asset Pledges, the Mexican Equity Pledges, and all other documents, instruments and agreements governed by the laws of Mexico now or hereafter securing (or given with the intent to secure) any of the Foreign Facility Obligations, in each case as amended, restated, supplemented or otherwise modified from time to time.

“ Mexico ” means the United Mexican States.

“ Moody’s ” Moody’s Investors Service, Inc., and its successors.

“ Mortgages ” the Canadian Mortgages, the UK Mortgages and/or the U.S. Mortgages, as the context requires.

“ Mortgaged Property ” each parcel of real property and improvements thereto with respect to which a Mortgage is required to be granted pursuant to Section  10.1.9 .

“ Multiemployer Plan ” any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which an Obligor or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“ Net Leverage Ratio ” on any date, the ratio of (a)  Total Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b)  Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

“ Net Proceeds ” with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any noncash proceeds, but only as and when received, (ii) in the case of a casualty, insurance proceeds in excess of $ 1,000,000 500,000 and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Parent Borrower and the Subsidiaries to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by the Parent Borrower and the Subsidiaries as a result of such event to repay Debt (other than Loans, Debt in respect of the Senior Term Loans, Term Loan Debt, Pari Passu Alternative Incremental Debt or any Permitted Term Loan Refinancing First Lien Term Loan Debt, and the Second Lien Term Loan Debt) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all Taxes paid (or reasonably estimated to be payable) by the Parent Borrower and the Subsidiaries, and

 

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the amount of any reserves established by the Parent Borrower and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the 24-month period immediately following such event and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Parent Borrower) to the extent such liabilities are actually paid within such applicable time periods.

“ New Borrower ” as defined in Section  10.1.9(d) .

“ New Lender ” each Lender that becomes a party to this Agreement after the Closing Date.

“ New York Account ” Account number 65502-01805 established at Bank of America for the account of Bank of America (Canada).

“ NOLV Percentage ” the net orderly liquidation value of any particular type of Inventory (whether raw materials, work-in-process or finished goods), expressed as a percentage, expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent appraisal of Borrowers’ Inventory performed by an appraiser and on terms satisfactory to Agent.

“ Notice of Borrowing ” a request by Borrower Agent of a Borrowing of Revolver Loans in the form attached as Exhibit F hereto or otherwise in form satisfactory to Agent.

“ Notice of Conversion/Continuation ” a request by Borrower Agent of a conversion or continuation of any Loans as Canadian BA Rate Loans or LIBOR Loans, in form satisfactory to Agent.

“ Obligations ” all (a) principal of and premium, if any, on the Loans, (b) LC Obligations and other obligations of Obligors with respect to Letters of Credit, (c) interest, expenses, fees, indemnification obligations, Extraordinary Expenses and other amounts payable by Obligors under Loan Documents, (d) Secured Bank Product Obligations, and (e) other Debts, obligations and liabilities of any kind owing by Obligors pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several, including without limitation the Foreign Facility Obligations and the U.S. Facility Obligations; provided that Obligations of an Obligor shall not include its Excluded Swap Obligations.

“ Obligors ” the Canadian Facility Obligors, the UK Facility Obligors and the U.S. Facility Obligors, collectively, and “ Obligor ” means any of the Obligors, individually.

“ Obligor Group ” a group consisting of (a) the Canadian Facility Obligors, (b) the UK Facility Obligors or (c) the U.S. Facility Obligors, as the context requires.

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

“ Ordinary Course of Business ” the ordinary course of business of any Borrower or Subsidiary, undertaken in good faith and consistent with Applicable Law and past practices.

“ Organic Documents ” with respect to any Person, its charter, certificate or articles of incorporation, memorandum of association, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of

 

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partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.

“ Original Closing Date ” June 30, 2015.

“ Original Closing Date Dividend ” as defined in the definition of “Original Closing Date Transactions”.

“ Original Closing Date Transactions ” collectively, (a) the consummation of the Spin-Off in accordance with the terms of the Spin-Off Agreement, (b) the payment of a dividend in an amount not to exceed $225,000,000, $200,000,000 of such dividend being funded with Term Loan Debt and the remaining amount being funded with cash on-hand, made on the Original Closing Date by the Parent Borrower to TriMas in accordance with the Spin-Off Agreement (the “ Original Closing Date Dividend ”),

(c) the execution, delivery and performance on the Original Closing Date by each U.S. Obligor of the Loan Documents to which it was a party as of such date, the borrowing (if any) of the Loans on the Original Closing Date and issuance (if any) of Letters of Credit under the Original Loan Agreement on the Original Closing Date and the use of the proceeds of the foregoing, (d) the execution, delivery and performance by each U.S. Obligor of the Term Loan Documents to which it is a party, the borrowing of Term Loan Debt on the Original Closing Date and the use of the proceeds thereof and (e) the payment of the fees and expenses payable in connection with the foregoing.

“ OSHA ” the Occupational Safety and Hazard Act of 1970.

“ Other Agreement ” the Intercreditor Agreement and each LC Document, fee letter, Lien Waiver, Borrowing Base Report, Compliance Certificate, Perfection Certificate, Borrower Materials, or other note, document, instrument or agreement (other than this Agreement or a Security Document) now or hereafter delivered by an Obligor or other Person to Agent, a Security Trustee or a Lender in connection with any transactions relating hereto .

“ Other Connection Taxes ” Taxes imposed on a Recipient due to a present or former connection between it and the taxing jurisdiction (other than connections arising from the Recipient having executed, delivered, become party to, performed obligations or received payments under, received or perfected a Lien or engaged in any other transaction pursuant to, enforced, or sold or assigned an interest in, any Loan or Loan Document).

“ Other Taxes ” all present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a Lien under, or otherwise with respect to, any Loan Document, except Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section  13.4 ).

“ Overadvance ” a Canadian Overadvance, a UK Overadvance or a U.S. Overadvance, as the context requires.

“ Overadvance Loan ” a Canadian Overadvance Loan, a UK Overadvance Loan or a U.S. Overadvance Loan, as the context requires.

“ Parent Borrower ” as defined in the preamble to this Agreement.

“ Pari Passu Alternative Incremental Debt ” as defined in the definition of “ Alternative Incremental Debt ” .

 

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“ Pari Passu Permitted Term Loan Refinancing Debt ” Permitted Term Loan Refinancing Debt that is secured by Liens on a pari passu basis with the Liens on the Collateral securing the Term Loan Debt.

“ Participant ” as defined in Section  13.2 .

“ Participating Member State ” any member state of the European Union that has the Euro as its lawful currency in accordance with the legislation of the European Union relating to the Economic and Monetary Union.

“ Patents ” with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications and any and all industrial designs and industrial design applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisionals, continuations, renewals and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Patriot Act ” the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).

“ Payment Item ” each check, draft or other item of payment payable to an Obligor, including those constituting proceeds of any Collateral.

“ PBA ” the Pension Benefits Act (Ontario) , as amended from time to time, or any other Canadian federal or provincial or territorial pension benefit standards legislation pursuant to which any Canadian Pension Plan is required to be registered.

“ PBGC ” the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“ Perfection Certificate ” a certificate in the form of Exhibit D hereto or any other form approved by Agent.

“ Permitted Acquisition ” any Acquisition, whether by purchase, merger, consolidation or otherwise, by the Parent Borrower or a Subsidiary of all or substantially all the assets of, or all of the Equity Interests in, a Person or a division, line of business or other business unit of a Person so long as (a)   such Acquisition shall not have been preceded by a tender offer that has not been approved or otherwise recommended by the board of directors of such Person, (b)  such assets are to be used in, or such Person so acquired is engaged in, as the case may be, a business of the type conducted by the Parent Borrower and its Subsidiaries on the date of execution of this Agreement or in a business reasonably related thereto and (c)  immediately after giving effect thereto, (i)  no Default has occurred and is continuing or would result therefrom, (ii)  all transactions related thereto are consummated in all material respects in accordance with Applicable Laws, (iii)  all of the Equity Interests (other than Assumed Preferred Stock) of each Subsidiary formed for the purpose of or resulting from such acquisition shall be owned directly by the Parent Borrower or a Subsidiary and all actions required to be taken under Section  10.1.9 have been taken, (iv)  the investment is permitted under clauses (q) , (r) or (s)  of Section  10.2.4 , (v) any Debt or any preferred stock that is incurred, acquired or assumed in connection with such acquisition shall be in compliance with Section  10.2.1 and (vi)  the Parent Borrower has delivered to Agent an officers ’ certificate to the effect set forth in clauses (a), (b) and (c)(i) through (v)  above, together with all relevant financial information for the Person or assets to be acquired. Notwithstanding anything to the contrary

 

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herein, no acquisition or other transaction shall be deemed to be a Permitted Acquisition during the Senior Term Period.

“ Permitted Bond Hedge Transaction ” means any call or capped call option (or substantively equivalent derivative transaction) relating to the Parent Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Parent Borrower so long as any such securities do not constitute Disqualified Equity Interests of an Obligor) purchased by the Parent Borrower in connection with the issuance of any Permitted Convertible Indebtedness and in each case existing as of the Seventh Amendment Effective Date ; provided, that the purchase price for such Permitted Bond Hedge Transaction, less the proceeds received by the Parent Borrower from the sale of any related Permitted Warrant Transaction, does not exceed the net proceeds received by the Parent Borrower from the sale of such Permitted Convertible Indebtedness issued in connection with such Permitted Bond Hedge Transaction.

“ Permitted Convertible Indebtedness ” means senior, unsecured Debt of the Parent Borrower that (i)  has no scheduled principal amortization prior to maturity, (ii)  has a scheduled maturity date not earlier than 91 days following the Latest Maturity Date then in effect with respect to the Obligations and (iii)  is convertible into shares of common stock of the Parent Borrower (or other securities or property following a merger event or other change of the common stock of the Parent Borrower so long as any such securities do not constitute Disqualified Equity Interests of an Obligor) (and cash in lieu of fractional shares) and/or cash (in an amount determined by reference to the price of such common stock or such other securities) Indebtedness of the Parent Borrower under the 2.75% Convertible Senior Notes due 2022 issued pursuant to the Convertible Notes Indenture.

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

“ Permitted Encumbrances ”

(a)        Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section  10.1.6 ;

(b)        carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the Ordinary Course of Business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section  10.1.6 ;

(c)        pledges and deposits made in the Ordinary Course of Business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)        deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the Ordinary Course of Business;

(e)        judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k)  of Section  11.1 ;

(f)        easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the Ordinary Course of Business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of any Borrower or any Subsidiary and, with respect to any Real Estate located in Canada, the

 

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qualifications, limitations, reservations and provisos contained in the original grant from the Crown, as varied by statutes;

(g)        ground leases in respect of real property on which facilities owned or leased by any Borrower or any of the Subsidiaries are located, other than any Mortgaged Property;

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

(i)        leases or subleases granted to other Persons and not interfering in any material respect with the business of the Borrowers and the Subsidiaries, taken as a whole;

(j)        banker’s liens, rights of set-off or similar rights, in each case arising by operation of law;

(k)        Liens in favor of a landlord on leasehold improvements in leased premises; and

(l)        any Lien arising under the general terms and conditions ( algemene bankvoorwaarden ) of any member of the Dutch Bankers’ Association ( Nederlandse Vereniging van Banken ) or any similar term applied by a financial institution in the Netherlands pursuant to its general terms and conditions;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Debt.

“ Permitted Incremental Term Loans ” any Incremental Term Commitment (and the Incremental Term Loans in respect thereof) incurred so long as the aggregate principal amount thereof, as of the date of incurrence of such Debt, did not exceed (i) (together with the amount of Alternative Incremental Debt established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount as of the date of incurrence of such Debt plus (ii)  an additional amount so long as after giving effect to the establishment of such Incremental Term Commitment (and assuming such Incremental Term Commitment was fully drawn) and any other Debt incurred substantially simultaneously therewith and any related repayment of Debt, the First Lien Net Leverage Ratio, calculated on a pro forma basis as of the date of incurrence of such Debt (but disregarding the proceeds of any such Debt in calculating Unrestricted Domestic Cash) did not exceed 3.50 to  1.00.

“ Permitted Investments ”

(a)        direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;

(b)        investments in commercial paper maturing within one year from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;

(c)        investments in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000;

 

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(d)        fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;

(e)        securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(f)        securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having the highest credit rating obtainable from S&P or from Moody’s;

(g)        investments of the same quality as those identified on Schedule 10.2.4 as “Qualified Foreign Investments” made in the Ordinary Course of Business;

(h)        cash; and

(i)        investments in funds that invest solely in one or more types of securities described in clauses (a), (e) and (f) above.

“ Permitted Jurisdiction   ” as defined in Section 10.1.9(a) . Refinancing Debt ” means any Debt of the Parent Borrower or any of its Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Debt of the Parent Borrower or any of its Subsidiaries; provided that (a)  the principal amount (or accreted value, if applicable) of such Permitted Refinancing Debt does not exceed the principal amount (or accreted value, if applicable) of the Debt so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest thereon and the amount of any reasonable expenses incurred in connection therewith); (b) such Permitted Refinancing Debt has a final maturity date later than the final maturity date of the Debt being extended, refinanced, renewed, replaced, defeased or refunded, and an average life to maturity greater than the average life to maturity of the Debt being extended, refinanced, renewed, replaced, defeased or refunded; (c)  if the Debt being extended, refinanced, renewed, replaced, defeased or refunded is contractually subordinated in right of payment to the Loans, such Permitted Refinancing Debt is contractually subordinated in right of payment to the Loans on terms at least as favorable to the Lenders as those contained in the documentation governing the Debt being extended, refinanced, renewed, replaced, defeased or refunded; (d)  if the Debt being extended, refinanced, renewed, replaced, defeased or refunded is pari passu in right of payment with the Loans or any guarantee therefor, such Permitted Refinancing Debt is pari passu in right of payment with, or subordinated in right of payment to, the Loans or such guarantee, and, in any event, such Permitted Refinancing Debt shall not have a higher priority with respect to payments or collateral than the Debt being extended, refinanced, renewed, replaced, defeased or refunded; (e)  the terms and conditions of such Permitted Refinancing Debt shall be no more materially restrictive, when taken as a whole, than the terms and conditions of the Debt being extended, refinanced, renewed, replaced, defeased or refunded (and, to the extent the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded permits the payment of any interest thereon “ in kind ” , the Refinancing Debt thereof shall likewise permit the payment of interest “ in kind ” ); (f) such Permitted Refinancing Debt is not incurred or guaranteed by any Person who is not an obligor under the Debt being extended, refinanced, renewed, replaced, defeased or refunded and is not secured by any property that does not secure the Debt being extended, refinanced, renewed, replaced, defeased or refunded and, if secured, shall not be secured at a higher priority than the Debt being extended, refinanced, renewed, replaced, defeased or refunded; (g)   if the obligor of the Debt being extended, refinanced, renewed, replaced, defeased or

 

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refunded is a Foreign Subsidiary, the proceeds of such Permitted Refinancing Debt must be used for ordinary course working capital purposes of such Foreign Subsidiary consistent with past practice; and (h) such refinancing Debt, if secured, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to Agent; provided that no such Permitted Refinancing Debt shall be, directly or indirectly .

“ Permitted Term Loan Refinancing Debt ” any Debt incurred to refinance all or any portion of the outstanding Term Loan Debt or Incremental Term Loans; provided   that, (i) such refinancing Debt, if secured, is secured only by the Collateral securing the Term Loan Debt, and having lien priorities no more beneficial than those applicable to the Term Loan Debt as in effect on the Original Closing Date, (ii) no Subsidiary that is not originally obligated with respect to repayment of the Debt being refinanced is obligated with respect to the refinancing Debt, (iii) the weighted average life to maturity of the refinancing Debt shall be no shorter than the remaining weighted average life to maturity of the Term Loan Debt being refinanced, (iv) the maturity date in respect of the refinancing Debt shall not be earlier than the maturity date in respect of the Debt being refinanced, (v) the principal amount of such refinancing  Debt does not exceed the principal amount of the Debt so refinanced except by an amount (such amount, the “ Additional Permitted Amount ”) equal to unpaid accrued interest and premium thereon at such time plus reasonable fees and expenses incurred in connection with such refinancing, (vi) the Debt being so refinanced is paid down on a dollar-for-dollar basis by such refinancing Debt (other than by the Additional Permitted Amount), (vii) the terms of any such refinancing Debt (1) (excluding pricing, fees and rate floors and optional prepayment or redemption terms and subject to clause (2) below) reflect, in Parent Borrower’s reasonable judgment, then-existing market terms and conditions and (2) (excluding pricing, fees and rate floors) are no more favorable to the lenders providing such refinancing Debt than those applicable to the Debt being refinanced (in each case, including with respect to mandatory and optional prepayments); provided that the foregoing shall not apply to covenants or other provisions applicable only to periods after the Latest Maturity Date in effect immediately prior to the establishment of such refinancing Debt; provided further that any such refinancing Debt may contain, without any Lender’s consent, additional covenants or events of default not otherwise applicable to the Debt being refinanced or covenants more restrictive than the covenants applicable to the Debt being refinanced, in each case prior to the Latest Maturity Date in effect immediately prior to the establishment of such refinancing Debt, so long as all Lenders receive the benefits of such additional covenants, events of default or more restrictive covenants and (viii) such refinancing Debt, if secured, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to Agent.

“ Permitted Unsecured Debt ” any unsecured notes or bonds or other unsecured debt securities;  provided  that (a) such Debt shall not mature prior to the date that is 91 days after the Latest Maturity Date in effect at the time of the issuance of such Debt and shall not have any principal payments due prior to such date, except upon the occurrence of a change of control or similar event (including asset sales), in each case so long as the provisions relating to change of control or similar events (including asset sales) included in the governing instrument of such Debt provide that the provisions of this Agreement must be satisfied prior to the satisfaction of such provisions of such Debt, (b) such Debt is not Guaranteed by any Subsidiary of Parent Borrower other than the U.S. Obligors (which Guarantees shall be unsecured and shall be permitted only to the extent permitted by Section 10.2.1(a)(vii )), (c) such Debt shall not have any financial maintenance covenants, (d) such Debt shall not have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the definition of Change in Control set forth herein  and (e) such Debt, if subordinated in right of payment to the Obligations, shall be subject to subordination and intercreditor provisions that are, in Agent’s reasonable judgment, customary under then-existing market convention.

 

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“ Permitted Warrant Transaction ” means any call option, warrant or right to purchase (or substantively equivalent derivative transaction) relating to the Parent Borrower’s common stock (or other securities or property following a merger event or other change of the common stock of the Parent Borrower so long as any such securities do not constitute Disqualified Equity Interests of an Obligor) and/or cash (in an amount determined by reference to the price of such common stock) sold by the Parent Borrower substantially concurrently with any purchase by the Parent Borrower of a Permitted Bond Hedge Transaction , in each case, existing as of the Seventh Amendment Effective Date .

“ Person ” any individual, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, Governmental Authority or other entity.

“ Platform ” as defined in Section  14.3.3 .

“ PPSA ” the Personal Property Security Act (Ontario) , as amended from time to time, (or any successor statute) and the regulations thereunder; provided , however , if validity, perfection and effect of perfection and non-perfection and opposability of Agent’s security interest in and Lien on any Canadian Facility Collateral  of any Canadian Domiciled Obligor  are governed by the personal property security laws of any jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code) in such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.

“ Preferred Dividends ” any cash dividends of the Parent Borrower permitted hereunder to be paid with respect to preferred stock of the Parent Borrower in reliance on  Section 10.2.8(a)(iv) .

“ Prime Rate ” the rate of interest announced by Bank of America from time to time as its prime rate. Such rate is set by Bank of America on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate publicly announced by Bank of America shall take effect at the opening of business on the day specified in the announcement.

“ Pro Rata ” with respect to any Lender and any Borrower Group, a percentage (rounded to the ninth decimal place) determined, (a) by dividing the amount of such Lender’s Borrower Group Commitment to such Borrower Group by the aggregate outstanding Borrower Group Commitments of all Lenders to such Borrower Group; or (b) following termination of the Borrower Group Commitments to such Borrower Group, by dividing the amount of such Lender’s Loans and LC Obligations with respect to such Borrower Group by the aggregate outstanding Loans and LC Obligations with respect to such Borrower Group or, if all Loans and LC Obligations with respect to such Borrower Group have been paid in full and/or Cash Collateralized, by dividing such Lender’s and its Affiliates’ remaining Obligations with respect to such Borrower Group by the aggregate remaining Obligations with respect to such Borrower Group.

“ Proceeds of Crime Act ” the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (or any successor statute), as amended from time to time, and including all regulations thereunder.

“ Property ” any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“ Protected Party ” a Lender, Agent or a Security Trustee which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or

 

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any sum deemed for the purposes of Tax to be received or receivable) from the Relevant Borrower under a Loan Document.

“ Protective Advances ” Canadian Protective Advances, UK Protective Advances and/or U.S. Protective Advances, as the context requires.

“ PTE ” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“ Purchase Money Debt ” (a) Debt (other than the Obligations) for payment of any of the purchase price of fixed assets; (b) Debt (other than the Obligations) incurred within 10 days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof; and (c) any renewals, extensions or refinancings (but not increases) thereof.

“ Purchase Money Lien ” a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Debt and constituting a Capital Lease Obligation or a purchase money security interest under the UCC or PPSA.

“ Qualified ECP ” an Obligor with total assets exceeding $10,000,000, or that constitutes an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” under Section 1a(18)(A)(v)(II) of such act.

“ Qualified Equity Interests ” means and refers to any Equity Interests issued by an Obligor that are not Disqualified Equity Interests.

“ Qualified Parent Borrower Preferred Stock ” any preferred Equity Interests of Parent Borrower (a) (i) that does not provide for any cash dividend payments or other cash distributions in respect thereof prior to the Latest Maturity Date in effect as of the date of issuance of such Equity Interests and (ii) that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable or exercisable) or upon the happening of any event does not (A) (x) mature or become mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (y) become convertible or exchangeable at the option of the holder thereof for Debt or preferred stock that is not Qualified Parent Borrower Preferred Stock or (z) become redeemable at the option of the holder thereof (other than as a result of a change of control event), in whole or in part, in each case on or prior to the date that is 365 days after the Latest Maturity Date in effect at the time of the issuance thereof  and (B)  provide holders thereunder with any rights upon the occurrence of a “ change of control ” event prior to the repayment of the Obligations and termination of the Commitments under the Loan Documents, (b)  with respect to which Parent Borrower has delivered a notice to Agent that it has issued   preferred Equity Interests in lieu of incurring Debt permitted under  Section 10.2.1(a)(xii) , with such notice specifying to which of such Debt ; provided that the terms of such preferred stock or preferred equity interest applies;  provided  that (i)  the aggregate liquidation value of all such preferred stock or preferred equity interest issued pursuant to this clause (b)  shall not exceed at any time the dollar limitation related to the applicable Debt hereunder, less the aggregate principal amount of such Debt then outstanding and (ii)  the terms of such preferred stock or preferred equity interests (x) interests shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of Parent Borrower  and (y)  shall otherwise be no less favorable to the Lenders, in the aggregate, than the terms of the applicable Debt or (c)  having an aggregate initial liquidation value not to exceed $10,000,000; provided   that the terms of such preferred stock or preferred equity interests shall provide that upon a default thereof, the remedies of the holders thereof shall be limited to the right to additional representation on the board of directors of Parent Borrower . Qualified Parent Borrower Preferred Stock shall include the

 

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preferred Equity Interests of the Parent Borrower issued to the Second Lien Term Loan Lenders pursuant to the Second Lien Term Loan Agreement and the other Second Lien Term Loan Documents .

“ Qualifying Lender ” as defined, in relation to United Kingdom Tax matters, in Section  5.8.4 .

“ Real Estate ” all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.

“ Reallocation ” as defined in Section  2.1.7(a) .

“ Reallocation Date ” as defined in Section  2.1.7(a) .

“ Recipient ” Agent, Issuing Bank, any Lender, any Security Trustee or any other recipient of a payment to be made by an Obligor under a Loan Document or on account of an Obligation.

“ Registered Equivalent Notes ” with respect to any bonds, notes, debentures or similar instruments originally issued in a Rule 144A or other private placement transaction under the Securities Act of 1933, substantially identical notes (having the same Guarantees) issued in a dollar for dollar exchange therefor pursuant to an exchange offer registered with the Commission.

“ Regulation U ” Regulation U of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Regulation X ” Regulation X of the Board as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Release ” any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration into or through the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture.

“ Relevant Borrower ” as defined, in relation to United Kingdom Tax matters, in Section  5.8.4 .

“ Rent and Charges Reserve ” the Canadian Rent and Charges Reserve, the UK Rent and Charges Reserve or the U.S. Rent and Charges Reserve, as the context requires.

“ Report ” as defined in Section  12.3.3 .

“ Reporting Trigger Period ” the period (a)  commencing on the day that an Event of Default occurs, or U.S. Adjusted Availability (computed without reference to the U.S. Special Availability Block during the period from the Fourth Amendment Effective Date to but excluding February 28, 2019) is less than or equal to the greater of (i)  the lesser of (A) 20% of the U.S. Borrowing Base or (B) 20% of the aggregate amount of all U.S. Revolver Commitments or (ii) $17,500,000; and (b)  continuing until no Event of Default exists and, during each of the preceding 30 consecutive days, U.S. Adjusted Availability (computed without reference to the U.S. Special Availability Block during the period from the Fourth Amendment Effective Date to but excluding February 28, 2019) has been greater than the greater of (i)  the lesser of (A) 20% of the U.S. Borrowing Base or (B) 20% of the aggregate amount of all U.S. Revolver Commitments or (ii)  $17,500,000.

“ Required Conditions ” with respect to any event, the following conditions: no Default exists or is caused thereby and upon giving pro forma effect thereto, either (a) during each of the preceding 30

 

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consecutive days and as of such event, U.S. Availability is greater than or equal to the greater of (i) the lesser of (A) 20% of the U.S. Borrowing Base (computed without regard to the U.S. Special Availability Block) or (B) 20% of the aggregate amount of all U.S. Revolver Commitments or (ii) $17,500,000; or (b) (i) during each of the preceding 30 consecutive days and as of such event, U.S. Availability is greater than or equal to the greater of (A) the lesser of (1) 15% of the U.S. Borrowing Base (computed without regard to the U.S. Special Availability Block) or (2) 15% of the aggregate amount of all U.S. Revolver Commitments or (B) $12,500,000 and (ii) the Fixed Charge Coverage Ratio, determined on a pro forma basis giving effect to such event, is not less than 1.0 to 1.0, whether or not a Financial Covenant Trigger Period exists.

“ Required Lenders ” Secured Parties holding more than 50% of (a) the aggregate outstanding Revolver Commitments; or (b) following termination of the Revolver Commitments, the aggregate outstanding Loans and LC Obligations or, if all Loans and LC Obligations have been Fully Paid, the aggregate remaining Obligations; provided, however, (i) if there are more than one (1), but fewer than three (3) unaffiliated Secured Parties at such time, “Required Lenders” must include at least two (2) unaffiliated Secured Parties and (ii) that Commitments, Loans and other Obligations held by a Defaulting Lender and its Affiliates shall be disregarded in making such calculation, but any related Fronting Exposure shall be deemed held as a Loan or LC Obligation by the Secured Party that funded the applicable Loan or issued the applicable Letter of Credit.

“ Restricted Debt ” Debt of the Parent Borrower or any Subsidiary, the payment, prepayment, redemption, repurchase or defeasance of which is restricted under Section  10.2.8(b) .

“ Restricted Payment ” any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Parent Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancelation or termination of any Equity Interests in the Parent Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Parent Borrower or any Subsidiary.

“ Revolver Commitments ” the Canadian Revolver Commitments, the UK Revolver Commitments and/or the U.S. Revolver Commitments, as the context requires.

“ Revolver Loan ” a Canadian Revolver Loan, a UK Revolver Loan or a U.S. Revolver Loan, as the context requires.

“ Revolver Priority Collateral ” the “ABL Priority Collateral”, as defined in the Intercreditor Agreement.

“ Revolver Termination Date ” the fifth anniversary of the Original Closing Date.

“ Revolver Usage ” the Canadian Revolver Usage, the UK Revolver Usage or the U.S. Revolver Usage, as the context requires.

“ RUG ” the Mexican Sole Registry of Liens Over Movable Assets ( Registro Único de Garantías Mobiliarias ).

“ S&P ” Standard & Poor’s Financial Services LLC, or any successor thereto.

 

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“ Sanctioned Country ” at any time, a country, region or territory which is itself the subject or target of any Sanctions (including, without limitation, the Crimea region of Ukraine, Cuba, Iran, North Korea, Sudan and Syria).

“ Sanctioned Person ” at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, or by the Government of Canada, the United Nations Security Council, the European Union or any European Union member state, (b) any Person operating, organized or resident in a Sanctioned Country or (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

“ Sanctions ” all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the Government of Canada, the United Nations Security Council, the European Union or Her Majesty’s Treasury of the United Kingdom.

“ Second Lien Term Loan Agent ” Cortland Capital Market Services LLC, in its capacity as agent for the lenders under the Second Lien Term Loan Agreement, and its successors and assigns including under any replacement or refinancing with respect thereto.

“ Second Lien Term Loan Agreement ” that certain Second Lien Term Loan Credit Agreement, dated as of the Seventh Amendment Effective Date, among Second Lien Term Loan Agent, the Second Lien Term Loan Lenders, the Parent Borrower, and the other parties thereto, as such document or the credit facility thereunder may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

“ Second Lien Term Loan Debt ” the Debt and “ Obligations ” (as defined under the Second Lien Term Loan Agreement) evidenced by the Second Lien Term Loan Documents, in aggregate principal amount (in the case of loans) not to exceed $52,000,000 plus an additional amount of Debt incurred under the Second Lien Term Loan Documents solely in connection with the “ in-kind ” payment of interest thereon pursuant to the terms of the Second Lien Term Loan Agreement as in effect on the Seventh Amendment Effective Date.

“ Second Lien Term Loan Documents ” collectively ” (a) the Second Lien Term Loan Agreement and (b)  all other agreements, instruments, documents and certificates executed and delivered to, or in favor of, the Second Lien Term Loan Agent or the Second Lien Term Loan Lenders in connection therewith.

“ Second Lien Term Loan Lenders ” the lenders party to the Second Lien Term Loan Agreement.

“ Second Lien Term Loan Security Documents ” collectively, the Guarantee and Collateral Agreement (as defined in the Second Lien Term Loan Agreement), the Mortgages (as defined in the Second Lien Term Loan Agreement) and all other security documents delivered to the Second Lien Term Loan Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Obligor under the Second Lien Term Loan Agreement or the Guarantee and Collateral Agreement (as defined in the Second Lien Term Loan Agreement), as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.

 

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“ Secured Bank Product Obligations ” Debt, obligations and other liabilities with respect to Bank Products owing by a Borrower or Affiliate of a Borrower to a Secured Bank Product Provider; provided , that Secured Bank Product Obligations of an Obligor shall not include its Excluded Swap Obligations; and provided, further , that the aggregate amount of Secured Bank Product Obligations attributable to Supply Chain Finance Arrangements shall not exceed $20,000,000 at any time.

“ Secured Bank Product Provider ” (a) Bank of America or any of its Affiliates or branches; and (b) any other Lender or Affiliate or branch of a Lender that is providing a Bank Product, provided such provider delivers written notice to Agent, in form and substance satisfactory to Agent, within 10 days following the later of the Closing Date or creation of the Bank Product, (i) describing the Bank Product and setting forth the maximum amount to be secured by the Collateral and the methodology to be used in calculating such amount, and (ii) agreeing to be bound by Section  12.14 .

“ Secured Debt ” Total Debt that is secured by a Lien on any asset of the Parent Borrower or any of its  Subsidiaries.

“ Secured Net Leverage Ratio ” on any date, the ratio of (a)  Secured Debt as of such date less the aggregate amount (not to exceed $100,000,000) of the sum of Unrestricted Domestic Cash plus 65% of Unrestricted Foreign Cash, in each case as of such date, to (b)  Consolidated EBITDA for the period of four consecutive Fiscal Quarters of the Parent Borrower ended on such date (or, if such date is not the last day of a Fiscal Quarter, ended on the last day of the Fiscal Quarter of the Parent Borrower most recently ended prior to such date for which financial statements are available).

“ Secured Parties ” the Canadian Facility Secured Parties, the UK Facility Secured Parties and/or the U.S. Facility Secured Parties, as the context requires.

“ Securities Accounts ” all present and future “securities accounts” (as defined in Article 8 of the UCC or the STA, as applicable), including all monies, “uncertificated securities,” “securities entitlements” and other “financial assets” (as defined in Article 8 of the UCC or the STA, as applicable) contained therein.

“ Securities Account Control Agreement ” means with respect to a Securities Account established by an Obligor (or a Securities Account of an Obligor in existence as of the Closing Date), an agreement, in form and substance reasonably satisfactory to Agent, establishing Control of such Securities Account by Agent or a Security Trustee to perfect Agent’s or such Security Trustee’s Lien on such Securities Account and whereby the bank or other financial institution maintaining such Securities Account agrees to comply only with the instructions originated by Agent or such Security Trustee without the further consent of any Obligor upon the delivery of a notice of sole control by Agent or such Security Trustee. As used in this definition, “Control” has the meaning set forth in the PPSA, the STA, Article 8 or Section 9-102(b) of Article 9 or, if applicable, shall mean satisfaction of the requirements set forth in Section 9-104, 9-105, 9-106 or 9-107 of Article 9 of the UCC.

“ Security Documents ” without duplication, the Canadian Security Documents, the Mexican Security Documents, the UK Security Documents, the Dutch Security Documents, German Security Documents and/or the U.S. Security Documents, as the context requires.

“ Security Trustee ” the UK Security Trustee and/or any other security trustee appointed by Agent from time to time, as the context requires.

“ Senior Debt ” Total Debt less Subordinated Debt.

 

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“ Senior Officer ” the chairman of the board, president, chief executive officer or chief financial officer, or in the case of a UK Domiciled Obligor, a director, of a Borrower or, if the context requires, an Obligor; provided, however, that the vice president of the Canadian Borrower shall be deemed to be a Senior Officer.

“ Senior Term Agent ” the Administrative Agent under the Senior Term Credit Agreement.

“ Senior Term Credit Agreement ” the Credit Agreement, dated as of the Fourth Amendment Effective Date, by and among Horizon Global Corporation , the several banks and other financial institutions or entities from time to time party thereto and Cortland Capital Market Services LLC, as Administrative Agent.

“ Senior Term Loan Debt ” the Debt and “ Obligations ” (as defined under the Senior Term Loan Agreement) evidenced by the Senior Term Loan Documents, in aggregate principal amount (in the case of loans) not to exceed $10,000,000.

“ Senior Term Loans ” the “ Loans ” as defined in the Senior Term Credit Agreement.

“ Senior Term Loan Documents ” the “ Loan Documents ” as defined in the Senior Term Credit Agreement.

“ Senior Term Loan Debt ” the Debt and “ Obligations ” (as defined under the Term Loan Agreement) evidenced by the Term Loan Documents, in aggregate principal amount (in the case of loans) not to exceed $10,000,000.

“ Senior Term Period ” means the period beginning on the Fourth Amendment Effective Date and ending at the time of the Discharge of Senior Obligations.  “ Settlement Report ” a report summarizing Revolver Loans and participations in LC Obligations outstanding as of a given settlement date, allocated to Lenders on a Pro Rata basis in accordance with their Revolver Commitments.

“ Seventh Amendment ” that certain Seventh Amendment to this Agreement, dated as of March 15, 2019 among the Borrowers, the other Obligors party thereto, the Agent and the Lenders party thereto.

“ Seventh Amendment Effective Date ” the “ Amendment Effective Date ” as set forth in the Seventh Amendment.

“ Seventh Amendment Transactions ” (a) the execution, delivery and performance of (1)  the Existing Senior Credit Agreement and the transactions contemplated thereby, (2)  the Fourth Amendment and the transactions contemplated thereby, (3)  the Fifth Amendment and the transactions contemplated thereby, (4)  the Sixth Amendment and the transactions contemplated thereby and (5)  the Fifth Amendment to the First Lien Term Loan Agreement and the transactions contemplated thereby, (b)  the refinancing of the Indebtedness under the Existing Senior Credit Agreement on the Seventh Amendment Effective Date, (c)  the execution, delivery and performance by each Obligor of the Sixth Amendment to the First Lien Term Loan Agreement, (d)  the execution, delivery and performance by each Obligor of the Seventh Amendment and the transactions contemplated thereby, (e)  the execution, delivery and performance by each Obligor of the Second Lien Term Loan Documents and the transactions contemplated thereby, including the issuance of warrants and preferred equity interests of the Parent Borrower pursuant thereto, and (f)  the payment of the fees and expenses payable in connection with the foregoing.

 

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“ Significant Investment ” any acquisition by a Borrower or a Subsidiary of more than 50% (but less than 100%) of the Equity Interests in a Person (such Person, the “ Subject Person ”), so long as such acquisition is permitted by Section  10.2.4 .

“ Sixth Amendment ” means that certain Sixth Amendment to this Agreement, dated as of March 7, 2019 among the Borrowers, the other Obligors party thereto, the Agent and the Lenders party thereto.

“ Sixth Amendment Effective Date ” means the “Sixth Amendment Effective Date” as set forth in the Sixth Amendment .

“ Solvent ” (a) as to any Person (other than a Person incorporated or organized under the laws of any legal jurisdiction of Canada, Mexico, the Netherlands or any legal jurisdiction of the UK, or any province or territory of Canada), such Person (i) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (ii) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (iii) is able to pay all of its debts as they mature; (iv) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions and all business and transactions in which it is about to engage; (v) is not “insolvent” within the meaning of Section 101(32) of the U.S. Bankruptcy Code; and (vi) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates; (b) as to any Person incorporated or organized under the laws of Canada or any province or territory of Canada, such Person is not an “insolvent person” as defined in the Bankruptcy and Insolvency Act (Canada) ; (c) as to any Person incorporated or organized under the laws of Mexico, such Person is not under an Insolvency Proceeding or a “ concurso mercantil ” as defined in the Mexican Bankruptcy Law; (d) as to any Person incorporated or organized under the laws of the Netherlands, such Person is not declared bankrupt ( in staat van faillissement verklaard ) or granted (provisional) suspension of payments ( (voorlopige) surceance van betaling verleend ); and (e) as to any Person incorporated in any legal jurisdiction of the UK, such Person is able or does not admit its inability to pay its debts as they fall due, does not suspend or threaten to suspend making payments on any of its debt, does not by reason of actual or anticipated financial difficulties, commence negotiations with its creditors with a view of rescheduling its indebtedness and no moratorium is declared in respect of its indebtedness. “ Fair salable value ” means the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase. “ Solvency ” has a correlative meaning.

“ Specified Obligor ” an Obligor that is not then an “eligible contract participant” under the Commodity Exchange Act (determined prior to giving effect to Section  5.10 ).

“ Specified Vendor Payables Financing ” the sale by one or more vendors of the Parent Borrower and certain Subsidiaries of accounts receivable (which such accounts receivable are accounts payable of the Parent Borrower and such Subsidiaries) to a Lender or any of its Affiliates pursuant to financing agreements to which the Parent Borrower and such Subsidiaries are party, in transactions constituting “ true sales ” ; provided that the aggregate amount of all such vendor payables financings shall not exceed $30,000,000 at any time outstanding.

“ Specified Vendor Payables Financing Documents ” all documents and agreements relating to the Specified Vendor Payables Financing.

 

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“ Specified Vendor Receivables Financing ” the sale by the Parent Borrower and certain Subsidiaries of accounts receivable to one or more financial institutions pursuant to third-party financing agreements in transactions constituting “true sales”; provided that the aggregate amount of all such receivables financings shall not exceed $50,000,000 at any time outstanding. which are permitted pursuant to Section 10.2.1(a)(ii) .

“ Specified Vendor Receivables Financing Documents ” all documents and agreements relating to Specified Vendor Receivables Financing.

“ Spin-Off ” a “spin-off” transaction that occurred on the Original Closing Date with respect to the Parent Borrower such that all of the Equity Interests in the Parent Borrower were “spun-off” from TriMas ratably to the holders of all the Equity Interests in TriMas and the Parent Borrower ceased to be a Subsidiary of TriMas and became a public company.

“ Spin-Off Agreement ” a Separation and Distribution Agreement, dated as of or prior to the Original Closing Date, by and between the Parent Borrower and TriMas.

“ Spin-Off Documentation ” collectively, the Spin-Off Agreement and all schedules, exhibits and annexes thereto and all side letters and agreements affecting the terms thereof or entered into in connection therewith, including, without limitation, (i) an employee matters agreement by and between the Parent Borrower and TriMas, (i) a tax sharing agreement by and between the Parent Borrower and TriMas, and (iii) a transition services agreement by and between the Parent Borrower and TriMas.

“ Spot Rate ” the exchange rate, as determined by Agent, that is applicable to conversion of one currency into another currency, which is (a) the exchange rate reported by Bloomberg (or other commercially available source designated by Agent) as of the end of the preceding Business Day in the financial market for the first currency; or (b) if such report is unavailable for any reason, the spot rate for the purchase of the first currency with the second currency as in effect during the preceding Business Day in Agent’s principal foreign exchange trading office for the first currency.

“ STA ” the Securities Transfer Act , 2006  (Ontario) (or any successor statute), as amended from time to time, and the regulations thereunder.

“ Stated Amount ” the outstanding amount of a Letter of Credit, including any automatic increase or tolerance (whether or not then in effect) provided by the Letter of Credit or related LC Documents.

“ Sterling ” the lawful currency of the United Kingdom.

“ Subject Person ” as defined in the definition of “Significant Investment.”

“ Subordinated Debt ” Debt incurred by a Borrower that is expressly subordinate and junior in right of payment to Full Payment of all Obligations, and is on terms (including maturity, interest, fees, repayment, covenants and subordination) satisfactory to Agent.

“ Subsidiary ” any entity at least 50% of whose voting securities or Equity Interests is owned by a Borrower or combination of Borrowers (including indirect ownership through other entities in which a Borrower directly or indirectly owns 50% of the voting securities or Equity Interests).

“ Subsidiary Obligor ” a Canadian Subsidiary Obligor, a UK Subsidiary Obligor, a U.S. Subsidiary Obligor and/or any other Obligor that is a Subsidiary, as the context requires.

 

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“ Supply Chain Finance Arrangements ” means an arrangement entered into by a Borrower or an Affiliate of a Borrower with a Secured Bank Product Provider pursuant to which such Secured Bank Product Provider finances open account payables of a Borrower or an Affiliate of Borrower owing to its vendors.

“ Swap ” any agreement, contract, or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“ Swap Obligation ” with respect to any person, any obligation to pay or perform under any Swap.

“ Swingline Loan ” a Canadian Swingline Loan, a UK Swingline Loan or a U.S. Swingline Loan, as the context requires.

“ Synthetic Purchase Agreement ” any swap, derivative or other agreement or combination of agreements pursuant to which the Parent Borrower or a Subsidiary is or may become obligated to make (i) any payment (other than in the form of Equity Interests in the Parent Borrower) in connection with a purchase by a third party from a Person other than the Parent Borrower or a Subsidiary of any Equity Interest or Restricted Debt or (ii) any payment (other than on account of a permitted purchase by it of any Equity Interest or any Restricted Debt) the amount of which is determined by reference to the price or value at any time of any Equity Interest or Restricted Debt; provided that phantom stock or similar plans providing for payments only to current or former directors, officers, consultants, advisors or employees of the Parent Borrower or the Subsidiaries (or to their heirs or estates) shall not be deemed to be Synthetic Purchase Agreements. For the avoidance of doubt, the term “Synthetic Purchase Agreement” shall not include any agreement, indenture or other document governing any Permitted Bond Hedge Transaction, Permitted Convertible Indebtedness or Permitted Warrant Transaction.

“ TARGET Day ” any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by Agent to be a suitable replacement) is open for the settlement of payments in Euros.

“ Taxes ” 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, additions to tax or penalties applicable thereto.

“ Term Intercreditor Agreement ” means that  Term Intercreditor Agreement, dated as of the Fourth Seventh Amendment Effective Date, among the Obligors, the First Lien Term Loan Agent and the Senior Second Lien Term Agent, as amended, restated, supplemented, or otherwise modified from time to time in accordance with the terms thereof.

“ Term Loan Agent ” JPMorgan Chase Bank, N.A . in its capacity as age nt for the lenders under the Term Loan Agreement, and its successors and assigns including under any replacement or refinancing with respect thereto . Agents ” the First Lien Term Loan Agent and the Second Lien Term Loan Agent.

“ Term Loan Agreement ” that certain Term Loan Credit Agreement, dated as of June 30, 2015, among Term Loan Agent, the Term Loan Lenders, the Parent Borrower, and the other parties thereto.

“ Term Loan Agreement Fourth Amendment ” that certain Fourth Amendment to Credit Agreement, dated as of July 31, 2018, among Term Loan Agent, the Term Loan Lenders party thereto, the Parent Borrower, Horizon Global Americas Inc., a Delaware corporation, Horizon Global Company LLC, a Delaware limited liability company, and the other parties thereto.

 

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“ Term Loan Debt ” the Debt and “ Obligations ” (as defined under the Term Loan Agreement) evidenced by the Term Loan Documents, in aggregate principal amount (in the case of loans) not to exceed (a) $200,000,000   plus  (b) the aggregate principal amount of Permitted Incremental Term Loans less (c) the aggregate principal amount of Senior Term Loans.

“ Term Loan Documents ” collectively ” (a) the Term Loan Agreement and (b)  all other agreements, instruments, documents and certificates executed and delivered to, or in favor of, the Term Loan Agent or the Term Loan Lenders in connection  therewith.

“ Term Loan Lenders ” the lenders party to the Term Loan Agreement

“ Term Loan Agreements ” the First Lien Term Loan Agreement and the Second Lien Term Loan Agreement.

“ Term Loan Debt ” First Lien Term Loan Debt and Second Lien Term Loan Debt.

“ Term Loan Documents ” First Lien Term Loan Documents and Second Lien Term Loan Documents.

“ Term Loan Lenders ” First Lien Term Loan Lenders and Second Lien Term Loan Lenders .

“ Term Loan Security Documents ” collectively, the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), the Mortgages (as defined in the Term Loan Agreement) and all other security documents delivered to the Term Loan Agent granting a Lien on any property of any Person to secure the obligations and liabilities of any Obligor under the Term Loan Agreement or the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), as such documents may be amended, restated, supplemented, replaced, refinanced or otherwise modified from time to time in accordance with the requirements thereof and of this Agreement.   First Lien Term Loan Security Documents and Second Lien Term Loan Security Documents .

“ Term Priority Collateral ” the “Term Priority Collateral”, as defined in the Intercreditor Agreement.

“ Termination Event ” (a) the voluntary full or partial wind up of a Canadian Pension Plan that is a registered pension plan by a Canadian Domiciled Obligor; (b) the institution of proceedings by any Governmental Authority to terminate in whole or in part or have a trustee appointed to administer such a plan; or (c) any other event or condition which might constitute grounds for the termination of, winding up or partial termination of winding up or the appointment of trustee to administer, any such plan.

“ Toronto Account ” Account number 90083255 established at Bank of America ( Canada ) .

“ Total Availability ” the sum of the Canadian Availability, the UK Availability and the U.S. Availability.

“ Total Borrowing Base ” the sum of the Canadian Borrowing Base, the UK Borrowing Base and the U.S. Borrowing Base.

“ Total Debt ” as of any date, the aggregate principal amount of Debt for Borrowed Money of the Parent Borrower and the Subsidiaries outstanding as of such date, in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP.

 

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“ Total Revolver Usage ” the sum of the Canadian Revolver Usage, the UK Revolver Usage and the U.S. Revolver Usage.

“ Trademarks ” with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all renewals of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (d) all rights to sue for past, present, and future infringements of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Transactions ” collectively, (a) the Original Closing Date Transactions, (b) the execution, delivery and performance on the Closing Date by each Obligor of the Loan Documents to which it was a party as of such date, the borrowing (if any) of the Loans on the Closing Date and issuance (if any) of Letters of Credit hereunder on the Closing Date and the use of the proceeds of the foregoing, and (c) the payment of the fees and expenses payable in connection with the foregoing.

“ Transferee ” any actual or potential Eligible Assignee, Participant or other Person acquiring an interest in any Obligations.

“ Treaty ” a double taxation agreement.

“ Treaty Lender ” a Lender which:

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

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

(c)        meets all of the conditions in the Treaty for full exemption from Taxes imposed by the United Kingdom on interest, subject to the completion of any necessary procedural formalities.

“ Treaty State ” as defined, in relation to United Kingdom Tax matters, in Section  5.8.4 .

“ TriMas ” TriMas Company LLC, a Delaware limited liability company.

“ UCC ” the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the perfection or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.

“ UK or United Kingdom ” the United Kingdom of Great Britain and Northern Ireland.

“ UK Allocated U.S. Availability ” U.S. Availability designated by the Borrower Agent for application to the UK Borrowing Base.

“ UK Availability ” the UK Borrowing Base minus the UK Revolver Usage.

“ UK Availability Reserve ” the sum (without duplication) of (a) the UK Inventory Reserve; (b) the UK Rent and Charges Reserve; (c) the UK Bank Product Reserve; (d) the aggregate amount of liabilities secured by Liens upon UK Facility Collateral that are (or, in the opinion of Agent in the

 

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exercise of its Permitted Discretion, may be) senior to Agent’s or any Security Trustee’s Liens or that Agent in its Permitted Discretion determines may be required to be paid to permit or facilitate exercise of rights or remedies with respect to UK Facility Collateral (but imposition of any such reserve shall not waive an Event of Default arising therefrom); including, without limitation, (i) amounts due to employees in respect of unpaid wages and holiday pay, (ii) the “prescribed part” of floating charge realisations held for unsecured creditors and (iii) the expenses and liabilities incurred by any administrator (or other insolvency officer) and any remuneration of such administrator (or other insolvency officer) and (e) such additional reserves, in such amounts and with respect to such matters, as Agent in its Permitted Discretion may elect to impose from time to time ;   provided  the imposition of any such reserves or change in a reserve after the Closing Date shall not be effective until two (2)  Business Days after notice thereof (which may be oral notice, promptly confirmed in writing) to the Borrower Agent unless (i)  a Default has occurred and is then continuing, (ii)  the reserve or change in reserve is the result of a Lien, senior in priority to Agent ’ s or applicable Security Trustee ’ s Lien, attached to any UK Facility Collateral included in the UK Borrowing Base and/or (iii)  the changes to any such reserve results solely from mathematical calculations of the amount of such reserve in accordance with the methodology of calculation previously utilized (in the case of each of which such reserve or change in reserve shall be effective immediately); and   provided further  that during any such two (2)  Business Day notice period, Lenders shall have no obligations to fund any UK Revolver Loan or cause to be issued any UK Letter of Credit to the extent that, after giving pro forma effect to the making of such UK Revolver Loan or issuance of such UK Letter of Credit and to the establishment of any such new reserve or change in such reserve, a UK Overadvance would  exist .

“ UK Bank Product Reserve ” the aggregate amount of reserves established by Agent from time to time in its Permitted Discretion in respect of Secured Bank Product Obligations for the account of the UK Domiciled Obligors and any Affiliate thereof domiciled in the UK.

“ UK Base Rate Loan ” a UK Revolver Loan, or portion thereof, funded in Dollars and bearing interest calculated by reference to the U.S. Base Rate.

“ UK Borrower ” Cequent UK (as defined in the preamble to this Agreement).

“ UK Borrowing Base ” on any date of determination, an amount (expressed in Dollars, based on the Dollar Equivalent thereof) equal to the lesser of (a) the aggregate UK Revolver Commitments and (b) the sum of the UK Inventory Formula Amount, plus UK Allocated U.S. Availability, minus the UK Availability Reserve; provided, however, that no Inventory or other Property acquired  in a Permitted Acquisition or otherwise  outside the Ordinary Course of Business shall be included in the calculation of the UK Borrowing Base until completion of a customary due diligence investigation by Agent, which may in Agent’s sole discretion include applicable field examinations and appraisals (which shall not be included in the limits on the number of field examinations or appraisals provided in Section  10.1.1 ) satisfactory to Agent.

“ UK Commitment Termination Date ” the earliest to occur of (a) the Revolver Termination Date; (b) the date on which U.S. Borrowers terminate the U.S. Revolver Commitments pursuant to Section  2.1.4 ; (c) the date on which the U.S. Revolver Commitments are terminated pursuant to Section  11.2 ; (d) the date on which UK Borrower terminates the UK Revolver Commitments pursuant to Section  2.1.4 ; (c) the date on which the UK Revolver Commitments are terminated pursuant to Section  11.2 .

“ UK Debenture ” (a) the debenture, governed by English law dated on or about the date of this Agreement 22  December 2015 and made between UK Borrower and UK Security Trustee , as and (b)  the debenture, governed by English law made between UK Borrower and UK Security Trustee to be

 

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delivered after the Seventh Amendment Effective Date pursuant to Section 10.1.15, as each such debenture is amended, restated, supplemented or otherwise modified from time to time.

“ UK Deposit Account Control Agreement ” a control agreement (whether in the form of an agreement, notice and acknowledgement or like instrument) satisfactory to Agent executed by an institution maintaining a Deposit Account for an Obligor in favor of Agent as security for the UK Facility Obligations of such Obligor.

“ UK Domiciled Obligor ” UK Borrower and each UK Subsidiary that is or is required to be liable for payment of any Foreign Facility  Obligations or that has granted a Lien on its assets in favor of Agent or any Security Trustee to secure any  Foreign Facility  Obligations, and “ UK Domiciled Obligors ” means all such Persons, collectively.

“ UK Dominion Account(s) ” one or more special accounts established by the UK Borrower at Bank of America or another bank reasonably acceptable to Agent, held in the United States, and, as required under Section  8.2.4 , with respect to which Agent has the right to issue a notice of exclusive control for withdrawal purposes during a Dominion Trigger Period.

“ UK Eligible Inventory ” Inventory owned by UK Borrower that Agent, in its Permitted Discretion, deems to be UK Eligible Inventory. Without limiting the foregoing, no Inventory shall be UK Eligible Inventory unless it (a) is finished goods or raw materials or work-in-process and not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, has not been acquired from a Person subject to any Sanction or on any specially designated nationals list maintained by OFAC, and does not constitute Hazardous Materials under any Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s or a Security Trustee’s duly perfected, first priority Lien, and no other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section  10.2.2(a) or Section  10.2.2(r) is prior to the Lien of Agent or of the Security Trustee, as applicable, unless a UK Availability Reserve is in effect with respect thereto)); (h) is within the UK, U.S. or Mexico, is not in transit except between locations of UK Borrower, and is not consigned to any Person; (i) is not subject to any negotiable document; (j) is not subject to any License or other arrangement that restricts UK Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or an appropriate UK Rent and Charges Reserve has been established; and (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate UK Rent and Charges Reserve has been established; and (l) is reflected in the details of a current perpetual inventory report.

“ UK Facility Collateral ” Collateral granted by any UK Domiciled Obligor and/or Mexican Domiciled Obligor that now or hereafter secures (or is intended to secure) any of the  UK Facility  Obligations.

“ UK Facility Guarantor ” each Dutch Domiciled Obligor, each U.S. Domiciled Obligor, each Canadian Domiciled Obligor, each Mexican Domiciled Obligor, each UK Subsidiary Obligor, each German Domiciled Obligor and each other Person that guarantees or is required to guarantee payment or

 

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performance of the UK Facility  Obligations  (including pursuant to a Foreign Cross-Guarantee)  pursuant to Section  10.1.9 and/or the Collateral and Guarantee Requirement.

“ UK Facility Obligations ” all Obligations of the UK Facility Obligors owed to the UK Facility Secured Parties, and the other Foreign Facility Obligations that are the subject of a cross-Guarantee (including, without limitation, the Foreign Cross-Guarantee) made by the UK Facility Obligors. (a) principal of and premium, if any, on the UK Revolving Loans, (b)  UK LC Obligations and other obligations with respect to UK Letters of Credit, (c)  interest, expenses, fees, indemnification obligations, Extraordinary Expenses and other amounts payable in connection with the UK Revolving Loans under Loan Documents, (d)  Secured Bank Product Obligations for the account of the UK Borrower and any UK Subsidiary or Affiliate domiciled in the United Kingdom, and (e)  other Debts, obligations and liabilities of any kind owing with respect to the UK Revolving Loans pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several.

“ UK Facility Obligor ” UK Borrower , and each UK Facility Guarantor  and each other Person that has or is required pursuant to  Section 10.1.9  and/or the Collateral and Guarantee Requirement to grant a Lien on its assets in favor of Agent or any Security Trustee to secure any UK Facility Obligations .

“ UK Facility Secured Parties ” Agent, UK Issuing Bank, UK Lenders, UK Security Trustee, any other Security Trustee with respect to the UK Facility Obligations, and Secured Bank Product Providers of Bank Products for the account of UK Domiciled Obligors and their Affiliates domiciled in the UK , and the other Foreign Facility Secured Parties that are the beneficiaries of a Foreign Cross-Guarantee made by the UK Domiciled  Obligors .

“ UK Guaranties ” each guaranty executed by a UK Facility Guarantor in favor of Agent in order to guaranty the payment and/or performance of the UK Facility  Obligations (including without limitation this Agreement and the Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement).

“ UK Inventory Formula Amount ” (a) the lesser of (i) 70% of the Value of UK Eligible Inventory or (ii) 85% of the NOLV Percentage of the Value of UK Eligible Inventory; plus (b) the lesser of (i) 70% of the Value of Eligible In-Transit Inventory owned by UK Borrower or (ii) 85% of the NOLV Percentage of the Value of Eligible In-Transit Inventory owned by UK Borrower; provided that (i) prior to the date that the conditions set forth in clause (b) of the definition of “Eligible In-Transit Inventory” are met, whether or not an Eligible In-Transit Inventory Trigger Period has occurred and is continuing, the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Borrowers shall not exceed an aggregate amount of $10,000,000 at any time and (ii) the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Foreign Borrowers that is in transit to Mexico shall not exceed an aggregate amount of $2,000,000 at any time.

“ UK Inventory Reserve ” reserves established by Agent to reflect factors that may negatively impact the Value of Inventory of the UK Borrower, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

“ UK IP Assignment ” a Lien on the Intellectual Property of a UK Facility Obligor in favor of Agent or a Security Trustee, as security for (or given with the intent to secure) the  UK Facility  Obligations.

 

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“ UK Issuing Bank ” Bank of America (including any Lending Office of Bank of America), any Affiliate thereof, or any replacement issuer appointed pursuant to Section  2.5 that agrees to issue UK Letters of Credit.

“ UK Issuing Bank Indemnitees ” UK Issuing Bank and its officers, directors, employees, Affiliates, agents and attorneys.

“ UK LC Application ” an application by Borrower Agent or UK Borrower to UK Issuing Bank for issuance of a UK Letter of Credit, in form and substance satisfactory to UK Issuing Bank and Agent.

“ UK LC Conditions ” the following conditions necessary for issuance of a UK Letter of Credit: (a) each of the conditions set forth in Section  6 ; (b) after giving effect to such issuance, total UK LC Obligations do not exceed the UK Letter of Credit Subline, no UK Overadvance exists and UK Revolver Usage does not exceed the UK Borrowing Base; (c) the UK Letter of Credit and payments thereunder are denominated in Sterling, Euros, Dollars or other currency satisfactory to Agent and UK Issuing Bank; and (d) the purpose and form of the proposed UK Letter of Credit are satisfactory to Agent and UK Issuing Bank in their Permitted Discretion.

“ UK LC Documents ” all documents, instruments and agreements (including UK LC Requests and UK LC Applications) delivered by UK Borrower or any other Person to UK Issuing Bank or Agent in connection with any UK Letter of Credit.

“ UK LC Obligations ” the Dollar Equivalent of the sum of (a) all amounts owing by UK Borrower for drawings under UK Letters of Credit; and (b) the Stated Amount of all outstanding UK Letters of Credit.

“ UK LC Request ” a request for issuance of a UK Letter of Credit, to be provided by Borrower Agent or UK Borrower to UK Issuing Bank, in form satisfactory to Agent and UK Issuing Bank.

“ UK Lenders ” Bank of America, each other lender party to this Agreement that has issued a UK Revolver Commitment, the UK Swingline Lender, and any Person who hereafter becomes a “Lender” with a UK Revolver Commitment pursuant to an Assignment, including any Lending Office of the foregoing.

“ UK Letter of Credit ” any standby or documentary letter of credit, foreign guaranty, documentary bankers acceptance or similar instrument issued by UK Issuing Bank for the account or benefit of UK Borrower or an Affiliate of UK Borrower.

“ UK Letter of Credit Subline ” the lesser of (a) $0 and (b) the UK Revolver Commitments.

“ UK Mortgage ” a Lien on any Mortgaged Property to secure (or given with the intent to secure) the  UK Facility  Obligations. Each UK Mortgage shall be in form and substance reasonably satisfactory to Agent.

“ UK Overadvance ” as defined in Section  2.1.5 .

“ UK Overadvance Loan ” a UK Base Rate Loan made to UK Borrower when a UK Overadvance exists or is caused by the funding thereof.

 

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“ UK Overadvance Loan Balance ” on any date, the Dollar Equivalent of the amount by which the aggregate UK Revolver Loans of the UK Borrower exceed the amount of the UK Borrowing Base on such date.

“ UK Protective Advances ” as defined in Section  2.1.6 .

“ UK Reimbursement Date ” as defined in Section  2.3.2 .

“ UK Rent and Charges Reserve ” the aggregate of (a) all past due rent and other amounts owing by UK Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any UK Facility Collateral or could assert a Lien on any UK Facility Collateral; and (b) a reserve at least equal to two months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

“ UK Revolver Commitment ” for any UK Lender, its obligation to make UK Revolver Loans and to participate in UK LC Obligations up to the maximum principal amount shown on Schedule 1.1(B) , as hereafter modified pursuant to Section  2.1.4 , Section  2.1.7 or an Assignment to which it is a party. “ UK Revolver Commitments ” means the aggregate amount of such commitments of all UK Lenders.

“ UK Revolver Loan ” a loan made by a UK Lender to UK Borrower pursuant to Section  2.1 , which loan shall be either a LIBOR Loan (in which case such loan shall be denominated in Sterling, Dollars or Euros) or a UK Base Rate Loan (in which case such loan shall be denominated in Dollars), in each case as selected by the Borrower Agent on behalf of the UK Borrower, and any UK Swingline Loan, UK Overadvance Loan or UK Protective Advance.

“ UK Revolver Usage ” the Dollar Equivalent of an amount equal to (a) the aggregate amount of outstanding UK Revolver Loans; plus (b) the aggregate Stated Amount of outstanding UK Letters of Credit, except to the extent Cash Collateralized by UK Borrower.

“ UK Security Agreements ” the UK Debenture, the UK Share Mortgage and each other debenture or security agreement governed by English law among any Obligor and Agent or UK Security Trustee.

“ UK Security Documents ” the UK Security Agreements, the UK Guaranties, the UK Mortgages, the UK IP Assignments, the   UK  Deposit Account Control Agreements, the Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement, the Dutch Security Documents, the Mexican Security Documents, the Canadian Security Documents, the U.S. Security Documents , the German Security Documents and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any UK Facility  Obligations.

“ UK Security Trustee ” Bank of America (London) or any successor security trustee appointed in accordance with Section  12.2 .

“ UK Share Mortgage ” (a) the share mortgage dated 22 December 2105 governed by English law among Cequent Nederland Holdings B.V. and UK Security Trustee . and (b) the share mortgage governed by English law among Cequent Nederland Holdings B.V. and UK Security Trustee to be delivered after the Seventh Amendment Effective Date pursuant to Section 10.1.15 .

“ UK Subsidiary ” each Subsidiary that is incorporated or organized under the laws of any legal jurisdiction of the United Kingdom.

 

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“ UK Subsidiary Obligor ” any Subsidiary directly owned by a UK Domiciled Obligor that is not an Immaterial Subsidiary .

“ UK Swingline Lender ” Bank of America or an Affiliate of Bank of America in its capacity as provider of UK Swingline Loans.

“ UK Swingline Loan ” any Borrowing of UK Revolver Loans funded with UK Swingline Lender’s funds, until such Borrowing is settled among UK Lenders or repaid by UK Borrower, which UK Revolver Loan shall be a UK Base Rate Loan.

“ Unfunded Current Liability ” of any Canadian Pension Plan shall mean the excess of the present value of the benefit liabilities determined on a plan termination basis in accordance with actuarial assumptions over the current value of the assets, and in any event includes any unfunded liability, solvency liability or wind up deficiency in respect of any Canadian Pension Plan.

“ Unrestricted Domestic Cash ” as of any date, domestic unrestricted cash and domestic unrestricted Permitted Investments of the Parent Borrower and its Domestic Subsidiaries as of such date.

“ Unrestricted Foreign Cash ” as of any date, unrestricted cash and unrestricted Permitted Investments of the Obligors (other than Parent Borrower and its Domestic Subsidiaries) as of such date.

“ Unused Line Fee Rate ” a per annum rate equal to 0.25%.

“ U.S. or United States ” the United States of America.

“ U.S. Accounts Formula Amount ” 85% of the Value of U.S. Eligible Accounts; provided , however, that such percentage shall be reduced by 1.0% for each percentage point (or portion thereof) that the Dilution Percent exceeds 5%.

“ U.S. Adjusted Availability ” the difference of (a) the U.S. Borrowing Base, calculated as though the FILO Amount were equal to $0,  minus (b) U.S. Revolver Usage.

“ U.S. Availability ” the U.S. Borrowing Base minus U.S. Revolver Usage.

“ U.S. Availability Reserve ” the sum (without duplication) of (a) the U.S. Inventory Reserve; (b) the U.S. Rent and Charges Reserve; (c) the U.S. Bank Product Reserve; (d) the aggregate amount of liabilities secured by Liens upon U.S Facility Collateral that are (or, in the opinion of Agent in the exercise of its Permitted Discretion, may be) senior to Agent’s Liens or any Security Trustee’s Liens or that Agent in its Permitted Discretion determines may be required to be paid to permit or facilitate exercise of rights or remedies with respect to U.S. Facility Collateral (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (e) the Foreign Allocated U.S. Availability Reserve, (f) the U.S. Special Availability Block and (g) such additional reserves, in such amounts and with respect to such matters, as Agent in its Permitted Discretion may elect to impose from time to time ; provided   the imposition of any such reserves or change in a reserve after the Closing Date shall not be effective until two (2) Business Days after notice thereof (which may be oral notice, promptly confirmed in writing) to the Borrower Agent unless (i) a Default has occurred and is then continuing, (ii) the reserve or change in reserve is the result of a Lien, senior in priority to Agent’s or applicable Security Trustee’s Lien, attached to any U.S. Facility Collateral that is Revolver Priority Collateral included in the U.S. Borrowing Base and/or (iii) the changes to any such reserve results solely from mathematical calculations of the amount of such reserve in accordance with the methodology of calculation previously utilized (in the case of each of which such reserve or change in reserve shall be effective immediately); provided

 

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further that during any such two (2) Business Day notice period, Lenders shall have no obligations to fund any U.S. Revolver Loan or cause to be issued any U.S. Letter of Credit to the extent that, after giving pro forma effect to the making of such U.S. Revolver Loan or issuance of such U.S. Letter of Credit and to the establishment of any such new reserve or change in such reserve, a U.S. Overadvance would exist; and provided still further  that the Foreign Allocated U.S. Availability Reserve and changes thereto will be effective immediately without necessity of notice to Borrower Agent. .

“ U.S. Bank Product Reserve ” the aggregate amount of reserves established by Agent from time to time in its Permitted Discretion in respect of Secured Bank Product Obligations for the account of the U.S. Domiciled Obligors and the Affiliates thereof domiciled in the U.S.

“ U.S. Bankruptcy Code ” Title 11 of the United States Code.

“ U.S. Base Rate ” for any day, a per annum rate equal to the greater of (a) the Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) LIBOR for a 30 day interest period as of such day, plus 1.0%.

“ U.S. Base Rate Loan ” any Revolver Loan that bears interest based on the U.S. Base Rate.

“ U.S. Borrowers ” Parent Borrower, Cequent Performance and Cequent Consumer (each as defined in the preamble to this Agreement).

“ U.S. Borrowing Base ” on any date of determination, an amount equal to the lesser of (a) the aggregate U.S. Revolver Commitments and (b) the sum of the U.S. Accounts Formula Amount, plus the U.S. Inventory Formula Amount,   plus  on and after the FILO Commencement Date, the FILO Amount, minus the U.S. Availability Reserve; provided, however, that no Accounts, Inventory or other Property acquired  in a Permitted Acquisition or otherwise  outside the Ordinary Course of Business shall be included in the calculation of the U.S. Borrowing Base until completion of a customary due diligence investigation by Agent, which may in Agent’s sole discretion include applicable field examinations and appraisals (which shall not be included in the limits on the number of field examinations or appraisals provided in Section  10.1.1 ) satisfactory to Agent.

“ U.S. Cash Collateral Account ” a demand deposit, money market or other account established by Agent at such financial institution as Agent may select in its Permitted Discretion, which account shall be subject to a Lien in favor of Agent for the benefit of the U.S. Facility Secured Parties.

“ U.S. Commitment Termination Date ” the earliest to occur of (a) the Revolver Termination Date; (b) the date on which U.S. Borrowers terminate the U.S. Revolver Commitments pursuant to Section  2.1.4 ; or (c) the date on which the U.S. Revolver Commitments are terminated pursuant to Section  11.2 .

“ U.S. Deposit Account Control Agreement ” a control agreement satisfactory to Agent executed by an institution maintaining a Deposit Account for an Obligor, to perfect Agent ’ s Lien on such account, as security for (or given with the intent to secure) the  Obligations.

“ U.S. Domiciled Obligor ” each U.S. Borrower and each U.S. Subsidiary that is or is required to be liable for payment of any Obligations or that has granted a Lien on its assets in favor of Agent or any Security Trustee to secure any Obligations, and “ U.S. Domiciled Obligors ” means all such Persons, collectively.

“ U.S. Dominion Account(s) ” one or more special accounts established by one or more U.S. Borrowers at Bank of America or another bank reasonably acceptable to Agent, and, as required under

 

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Section  8.2.4 , with respect to which Agent has the right to issue a notice of exclusive control for withdrawal purposes during a Dominion Trigger Period.

“ U.S. Eligible Account ” an Account owing to a U.S. Borrower that arises in the Ordinary Course of Business from the sale of goods, is payable in Dollars and is deemed by Agent, in its Permitted Discretion, to be a U.S. Eligible Account. Without limiting the foregoing, no Account shall be a U.S. Eligible Account if (a) it is unpaid for more than 60 days after the original due date, or more than 120 days after the original invoice date; (b) 50% or more of the Accounts owing by the Account Debtor are not U.S. Eligible Accounts under the foregoing clause; (c) when aggregated with other Accounts owing by the Account Debtor, it exceeds (but solely to the extent of such excess) 15% of the aggregate U.S. Eligible Accounts (or such higher percentage as Agent may establish for the Account Debtor from time to time); (d) it does not conform with a covenant or representation herein; (e) it is owing by a creditor or supplier, or is otherwise subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof); (f) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, is not Solvent, or is subject to any Sanction or on any specially designated nationals list maintained by OFAC; or the applicable U.S. Borrower is not able to bring suit or enforce remedies against the Account Debtor through judicial process, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) from a financial institution reasonably acceptable to Agent and on terms reasonably satisfactory to Agent; (g) the Account Debtor is organized or has its principal offices or assets outside the United States or Canada, unless the Account is supported by a letter of credit (delivered to and directly drawable by Agent) from a financial institution reasonably acceptable to Agent and on terms reasonably satisfactory to Agent; (h) it is owing by a Governmental Authority, unless the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in compliance with the federal Assignment of Claims Act; (i) it is not subject to a duly perfected, first priority Lien in favor of Agent, or is subject to any other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section  10.2.2(a) or Section  10.2.2(r) is prior to the Lien of Agent or of the Security Trustee, as applicable, unless a U.S. Availability Reserve is in effect with respect thereto)); (j) the goods giving rise to it have not been delivered to the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale; (k) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment; (l) its payment has been extended or the Account Debtor has made a partial payment; (m) it arises from a sale to an Affiliate, from a sale on a cash-on-delivery, bill-and-hold, sale-or-return, sale-on-approval, consignment, or other repurchase or return basis, or from a sale for personal, family or household purposes; (n) it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued; or (o) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof. In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than 120 days old will be excluded.

“ U.S. Eligible Inventory ” Inventory owned by a U.S. Borrower that Agent, in its Permitted Discretion, deems to be U.S. Eligible Inventory. Without limiting the foregoing, no Inventory shall be U.S. Eligible Inventory unless it (a) is finished goods or raw materials or work-in-process and not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies; (b) is not held on consignment, nor subject to any deposit or down payment; (c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale; (d) is not slow-moving, perishable, obsolete or unmerchantable, and does not constitute returned or repossessed goods; (e) meets all standards imposed by any Governmental Authority, has not been acquired from a

 

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Person subject to any Sanction or on any specially designated nationals list maintained by OFAC, and does not constitute Hazardous Materials under any Environmental Law; (f) conforms with the covenants and representations herein; (g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section  10.2.2(a) or Section  10.2.2(r) is prior to the Lien of Agent or of the Security Trustee, as applicable, unless a U.S. Availability Reserve is in effect with respect thereto)); (h) is within the continental United States or Canada, is not in transit except between locations of U.S. Borrowers, and is not consigned to any Person; (i) is not subject to any negotiable document; (j) is not subject to any License or other arrangement that restricts such U.S. Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Lien Waiver or an appropriate U.S. Rent and Charges Reserve has been established; and (k) is not located on leased premises or in the possession of a warehouseman, processor, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Lien Waiver or an appropriate U.S. Rent and Charges Reserve has been established; and (l) is reflected in the details of a current perpetual inventory report.

“ U.S. Facility Collateral ” Collateral granted by the U.S. Domiciled Obligors that now or hereafter secures (or is intended to secure) any of the U.S. Facility  Obligations.

“ U.S. Facility Collateral and Guarantee Requirement ” with respect to any and all U.S. Facility Obligors, the requirement that, subject to any applicable limitations set forth in the Security Documents:

(a)        Agent shall have received from each party thereto (other than Agent) either (i)  a counterpart of each applicable U.S. Security Document, duly executed and delivered on behalf of such U.S. Facility Obligor, or (ii)  in the case of any Person that becomes a U.S. Facility Obligor after the Original Closing Date, a joinder to this Agreement and a supplement to each applicable U.S. Security Document and the Intercreditor Agreement, in each case in the form specified therein, duly executed and delivered on behalf of such U.S. Facility Obligor;

(b)        all outstanding Equity Interests of the Parent Borrower and each Subsidiary owned by or on behalf of any U.S. Facility Obligor shall have been pledged pursuant to the Guarantee and Collateral Agreement  (except that the U.S. Facility Obligors shall not be required to pledge more than 65% of the outstanding voting Equity Interests of any Foreign Subsidiary , any CFC (other than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof) or the Netherlands)) to secure the U.S. Facility Obligations;   provided, however, that if one or more of the Senior Term Loan Documents and/or the Term Loan Documents would require a greater pledge, the limitation in this parenthetical shall be automatically deemed to be modified to require a pledge equivalent to that required by the  Senior Term Loan Documents and/or the Term Loan Documents) and, subject to the Intercreditor Agreement, Agent or the Controlling Term Loan Agent, as applicable, shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank;

(c)        all Debt for borrowed money having an aggregate principal amount in excess of $500,000 that is owing to any U.S. Facility Obligor shall be evidenced by a promissory note and shall have been pledged pursuant to the Guarantee and Collateral Agreement  and subject to the Intercreditor Agreement, Agent and/or the Controlling Term Loan Agent, as applicable, shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank;

(d)        all documents and instruments, including UCC financing statements, required by law or reasonably requested by Agent to be filed, registered or recorded to create the Liens intended to be created by the U.S. Security Documents and perfect such Liens to the extent required by, and with the

 

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priority required by, the U.S.  Security Documents (in each case subject to the Intercreditor Agreement), shall have been filed, registered or recorded or delivered to Agent for filing, registration or recording;

(e)        Agent shall have received, with respect to any Mortgaged Property of any U.S. Facility Obligor, (i) counterparts of a U.S. Mortgage with respect to such Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company insuring the Lien of each such U.S. Mortgage as a valid first Lien on the Mortgaged Property described therein, free of any other Liens except as expressly permitted by Section 10.2.2, together with such endorsements, coinsurance and reinsurance as Agent or the Required Lenders may reasonably request, but only to the extent such endorsements are (A) available in the relevant jurisdiction ( provided in no event shall Agent request a creditors’ rights endorsement) and (B) available at commercially reasonable rates, (iii) if any such Mortgaged Property is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, evidence of such flood insurance as may be required under Applicable Law, including Regulation H of the Board of Governors, and an acknowledged notice to U.S. Facility Obligors, (iv) if reasonably requested by Agent, a current appraisal of any such Mortgaged Property, prepared by an appraiser acceptable to Agent, and in form and substance satisfactory to Required Lenders (it being understood that if such appraisal is required in order to comply with Agent’s internal policies, such request shall be deemed to be reasonable), (v) if reasonably requested by Agent, an environmental assessment with respect to any such Mortgaged Property, prepared by environmental engineers reasonably acceptable to Agent, and such other reports, certificates, studies or data with respect to such Mortgaged Property as Agent may reasonably require, all in form and substance reasonably satisfactory to Required Lenders (it being understood that if such assessment or other materials are required in order to comply with Agent’s internal policies, such request shall be deemed to be reasonable), and (vi) such abstracts, legal opinions and other documents as Agent or the Required Lenders may reasonably request with respect to any such U.S. Mortgage or Mortgaged Property; provided , however , in no event shall surveys be required to be obtained with respect to any such Mortgaged Property;

(f)        each U.S. Facility Obligor shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all U.S.  Security Documents to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder, and in each case except to the extent not required to be obtained pursuant to the Loan  Documents;

provided , that, (i) with respect to any U.S. Facility Obligor that is a Foreign Subsidiary organized under the laws of Germany, the United Kingdom (or any political subdivision thereof), or the Netherlands, the U.S. Collateral and Guarantee Requirement shall require the provision of the documents and satisfaction of the requirements set forth in Schedule I to the Fourth Amendment and (ii) with respect to any U.S. Facility Obligor that is a Foreign Subsidiary organized under the laws of any other jurisdiction, the U.S. Collateral and Guarantee Requirement shall be modified as reasonably requested by the Required Lenders to reflect the requirements and limitations of the jurisdiction in which such Foreign Subsidiary is organized.

“ U.S. Facility Guarantor ” each U.S. Borrower, Horizon Global Company LLC, a Delaware limited liability company, each other U.S.  Subsidiary Obligor , Dutch Domiciled Obligor, each U.S. Domiciled Obligor, each UK Domiciled Obligor, each Mexican Domiciled Obligor, each Canadian Domiciled Obligor, each German Domiciled Obligor and each other Person that has guarantees or is required by to guarantee payment or performance of the Obligations pursuant to Section  10.1.9 and/or the U.S. Facility  Collateral and Guarantee Requirement  to provide a guarantee in favor of Agent of any U.S. Facility Obligations .

 

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“ U.S. Facility Obligor ” each U.S. Borrower , and each U.S. Facility Guarantor  and each other Person that has or is required by  Section 10.1.9  and/or the U.S. Facility Collateral and Guarantee Requirement to grant a Lien on its assets in favor of Agent to secure any U.S. Facility Obligations. .

“ U.S. Facility Obligations ” all Obligations of the U.S. Facility Obligors owed to the U.S. Facility Secured Parties and the Obligations of the U.S. Facility Guarantors as guarantors of the Foreign Facility Obligations). (a) principal of and premium, if any, on the U.S. Revolving Loans, (b) U.S. LC Obligations and other obligations with respect to U.S. Letters of Credit, (c) interest, expenses, fees, indemnification obligations, Extraordinary Expenses and other amounts payable in connection with the U.S. Revolving Loans under Loan Documents, (d) Secured Bank Product Obligations for the account of the U.S. Borrower and any U.S. Subsidiary or Affiliate domiciled in the United States of America, and (e) other Debts, obligations and liabilities of any kind owing with respect to the U.S. Revolving Loans pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several .

“ U.S. Facility Secured Parties ” Agent, U.S. Issuing Bank, U.S. Lenders and Secured Bank Product Providers of Bank Products for the account of U.S. Domiciled Obligors and their Affiliates domiciled in the U.S.

“ U.S. Guaranties ” the Amended and Restated ABL Guarantee and Collateral Agreement and each other guaranty agreement executed by a U.S. Facility Guarantor in favor of Agent in order to guarantee the payment and/or performance of the  U.S. Facility  Obligations (including without limitation this Agreement).

“ U.S. Holdco ” any existing or future Domestic Subsidiary the Equity Interests of which are held solely by Foreign Subsidiaries (other than Foreign Subsidiaries organized under the laws of Germany, the United Kingdom, Mexico, Canada (or any province or territory thereof) or the Netherlands (or any political subdivision thereof)) , so long as such existing or newly formed Subsidiary does not engage in any business or own any assets other than the ownership of Equity Interests in Foreign Subsidiaries and intercompany obligations that are otherwise permitted hereunder.

“ U.S. Inventory Formula Amount ” (a) the lesser of (i) 70% of the Value of U.S. Eligible Inventory or (ii) 85% of the NOLV Percentage of the Value of U.S. Eligible Inventory; plus (b) the lesser of (i) 70% of the Value of Eligible In-Transit Inventory owned by a U.S. Borrower, or (ii) 85% of the NOLV Percentage of the Value of Eligible In-Transit Inventory owned by a U.S. Borrower; provided that notwithstanding anything to the contrary contained in this Agreement, prior to the date that the conditions set forth in clause (b) of the definition of “Eligible In-Transit Inventory” are met, whether or not an Eligible In-Transit Inventory Trigger Period has occurred and is continuing, the Inventory Formula Amount applicable to the Eligible In-Transit Inventory of all Borrowers shall not exceed an aggregate amount of $10,000,000 at any time.

“ U.S. Inventory Reserve ” reserves established by Agent to reflect factors that may negatively impact the Value of Inventory of the U.S. Borrowers, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

“ U.S. IP Assignment ” a collateral assignment or security agreement pursuant to which a U.S. Facility Obligor grants a Lien on its Intellectual Property to Agent, as security for (or given with the intent to secure) the U.S. Facility  Obligations.

 

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“ U.S. Issuing Bank ” Bank of America (including any Lending Office of Bank of America), any Affiliate thereof, or any replacement issuer appointed pursuant to Section  2.5 that agrees to issue U.S. Letters of Credit.

“ U.S. Issuing Bank Indemnitees ” U.S. Issuing Bank and its officers, directors, employees, Affiliates, agents and attorneys.

“ U.S. LC Application ” an application by Borrower Agent or a U.S. Borrower to U.S. Issuing Bank for issuance of a U.S. Letter of Credit, in form and substance satisfactory to U.S. Issuing Bank and Agent.

“ U.S. LC Conditions ” the following conditions necessary for issuance of a U.S. Letter of Credit: (a) each of the conditions set forth in Section  6 ; (b) after giving effect to such issuance, total U.S. LC Obligations do not exceed the U.S. Letter of Credit Subline, no U.S. Overadvance exists and U.S. Revolver Usage does not exceed the U.S. Borrowing Base; (c) the U.S. Letter of Credit and payments thereunder are denominated in Dollars or other currency satisfactory to Agent and U.S. Issuing Bank; and (d) the purpose and form of the proposed U.S. Letter of Credit are satisfactory to Agent and U.S. Issuing Bank in their Permitted Discretion.

“ U.S. LC Documents ” all documents, instruments and agreements (including U.S. LC Requests and U.S. LC Applications) delivered by Borrowers or any other Person to U.S. Issuing Bank or Agent in connection with any U.S. Letter of Credit.

“ U.S. LC Obligations ” the sum of (a) all amounts owing by U.S. Borrowers for drawings under U.S. Letters of Credit; and (b) the Stated Amount of all outstanding U.S. Letters of Credit.

“ U.S. LC Request ” a request for issuance of a U.S. Letter of Credit, to be provided by Borrower Agent or a U.S. Borrower to U.S. Issuing Bank, in form satisfactory to Agent and U.S. Issuing Bank.

“ U.S. Lenders ” Bank of America, each other lender party to this Agreement that has issued a U.S. Revolver Commitment, U.S. Swingline Lender, and any Person who hereafter becomes a “Lender” with a U.S. Revolver Commitment pursuant to an Assignment, including any Lending Office of the foregoing.

“ U.S. Letter of Credit ” any of the Existing Letters of Credit and any standby or documentary letter of credit, foreign guaranty, documentary bankers acceptance or similar instrument issued by U.S. Issuing Bank for the account or benefit of a U.S. Borrower or Affiliate of a U.S. Borrower.

“ U.S. Letter of Credit Subline ” the lesser of (a) the positive difference of (i) $20,000,000 less (ii) the sum of all Canadian LC Obligations and UK LC Obligations and (b) the U.S. Revolver Commitments.

“ U.S. Mortgage ” a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure (or given with the intent to secure) the  U.S. Facility  Obligations. Each U.S. Mortgage shall be in form and substance reasonably satisfactory to Agent.

“ U.S. Obligor ” any Obligor that is both a U.S. Domiciled Obligor and a U.S. Facility Obligor.

“ U.S. Overadvance ” as defined in Section  2.1.5 .

“ U.S. Overadvance Loan ” a U.S. Base Rate Loan made to the U.S. Borrowers when an U.S. Overadvance exists or is caused by the funding thereof.

 

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“ U.S. Overadvance Loan Balance ” on any date, the amount by which the aggregate U.S. Revolver Loans of the U.S. Borrowers exceed the amount of the U.S. Borrowing Base on such date.

“ U.S. Pension Plan ” any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Parent Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “ employer ” as defined in Section 3(5) of ERISA.

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

“ U.S. Protective Advances ” as defined in Section  2.1.6 .

“ U.S. Reimbursement Date ” as defined in Section  2.4.2 .

“ U.S. Rent and Charges Reserve ” the aggregate of (a) all past due rent and other amounts owing by a U.S. Borrower to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any U.S. Facility Collateral or could assert a Lien on any U.S. Facility Collateral; and (b) a reserve at least equal to two months’ rent and other charges that could be payable to any such Person, unless it has executed a Lien Waiver.

“ U.S. Revolver Commitment ” for any U.S. Lender, its obligation to make U.S. Revolver Loans and to participate in U.S. LC Obligations up to the maximum principal amount shown on Schedule 1.1(B) , as hereafter modified pursuant to Section  2.1.4 , Section  2.1.7 , Section  2.1.8 or an Assignment to which it is a party. “ U.S. Revolver Commitments ” means the aggregate amount of such commitments of all Lenders.

“ U.S. Revolver Loan ” a loan made in Dollars by a U.S. Lender to a U.S. Borrower made pursuant to Section  2.1 , and any U.S. Swingline Loan, U.S. Overadvance Loan or U.S. Protective Advance.

“ U.S. Revolver Usage ” (a) the aggregate amount of outstanding U.S. Revolver Loans; plus (b) the aggregate Stated Amount of outstanding U.S. Letters of Credit, except to the extent Cash Collateralized by U.S. Borrowers.

“ U.S. Security Documents ” the U.S. Guaranties, the Amended and Restated ABL Guarantee and Collateral Agreement, the U.S. Mortgages, the U.S. IP Assignments, the  U.S.  Deposit Account Control Agreements, the Canadian Security Documents, the Dutch Security Documents, the German Security Documents, the UK Security Documents, the Mexican Security Documents and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any U.S Facility  Obligations.

“ U.S. Special Availability Block ” means $ 6,700,000. 5,000,000.

“ U.S. Subsidiary ” each Subsidiary that is organized under the laws of a jurisdiction of the United States of America or any State thereof or the District of Columbia.

“ U.S. Subsidiary Obligor ” means any Subsidiary that is not (a) a Foreign Subsidiary (other than any Foreign Subsidiary organized under the laws  of  Germany, the United Kingdom (or any political subdivision thereof)   or , the Netherlands , Mexico or Canada (or any province or territory thereof ), (b) a CFC (other than any CFC organized under the laws of Germany, the United Kingdom (or any political subdivision thereof)   or , the Netherlands ) , Mexico or Canada (or any province or territory thereof)), or (c)

 

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a U.S. Holdco  or (d)  an Immaterial Subsidiary ; provided , that the Required Lenders, in their sole discretion, may at any time request any Foreign Subsidiary, CFC or U.S. Holdco to become a U.S. Subsidiary Obligor  if such Foreign Subsidiary, CFC or U.S. Holdco has become a “ Loan Party ” under the Senior Term Loan Documents .

“ U.S. Swingline Lender ” Agent in its capacity as provider of U.S. Swingline Loans.

“ U.S. Swingline Loan ” any Borrowing of U.S. Base Rate Loans funded with U.S. Swingline Lender’s funds, until such Borrowing is settled among U.S. Lenders or repaid by U.S. Borrowers.

“ U.S. Tax Compliance Certificate ” as defined in Section  5.9.2(b)(iii) .

“ Value ” (a) for any particular type of Inventory (whether raw materials, work-in-process or finished goods), its value determined on the basis of the lower of cost or market, calculated on a first-in, first-out basis, and excluding any portion of cost attributable to intercompany profit among Borrowers and their Affiliates; and (b) for an Account, its face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person.

“ VAT ”

“(a) any Tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

“(b) any other Tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such Tax referred to in paragraph (a) above, or imposed elsewhere.

“ VAT Recipient ” as defined in Section  5.8.4 .

“ VAT Relevant Party ” as defined in Section  5.8.4 .

“ VAT Supplier ” as defined in Section  5.8.4 .

“ Westfalia Acquisition ” the acquisition of all Equity Interests of Westfalia-Automotive Holding GmbH, a limited liability company organized under the laws of Germany, and TeIJs Holding B.V., a private company with limited liability organized under the laws of the Netherlands (collectively, the “ Westfalia Group ”), by Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, and the guarantee by Parent Borrower of the obligations of Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, under the Westfalia Purchase Agreement, all pursuant to the Westfalia Purchase Agreement and all in accordance with the terms of the Westfalia Purchase Agreement without giving effect to any amendment thereto.

“ Westfalia Acquisition Closing Date ” means October 4, 2016.

“ Westfalia Group ” as defined in the definition of “Westfalia Acquisition”.

“ Westfalia Purchase Agreement ” that certain Sale and Purchase Agreement, recorded in Munich on August 24, 2016, by and among Parcom Deutschland I GmbH & Co. KG, a limited partnership organized under the laws of Germany, as a seller; Co-Investment Partners Europe L.P., a limited partnership organized under the laws of the Cayman Islands, as a seller; Bayernlb Private Equity GmbH, a

 

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limited liability company organized under the laws of Germany, as a seller; Walter Gnauert, an individual resident of Cavaion, Italy, as a seller; Dr. Bernd Welzel, an individual resident of Bramsche, Germany, as a seller; Frank Klebedamz, an individual resident of Gladbeck, Germany, as a seller; Jurgen Lotter, an individual resident of Rosrath, Germany, as a seller; Westfalia Mitarbeiterbeteiligungs GmbH & Co. KG, a limited partnership organized under the laws of Germany, as a seller; Blitz K16-102 GmbH, a limited liability company organized under the laws of Germany, as purchaser; and Parent Borrower, as guarantor.

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

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

1.2        “ Accounting Terms . Under the Loan Documents (except as otherwise specified therein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the audited financial statements of Borrowers delivered to Agent with respect to the Fiscal Year ending on December 31, 2014 and using the same inventory valuation method as used in such financial statements, except for any change required or permitted by GAAP if Borrowers’ certified public accountants concur in such change, the change is disclosed to Agent, and all relevant provisions of the Loan Documents are amended in a manner satisfactory to Required Lenders to take into account the effects of the change.

1.3         Uniform Commercial Code/PPSA . As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York from time to time: “Chattel Paper,” “Commercial Tort Claim,” “Equipment,” “Goods,” “Instrument” and “Investment Property”; provided, however, that (a) as such terms relate to any such Property of any Canadian Domiciled Obligor, such terms shall refer to such Property as defined in the PPSA, to the extent applicable and (b) as such terms relate to any such Property encumbered by or to be encumbered by a Mexican Security Document, such terms shall have the meanings assigned to them in such Mexican Security Document, to the extent applicable. In addition, other terms relating to Collateral used and not otherwise defined herein that are defined in the UCC or the PPSA shall have the meanings set forth in the UCC or the PPSA, as applicable and as the context requires.

1.4         Certain Matters of Construction . The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later specified date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and “include” shall mean “including, without limitation” and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document. All references to (a) laws include all related regulations, interpretations, supplements, amendments and successor provisions; (b) any document, instrument or agreement include any amendments, waivers and other modifications, extensions or renewals (to the extent permitted by the Loan Documents); (c) any section mean, unless the context otherwise requires, a section of this Agreement; (d) any exhibits or schedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated by reference; (e) any Person include successors and assigns; or (f) time of day mean time of day at Agent’s notice

 

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address under Section  14.3.1 . All determinations (including calculations of the Total Borrowing Base, each component of the Total Borrowing Base and financial covenants) made from time to time under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to Agent (and not necessarily calculated in accordance with GAAP). Borrowers shall have the burden of establishing any alleged negligence, misconduct or lack of good faith by Agent, any Security Trustee, Issuing Bank or any Lender under any Loan Documents. No provision of any Loan Documents shall be construed against any party by reason of such party having, or being deemed to have, drafted the provision. Reference to a Borrower’s “knowledge” or similar concept means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter.

1.5          Currency Equivalents .

1.5.1     Calculations . All references in the Loan Documents to Loans, Letters of Credit, Obligations, Borrowing Base components and other amounts shall be denominated in Dollars, unless expressly provided otherwise. The Dollar Equivalent of any amounts denominated or reported under a Loan Document in a currency other than Dollars shall be determined by Agent on a daily basis, based on the current Spot Rate. Borrowers shall report Value and other Borrowing Base components to Agent in the currency invoiced by Borrowers or shown in Borrowers’ financial records, and unless expressly provided otherwise, shall deliver financial statements and calculate financial covenants in Dollars. Notwithstanding anything herein to the contrary, if any Obligation is funded and expressly denominated in a currency other than Dollars, Borrowers shall repay such Obligation in such other currency.

1.5.2     Judgments . If, for purposes of obtaining judgment in any court, it is necessary to convert a sum from the currency provided under a Loan Document (“ Agreement Currency ”) into another currency, the Spot Rate shall be used as the rate of exchange. Notwithstanding any judgment in a currency (“ Judgment Currency ”) other than the Agreement Currency, Obligors shall discharge their obligations in respect of any sum due under a Loan Document only if, on the Business Day following receipt by Secured Parties or Security Trustees of payment in the Judgment Currency, such Secured Parties or such Security Trustees, as applicable, can use the amount paid to purchase the sum originally due in the Agreement Currency. If the purchased amount is less than the sum originally due, Obligors agree, as a separate obligation and notwithstanding any such judgment, to indemnify such Secured Parties and Security Trustees against such loss. If the purchased amount is greater than the sum originally due, Secured Parties or Security Trustees, as applicable, shall return the excess amount to Obligors (or to the Person legally entitled thereto). The covenants contained in this Section  1.5.2 shall survive the Full Payment of the Obligations.

1.6         Interpretation (Québec) . For purposes of any Collateral located in the Province of Québec or charged by any Deed of Movable Hypothec (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of the Province of Québec or a court or tribunal exercising jurisdiction in the Province of Québec, (a) “personal property” shall be deemed to include “movable property”, (b) “real property” shall be deemed to include “immovable property”, (c) “tangible property” shall be deemed to include “corporeal property”, (d) “intangible property” shall be deemed to include “incorporeal property”, (e) “security interest”, “mortgage” and “lien” shall be deemed to include a “hypothec”, “prior claim” and a “resolutory clause”, (f) all references to filing, registering or recording under the UCC or the PPSA shall be deemed to include publication under the Civil Code, (g) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to an “opposable” or “set up” Liens as against third parties, (h) any

 

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“right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (i) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, (j) an “agent” shall be deemed to include a “mandatary”, (k) “construction liens” shall be deemed to include “legal hypothecs”, (l) “joint and several” shall be deemed to include “solidary”, (m) “gross negligence or willful misconduct” shall be deemed to be “intentional or gross fault”, (n) “beneficial ownership” shall be deemed to include “ownership on behalf of another as mandatary”, (o) “servitude” shall be deemed to include “easement”, (p) “priority” shall be deemed to include “prior claim”, (q) “survey” shall be deemed to include “certificate of location and plan”, and   (r) “fee simple title ” shall be deemed to include “absolute ownership”, and (s) “foreclosure ” shall be deemed to include “ absolute ownership the “exercise of a hypothecary right ”. The parties hereto confirm that it is their wish that this Agreement and any other document executed in connection with the transactions contemplated herein be drawn up in the English language only (except if another language is required under any Applicable Law) and that all other documents contemplated thereunder or relating thereto, including notices, may also be drawn up in the English language only. Les parties aux pr é sentes confirment que c ’est leur volont é que cette convention et les autres documents de cr é dit soient r é dig é s en langue anglaise seulement et que tous les documents, y compris tous avis, envisag é s par cette convention et les autres documents peuvent ê tre r é dig é s en la langue anglaise seulement (sauf si une autre langue est requise en vertu d ’ une loi applicable).

SECTION 2

CREDIT FACILITIES

2.1         Revolver Commitment .

2.1.1             Revolver Loans .

(a)         Canadian Revolver Loans . Each Canadian Lender agrees, severally on a Pro Rata basis up to its Canadian Revolver Commitment, on the terms set forth herein, to make Canadian Revolver Loans to Canadian Borrower from time to time through the Canadian Commitment Termination Date. The Canadian Revolver Loans may be repaid and reborrowed as provided herein. In no event shall Canadian Lenders have any obligation to honor a request for a Canadian Revolver Loan if Canadian Revolver Usage at such time plus the requested Canadian Revolver Loan would exceed the Canadian Borrowing Base.

(b)         UK Revolver Loans . Each UK Lender agrees, severally on a Pro Rata basis up to its UK Revolver Commitment, on the terms set forth herein, to make UK Revolver Loans to UK Borrower from time to time through the UK Commitment Termination Date. The UK Revolver Loans may be repaid and reborrowed as provided herein. In no event shall UK Lenders have any obligation to honor a request for a UK Revolver Loan if UK Revolver Usage at such time plus the requested UK Revolver Loan would exceed the UK Borrowing Base.

(c)         U.S. Revolver Loans . Immediately prior to the effectiveness of this Agreement, the outstanding principal balance of the “Revolver Loans” as of the date hereof made under the Original Loan Agreement was $0.00 (the “ Outstanding Original Revolver Loan Balance ”). Immediately upon giving effect to this Agreement, the Outstanding Original Revolver Loan Balance shall be continued and shall convert automatically, for all purposes of this Agreement, to outstanding U.S. Revolver Loans hereunder owing to the U.S. Lenders as if such U.S. Revolver Loans had been made by the U.S. Lenders to U.S. Borrowers hereunder on a Pro Rata basis in accordance with their respective U.S. Revolver Commitments. Each U.S. Lender agrees, severally on a Pro Rata basis up to its U.S. Revolver Commitment, on the terms set forth

 

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herein, to make U.S. Revolver Loans to U.S. Borrowers from time to time through the U.S. Commitment Termination Date. The U.S. Revolver Loans may be repaid and reborrowed as provided herein. In no event shall U.S. Lenders have any obligation to honor a request for a U.S. Revolver Loan if U.S. Revolver Usage at such time plus the requested U.S. Revolver Loan would exceed the U.S. Borrowing Base.

(d)         Cap on Total Revolver Usage . Notwithstanding anything to the contrary contained in this Section  2.1.1 , in no event shall any Borrower be entitled to receive a Revolver Loan if at the time of the proposed funding of such Revolver Loan (and after giving effect thereto and all pending requests for Revolver Loans), the Total Revolver Usage exceeds (or would exceed) the Commitments.

2.1.2         Notes . Loans and interest accruing thereon shall be evidenced by the records of Agent and the applicable Lender. At the request of a Lender, Borrowers within the Borrower Group to which such Lender has extended a Commitment shall deliver promissory note(s) to such Lender, evidencing its Loan(s), in the amount of such Lender’s Commitment to such Borrower Group.

2.1.3         Use of Proceeds . The proceeds of Revolver Loans shall be used by Borrowers solely (a) to satisfy existing Debt; (b) to pay fees and transaction expenses associated with the closing of this credit facility; (c) to pay Obligations in accordance with this Agreement; and (d) for lawful corporate purposes of Borrowers, including working capital.

2.1.4          Voluntary Reduction or Termination of Revolver Commitments .

(a)        The Canadian Revolver Commitments shall terminate on the Canadian Commitment Termination Date. Upon at least 90 days prior written notice to Agent from Borrower Agent at any time after the first Loan Year, Canadian Borrower may, at its option, terminate the Canadian Revolver Commitments. On the Canadian Commitment Termination Date, Canadian Borrower shall make Full Payment of all Canadian Facility Obligations.

(b)        The UK Revolver Commitments shall terminate on the UK Commitment Termination Date. Upon at least 90 days prior written notice to Agent from Borrower Agent at any time after the first Loan Year, UK Borrower may, at its option, terminate the UK Revolver Commitments. On the UK Commitment Termination Date, UK Borrower shall make Full Payment of all UK Facility Obligations.

(c)        The U.S. Revolver Commitments shall terminate on the U.S. Commitment Termination Date. Upon at least 90 days prior written notice to Agent from Borrower Agent at any time after the first Loan Year, U.S. Borrowers may, at their option, terminate the U.S. Revolver Commitments and this credit facility. If the U.S. Borrowers elect to terminate the U.S. Revolver Commitments pursuant to the previous sentence, the Foreign Revolver Commitments shall automatically terminate concurrently with the termination of the U.S. Revolver Commitments. On the U.S. Commitment Termination Date, U.S. Borrowers shall make Full Payment of all U.S. Facility Obligations.

(d)        Any notice of termination given by Borrower Agent shall be irrevocable.

(e)        Borrowers may permanently reduce the Revolver Commitments, on a ratable basis for all Lenders, upon at least 90 days prior written notice from Borrower Agent to Agent delivered at any time after the first Loan Year, which notice shall (i) specify the amount of the reduction, (ii) specify the allocation of the reduction to, and the corresponding reductions of,

 

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each Foreign Revolver Commitment and/or the U.S. Revolver Commitment (each of which shall be allocated to the Lenders among the affected Borrower Groups on a ratable basis at the time of such reduction) and (iii) be irrevocable once given. Each reduction shall be in a minimum amount of $5,000,000, or an increment of $1,000,000 in excess thereof; provided that in no event may any reduction of a Borrower Group Commitment be made pursuant to this Section  2.1.4(e) if, after giving effect thereto, the U.S. Revolver Commitments would be less than 75% of the Commitments.

2.1.5          Overadvances .

(a)         Canadian Overadvances . If Canadian Revolver Usage exceeds the Canadian Borrowing Base (a “ Canadian Overadvance ”) at any time (whether as a result of fluctuations in Spot Rates or otherwise), the excess amount shall be payable by the Canadian Borrower on demand by Agent, but all such Canadian Revolver Loans shall nevertheless constitute Canadian Facility Obligations secured by the  Canadian Facility  Collateral and entitled to all benefits of the Loan Documents.

(b)         UK Overadvances . If UK Revolver Usage exceeds the UK Borrowing Base (a “ UK Overadvance ”) at any time (whether as a result of fluctuations in Spot Rates or otherwise), the excess amount shall be payable by the UK Borrower on demand by Agent, but all such UK Revolver Loans shall nevertheless constitute UK Facility Obligations secured by the UK Facility  Collateral and entitled to all benefits of the Loan Documents.

(c)         U.S. Overadvances . If U.S. Revolver Usage exceeds the U.S. Borrowing Base (a “ U.S. Overadvance ”) at any time, the excess amount shall be payable by the U.S. Borrowers on demand by Agent, but all such U.S. Revolver Loans shall nevertheless constitute U.S. Facility Obligations secured by the  U.S. Facility  Collateral and entitled to all benefits of the Loan Documents.

(d)         Funding of Overadvance Loans . Agent may require Applicable Lenders to honor requests for Overadvance Loans and to forbear from requiring the applicable Borrower(s) to cure an Overadvance, (a) when no other Event of Default is known to Agent, as long as (i) the Overadvance does not continue for more than 30 consecutive days (and no Overadvance may exist for at least five consecutive days thereafter before further Overadvance Loans are required), and (ii) (A) if a Canadian Overadvance, such Overadvance, when combined with all Canadian Protective Advances and all other Canadian Overadvances existing at such time, is not known by Agent to exceed 10% of the Canadian Borrowing Base, (B) if a UK Overadvance, such Overadvance, when combined with all UK Protective Advances and all other UK Overadvances existing at such time, is not known by Agent to exceed 10% of the UK Borrowing Base or (C) if a U.S. Overadvance, such Overadvance, when combined with all U.S. Protective Advances and all other U.S. Overadvances existing at such time, is not known by Agent to exceed 10% of the U.S. Borrowing Base; and (b) regardless of whether an Event of Default exists, if Agent discovers an Overadvance not previously known by it to exist, as long as from the date of such discovery the Overadvance does not continue for more than 30 consecutive days. Required Lenders may at any time revoke Agent’s authority under the immediately preceding sentence to require Lenders to honor requests for Overadvance Loans and to forbear from requiring the applicable Borrowers to cure an Overadvance by written notice to Agent. In no event shall Overadvance Loans be required that would cause (A) Canadian Revolver Usage to exceed the aggregate Canadian Revolver Commitments, (B) the UK Revolver Usage to exceed the aggregate UK Revolver Commitments or (C) the U.S. Revolver Usage to exceed the

 

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aggregate U.S. Revolver Commitments. Any funding of an Overadvance Loan or sufferance of an Overadvance shall not constitute a waiver by Agent or Lenders of the Event of Default caused thereby. In no event shall any Borrower or other Obligor be deemed a beneficiary of this Section nor authorized to enforce any of its terms.

2.1.6          Protective Advances .

(a)         Canadian Protective Advances . Agent shall be authorized, in its discretion, at any time that any conditions in Section  6 are not satisfied, to make Canadian Base Rate Loans or Canadian Prime Rate Loans to Canadian Borrower (as applicable, through its Canadian Lending Office, branch or Affiliate) (“ Canadian Protective Advances ”) (i) up to an aggregate amount, when combined with all Canadian Overadvances and all other Canadian Protective Advances, of 10% of the Canadian Borrowing Base outstanding at any time, if Agent deems such Loans necessary or desirable to preserve or protect Canadian Facility Collateral, or to enhance the collectability or repayment of the Canadian Facility Obligations, as long as such Loans do not cause Canadian Revolver Usage to exceed the Canadian Borrowing Base; or (ii) to pay any other amounts chargeable to Canadian Facility Obligors under any of the Loan Documents, including interest, costs, fees and expenses. Canadian Lenders shall participate on a Pro Rata basis in Canadian Protective Advances outstanding from time to time. Required Lenders may at any time revoke Agent’s authority to make further Canadian Protective Advances under clause (i) by written notice to Agent. Absent such revocation, Agent’s determination that funding of a Canadian Protective Advance is appropriate shall be conclusive. All Canadian Protective Advances shall be Canadian Facility Obligations, secured by the  Canadian Facility  Collateral and, if denominated in Canadian Dollars, shall be treated for all purposes as a Canadian Prime Rate Loan or, if denominated in Dollars, shall be treated for all purposes as a Canadian Base Rate Loan.

(b)         UK Protective Advances . Agent shall be authorized, in its discretion, at any time that any conditions in Section  6 are not satisfied, to make UK Base Rate Loans to UK Borrower (“ UK Protective Advances ”) (i) up to an aggregate amount, when combined with all UK Overadvances and all other UK Protective Advances, of 10% of the UK Borrowing Base outstanding at any time, if Agent deems such Loans necessary or desirable to preserve or protect UK Facility Collateral, or to enhance the collectability or repayment of the UK Facility Obligations, as long as such Loans do not cause UK Revolver Usage to exceed the UK Borrowing Base; or (ii) to pay any other amounts chargeable to UK Facility Obligors under any of the Loan Documents, including interest, costs, fees and expenses. UK Lenders shall participate on a Pro Rata basis in UK Protective Advances outstanding from time to time. Required Lenders may at any time revoke Agent’s authority to make further UK Protective Advances under clause (i) by written notice to Agent. Absent such revocation, Agent’s determination that funding of a UK Protective Advance is appropriate shall be conclusive. All UK Protective Advances shall be UK Facility Obligations and secured by the  UK Facility  Collateral.

(c)         U.S. Protective Advances . Agent shall be authorized, in its discretion, at any time that any conditions in Section  6 are not satisfied, to make U.S. Base Rate Loans to U.S. Borrowers (“ U.S. Protective Advances ”) (i) up to an aggregate amount, when combined with all U.S. Overadvances and all other U.S. Protective Advances, of 10% of the U.S. Borrowing Base outstanding at any time, if Agent deems such Loans necessary or desirable to preserve or protect U.S. Facility Collateral, or to enhance the collectability or repayment of the U.S. Facility Obligations, as long as such Loans do not cause U.S. Revolver Usage to exceed the U.S.

 

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Borrowing Base; or (ii) to pay any other amounts chargeable to U.S. Facility Obligors under any of the Loan Documents, including interest, costs, fees and expenses. U.S. Lenders shall participate on a Pro Rata basis in U.S. Protective Advances outstanding from time to time. Required Lenders may at any time revoke Agent’s authority to make further U.S. Protective Advances under clause (i) by written notice to Agent. Absent such revocation, Agent’s determination that funding of a U.S. Protective Advance is appropriate shall be conclusive. All U.S. Protective Advances shall be U.S. Facility Obligations and secured by the  U.S. Facility Collateral.

2.1.7          Reallocation of Revolver Commitments .

(a)         Reallocation Mechanism . Subject to the terms and conditions of this Section  2.1.7 , the Borrower Agent may request that the Lenders to certain Borrower Groups (and such Lenders hereby agree to) change the then current allocation of each such Lender’s (and, if applicable, each of its Affiliate’s and branch’s) Commitments among the Borrower Group Commitments in order to effect an increase or decrease to particular Borrower Group Commitments, with any such increase or decrease in a Borrower Group Commitment to be accompanied by a concurrent and equal decrease or increase, respectively, in the other Borrower Group Commitments (each, a “ Reallocation ”). Any such Reallocation shall be subject to the following conditions: (i) the Borrower Agent shall have provided to Agent a written request (in reasonable detail) at least ten (10) Business Days prior to the requested effective date therefor (which effective date must be a Business Day) (the “ Reallocation Date ”) setting forth the proposed Reallocation Date and the amounts of the proposed Borrower Group Commitment reallocations to be effected, (ii) any such Reallocation shall increase or decrease the applicable Borrower Group Commitments in an amount equal to $2,500,000 and in increments of $500,000 in excess thereof, (iii) after giving effect to any such Reallocation (A) the U.S. Revolver Commitments shall be at least 75% of the Commitments and (B) the UK Revolver Commitments shall in no event exceed $10,000,000, (iv) no more than one Reallocation may be requested in any Fiscal Quarter, (v) no Default or Event of Default shall have occurred and be continuing either as of the date of such request or on the Reallocation Date (both immediately before and after giving effect to such Reallocation), (vi) any increase in a Borrower Group Commitment shall result in a dollar-for-dollar decrease in one or more of the other Borrower Group Commitments, and any decrease in a Borrower Group Commitment pursuant to this Section  2.1.7 shall result in a dollar-for-dollar increase in one or more of the other Borrower Group Commitments, (vii) in no event shall the sum of all the Borrower Group Commitments exceed the aggregate amount of the Commitments then in effect, (viii) after giving effect to such Reallocation, no Overadvance would exist or would result therefrom, and (ix) at least three (3) Business Days prior to the proposed Reallocation Date, a Senior Officer of the Borrower Agent shall have delivered to Agent a certificate in form and substance acceptable to Agent certifying as to compliance with the foregoing conditions and demonstrating (in reasonable detail) the calculations required in connection therewith, which certificate shall be deemed recertified to Agent by a Senior Officer of the Borrower Agent on and as of the Reallocation Date.

(b)         Reallocations Generally. Agent shall promptly inform the Lenders of the affected Borrower Groups of any request for a Reallocation. On the Reallocation Date, each Lender’s affected Borrower Group Commitments shall be increased or decreased on a pro rata basis based on the affected Borrower Group Commitments of the Lenders. If the conditions set forth in Section  2.1.7(a) are not satisfied on the applicable Reallocation Date (or, to the extent such conditions relate to an earlier date, on such earlier date), Agent shall notify the Borrower Agent in writing that the requested Reallocation will not be effectuated; provided that Agent shall

 

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in all cases be entitled to rely (without liability) on the certificate delivered by the Borrower Agent pursuant to Section  2.1.7(a) in making its determination as to the satisfaction of the conditions set forth in Section  2.1.7(a) . On each Reallocation Date, Agent shall notify the Lenders of the affected Borrower Groups and the Borrower Agent, on or before 3:00 p.m. (Eastern time) by facsimile, e-mail or other electronic means, of the occurrence of the Reallocation to be effected on such Reallocation Date, the amount of the Loans held by each such Lender as a result thereof and the amount of the affected Borrower Group Commitments of each such Lender as a result thereof. To the extent necessary where a Lender in one Borrower Group and its separate Affiliate or branch that is a Lender in another Borrower Group are participating in a Reallocation, the Reallocation among such Persons shall be deemed to have been consummated pursuant to an Assignment. The respective Pro Rata shares of the Lenders shall thereafter be determined based on such reallocated amounts (subject to any subsequent changes thereto in accordance with this Agreement), and Agent and the affected Lenders shall make such adjustments as Agent shall deem necessary so that the outstanding Loans and LC Obligations of each Lender equals its Pro Rata share thereof after giving effect to the Reallocation.

2.1.8         Increase in U.S. Revolver Commitments . U.S. Borrowers may request an increase in U.S. Revolver Commitments from time to time upon notice to Agent, as long as (a) the requested increase is in a minimum amount of $10,000,000 and is offered on the same terms as existing U.S. Revolver Commitments, except for a closing fee specified by U.S. Borrowers, (b) increases under this Section  2.1.8 do not exceed $25,000,000 in the aggregate and no more than five (5) increases are made, (c) no reduction in Commitments pursuant to Section  2.1.4 has occurred prior to the requested increase, (d) the requested increase does not cause the Commitments to exceed 90% of any applicable cap under any Subordinated Debt agreement, (e) the requested increase does not cause the Commitments to exceed 90% of any applicable cap contained in the Term Loan Documents (excluding the effect of any provision permitting Revolver Loans or Letters of Credit in amounts exceeding any expressed dollar cap in reliance upon the Borrowing Base), and (f) the Obligors deliver such resolutions, acknowledgements, and reaffirmations as are requested by the Agent in connection with such increase. Agent shall promptly notify U.S. Lenders of the requested increase and, within ten (10) Business Days thereafter, each U.S. Lender shall notify Agent if and to what extent such U.S. Lender commits to increase its U.S. Revolver Commitment. Any U.S. Lender not responding within such period shall be deemed to have declined an increase. If U.S. Lenders fail to commit to the full requested increase, other Lenders or Eligible Assignees may issue additional U.S. Revolver Commitments and become U.S. Lenders hereunder. Agent may allocate, in its discretion, the increased U.S. Revolver Commitments among committing U.S. Lenders and, if necessary, other Lenders and Eligible Assignees. Provided the conditions set forth in Section  6.2 are satisfied, total U.S. Revolver Commitments shall be increased by the requested amount (or such lesser amount committed by U.S. Lenders, other Lenders and Eligible Assignees) on a date agreed upon by Agent and Borrower Agent, but no later than 45 days following U.S. Borrowers’ increase request. Agent, Obligors, and new and existing Lenders shall execute and deliver such documents and agreements as Agent deems appropriate to evidence the increase in and allocations of U.S. Revolver Commitments. On the effective date of an increase, the U.S. Revolver Usage and other exposures under the U.S. Revolver Commitments shall be reallocated among U.S. Lenders, and settled by Agent if necessary, in accordance with U.S. Lenders’ adjusted shares of such Commitments.

2.2          Canadian Letter of Credit Facility .

2.2.1         Issuance of Canadian Letters of Credit . Canadian Issuing Bank shall issue Canadian Letters of Credit in Canadian Dollars or, at the option of Canadian Borrower, Dollars, or any other currency acceptable to Agent and Canadian Issuing Bank, from time to time until 30 days prior to

 

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the Revolver Termination Date (or until the Canadian Commitment Termination Date, if earlier), on the terms set forth herein, including the following:

(a)        Canadian Borrower acknowledges that Canadian Issuing Bank’s issuance of any Canadian Letter of Credit is conditioned upon Canadian Issuing Bank’s receipt of a Canadian LC Application with respect to the requested Canadian Letter of Credit, as well as such other instruments and agreements as Canadian Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. Canadian Issuing Bank shall have no obligation to issue any Canadian Letter of Credit unless (i) Canadian Issuing Bank receives a Canadian LC Request and Canadian LC Application at least three Business Days prior to the requested date of issuance; (ii) each Canadian LC Condition is satisfied; and (iii) if a Defaulting Lender exists that is a Canadian Lender, such Canadian Lender or Canadian Borrower has entered into arrangements satisfactory to Agent and Canadian Issuing Bank to eliminate any Fronting Exposure associated with such Canadian Lender. If, in sufficient time to act, Canadian Issuing Bank receives written notice from Agent or Required Lenders that a Canadian LC Condition has not been satisfied, Canadian Issuing Bank shall not issue the requested Canadian Letter of Credit. Prior to receipt of any such notice, Canadian Issuing Bank shall not be deemed to have knowledge of any failure of Canadian LC Conditions.

(b)        Canadian Letters of Credit may be requested by Canadian Borrower to support obligations incurred in the Ordinary Course of Business, or as otherwise approved by Agent. Increase, renewal or extension of a Canadian Letter of Credit shall be treated as issuance of a new Canadian Letter of Credit, except that Canadian Issuing Bank may require a new Canadian LC Application in its discretion.

(c)        Canadian Borrower assumes all risks of the acts, omissions or misuses of any Canadian Letter of Credit by the beneficiary. In connection with issuance of any Canadian Letter of Credit, none of Agent, Canadian Issuing Bank or any Canadian Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a Canadian Letter of Credit or Document; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and Canadian Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any Canadian Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of Canadian Issuing Bank, Agent or any Canadian Lender, including any act or omission of a Governmental Authority. The rights and remedies of Canadian Issuing Bank under the Loan Documents shall be cumulative. Canadian Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against Canadian Borrower are discharged with proceeds of any Canadian Letter of Credit.

(d)        In connection with its administration of and enforcement of rights or remedies under any Canadian Letters of Credit or Canadian LC Documents, Canadian Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification,

 

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documentation or communication in whatever form believed by Canadian Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. Canadian Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. Canadian Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to Canadian Letters of Credit or Canadian LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

2.2.2          Canadian Letter of Credit Reimbursement; Canadian Participations .

(a)        If Canadian Issuing Bank honors any request for payment under a Canadian Letter of Credit, Canadian Borrower shall pay to Canadian Issuing Bank, on the same day (“ Canadian Reimbursement Date ”), the amount paid by Canadian Issuing Bank under such Canadian Letter of Credit, together with interest at the interest rate for Canadian Prime Rate Loans (if the Canadian Letter of Credit was denominated in Canadian Dollars) and Canadian Base Rate Loans (if the Canadian Letter of Credit was denominated in Dollars) from the Canadian Reimbursement Date until payment by Canadian Borrower. The obligation of Canadian Borrower to reimburse Canadian Issuing Bank for any payment made under a Canadian Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any Canadian Letter of Credit or the existence of any claim, setoff, defense or other right that Canadian Borrower may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, Canadian Borrower shall be deemed to have requested a Borrowing of Canadian Prime Rate Loans or Canadian Base Rate Loans, as applicable, in an amount necessary to pay all amounts due Canadian Issuing Bank in the currency in which the underlying Canadian Letter of Credit was issued on any Canadian Reimbursement Date and each Canadian Lender shall fund its Pro Rata share of such Borrowing whether or not the Canadian Revolver Commitments have terminated, an Overadvance exists or is created thereby, or the conditions in Section  6 are satisfied.

(b)        Each Canadian Lender hereby irrevocably and unconditionally purchases from Canadian Issuing Bank, without recourse or warranty, an undivided Pro Rata participation in all Canadian LC Obligations outstanding from time to time. Canadian Issuing Bank is issuing Canadian Letters of Credit in reliance upon this participation. If Canadian Borrower does not make a payment to Canadian Issuing Bank when due hereunder, Agent shall promptly notify Canadian Lenders and each Canadian Lender shall within one Business Day after such notice pay to Agent, for the benefit of Canadian Issuing Bank, such Canadian Lender’s Pro Rata share of such payment. Upon request by a Canadian Lender, Canadian Issuing Bank shall provide copies of Canadian Letters of Credit and Canadian LC Documents in its possession at such time.

(c)        The obligation of each Canadian Lender to make payments to Agent for the account of Canadian Issuing Bank in connection with Canadian Issuing Bank’s payment under a Canadian Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a Canadian Letter of Credit having been determined to be forged, fraudulent, noncompliant, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; any waiver by Canadian Issuing Bank of a requirement that exists for its protection (and

 

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not Canadian Borrower’s protection) or that does not materially prejudice Canadian Borrower; any honor of an electronic demand for payment even if a draft is required; any payment of an item presented after a Canadian Letter of Credit’s expiration date if authorized by applicable customs or practices; or any setoff or defense that a Canadian Facility Obligor may have with respect to any  Canadian Facility  Obligations. Canadian Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by Canadian Borrower or other Person of any obligations under any Canadian LC Documents. Canadian Issuing Bank does not make to Canadian Lenders any express or implied warranty, representation or guaranty with respect to any Canadian Letter of Credit, Canadian Facility  Collateral, Canadian LC Document or Canadian Facility Obligor. Canadian Issuing Bank shall not be responsible to any Canadian Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any Canadian LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any Canadian Facility  Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Canadian Facility  Obligor.

(d)        No Canadian Issuing Bank Indemnitee shall be liable to any Canadian Lender or other Person for any action taken or omitted to be taken in connection with any Canadian Letter of Credit or Canadian LC Document except as a result of its gross negligence or willful misconduct. Canadian Issuing Bank may refrain from taking any action with respect to a Canadian Letter of Credit until it receives written instructions (and in its discretion, appropriate assurances) from the Canadian Lenders.

2.2.3         Canadian Letter of Credit Cash Collateral . Subject to Section  2.1.5 , if at any time (a) an Event of Default exists, (b) the Canadian Commitment Termination Date has occurred, or (c) the Revolver Termination Date is scheduled to occur within 20 Business Days, then Canadian Borrower shall, at Canadian Issuing Bank’s or Agent’s request, Cash Collateralize all outstanding Canadian Letters of Credit. Canadian Borrower shall, at Canadian Issuing Bank’s or Agent’s request at any time, Cash Collateralize the Fronting Exposure of any Defaulting Lender that is a Canadian Lender. If as a result of fluctuations in Spot Rates or otherwise the Dollar Equivalent of the Canadian LC Obligations exceeds the Canadian Letter of Credit Subline, the excess amount shall be payable by the Canadian Borrower within three (3) Business Days following demand by Agent or the Canadian Issuing Bank. If Canadian Borrower fails to provide any Cash Collateral as required hereunder, Canadian Lenders may (and shall upon direction of Agent) advance, as Canadian Revolver Loans, the amount of Cash Collateral required (whether or not the Canadian Revolver Commitments have terminated, a Overadvance exists or the conditions in Section  6 are satisfied).

2.3          UK Letter of Credit Facility .

2.3.1         Issuance of UK Letters of Credit . UK Issuing Bank shall issue UK Letters of Credit in Sterling or, at the option of the UK Borrower, Dollars or Euros, or any other currency acceptable to Agent and UK Issuing Bank, from time to time until 30 days prior to the Revolver Termination Date (or until the UK Commitment Termination Date, if earlier), on the terms set forth herein, including the following:

(a)        UK Borrower acknowledges that UK Issuing Bank’s issuance of any UK Letter of Credit is conditioned upon UK Issuing Bank’s receipt of a UK LC Application with respect to the requested UK Letter of Credit, as well as such other instruments and agreements as UK Issuing Bank may customarily require for issuance of a letter of credit of similar type and

 

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amount. UK Issuing Bank shall have no obligation to issue any UK Letter of Credit unless (i) UK Issuing Bank receives a UK LC Request and UK LC Application at least three Business Days prior to the requested date of issuance; (ii) each UK LC Condition is satisfied; and (iii) if a Defaulting Lender exists that is a UK Lender, such UK Lender or UK Borrower has entered into arrangements satisfactory to Agent and UK Issuing Bank to eliminate any Fronting Exposure associated with such UK Lender. If, in sufficient time to act, UK Issuing Bank receives written notice from Agent or Required Lenders that a UK LC Condition has not been satisfied, UK Issuing Bank shall not issue the requested UK Letter of Credit. Prior to receipt of any such notice, UK Issuing Bank shall not be deemed to have knowledge of any failure of UK LC Conditions.

(b)         UK Letters of Credit may be requested by UK Borrower to support obligations incurred in the Ordinary Course of Business, or as otherwise approved by Agent. Increase, renewal or extension of a UK Letter of Credit shall be treated as issuance of a new UK Letter of Credit, except that UK Issuing Bank may require a new UK LC Application in its discretion.

(c)         UK Borrower assumes all risks of the acts, omissions or misuses of any UK Letter of Credit by the beneficiary. In connection with issuance of any UK Letter of Credit, none of Agent, UK Issuing Bank or any UK Lender shall be responsible for the existence, character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a UK Letter of Credit or Document; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and UK Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any UK Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of UK Issuing Bank, Agent or any UK Lender, including any act or omission of a Governmental Authority. The rights and remedies of UK Issuing Bank under the Loan Documents shall be cumulative. UK Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against UK Borrower are discharged with proceeds of any UK Letter of Credit.

(d)         In connection with its administration of and enforcement of rights or remedies under any UK Letters of Credit or UK LC Documents, UK Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in whatever form believed by UK Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. UK Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. UK Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to UK Letters of Credit or UK LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

 

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2.3.2         UK Letter of Credit Reimbursement; UK Participations .

(a)         If UK Issuing Bank honors any request for payment under a UK Letter of Credit, UK Borrower shall pay to UK Issuing Bank, on the same day (“ UK Reimbursement Date ”), the amount paid by UK Issuing Bank under such UK Letter of Credit, together with interest at the interest rate for UK Base Rate Loans from the UK Reimbursement Date until payment by UK Borrower. The obligation of UK Borrower to reimburse UK Issuing Bank for any payment made under a UK Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any UK Letter of Credit or the existence of any claim, setoff, defense or other right that UK Borrower may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, UK Borrower shall be deemed to have requested a Borrowing of UK Base Rate Loans in an amount necessary to pay all amounts due UK Issuing Bank in the currency in which the underlying UK Letter of Credit was issued on any UK Reimbursement Date and each UK Lender shall fund its Pro Rata share of such Borrowing whether or not the UK Revolver Commitments have terminated, a Overadvance exists or is created thereby, or the conditions in Section  6 are satisfied.

(b)         Each UK Lender hereby irrevocably and unconditionally purchases from UK Issuing Bank, without recourse or warranty, an undivided Pro Rata participation in all UK LC Obligations outstanding from time to time. UK Issuing Bank is issuing UK Letters of Credit in reliance upon this participation. If UK Borrower does not make a payment to UK Issuing Bank when due hereunder, Agent shall promptly notify UK Lenders and each UK Lender shall within one Business Day after such notice pay to Agent, for the benefit of UK Issuing Bank, such UK Lender’s Pro Rata share of such payment. Upon request by a UK Lender, UK Issuing Bank shall provide copies of UK Letters of Credit and UK LC Documents in its possession at such time.

(c)         The obligation of each UK Lender to make payments to Agent for the account of UK Issuing Bank in connection with UK Issuing Bank’s payment under a UK Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a UK Letter of Credit having been determined to be forged, fraudulent, noncompliant, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; any waiver by UK Issuing Bank of a requirement that exists for its protection (and not UK Borrower’s protection) or that does not materially prejudice UK Borrower; any honor of an electronic demand for payment even if a draft is required; any payment of an item presented after a UK Letter of Credit’s expiration date if authorized by applicable customs or practices; or any setoff or defense that a UK Facility Obligor may have with respect to any  UK Facility  Obligations. UK Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by UK Borrower or other Person of any obligations under any UK LC Documents. UK Issuing Bank does not make to UK Lenders any express or implied warranty, representation or guaranty with respect to any UK Letter of Credit, UK Facility  Collateral, UK LC Document or UK Facility Obligor. UK Issuing Bank shall not be responsible to any UK Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any UK LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any  UK Facility  Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any UK Facility Obligor.

 

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(d)         No UK Issuing Bank Indemnitee shall be liable to any UK Lender or other Person for any action taken or omitted to be taken in connection with any UK Letter of Credit or UK LC Document except as a result of its gross negligence or willful misconduct. UK Issuing Bank may refrain from taking any action with respect to a UK Letter of Credit until it receives written instructions (and in its discretion, appropriate assurances) from the UK Lenders.

2.3.3     UK Letter of Credit Cash Collateral . Subject to Section  2.1.5 , if at any time (a) an Event of Default exists, (b) the UK Commitment Termination Date has occurred, or (c) the Revolver Termination Date is scheduled to occur within 20 Business Days, then UK Borrower shall, at UK Issuing Bank’s or Agent’s request, Cash Collateralize all outstanding UK Letters of Credit. UK Borrower shall, at UK Issuing Bank’s or Agent’s request at any time, Cash Collateralize the Fronting Exposure of any Defaulting Lender that is a UK Lender. If as a result of fluctuations in Spot Rates or otherwise the Dollar Equivalent of the UK LC Obligations exceeds the UK Letter of Credit Subline, the excess amount shall be payable by the UK Borrower within three (3) Business Days following demand by Agent or the UK Issuing Bank. If UK Borrower fails to provide any Cash Collateral as required hereunder, UK Lenders may (and shall upon direction of Agent) advance, as UK Revolver Loans, the amount of Cash Collateral required (whether or not the UK Revolver Commitments have terminated, a Overadvance exists or the conditions in Section  6 are satisfied).

2.4         U.S. Letter of Credit Facility .

2.4.1         Issuance of U.S. Letters of Credit . U.S. Issuing Bank shall issue U.S. Letters of Credit (which, together with the Existing Letters of Credit, constitute U.S. Letters of Credit) in Dollars, or any other currency acceptable to Agent and U.S. Issuing Bank, from time to time until 30 days prior to the Revolver Termination Date (or until the U.S. Commitment Termination Date, if earlier), on the terms set forth herein, including the following:

(a)         Each U.S. Borrower acknowledges that U.S. Issuing Bank’s issuance of any U.S. Letter of Credit is conditioned upon U.S. Issuing Bank’s receipt of a U.S. LC Application with respect to the requested U.S. Letter of Credit, as well as such other instruments and agreements as U.S. Issuing Bank may customarily require for issuance of a letter of credit of similar type and amount. U.S. Issuing Bank shall have no obligation to issue any U.S. Letter of Credit unless (i) U.S. Issuing Bank receives a U.S. LC Request and U.S. LC Application at least three Business Days prior to the requested date of issuance; (ii) each U.S. LC Condition is satisfied; and (iii) if a Defaulting Lender exists that is a U.S. Lender, such U.S. Lender or U.S. Borrowers have entered into arrangements satisfactory to Agent and U.S. Issuing Bank to eliminate any Fronting Exposure associated with such U.S. Lender. If, in sufficient time to act, U.S. Issuing Bank receives written notice from Agent or Required Lenders that a U.S. LC Condition has not been satisfied, U.S. Issuing Bank shall not issue the requested U.S. Letter of Credit. Prior to receipt of any such notice, U.S. Issuing Bank shall not be deemed to have knowledge of any failure of U.S. LC Conditions.

(b)         U.S. Letters of Credit may be requested by a U.S. Borrower to support obligations incurred in the Ordinary Course of Business, or as otherwise approved by Agent. Increase, renewal or extension of a U.S. Letter of Credit shall be treated as issuance of a new U.S. Letter of Credit, except that U.S. Issuing Bank may require a new U.S. LC Application in its discretion.

(c)         U.S. Borrowers assume all risks of the acts, omissions or misuses of any U.S. Letter of Credit by the beneficiary. In connection with issuance of any U.S. Letter of Credit, none of Agent, U.S. Issuing Bank or any U.S. Lender shall be responsible for the existence,

 

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character, quality, quantity, condition, packing, value or delivery of any goods purported to be represented by any Documents; any differences or variation in the character, quality, quantity, condition, packing, value or delivery of any goods from that expressed in any Documents; the form, validity, sufficiency, accuracy, genuineness or legal effect of any Documents or of any endorsements thereon; the time, place, manner or order in which shipment of goods is made; partial or incomplete shipment of, or failure to ship, any goods referred to in a U.S. Letter of Credit or Document; any deviation from instructions, delay, default or fraud by any shipper or other Person in connection with any goods, shipment or delivery; any breach of contract between a shipper or vendor and a U.S. Borrower; errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex, telecopy, e-mail, telephone or otherwise; errors in interpretation of technical terms; the misapplication by a beneficiary of any U.S. Letter of Credit or the proceeds thereof; or any consequences arising from causes beyond the control of U.S. Issuing Bank, Agent or any U.S. Lender, including any act or omission of a Governmental Authority. The rights and remedies of U.S. Issuing Bank under the Loan Documents shall be cumulative. U.S. Issuing Bank shall be fully subrogated to the rights and remedies of each beneficiary whose claims against U.S. Borrowers are discharged with proceeds of any U.S. Letter of Credit.

(d)         In connection with its administration of and enforcement of rights or remedies under any U.S. Letters of Credit or U.S. LC Documents, U.S. Issuing Bank shall be entitled to act, and shall be fully protected in acting, upon any certification, documentation or communication in whatever form believed by U.S. Issuing Bank, in good faith, to be genuine and correct and to have been signed, sent or made by a proper Person. U.S. Issuing Bank may consult with and employ legal counsel, accountants and other experts to advise it concerning its obligations, rights and remedies, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by such experts. U.S. Issuing Bank may employ agents and attorneys-in-fact in connection with any matter relating to U.S. Letters of Credit or U.S. LC Documents, and shall not be liable for the negligence or misconduct of agents and attorneys-in-fact selected with reasonable care.

(e)         As of the Closing Date, each of the Existing Letters of Credit shall constitute, for all purposes of this Agreement and the other Loan Documents, a U.S. Letter of Credit issued and outstanding hereunder.

2.4.2          U.S. Letter of Credit Reimbursement; U.S. Participations .

(a)         If U.S. Issuing Bank honors any request for payment under a U.S. Letter of Credit, U.S. Borrowers shall pay to U.S. Issuing Bank, on the same day (“ U.S. Reimbursement Date ”), the amount paid by U.S. Issuing Bank under such U.S. Letter of Credit, together with interest at the interest rate for U.S. Base Rate Loans from the U.S. Reimbursement Date until payment by U.S. Borrowers. The obligation of U.S. Borrowers to reimburse U.S. Issuing Bank for any payment made under a U.S. Letter of Credit shall be absolute, unconditional, irrevocable, and joint and several, and shall be paid without regard to any lack of validity or enforceability of any U.S. Letter of Credit or the existence of any claim, setoff, defense or other right that U.S. Borrowers may have at any time against the beneficiary. Whether or not Borrower Agent submits a Notice of Borrowing, U.S. Borrowers shall be deemed to have requested a Borrowing of U.S. Base Rate Loans in an amount necessary to pay all amounts due U.S. Issuing Bank on any U.S. Reimbursement Date and each U.S. Lender shall fund its Pro Rata share of such Borrowing whether or not the U.S. Revolver Commitments have terminated, a U.S. Overadvance exists or is created thereby, or the conditions in Section  6 are satisfied.

 

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(b)         Each U.S. Lender hereby irrevocably and unconditionally purchases from U.S. Issuing Bank, without recourse or warranty, an undivided Pro Rata participation in all U.S. LC Obligations outstanding from time to time. U.S. Issuing Bank is issuing U.S. Letters of Credit in reliance upon this participation. If U.S. Borrowers do not make a payment to U.S. Issuing Bank when due hereunder, Agent shall promptly notify U.S. Lenders and each U.S. Lender shall within one Business Day after such notice pay to Agent, for the benefit of U.S. Issuing Bank, such U.S. Lender’s Pro Rata share of such payment. Upon request by a U.S. Lender, U.S. Issuing Bank shall provide copies of U.S. Letters of Credit and U.S. LC Documents in its possession at such time.

(c)         The obligation of each U.S. Lender to make payments to Agent for the account of U.S. Issuing Bank in connection with U.S. Issuing Bank’s payment under a U.S. Letter of Credit shall be absolute, unconditional and irrevocable, not subject to any counterclaim, setoff, qualification or exception whatsoever, and shall be made in accordance with this Agreement under all circumstances, irrespective of any lack of validity or unenforceability of any Loan Documents; any draft, certificate or other document presented under a U.S. Letter of Credit having been determined to be forged, fraudulent, noncompliant, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; any waiver by U.S. Issuing Bank of a requirement that exists for its protection (and not a U.S. Borrower’s protection) or that does not materially prejudice a U.S. Borrower; any honor of an electronic demand for payment even if a draft is required; any payment of an item presented after a U.S. Letter of Credit’s expiration date if authorized by the UCC or applicable customs or practices; or any setoff or defense that a   U.S.  Facility an Obligor may have with respect to any   U.S.  Facility  Obligations.

U.S. Issuing Bank does not assume any responsibility for any failure or delay in performance or any breach by any U.S. Borrower or other Person of any obligations under any U.S. LC Documents. U.S. Issuing Bank does not make to U.S. Lenders any express or implied warranty, representation or guaranty with respect to any U.S. Letter of Credit,  U.S. Facility  Collateral, U.S. LC Document or U.S. Facility Obligor. U.S. Issuing Bank shall not be responsible to any U.S. Lender for any recitals, statements, information, representations or warranties contained in, or for the execution, validity, genuineness, effectiveness or enforceability of any U.S. LC Documents; the validity, genuineness, enforceability, collectability, value or sufficiency of any  U.S. Facility Collateral or the perfection of any Lien therein; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any U.S. Facility Obligor.

(d)         No U.S. Issuing Bank Indemnitee shall be liable to any U.S. Lender or other Person for any action taken or omitted to be taken in connection with any U.S. Letter of Credit or U.S. LC Document except as a result of its gross negligence or willful misconduct. U.S. Issuing Bank may refrain from taking any action with respect to a U.S. Letter of Credit until it receives written instructions (and in its discretion, appropriate assurances) from the U.S. Lenders.

2.4.3         U.S. Letter of Credit Cash Collateral . Subject to Section  2.1.5 , if at any time (a) an Event of Default exists, (b) the U.S. Commitment Termination Date has occurred, or (c) the Revolver Termination Date is scheduled to occur within 20 Business Days, then U.S. Borrowers shall, at U.S. Issuing Bank’s or Agent’s request, Cash Collateralize all outstanding U.S. Letters of Credit. U.S. Borrowers shall, at U.S. Issuing Bank’s or Agent’s request at any time, Cash Collateralize the Fronting Exposure of any Defaulting Lender that is a U.S. Lender. If U.S. Borrowers fail to provide any Cash Collateral as required hereunder, U.S. Lenders may (and shall upon direction of Agent) advance, as U.S. Revolver Loans, the amount of Cash Collateral required (whether or not the U.S. Revolver Commitments have terminated, a U.S. Overadvance exists or the conditions in Section  6 are satisfied).

 

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2.5         Resignation of Issuing Banks . An Issuing Bank may resign at any time upon notice to Agent and Borrower Agent. From the effective date of such resignation, such Issuing Bank shall have no obligation to issue, amend, renew, extend or otherwise modify any Letter of Credit, but shall continue to have all rights and other obligations of an Issuing Bank hereunder relating to any Letter of Credit issued by it prior to such date. Agent shall promptly appoint a replacement Issuing Bank, which, as long as no Default exists, shall be reasonably acceptable to Borrower Agent.

2.6         Effect of Amendment and Restatement . Upon the execution and delivery of this Agreement, the “Obligations”, under and as defined in the Original Loan Agreement, obligations and other liabilities (including, without limitation, interest, fees and out-of-pocket expenses accrued to the date hereof) governed by the Original Loan Agreement (collectively, the “ Original Obligations ”) shall continue to be in full force and effect, but shall be governed by the terms and conditions set forth in this Agreement and shall be deemed to be  U.S. Facility  Obligations hereunder. The Original Obligations, together with any and all additional  U.S. Facility  Obligations incurred by U.S. Facility Obligors hereunder or under any of the other Loan Documents, shall continue to be secured by all of the U.S. Security Documents provided in connection with the Original Loan Agreement (and, from and after the date hereof, shall be secured by all of the   U.S.  Security Documents provided in connection with this Agreement, whether on the Closing Date or otherwise), all as more specifically set forth in this Agreement and the   U.S.  Security Documents. Each  U.S. Facility  Obligor hereby reaffirms its obligations under each Loan Document (as defined in the Original Loan Agreement, collectively, the “ Original Loan Documents ”) to which it is party, as amended, restated, supplemented or otherwise modified by this Agreement and by the other Loan Documents delivered on the Closing Date. Each Borrower agrees that each such Original Loan Document shall remain in full force and effect following the execution and delivery of this Agreement and that all references to the “Loan Agreement” or “Credit Agreement” in such Original Loan Documents shall be deemed to refer to this Agreement. The execution and delivery of this Agreement shall constitute an amendment, replacement and restatement, but not a novation or repayment, of the Original Obligations.

SECTION 3

INTEREST, FEES AND CHARGES

3.1         Interest .

3.1.1         Rates and Payment of Interest .

(a)         The Canadian Facility Obligations shall bear interest (i) if a Canadian BA Rate Loan, at the Canadian BA Rate for the applicable Interest Period, plus the Applicable Margin pertaining to such Canadian BA Rate Loan; (ii) if a Canadian Prime Rate Loan, at the Canadian Prime Rate in effect from time to time, plus the Applicable Margin pertaining to such Canadian Prime Rate Loan; (iii) if a Canadian Base Rate Loan, at the Canadian Base Rate in effect from time to time, plus the Applicable Margin pertaining to such Canadian Base Rate Loan; (iv) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin pertaining to such LIBOR Loan; and (v) if any other Canadian Facility Obligation (including, to the extent permitted by law, interest not paid when due), at the Canadian Prime Rate in effect from time to time, plus the Applicable Margin for Canadian Prime Rate Loans. The UK Facility Obligations shall bear interest (i) if a UK Base Rate Loan, at the UK Base Rate in effect from time to time, plus the Applicable Margin pertaining to such UK Base Rate Loan; (ii) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin pertaining to such LIBOR Loan; and (iii) if any other UK Facility Obligation (including, to the extent permitted by law, interest not paid when due), at the UK Base Rate in effect from time to

 

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time, plus the Applicable Margin for UK Base Rate Loans. The U.S. Facility Obligations shall bear interest (i) if a U.S. Base Rate Loan, at the U.S. Base Rate in effect from time to time, plus the Applicable Margin pertaining to such U.S. Base Rate Loan; (ii) if a LIBOR Loan, at LIBOR for the applicable Interest Period, plus the Applicable Margin pertaining to such LIBOR Loan; and (iii) if any other U.S. Facility Obligation (including, to the extent permitted by law, interest not paid when due), at the U.S. Base Rate in effect from time to time, plus the Applicable Margin for U.S. Base Rate Loans.

(b)         During an Insolvency Proceeding with respect to any Borrower, or during any other Event of Default if Agent or Required Lenders in their discretion so elect, Obligations shall bear interest at the Default Rate (whether before or after any judgment). Each Borrower acknowledges that the cost and expense to Agent and Lenders due to an Event of Default are difficult to ascertain and that the Default Rate is fair and reasonable compensation for this.

(c)         Interest shall accrue from the date a Loan is advanced or Obligation is incurred or payable, until paid in full by Borrowers. Interest accrued on the Loans shall be due and payable in arrears, (i) on the first day of each month and (ii) on any date of prepayment, with respect to the principal amount of Loans being prepaid. In addition, interest accrued on the (i) Canadian Revolver Loans shall be due and payable on the Canadian Revolver Commitment Termination Date, (ii) UK Revolver Loans shall be due and payable on the UK Revolver Commitment Termination Date and (iii) U.S. Revolver Loans shall be due and payable on the U.S. Revolver Commitment Termination Date. Interest accrued on any other Obligations shall be due and payable as provided in the Loan Documents and, if no payment date is specified, shall be due and payable on demand . Notwithstanding the foregoing, interest accrued at the Default Rate shall be due and payable on demand .

(d)         Interest on the Loans shall be payable in the currency of the underlying Revolver Loan.

3.1.2         Application of LIBOR to Outstanding Loans .

(a)        Borrowers may on any Business Day, subject to delivery of a Notice of Conversion/Continuation and the other terms hereof, elect to convert any portion of any Base Rate Loan funded in Dollars to, or to continue any LIBOR Loan at the end of its Interest Period as, a LIBOR Loan. During any Default or Event of Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a LIBOR Loan.

(b)        Whenever Borrowers within a Borrower Group desire to convert or continue Loans as LIBOR Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m. (Local Time) at least three Business Days before the requested conversion or continuation date. Promptly after receiving any such notice, Agent shall notify each Applicable Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period (which shall be deemed to be 30 days if not specified). If, upon the expiration of any Interest Period for any LIBOR Loan, Borrower Agent shall have failed to deliver a Notice of Conversion/Continuation with respect thereto as required above, the applicable Borrower Group shall be deemed to have elected to convert such Loans into Base Rate Loans. Agent does not

 

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warrant or accept responsibility for, nor shall it have any liability with respect to, administration, submission or any other matter related to any rate described in the definition of LIBOR.

3.1.3     Application of Canadian BA Rate to Outstanding Loans .

(a)         Canadian Borrower may on any Business Day, subject to delivery of a Notice of Conversion/Continuation and the other terms hereof, elect to convert any portion of any Canadian Prime Rate Loan to, or to continue any Canadian BA Rate Loan at the end of its Interest Period as, a Canadian BA Rate Loan. During any Default or Event of Default, Agent may (and shall at the direction of Required Lenders) declare that no Loan may be made, converted or continued as a Canadian BA Rate Loan.

(b)         Whenever Canadian Borrower desires to convert or continue Loans as Canadian BA Rate Loans, Borrower Agent shall give Agent a Notice of Conversion/Continuation, no later than 11:00 a.m. (Local Time) at least three Business Days before the requested conversion or continuation date. Promptly after receiving any such notice, Agent shall notify each Canadian Lender thereof. Each Notice of Conversion/Continuation shall be irrevocable, and shall specify the amount of Loans to be converted or continued, the conversion or continuation date (which shall be a Business Day), and the duration of the Interest Period (which shall be deemed to be 30 days if not specified). If, upon the expiration of any Interest Period for any Canadian BA Rate Loans, Borrower Agent shall have failed to deliver a Notice of Conversion/Continuation with respect thereto as required above, Canadian Borrower shall be deemed to have elected to convert such Loans into Canadian Prime Rate Loans.

3.1.4         Interest Periods .    In connection with the making, conversion or continuation of any Interest Period Loans, the Borrower Agent, on behalf of the applicable Borrower Group, shall select an interest period (“ Interest Period ”) to apply, which Interest Period shall be 30, 60, or 90 days (if available from all Applicable Lenders); provided, however, that:

(a)         the Interest Period shall begin on the date the Loan is made or continued as, or converted into, an Interest Period Loan, and shall expire on the numerically corresponding day in the calendar month at its end;

(b)         if any Interest Period begins on a day for which there is no corresponding day in the calendar month at its end or if such corresponding day falls after the last Business Day of such month, then the Interest Period shall expire on the last Business Day of such month, and if any Interest Period would otherwise expire on a day that is not a Business Day, the period shall expire on the next Business Day; and

(c)         no Interest Period shall extend beyond the Revolver Termination Date (or, in the case of any Loan owing by (i) Canadian Borrower, the Canadian Revolver Commitment Termination Date, (ii) UK Borrower, the UK Revolver Commitment Termination Date or (iii) any U.S. Borrower, the U.S. Revolver Commitment Termination Date, in each case if earlier).

3.1.5         Interest Rate Not Ascertainable . If, due to any circumstance affecting the interbank market, Agent determines that adequate and fair means do not exist for ascertaining LIBOR or the Canadian BA Rate on any applicable date or that any Interest Period is not available on the basis provided herein, then Agent shall immediately notify Borrower Agent of such determination. Until Agent notifies Borrower Agent that such circumstance no longer exists, the obligation of Lenders to make affected LIBOR Loans or Canadian BA Rate Loans, as applicable, shall be suspended and no further

 

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Loans may be converted into or continued as such LIBOR Loans or such Canadian BA Rate Loans, as applicable.

3.2         Fees .

3.2.1         Unused Line Fee .

(a)         Canadian Unused Line Fee . Canadian Borrower shall pay to Agent, for the Pro Rata benefit of Canadian Lenders, a fee equal to the Unused Line Fee Rate times the amount by which the Canadian Revolver Commitments exceed the average daily Canadian Revolver Usage during any month. Such fee shall be payable in arrears, on the first day of each month and on the Canadian Commitment Termination Date.

(b)         UK Unused Line Fee . UK Borrower shall pay to Agent, for the Pro Rata benefit of UK Lenders, a fee equal to the Unused Line Fee Rate times the amount by which the UK Revolver Commitments exceed the average daily UK Revolver Usage during any month. Such fee shall be payable in arrears, on the first day of each month and on the UK Commitment Termination Date.

(c)         U.S. Unused Line Fee . U.S. Borrowers shall pay to Agent, for the Pro Rata benefit of U.S. Lenders, a fee equal to the Unused Line Fee Rate times the amount by which the U.S. Revolver Commitments exceed the average daily U.S. Revolver Usage during any month. Such fee shall be payable in arrears, on the first day of each month and on the U.S. Commitment Termination Date.

3.2.2         LC Facility Fees .

(a)         Canadian LC Facility Fees . Canadian Borrower shall pay (i) to Agent, for the Pro Rata benefit of Canadian Lenders, a fee equal to the Applicable Margin in effect for Canadian BA Rate Loans times the average daily Stated Amount of Canadian Letters of Credit, which fee shall be payable monthly in arrears, on the first day of each month; (ii) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the Stated Amount of each Canadian Letter of Credit, which fee shall be payable monthly in arrears, on the first day of each month; and (iii) to Canadian Issuing Bank, for its own account, all reasonable and customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of Canadian Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (i) shall be increased by 2% per annum.

(b)         UK LC Facility Fees . UK Borrower shall pay (i) to Agent, for the Pro Rata benefit of UK Lenders, a fee equal to the Applicable Margin in effect for LIBOR Revolver Loans times the average daily Stated Amount of UK Letters of Credit, which fee shall be payable monthly in arrears, on the first day of each month; (ii) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the Stated Amount of each UK Letter of Credit, which fee shall be payable monthly in arrears, on the first day of each month; and (iii) to UK Issuing Bank, for its own account, all reasonable and customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of UK Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (i) shall be increased by 2% per annum.

(c)         U.S. LC Facility Fees . U.S. Borrowers shall pay (i) to Agent, for the Pro Rata benefit of U.S. Lenders, a fee equal to the Applicable Margin in effect for LIBOR Revolver

 

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Loans times the average daily Stated Amount of U.S. Letters of Credit, which fee shall be payable monthly in arrears, on the first day of each month; (ii) to Agent, for its own account, a fronting fee equal to 0.125% per annum on the Stated Amount of each U.S. Letter of Credit, which fee shall be payable monthly in arrears, on the first day of each month; and (iii) to U.S. Issuing Bank, for its own account, all reasonable and customary charges associated with the issuance, amending, negotiating, payment, processing, transfer and administration of U.S. Letters of Credit, which charges shall be paid as and when incurred. During an Event of Default, the fee payable under clause (i) shall be increased by 2% per annum.

3.2.3         Fee Letters . Borrowers shall pay all fees set forth in any fee letter executed in connection with this Agreement or the Original Loan Agreement.

3.3         Computation of Interest, Fees, Yield Protection . All interest, as well as fees and other charges calculated on a per annum basis, shall be computed for the actual days elapsed, based on a year of 360 days, or, in the case of interest on Canadian Prime Rate Loans and Canadian BA Rate Loans, on the basis of a 365 day year. Each determination by Agent of any interest, fees or interest rate hereunder shall be final, conclusive and binding for all purposes, absent manifest error. All fees shall be fully earned when due and shall not be subject to rebate, refund or proration. All fees payable under Section  3.2 are compensation for services and are not, and shall not be deemed to be, interest or any other charge for the use, forbearance or detention of money, except to the extent such treatment is inconsistent with any Applicable Law. A certificate as to amounts payable by Borrowers under Section  3.4 , 3.6 , 3.7 , 3.9 or 5.8 , submitted to Borrower Agent by Agent or the affected Lender shall be final, conclusive and binding for all purposes, absent manifest error, and Borrowers shall pay such amounts to the appropriate party within 10 days following receipt of the certificate. For the purpose of complying with the Interest Act (Canada) , it is expressly stated that where interest is calculated pursuant hereto at a rate based upon a period of time different from the actual number of days in the year (for the purposes of this Section, the “first rate”), the yearly rate or percentage of interest to which the first rate is equivalent is the first rate multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by the number of days in the shorter period, and the parties hereto acknowledge that there is a material distinction between the nominal and effective rates of interest and that they are capable of making the calculations necessary to compare such rates and that the calculations herein are to be made using the nominal rate method and not on any basis that gives effect to the principle of deemed reinvestment of interest. “ Each Canadian Domiciled Obligor confirms that it understands and is able to calculate the rate of interest applicable to the  Canadian Facility  Obligations based on the methodology for calculating per annum rates provided in this Agreement. Each Canadian Domiciled Obligor irrevocably agrees not to plead or assert, whether by way of defense or otherwise, in any proceeding relating to this Agreement or any other Loan Document, that the interest payable under this Agreement and the calculation thereof has not been adequately disclosed to the Canadian Domiciled Obligors as required pursuant to Section 4 of the Interest Act (Canada).

3.4         Reimbursement Obligations . Borrowers shall pay all Extraordinary Expenses promptly upon request. Borrowers shall also reimburse Agent and Security Trustees, upon presentation of a summary statement, for all legal, accounting, appraisal, consulting, and other fees, costs and expenses incurred by it in connection with (a) negotiation  and , preparation and administration of any Loan Documents, including any amendment or other modification thereof and the monitoring of the performance of the Parent Borrower and its Affiliates ; (b) administration of and actions relating to any Collateral, Loan Documents and transactions contemplated thereby, including any actions taken to perfect or maintain priority of Agent’s or any Security Trustee’s Liens on any Collateral, to maintain any insurance required hereunder or to verify Collateral; and (c) subject to the limits of Section  10.1.1(b) , each inspection, audit or appraisal with respect to any Obligor or Collateral, whether prepared by Agent’s

 

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personnel or a third party. All legal, accounting and consulting fees shall be charged to Borrowers by Agent’s or the applicable Security Trustee’s professionals at their full hourly rates, regardless of any alternative fee arrangements that Agent, any Security Trustee, any Lender or any of their Affiliates may have with such professionals that otherwise might apply to this or any other transaction. Borrowers acknowledge that counsel may provide Agent or one or more of the Security Trustee’s with a benefit (such as a discount, credit or accommodation for other matters) based on counsel’s overall relationship with Agent or such Security Trustee(s), including fees paid hereunder. If, for any reason (including inaccurate reporting in any Borrower Materials), it is determined that a higher Applicable Margin should have applied to a period than was actually applied, then the proper margin shall be applied retroactively and Borrowers shall immediately pay to Agent, for the ratable benefit of Lenders, an amount equal to the difference between the amount of interest and fees that would have accrued using the proper margin and the amount actually paid. All amounts payable by Borrowers under this Section shall be due on demand.

3.5         Illegality . If any Lender determines that any Applicable Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender to make, maintain or fund Interest Period Loans, or to determine or charge interest rates based upon the Canadian BA Rate or LIBOR, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, a currency in the London interbank market or to purchase, sell, issue or otherwise transact bankers’ acceptances in the Canadian interbank market, then, on notice thereof by such Lender to Agent, any obligation of such Lender to make or continue affected Interest Period Loans or to convert Floating Rate Loans to affected Interest Period Loans shall be suspended until such Lender notifies Agent that the circumstances giving rise to such determination no longer exist. Upon delivery of such notice, Borrower(s) of the affected Borrower Group shall prepay or, if applicable, convert all affected Interest Period Loans of such Lender to Floating Rate Loans, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Interest Period Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Interest Period Loans. Upon any such prepayment or conversion, Borrower(s) of the affected Borrower Group shall also pay accrued interest on the amount so prepaid or converted.

3.6         Inability to Determine Rates . Agent will promptly notify Borrower Agent and the Applicable Lenders if, in connection with any Loan or request for a Loan, (a) Agent determines that (i) deposits or bankers’ acceptances are not being offered to (A) with respect to LIBOR, banks in the London interbank Eurodollar market or (B) with respect to the Canadian BA Rate, banks in the Canadian interbank market, in each case for the applicable Loan amount or Interest Period, or (ii) adequate and reasonable means do not exist for determining LIBOR or the Canadian BA Rate for the Interest Period; or (b) Agent or Required Lenders determine for any reason that LIBOR or the Canadian BA Rate for the Interest Period does not adequately and fairly reflect the cost to the Applicable Lenders of funding the Loan. Thereafter, the Applicable Lenders’ obligations to make or maintain affected Interest Period Loans and utilization of the LIBOR or the Canadian BA Rate component (if affected) in determining any other interest rate applicable to any of the Obligations shall be suspended until Agent (upon instruction by Required Lenders) withdraws the notice. Upon receipt of such notice, Borrower Agent may revoke any pending request for a LIBOR Loan or Canadian BA Rate Loan or, failing that, will be deemed to have requested a Base Rate Loan or a Canadian Prime Rate Loan, respectively.

3.7         Increased Costs; Capital Adequacy .

3.7.1         Increased Costs Generally . If any Change in Law shall:

(a)         impose, modify or deem applicable any reserve, liquidity, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with

 

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or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement reflected in calculating LIBOR or the Canadian BA Rate) or Issuing Bank;

(b)         subject any Recipient to Taxes (other than (i) Indemnified Taxes otherwise indemnifiable under Section  5.8 and (ii) Excluded Taxes) on its Loan, Letter of Credit, Commitment or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(c)         impose on any Lender, Issuing Bank or interbank market any other condition, cost or expense affecting any Loan, Letter of Credit, participation in LC Obligations, Commitment or Loan Document;

and the result thereof shall be to increase the cost to a Lender of making or maintaining any Loan or Commitment, or converting to or continuing any interest option for a Loan, or to increase the cost to a Lender or an Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by a Lender or an Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or such Issuing Bank, the Borrower Group to which such Lender or such Issuing Bank has a Commitment will pay to it such additional amount(s) as will compensate it for the additional costs incurred or reduction suffered.

3.7.2         Capital Requirements . If a Lender or Issuing Bank determines that a Change in Law affecting such Lender or Issuing Bank or its 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, Issuing Bank’s or holding company’s capital as a consequence of this Agreement, or such Lender’s or Issuing Bank’s Commitments, Loans, Letters of Credit or participations in LC Obligations or Loans, to a level below that which such Lender, Issuing Bank or holding company could have achieved but for such Change in Law (taking into consideration its policies with respect to capital adequacy), then from time to time Borrower Group to which such Lender or Issuing Bank has a Commitment will pay to such Lender or Issuing Bank, as the case may be, such additional amounts as will compensate it or its holding company for the reduction suffered.

3.7.3         Canadian BA Rate Loan and LIBOR Loan Reserves . If any Lender is required to maintain reserves with respect to liabilities or assets consisting of or including Canadian Dollar or Eurocurrency funds or deposits, the Borrower Group to which such Lender has a Commitment shall pay additional interest to such Lender on each Canadian BA Rate Loan and LIBOR Loan equal to the costs of such reserves allocated to the Loan by the Lender (as determined by it in good faith, which determination shall be conclusive). The additional interest shall be due and payable on each interest payment date for the Loan; provided, however, that if the Lender notifies Borrower Agent (with a copy to Agent) of the additional interest less than 10 days prior to the interest payment date, then such interest shall be payable 10 days after Borrower Agent’s receipt of the notice.

3.7.4         Compensation . Failure or delay on the part of any Lender or Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of its right to demand such compensation, but Borrowers of a Borrower Group shall not be required to compensate a Lender to such Borrower Group or an Issuing Bank for any increased costs or reductions suffered more than nine months (plus any period of retroactivity of the Change in Law giving rise to the demand) prior to the date that such Lender or such Issuing Bank notifies Borrower Agent of the applicable Change in Law and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor.

 

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3.8         Mitigation . If any Lender gives a notice under Section  3.5 or requests compensation under Section  3.7 , or if Borrowers are required to pay any Indemnified Taxes or additional amounts with respect to a Lender under Section  5.8 , then at the request of Borrower Agent, such Lender shall use reasonable efforts to designate a different Lending Office or to assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (a) would eliminate the need for such notice or reduce amounts payable or to be withheld in the future, as applicable; and (b) would not subject the Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to it or unlawful. Borrowers shall pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

3.9         Funding Losses . If for any reason (a) any Borrowing, conversion or continuation of an Interest Period Loan does not occur on the date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn), (b) any repayment or conversion of an Interest Period Loan occurs on a day other than the end of its Interest Period, (c) any Borrower Group fail to repay an Interest Period Loan when required hereunder, or (d) a Lender (other than a Defaulting Lender) is required to assign an Interest Period Loan prior to the end of its Interest Period pursuant to Section  13.4 , then such Borrower Group shall pay to Agent its customary administrative charge and to each Lender all losses, expenses and fees arising from redeployment of funds or termination of match funding. For purposes of calculating amounts payable under this Section, a Lender shall be deemed to have funded an Interest Period Loan by a matching deposit or other borrowing in the London interbank market or any other applicable market for a comparable amount and period, whether or not the Loan was in fact so funded.

3.10         Maximum Interest . Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by Applicable Law (“ maximum rate ”). If Agent or any Lender shall receive interest in an amount that exceeds the maximum rate, the excess interest shall be applied to the principal of the Obligations of the Borrower Group to which such excess interest relates or, if it exceeds such unpaid principal, refunded to such Borrower Group. In determining whether the interest contracted for, charged or received by Agent or a Lender exceeds the maximum rate, such Person may, to the extent permitted by Applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest; (b) exclude voluntary prepayments and the effects thereof; and (c) amortize, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder. Without limiting the generality of the foregoing provisions of this Section  3.10 , if any provision of any of the Loan Documents would obligate any Canadian Domiciled Obligor to make any payment of interest with respect to the  Canadian Facility  Obligations in an amount or calculated at a rate which would be prohibited by Applicable Law or would result in the receipt of interest with respect to the Canadian Facility  Obligations at a criminal rate (as such terms are construed under the Criminal Code (Canada)), then notwithstanding such provision, such amount or rates shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by the applicable recipient of interest with respect to the  Canadian Facility  Obligations at a criminal rate, such adjustment to be effected, to the extent necessary, as follows: (i) first, by reducing the amount or rates of interest required to be paid by the Canadian Domiciled Obligors to the applicable recipient under the Loan Documents; and (ii) thereafter, by reducing any fees, commissions, premiums and other amounts required to be paid by the Canadian Domiciled Obligors to the applicable recipient which would constitute interest with respect to the  Canadian Facility  Obligations for purposes of Section 347 of the Criminal Code (Canada). Notwithstanding the foregoing, and after giving effect to all adjustments contemplated thereby, if the applicable recipient shall have received an amount in excess of the maximum permitted by that section of the Criminal Code (Canada), then Canadian Domiciled Obligors shall be

 

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entitled, by notice in writing to Agent, to obtain reimbursement from the applicable recipient in an amount equal to such excess, and pending such reimbursement, such amount shall be deemed to be an amount payable by the applicable recipient to the applicable Canadian Domiciled Obligor. Any amount or rate of interest with respect to the  Canadian Facility  Obligations referred to in this Section  3.10 shall be determined in accordance with generally accepted actuarial practices and principles as an effective annual rate of interest over the term that any Canadian Revolver Loan to Canadian Borrower remains outstanding on the assumption that any charges, fees or expenses that fall within the meaning of “interest” (as defined in the Criminal Code (Canada)) shall, if they relate to a specific period of time, be prorated over that period of time and otherwise be prorated over the period from the Closing Date to the date of Full Payment of the  Canadian Facility  Obligations, and, in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries appointed by Agent shall be conclusive for the purposes of such determination.

SECTION 4

LOAN ADMINISTRATION

4.1         Manner of Borrowing and Funding Revolver Loans .

4.1.1         Notice of Borrowing .

(a)         Revolver Loans . Whenever a Borrower Group desires funding of Revolver Loans, Borrower Agent shall give Agent a Notice of Borrowing. Such notice must be received by Agent by 11:00 a.m. (Local Time) (i) on the requested funding date, in the case of Floating Rate Loans, and (ii) at least three Business Days prior to the requested funding date, in the case of Interest Period Loans. Notices received after such time shall be deemed received on the next Business Day. Each Notice of Borrowing shall be irrevocable and shall specify (A) the amount of the Borrowing, (B) the requested funding date (which must be a Business Day), (C) whether the Borrowing is to be made as a U.S. Base Rate Loan or LIBOR Loan, in the case of the U.S. Borrowers, or a Canadian Base Rate Loan, LIBOR Loan, Canadian Prime Rate Loan or Canadian BA Rate Loan, in the case of Canadian Borrower, or a LIBOR Loan or a UK Base Rate Loan, in the case of UK Borrower, (D) in the case of an Interest Period Loan, the applicable Interest Period (which shall be deemed to be 30 days if not specified) and (E) the Borrower Group Commitment under which such Borrowing is proposed to be made and, if such Borrowing is requested for Canadian Borrower, whether such Loan is to be denominated in Dollars or Canadian Dollars and, if such Borrowing is requested for UK Borrower, whether such Loan is to be denominated in Sterling, Dollars or Euros. Notwithstanding anything to the contrary contained herein, given that U.S. Borrowers elected to utilize FILO Loans on the Original Closing Date, all U.S. Revolver Loans outstanding from time to time up to the FILO Amount shall be deemed to be outstanding FILO Loans for all purposes under this  Agreement.

(b)         Deemed Requests for Revolver Loans . Unless payment is otherwise made by a Borrower Group, the becoming due of any Obligation of the Obligor Group to which such Borrower Group belongs (whether principal, interest, fees or other charges, including Extraordinary Expenses, LC Obligations, Cash Collateral and Secured Bank Product Obligations) shall be deemed to be a request for Revolver Loans by such Borrower Group on the due date in the amount due and shall bear interest at the per annum rate applicable hereunder to Base Rate Loans, in the case of such Obligations owing by any Obligor (other than a Canadian Domiciled Obligor), or to Canadian Prime Rate Loans, in the case of such Obligations owing by a Canadian Domiciled Obligor, and the Loan proceeds shall be disbursed as direct payment of such

 

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Obligation. In addition, Agent may, at its option, charge any such amount owed by any Obligor Group against any operating, investment or other account of a Borrower that is a member of such Obligor Group maintained with Agent or any of its Affiliates.

(c)         Controlled Disbursement Accounts . If any Borrower within a Borrower Group maintains a disbursement account with Agent or any of its Affiliates or branches, then presentation for payment in the account of a Payment Item when there are insufficient funds to cover it shall be deemed to be a request for Revolver Loans by such Borrower Group on the presentation date, in the amount of the Payment Item, and shall bear interest at the per annum rate applicable hereunder to Base Rate Loans, in the case of insufficient funds owing by any Obligor (other than a Canadian Domiciled Obligor), or to Canadian Prime Rate Loans, in the case of insufficient funds owing by a Canadian Domiciled Obligor. Proceeds of such Loan may be disbursed directly to such account.

4.1.2         Fundings by Lenders . Except for Borrowings to be made as Swingline Loans, Agent shall endeavor to notify the Applicable Lenders of each Notice of Borrowing (or deemed request for a Borrowing) by 1:00 p.m. on the proposed funding date for a Floating Rate Loan or by 3:00 p.m. at least two Business Days before a proposed funding of an Interest Period Loan. Each Applicable Lender shall fund its Pro Rata share of a Borrowing in immediately available funds not later than 3:00 p.m. on the requested funding date, unless Agent’s notice is received after the times provided above, in which case each Applicable Lender shall fund by 11:00 a.m. on the next Business Day. Subject to its receipt of such amounts from Applicable Lenders, Agent shall disburse the Borrowing proceeds as directed by Borrower Agent. Unless Agent shall have received (in sufficient time to act) written notice from an Applicable Lender that it does not intend to fund its share of a Borrowing, Agent may assume that such Applicable Lender has deposited or promptly will deposit its share with Agent, and Agent may disburse a corresponding amount to the Borrower or Borrowers within such Borrower Group. If an Applicable Lender’s share of a Borrowing or of a settlement under Section  4.1.3(d) is not received by Agent, then the Borrower or Borrowers within such Borrower Group agree to repay to Agent on demand the amount of such share, together with interest thereon from the date disbursed until repaid, at the rate applicable to the Borrowing. A Lender or Issuing Bank may fulfill its obligations under Loan Documents through one or more Lending Offices, and this shall not affect any obligation of Obligors under the Loan Documents or with respect to any Obligations.

4.1.3         Swingline Loans; Settlement .

(a)         Canadian Swingline Loans . To fulfill any request for a Canadian Base Rate Loan or a Canadian Prime Rate Loan hereunder, Canadian Swingline Lender may in its discretion, advance Canadian Swingline Loans to Canadian Borrower, up to an aggregate outstanding amount of $1,000,000. Canadian Swingline Loans shall constitute Canadian Revolver Loans for all purposes, except that payments thereon shall be made to Canadian Swingline Lender for its own account until the Canadian Lenders have funded their participations therein as provided below.

(b)         UK Swingline Loans . To fulfill any request for a UK Base Rate Loan, UK Swingline Lender may in its discretion, advance UK Swingline Loans to UK Borrower, up to an aggregate outstanding amount of $1,000,000. UK Swingline Loans shall constitute UK Revolver Loans for all purposes, except that payments thereon shall be made to UK Swingline Lender for its own account until the UK Lenders have funded their participations therein as provided below.

 

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(c)         US Swingline Loans . To fulfill any request for a U.S. Base Rate Loan, U.S. Swingline Lender may in its discretion, advance U.S. Swingline Loans to U.S. Borrowers, up to an aggregate outstanding amount equal to the difference of (i) $10,000,000 less (ii) the aggregate outstanding amount of all Canadian Swingline Loans and UK Swingline Loans. U.S. Swingline Loans shall constitute U.S. Revolver Loans for all purposes, except that payments thereon shall be made to U.S. Swingline Lender for its own account until the U.S. Lenders have funded their participations therein as provided below.

(d)         Settlement of Loans . Settlement of Loans, including Swingline Loans, among Lenders and Agent shall take place on a date determined from time to time by Agent (but at least weekly, unless the settlement amount is de minimis), on a Pro Rata basis in accordance with the Settlement Report delivered by Agent to Lenders. Between settlement dates, Agent may in its discretion apply payments on Revolver Loans to Swingline Loans (such that payments on Canadian Revolver Loans are applied to Canadian Swingline Loans, payments on UK Revolver Loans are applied to UK Swingline Loans, and payments on U.S. Revolver Loans are applied to U.S. Swingline Loans) regardless of any designation by Borrower Agent or any provision herein to the contrary. Each Canadian Lender, UK Lender and U.S. Lender hereby purchases, without recourse or warranty, an undivided Pro Rata participation in all Canadian Swingline Loans, UK Swingline Loans and U.S. Swingline Loans, respectively, outstanding from time to time until settled. If a Swingline Loan cannot be settled among the Applicable Lenders, whether due to an Obligor’s Insolvency Proceeding or for any other reason, each Applicable Lender shall pay the amount of its participation in the Loan to the applicable Swingline Lender, in immediately available funds, within one Business Day after Agent’s request therefor. Lenders’ obligations to make settlements and to fund participations are absolute, irrevocable and unconditional, without offset, counterclaim or other defense, and whether or not the Commitments have terminated, an Overadvance exists or the conditions in Section  6 are satisfied. When settling any Canadian Revolver Loans and any Canadian Swingline Loans pursuant to this Section  4.1.3(d) , Agent shall act through Bank of America (Canada).

4.1.4         Notices . Borrower Agent may request, convert or continue Loans, select interest rates and transfer funds based on telephonic instructions or e-mailed instructions to Agent, in each case to be confirmed in accordance with this Section  4.1.4 . Borrower Agent shall confirm each such request by prompt delivery to Agent of a Notice of Borrowing or Notice of Conversion/Continuation, if applicable, but if it differs materially from the action taken by Agent or Lenders, the records of Agent and Lenders shall govern. Neither Agent nor any Lender shall have any liability for any loss suffered by a Borrower as a result of Agent or any Lender acting upon its understanding of telephonic or e-mailed instructions from a person believed in good faith by Agent or any Lender to be a person authorized to give such instructions on Borrower Agent’s behalf.

4.2         Defaulting Lender . Notwithstanding anything herein to the contrary:

4.2.1         Reallocation of Pro Rata Share; Amendments . For purposes of determining Lenders’ obligations or rights to fund, participate in or receive collections with respect to Loans and Letters of Credit (including existing Swingline Loans, Protective Advances and LC Obligations), Agent may in its discretion reallocate Pro Rata shares by excluding a Defaulting Lender’s Commitments and Loans from the calculation of shares. A Defaulting Lender shall have no right to vote on any amendment, waiver or other modification of a Loan Document, except as provided in Section  14.1.1(c) .

4.2.2         Payments; Fees . Agent may, in its discretion, receive and retain any amounts payable to a Defaulting Lender under the Loan Documents, and a Defaulting Lender shall be deemed to

 

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have assigned to Agent such amounts until all Obligations owing to Agent, non-Defaulting Lenders and other Secured Parties have been paid in full. Agent may use such amounts to cover the Defaulting Lender’s defaulted obligations, to Cash Collateralize such Lender’s Fronting Exposure, to readvance the amounts to Borrowers or to repay Obligations. A Lender shall not be entitled to receive any fees accruing hereunder while it is a Defaulting Lender and its unfunded Commitment shall be disregarded for purposes of calculating the unused line fee under Section  3.2.1 . If any LC Obligations owing to a Defaulting Lender are reallocated to other Lenders, fees attributable to such LC Obligations under Section  3.2.2 shall be paid to such Lenders. Agent shall be paid all fees attributable to LC Obligations that are not reallocated.

4.2.3         Status; Cure . Agent may determine in its discretion that a Lender constitutes a Defaulting Lender and the effective date of such status shall be conclusive and binding on all parties, absent manifest error. Borrowers, Agent and each Issuing Bank may agree in writing that a Lender has ceased to be a Defaulting Lender, whereupon Pro Rata shares shall be reallocated without exclusion of the reinstated Lender’s Commitments and Loans, and the Revolver Usage and other exposures under the Revolver Commitments shall be reallocated among Lenders and settled by Agent (with appropriate payments by the reinstated Lender, including payment of any breakage costs for reallocated Interest Period Loans) in accordance with the readjusted Pro Rata shares. Unless expressly agreed by Borrowers, Agent and each Issuing Bank, no reinstatement of a Defaulting Lender shall constitute a waiver or release of claims against such Lender. The failure of any Lender to fund a Loan, to make a payment in respect of LC Obligations or otherwise to perform obligations hereunder shall not relieve any other Lender of its obligations under any Loan Document. No Lender shall be responsible for default by another Lender. When settling exposures under the Canadian Revolver Commitments pursuant to this Section  4.2.3 , Agent shall act through Bank of America (Canada).

4.3         Number and Amount of Interest Period Loans; Determination of Rate . Each Borrowing of Interest Period Loans when made shall be in a minimum amount of $1,000,000 (or its Dollar Equivalent in any other currency or Cdn$1,000,000 as regards Canadian BA Rate Loans), plus an increment of $100,000 (or its Dollar Equivalent in any other currency or Cdn$100,000 as regards Canadian BA Rate Loans) in excess thereof. No more than 5 Borrowings of Interest Period Loans may be outstanding at any time with respect to the Borrower Group consisting of U.S. Borrowers, and no more than 2 Borrowings of Interest Period Loans may be outstanding at any time with respect to any other Borrower Group. A ll Interest Period Loans to a Borrower Group having the same length, beginning date of their Interest Periods and currency shall be aggregated together and considered one Borrowing for this purpose. Upon determining Canadian BA Rate or LIBOR for any Interest Period requested by Borrowers within a Borrower Group, Agent shall promptly notify Borrower Agent thereof by telephone or electronically and, if requested by Borrower Agent, shall confirm any telephonic notice in writing (including, without limitation, via a writing transmitted electronically).

4.4         Borrower Agent . Each Obligor hereby designates Parent Borrower (“ Borrower Agent ”) as its representative and agent for all purposes under the Loan Documents, including requests for and receipt of Loans and Letters of Credit, designation of interest rates, delivery or receipt of communications, delivery of Borrower Materials, payment of Obligations, requests for waivers, amendments or other accommodations, actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with Agent, any Security Trustee, any Issuing Bank or any Lender. Borrower Agent hereby accepts such appointment. Agent, Security Trustees, Issuing Banks and Lenders shall be entitled to rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of borrowing) delivered by Borrower Agent on behalf of any Obligor. Agent, Security Trustees, Issuing Banks and Lenders may give any notice or communication with an Obligor to Borrower Agent on behalf of such Obligor. Each of Agent, Security Trustees Issuing

 

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Banks and Lenders shall have the right, in its discretion, to deal exclusively with Borrower Agent for all purposes under the Loan Documents. Each Obligor agrees that any notice, election, communication, delivery, representation, agreement, action, omission or undertaking on its behalf by Borrower Agent shall be binding upon and enforceable against it.

4.5         One Obligation . Without in any way limiting any Guarantee of any Obligor of the Obligations of any other Obligor, (a) the Canadian Revolver Loans, the Canadian LC Obligations and the other Canadian Facility Obligations owing by each Canadian Facility Obligor constitute one general obligation of the Canadian Facility Obligors and (unless otherwise expressly provided in any Loan Document) shall be secured by Agent’s or applicable Security Trustee’s Lien upon all Collateral of each Canadian Facility Obligor, provided that each Credit Party shall be deemed to be a creditor of, and the holder of a separate claim against, each Canadian Facility Obligor to the extent of any Canadian Facility Obligations jointly or severally owed by such Canadian Facility Obligor to such Credit Party, (b) the UK Revolver Loans, the UK LC Obligations and the other UK Facility Obligations owing by each UK Facility Obligor constitute one general obligation of the UK Facility Obligors and (unless otherwise expressly provided in any Loan Document) shall be secured by Agent’s and UK Security Trustee’s Lien upon all Collateral of each UK Facility Obligor, provided that each Credit Party shall be deemed to be a creditor of, and the holder of a separate claim against, each UK Facility Obligor to the extent of any UK Facility Obligations owed by such UK Facility Obligor to such Credit Party and (c) the U.S. Revolver Loans, the U.S. LC Obligations and the other U.S. Facility Obligations owing by each U.S. Facility Obligor constitute one general obligation of the U.S. Facility Obligors and (unless otherwise expressly provided in any Loan Document) shall be secured by Agent’s or the applicable Security Trustee’s Lien upon all Collateral of each U.S. Facility Obligor, provided that each Credit Party shall be deemed to be a creditor of, and the holder of a separate claim against, each U.S. Facility Obligor to the extent of any U.S. Facility Obligations jointly or severally owed by such U.S. Facility Obligor to such Credit Party.

4.6         Effect of Termination . On the effective date of the termination of all Commitments, all Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products; provided that (a) on the effective date of the termination of all Canadian Revolver Commitments, all Canadian Facility Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products provided for the account of Canadian Domiciled Obligors and their Affiliates domiciled in Canada, (b) on the effective date of the termination of all UK Revolver Commitments, all UK Facility Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products provided for the account of UK Domiciled Obligors and their Affiliates domiciled in the UK, and (c) on the effective date of the termination of all U.S. Revolver Commitments, all U.S. Facility Obligations shall be immediately due and payable, and each Secured Bank Product Provider may terminate its Bank Products provided for the account of U.S. Domiciled Obligors and their Affiliates domiciled in the U.S. Until Full Payment of all Obligations, all undertakings of Borrowers contained in the Loan Documents shall continue, and Agent and Security Trustees shall retain their Liens in the Collateral and all of their rights and remedies under the Loan Documents. Agent and Security Trustees shall not be required to terminate their Liens unless Agent or a Security Trustee receives Cash Collateral or a written agreement, in each case satisfactory to Agent, protecting Agent and Lenders from dishonor or return of any Payment Item previously applied to the Obligations. Sections 2.2 , 2.3 , 2.4 , 3.4 , 3.6 , 3.7 , 3.9 , 5.4 , 5.8 , 5.9 , 12 , 14.2 , this Section, and each indemnity or waiver given by an Obligor or Lender in any Loan Document, shall survive Full Payment of the Obligations.

 

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4.7         Limitation on Borrowings .

4.7.1    Notwithstanding anything to the contrary contained herein, each of the parties hereto acknowledge and agree that maximum principal amount of U.S. Revolver Loans and/or U.S. LC Obligations which Parent Borrower shall be entitled to have outstanding at any time under this Agreement for its own account (and not for the account of any other U.S. Borrower) shall not exceed $2,500,000 in the aggregate; it being understood and agreed by each of the parties hereto that any Borrowing and/or Letter of Credit requested by Parent Borrower in its capacity as Borrower Agent which exceed the above noted limitation shall be Borrowings and/or Letters of Credit for the account of one or more of the other Borrowers and not for the account of Parent Borrower; provided that nothing set forth in this Section shall in any way affect or limit the duties and obligations of each Borrower with respect to the Obligations set forth in Section  5.10 .

4.7.2    Agent and Lenders shall have the right, at any time in their Permitted Discretion, to condition Loans and Letters of Credit upon a separate calculation of borrowing availability for each Borrower and to restrict the disbursement and use of Loans and Letters of Credit to a Borrower based on that calculation.

SECTION 5

PAYMENTS

5.1         General Payment Provisions . All payments of Obligations shall be made without offset, counterclaim or defense of any kind, free and clear of (and without deduction for) any Taxes, and in immediately available funds, not later than 12:00 (Local Time) on the due date. Any payment after such time shall be deemed made on the next Business Day. Any payment of an Interest Period Loan prior to the end of its Interest Period shall be accompanied by all amounts due under Section  3.9 . Borrowers agree that Agent shall have the continuing, exclusive right to apply and reapply payments and proceeds of Collateral against the Obligations, in such manner as Agent deems advisable  (so long as such application or reapplication could not reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section  956 of the Code) , but whenever possible, any prepayment of Loans shall be applied first to Floating Rate Loans and then to Interest Period Loans. All payments with respect to any Obligation shall be made in the currency of the underlying Obligation. Any payment made contrary to the requirements of the preceding sentence shall be subject to the terms of Section  5.11 . If any payment under the Loan Documents shall be stated to be due on a day other than a Business Day, the due date shall be extended to the next Business Day and such extension of time shall be included in any computation of interest and fees.

5.2         Repayment of Revolver Loans . Canadian Facility Obligations shall be due and payable in full on the Canadian Commitment Termination Date, UK Facility Obligations shall be due and payable in full on the UK Commitment Termination Date and U.S. Facility Obligations shall be due and payable in full on the U.S. Commitment Termination Date, in each case unless payment is sooner required hereunder. Revolver Loans may be prepaid from time to time, without penalty or premium. Subject to Section  2.1.5 , if an Overadvance exists at any time (including, without limitation, with respect to the U.S. Revolver Loans as the result of a scheduled reduction in the FILO Amount) , the Borrower Group owing such Overadvance shall, on the sooner of Agent’s demand or the first Business Day after any Borrower of such Borrower Group has knowledge thereof, repay Revolver Loans in an amount sufficient to reduce Revolver Usage of such Borrower Group to the Borrowing Base of such Borrower Group. If any Asset Disposition includes the disposition of Inventory, Accounts or Revolver Priority Collateral, the Obligor Group that includes the Obligor(s) that made such Asset Disposition shall apply the Net Proceeds of such

 

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Asset Disposition to repay the Revolver Loans of the Borrower Group(s) included within such Obligor Group (if more than one Borrower Group is included in such Obligor Group, such Net Proceeds shall be applied ratably to repay the Revolver Loans of such Borrower Groups , but in no event shall Net Proceeds of Asset Dispositions made by Foreign Obligors be applied to the Obligations of the U.S. Borrowers if such application could reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section  956 of the Code ) equal to the greater of (a) the net book value of such Inventory, Accounts and Revolver Priority Collateral, or (b) the reduction in Borrowing Base of such Borrower Group(s) resulting from the disposition (if there is no such reduction, the amount described in this clause (b) shall be deemed to be zero).

5.3         Payment of Other Obligations . Obligations other than Loans, including LC Obligations and Extraordinary Expenses, shall be paid by Borrowers as provided in the Loan Documents or, if no payment date is specified, on demand.

5.4         Marshaling; Payments Set Aside . None of Agent, Security Trustees, Issuing Banks or Lenders shall be under any obligation to marshal any assets in favor of any Obligor or against any Obligations. If any payment by or on behalf of any Borrower or Borrowers is made to Agent, any Security Trustee, any Issuing Bank or any Lender, or if Agent, any applicable Security Trustee, any Issuing Bank or any Lender exercises a right of setoff, and any of such payment or setoff is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by Agent, a Security Trustee, an Issuing Bank or a Lender in its discretion) to be repaid to a Creditor Representative or any other Person, then the Obligation originally intended to be satisfied, and all Liens, rights and remedies relating thereto, shall be revived and continued in full force and effect as if such payment or setoff had not occurred.

5.5         Application and Allocation of Payments .

5.5.1             Application . Payments made by a Borrower Group (or any member thereof) hereunder shall be applied (a) first, as specifically required hereby; (b) second, to Obligations of such Borrower Group then due and owing; (b) third, to other Obligations specified by Borrower Agent; and (c) fourth, as determined by Agent in its Permitted Discretion . Any payment of the U.S. Revolver Loans shall be applied first to the U.S. Revolver Loans that are not FILO Loans until repaid in full, and then to FILO  Loans .

5.5.2             Post-Default Allocation . Notwithstanding anything in any Loan Document to the contrary, but subject to the Intercreditor Agreement, during an Event of Default, monies to be applied to the Obligations, whether arising from payments by Obligors, realization on Collateral, setoff or otherwise, shall be allocated as follows:

(a)        with respect to monies, payments, Property or Collateral of or from the Canadian Domiciled Obligors, together with any allocations pursuant to subclause (x) of any other clause of this Section  5.5.2 :

(i)         first , to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent or any Security Trustee, to the extent owing by any of with respect to the Canadian Domiciled Obligors Facility Obligations ;

(ii)         second , to all amounts owing to Canadian Swingline Lender or Agent on Canadian Swingline Loans, Canadian Protective Advances, and Canadian Revolver Loans and participations that a Defaulting Lender has failed to settle or fund;

 

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(iii)        third , to all amounts owing to Canadian Issuing Bank on Canadian LC Obligations;

(iv)        fourth , to all Canadian Facility Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing by any of the Canadian Domiciled Obligors to Lenders (exclusive of any UK Facility Obligations which are guaranteed by the Canadian Domiciled Obligors) to any Secured Party ;

(v)         fifth , to all Canadian Facility Obligations (other than Secured Bank Product Obligations) constituting interest owing by any of the Canadian Domiciled Obligors (exclusive of any UK Facility Obligations which are guaranteed by the Canadian Domiciled Obligors) to any Secured Party ;

(vi)        sixth , to Cash Collateralize all Canadian LC Obligations;

(vii)       seventh , to all Canadian Revolver Loans, and to Secured Bank Product Obligations of Canadian Domiciled Obligors arising under Hedging Agreements (including Cash Collateralization thereof , but excluding any such Secured Bank Product Obligation which is a UK Facility Obligation guaranteed by any of the Canadian Domiciled Obligors ) up to the amount of Canadian Availability Reserves existing therefor;

(viii)      eighth , to all other Secured Bank Product Obligations of any of the Canadian Domiciled Obligors  (but excluding any such Secured Bank Product Obligation which is a UK Facility Obligation guaranteed by any of the Canadian Domiciled Obligors) ;

(ix)        ninth , to all other Canadian Facility Obligations   (exclusive  of any UK Facility Obligations which are guaranteed by any of the Canadian Domiciled Obligors) ; and

(x)         tenth , to be applied ratably to all other  Foreign Facility Obligations as determined by Agent in its Permitted Discretion .

(b)        with respect to monies, payments, Property or Collateral of or from the UK Domiciled Obligors and/or Mexican Domiciled Obligors , together with any allocations pursuant to subclause (x) of any other clause of this Section  5.5.2 :

(i)          first , to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent or any Security Trustee, with respect to the extent owing by any of the UK Domiciled Obligors UK Facility Obligations ;

(ii)         second , to all amounts owing to UK Swingline Lender or Agent on UK Swingline Loans, UK Protective Advances, and UK Revolver Loans and participations that a Defaulting Lender has failed to settle or fund;

(iii)        third , to all amounts owing to UK Issuing Bank on UK LC Obligations;

 

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(iv)       fourth , to all UK Facility Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing by any of the UK Domiciled Obligors to Lenders (exclusive of any Canadian Facility Obligations which are guaranteed by the UK Domiciled Obligors) to any Secured Party ;

(v)        fifth , to all UK Facility Obligations (other than Secured Bank Product Obligations) constituting interest owing by any of the UK Domiciled Obligors (exclusive of any Canadian Facility Obligations which are guaranteed by the UK Domiciled Obligors) to any Secured Party ;

(vi)       sixth , to Cash Collateralize all UK LC Obligations;

(vii)      seventh , to all UK Revolver Loans, and to Secured Bank Product Obligations of UK Domiciled Obligors arising under Hedging Agreements (including Cash Collateralization thereof , but excluding any such Secured Bank Product Obligation which is a Canadian Facility Obligation guaranteed by any of the UK Domiciled Obligors ) up to the amount of UK Availability Reserves existing therefor;

(viii)     eighth , to all other Secured Bank Product Obligations of any of the UK Domiciled Obligors  (but excluding any such Secured Bank Product Obligation which is a Canadian Facility Obligation guaranteed by any of the UK Domiciled Obligors) ;

(ix)       ninth , to all other UK Facility Obligations  (exclusive of (exclusive of  any Canadian Facility Obligations which are guaranteed by any of the UK Domiciled Obligors) ; and

(x)        tenth , to be applied ratably to all other  Foreign Foreign  Facility Obligations as determined by Agent in its Permitted Discretion .

(c)        with respect to monies, payments, Property or Collateral of or from the U.S. Domiciled Obligors, together with any allocations pursuant to subclause (x) of any other clause of this Section  5.5.2 :

(i)         first , to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent or any Security Trustee , with respect to the extent owing by any of the U.S. Obligors U.S. Facility Obligations ;

(ii)        second , to all amounts owing to U.S. Swingline Lender or Agent on U.S. Swingline Loans, U.S. Protective Advances, and U.S. Revolver Loans and participations that a Defaulting Lender has failed to settle or fund;

(iii)       third , to all amounts owing to U.S. Issuing Bank on U.S. LC Obligations;

(iv)        fourth , to all U.S. Facility Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing by any of the U.S. Obligors to Lenders (exclusive of any Foreign Facility Obligations which are guaranteed by the U.S. Obligors) to any Secured Party ;

 

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(v)        fifth , to all U.S. Facility Obligations (other than Secured Bank Product Obligations) constituting interest owing by any of the U.S. Obligors (exclusive of any Foreign Facility Obligations which are guaranteed by the U.S. Obligors) to any Secured Party ;

(vi)       sixth , to Cash Collateralize all U.S. LC Obligations;

(vii)      seventh , to all U.S. Revolver Loans, and to Secured Bank Product Obligations of U.S. Obligors arising under Hedging Agreements (including Cash Collateralization thereof , but excluding any such Secured Bank Product Obligation which is a Foreign Facility Obligation guaranteed by any of the U.S. Obligors ) up to the amount of U.S. Availability Reserves existing therefor;

(viii)     eighth , to all other Secured Bank Product Obligations of any of the U.S. Obligors  (but excluding any such Secured Bank Product Obligation which is a Foreign Facility Obligation guaranteed by any of the U.S. Obligors) ;

(ix)       ninth , to all other U.S. Facility Obligations   (exclusive  of  any Foreign Facility Obligations which are guaranteed by any of the U.S. Obligors) ; and

(x)        tenth , to be applied ratably to all other Obligations as determined by Agent in its Permitted Discretion .

(d)        with respect to monies, payments, Property or Collateral of or from the Foreign Obligors that are neither not Canadian Domiciled Obligors  nor , Mexican Domiciled Obligors or UK Domiciled Obligors, in each case to be applied ratably:

(i)         first , to all fees, indemnification, costs and expenses, including Extraordinary Expenses, owing to Agent or any Security Trustee, to the extent owing by Foreign Obligors owing with respect to all Obligations ;

(ii)        second , (A )  to all amounts owing to U.S. Swingline Lender or Agent on U.S. Swingline Loans, U.S. Protective Advances, and U.S. Revolver Loans and participations that a Defaulting Lender has failed to settle or fund, (B ) to all amounts owing to Canadian Swingline Lender or Agent on Canadian Swingline Loans, Canadian Protective Advances, Canadian Revolver Loans and participations that a Defaulting Lender has failed to settle or fund and ( B C ) to all amounts owing to UK Swingline Lender or Agent on UK Swingline Loans, UK Protective Advances, UK Revolver Loans and participations that a Defaulting Lender has failed to settle or fund;

(iii)       third , to all amounts owing to U.S. Issuing Bank on U.S. LC Obligations, all amounts owing to Canadian Issuing Bank on Canadian LC Obligations and all amounts owing to UK Issuing Bank on UK LC Obligations;

(iv)       fourth , to all   Foreign  Facility  Obligations (other than Secured Bank Product Obligations) constituting fees, indemnification, costs or expenses owing by any of the Foreign  Obligors to Lenders;

(v)        fifth , to all Foreign Facility Obligations (other than Secured Bank Product Obligations) constituting interest owing by any of the Foreign  Obligors;

 

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(vi)       sixth , to Cash Collateralize all U.S. LC Obligations, Canadian LC Obligations and all UK LC Obligations;

(vii)      seventh , to all U.S. Revolver Loans, all Canadian Revolver Loans, all UK Revolver Loans and to Secured Bank Product Obligations of Foreign  Obligors arising under Hedging Agreements (including Cash Collateralization thereof) up to the amount of U.S. Availability Reserves, Canadian Availability Reserves or UK Availability Reserves, as applicable, existing therefor;

(viii)     eighth , to all other Secured Bank Product Obligations of any of the Foreign  Obligors; and

(ix)       ninth , to be applied ratably to all other   Foreign  Facility Obligations as determined by Agent in its Permitted Discretion .

Amounts shall be applied to payment of each category of Obligations set forth within subsections (a) through (d) above, as applicable, only after Full Payment of amounts payable from time to time under all preceding categories set forth within such subsection. If amounts are insufficient to satisfy a category, they shall be paid ratably among outstanding Obligations in the category. Monies and proceeds obtained from an Obligor shall not be applied to its Excluded Swap Obligations, but appropriate adjustments shall be made with respect to amounts obtained from other Obligors to preserve the allocations in any applicable category. Agent shall have no obligation to calculate the amount of any Secured Bank Product Obligation and may request a reasonably detailed calculation thereof from a Secured Bank Product Provider. If the provider fails to deliver the calculation within five days following request, Agent may assume the amount is zero. The allocations set forth in this Section are solely to determine the rights and priorities among Secured Parties, and may be changed by agreement of the affected Secured Parties, without the consent of any Obligor  (so long as such change could not reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section  956 of the Code) . This Section is not for the benefit of or enforceable by any Obligor, and each Borrower irrevocably waives the right to direct the application of any payments or Collateral proceeds subject to this Section.  Any amount applied to the U.S. Revolver Loans shall be applied first to the U.S. Revolver Loans that are not FILO Loans until repaid in full, and then to FILO  Loans.

5.5.3         Erroneous Application . Agent shall not be liable for any application of amounts made by it in good faith and, if any such application is subsequently determined to have been made in error, the sole recourse of any Lender or other Person to which such amount should have been made shall be to recover the amount from the Person that actually received it (and, if such amount was received by a Secured Party, the Secured Party agrees to return it).

5.6         Dominion Account . The available amount in the Dominion Accounts of each Borrower as of the end of a Business Day shall be applied to the Obligations of the Obligor Group to which such Borrower belongs at the beginning of the next Business Day during any Dominion Trigger Period; provided that during any Dominion Trigger Period, Obligors shall cause all amounts in excess of $400,000 in the aggregate in the deposit accounts Deposit Accounts of Canadian Borrower (taken as a whole) to be wire transferred in immediately available funds no later than the Business Day after exceeding such threshold as follows: (i) to the extent such monies are in U.S. Dollars, to the New York Account, and (ii) to the extent such monies are in Canadian Dollars, to the Toronto Account. All such amounts shall be applied to the Canadian Facility Obligations. Notwithstanding the foregoing, during the Senior Term Period, (i) the Obligors shall not have any obligation to deposit any proceeds of any Senior Term Loan into a Dominion Account or otherwise cause the same to be applied to the Obligations while any Dominion Trigger Period is in effect and (ii) so long as no Event of Default shall have occurred and

 

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be continuing, Agent shall not initiate a sweep of balances in (A) the operating account of Horizon Global Company LLC ending in ’89, (B) the account of Cequent UK Limited ending in ‘7981 or (C) the account of Cequent UK Limited ending in ‘2002. If a credit balance results from such application, it shall not accrue interest in favor of Borrowers and shall be made available to Borrowers of the applicable Borrower Group as long as no Default exists.

5.7         Account Stated . Agent shall maintain, in accordance with its customary practices, loan account(s) evidencing the Debt of Borrowers hereunder. Any failure of Agent to record anything in a loan account, or any error in doing so, shall not limit or otherwise affect the obligation of Borrowers to pay any amount owing hereunder. Entries made in a loan account shall constitute presumptive evidence of the information contained therein. If any information contained in a loan account is provided to or inspected by any Person, the information shall be conclusive and binding on such Person for all purposes absent manifest error, except to the extent such Person notifies Agent in writing within 30 days after receipt or inspection that specific information is subject to dispute.

5.8         Taxes .

5.8.1             Payments Free of Taxes; Obligation to Withhold; Tax Payment .

(a)        All payments of Obligations by Obligors shall be made without deduction or withholding for any Taxes, except as required by Applicable Law. If Applicable Law requires the deduction or withholding of any Tax from any such payment by Agent or an Obligor, then Agent or such Obligor shall be entitled to make such deduction or withholding based on information and documentation provided pursuant to Section  5.9 .

(b)        If Agent or any Obligor is required by the Code to withhold or deduct Taxes, including backup withholding and withholding taxes, from any payment, then (i) Agent shall pay the full amount that it determines is to be withheld or deducted to the relevant Governmental Authority pursuant to the Code, and (ii) to the extent the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(c)        If Agent or any Obligor is required by any Applicable Law other than the Code to withhold or deduct Taxes, including backup withholding and withholding taxes, from any payment, then (i) Agent or such Obligor, as required by Applicable Law, shall pay the full amount that it determines is to be withheld or deducted to the relevant Governmental Authority pursuant to such Applicable Law, and (ii) to the extent the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Obligor shall be increased as necessary so that the Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

5.8.2             Payment of Other Taxes . Without limiting the foregoing, Borrowers shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at Agent’s option, timely reimburse Agent for payment of, any Other Taxes.

5.8.3             Tax Indemnification .

(a)        Each Obligor shall indemnify and hold harmless, on a joint and several basis, each Lender, each Security Trustee and Agent against any Indemnified Taxes (including those imposed or asserted on or attributable to amounts payable under this Section) payable or

 

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paid by a Lender, a Security Trustee or Agent or required to be withheld or deducted from a payment to a Lender, a Security Trustee or Agent, in each case with respect to any Obligations of the Obligor Group to which such Obligor belongs, 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. The applicable Obligor shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate as to the amount of such payment or liability delivered to Borrower Agent by a Lender, a Security Trustee (in each of the foregoing cases, with a copy to Agent) or Agent on its own behalf shall be conclusive absent manifest error.

(b)        Each Lender shall indemnify and hold harmless, on a several basis, (i) Agent against any Indemnified Taxes attributable to such Lender (but only to the extent Borrowers have not already paid or reimbursed Agent therefor and without limiting Borrowers’ obligation to do so), (ii) Agent and Borrowers, as applicable, against any Taxes attributable to such Lender’s failure to maintain a Participant register as required hereunder, and (iii) Agent and Borrowers, as applicable, against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Agent or a Borrower in connection with any Obligations, 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. Each Lender shall make payment within 10 days after demand for any amount or liability payable under this Section. A certificate as to the amount of such payment or liability delivered to any Lender by Agent or the Borrower Agent shall be conclusive absent manifest error.

5.8.4         United Kingdom Tax Matters . The provisions of Section  5.8 (other than this Section  5.8.4 ) and Section  5.9.1 shall not apply, and instead the provisions of this Section  5.8.4 shall apply, to any advance under any Loan Document to UK Borrower (the “ Relevant Borrower ” for the purposes of this Section  5.8.4 ). For the avoidance of doubt, this Section  5.8.4 shall not apply to any advance under any Loan Document to any Borrower other than UK Borrower.

(a)         Definitions . Solely for the purposes of this Section  5.8.4 , the following terms shall have the following meanings:

FATCA Deduction : a deduction or withholding from a payment under a Loan Document required by FATCA.

Qualifying Lender :

(a)        a Lender (other than a Lender within clause (b) of the definition of Qualifying Lender) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Loan Document and is:

(i)         a Lender;

(A)        that is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Loan Document; or

(B)        in respect of an advance under a Loan Document by a Person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that such advance under a Loan Document was made,

 

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and, in each case, which is within the charge to United Kingdom Corporation Tax with respect to any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or

(ii)        a Lender which is:

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

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

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

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

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

(iii)      a Treaty Lender; or

(b)a        a building society (as defined for the purposes of section 880 of the ITA) making an dvance.

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

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

(b)        a partnership each member of which is:

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

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

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

Tax Credit : a credit against, relief or remission for, or repayment of, any Tax.

 

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Tax Deduction : a deduction or withholding for or on account of Tax from a payment under a Loan Document, other than a FATCA Deduction.

Tax Payment : either the increase in a payment made by an Obligor to a Lender or Agent under Section  5.8.4(b) or 5.8.4(c) .

Treaty State : a jurisdiction having a Treaty with the United Kingdom which makes provision for full exemption from Tax imposed by the United Kingdom on interest.

UK Non-Bank Lender :

(a)        a Lender (which falls within clause (a)(ii) of the definition of Qualifying Lender) which is a party to this Agreement and which has provided a Tax Confirmation to Agent; and

(b)        where a Lender becomes a party after the Closing Date, an Eligible Assignee which gives a Tax Confirmation in the Assignment which it executes on becoming a party hereunder.

(b)         Tax Gross-up .

(i)        Each Relevant Borrower shall make all payments to be made by it under any Loan Document without any Tax Deduction unless a Tax Deduction is required by Applicable Law.

(ii)       A Relevant Borrower shall, promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify Agent accordingly. Similarly, a Lender shall promptly notify Agent on becoming so aware in respect of a payment payable to that Lender. If Agent receives such notification from a Lender it shall notify the Relevant Borrower.

(iii)      If a Tax Deduction is required by Applicable Law to be made by a Relevant Borrower, the amount of the payment due from that Relevant Borrower shall be increased to an amount which (after making any Tax Deduction) is equal to the payment which would have been made by the Relevant Borrower if no Tax Deduction had been required.

(iv)       A payment shall not be increased under clause (iii) above by reason of a Tax Deduction on account of Taxes imposed by the United Kingdom if, on the date on which the payment falls due:

(A)        the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or

(B)        the relevant Lender is a Qualifying Lender solely by virtue of clause (a)(ii) of the definition of Qualifying Lender, and:

(1)        an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a “ Direction ”) under section 931 of the ITA which

 

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relates to the payment and that Lender has received from the Relevant Borrower making the payment a certified copy of that Direction; and

(2)        the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or

(C)        the relevant Lender is a Qualifying Lender solely by virtue of clause (a)(ii) of the definition of Qualifying Lender and:

(1)        the relevant Lender has not given a Tax Confirmation to the Relevant Borrower; and

(2)        the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Relevant Borrower, on the basis that the Tax Confirmation would have enabled the Relevant Borrower to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA; or

(D)        the relevant Lender is a Treaty Lender and the Relevant Borrower making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under clause (b)(vii) , (b)(xi) or (f)(i) (as applicable) below.

(v)        If a Relevant Borrower is required to make a Tax Deduction, that Relevant Borrower shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

(vi)      Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Relevant Borrower making that Tax Deduction shall deliver to Agent for the benefit of the Lender entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Lender that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

(vii)     A Treaty Lender and each Relevant Borrower which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Relevant Borrower to obtain authorization to make that payment without a Tax Deduction.

(viii)    Nothing in clause (b)(vii) above shall require a Treaty Lender to:

(A)        register under the HMRC DT Treaty Passport scheme;

(B)        apply the HMRC DT Treaty Passport scheme to any advance if it has so registered; or

(C)        file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport Scheme to apply to this Agreement in accordance with subsections (b)(xi) or (f)(i) (HMRC DT Treaty Passport scheme confirmation) and the Relevant Borrower making that payment has not complied with its

 

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obligations under subsections (b)(xii) or (f)(ii) (HMRC DT Treaty Passport scheme confirmation).

(ix)      A UK Non-Bank Lender which becomes a party on the day on which this Agreement is entered into gives a Tax Confirmation to Agent by entering into this Agreement.

(x)       A UK Non-Bank Lender shall promptly notify Agent and the Relevant Borrower if there is any change in the position from that set out in the Tax Confirmation.

(xi)      A Treaty Lender which becomes a party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of Agent and without liability to any Relevant Borrower) by notifying Agent and the Relevant Borrower of its scheme reference number and its jurisdiction of Tax residence.

(xii)     Where a Lender notifies Agent and the Relevant Borrower as described in clause (b)(xi) above each Relevant Borrower shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date of this Agreement and shall promptly provide the Lender with a copy of that filing.

(xiii)     If a Lender has not included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with clause (b)(xi) above or clause (f)(i) (HMRC DT Treaty Passport scheme confirmation), no Relevant Borrower shall file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lender’s advance or its participation in any advance.

(c)         Tax Indemnity .

(i)        The Relevant Borrowers shall (within three (3) Business Days of demand by Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Taxes by that Protected Party in respect of a Loan Document.

(ii)        Clause (c)(i) above shall not apply:

(A)        with respect to any Taxes that are described in clause (a) of the definition of Excluded Taxes; or

(B)        to the extent a loss, liability or cost:

(1)        is compensated for by an increased payment under Section  5.8.4(b)(iii) ;

 

(2)        would have been compensated for by an increased payment under Section  5.8.4(b)(iii) but was not so compensated solely because one of the exclusions in Section  5.8.4(b)(iv) applied; or

(3)        relates to a FATCA Deduction.

 

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(iii)       A Protected Party making, or intending to make a claim under Section 5.8.4(c)(i) above shall promptly notify Agent of the event which will give, or has given, rise to the claim, following which Agent shall notify the Borrower Agent.

(iv)       A Protected Party shall, on receiving a payment from the Relevant Borrowers under this Section  5.8.4(c) , notify Agent.

(d)         Tax Credit . If a Relevant Borrower makes a Tax Payment and the relevant Protected Party determines that:

(i)        a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment; and

(ii)      that Protected Party has obtained and utilized that Tax Credit,

the relevant Protected Party shall pay an amount to the Relevant Borrower which that Protected Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Relevant Borrower.

(e)         Lender Status Confirmation . Each New Lender shall indicate, in the Assignment which it executes on becoming a party, and for the benefit of Agent and without liability to any Relevant Borrower, which of the following categories it falls within:

(i)          not a Qualifying Lender;

(ii)         a Qualifying Lender (other than a Treaty Lender); or

(iii)        a Treaty Lender.

If a New Lender fails to indicate its status in accordance with this Section  5.8.4(e) , then such New Lender or Lender (as appropriate) shall be treated for the purposes of this Agreement (including by each Relevant Borrower) as if it is not a Qualifying Lender until such time as it notifies Agent which category of Qualifying Lender applies (and Agent, upon receipt of such notification, shall inform the Relevant Borrower). For the avoidance of doubt, an Assignment shall not be invalidated by any failure of a New Lender to comply with this Section  5.8.4(e) .

(f)         HMRC DT Treaty Passport Scheme Confirmation .

(i)          A New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of Agent and without liability to any Relevant Borrower) in the Assignment which it executes by including its scheme reference number and its jurisdiction of Tax residence in that Assignment.

(ii)          Where an Assignment includes the indication described in clause (f)(i) above in the relevant Assignment, each Relevant Borrower which is a party as a Borrower as at the date that the relevant Assignment is executed (the “ HMRC Transfer Date ”) shall file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of that HMRC Transfer Date and shall promptly provide the Lender with a copy of that filing.

 

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(g)         United Kingdom Stamp Taxes . The Relevant Borrowers shall pay and, within three (3) Business Days of demand, indemnify each Lender against any cost, loss or liability that Lender incurs in relation to all stamp duties, registration or other similar Taxes payable in respect of any Loan Document.

(h)         Value Added Tax .

(i)          All amounts set out or expressed in a Loan Document to be payable by any party to any Lender which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to clause (ii) below, if VAT is or becomes chargeable on any supply made by any Lender to any party under a Loan Document, that party shall pay to the Lender (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Lender shall promptly provide an appropriate VAT invoice to such party).

(ii)         If VAT is or becomes chargeable on any supply made by any Lender (the “ VAT Supplier ”) to any other Lender (the “ VAT Recipient ”) under a Loan Document, and any party other than the VAT Recipient (the “ VAT Relevant Party ”) is required by the terms of any Loan Document to pay an amount equal to the consideration for that supply to the VAT Supplier (rather than being required to reimburse or indemnify the VAT Recipient in respect of that consideration),

(A)        (where the VAT Supplier is the person required to account to the relevant Tax authority for the VAT) the VAT Relevant Party must also pay to the VAT Supplier (at the same time as paying that amount) an additional amount equal to the amount of VAT. The VAT Recipient must (where this subsection (ii)(A) applies) promptly pay to the VAT Relevant Party an amount equal to any credit or repayment the VAT Recipient receives from the relevant Tax authority which the VAT Recipient reasonably determines relates to the VAT chargeable on that supply; and

(B)        (where the VAT Recipient is the person required to account to the relevant Tax authority for the VAT), the VAT Relevant Party must promptly, following demand from the VAT Recipient, pay to the VAT Recipient an amount equal to the VAT chargeable on that supply. The VAT Recipient must (where this subsection (ii)(B) applies) promptly pay to the VAT Relevant Party an amount equal to any credit or repayment the VAT Recipient receives from the relevant Tax authority which the VAT Recipient reasonably determines relates to the VAT chargeable on that supply.

(iii)      Where a Loan Document requires any party to reimburse or indemnify a Lender for any cost or expense in connection with such Loan Document, the reimbursement or indemnity (as the case may be) shall be for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Lender reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant Tax authority).

(iv)        Any reference in this Section  5.8.4 to any party shall, at any time when such party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the United Kingdom Value Added Tax Act 1994).

 

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(v)        In relation to any supply made by a Lender to any party under a Loan Document, if reasonably requested by such Lender, that party must as promptly as reasonably practicable provide such Lender with details of that party’s VAT registration and such other information as is reasonably requested in connection with such Lender’s VAT reporting requirements in relation to such supply.

(i)         FATCA Deduction .

(i)         The Relevant Borrower (and Agent to the extent it makes a payment on behalf of the Relevant Borrower) may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and shall not be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

(ii)        Each party to this Agreement shall promptly, upon becoming aware that it must make a FATCA Deduction to which Section  5.8.4(i)(i) above applies (or that there is any change in the rate or the basis of such FATCA Deduction), notify the party to whom it is making the payment and, in addition, shall notify the Relevant Borrower and Agent.

Except as otherwise expressly provided in this Section  5.8.4 , a reference to “determines” or “determined” in connection with Tax provisions contained in Section  5.8.4 means a determination made in the absolute discretion of the person making the determination.

5.8.5         Evidence of Payments . If Agent or an Obligor pays any Taxes pursuant to this Section, then upon request, Agent shall deliver to Borrower Agent or Borrower Agent shall deliver to Agent, respectively, a copy of a receipt issued by the appropriate Governmental Authority evidencing the payment, a copy of any return required by Applicable Law to report the payment, or other evidence of payment reasonably satisfactory to Agent or Borrower Agent, as applicable.

5.8.6         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 by Borrowers or with respect to which an Obligor has paid additional amounts pursuant to this Section, it shall pay Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by Obligors with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such party, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that Borrowers agree, upon request by such party, to repay the amount paid over to Borrowers (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such party if such party is required to repay such refund to the Governmental Authority. Notwithstanding anything herein to the contrary, no Recipient shall be required to pay any amount to Borrowers if such payment would place the Recipient in a less favorable net after-Tax position than it 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. In no event shall Agent or any Lender be required to make its tax returns (or any other information relating to its taxes that it deems confidential) available to any Borrower or other Person.

5.8.7         Lenders/Issuing Bank . For purposes of Sections 5.8 and 5.9 , the term “Lender” shall include the Issuing Bank.

5.8.8         Survival . Each party’s obligations under Sections 5.8 and 5.9 shall survive the resignation or replacement of Agent or any assignment of rights by or replacement of a Lender, the

 

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termination of the Commitments, and the repayment, satisfaction, discharge or Full Payment of any Obligations.

5.9         Lender Tax Information .

5.9.1         Status of Lenders . Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments of Obligations shall deliver to Borrower Agent and Agent properly completed and executed documentation reasonably requested by Borrowers or Agent as will permit such payments to be made without or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by Borrower Agent or Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by Borrower Agent or Agent to enable them to determine whether such Lender is subject to backup withholding or information reporting requirements. Notwithstanding the foregoing, such documentation (other than documentation described in Sections 5.9.2(a), (b) and (d) ) shall not be required if a Lender reasonably believes delivery of the documentation would subject it to any material unreimbursed cost or expense or would materially prejudice its legal or commercial position. Person,

5.9.2         Documentation . Without limiting the foregoing, if any Borrower is a U.S.

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

(b)        Any Foreign Lender (as used in this Section  5.9.2 , “Foreign Lender” means a Lender or Issuing Bank that is not a U.S. Person) shall, to the extent it is legally entitled to do so, deliver to Borrower Agent and 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 hereunder (and from time to time thereafter upon reasonable request of Borrower Agent or Agent), whichever of the following is applicable:

(i)         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-E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty, and (y) with respect to other payments under the Loan Documents, IRS Form W-8BEN-E establishing an exemption from or reduction of U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

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

(iii)       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 in form satisfactory to Agent 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 a 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 (“ U.S. Tax Compliance Certificate ”), and (y) executed originals of IRS Form W-8BEN-E; or

 

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(iv)      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-E, a U.S. Tax Compliance Certificate in form satisfactory to Agent, 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 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 Borrower Agent and 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 hereunder (and from time to time thereafter upon the reasonable request of Borrower Agent or Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit Borrowers or Agent to determine the withholding or deduction required to be made; and

(d)        if payment of an Obligation to a Lender would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code), such Lender shall deliver to Borrower Agent and Agent at the time(s) prescribed by law and otherwise as reasonably requested by Borrower Agent or Agent such documentation prescribed by Applicable Law (including Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower Agent or Agent as may be necessary for them to comply with their obligations under FATCA and to determine that such Lender has complied with its 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 Original Closing Date, and for purposes of Section  5.8 and Section  5.9 , the term “Applicable Law” shall include FATCA.

5.9.3         Redelivery of Documentation . If any form or certification previously delivered by a Lender pursuant to this Section expires or becomes obsolete or inaccurate in any respect, such Lender shall promptly update the form or certification or notify Borrower Agent and Agent in writing of its inability to do so.

5.9.4         FATCA Non-grandfathered Obligation . For purposes of determining withholding Taxes imposed under FATCA, the Obligors and Agent shall treat (and the Lenders hereby authorize Agent to treat) the Loan Documents as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

5.10         Nature and Extent of Each Borrower’s Liability .

5.10.1         Joint and Several Liability of  U.S. Obligors .

(a)        Each   U.S.  Obligor agrees that it is jointly and severally liable for, and absolutely , irrevocably and unconditionally guarantees to Agent and the other Secured Parties the prompt payment and performance of, all Obligations , except (but excluding its Excluded Swap Obligations ) . Each   U.S.  Obligor agrees that its guarantee obligations hereunder constitute a continuing guaranty guarantee of payment and not of collection, that such guarantee obligations shall not be discharged until Full Payment of the all Obligations, and that such guarantee

 

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obligations are absolute and unconditional, irrespective of ( a i ) the g e nuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Obligations Obligation or any Loan Document, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound; ( b ii ) the absence of any action to enforce this Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by Agent , any Security Trustee or any other Secured Party with respect thereto; ( c iii ) the existence, value or condition of, or failure to perfect a Lien or to preserve rights against, any security or guaranty for any Obligations or any action, or the absence of any action, by Agent or any other Secured Party in respect thereof (including the release of any security or guaranty); (d) the insolvency of any Obligor; (e)  any election by Agent or any other Secured Party in an Insolvency Proceeding for the application of Section  1111(b)(2) of the U.S. Bankruptcy Code; (f)  any borrowing or grant of a Lien by any other Obligor, as debtor-in-possession under Section  364 of the U.S. Bankruptcy Code or otherwise; (g)  the disallowance of any claims of Agent or any other Secured Party against any Obligor for the repayment of any Obligations under Section  502 of the U.S. Bankruptcy Code or otherwise; or (h)  any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except Full Payment of all  Obligations.

5.10.2           Waivers by U.S. Obligors .

(a)          Each U.S. Obligor expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Agent or any other Secured Party to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Obligations before, or as a condition to, proceeding against such Obligor. Each U.S. Obligor waives all defenses available to a surety, guarantor or accommodation co-obligor other than Full Payment of Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of Obligations as long as it is an Obligor. It is agreed among each U.S. Obligor, Agent and the other Secured Parties that the provisions of this  Section 5.10  are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Agent, Issuing Banks and Lenders would decline to make Loans and issue Letters of Credit. Each U.S Obligor acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business, and can be expected to benefit such  business.

(b)          Agent and the other Secured Parties may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon Collateral or any Real Estate by judicial foreclosure or nonjudicial sale or enforcement, without affecting any rights and remedies under this  Section 5.10 . If, in taking any action in connection with the exercise of any rights or remedies, Agent or any other Secured Party shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any U.S. Obligor or other Person, whether because of any Applicable Laws pertaining to “ election of remedies ” or otherwise, each U.S. Obligor consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any U.S. Obligor might otherwise have had. Any election of remedies that results in denial or impairment of the right of Agent or any other Secured Party to seek a deficiency judgment against any Obligor shall not impair any other U.S. Obligor ’ s obligation to pay the full amount of the Obligations. Each U.S. Obligor waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for Obligations, even though that election of remedies destroys such U.S. Obligor ’ s rights of subrogation against any other Person. Agent may bid Obligations, in whole or part,  at  any  foreclosure,   trustee   or   other  sale,   including  any   private  sale,  and  the   amount   of  such

 

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bid need not be paid by Agent but shall be credited against the Obligations. The amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral of the U.S. Obligors, and the difference between such bid amount and the remaining balance of the Obligations shall be conclusively deemed to be the amount of the Obligations guaranteed under this  Section 5.10 , notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent or any other Secured Party might otherwise be entitled but for such bidding at any such  sale .

5.10.3         Extent of Liability of U.S. Obligors; Contribution.

(a)          Notwithstanding anything herein to the contrary, each U.S. Obligor’s liability under this Section 5.10 shall not exceed the greater of (i) all amounts for which such U.S. Obligor is primarily liable, as described in clause (c) below, and (ii) such U.S. Obligor’s Allocable Amount.

(b)          If any U.S. Obligor makes a payment under this Section  5.10 of any Obligations (other than amounts for which such U.S. Obligor is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments previously or concurrently made by any other U.S. Obligor, exceeds the amount that such U.S. Obligor would otherwise have paid if each U.S. Obligor had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such U.S Obligor’s Allocable Amount bore to the total Allocable Amounts of all U.S. Obligors, then such U.S. Obligor shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other U.S. Obligor for the amount of such excess, ratably based on their respective Allocable Amounts in effect immediately prior to such Guarantor Payment. The “ Allocable Amount ” for any U.S. Obligor shall be the maximum amount that could then be recovered from such U.S. Obligor under this  Section 5.10  without rendering such payment voidable under Section  548 of the U.S. Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statute or common  law.

(c)         Nothing contained in this Section  5.10.3 shall limit the liability of any Obligor to pay or guarantee Loans made directly or indirectly to it (including Loans advanced hereunder to any other Person and then re-loaned or otherwise transferred to, or for the benefit of, such Obligor), LC Obligations relating to Letters of Credit issued to support its business, Secured Bank Product Obligations incurred to support its business, and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Obligor shall be primarily liable for all purposes  hereunder.

5.10.4        Joint and Several Liability of Foreign Obligors.(a) Each Foreign Obligor agrees that it is jointly and severally liable for, and absolutely, irrevocably and unconditionally guarantees to Agent and the other Foreign Facility Secured Parties the prompt payment and performance of, all Foreign Facility Obligations (but excluding for the avoidance of doubt, any U.S. Facility Obligations and its Excluded Swap Obligations) (the “ Foreign Cross-Guarantee ”). Each Foreign Obligor agrees that its guarantee obligations hereunder constitute a continuing guarantee of payment and not of collection, that such guarantee obligations shall not be discharged until Full Payment of all Foreign Facility Obligations, and that such  guarantee obligations are absolute and unconditional, irrespective of (i) the genuineness, validity, regularity, enforceability, subordination or any future modification of, or change in, any Foreign Facility Obligation or any Loan Document, or any other document, instrument or agreement to which any Obligor is or may become a party or be bound; (ii) the absence of any action to enforce this

 

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Agreement (including this Section) or any other Loan Document, or any waiver, consent or indulgence of any kind by Agent , any Security Trustee  or any other Foreign Facility Secured Party with respect thereto; (iii)  the existence, value or condition of,  or failure to perfect, register, stamp or terminate a Lien or to preserve rights against, any security or guaranty for the Foreign Facility  Obligations or any action, or the absence of any action, by Agent, any Security Trustee or any other  Foreign Facility  Secured Party in respect thereof (including the release, variation or discharge of any security or guarantee of, or the release of, any Obligor or any other Person (other than a release of such Foreign  Obligor) whether under the terms of any proposal, composition or arrangement with any creditor of any Obligor or any other Person or otherwise); (iv) the insolvency of any Obligor or any Insolvency Proceeding in relation to any Obligor; (v) any election by Agent or any other Secured Party in an Insolvency Proceeding for the application of Section 1111(b)(2) of the U.S. Bankruptcy Code (or the substantial equivalent under any other Applicable Law); (vi) any borrowing or grant of a Lien by any other Obligor, as debtor-in-possession under Section 364 of the U.S. Bankruptcy Code (or the substantial equivalent under any other Applicable Law) or otherwise; (vii) the disallowance of any claims of Agent or any other Secured Party against any Obligor for the repayment of any Obligations under Section 502 of the U.S. Bankruptcy Code (or the substantial equivalent under any other Applicable Law) or otherwise; (viii) any incapacity or lack of power, authority or legal personality of, or dissolution or change in the members or status of, any Obligor or any other Person; or (ix) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, except Full Payment of all  Foreign Facility  Obligations.

(b)        Each   Foreign  Obligor agrees with each   Foreign  Facility  Secured Party and its successors and permitted assigns that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Foreign Facility  Secured Party and its successors and permitted assigns immediately on demand against any cost, loss or liability it incurs as a result of a  Foreign  Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Loan Document on the date when it would have been due. The amount payable by a Foreign  Obligor under this indemnity will not exceed the amount it would have had to pay under this Section  5.10 if the amount claimed had been recoverable on the basis of a guarantee.

(c)        Without prejudice to the generality of Section   5.10.4 5.10.1 (a) above, each   Foreign  Obligor expressly confirms that it intends that the guarantee created by this Section   5.10.4 5.10.1 shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Loan Documents and/or any facility or amount made available under any of the Loan Documents for the purposes of or in connection with (i) acquisitions of any nature; (ii) increasing working capital; (iii) enabling investor distributions to be made; (iv) carrying out restructurings; (v) refinancing existing credit facilities; (vi) refinancing any other Debt; (vii) making credit available to new Foreign  Borrower(s); (viii) any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and (ix) any fees, costs and/or expenses associated with any of the foregoing.

5.10.2          5.10.5 Waivers by   Foreign Obligors .

(a)          Each   Foreign Obligor hereby expressly waives all rights that it may have now or in the future under any statute, at common law, in equity or otherwise, to compel Agent, any Security Trustee or any other Foreign Facility  Secured Party to marshal assets or to proceed against any Obligor, other Person or security for the payment or performance of any Foreign Facility  Obligation before, or as a condition to, proceeding against such Obligor. Each Foreign  Obligor waives all defenses available to a surety, guarantor or accommodation co-obligor other

 

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than Full Payment of all Foreign Facility  Obligations and waives, to the maximum extent permitted by law, any right to revoke any guaranty of Foreign Facility  Obligations as long as it is an Obligor. It is agreed among each Foreign  Obligor, Agent and the other  Foreign Facility  Secured Parties that the provisions of this Section  5.10 are of the essence of the transaction contemplated by the Loan Documents and that, but for such provisions, Agent, Issuing Banks and Lenders would decline to make Loans and issue Letters of Credit to Foreign  Borrowers. Each Foreign  Obligor acknowledges that its guaranty pursuant to this Section is necessary to the conduct and promotion of its business and those of its direct or indirect holding companies, and can be expected to benefit such business.

(b)         Agent, Security Trustees and the other   Foreign  Facility  Secured Parties may, in their discretion, pursue such rights and remedies as they deem appropriate, including realization upon the Collateral or Real Estate by judicial foreclosure or non-judicial sale or enforcement, to the extent permitted under Applicable Law, without affecting any rights and remedies under this Section  5.10 . If, in taking any action in connection with the exercise of any rights or remedies, Agent, any Security Trustee or any other Foreign Facility  Secured Party shall forfeit any other rights or remedies, including the right to enter a deficiency judgment against any Obligor or other Person, whether because of any Applicable Laws pertaining to “election of remedies” or otherwise, each Foreign  Obligor consents to such action and waives any claim based upon it, even if the action may result in loss of any rights of subrogation that any Foreign  Obligor might otherwise have had. Any election of remedies that results in denial or impairment of the right of Agent, any Security Trustee or any other Foreign Facility  Secured Party to seek a deficiency judgment against any Obligor shall not impair any Foreign  Obligor’s obligation to pay the full amount of the Foreign Facility  Obligations. Each   Foreign  Obligor waives all rights and defenses arising out of an election of remedies, such as nonjudicial foreclosure with respect to any security for the Foreign Facility  Obligations, even though that election of remedies destroys such Foreign  Obligor’s rights of subrogation against any other Person. Agent may bid Obligations of the   Foreign  Obligors, in whole or in part, at any foreclosure, trustee or other sale, including without limitation any private sale, and the amount of such bid need not be paid by Agent but shall be credited against the Foreign Facility  Obligations. The amount of the successful bid at any such sale, whether Agent or any other Person is the successful bidder, shall be conclusively deemed to be the fair market value of the Collateral of the Foreign  Obligors, and the difference between such bid amount and the remaining balance of the Foreign Facility  Obligations shall be conclusively deemed to be the amount of the  Foreign Facility  Obligations guaranteed under this Section  5.10 , notwithstanding that any present or future law or court decision may have the effect of reducing the amount of any deficiency claim to which Agent or any other Foreign Facility  Secured Party might otherwise be entitled but for such bidding at any such sale.

(c)         Each Mexican Domiciled Obligor hereby expressly acknowledges and agrees that this Agreement is governed by the laws of the State of New York as set forth in Section 14.14 and expressly agrees that any rights and privileges that it might otherwise have under the laws of Mexico shall not be applicable to this Agreement, indemnities and other assurances contained herein or any guarantee granted by such Mexican Domiciled Obligor, on the date hereof or in the future, pursuant to this Agreement. For such purposes, each Mexican Domiciled Obligor hereby unconditionally and irrevocably waives any rights to which it may be entitled (including the rights to excusión, orden, división and subrogación), to the extent applicable, under Articles 2813, 2814, 2815, 2816, 2817, 2818, 2819, 2820, 2821, 2822, 2823, 2824, 2826, 2827, 2828, 2830, 2835, 2836, 2837, 2838, 2839, 2840, 2842, 2844, 2846, 2847, 2848 and 2849 of the Federal Civil Code (Código Civil Federal) and the corresponding

 

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provisions of the Civil Codes of the States of Mexico and the Federal District of Mexico (or any successor provisions). Each Mexican Domiciled Obligor represents that (i) it is familiar with the contents of the articles referred to in subparagraph (c) above; (ii) it will receive valuable direct and indirect benefits as a result of the entering into this Foreign Cross-Guaranty or any Agreement and the other Loan Document Documents to which it is a party; (iii) it is solvent (solvente) pursuant to the terms of the Mexican Bankruptcy Law; (iv) it has not been declared in concurso mercantil or bankruptcy (quiebra) or other similar insolvency procedure; and (v) there is no pending and, to its knowledge, threatened action, claim, requirement or proceeding before any court, governmental agency, arbitrator or jurisdictional entity that affects or could affect the legality, validity or enforceability of this Foreign Cross-Guaranty. Loan Agreement or any other Loan Document to which each a Mexican Domiciled Obligor is a party.

5.10.3          Exten t o f Liabilit y o f U.S . Obligors ; Contribution.

(a)          Notwithstanding anything herein to the contrary, each U.S. Obligor’s liability under this Section  5.10 shall not exceed the greater of (i) all amounts for which such U.S. Obligor is primarily liable, as described in clause (c) below, and (ii) such U.S. Obligor’s Allocabl e Amount.

(b)          If any U.S. Obligor makes a payment under this Section  5.10 of any Obligations (other than amounts for which such U.S. Obligor is primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments previously or concurrently made by any other U.S. Obligor, exceeds the amount that such U.S. Obligor would otherwise have paid if each U.S. Obligor had paid the aggregate Obligations satisfied by such Guarantor Payments in the same proportion that such U.S Obligor’s Allocable Amount bore to the total Allocable Amounts of all U.S. Obligors, then such U.S. Obligor shall be entitled to receive contribution and indemnification payments from, and to be reimbursed by, each other U.S. Obligor for the amount of such excess, ratably based on their respective Allocable Amounts in effect immediately prior to such Guarantor Payment. The “Allocable Amount” for any U.S. Obligor shall be the maximum amount that could then be recovered from such U.S. Obligor under this Section  5.10 without rendering such payment voidable under Section 548 of the U.S. Bankruptcy Code or under any applicable state fraudulent transfer or conveyance act, or similar statut e o r comm o n law.

(c)          Nothing contained in this Section  5.10.3 shall limit the liability of any Obligor to pay or guarantee Loans made directly or indirectly to it (including Loans advanced hereunder to any other Person and then re-loaned or otherwise transferred to, or for the benefit of, such Obligor), LC Obligations relating to Letters of Credit issued to support its business, Secured Bank Product Obligations incurred to support its business, and all accrued interest, fees, expenses and other related Obligations with respect thereto, for which such Obligor shall be primarily liable for all purposes hereunder.

5.10.4          German Guarantee Limitations. On the basis of the judgements LG Darmstadt, 25.4.2013 – 16 O 195/12, OLG Frankfurt a. M., 8.11.2013 – 24 U 80/13 A, BGH, 10.1.2017 – II ZR 94/15 and BGH, 21.3.2017 – II ZR 93/16 the respective directors (Geschäftsführer) of each of the German Domiciled Obligor have assessed the financing concept provided for in connection with the Loan Documents and are satisfied by its robustness. In the case that during the lifetime of this Agreement the directors of a German Domiciled Obligor reasonably expect to suffer a personal liability in the case of a demand under the guarantee and indemnity as a result of a change in law or a further interpretation of the foregoing judgements, the Lenders agree to enter into negotiations with that German Domiciled Obligor

 

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in order to limit the guarantee and indemnity in order to avoid a personal liability of the directors of that German Domiciled Obligor. Other limitations and qualifications to the Obligations of any German Domiciled Obligor set forth in Schedule I to the Seventh Amendment may be agreed in writing by Agent in its discretion.

5.10.5    [Reserved].

5.10.6 U.S. Limitations . To   the   extent  that   providing  such   Foreign  Cross-Guarantee would reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section  956 of the Code, the Foreign Cross-Guarantee shall not require any Foreign Obligor that is not or is not required to be a U.S. Facility Obligor to guarantee any Obligations of any other Foreign Obligor that is disregarded as an entity separate from any U.S. Subsidiary for U.S. federal income tax purposes.   [Reserved].

5.10.7    Joint Enterprise . Each Borrower has requested that Agent, Issuing Banks and Lenders make this credit facility available to Borrowers on a combined basis, in order to finance Borrowers’ business most efficiently and economically. Obligors’ business is a mutual and collective enterprise, and the successful operation of each Obligor is dependent upon the successful performance of the integrated group. Borrowers believe that consolidation of their credit facility will enhance the borrowing power of each Borrower and ease administration of the facility, all to their mutual advantage. Borrowers acknowledge that Agent’s, Issuing Banks’ and Lenders’ willingness to extend credit and to administer the Collateral on a combined basis hereunder is done solely as an accommodation to Borrowers and at Borrowers’ request.

5.10.8          Subordination . Each Obligor hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement, exoneration, contribution, indemnification or set off, that it may have at any time against any other Obligor, howsoever arising, to the Full Payment of all Obligations.

5.10.9          Keepwell . Each Obligor that is a Qualified ECP when its guaranty of or grant of Lien as security for a Swap Obligation becomes effective hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide funds or other support to each Specified Obligor with respect to such Swap Obligation as may be needed by such Specified Obligor from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP’s obligations and undertakings under this Section  5.10 voidable under any applicable fraudulent transfer or conveyance act , and in each case only so long as providing such funds or support could not reasonably be expected to result in material adverse tax consequences to an Obligor or a Subsidiary of an Obligor under Section  956 of the Code ). The obligations and undertakings of each Qualified ECP under this Section shall remain in full force and effect until Full Payment of all Obligations. Each Obligor intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support or other agreement” for the benefit of, each Obligor for all purposes of the Commodity Exchange Act.

5.11     Currency Matters . Dollars are the currency of account and payment for each and every sum at any time due from Obligors hereunder or under any other Loan Document unless otherwise specifically provided in this Agreement, any other Loan Document or otherwise agreed to by Agent; provided that:

 

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5.11.1   each repayment of a Revolver Loan, LC Obligation or a part thereof shall be made in the currency in which such Revolver Loan or LC Obligation is denominated at the time of that repayment;

5.11.2   each payment of interest shall be made in the currency in which the principal or other sum in respect of which such interest is denominated;

5.11.3   (a) each payment of fees pursuant to Section  3.2.1(c) shall be in Dollars; (b) each payment of fees pursuant to Section  3.2.1(a) shall be in Dollars or Canadian Dollars and (c) each payment of fees pursuant to Section  3.2.1(b) shall be in Dollars or Sterling, which payment currency, in the case of clauses (b) and (c) above, shall be at the option of the relevant Borrower Group, and the amount of any such payment made in a currency other than Dollars determined by Agent based on the Spot Rate;

5.11.4   each payment of fees pursuant to Section  3.2.2 shall be in the currency of the underlying Letter of Credit; and

5.11.5   each payment in respect of Extraordinary Expenses and any other costs, expenses and indemnities shall be made in the currency in which the same were incurred by the party to whom payment is to be made.

No payment to any Credit Party or any Security Trustee (whether under any judgment or court order or otherwise) shall discharge the obligation or liability of the Obligor in respect of which it was made unless and until such Credit Party or such Security Trustee shall have received Full Payment in the currency in which such obligation or liability is payable pursuant to the above provisions of this Section  5.11 . Agent has the right, at the expense of the applicable Obligor, to convert any payment made in an incorrect currency into the applicable currency required under this Agreement. To the extent that the amount of any such payment shall, on actual conversion into such currency, fall short of such obligation or liability actual or contingent expressed in that currency, such Obligor (together with the other Obligors within its Obligor Group or other obligors pursuant to any Guarantee of the Obligations of such Obligor Group) agrees to indemnify and hold harmless such Credit Party or such Security Trustee, with respect to the amount of the shortfall with respect to amounts payable by such Obligor hereunder, with such indemnity surviving the termination of this Agreement and any legal proceeding, judgment or court order pursuant to which the original payment was made which resulted in the shortfall. To the extent that the amount of any such payment to a Credit Party or a Security Trustee shall, upon an actual conversion into such currency, exceed such obligation or liability, actual or contingent, expressed in that currency, such Credit Party or such Security Trustee shall return such excess to the members of the affected Borrower Group.

SECTION 6

CONDITIONS PRECEDENT

6.1                                      Conditions Precedent to Closing Date . In addition to the conditions set forth in Section  6.2 , Lenders shall not be required to fund any requested Loan, issue any Letter of Credit, or otherwise extend credit to Borrowers hereunder, until the time that each of the following conditions has been satisfied (the date, if any, upon which such conditions are first satisfied is referred to herein as the “ Closing Date ”):

(a)         Each Loan Document shall have been duly executed and delivered to Agent by each of the signatories thereto, and each Obligor shall be in compliance with all terms

 

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thereof; provided, however , that Borrowers shall not be required to deliver a Lien Waiver on the Closing Date for a location for which Agent has established a Rent and Charges Reserve.

(b)         [Reserved.]

(c)         Each Collateral and Guarantee Requirement shall have been satisfied and Agent shall have received a completed Perfection Certificate dated as of the Closing Date and signed by an executive officer or Financial Officer of each Obligor, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code, PPSA and equivalent filings made with respect to the Obligors in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to Agent (including PPSA estoppel letters) that the Liens indicated by such financing statements (or similar documents) are permitted by Section 10.2.2 or have been released or will be released pursuant to UCC-3 financing statements, PPSA termination statements or other release documentation delivered to Agent.

(d)         Agent shall have received duly executed agreements establishing and/or evidencing each Dominion Account and (where applicable) related lockbox and each Controlled Account, each in form and substance, and with financial institutions, satisfactory to Agent.

(e)         Agent shall have received certificates, in form and substance satisfactory to it, from a knowledgeable Senior Officer of each Borrower and each Mexican Domiciled Obligor certifying that, after giving effect to the initial Loans and transactions hereunder, (i) no Default exists; (ii) the representations and warranties set forth in Section  9 are true and correct; and (iii) such Borrower has complied with all agreements and conditions to be satisfied by it under the Loan Documents.

(f)         Agent shall have received a certificate of a duly authorized officer of each Obligor, certifying (i) that attached copies of such Obligor’s Organic Documents (including, without limitation, charter documents of such Obligor that are, except with respect to a UK Domiciled Obligor or a Dutch Domiciled Obligor, certified by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization) are true and complete, and in full force and effect, without amendment except as shown; (ii) that an attached copy of resolutions authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and (with respect to the U.S. Obligors, together with the resolutions delivered pursuant to Section 6 of the Original Loan Agreement) constitute all resolutions adopted with respect to this credit facility; and (iii) to the title, name and signature of each Person authorized to sign the Loan Documents. Agent may conclusively rely on this certificate until it is otherwise notified by the applicable Obligor in writing.

(g)         Agent shall have received a written opinion of Cahill Gordon & Reindel LLP, as well as any local counsel to Obligors or Agent (including, without limitation, Canadian, English, Mexican and Dutch counsel), in form and substance satisfactory to Agent.

(h)         Agent shall have received good standing certificates for each Obligor (other than the Dutch Domiciled Obligors) issued by the Secretary of State or other appropriate official of such Obligor’s jurisdiction of organization and each jurisdiction in the United States, Canada, the United Kingdom, Mexico or the Netherlands where such Obligor’s conduct of business or ownership of Property necessitates qualification (in each case, to the extent that such

 

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certificates or certificates of similar subject matter are issued, in general, by such officials in such jurisdictions).

(i)         Agent shall have received copies of policies or certificates of insurance for the insurance policies carried by Obligors, together with a loss payable endorsement naming Agent as loss payee and reasonably acceptable to Agent, all in compliance with the Loan Documents.

(j)         Agent shall have completed its business, financial and legal due diligence of Obligors, including a roll-forward of its previous field examination, with results satisfactory to Agent. No material adverse change in the financial condition of Obligors and their Subsidiaries, taken as a whole, or in the quality, quantity or value of any Collateral shall have occurred since December 31, 2014. The capital structure of the Obligors shall be satisfactory to Agent.

(k)         Borrowers shall have paid all fees and expenses (provided that legal fees required to be paid as a condition precedent to the occurrence of the Closing Date shall be limited to such legal fees as to which Borrowers have received a summary invoice) required to be paid to Agent and/or the Lenders under the Loan Documents on or prior to the Closing Date.

(l)         Agent shall have received a Borrowing Base Report as of the most recent month ending at least 15 days prior to the Closing Date.

(m)         Agent and the Lenders shall have received all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act and other AML Legislation.

(n)         Agent shall have received executed copies of the any Term Loan Document or modifications to the Term Loan Documents executed in connection with the Transactions, which shall be in form and substance satisfactory to Agent and shall be in full force and effect.

(o)         Agent shall have received the originals of any pledged Collateral representing all of the issued and outstanding shares of the Equity Interests constituting Collateral and required to be delivered to Agent under the Loan Documents, in each case together with stock powers (or the equivalent, including, without limitation, endorsements ( endosos )) duly executed in blank with respect thereto (except with respect to uncertificated pledged Collateral and such Collateral that constitutes Term Priority Collateral).

(p)         Agent shall have received payoff or release letters, in form and substance satisfactory to Agent, confirming that the Obligors and their Subsidiaries are released from all obligations under any Debt not expressly permitted by this Agreement and providing a release of all of the Liens existing with respect to any such Debt in and to the assets of the applicable Obligors and their Subsidiaries, together with termination statements and other documentation evidencing the termination of any such Liens in and to the properties and assets of the applicable Obligors and their Subsidiaries.

(q)         Agent shall have received evidence, in form and substance satisfactory to Agent, that the Mexican Domiciled Obligors have irrevocably appointed the Borrower Agent,

 

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before a Mexican notary public, a special irrevocable power of attorney, in the form of Exhibit E , to act as its agent for service of process.

6.2         Conditions Precedent to All Credit Extensions . Agent, Issuing Banks and Lenders shall not be required to fund any Loans, arrange for issuance of any Letters of Credit or grant any other accommodation to or for the benefit of Borrowers, unless the following conditions are satisfied:

(a)         No Default or Event of Default shall exist at the time of, or result from, such funding, issuance or grant;

(b)         The representations and warranties of each Obligor in the Loan Documents shall be true and correct on the date of, and upon giving effect to, such funding, issuance or grant (except for representations and warranties that expressly relate to an earlier date);

(c)         All conditions precedent in any other Loan Document shall be satisfied;

(d)         No event shall have occurred or circumstance exist that has or could reasonably be expected to have a Material Adverse Effect; and

(e)         With respect to issuance of a Letter of Credit, the LC Conditions shall be satisfied.

Each request (or deemed request) by Borrowers for funding of a Loan, issuance of a Letter of Credit or grant of an accommodation shall constitute a representation by Borrowers that the foregoing conditions are satisfied on the date of such request and on the date of such funding, issuance or grant. As an additional condition to any funding, issuance or grant, Agent shall have received such other information, documents, instruments and agreements as it deems appropriate in connection therewith.

SECTION 7

COLLATERAL

7.1         Grant      of Security Interest . As security for the full and timely payment and performance of all Obligations, the Borrowers shall, and shall cause each other Obligor to, on or before the Closing Date, subject to any applicable limitations set forth in the Security Documents, do or cause to be done all things necessary in the opinion of Agent in its Permitted Discretion to cause each Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of such Obligors. Without limiting the foregoing, the Borrowers shall deliver, and shall cause each other Obligor to deliver, to Agent, in form and substance reasonably acceptable to Agent, the Security Documents to which such Obligors are required to be party and, subject to the Agreed Security Principles (if applicable) and the limitations set forth in the Security Documents, shall take such further action and deliver or cause to be delivered such further documents as required by the Security Documents or otherwise as Agent may reasonably request to effect the transactions contemplated by this Section  7 .

7.2          Cash Collateral .

7.2.1         [ Reserved .]

7.2.2         Cash Collateral . Cash Collateral may be invested, at Agent’s Permitted Discretion (and with the consent of Borrower Agent, as long as no Event of Default exists), but Agent

 

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shall have no duty to do so, regardless of any agreement or course of dealing with any Obligor, and shall have no responsibility for any investment or loss. As security for the Obligations, each Obligor shall grant to Agent, in accordance with the  applicable  Collateral and Guarantee Requirement, a security interest in and Lien upon all Cash Collateral held from time to time and all proceeds thereof, whether held in a Cash Collateral Account or otherwise. Agent may apply Cash Collateral of (a)  a U.S. an Obligor to the payment of any  Obligations and (b)  a Foreign Obligor to the payment of any Foreign Facility Obligations, in each case, to the payment of such  Obligations as they become due, in such order as Agent may elect. Each Cash Collateral Account and all Cash Collateral shall be under the sole dominion and control of Agent. No U.S.  Obligor or other Person claiming through or on behalf of any U.S.  Obligor shall have any right to any Cash Collateral until Full Payment  of all Obligations. No Foreign Obligor or other Person claiming through or on behalf of any Foreign Obligor shall have any right to any Cash Collateral until Full Payment of all Foreign Facility Obligations.   of all Obligations.

7.3         Collateral Assignment of Leases . To further secure the prompt payment and performance of the  Foreign Facility  Obligations, each Canadian Domiciled Obligor and each U.S. Domiciled Obligor hereby transfers and assigns to Agent and/or Security Trustee all of such Obligor’s right, title and interest in, to and under all now or hereafter existing leases of real property with annual rents in excess of $1,500,000 to which such Obligor is a party, whether as lessor or lessee, and all extensions, renewals, modifications and proceeds thereof. To further secure the prompt payment and performance of all Obligations, each U.S. Obligor hereby transfers and assigns to Agent all of such Obligor ’ s right, title and interest in, to and under all now or hereafter existing leases of real property with annual rents in excess of $1,500,000 to which such Obligor is a party, whether as lessor or lessee, and all extensions, renewals,  modifications and proceeds thereof.

7.4         Limitations . The Lien on Collateral granted under the Security Documents is given as security only and shall not subject Agent, any Security Trustee, any Issuing Bank or any Lender to, or in any way modify, any obligation or liability of Obligors relating to any Collateral. In no event shall the grant of any Lien under any Loan Document secure an Excluded Swap Obligation of the granting Obligor.

SECTION 8

COLLATERAL ADMINISTRATION

8.1         Borrowing Base Reports; Reallocation of U.S. Availability . By the 15th day of each month, Borrower Agent shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a Borrowing Base Report as of the close of business of the previous month, and at such other times as Agent may request; provided , that , (A) from the period beginning on the Seventh Amendment Effective Date to and including the date that is 30 days after the Seventh Amendment Effective Date, and (B)  during any Borrowing Base Trigger Period, by Wednesday of each week, Borrower Agent shall deliver to Agent (and Agent shall promptly deliver same to Lenders) a Borrowing Base Report as of the close of business of the previous week, and at such other times as Agent may request. In addition, (i) Borrower Agent shall deliver to Agent (and Agent shall promptly deliver same to Lenders) Borrowing Base Reports as and when contemplated by Section 9.1.20 and (ii)  upon the occurrence and during the continuation of an Event of Default, Borrower Agent shall deliver to Agent (and Agent shall promptly deliver same to Lenders) Borrowing Base Reports on a more frequent basis if requested by Agent. All information (including calculation of Total Availability and each component of Total Availability) in a Borrowing Base Report shall be certified by Borrower Agent. Agent may from time to time adjust any such report (a) to reflect Agent’s reasonable estimate of declines in value of Collateral, due to collections received in the Dominion Accounts or otherwise; (b) to adjust advance rates to reflect changes in dilution, quality,

 

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mix and other factors affecting Collateral; and (c) to the extent any information or calculation does not comply with this Agreement. The Borrowers may neither (a) reallocate the Foreign Allocated U.S. Availability component of any Foreign Borrower’s Borrowing Base if such reallocation would result in an Overadvance for such Foreign Borrower nor (b) allocate U.S. Availability to any Foreign Borrower’s Borrowing Base if such reallocation would result in a U.S. Overadvance.

8.2         Accounts .

8.2.1         Records and Schedules of Accounts . Each Borrower shall keep accurate and complete records of its Accounts in all material respects, including all payments and collections thereon, in a manner consistent with past business practices, and shall submit to Agent sales, collection, reconciliation and other reports in form satisfactory to Agent, on such periodic basis as Agent may request. Each Borrower shall also provide to Agent, on each date that a Borrowing Base Report is delivered or required to be delivered pursuant to Section  8.1 , an ineligible Account reconciliation report and a detailed aged trial balance of all Accounts as of the end of the preceding month, specifying each Account’s Account Debtor name and address, amount, invoice date and due date, showing any discount, allowance, credit, authorized return or dispute, and, if a Borrowing Base Trigger Period is in effect or such materials are reasonably requested by Agent, documents evidencing proof of delivery, copies of invoices and invoice registers, copies of related documents, repayment histories, status reports and other information as Agent may reasonably request. If Accounts in an aggregate face amount of $2,000,000 or more cease to be Eligible Accounts, Borrower Agent shall notify Agent of such occurrence promptly (and in any event within one Business Day) after any Borrower has knowledge thereof.

8.2.2         [ Reserved .]

8.2.3         [ Reserved .]

8.2.4         Maintenance of Dominion Account . Obligors shall maintain each Dominion Account and each Controlled Account pursuant to lockbox or other arrangements reasonably acceptable to Agent. Each Obligor shall obtain, on or prior to the applicable deadline set forth in the Security Document(s) to which such Obligor is a party, an agreement (in form and substance satisfactory to Agent) from the lockbox servicers (if applicable), Dominion Account bank (if applicable) and other depositories and securities intermediaries with whom Controlled Accounts are maintained, establishing Agent’s or a Security Trustee’s control over and Lien in the lockboxes (if applicable), each Dominion Account (if applicable) and each Controlled Account, which may be exercised by Agent or the applicable Security Trustee during any Dominion Trigger Period, requiring immediate deposit of all remittances received in the lockbox (if applicable) or other Controlled Accounts to a Dominion Account, and waiving offset rights of such servicer or bank, except for customary administrative charges. If a Dominion Account is not maintained with Bank of America or Bank of America (Canada), Agent may, during any Dominion Trigger Period, require immediate transfer of all funds in such account to a Dominion Account maintained with Bank of America or Bank of America (Canada), as applicable. Agent and Lenders assume no responsibility to any Obligor for any lockbox arrangement, Controlled Account or Dominion Account, including any claim of accord and satisfaction or release with respect to any Payment Items accepted by any bank.

8.2.5         Proceeds of Collateral . Obligors Borrowers shall request in writing and otherwise take all necessary steps to ensure that all payments on Accounts or otherwise relating to Collateral are made directly to a Dominion Account (or a lockbox relating to a Dominion Account). If any Obligor or Subsidiary Borrower receives cash or Payment Items with respect to any Collateral, it shall hold same in trust for Agent and Security Trustees and promptly (not later than the next Business Day)

 

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deposit same into a Dominion Account. Foreign Borrowers shall not participate in any cash pooling arrangements.

8.3         Inventory .

8.3.1         Records and Reports of Inventory . Each Borrower shall keep accurate and complete records of its Inventory in all material respects, including costs and daily withdrawals and additions, in a manner consistent with past business practice, and shall submit to Agent inventory and reconciliation reports in form satisfactory to Agent, on such periodic basis as Agent may request. Each Borrower shall conduct a physical inventory at least once per calendar year (and on a more frequent basis if requested by Agent when an Event of Default exists) and periodic cycle counts consistent with historical practices, and shall provide to Agent a report based on each such inventory and count promptly upon completion thereof, together with such supporting information as Agent may request. Agent may participate in and observe each physical count.

8.3.2         [ Reserved .]

8.3.3         Acquisition, Sale and Maintenance . Each Borrower shall make commercially reasonable efforts to assure that all Inventory is produced in accordance with Applicable Law, including the FLSA. Borrowers shall use, store and maintain all Inventory with reasonable care and caution, in accordance with applicable standards of any insurance and in conformity with all Applicable Law.

8.4         [ Reserved .]

8.5         Deposit Accounts . Each Obligor shall take all actions necessary to establish and maintain Agent’s (or the applicable Security Trustee’s) control of, and first priority perfected Lien (which shall constitute a floating charge in respect of Deposit Accounts and Securities Accounts located in the United Kingdom) on, each Deposit Account and Securities Account (in each case, other than Excluded Accounts) as required by this Agreement and/or the Security Documents. Each applicable Obligor shall be the sole account holder of each applicable Deposit Account and Securities Account (in each case, other than Excluded Accounts) of such Obligor and shall not allow any other Person (other than Agent, a Security Trustee, the Senior Term Agent  and/or the Term Loan Agent Agents or in respect of any Permitted Encumbrance arising under clause (j) of the definition thereof) to have control over or a Lien on any such Deposit Account, Securities Account or any Property deposited or held therein.

8.6         General Provisions .

8.6.1         [ Reserved .]

8.6.2         Insurance of Collateral; Condemnation Proceeds .

(a)         [Reserved.]

(b)         Any Net Proceeds of insurance (other than proceeds from workers’ compensation or D&O insurance) and any Net Proceeds of awards arising from condemnation of any Collateral shall be paid to Agent and/or the Controlling Term Loan Agent as required pursuant to the Loan Documents, the Senior Term Loan Documents,  the Term Loan Documents and the Intercreditor Agreement. Any such Net Proceeds of insurance or condemnation awards that relate to Revolver Priority Collateral shall be applied to payment of the Revolver Loans, and then to other Obligations. Subject to the Intercreditor Agreement and clause (c) below, any such

 

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Net Proceeds of insurance or condemnation awards that relate to Term Priority Collateral, to the extent not timely applied to repair, restore or replace such property or asset in accordance with the Senior Term Loan Documents and/or  the Term Loan Documents, shall be applied first to the Senior Term Debt and/or the First Lien Term Loan Debt until paid in full, then to U.S. Revolver Loans until paid in full and then to other Obligations.

(c)         To the extent permitted by   the   Senior  Term   Loan  Documents  and  the Term Loan Documents and subject to the Intercreditor Agreement, Borrowers may use Net Proceeds of insurance that relate to Equipment or Real Estate and Net Proceeds of awards arising from condemnation of Real Estate to repair, restore or replace such Equipment or Real Estate.

8.6.3         Protection of Collateral . All expenses of protecting, storing, warehousing, insuring, handling, maintaining and shipping any Collateral of an Obligor Group, all Taxes payable with respect to any Collateral of an Obligor Group (including any sale thereof), and all other payments required to be made by Agent or a Security Trustee to any Person to realize upon any Collateral of an Obligor Group, shall be borne and paid by such Obligor Group. Neither Agent nor any Security Trustee shall be liable or responsible in any way for the safekeeping of any Collateral, for any loss or damage thereto (except for reasonable care in its custody while Collateral is in Agent’s or such Security Trustee’s actual possession), for any diminution in the value thereof, or for any act or default of any warehouseman, carrier, forwarding agency or other Person whatsoever, but the same shall be at Obligors’ sole risk.

SECTION 9

REPRESENTATIONS AND WARRANTIES

9.1         General Representations and Warranties . To induce Agent and Lenders to enter into this Agreement and to make available the Commitments, Loans and Letters of Credit, each Obligor represents and warrants that, on the Closing Date and at each time that the following representations and warranties are made or deemed to be made thereafter:

9.1.1         Organization; Powers . Each Obligor and each Subsidiary of each Obligor is duly organized or incorporated, validly existing and in good standing (where applicable) under the laws of the jurisdiction of its organization or incorporation, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.

9.1.2         Authorization; Enforceability . The Transactions to be entered into by each Obligor are within such Obligor’s powers and have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by each Obligor and constitutes, and each other Loan Document to which any Obligor is to be a party, when executed and delivered by such Obligor, will constitute, a legal, valid and binding obligation of such Obligor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

9.1.3         Governmental Approvals; No Conflicts . The Transactions and the other transactions contemplated hereby (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created under the Loan Documents and (iii) consents, approvals, registrations, filings or actions the failure of which to obtain or perform could

 

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not reasonably be expected to result in a Material Adverse Effect, (b) will not violate any Applicable Law or regulation or the charter, by-laws or other organizational documents of any Obligor or any Subsidiary of any Obligor or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, or give rise to a right thereunder to require any payment to be made by any Obligor or any Subsidiary of any Obligor, except for violations, defaults or the creation of such rights that could not reasonably be expected to result in a Material Adverse Effect, (d) will not result in the creation or imposition of any Lien on any asset of any Obligor or any Subsidiary of any Obligor, except Liens created under the Loan Documents and Liens permitted by Section  10.2.2 , and (e) do not require any acknowledgement, agreement or consent under any indenture, agreement or other instrument binding upon any Obligor or any Subsidiary of any Obligor or their assets, except for such acknowledgements, agreements and consents as have been obtained or made and are in full force and effect, and such acknowledgements, agreements or consents the failure of which to obtain could not reasonably be expected to result in a Material Adverse Effect. Schedule 9.1.3 sets forth for each Obligor a description of each license from a Governmental Authority which is material to the conduct of the business of such Obligor as of the Closing Date.

9.1.4         Financial Condition; No Material Adverse Change .

(a)         The Obligors have heretofore furnished to Agent and the Lenders the consolidated balance sheet of the Parent Borrower and its consolidated Subsidiaries and the related statements of income, stockholders equity and cash flows (i) as of and for the fiscal years ended December 31, 2013 and December 31, 2014, reported on by Deloitte & Touche LLP, independent public accountants, and (ii) as of and for each Fiscal Quarter ended subsequent to December 31, 2014 and at least 45 days prior to the Closing Date, in each case certified by its chief financial officer (it being understood that the Obligors have furnished the foregoing referenced in clause (i) to Agent on the Original Closing Date). Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Parent Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)         The Obligors have heretofore furnished to Agent a pro forma consolidated balance sheet of the Parent Borrower and its consolidated Subsidiaries and related pro forma consolidated statement of income of the Parent Borrower as of and for the 12-month period ending on the last day of the most recently completed four-Fiscal Quarter period for which financial statements were delivered under Section  9.1.4(a) , prepared after giving effect to the Transactions and the other transactions contemplated hereby to be consummated on the Closing Date as if the Transactions and such other transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such income statements).

(c)         Except as disclosed in the financial statements referred to above, except for the Disclosed Matters and except for liabilities arising as a result of the Transactions, after giving effect to the Transactions, neither the Parent Borrower nor any Subsidiary of the Parent Borrower has, as of the Closing Date, any contingent liabilities that would be material to the Parent Borrower and its Subsidiaries, taken as a whole.

(d)         Since December 31, 2014, there has been no event, change or occurrence that, individually or in the aggregate, has had or could reasonably be expected to result in a Material Adverse Effect.

 

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9.1.5         Properties .

(a)        Each of the Parent Borrower and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business (including its Real Estate that is subject to a Mortgage), except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.

(b)        Each of the Parent Borrower and its Subsidiaries owns, or is licensed to use, all Intellectual Property material to its business, and the use thereof by the Parent Borrower and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

(c)         Schedule 9.1.5 sets forth the address of each real property that is owned or leased by the Parent Borrower or any of its Subsidiaries as of the Closing Date after giving effect to the Transactions.

9.1.6         Litigation and Environmental Matters .

(a)        There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Parent Borrower, threatened against or affecting the Parent Borrower or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters set forth on Schedule 9.1.6 ) or (ii) that involve any of the Loan Documents or the Transactions.

(b)        Except for the Disclosed Matters set forth on Schedule 9.1.6 and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Parent Borrower nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.

(c)        Since the Original Closing Date, there has been no change in the status of the Disclosed Matters set forth on Schedule 9.1.6 that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

(d)        No Obligor is in default with respect to any order, injunction or judgment of any Governmental Authority, except for such defaults which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

9.1.7         Compliance with Laws and Agreements . Each of the Parent Borrower and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.

 

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9.1.8         Investment Company Status . Neither the Parent Borrower nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

9.1.9         Taxes . Each of the Parent Borrower and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Parent Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, there is no pending audit of any Obligor with any federal, state, provincial, local or foreign tax authority, except as could not reasonably be expected to result in a Material Adverse Effect.

9.1.10         Employee Benefit Plans .

(a)         ERISA . No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. As of the Closing Date, the present value of all accumulated benefit obligations of all underfunded U.S. Pension Plans (based on the assumptions used for purposes of the Financial Accounting Standards Board Accounting Standards Codification Topic No. 715-30) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $ 10,000,000 5,000,000 the fair market value of the assets of all such underfunded U.S. Pension Plans.

(b)         Canadian Employee Plans . No Canadian Employee Plan provides for medical, life or other welfare benefits (through insurance or otherwise), with respect to any current or former employee of any Canadian Domiciled Obligor or any Affiliate thereof after retirement or other termination of service (other than coverage mandated by requirements of Applicable Law or coverage provided through the end of the month containing the date of termination from service or otherwise where part of a severance package or with respect to injured or disabled employees). Canadian Domiciled Obligors are in compliance with the requirements of the PBA and any binding FSCO requirements of general application with respect to each Canadian Pension Plan and in compliance with any FSCO directive or order directed specifically at a Canadian Pension Plan. No Canadian Pension Plan has any Unfunded Current Liability. No fact or situation that may reasonably be expected to result in a Material Adverse Effect exists in connection with any Canadian Pension Plan. No Canadian Domiciled Obligor or Subsidiary contributes to or participates in a Canadian Multi-Employer Plan. No Canadian Domiciled Obligor or an Affiliate thereof maintains, contributes or has any liability with respect to a Canadian Pension Plan which provides benefits on a defined benefit basis. No Termination Event has occurred. All contributions required to be made by any Canadian Domiciled Obligor or Subsidiary to any Canadian Pension Plan have been made in a timely fashion in accordance with the terms of such Canadian Pension Plan and the PBA. No Lien has arisen, choate or inchoate, in respect of any Canadian Domiciled Obligor or their property in connection with any Canadian Pension Plan (other than contribution amounts not yet due).

(c)         Foreign Plans . All Foreign Plans are in compliance with, and have been established, administered and operated in accordance with, the terms of such Foreign Plans and Applicable Law, except for any failure to so comply, establish, administer or operate the Foreign Plans as would not reasonably be expected to have a Material Adverse Effect. All contributions or other payments which are due with respect to each Foreign Plan have been made in full and

 

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there are no funding deficiencies thereunder, except to the extent any such events would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(d)         UK Pension Plan . No UK Domiciled Obligor is or has at any time been (1) an employer (as defined for the purposes of sections 38 to 51 of the Pensions Act 2004(UK)) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act (1993)(UK)) or (2) “connected” with or an “associate” (as those terms are used in sections 38 and 43 of the Pensions Act 2004(UK)) of such an employer.

(e)         Use of Plan Assets. No Borrower uses “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments.

9.1.11         Disclosure . The Parent Borrower has disclosed to Agent and the Lenders all agreements, instruments and corporate or other restrictions to which the Parent Borrower or any of its Subsidiaries is subject, and all other matters known to any of them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the other reports, financial statements, certificates or other information furnished by or on behalf of any Obligor to Agent or any Lender in connection with the negotiation of the Original Loan Agreement, this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished) contains any material misstatement of 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, the Parent Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time such projections were prepared.

9.1.12         Subsidiaries . The Parent Borrower does not have any subsidiaries other than the other Obligors and the Subsidiaries of the other Obligors. Schedule 9.1.12 sets forth the name of, and the ownership interest of the Parent Borrower in, each Subsidiary of the Parent Borrower and identifies each Subsidiary that is an Obligor, in each case as of the Closing Date.

9.1.13         Insurance . Schedule 9.1.13 sets forth a description of all material insurance policies maintained by or on behalf of the Parent Borrower and the Subsidiaries as of the Closing Date. As of the Closing Date, all premiums due in respect of such insurance have been paid.

9.1.14         Labor Matters . As of the Closing Date, there are no strikes, lockouts or slowdowns against the Parent Borrower or any Subsidiary pending or, to the knowledge of the Parent Borrower, threatened that could reasonably be expected to have a Material Adverse Effect. All payments due from the Parent Borrower or any Subsidiary, or for which any claim may be made against the Parent Borrower or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of the Parent Borrower or such Subsidiary except for those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Parent Borrower or any Subsidiary is bound.

9.1.15         Solvency . Immediately after the consummation of the Transactions to occur on the Closing Date and immediately following the making of each Loan made on the Closing Date and after giving effect to the application of the proceeds of such Loans, (a) the fair value of the assets of each Obligor Borrower, individually, and the Obligors, taken as a whole , at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise, (b) the present fair saleable value of the

 

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property of each Obligor Borrower, individually, and the Obligors, taken as a whole, will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured, (c) each  Obligor Borrower, individually, and the Obligors, taken as a whole, will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or fall due and (d) the Obligors, on a consolidated basis, will not have unreasonably small capital with which to conduct the business in which  it is they are engaged as such business is now conducted and is proposed to be conducted following the Closing Date.

9.1.16         Senior Indebtedness . The Obligations constitute “Senior Debt”, however defined, under the terms of any Debt that is subordinated in right of payment to the Obligations.

9.1.17         Security Documents .

(a)         Canadian Security Documents .

(i)        The  Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement , the Canadian Security Agreement and each Deed of Movable Hypothec is effective to create in favor of Agent, for the benefit of the  Canadian Facility  Secured Parties, a legal, valid and enforceable security interest in the Collateral described therein and (A) in respect of any such Collateral in which a security interest can be perfected by control or possession, such Collateral has been delivered to Agent, in its capacity as agent for the  Foreign Facility  Secured Parties solely for the purpose of perfecting the security interest granted to Agent in such Collateral, and for so long as Agent remains in control or possession of such Collateral, the security interest in such Collateral created by the Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement, the Canadian Security Agreement and each Deed of Movable Hypothec shall constitute a perfected first priority security interest in all right, title and interest of the pledgor thereunder in such Collateral, in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section  10.2.2 and (B) in respect of such Collateral in which a security interest can be perfected by the filing of a UCC or PPSA financing statement or a hypothec registration in accordance with the Civil Code, financing statements and registrations, as applicable, in appropriate form have been filed or registered in the offices specified on Schedule 1.04 to the Perfection Certificate most recently delivered to Agent, and the security interests created by the Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement, the Canadian Security Agreement and each Deed of Movable Hypothec constitute perfected security interests in all right, title and interest of the grantors thereunder in such Collateral, in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section  10.2.2 .

(ii)        [Reserved].

(iii)        The Canadian Security Agreement (or a summary thereof) will within ten (10) days of the Closing Date be filed in the Canadian Intellectual Property Office and each other intellectual property registration office where same has been filed, the financing statements and registrations referred to in Section  9.1.17(a)(i)(B) above have been appropriately filed and registered and each security interest created by the Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement, the Canadian Security Agreement and each Deed of Movable Hypothec constitutes or will constitute a perfected security interest in all right, title and interest of the grantors

 

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thereunder in the Intellectual Property in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the Canadian Intellectual Property Office and each other intellectual property registration office where same has been filed, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the Canadian Intellectual Property Office and each other intellectual property registration office where same has been filed and subsequent PPSA filings may be necessary to better evidence or perfect a Lien on registered Intellectual Property acquired by the Obligors after the Closing Date), other than with respect to Liens permitted by Section  10.2.2 .

(iv)        Each Canadian Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to Agent, for the benefit of the  Canadian Facility  Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Real Estate thereunder and the proceeds thereof, and when the Canadian Mortgages are filed in the appropriate offices, the Lien created by each Canadian Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Real Estate and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section  10.2.2 .

(b)         UK and Dutch Security Documents .

(i)        Each Dutch Security Document is effective to create in favor of Agent, for the benefit of the  Foreign Facility  Secured Parties, a legal, valid and enforceable security interest in the Collateral described in such Dutch Security Document.

(ii)        Each UK Security Agreement is effective to create in favor of the UK Security Trustee, for the benefit of the  Foreign Facility  Secured Parties, a legal, valid and enforceable security interest in the “Security Assets” (as defined in the UK Security Agreements).

(iii)        Under the law of each Obligor’s jurisdiction of incorporation or organization it is not necessary that any UK Security Document be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar Tax be paid on or in relation to any UK Security Document or the transactions contemplated by any UK Security Document, except (a) registration of particulars of each UK Security Document granted by a UK Domiciled Obligor at the Companies Registration Office in England and Wales in accordance with Part 25 (Company Charges) of the Companies Act 2006 (UK) or any regulations relating to the registration of charges made under, or applying the provisions of, the Companies Act 2006 (UK), (b) filing, registration or recordation on a voluntary basis or as required in order to perfect the security interest created by any UK Security Document in any relevant jurisdiction and (c) in each case, payment of associated fees, stamp Taxes or mortgage duties.

(iv)        Each UK Domiciled Obligor’s payment obligations under the Loan Documents rank at least pari passu with the claims of all its other unsecured and

 

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unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

(v)        Each UK Security Document has or will have the ranking in priority which it is expressed to have in the relevant UK Security Document and, other than as permitted under or contemplated by the Loan Documents, it is not subject to any prior ranking or pari passu ranking Lien.

(c)         U.S. Security Documents .

(i)        The Amended and Restated ABL Guarantee and Collateral Agreement is effective to create in favor of Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the “Pledged Collateral” (as defined in the Amended and Restated ABL Guarantee and Collateral Agreement) and, in respect of such Pledged Collateral in which a security interest can be perfected by control, such Collateral has been delivered to Agent or the Controlling Term Loan Agent, in its capacity as agent for Agent solely for the purpose of perfecting the security interest granted to Agent in such Collateral, and for so long as Agent or the Controlling Term Loan Agent, as applicable, remains in control of such Collateral, the security interest in such “Pledged Collateral” created by the Amended and Restated ABL Guarantee and Collateral Agreement shall constitute a perfected junior priority security interest (subordinate only to the security interests under  the Senior Term Loan Documents and  the Term Loan Documents) in all right, title and interest of the pledgor thereunder in such “Pledged Collateral”, in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section  10.2.2 and subject to the Intercreditor Agreement.

(ii)        The Amended and Restated ABL Guarantee and Collateral Agreement is effective to create in favor of Agent, for the benefit of the Secured Parties, a legal, valid and enforceable security interest in the “Collateral” other than the “Pledged Collateral” (in each case as defined in the Amended and Restated ABL Guarantee and Collateral Agreement) and, in respect of such Collateral in which a security interest can be perfected by the filing of a UCC financing statement, financing statements in appropriate form have been filed in the offices specified on Schedule 1.04 to the Perfection Certificate most recently delivered to Agent, and the security interest created by the Amended and Restated ABL Guarantee and Collateral Agreement constituted a perfected security interest in all right, title and interest of the grantors thereunder in such Collateral (other than the Intellectual Property), in each case prior and superior in right to any other Person, other than with respect to Liens permitted by Section  10.2.2 and subject to the Intercreditor Agreement.

(iii)        The Amended and Restated ABL Guarantee and Collateral Agreement (or a summary thereof) has been filed in the United States Patent and Trademark Office and the United States Copyright Office, the financing statements referred to in Section  9.1.17(c)(ii) above have been appropriately filed and the security interest created by the Amended and Restated ABL Guarantee and Collateral Agreement constitutes a perfected security interest in all right, title and interest of the grantors thereunder in the Intellectual Property in which a security interest may be perfected by filing, recording or registering a security agreement, financing statement or analogous document in the United States Patent and Trademark Office or the United States

 

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Copyright Office, as applicable, in each case prior and superior in right to any other Person (it being understood that subsequent recordings in the United States Patent and Trademark Office and the United States Copyright Office and subsequent UCC filings may be necessary to perfect a lien on registered trademarks, trademark applications and copyrights acquired by the Obligors after the Original Closing Date), other than with respect to Liens permitted by Section  10.2.2 and subject to the Intercreditor Agreement.

(iv)        Each Mortgage, upon execution and delivery thereof by the parties thereto, is effective to create, subject to the exceptions listed in each title insurance policy covering such Mortgage, in favor of and reasonably satisfactory to Agent, for the benefit of the Secured Parties, a legal, valid and enforceable Lien on all of the applicable mortgagor’s right, title and interest in and to the Real Estate thereunder and the proceeds thereof, and when the Mortgages are filed in the appropriate offices, the Lien created by each Mortgage shall constitute a perfected Lien on all right, title and interest of the applicable mortgagor in such Real Estate and the proceeds thereof, in each case prior and superior in right to any other Person, other than with respect to the rights of Persons pursuant to Liens permitted by Section  10.2.2 and subject to the Intercreditor Agreement.

(v)        The information set forth in the Schedules to the Amended and Restated ABL Guarantee and Collateral Agreement is true, complete and correct as of the Closing Date.

(d)         Mexican Security Documents .

(i)        Each Mexican Security Document is effective to create in favor of Agent, for the benefit of the  Foreign Facility  Secured Parties, a legal, valid and enforceable security interest in the “Pledged Assets ( Bienes Pignorados )” (as defined in the corresponding Mexican Security Document).

(ii)        When each Mexican Security Document has been filed in the RUG and IMPI, if applicable, the security interest created therein will constitute a perfected security interest in all right, title and interest of the grantors thereunder in the Collateral described therein, including but not limited to Equipment, Inventory and Intellectual Property in which a security interest may be perfected by filing, recording or registering a security agreement, in the RUG and IMPI, as applicable, in each case prior and superior in right to any other Person.

Each provision of this Section  9.1.17 shall be subject to any applicable limitation set forth in the applicable Security Documents.

9.1.18         Federal Reserve Regulations .

(a)        Neither the Parent Borrower nor any of any Obligor’s Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock.

(b)        No part of the proceeds of any Revolver Loan or any Letter of Credit will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of the provisions of the regulations of the Board, including Regulation U or X.

 

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9.1.19         Anti-Corruption Laws and Sanctions . The Parent Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Parent Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Parent Borrower, its Subsidiaries and their respective officers and employees and to the knowledge of the Parent Borrower its directors and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects. None of (a) the Parent Borrower, any Subsidiary of any Obligor or any of their respective directors, officers or employees, or (b) to the knowledge of the Parent Borrower, any agent of the Parent Borrower or any Subsidiary of any Obligor that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. No Borrowing or Letter of Credit, use of proceeds or other transaction contemplated by this Agreement will violate Anti-Corruption Laws or applicable Sanctions.

9.1.20         Accounts . Agent may rely, in determining which Accounts are Eligible Accounts, on all statements and representations made by Borrowers with respect thereto. Borrowers warrant, with respect to each Account shown as an Eligible Account in a Borrowing Base Report, that:

(a)        it is genuine and in all respects what it purports to be;

(b)        it arises out of a completed, bona fide sale and delivery of goods in the Ordinary Course of Business, and substantially in accordance with any purchase order, contract or other document relating thereto;

(c)        it is for a sum certain, maturing as stated in the applicable invoice, a copy of which has been furnished or is available to Agent on request;

(d)        it is owned by a Borrower and not subject to any offset, Lien (other than Permitted Encumbrances and Liens permitted under Sections 10.2.2(a) and 10.2.2(r) (in each case provided that no such Permitted Encumbrance or Lien permitted under Section  10.2.2(a) or Section  10.2.2(r) is prior to the Lien of Agent or the applicable Security Trustee, unless an Availability Reserve is in effect with respect thereto)), deduction, defense, dispute, counterclaim or other adverse condition except as arising in the Ordinary Course of Business and disclosed to Agent; and  it is absolutely owing by the Account Debtor, without contingency in any respect; and if part of a sale of Accounts exceeding $3,000,000 being sold or discounted (or intended to be sold or discounted) pursuant to any Specified Vendor Receivables Financing prior to delivery of the next scheduled Borrowing Base Report, Borrowers have delivered to Agent an updated Borrowing Base Certificate prior to or concurrent with such sale or discount reflecting the removal of such Accounts from the Borrowing Base .

(e)        no purchase order, agreement or Applicable Law restricts assignment of the Account to Agent (regardless of whether, under the UCC, the PPSA, the Civil Code or other Applicable Law, the restriction is ineffective), and the applicable Borrower is the sole payee or remittance party shown on the invoice;

(f)        no extension, compromise, settlement, modification, credit, deduction or return has been authorized or is in process with respect to the Account, except discounts or allowances granted in the Ordinary Course of Business for prompt payment that are reflected on the face of the invoice related thereto and in the reports submitted to Agent hereunder; and

(g)        to Borrowers’ knowledge, without investigation, (i) there are no facts or circumstances that are reasonably likely to impair the enforceability or collectability of such Account; (ii) the Account Debtor had the capacity to contract when the Account arose, continues

 

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to meet the applicable Borrower’s customary credit standards, is Solvent, is not contemplating or subject to an Insolvency Proceeding, and has not failed, or suspended or ceased doing business; and (iii) there are no proceedings or actions threatened or pending against any Account Debtor that could reasonably be expected to have a material adverse effect on the Account Debtor’s financial condition.

9.1.21        [ Reserved .]

9.1.22     Centre of Main Interests and Establishments . For the purposes of  The Council of the European Union regulation No.  1346/2000 on Insolvency Proceedings Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast) (the “ CMI Regulation ”), each of the UK Domiciled Obligors’ centre of main interest (as that term is used in Article 3(1) of the CMI Regulation) is situated in its jurisdiction of incorporation and none of them have an “establishment” (as that term is used in Article 2( h 10 ) of the CMI Regulation) in any other jurisdiction.

9.1.23         Material Contracts . Schedule 9.1.23 hereto sets forth for each Obligor, as of the Closing Date, a list of all of the material contracts and agreements to which such Obligor is a party, including, without limitation, all Specified Vendor Receivables Financing Documents (other than agreements disclosed to Agent pursuant to Section  10.1.2(h) , agreements relating to Debt described on Schedule 10.2.1 , real property leases identified on Schedule 2.03 to the Perfection Certificate delivered to Agent on the Closing Date, and Licenses identified on Schedule 4.04 to the Perfection Certificate delivered to Agent on the Closing Date).

9.1.24         Trade Relations . To the Obligors’ knowledge, there exists no actual or threatened termination, limitation or adverse modification of any business relationship between any Obligor or Subsidiary and any customer or supplier, or any group of customers or suppliers, who individually or in the aggregate are material to the business of such Obligor or Subsidiary, except for those which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. To the Obligors’ knowledge, there exists no condition or circumstance that could reasonably be expected to impair the ability of any Obligor or Subsidiary to conduct its business at any time hereafter in substantially the same manner as conducted on the Original Closing Date.

9.1.25         Payable Practices . No Obligor or Subsidiary has made any material change in its historical accounts payable practices from those in effect on the Original Closing Date.

9.1.26         Spin-Off . The Spin-Off was consummated on the Original Closing Date in accordance with Applicable Law and the Spin-Off Documentation (without giving effect to any modification or waiver of any provisions of, or any consent given in respect of, the Spin-Off Documentation not approved by Agent).

9.1.27         EEA Financial Institution . No Obligor is an EEA Financial Institution.

SECTION 10

COVENANTS AND CONTINUING AGREEMENTS

10.1         Affirmative Covenants . On and after the Closing Date and until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees and expenses payable hereunder have been paid in full and all Letters of Credit have expired, terminated or been Cash Collateralized and all unpaid drawings under any Letters of Credit shall have been reimbursed, each Obligor shall, and shall cause each Subsidiary to:

 

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10.1.1         Inspections; Appraisals ; Cooperation; Lender Calls .

(a)        Permit Agent from time to time, subject to reasonable notice and normal business hours, to visit and inspect the Properties of any Obligor or Subsidiary, inspect, audit and make extracts from any Obligor’s or Subsidiary’s books and records, and discuss with its officers, employees, agents, advisors and independent accountants such Obligor’s or Subsidiary’s business, financial condition, assets, prospects and results of operations. Lenders may participate in any such visit or inspection, at their own expense. Neither Agent nor any Lender shall have any duty to any Obligor to make any inspection, nor to share any results of any inspection, appraisal or report with any Obligor. Obligors acknowledge that all inspections, appraisals and reports are prepared by Agent and Lenders for their purposes, and Obligors shall not be entitled to rely upon them. Notwithstanding anything to the contrary herein, no Obligor or Subsidiary shall be required to disclose, permit the inspection, examination or making of copies of, or discuss any document, information, or other matter (A) that constitutes non-financial trade secrets or non-financial proprietary information of any Obligor or Subsidiary and/or any of its customers and/or suppliers, (B) in respect of which disclosure to Agent or any Lender (or any of their respective representatives or contractors) is prohibited by Applicable Law, (C) that is subject to attorney-client or similar privilege or constitutes attorney work product or (D) in respect of which any Obligor or Subsidiary owes confidentiality obligations to any third party (provided such confidentiality obligations were not entered into in contemplation of the requirements of this Section  10.1.1(a) ) and disclosure to Agent, any Lender or any Issuing Bank is prohibited notwithstanding the confidentiality obligations set forth in Section  14.12 unless Agent, Lenders and Issuing Banks agree to be bound by such additional confidentiality obligations with respect to such confidential information as may be reasonably requested by the Obligors and/or such third party to permit such disclosure.

(b)        Reimburse Agent for all charges, costs and expenses of Agent in connection with (i)  the engagement of Conway MacKenzie, Inc. or another professional consulting firm satisfactory to Agent and Lenders, to advise and assist Agent, Agent’s counsel, and Lenders with their on-going assessment of Obligors’ financial performance and ability to repay the Obligations (such assistance to include, without limitation, (1) a review of budgets and related reporting described in Section 10.1.2(m) hereof, and (2) on-going monitoring, consultation and updates on behalf of and as requested by Agent and Lenders), (ii) examinations of any Obligor’s books and records or any other financial or Collateral matters as Agent deems appropriate, up to one time per Loan Year (or up to  two times per Loan Year  during a Reporting Trigger Period) ; and ( ii iii ) appraisals of any Obligor’s Inventory up to one time per Loan Year (or up to  two times per Loan Year  during a Reporting Trigger Period) ; provided , however , that if an examination or appraisal is initiated during a Default or Event of Default, all charges, costs and expenses relating thereto shall be reimbursed by Obligors without regard to such limits. Obligors agree to pay Agent’s then standard charges for examination activities, including charges for Agent’s internal examination and appraisal groups, as well as the charges of any third party used for such purposes. Each Obligor acknowledges and agrees that Agent and Lenders may elect to maintain the confidentiality of any conclusions reached or reports prepared by the consultant referred to in clause (b)(i) above and may also provide that the consultant ’ s conclusions shall be covered by the attorney work-product privilege.

(c)          Hold a telephone call once per calendar month, if requested by Agent, for the benefit of Agent and Lenders to discuss Obligors ’ operational and financial performance, the status of strategic initiatives and any other items reasonably requested to be covered by any Lender and respond to questions that are raised on such call.

 

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(d)          Parent Borrower will, and will cause each of the Subsidiaries to,reasonably cooperate with one financial advisor acting on behalf of Agent and Lenders .

10.1.2         Financial and Other Information . Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP reflecting all financial transactions, and furnish to Agent and Lenders:

(a)        within 90 days after the end of each Fiscal Year of Parent Borrower, its audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Deloitte & Touche LLP or other independent public accountants of recognized national standing (without a “ going concern ” or like qualification or exception (except for any such qualification or exception resulting from any current maturity of Loans hereunder) and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of Parent Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied (it being understood that the obligation to furnish the foregoing to Agent and the Lenders shall be deemed to be satisfied in respect of any Fiscal Year of Parent Borrower by the filing of Parent Borrower’ annual report on Form 10-K for such Fiscal Year with the Commission to the extent the foregoing are included therein);

(b)        within 45 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of Parent Borrower, its consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of Parent Borrower and its consolidated subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes (it being understood that the obligation to furnish the foregoing to Agent and the Lenders shall be deemed to be satisfied in respect of any Fiscal Quarter of Parent Borrower by the filing of Parent Borrower’s quarterly report on Form 10-Q for such Fiscal Quarter with the Commission to the extent the foregoing are included therein);

(c)         during   any  Reporting   Trigger  Period,  as soon as available, and in any event within 30 days after the end of each month, (i)  unaudited balance sheets as of the end of such month and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on a consolidated basis for Obligors and their Subsidiaries and on a consolidating basis for each Obligor, from the Obligors’ internal operating statements (which are not intended to be prepared in accordance with GAAP), setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous Fiscal Year, certified by a Financial Officer of Parent Borrower as fairly presenting the financial position and results of operations for such month , and (ii) a variance analysis to the budget for the P&L and cash flow on a segment basis, each in a form reasonably acceptable to Agent and Required Lenders ;

(d)        concurrently with delivery of financial statements under clauses (a), (b) and (c) above, or more frequently if requested by Agent while a Default or Event of Default exists, a Compliance Certificate executed by a Financial Officer of the Parent Borrower which,

 

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inter alia shall (i) certify as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) set forth reasonably detailed calculations demonstrating compliance with the financial covenant set forth in Section  10.3 (whether or not a Financial Covenant Trigger Period is in effect), (iii) state whether any change in GAAP or in the application thereof has occurred since the date of Parent Borrower’s audited financial statements referred to in Section  9.1.4 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate and (iv) identify all Subsidiaries existing on the date of such certificate and indicate, for each such Subsidiary, whether such Subsidiary is an Obligor and/or a Foreign  Subsidiary and/or an Immaterial  Subsidiary and whether such Subsidiary was formed or acquired since the end of the previous Fiscal Quarter;

(e)        promptly following any request therefor, provide information and documentation reasonably requested by Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the PATRIOT Act, the Beneficial Ownership Regulation, and the AML Legislation;

(f)        not later than February 15 of each Fiscal Year, projections of Borrowers’ consolidated balance sheets, results of operations, cash flow, Total Availability and each component of Total Availability for such Fiscal Year, quarter by quarter;

(g)        at Agent’s request, a listing of each Borrower’s trade payables, specifying the trade creditor and balance due, and a detailed trade payable aging, all in form reasonably satisfactory to Agent;

(h) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Parent Borrower or any Subsidiary with the Commission or with any national securities exchange, as the case may be (it being understood that the obligation to furnish the foregoing to Agent and the Lenders shall be deemed to be satisfied to the extent the foregoing are filed with the Commission);

(i)        promptly upon Obligors’ receipt thereof, (A) copies of all material compliance reports filed and material correspondence regarding any active or pending investigation or enforcement action concerning any Obligor with any state, federal, local or foreign regulatory agency and (B) all material correspondence, if any, alleging violation of or requesting compliance by any Obligor with laws, regulations, etc. or requests for information pursuant to interstate commerce laws, antitrust laws, securities laws, worker safety laws (OSHA), etc.;

(j)        except to the extent already provided for in this Section  10.1.2 , promptly after the sending thereof, copies of any material deliverable or proposed waiver, consent, or amendment concerning any of  the Senior Term Loan Documents and/or  the Term Loan Documents;

(k) promptly upon the effectiveness thereof, (A) a description of each license from a Governmental Authority which becomes effective after the Closing Date and is material to the conduct of the business of the Obligors and their respective Subsidiaries, taken as a whole, and (B) a description of each material contract or agreement to which any Obligor is a party, including, without limitation, each Specified Vendor Receivables Financing Document (other than contracts and agreements disclosed to Agent pursuant to Section  10.1.2(h) , agreements

 

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described on Schedule 9.1.23 or Schedule 10.2.1 , and without duplication of real property leases identified on Schedule 2.03 to the Perfection Certificate most recently delivered to Agent and Licenses identified on Schedule 4.04 to the Perfection Certificate most recently delivered to Agent);

(l)        prior to any sale, transfer or other disposition of Revolver Priority Collateral in an aggregate amount in excess of $ 5,000,000 3,000,000 in reliance on Section  10.2.5(j) , Borrowers shall deliver to Agent a Borrowing Base Report, in form and substance acceptable to Agent in all respects, showing that, after giving pro forma effect to such disposition, no Overadvance exists, Canadian Revolver Usage does not exceed the Canadian Borrowing Base, UK Revolver Usage does not exceed the UK Borrowing Base, U.S. Revolver Usage does not exceed the U.S. Borrowing Base and Total Revolver Usage does not exceed the Total Borrowing Base ;

(m)          (i)(I) from the period beginning on the Seventh Amendment Effective Date to and including the date that is 30 days after the Seventh Amendment Effective Date, by no later than 11:00 p.m. (New York time) on Wednesday of each week, and (II) at all other times, by no later than 11:00 p.m. (New York time) on the last Wednesday of each fiscal month, an updated 13-week statement of projected receipts and disbursements (each such statement, a “Rolling 13-Week Cash Flow Forecast”) in form and detail reasonably satisfactory to Agent and Required Lenders, (ii) on each Wednesday, a report showing actual receipts and disbursements through the prior week for North America and Europe-Africa, including a variance report showing the variance to the immediately prior Rolling 13-Week Cash Flow Forecast with qualitative commentary explaining any material variations to such Rolling 13-Week Cash Flow Forecast,

(n)          on each Wednesday, a flash report in a form reasonably acceptable to Agent and Required Lenders providing estimated revenues by segment and those other key performance indicators by major location reasonably produced on a weekly basis for the prior week or those available monthly on a monthly basis for the prior month;

(o)           on the 15th day of each calendar month, an accounts payable aging report as of the prior fiscal month-end for Horizon Global Company LLC, Horizon Global Americas, Inc. and Westfalia- Automotive GmbH;

(p)          [reserved] ; and

(q)          (m)  such other reports and information (financial or otherwise) as Agent may reasonably request from time to time in connection with any Collateral or any Borrower’s, Subsidiary’s or other Obligor’s financial condition or business.

Each Obligor represents and warrants that it and each of its Subsidiaries either (i) has no registered or publicly traded securities outstanding or (ii) files its financial statements with the Commission and/or makes its financial statements available to potential holders of its 144A securities, and, accordingly, each Borrower hereby (x) authorizes Agent to make the financial statements to be provided under Section  10.1.2(a) and (b)  above, along with the Loan Documents, available to all Lenders and (y) agrees that at the time such financial statements are provided hereunder, they shall already have been made available to holders of its securities. The Obligor will not request that any other material be posted to all Lenders without expressly representing and warranting to Agent in writing that (A) such materials do not constitute material non-public information within the meaning of the federal securities laws (“ MNPI ”) or (B) (i) the Parent Borrower and its Subsidiaries have no outstanding publicly traded securities, including 144A securities, and (ii) if at any time the Parent Borrower or any of its Subsidiaries issues publicly

 

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traded securities, including 144A securities, the Obligors will, following the issuance of such securities, make such materials that do constitute MNPI at the time of issuance of such securities publicly available by press release or public filing with the Commission.

10.1.3         Notices .

(a)        Notify Agent and Lenders in writing ,   promptly after an Obligor’s obtaining knowledge thereof, of any of the following that affects an Obligor: (i) the commencement of any proceeding or investigation, whether or not covered by insurance, if an adverse determination could reasonably be expected to result in a Material Adverse Effect; (ii) any pending or threatened labor dispute, strike or walkout, or the expiration of any material labor contract; (iii) any material notice or default under or termination of a Material Agreement; (iv) the existence of any Default or Event of Default; (v) any judgment for the payment of money in an aggregate amount exceeding $ 2,500,000 5,000,000 that remains undischarged for a period of 30 consecutive days, during which execution is not effectively stayed, or the occurrence of any action legally taken by a judgment creditor to attach or levy upon assets in order to enforce any such judgment; (vi) the assertion of any Intellectual Property Claim, if an adverse resolution could have a Material Adverse Effect; (vii) any violation or asserted violation of any Applicable Law (including ERISA, PBA, OSHA, FLSA, or any Environmental Laws), if an adverse resolution could have a Material Adverse Effect; (viii) any Release by an Obligor or with respect to any Real Estate owned, leased or occupied by an Obligor; or receipt of any Environmental Notice, in each case where the expected remedial costs or liability is reasonably expected to exceed $2,500,000; (ix) the occurrence of any ERISA Event or Termination Event that, alone or together with any other ERISA Events or Termination Events that have occurred, could reasonably be expected to result in liability of the Parent Borrower and its Subsidiaries in an aggregate amount exceeding $ 10,000,000 5,000,000 ; (x) the discharge of or any withdrawal or resignation by Obligors’ independent accountants; (xi) any material audit of any Obligor with any federal, state, provincial, local or foreign tax authority; or (xii) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Parent Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.

(b)        [Reserved.]

(c)        Each year, within 90 days after the end of each Fiscal Year of Parent Borrower, Parent Borrower (on behalf of itself and the other Obligors) shall deliver to Agent a certificate of a Financial Officer of Parent Borrower (i) setting forth the information required pursuant to the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Closing Date or the date of the most recent Perfection Certificate delivered pursuant to this Section and (ii) certifying that all UCC and PPSA financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Security Documents for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period).

 

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10.1.4         Landlord and Storage Agreements . Upon request, provide Agent with copies of all existing agreements, and promptly after execution thereof provide Agent with copies of all future agreements, between an Obligor and any landlord, warehouseman, processor, shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle any Collateral.

10.1.5         Compliance with Laws . Each of the Obligors will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Each Obligor will maintain in effect and enforce policies and procedures designed to ensure compliance by such Obligor, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

10.1.6         Payment of Obligations . Each of the Obligors will, and will cause each of the Subsidiaries to, pay its Debt and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except (a) those being contested in good faith by appropriate proceedings and for which such Obligor or such Subsidiary, as applicable, has set aside on its books adequate reserves with respect thereto in accordance with GAAP, or (b) to the extent the failure to make payment could not reasonably be expected to result in a Material Adverse Effect; provided that no amounts received from any Obligor shall be applied to Excluded Swap Obligations of such Obligor.

10.1.7         Insurance . Each of the Obligors will, and will cause each of the Subsidiaries to, maintain insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations, except where the failure to do so could not reasonably be expected to result in a Material Adverse Effect. Such insurance shall be maintained with financially sound and reputable insurance companies, except that a portion of such insurance program (not to exceed that which is customary in the case of companies engaged in the same or similar business or having similar properties similarly situated) may be effected through self-insurance; provided adequate reserves therefor, in accordance with GAAP, are maintained. In addition, each of the Obligors will, and will cause each of its Subsidiaries to, maintain all insurance required to be maintained pursuant to the Security Documents. With respect to each Mortgaged Property that is located in an area determined by the Federal Emergency Management Agency to have special flood hazards, the applicable Obligor will maintain, with financially sound and reputable insurance companies, such flood insurance as is required under Applicable Law, including Regulation H of the Board of Governors. The Parent Borrower will furnish to the Lenders, upon request of Agent, information in reasonable detail as to the insurance so maintained. All insurance policies or certificates (or certified copies thereof) with respect to such insurance shall be endorsed to Agent’s reasonable satisfaction for the benefit of the Lenders (including by naming Agent as lender loss payee, as appropriate).

10.1.8          Existence; Conduct of Business .

(a)        Each of the Obligors will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names the loss of which would have a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section  10.2.3 or disposition permitted under Section  10.2.5 .

 

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(b)        The Parent Borrower will cause all the Equity Interests of each Subsidiary which is a Borrower to be owned, directly or indirectly, by the Parent Borrower or any Subsidiary.

10.1.9         Future Subsidiaries; Further Assurances .

(a)        If any additional Subsidiary is formed or acquired after the   Original Closing Date, the Parent Borrower Seventh Amendment Effective Date (or any existing Subsidiary becomes a Subsidiary Loan Party after the Seventh Amendment Effective Date), Borrowers will, within five Business Days after such Subsidiary is formed or acquired (or becomes a Subsidiary Obligor) , notify Agent and the Lenders  thereof and, within 30 days (or such longer period as may be agreed to by Agent) after any such Subsidiary that is organized, incorporated or formed in the same jurisdiction or country as any member of any then-existing Obligor Group (each, a “ Permitted Jurisdiction ” ; as of the Closing Date, the Permitted Jurisdictions include the United States, the United Kingdom, Canada, the Netherlands, and Mexico and any state, province, territory or other jurisdiction of any of the foregoing countries; Permitted Jurisdictions will be deemed to include, without limitation, the jurisdiction or country of each New Borrower) such Subsidiary is formed or acquired (or becomes a Subsidiary Obligor) , cause each applicable the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary, including with respect to any Equity Interest in or Debt Indebtedness of such Subsidiary owned by or on behalf of any Obligor , including delivery of such legal opinions, in form and substance satisfactory to Agent, as it shall deem appropriate in its Permitted Discretion. For the avoidance of doubt, notwithstanding anything herein or in the other Loan Documents to the contrary, no action in any jurisdiction that is not a Permitted Jurisdiction or required by the Laws of any jurisdiction that is not a Permitted Jurisdiction shall be required in order to create any security interests in assets located, titled, registered or filed outside of a Permitted Jurisdiction or to perfect such security interests (it being understood that there shall be no security agreement or pledge agreement governed by the Laws of any jurisdiction that is not a Permitted Jurisdiction). Agent may grant extensions of time for the perfection of security interests in particular assets and the delivery of assets and Security Documents (other than U.S. Security Documents) or any other compliance with the requirements of this  Section 10.1.9  where it reasonably determines, in consultation with the Borrower Agent, that perfection or compliance cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required by this Agreement or such Security Documents. For the avoidance of doubt, no additional Subsidiary that is formed or acquired after the Original Closing Date that is not a U.S. Subsidiary Obligor shall be subject to the U.S. Facility Collateral and Guarantee Requirement .

(b)        Each of the Obligors (including any Foreign Subsidiary that is required to be a U.S. Subsidiary Obligor by the Required Lenders) will 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, Lien registrations, fixture filings, mortgages, deeds of trust, landlord waivers and other documents), which may be required under any Applicable Law, or which Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Obligors. The Obligors also agree to provide to Agent, from time to time upon request, evidence reasonably satisfactory to Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

 

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(c)        If any assets (including any real property or improvements thereto or any interest therein) having a book value or fair market value of  (a)  $500,000 or more in the aggregate   during the Senior Term Period or (b) $5,000,000 or more in the aggregate at any other time  are acquired by any Obligor after the Closing Date or through the acquisition of a Subsidiary Obligor or through the conversion of a Subsidiary into a Subsidiary Obligor (other than, in each case, assets constituting Collateral under any Security Document that become subject to the Lien of such Security Document upon acquisition thereof), the Parent Borrower or, if applicable, the relevant Subsidiary Obligor will notify Agent and the Lenders thereof, and, if reasonably requested by Agent or the Required Lenders, the Parent Borrower will cause such assets to be subjected to a Lien securing all Obligations of the Obligor Group of which the Obligor which is the direct owner of such Subsidiary Obligor is a member and will take, and cause the Subsidiary Obligors to take, such actions as shall be necessary or reasonably requested by Agent to grant and perfect such Liens, including actions described in paragraph (b) of this Section, all at the expense of the Obligors.

(d)        Any Subsidiary that is organized in any jurisdiction approved by Agent and Lenders, but is not a Canadian Subsidiary, UK Subsidiary or U.S. Subsidiary, may, at the election of the Borrower Agent and with the written approval of Agent and Lenders, become a Foreign Borrower hereunder (such Subsidiary, a “ New Borrower ”) upon (i) the execution and delivery to Agent and/or Security Trustees (A) by the Persons required to be parties thereto (including, with respect to the amendment of this Agreement, in accordance with Section  14.1.1 ) of an amendment and joinder to this Agreement and the other applicable Loan Documents, together with supplements to the applicable Loan Documents executed by such New Borrower and any other Person required by the terms of such Loan Documents to be party to such supplement, which may, if agreed to by Borrower Agent and Agent, provide for the addition to this Agreement of additional agreed security principals and for any appropriate modification to the tax gross-up provisions (including the definition of the Excluded Taxes) to reflect the withholding tax rules in the applicable new jurisdiction(s), all in form and substance acceptable to Agent in all respects, (B) by such New Borrower of Security Documents in form and substance satisfactory to Agent and any relevant Security Trustee as may be required for the relevant jurisdiction (provided that, to the extent appropriate with respect to such jurisdiction, any such new Security Document shall be in substantially the same form as any comparable Security Document to which any similarly-situated existing Obligor is party) and satisfaction of requirements substantially the same as the Collateral and Guarantee Requirement of the other Foreign Borrowers, modified as appropriate with respect to the relevant jurisdiction, (C) by an executive officer or Financial Officer of such New Borrower (and other Obligors, to the extent reasonably requested by Agent) of a completed Perfection Certificate dated as of the date that the joinder of such New Borrower to the applicable Loan Documents is effective (with respect to such New Borrower, the “ Joinder Date ”), together with all attachments contemplated thereby, including without limitation the results of a search of the relevant Lien-related filings made with respect to such New Borrower in the jurisdictions contemplated by such Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to Agent that the Liens indicated by such financing statements (or similar documents) are permitted by Section  10.2.2 or have been released or will be released pursuant to appropriate release documentation delivered to Agent, (D) by Borrower Agent of a Borrowing Base Report incorporating such New Borrower as of the most recent month ending at least 15 days prior to the Joinder Date, (E) by a knowledgeable Senior Officer of such New Borrower of a certificate of the type described in Section  6.1(e) , (F) by a duly authorized officer of such New Borrower of a certificate of the type described in Section  6.1(f) , together with all attachments thereto (including, without limitation, items that are the applicable jurisdictional

 

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equivalent of those referred to in Section  6.1(h) ), (G) by a knowledgeable Senior Officer of Borrower Agent, a certificate, in form and substance reasonably satisfactory to Agent, certifying that, after giving effect to the joinder of such New Borrower on the Joinder Date and any Loan or Letter of Credit to be extended or issued to or on behalf of the New Borrower on such date, no Default exists and the representations and warranties set forth in Section  9 are true and correct and (H) such other documents, instruments and agreements as Agent may reasonably require; (ii) Agent’s receipt of duly executed agreements establishing and/or evidencing each Dominion Account and related lockbox and each Controlled Account of such New Borrower, each in form and substance, and with financial institutions, satisfactory to Agent; (iii) Agent’s receipt of a written opinion of counsel to such New Borrower, as well as any local counsel to such New Borrower or Agent, in form and substance satisfactory to Agent; (iv) to the extent not previously delivered to Agent, Agent’s receipt of copies of policies or certificates of insurance for the insurance policies carried by such New Borrower, together with a loss payable endorsement naming Agent as loss payee and reasonably acceptable to Agent, all in compliance with the Loan Documents; (v) the completion of Agent’s business, legal and financial due diligence (it being understood that examinations and appraisals conducted pursuant to this clause (v) shall not be included in the limits on the number of examinations or appraisals provided in Section  10.1.1 ) with respect to such New Borrower, with results satisfactory to Agent, and Agent’s and the Applicable Lenders’ (for purposes of this clause (v), the Applicable Lenders being the Lenders that will provide a Commitment to such New Borrower) receipt of all documentation and other information required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act; (vi) Agent’s receipt of payoff or release letters, in form and substance satisfactory to Agent, confirming that such New Borrower is released from all obligations under any Debt not expressly permitted by this Agreement and providing a release of all of the Liens existing with respect to any such Debt in and to the assets of such New Borrower, together with termination statements and other documentation evidencing the termination of any such Liens in and to the properties and assets of such New Borrower and (vii) payment by Borrowers of all fees and expenses to be paid to Agent and/or the Lenders under the Loan Documents on or prior to the Joinder Date.

(e)        Each provision of the Section  10.1.9 shall be subject to any applicable limitation set forth in the applicable Security Documents and the Agreed Security Principles.

10.1.10         Casualty and Condemnation . The Parent Borrower (a) will furnish to Agent and the Lenders prompt written notice of casualty or other insured damage to any material portion of any Collateral having a book value or fair market value of $1,000,000 or more or the commencement of any action or proceeding for the taking of any Collateral having a book value or fair market value of $1,000,000 or more or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement, the Security Documents and the Intercreditor Agreement.

10.1.11         Canadian Pension Plans and UK Pension Plans .

(a)        Promptly after any Canadian Domiciled Obligor or any Affiliate knows or has reason to know of the occurrence of any of the following events, the applicable Canadian Domiciled Obligor will deliver to Agent a certificate of a Senior Officer of the applicable Canadian Domiciled Obligor setting forth details as to such occurrence and the action, if any, that such Canadian Domiciled Obligor or such Affiliate is required or proposes to take, together with

 

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any notices (required, proposed or otherwise) given to or filed with or by such Canadian Domiciled Obligor, such Affiliate, the FSCO, a Canadian Employee Plan participant (other than notices relating to an individual participant’s benefits) or the Canadian Employee Plan administrator with respect to any violation or asserted violation of any Applicable Law (including the PBA) or the occurrence of any Termination Event.

(b)        Each Canadian Domiciled Obligor’s and its Subsidiaries’ Canadian Pension Plans shall be duly registered and administered in all respects in material compliance with, as applicable, the PBA, the Income Tax Act (Canada) and all other Applicable Laws (including regulations, orders and directives), and the terms of the Canadian Pension Plans and any agreements relating thereto. Each Canadian Domiciled Obligor shall ensure that it and its Subsidiaries: (i) have no Unfunded Current Liability in respect of any Canadian Pension Plan, including any Canadian Pension Plan to be established and administered by it or them; (ii) pay all amounts required to be paid by it or them in respect of such Canadian Pension Plan when due;

(iii) have no Lien on any of its or their property that arises or exists in respect of any Canadian Pension Plan except as disclosed in Schedule 10.2.2 ; (iv) do not engage in a prohibited transaction or breach any applicable laws with respect to any Canadian Pension Plan that could reasonably be expected to result in a Material Adverse Effect in respect of such Canadian Pension Plan; (v) do not permit to occur or continue any Termination Event; and (vi) not maintain, contribute or have any liability in respect of a Canadian Pension Plan which provides benefits on a defined benefit basis during the term of this Agreement.

(d)        Each UK Domiciled Obligor shall ensure that all pension schemes operated by or maintained for the benefit of members of the UK Domiciled Obligors and/or any of their employees are fully funded based on the statutory funding objective under sections 221 and 222 of the Pensions Act 2004 (UK) and that no action or omission (including, without limitation, the termination or commencement of winding-up proceedings of any such pension scheme or any UK Domiciled Obligor ceasing to employ any member of such a pension scheme) is taken by any UK Domiciled Obligor in relation to such a pension scheme which has or is reasonably likely to have a Material Adverse Effect.

(e)        Each UK Domiciled Obligor shall ensure that no UK Domiciled Obligor is or has been at any time an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004 (UK)) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993 (UK)) or “connected” with or an “associate” of (as those terms are used in sections 38 or 43 of the Pensions Act 2004 (UK)) such an employer.

(f)        Each UK Domiciled Obligor shall deliver to Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the UK Domiciled Obligor), actuarial reports in relation to all pension schemes mentioned in paragraph (c) above.

(g)        Each UK Domiciled Obligor shall promptly notify Agent of any material change in the rate of contributions to any pension schemes mentioned in (c) above paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise).

10.1.12         Maintenance of Properties . Each of the Obligors will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of their business, taken as a whole, in good working order and condition, ordinary wear and tear excepted; provided that the foregoing

 

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shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section  10.2.3 or disposition permitted under Section  10.2.5 .

10.1.13         Use of Proceeds and Letters of Credit . The proceeds of the Revolver Loans will be used only for general corporate purposes  and Permitted Acquisitions . Letters of Credit will be available only for general corporate purposes. No part of the proceeds of any Revolver Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the regulations of the Board, including Regulations T, U and X. The Parent Borrower shall use the proceeds of the Second Lien Term Loan Debt (i)  on the Seventh Amendment Effective Date, (w)  to repay in full in cash all obligations outstanding under the Credit Agreement, dated as of February  20, 2019, by and among the Parent Borrower, Cortland Capital Market Services LLC, as administrative agent, and the lenders from time to time party thereto, (x)   to repay Loans outstanding in an aggregate principal amount of not less than $20,000,000 plus accrued interest on such amount, and (y)  to pay fees and expenses incurred in connection with the Seventh Amendment, the Second Lien Term Loan Agreement and the transactions contemplated thereby and (ii)  thereafter, for ordinary working capital purposes and accounts payable catch up consistent with the forecast delivered prior to the Seventh Amendment Effective Date.

10.1.14         Banking Relationships; Controlled Accounts; Deposit and Security Accounts . Within ninety (90) days of the Original Closing Date and continuing thereafter, each of the U.S. Domiciled Obligors will, and will cause each of the U.S. Subsidiaries to, maintain Bank of America or Wells Fargo Bank as their principal depository bank, including for the maintenance of operating and depository accounts, administration and services, funds transfer services, information reporting services, and other Cash Management Services. All Controlled Accounts of the UK   Domiciled Obligors Borrower shall be held in the United States. Each of the Obligors will cause all of their Deposit Accounts and Securities Accounts that do not constitute Excluded Accounts to be maintained in jurisdictions  (and in no event in any jurisdiction that is not a Permitted Jurisdiction)  and with banks or other financial institutions such that such Deposit Accounts and Securities Accounts may be subject to Deposit Account Control Agreements or Securities Account Control Agreements, as applicable, to the extent required by the Loan Documents without giving effect to the Agreed Security Principles (except with respect to the following, to which the Agreed Securities Principles will apply: (a) Deposit Accounts and Securities Accounts maintained by a UK Domiciled Obligor in the United Kingdom,  to the extent permitted to be maintained in such country pursuant to this  Section 10.1.14 ,  (b) Deposit Accounts and Securities Accounts maintained by a Mexican Domiciled Obligor in Mexico  and , (c) Secur i ties Accounts maintained by a Canadian Domiciled Obligor in Canada , (d)  Deposit Accounts and Securities Accounts maintained by a Dutch Domiciled Obligor in the Netherlands, and (e)  Deposit Accounts and Securities Accounts maintained by a German Domiciled Obligor in Germany ).

10.1.15         Post-Closing Deliverables . The Obligors shall deliver, or cause to be delivered, the following items to Agent, in each case in form and substance satisfactory to Agent and its counsel, and/or cause the following to occur, in each case on or before expiration of the respective specified time periods, in each case as extended in writing by Agent in the sole discretion of Agent:

(a)     No later than twenty (20) Business Days after the Closing Date (i) an amendment to the Intercreditor Agreement, executed and delivered by Agent and Term Loan Agent, (ii) an amendment to the Guarantee and Collateral Agreement, executed and delivered by Agent and the U.S. Obligors, and (iii) a copy of an amendment to the Guarantee and Collateral Agreement (as defined in the Term Loan Agreement), executed by the Term Loan Agent and the U.S. Obligors.

 

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(b) No later than twenty (20) Business Days after the Closing Date, a certificate of a duly authorized officer of Parent Borrower certifying that an attached copy of resolutions of the applicable governing body of Parent Borrower authorizing execution and delivery of the Loan Documents is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified or revoked, and, together with the resolutions delivered by the Parent Borrower pursuant to Section 6 of the Original Loan Agreement, constitute all resolutions adopted with respect to this credit facility. Upon receipt thereof, Agent may conclusively rely on such certificate until it is otherwise notified by the applicable Obligor in writing.

(c) No later than twenty (20) Business Days after the Closing Date, an amendment to the Limited Liability Company Agreement of Horizon International Holdings LLC, a Delaware limited liability company, certified by a duly authorized officer thereof, to permit Agent and its assignees to exercise all voting, management, economic and other membership rights under such Limited Liability Company Agreement, as amended, in connection with the enforcement and/or transfer of its rights and/or interests in the Equity Interests in Horizon International Holdings LLC pledged to Agent, in each case to the extent such enforcement and/or transfer is permitted by the Loan Documents.

(d) No later than twenty (20) Business Days after the Closing Date, evidence that all direct and indirect Subsidiaries of the Parent Borrower are insureds under the insurance policies set forth on Schedule 9.1.13.

(e) No later than sixty (60) Business Days after the Closing Date (provided that if Obligors are unable to comply with this covenant within such time period after exercising commercially reasonable efforts, Obligors shall be automatically granted an additional sixty (60) Business Day period to comply with this covenant so long as Obligors continue to exercise commercially reasonable efforts to complete the same), evidence, in form and substance satisfactory to Agent, that the Liens on the assets of Cequent Performance in favor of Heller Financial Inc. have been released, together with, in each case unless Cequent Performance (in its reasonable business judgment) and Agent shall reasonably determine that such Trademark is in no way material to the conduct of Cequent Performance’s business, a release of the interest of Heller Financial Inc. in Trademarks “Hidden Hitch Logo -- TMA582876”, “Pyramid, Hitchball & Design -- TMA317445” and “Hidden Hitch -- TMA390183” of Cequent Performance and evidence that filings appropriate to evidence the release of such Liens have been properly filed with the Canadian Intellectual Property Office.

(f)        Not later than thirty (30) days following the Closing Date, in each case unless Cequent Performance or Cequent Consumer, as applicable and in its reasonable business judgment, and Agent shall reasonably determine that the applicable Patent or Trademark is in no way material to the conduct of Cequent Performance’s or Cequent Consumer’s business, as applicable, cause to be filed with the PTO an update to the Owner Name to reflect the proper Obligor (Cequent Consumer Products, Inc. or Cequent Performance Products, Inc.) as owner for each of the following Patents and Trademarks and provide evidence of filing of the same to Agent: (i) adjustable enclosure and mounting box for a trailer hitch electrical connector (Reg. # 6,076,691) (currently assigned to Mascotech, Inc.); (ii) trailer hitch with load adjustment (Reg. # 6,722,682) (current owner is Hidden Hitch International); and (iii) sealed multiple-contact electrical connector (Reg. # 6,338,644) (current owner is Theodore Bargman, Inc. D/B/A The Bargman Company).

 

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(g)        Each Obligor will and will   case cause each other Obligor to satisfy the post-closing conditions described in Schedule I to the Fourth Seventh Amendment within the timelines set forth therein.

(h)         Within five (5)  Business Days following the Sixth Amendment Effective Date (or such later date as the Agent may consent in writing), Obligors shall furnish to Agent an executed officer ’ s certificate certifying and attaching a comprehensive list of deposit accounts and securities accounts of each Obligor substantially in the form of Schedule 3.03 of the Perfection   Certificate.

Except with respect to the extension of the deadline from that set forth in the Post-Closing Agreement referred to below with respect to the deliverables required by clause (f) of this Section  10.1.15 , this Section  10.1.15 does not amend or modify, or waive or release any obligation under, that certain Post-Closing Agreement, dated as of the Original Closing Date, by and among the U.S. Borrowers, the Lenders party thereto, and Agent, as such Post-Closing Agreement may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms.

10.1.16 Retention of Consultant . The Obligors shall continue to retain Brian Whittman of Alvarez & Marsal as a consultant to and as an officer of  the Borrowers for a period ending no sooner than March 31, 2019. the date that is 90 days from the Seventh Amendment Effective Date .

10.1.17 People with Significant Control regime. Each of the Obligors will, and will cause each of the Subsidiaries to (a)  within the relevant timeframe, comply with any notice it receives pursuant to Part 21A of the Companies Act 2006 from any company incorporated in the United Kingdom whose shares are the subject of a Lien in favor of the Agent, and (b) promptly provide the Agent with a copy of that notice .

10.2         Negative Covenants . On and after the Closing Date and until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees and expenses payable hereunder have been paid in full and all Letters of Credit have expired, terminated or been Cash Collateralized and all unpaid drawings under any Letters of Credit shall have been reimbursed, each Obligor covenants and agrees with the Lenders that:

10.2.1         Debt; Certain Equity Securities .

(a)        None of the Obligors will, nor will they permit any Subsidiary to, create, incur, assume or permit to exist any Debt or obligations under Hedging Agreements, except  (and provided, however, that during the Senior Term Period no additional arrangements for Debt described in clauses (i)(B), (ii), (iii)(B), (iv), (vii), (viii), (ix), (x), (xii), (xiii) or (xx)  below may be incurred by any Obligor or any  Subsidiary) :

(i)        (A) Debt created under the Loan Documents, (B)   any First Lien Term Loan Debt, and (C)  Second Lien Term Loan Debt and any Permitted Term Loan  Refinancing Debt and (D)  Senior Term Loan Debt in respect of any of the foregoing ;

(ii)         (A)   financings  in   respect   of   sales   of  accounts   receivable  by  a Foreign Subsidiary permitted by  Section 10.2.5(c)(i ), (B) the  Specified Vendor Receivables Financing and (C)  the Specified Vendor Payables Financing in existence on the Seventh Amendment Effective Date and Permitted Refinancing Debt in respect thereof ;

 

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(iii)        (A) Debt existing on the Original Closing Date and set forth in Seventh Amendment Effective Date (which Debt shall, to the extent the principal amount thereof as of the Seventh Amendment Effective Date exceeds $500,000, be set forth on Schedule 10.2.1 ) and (B)  extensions, renewals and replacements of any such Debt that do not increase the outstanding principal amount as specified on such Schedule 10.2.1 or result in an earlier maturity date or  decreased weighted average life thereof Permitted Refinancing Debt with respect to suc h Debt;

(iv)         Permitted Unsecured Debt of the Parent Borrower;  Permitted Unsecured Debt of the Parent Borrower; provided  that the Net Leverage Ratio (disregarding the proceeds of such Permitted Unsecured Debt in calculating Unrestricted Domestic Cash), on a pro forma basis after giving effect to the incurrence of such Permitted Unsecured Debt (and any related repayment of Debt) and recomputed as of the last day of the most recently ended Fiscal Quarter of the Parent Borrower for which financial statements are available, as if such incurrence (and any related repayment of Debt) had occurred on the first day of the relevant period is no greater than 4.00 to 1.00; [reserved];

(v)        Debt of the Parent Borrower to any Subsidiary and of any Subsidiary to the Parent Borrower or any other Subsidiary; provided that Debt of any Subsidiary (i)  that is not a U.S. an Obligor to the Parent Borrower or any Subsidiary Obligor or (ii) for which the Collateral and Guarantee Requirement has not been satisfied, in each case , shall be subject to Section  10.2.4 ;

(vi)        Guarantees by the Parent Borrower of Debt of any Subsidiary and by any Subsidiary of Debt of the Parent Borrower or any other Subsidiary; provided that Guarantees by the Parent Borrower or any Subsidiary Obligor of Debt of any Subsidiary that is not a U.S. an Obligor or for which the Collateral and Guarantee Requirement has not been satisfied shall be subject to Section  10.2.4 ;

(vii)        Guarantees by the Parent Borrower or any Subsidiary, as the case may be, in respect of (A)  the Term Loan Debt, (B)  any Permitted Term Loan Refinancing Debt, (C)  any Permitted Unsecured Debt or (D)   Senior the Term Loan Debt; provided that none of the Parent Borrower or any Subsidiary, as the case may be, shall Guarantee such Debt unless it also has Guaranteed the Obligations pursuant to a Guaranty;

(viii)        Debt of the Parent Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Debt assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Debt that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life thereof; provided that (A) such Debt is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement and (B) the aggregate principal amount of Debt permitted by this clause (viii) shall not exceed $ 20,000,000 10,000,000 at any time outstanding;

(ix)         Debt arising as a result of an Acquisition Lease Financing or   any other sale and leaseback transaction permitted under  Section 10.2.6 ; Indebtedness arising

 

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in connection with any retention of title arrangements ( verlängerter Eigentumsvorbehalt ) made in the Ordinary Course of Business;

(x)         Debt of any Person that becomes a Subsidiary after the Original Closing Date; provided that (A) such Debt exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B) the aggregate principal amount of Debt permitted by this clause (x) shall not exceed $25,000,000 at any time outstanding, less the liquidation value of any outstanding Assumed Preferred Stock; Indebtedness arising under a declaration of joint and several liability used for the purpose of section 2:403 of the Dutch Civil Code (and any residual liability under such declaration arising pursuant to section 2:404(2) of the Dutch Civil Code ;

(xi)        Debt of the Parent Borrower or any Subsidiary in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety appeal or similar bonds and completion guarantees provided by the Parent Borrower and the Subsidiaries in the ordinary course of their business;

(xii)         other unsecured Debt of the Parent Borrower or any Subsidiary Debt or other financings incurred by Foreign Subsidiaries in respect of accounts receivable and/or inventory in an aggregate principal amount not exceeding $15,000,000 10,000,000 at any time outstanding, less the liquidation value of any applicable Qualified Parent Borrower Preferred Stock issued and outstanding pursuant to clause (b) of the definition of Qualified Parent Borrower Preferred Stock; ;

(xiii)         secured  Debt incurred by Foreign Subsidiaries that are not Obligors in an aggregate amount not exceeding $ 50,000,000 10,000,000 at any time outstanding , in each case in respect of Debt of Foreign Subsidiaries (exclusive of any Debt of Foreign Subsidiaries arising under the Loan Documents) ;

(xiv)        Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the Ordinary Course of Business; provided , however , that such Debt is extinguished within ten days of incurrence;

(xv)        Debt arising in connection with endorsement of instruments for deposit in the Ordinary Course of Business;

(xvi)        Debt incurred in connection with the financing of insurance premiums in an aggregate amount at any time outstanding not to exceed the premiums owed under such policy, if applicable;

(xvii)         contingent  obligations to financial institutions, in each case to the extent in the Ordinary Course of Business and on terms and conditions which are within the general parameters customary in the banking industry, entered into to obtain cash management services or deposit account overdraft protection services (in an amount similar to those offered for comparable services in the financial industry) or other services in connection with the management or opening of deposit accounts or incurred as a result of endorsement of negotiable instruments for deposit or collection purposes and other customary, contingent  obligations of the Parent Borrower and its Subsidiaries incurred in the Ordinary Course of Business;

 

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(xviii)        unsecured guarantees by the Parent Borrower or any Subsidiary Obligor of facility leases of any Obligor;

(xix)        obligations of the Parent Borrower or any Subsidiary Obligor under Hedging Agreements permitted under Section  10.2.7 with respect to (A) any Permitted Bond Hedge Transaction, (B) any Permitted Warrant Transaction and/or interest rates, foreign currency exchange rates or commodity prices, in each case not entered into for speculative purposes; provided that if such Hedging Agreements relate to interest rates, (i) such Hedging Agreements relate to payment obligations on Debt otherwise permitted to be incurred by the Loan Documents and (ii) the notional principal amount of such Hedging Agreements at the time incurred does not exceed the principal amount of the Debt to which such Hedging Agreements relate;

(xx)         Alternative Incremental Debt;   provided   that the  aggregate principal amount of any Alternative Incremental Debt established on any date shall not exceed (i) (together with the aggregate amount of all Incremental Term Commitments established on such date in reliance on the Base Incremental Amount) an amount equal to the Base Incremental Amount on such date and (ii)  an additional amount subject to the Maximum Alternative Incremental Debt Amount as of such date;   [reserved];

(xxi)        Debt arising under a declaration of joint and several liability used for the purpose of section 2:403 of the Dutch Civil Code (and any residual liability under such declaration arising pursuant to section 2:404(2) of the Dutch Civil Code);

(xxii)         any   Capital   Lease  Obligations  of  a   Person  that   becomes  a Subsidiary pursuant to the Westfalia Acquisition;   provided   that (A)  such Capital Lease Obligation exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (B)  the aggregate principal amount of Debt permitted by this clause (xxii)  shall not exceed $15,000,000 at any time outstanding; and [reserved];

(xxiii)         any Permitted Convertible Indebtedness   and replacements or refinancings thereof in an aggregate principal amount not to exceed $125  million at the time of issuance; provided that at the time of and immediately after the issuance of such Debt, the Required Conditions are met. Unsecured Debt of the Parent Borrower in an amount not to exceed $15,000,000 at any time outstanding; provided that (a) such Debt shall not mature prior to the date that is 91 days after the Latest Maturity Date in effect at the time of the issuance of such Debt and shall not have any principal payments due prior to such date, except upon the occurrence of a change of control or similar event (including asset sales), in each case so long as the provisions relating to change of control or similar events (including asset sales) included in the governing instrument of such Debt provide that the provisions of this Agreement must be satisfied prior to the satisfaction of such provisions of such Debt, (b) such Debt is not Guaranteed by any Subsidiary of the Parent Borrower other than the Obligors (which Guarantees shall be unsecured and shall be permitted only to the extent permitted by Section 10.2.1(a)(vi )), (c) such Debt shall not have any financial maintenance covenants, (d) such Debt shall not have a definition of “Change of Control” or “Change in Control” (or any other defined term having a similar purpose) that is materially more restrictive than the definition of Change in Control set forth herein , (e) such Debt is subordinated to the Obligations on terms reasonably acceptable to the Required Lenders and (f)  no such Debt shall be,

 

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directly or indirectly, provided by any lender or agent or Affiliate of any lender or agent under the Second Lien Term Loan Agreement; and

(xxiv)          (A) Permitted Convertible Indebtedness outstanding on the Seventh Amendment Effective Date and (B) any Permitted Refinancing Debt with respect thereto; provided that the interest rate, fees, or yield payable with respect to such Permitted Refinancing Debt shall not be higher than the interest rate, fees, or yield payable under the Permitted Convertible Indebtedness outstanding on the Seventh Amendment Effective Date;

(b)        None of the Obligors will, nor will they permit any Subsidiary to, issue any warrants, preferred stock or other preferred Equity Interests, except (i)  Qualified Parent Borrower Preferred Stock, (ii)  Assumed Preferred Stock and (iii)  preferred stock or preferred Equity Interests held by the Parent Borrower or any Subsidiary (and provided, however, that during the Senior Term Period no other than (i) pursuant to the Second Lien Term Loan Agreement and (ii)  Qualified Parent Borrower Preferred Stock  or Assumed Preferred Stock may be issued by the Parent Borrower or any Subsidiary) .

10.2.2         Liens . None of the Obligors will, nor will they permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except  (and provided, however, that during the Senior Term Period no additional Liens described in clauses (a)(iii), (c), (e), (f), (h), (i), (j), (n) or (r)  below may be created, assumed or incurred by the Borrower or any Subsidiary) :

(a)        (i) Liens created under the Loan Documents , ; and (ii) Liens created under the Term Loan Documents , (iii)  Liens in respect of any Permitted Term Loan Refinancing Debt and (iv)  Liens created under the Senior Term Loan Documents which are subject to the Intercreditor Agreement;

(b)        Permitted Encumbrances;

(c)        Liens in respect of the Specified Vendor Receivables Financing permitte d unde r Sectio n 10.2.1(a)(ii);

(d)        any Lien on any property or asset of the Parent Borrower or any Subsidiary existing on the Original Closing Date and set forth in Seventh Amendment Effective Date (which Liens shall, to the extent securing Indebtedness with a principal amount in excess of $500,000 as of the Seventh Amendment Effective Date, be set forth on Schedule 10.2.2 ); provided that (i) such Lien shall not apply to any other property or asset of the Parent Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secured on the Original Closing Date and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;

(e)         any Lien existing on any property or asset prior to the acquisition thereof by the Parent Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Original Closing Date prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Parent Borrower or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the

 

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date such Person becomes a Subsidiary, as the case may be; Liens securing Debt permitted by Sectio n  10.2.1(a)(ix) ;

(f)        Liens on fixed or capital assets acquired, constructed or improved by, or in respect of Capital Lease Obligations of, the Parent Borrower or any Subsidiary; provided that (i) such security interests secure Debt permitted by Section 10.2.1(a)(viii), (ii) such security interests and the Debt secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (iii) the Debt secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Parent Borrower or any Subsidiary;

(g)        Liens, with respect to any Mortgaged Property, described in the applicable schedule of the title policy covering such Mortgaged Property;

(h)        Liens in respect of sales or other financings of accounts receivable or inventory by Foreign Subsidiaries to the extent the Debt is permitted by Section   10.2.5(c)(i 10.2.1(a)(xii ) ;

(i)        other Liens securing liabilities permitted hereunder  in an   aggregate amount not exceeding (i)  in respect of consensual Liens, $5,000,000 and (ii)  in respect of all such Liens, $10,000,000, in each case at any time outstanding $2,500,000 ;

(j)        Liens in respect of Debt permitted by Section  10.2.1(a)(xiii) , provided that the assets subject to such Liens are not located in the United States;

(k)        Liens, rights of setoff and other similar Liens existing solely with respect to cash and Permitted Investments on deposit in one or more accounts maintained by any Lender, in each case granted in the Ordinary Course of Business in favor of such Lender with which such accounts are maintained, securing amounts owing to such Lender with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Debt for Borrowed Money;

(l)        licenses or sublicenses of Intellectual Property granted by the Parent Borrower or any Subsidiary in the Ordinary Course of Business and not interfering in any material respect with the ordinary conduct of business of the Parent Borrower or any Subsidiary;

(m)        the filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

(n)         Liens   for  the   benefit   of   a   seller  deemed  to  attach   solely   to   cash  earnest money deposits in connection with a letter of intent or acquisition agreement with respect to a Permitted Acquisition; [reserved];

(o)        Liens deemed to exist in connection with investments permitted under Section  10.2.4 that constitute repurchase obligations and in connection with related set-off rights;

 

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(p)        Liens of a collection bank arising in the Ordinary Course of Business under Section 4-210 of the UCC in effect in the relevant jurisdiction covering only the items being collected upon;

(q)        Liens of sellers of goods to the Parent Borrower or any Subsidiary arising under Article 2 of the UCC in effect in the relevant jurisdiction in the Ordinary Course of Business, covering only the goods sold and covering only the unpaid purchase price for such goods and related expenses; and

(r)         Liens on Collateral securing Alternative Incremental Debt,   provided  that such Alternative Incremental Debt shall be secured only by a Lien on the Collateral having the same priorities in the Term Priority Collateral and the Revolver Priority Collateral as the Term Loan Debt (or on a subordinated basis) with the Obligations and, in each case, shall be subject to a customary intercreditor agreement in form and substance reasonably satisfactory to Agent.   [reserved].

10.2.3         Fundamental Changes .

(a)        None of the Obligors will, nor will they permit any Subsidiary to merge into or consolidate with any Person, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge into a Borrower in a transaction in which such Borrower is the surviving corporation, (ii) any Subsidiary (other than a Borrower) may merge into any Subsidiary in a transaction in which the surviving entity is a Subsidiary and (if any party to such merger is a Subsidiary Obligor) is a Subsidiary Obligor for which the Collateral and Guarantee Requirement has been satisfied and (iii) any Subsidiary (other than a Borrower or Subsidiary Obligor) may liquidate or dissolve if the Parent Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Parent Borrower and is not materially disadvantageous to the Lenders; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section  10.2.4 .  Notwithstanding the foregoing, this  Section 10.2.3  shall not prohibit any Permitted Acquisition.

(b)        The Parent Borrower will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Parent Borrower and its Subsidiaries on the date of execution of the Original Loan Agreement and businesses reasonably related thereto.

10.2.4         Investments, Loans, Advances, Guarantees and Acquisitions . None of the Obligors will, nor will they permit any Subsidiary to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except  (and provided, however, that during the Senior Term Period the Obligors or any Subsidiary may not make an additional purchase, acquisition, advance, or investment pursuant to any of the clauses (d) (unless consistent with prior practice and in the ordinary course of business), (f), (g), (q), (r) or (s)  below) :

(a)        Permitted Investments;

 

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(b)        investments existing on the Original   Closing  Date   and Seventh Amendment Effective Date (which investments shall, to the extent the principal amount thereof exceeds $500,000 as of the Seventh Amendment Effective Date, be set forth on Schedule 10.2.4 ) ;

(c)        [Reserved];

(d)        investments by the Parent Borrower and the Subsidiaries in their respective Subsidiaries that exist immediately prior to any applicable transaction; provided that (i) any such Equity Interests held by an Obligor shall be pledged pursuant to a Security Document acceptable to Agent, to the extent required by this Agreement ; (ii)  investments (excluding any   such investments, loans, advances and Guarantees to such Subsidiaries that are assumed and exist on the date any Permitted Acquisition is consummated and that are not made, incurred or created in contemplation of or in connection with such Permitted Acquisition) and (ii) investments by Obligors in, and loans and advances by Obligors to, and Guarantees by Obligors of Debt (or lease obligations) of, Subsidiaries that are not Obligors made after the Original Closing Date that have complied with the Collateral and Guarantee Requirement shall only be permitted if, (x) such investments are not made, directly or indirectly, by a Borrower with proceeds of any Revolver Loan, (y)  at the time of and after giving effect to such investment , (x) , the Required Conditions are met and ( y) z) at the time of and after giving effect to such investment, the aggregate principal amount of any Debt (or lease obligations) of of such investments, loans, advances and Guarantees made after the Seventh Amendment Effective Date under this clause 10.2.4(d)(ii) plus the amount of loans and advances permitted under Section 10.2.4(e)(ii) does not at any time exceed $ 10,000,000 (net of any cash that does not constitute proceeds of such investments, loans or advances held by any Foreign Subsidiaries that are not Obligors  subject to any Guarantee by any Obligor made after the Original Closing Date shall   not at any time exceed $ 40,000,000 ) ;

(e)        loans or advances made by the Parent Borrower to any Subsidiary and made by any Subsidiary to the Parent Borrower or any other Subsidiary; provided that (i) any such loans and advances made by an Obligor shall be evidenced by a promissory note pledged pursuant to a Security Document ; and (ii) any such loans and advances made after the Seventh Amendment Effective Date by Obligors to Subsidiaries that are not Obligors that have complied with the Collateral and Guarantee Requirement (x) shall not be made, directly or indirectly, by a Borrower with proceeds of any Revolver Loan, (y) shall not exceed $10,000,000 (net of any cash that does not constitute proceeds of such loans and advances held by any Foreign Subsidiaries that are not Obligors) when added to the amount of investments, loans, advances and Guarantees permitted under Section 10.2.4(d)(ii), and (z)  shall only be permitted if, at the time of and after giving effect to such investment, the Required Conditions are met ;

(f)        Guarantees permitted by Section  10.2.1(a)(vii) ;

(g)         Fi          Guarantees in respect of any Specified Vendor Payables nancing; [Reserved];

(h)        investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the Ordinary Course of Business;

(i)        any investments in or loans to any other Person received as noncash consideration for sales, transfers, leases and other dispositions permitted by Section  10.2.5 ;

 

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(j)        Guarantees by the Parent Borrower and the Subsidiaries of leases entered into by any Subsidiary as lessee; provided that such Guarantees made by Obligors to Subsidiaries that are not Obligors shall only be permitted if, at the time of and after giving effect to such investment, the Required Conditions are met, and the amount of lease obligations which is the subject of any such Guarantees shall be subject to the limitation set forth in clause (d) above;

(k)        extensions of credit in the nature of accounts receivable or notes receivable in the Ordinary Course of Business;

(l)        loans or advances to employees made in the Ordinary Course of Business consistent with prudent business practice and not exceeding $ 2,500,000 50,000 in the aggregate outstanding at any one time;

(m)        investments in the form of Hedging Agreements permitted under Section 10.2.7;

(n)        [ Reserved]; reserved];

(o)        payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the Ordinary Course of Business;

(p)         [ Reserved]; reserved];

(q)        investments, loans or advances in addition to those permitted by the other clauses of this Section  10.2.4 not exceeding in the aggregate $ 25,000,000 1,000,000 at any time outstanding, provided that no Default exists at the time that such investment, loan or advance is made or is caused thereby;

(r)         investments made (i)  in an amount not to exceed the Net Proceeds of  any issuance of Equity Interests in Parent Borrower issued after the Original Closing Date or (ii)  with Equity Interests in Parent Borrower; and [reserved]

(s)          [reserved].

(s) other investments by the Parent Borrower or any Subsidiary so long as the Required Conditions are met. Notwithstanding anything to the contrary in this Section  10.2.4, the Parent Borrower will not, nor will it permit any Subsidiary to (i)  form, acquire, incorporate or otherwise permit to exist any Subsidiary that is not a Subsidiary on the Seventh Amendment Effective Date or (ii)  make a loan or other advance to any director or officer of the Parent Borrower or any of its Subsidiaries.

10.2.5         Asset Sales . None of the Obligors will, nor will they permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will they permit any Subsidiary to issue any additional Equity Interest in such Subsidiary, except  (and provided, however, that during the Senior Term Period the Obligors or any Subsidiary may not, sell, transfer, lease or otherwise dispose of any additional asset, including any Equity Interest owned by it, nor will the Obligors permit any Subsidiary to issue any additional Equity Interest in such Subsidiary pursuant to any of the clauses (c), (e), (f) or (j)  below) :

 

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(a)        sales, transfers, leases and other dispositions of inventory, used or surplus equipment or other obsolete assets, Permitted Investments and investments referred to in Section  10.2.4(h) in the Ordinary Course of Business;

(b)        sales, transfers and dispositions to the Parent Borrower or a Subsidiary; provided that any the book value and the fair market value (whichever is higher) of all property that is subject to such sales, transfers or dispositions involving a Subsidiary that is not a U.S. Obligor shall be made an Obligor shall not exceed $10,000,000 in the aggregate for all such sales, transfers or dispositions made after the Seventh Amendment Effective Date and all such sales, transfers or dispositions shall be made in the Ordinary Course of Business and in compliance with Section 10.2. 4 and Section  10.2.9 ;

(c)        (i) sales of accounts receivable and inventory and related assets by a Foreign Subsidiary pursuant to customary terms whereby recourse and exposure in respect thereof to any Foreign Subsidiary does not exceed at any time $35,000,000 to the extent permitted by Section 10.2.1(a)(xii) and (ii) sales of accounts receivables receivable and related assets pursuant to the Specified Vendor Receivables Financing permitted under Section  10.2.1(a)(ii) ;

(d)        the creation of Liens permitted by Section  10.2.2 and dispositions as a result thereof;

(e)         sales   or  transfers   that   are  permitted   sale   and  leaseback  transactions pursuant to  Section 10.2.6 ; [reserved];

(f) Fi         sales and transfers that constitute part of an Acquisition Lease nancing; [reserved];

(g)        Restricted Payments permitted by Section  10.2.8 ;

(h)        transfers and dispositions constituting investments permitted under Section 10.2.4;

 

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(i)     sales, transfers and other dispositions of property  identified on  Schedule 10.2.5 ; and [reserved]; and

(j)        so long as no Event of Default shall have occurred and then be continuing, sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary) that are not permitted by any other clause of this Section; provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this clause (j) shall not exceed (i) 15% of the aggregate fair market value of all assets of the Parent Borrower (determined as of the end of its most recent Fiscal Year), including any Equity Interests owned by it, during any Fiscal Year of the Parent Borrower;  provided  that such amount shall be increased, in respect of the Fiscal Year ending on December 31, 2016, and each Fiscal Year thereafter by an amount equal to the total unused amount of such permitted sales, transfers and other dispositions for the immediately preceding Fiscal Year (without giving effect to the amount of any unused permitted sales, transfers and other dispositions that were carried forward to such preceding Fiscal Year) and (ii) 35% of the aggregate fair market value of all assets of the Parent Borrower as of the Original Closing Date, including any Equity Interests owned by it, during the time subsequent to the Original Closing $15,000,000 during the term of this Agreement after the Seventh Amendment Effective Date; provided , further , however , that Obligors shall comply with Section  10.1.2(l) concerning any sale, transfer or other disposition of Revolver Priority Collateral in an aggregate amount in excess of $ 5,000,000 3,000,000 ;

provided that (x) all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by clauses (b) or (h) above) shall be made for fair value and (y) all sales, transfers, leases and other dispositions permitted by clauses (i)   and clause (j) above shall be for at least 75% cash consideration.

10.2.6         Sale and Leaseback Transactions . None of the Obligors will, nor will they permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereinafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred , except, in each case, during the Senior Term Period, for (a)  any such sale of any fixed or capital assets (other than any such transaction to which (b)  or (c) below is applicable) that is made for cash consideration in an amount not less than the cost of such fixed or capital asset in an aggregate amount less than or equal to $10,000,000, so long as the Capital Lease Obligations associated therewith are permitted by  Section 10.2.1(a)(viii) , (b) in the case of property owned as of or after the Original Closing Date, any such sale of any fixed or capital assets that is made for cash consideration in an aggregate amount not less than the fair market value of such fixed or capital assets not to exceed $20,000,000 in the aggregate, in each case, so long as the Capital Lease Obligations (if any) associated therewith are permitted by  Section 10.2.1(a)(viii) , and (c)  any Acquisition Lease  Financing .

10.2.7         Hedging Agreements . None of the Obligors will, nor will they permit any Subsidiary to, enter into any Hedging Agreement, other than (a) Hedging Agreements entered into in the Ordinary Course of Business and which are not speculative in nature to hedge or mitigate risks to which the Parent Borrower or any other Subsidiary is exposed in the conduct of its business or the management of its assets or liabilities (including Hedging Agreements that effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise)), (b) except during the Senior Term Period,  any Permitted Bond Hedge Transaction and (c)  except during the Senior Term Period,  any Permitted Warrant Transaction.

10.2.8         Restricted Payments; Certain Payments of Debt .

 

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(a)        None of the Obligors will, nor will they permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except  (and provided, however, that the Borrower or any Subsidiary may not during the Senior Term Period declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment or incur any obligation (contingent or otherwise) to do so pursuant to any of the clauses (iii), (iv), (v), (vi), (vii) or (viii)  below) :

(i)        Parent Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional common Equity Interests in Parent Borrower;

(ii)         Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests;

(iii)         the Parent Borrower may (A)  use the proceeds of the Term Loan Debt to pay the Original Closing Date Dividend and (B)  make other Restricted Payments not exceeding $5,000,000 from and after the Original Closing Date, in each case pursuant

 

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to and in accordance with stock option plans, equity purchase programs or agreements or other benefit plans, in each case for management or employees or former employees of the Parent Borrower and the Subsidiaries;   Parent Borrower and its Subsidiaries may declare to make, or make, any Restricted Payment in connection with the Seventh Amendment Transactions on the Seventh Amendment Effective Date (but not, for the avoidance of doubt, any Restricted Payments made directly or indirectly in cash) ;

(iv)         the   Parent  Borrower  may  make   other  Restricted  Payments; provided  that at the time of and immediately after giving effect to such Restricted Payments (and any Debt incurred in connection therewith), the Required Conditions are met;  [reserved];

(v)         each of the Parent Borrower and Blitz K16-102 GmbH, a   limited liability company organized under the laws of Germany, may pay purchase price adjustments required to be paid by such Person pursuant to the Westfalia Purchase Agreement, without giving effect to any amendment thereto not specifically described in the definition of “ Westfalia Purchase Agreement ” ; [reserved];

(vi)         the   Parent  Borrower   may   make   any  Restricted   Payments  in respect of Permitted Convertible Indebtedness permitted under  Section 10.2.8(b ); Parent Borrower may make payments or deliveries in shares of common stock and cash in lieu of fractional shares required by the terms of, and otherwise perform its obligations under, the Convertible Notes Indenture (including, without limitation, making payments of interest and principal thereon and/or making deliveries (other than in cash) due upon conversion thereof);

(vii)        the Parent Borrower may pay the premium in respect of, and otherwise perform its obligations under, any Permitted Bond Hedge Transaction; and

(viii)         the   Parent   Borrower  may   make   any  Restricted   Payments  and/or payments or deliveries required by the terms of, and otherwise perform its obligations under,  any Permitted Warrant Transaction (including, without limitation, making payments and/or deliveries due upon exercise and settlement or termination thereof).  [reserved].

(b)        None of the Obligors will, nor will they permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Debt or any fees or PIK Amount (as defined in the First Lien Term Loan Agreement) owing under Section 2.12(c) of the First Lien Term Loan Agreement or similar fees , or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Debt, except  (and provided, however, that the Borrower or any Subsidiary may not during the Senior Term Period make, or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness pursuant to any of the clauses (vi), (vii) or (ix) (other than as required to comply with its obligations as in effect on the Fourth Amendment Effective Date) below) :

 

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(i)        payment of Debt created under the Loan Documents;

(ii)         (A) payment of regularly scheduled interest and principal payments as and when due in respect of any Debt, other than payments in respect of subordinated Debt prohibited by the subordination provisions thereof; provided that (a) no cash interest payments under any Debt under the Second Lien Term Loan Agreement may be made, (b) except as provided in clause (B) below, no cash payment of any PIK Amount (as defined in the First Lien Term Loan Agreement) may be made until the Term Loan Maturity Date (as defined in the First Lien Term Loan Agreement), and (c) any prepayment pursuant to Section 2.11(d) {Excess Cash Flow} of any Term Loan Agreement may only be made if on the date of such prepayment, after giving pro forma effect to such prepayment, the “Required Conditions” as in effect as of the Seventh Amendment Effective Date would be satisfied, and (B) payment of any fees and/or PIK Amount due under Section 2.12(c) of the First Lien Term Loan Agreement (collectively, the “Cash PIK Obligations”) may be made; provided that, if on such date for payment of such Cash PIK Obligations, after giving effect to payment thereof, the Required Conditions (as defined in the ABL Credit Agreement as in effect as of the Seventh Amendment Effective Date) would not be satisfied and Net Proceeds of sales or dispositions permitted under Section 6.05(j) of the First Lien Term Loan Agreement (“Net Sale Proceeds”) are not sufficient to fund the full amount of required principal repayment plus the Cash PIK Obligations, then the payment of any such Cash PIK Obligations (less any amount paid from Net Sale Proceeds after satisfying all principal prepayment obligations) shall instead be due and payable on the earlier to occur of (i) the first date that the Required Conditions can be satisfied after giving effect to such payment and (ii) July 1, 2020 .

(iii)        refinancings of Debt to the extent permitted by Section  10.2.1 ;

(iv)         subject to the Intercreditor Agreement, payment of   secured First Lien Secured Debt out of the proceeds of any sale or transfer of the property or assets securing such Debt;

(v)          payment of Second Lien Term Loan Debt solely with the proceeds of mandatory prepayments declined or waived by the First Lien Term Loan Lenders;

(vi)         (v)  [reserved];

(vi)         payments of Debt with the Net Proceeds of an issuance of Equity Interests in Parent Borrower;

(vii)         payments of Debt;  provided  that at the time of and immediately after giving effect to such payment, the Required Conditions are met; [reserved];

(viii)        the Parent Borrower may make any deliveries in shares of common stock (or other securities or property following a merger event or other change of the common stock of the Parent Borrower so long as any such securities do not constitute Disqualified Equity Interests of an Obligor) in connection with any conversion of any Permitted Convertible Indebtedness;

 

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(ix)        the Parent Borrower may make any cash payments in lieu of issuing fractional shares in connection with a conversion (including pursuant to any put transaction), exchange, refinancing or extension of any Permitted Convertible Indebtedness; and

(x)         the   Parent  Borrower  may  purchase   any  Permitted   Bond  Hedge Transaction and perform its obligations thereunder. [reserved].

(d)        None of the Obligors will, nor will they permit any Subsidiary to, enter into or be party to, or make any payment under, any Synthetic Purchase Agreement , unl e ss , in each case except during the Senior Term Period, (i)  in the case of any Synthetic Purchase Agreement related to any Restricted Debt Equity Interests of the Parent Borrower , the payments required to be made by the Parent Borrower or the Subsidiaries thereunder  are limited to the amount permitted under  Section 10.2.8(b)  and (iii)  in the case of any Synthetic Purchase Agreement, the obligations of the Parent Borrower and the Subsidiaries thereunder are subordinated to the Obligations on terms satisfactory to the Required Lenders amounts permitted to be paid under Section 10.2.8(a) .

10.2.9         Transactions with Affiliates . None of the Obligors will, nor will they permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except:

(a)        transactions that are at prices and on terms and conditions not less favorable to the Parent Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties; provided that (i) in the case of any single transaction or series of transactions with a volume in excess of $500,000, the board of directors of the Parent Borrower shall have made a determination in good faith that such transaction or series of transactions, as applicable, is on prices and on terms and conditions not less favorable to the Parent Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, and (ii) in the case of any single transaction or series of transactions with a volume in excess of $1,000,000, the board of directors of the Parent Borrower shall have engaged an independent financial advisor reasonably acceptable to the Required Lenders and such independent financial advisor shall have made a determination and delivered a customary fairness opinion stating that such transaction or series of transactions, as applicable, is on prices and on terms and conditions not less favorable to the Parent Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties;

(b)        transactions between or among the Parent Borrower and the Subsidiaries any other Obligor not involving any other Affiliate (to the extent not otherwise prohibited by other provisions of this Agreement);

(c)        any Restricted Payment permitted by Section  10.2.8 ; and

(d)         (i) transactions pursuant to agreements in effect on the Original Closing Date and listed on Schedule 10.2.9 ( provided that this clause (d) shall not apply to any extension, or renewal of, or any amendment or modification of such agreements that is less favorable to the Parent Borrower or the applicable Subsidiaries, as the case may be) and (ii) the Seventh Amendment Transactions with respect to agreements as in effect on the Seventh Amendment Effective Date and the performance of the Obligors’ obligations under such agreements.

 

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10.2.10         Restrictive Agreements . None of the Obligors will, nor will they permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of any Obligor or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Parent Borrower or any other Subsidiary or to Guarantee Debt of the Parent Borrower or any other Subsidiary; provided that that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document or any Specified Vendor Receivables Financing Document, Specified Vendor Payables Financing Document, Senior Term Loan Document or  Term Loan Document that are customary, in the reasonable judgment of the board of directors thereof, for the market in which such Debt is issued so long as such restrictions do not prevent, impede or impair (x) the creation of Liens and Guarantees in favor of the Lenders under the Loan Documents or (y) the satisfaction of the obligations of the Obligors under the Loan Documents, (ii)   the foregoing shall not apply to restrictions and conditions or existing on the Original Closing Seventh Amendment Effective Date and identified on Schedule 10.2.10 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), ( iii ii )the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale; provided , further , that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder and ( iv iii ) clause (a) of the foregoing shall not apply to (A) restrictions or conditions imposed by any agreement relating to secured Debt permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Debt and (B) customary provisions in leases and other agreements restricting the assignment thereof.

10.2.11 Amendment of Material Documents . None of the Obligors will, nor will they permit any Subsidiary to, amend, restate, modify or waive any of its rights under (a) (i) its certificate of incorporation, by-laws or other organizational documents , and /or  (ii) any Material Agreement, Spin-Off Documentation or other agreements (including joint venture agreements) other than the Term Loan Documents, in each case to the extent such amendment, restatement, modification or waiver is adverse to Agent or Lenders in any material respect (it being agreed that the addition or removal of Obligors from participation in a Specified Vendor Receivables  Financing or Specified Vendor Payables  Financing shall not constitute an amendment, modification or waiver of any Specified Vendor Receivables Financing Document or Specified Vendor Payables Financing Document, as applicable,  that is adverse to the Lenders), (b) the First Lien Term Loan Documents to the extent such amendment, restatement, modification or waiver (i) results in a maturity date earlier than 91 days following the Latest Maturity Date then in effect with respect to the Obligations, (ii) results in a decreased weighted average life of the First Lien Term Loan Debt (other than as a result of an amendment solely to the final maturity date permitted by clause (i) above), (iii) adds any mandatory prepayment provision or changes any mandatory prepayment provision in a manner that would increase the amount of any mandatory prepayment of the First Loan Term Loan Debt (provided, however, that this clause (iii) shall not restrict the modification to the definition of “ECF Percentage” effected by the First Lien Term Loan Agreement Fourth Amendment and the First Lien Term Loan Agreement Sixth Amendment ), (iv) increases the “Applicable Margin” or similar component of interest thereunder by more than 3.0% (other than as a result of accrual of interest at the default rate), or (v) adds an additional covenant or event of default or makes any covenant or event of default in any First Lien Term Loan Document materially more restrictive or burdensome prior to the Latest Maturity Date then in effect (unless this Agreement is amended to provide all of the Lenders with the benefits of such covenant or event of default), in each case under this clause (v) other than covenants and events of default solely relating to the Term Priority Collateral  or (c , (c) the Second Lien Term Loan Documents to the extent such amendment, restatement, modification or waiver (i) results in a maturity date earlier than 91 days following the Latest Maturity Date then in effect with respect to the Obligations,

 

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(ii) results in a decreased weighted average life of the Second Lien Term Loan Debt (other than as a result of an amendment solely to the final maturity date permitted by clause (i) above), (iii) adds any mandatory prepayment provision or changes any mandatory prepayment provision in a manner that would increase the amount of any mandatory prepayment of the Second Lien Term Loan Debt, (iv) increases the “Applicable Margin” or similar component of interest thereunder by more than 3.0% (other than as a result of accrual of interest at the default rate), or (v) adds an additional covenant or event of default or makes any covenant or event of default in any Second Lien Term Loan Document materially more restrictive or burdensome prior to the Latest Maturity Date then in effect (unless this Agreement is amended to provide all of the Lenders with the benefits of such covenant or event of default), in each case under this clause (v) other than covenants and events of default solely relating to the Term Priority Collateral, or (d) the documents evidencing any Permitted Convertible Indebtedness to the extent such amendment, restatement, modification or waiver (i) results in a maturity date earlier than 91 days following the Latest Maturity Date then in effect with respect to the Obligations or (ii) adds any required principal amortization or any mandatory prepayment or repurchase provision or changes any mandatory prepayment or repurchase provision in a manner that would increase the amount of any mandatory prepayment or repurchase obligation in respect of any Permitted Convertible Indebtedness.

10.2.12         Use of Proceeds . No Borrower will request any Revolver Loan or Letter of Credit, and no Borrower shall use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Revolver Loan or Letter of Credit (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, to the extent such activities, businesses or transaction would be prohibited by Sanctions if conducted by a Person organized in the United States, Canada, Mexico or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

10.2.13         Plans . The Obligors will not, and will not permit any Subsidiary to maintain, sponsor, contribute to or otherwise incur liability or obligations in respect of a Canadian Pension Plan that provides benefits on a defined benefit basis without the prior written consent of Agent.

10.2.14         Accounting Changes . None of the Obligors will, nor will they permit any Subsidiary to, make any material change in accounting treatment or reporting practices, except as required by GAAP and in accordance with Section  1.2 ; or change its Fiscal Year; provided that the Obligors may, upon written notice to Agent, change their Fiscal Year to another date, in which case the Obligors and Agent will, and are hereby authorized to, many any adjustments to this Agreement that are necessary to reflect such change in Fiscal Year.

10.3         Financial Covenant .    As long as any Commitment or Obligation is outstanding, Obligors shall:

10.3.1         Fixed Charge Coverage Ratio . Maintain a Fixed Charge Coverage Ratio for each 12 month period of at least 1.0 to 1.0 while a Financial Covenant Trigger Period is in effect, measured for the most recent monthly period for which financial statements were delivered hereunder under Section 10.1.2(c) prior to the Financial Covenant Trigger Period and each monthly period ending thereafter until the Financial Covenant Trigger Period is no longer in effect.

 

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SECTION 11

EVENTS OF DEFAULT; REMEDIES ON DEFAULT

11.1             Events of Default . Each of the following shall be an “Event of Default” if it occurs for any reason whatsoever, whether voluntary or involuntary, by operation of law or otherwise:

(a)        the Borrowers shall fail to (i) pay any principal of any Loan or any LC Obligation when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise or (ii) provide Cash Collateral when and as the same shall be required by Section  2.2.3 , 2.3.3 or 2.4.3 ;

(b)        any Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Section  11.1 ) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five Business Days;

(c)        any representation or warranty made or deemed made by or on behalf of any Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;

(d)        any Obligor shall fail to observe or perform any covenant, condition or agreement contained in Section  8.1, 8.2.4, 8.2.5, 8.6.2, 10.1.1, 10.1.2, 10.1.3(a)(iv) , 10.1.7 , 10.1.8 (with respect to the existence of any Obligor and ownership of the Obligors other than the Parent Borrower), 10.1.8(b) , 10.1.13 , 10.1.14 , 10.1.15 , 10.1.16 , Section  10.2 or Section  10.3 of this Agreement, or , to the extent that such Obligor is a party thereto or otherwise obligated thereby (whether pursuant to the agreement of an Obligor that is party thereto or otherwise), Section  5.13 of the Guarantee and Collateral Agreement or Section  5.13 of the Foreign Facility   Section 5.13 of the Amended and Restated ABL Guarantee and Collateral Agreement;

(e)        any Obligor shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document, to the extent that such Obligor is a party thereto or otherwise obligated thereby (whether pursuant to the agreement of an Obligor that is party thereto or otherwise) (other than those failures specified in clause (a), (b) or (d) of this Section  11.1 ), and such failure shall continue unremedied for a period of 30 20 days (or, with respect to a failure to observe or perform any covenant, condition or agreement contained in Section 8 of the Guarantee and Collateral Agreement or Section  8 of the Foreign Facility Amended and Restated ABL Guarantee and Collateral Agreement, a period of 15 days) after notice thereof from Agent to the Borrower Agent (which notice will be given at the request of any Lender 1 0 days );

(f)        the Parent Borrower or any Subsidiary shall fail to make any payment (whether of principal, interest or other payment obligations) in respect of any Material Debt, when and as the same shall become due and payable after giving effect to any applicable grace period with respect thereto;

(g)        any event or condition occurs (including a “Fundamental Change” as defined in the Convertible Notes Indenture) that results in any Material Debt becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Debt or

 

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any trustee or agent on its or their behalf to cause any Material Debt to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to (A)  secured Debt that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Debt; provided further   that this clause (g) shall not apply to and (B)  any Permitted Convertible Indebtedness or any Permitted Warrant Transaction to the extent such event or condition occurs as a result of (x) the satisfaction of a conversion contingency, (y) the exercise by a holder of Permitted Convertible Indebtedness of a conversion right resulting from the satisfaction of a conversion contingency or (z) a required repurchase in respect of any Permitted Warrant Transaction , in each case of this clause (B), solely to the extent that the obligation of Parent Borrower resulting from such event or condition is satisfied through the issuance of common Equity Interests of Parent Borrower other than the payment of cash in lieu of the issuance of fractional Equity Interests of the Company ;

(h)        an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, winding-up, reorganization arrangement, a proposal or other relief in respect of any Obligor or any Subsidiary or its debts, or of a substantial part of its assets, under any federal, state, provincial or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a Creditor Representative or similar official for the Parent Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)        the Parent Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, winding-up, reorganization, arrangement, a proposal or other relief under any federal, state, provincial or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Section, (iii) apply for or consent to the appointment of a Creditor Representative or similar official for the Parent Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)        the Parent Borrower or any Subsidiary shall become unable, admit in writing in a court proceeding its inability or fail generally to pay its debts as they become due or, with respect to any UK Borrower or UK Subsidiary, (i) it, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its Debt (ii) the value of its assets shall become less than the value of its liabilities (taking into account contingent and prospective liabilities) or (iii) a moratorium or other protection from its creditors is declared or imposed in respect of any its Debt;

(k)        one or more judgments for the payment of money in an aggregate amount in excess of $ 5,000,000 1,000,000 shall be rendered against the Parent Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Parent Borrower or any Subsidiary to enforce any such judgment;

(l)        an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect on the Parent Borrower and its Subsidiaries;

 

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(m)        any Lien covering property having a book value or fair market value of $ 5,000,000 1,000,000 or more purported to be created under any Security Document shall cease to be, or shall be asserted in writing by any Obligor not to be, a valid and perfected Lien on any Collateral, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents or (ii) as a result of Agent’s failure to maintain possession (or the failure of Agent’s agent or designee, including without limitation the Controlling Term Loan Agent, as Agent’s agent for perfection pursuant to the Intercreditor Agreement, to maintain possession) of any stock certificates, promissory notes or other instruments delivered to it under the Guarantee and Collateral Agreement and/or the Foreign Facility Am ended and Restated ABL Guarantee and Collateral Agreement;

(n)        any Guaranty shall cease to be, or shall have been asserted in writing not to be, in full force and effect;

(o)        the Parent Borrower or any Subsidiary shall challenge the subordination provisions of the Subordinated Debt or assert that such provisions are invalid or unenforceable or that the Obligations of any Obligor, or the Obligations of any Subsidiary under any Guaranty, are not senior Debt under the subordination provisions of the Subordinated Debt, or any court, tribunal or government authority of competent jurisdiction shall judge the subordination provisions of the Subordinated Debt to be invalid or unenforceable or such Obligations to be not senior Debt under such subordination provisions or otherwise cease to be, or shall be asserted not to be, legal, valid and binding obligations of the parties thereto, enforceable in accordance with their terms;

(p)        a Change in Control shall occur;

(q)        an Obligor denies or contests the validity or enforceability of any Loan Document (including, without limitation, the Intercreditor Agreement) or Obligations, or any Loan Document (including, without limitation, the Intercreditor Agreement) ceases to be in full force or effect for any reason (other than a waiver or release by Agent and Lenders);

(r)        a loss, theft, damage or destruction occurs with respect to any Collateral if the amount not covered by insurance exceeds $ 5,000,000 100,000 ;

(s)        any event occurs or condition exists that has a Material Adverse Effect; or

(t)        (i) a Termination Event occurs or any Canadian Multi-Employer Plan is terminated, in each case, in circumstances which would result or could reasonably be expected to result in a Canadian Facility Domiciled Obligor being required to make a contribution to or in respect of a Canadian Pension Plan or a Canadian Multi-Employer Plan or result in the appointment, by FSCO, of an administrator to wind up a Canadian Pension Plan, (ii) any Canadian Domiciled Obligor is in default with respect to any required contribution to a Canadian Pension Plan, or (iii) any Lien arises (save for a contribution amount not yet due) in connection with any Canadian Pension Plan; provided , however , that an event or circumstance of the type described in clause (i), (ii) or (iii) shall constitute an Event of Default under this clause (t) only if such event or circumstance, in the opinion of the Required Lenders, when taken together with all other events and circumstances of the type described in such clauses that have occurred or existed on or after the Closing Date, could reasonably be expected to result in a Material Adverse Effect (it being acknowledged that, for purposes of this clause (t), funding deficiencies and other benefit

 

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liabilities existing as of the Closing Date shall be included in the determination of whether a Material Adverse Effect has occurred or exists).

11.2         Remedies upon Default . If an Event of Default described in Section 11.1(h) or (i) occurs with respect to any Obligor, then to the extent permitted by Applicable Law, all Obligations (other than Secured Bank Product Obligations) shall become automatically due and payable and all Commitments shall terminate, without any action by Agent or notice of any kind. In addition, or if any other Event of Default exists, Agent may in its discretion (and shall upon written direction of Required Lenders) do any one or more of the following from time to time:

(a)        declare any Obligations (other than Secured Bank Product Obligations) immediately due and payable, whereupon they shall be due and payable without diligence, presentment, demand, protest or notice of any kind, all of which are hereby waived by Obligors to the fullest extent permitted by law;

(b)        terminate, reduce or condition any Commitment, or make any adjustment to any Borrowing Base;

 

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(c)        require Obligors to Cash Collateralize their LC Obligations, Secured Bank Product Obligations and other Obligations that are contingent or not yet due and payable, and if Obligors fail to deposit such Cash Collateral, Agent may (and shall upon the direction of Required Lenders) advance the required Cash Collateral as Revolver Loans (whether or not an Overadvance exists or is created thereby, or the conditions in Section  6 are satisfied); and

(d)        together with the Security Trustees (as applicable), exercise any other rights or remedies afforded under any agreement, by law, at equity or otherwise, including the rights and remedies of a secured party under the UCC, PPSA or other similar domestic or foreign statutes. Such rights and remedies include the rights to (i) take possession of any Collateral; (ii) require Borrowers to assemble Collateral, at Borrowers’ expense, and make it available to Agent and Security Trustees at a place designated by Agent or Security Trustees (as applicable); (iii) enter any premises where Collateral is located and store Collateral on such premises until sold (and if the premises are owned or leased by an Obligor, Obligors agree not to charge for such storage); and (iv) sell or otherwise dispose of any Collateral in its then condition, or after any further manufacturing or processing thereof, at public or private sale, with such notice as may be required by Applicable Law, in lots or in bulk, at such locations, all as Agent or Security Trustees (as applicable), in their discretion, deem advisable. Each Obligor agrees that 10 days’ notice of any proposed sale or other disposition of Collateral by Agent or a Security Trustee shall be reasonable, and that any sale conducted on the internet or to a Licensor of Intellectual Property shall be commercially reasonable. Agent and Security Trustees may conduct sales on any Obligor’s premises, without charge, and any sale may be adjourned from time to time in accordance with Applicable Law. Agent and Security Trustees shall have the right to sell, lease or otherwise dispose of any Collateral for cash, credit or any combination thereof, and Agent and/or Security Trustees may purchase any Collateral at public or, if permitted by law, private sale and, in lieu of actual payment of the purchase price, may credit bid and set off the amount of such price against the Obligations.

11.3         License . Agent and Security Trustees are hereby granted an irrevocable, non-exclusive license or other right to use, license or sub-license (without payment of royalty or other compensation to any Person) any or all Intellectual Property of Obligors, computer hardware and software, trade secrets, brochures, customer lists, promotional and advertising materials, labels, packaging materials and other Property, in advertising for sale, marketing, selling, collecting, completing manufacture of, or otherwise exercising any rights or remedies with respect to, any Collateral. Each Obligor’s rights and interests under Intellectual Property shall inure to Agent’s and Security Trustees’ benefit.

11.4         Setoff . At any time during an Event of Default, Agent, Security Trustees, Issuing Banks, Lenders, and any of their Affiliates are authorized, 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 Agent, such Security Trustee, such Issuing Bank, such Lender or such Affiliate to or for the credit or the account of an Obligor against its Obligations, whether or not Agent, such Security Trustee, such Issuing Bank, such Lender or such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such Obligations may be contingent or unmatured or are owed to a branch or office of Agent, such Security Trustee, such Issuing Bank, such Lender or such Affiliate different from the branch or office holding such deposit or obligated on such indebtedness. The rights of Agent, each Security Trustee, each Issuing Bank, each Lender and each such Affiliate under this Section are in addition to other rights and remedies (including other rights of setoff) that such Person may have.

11.5         Remedies Cumulative; No Waiver .

 

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11.5.1         Cumulative Rights . All agreements, warranties, guaranties, indemnities and other undertakings of Obligors under the Loan Documents are cumulative and not in derogation of each other. The rights and remedies of Agent, Security Trustees and Lenders under the Loan Documents are cumulative, may be exercised at any time and from time to time, concurrently or in any order, and are not exclusive of any other rights or remedies available by agreement, by law, at equity or otherwise. All such rights and remedies shall continue in full force and effect until Full Payment of all Obligations.

11.5.2         Waivers . No waiver or course of dealing shall be established by (a) the failure or delay of Agent, any Security Trustee or any Lender to require strict performance by any Obligor under any Loan Document, or to exercise any rights or remedies with respect to Collateral or otherwise; (b) the making of any Loan or issuance of any Letter of Credit during a Default, Event of Default or other failure to satisfy any conditions precedent; or (c) acceptance by Agent, any Security Trustee or any Lender of any payment or performance by an Obligor under any Loan Documents in a manner other than that specified therein. Any failure to satisfy a financial covenant on a measurement date shall not be cured or remedied by satisfaction of such covenant on a subsequent date.

SECTION 12

AGENT

12.1       Appointment, Authority and Duties of Agent .

12.1.1         Appointment and Authority .

(a)        Each Secured Party appoints and designates Bank of America as Agent under all Loan Documents. Agent may, and each Secured Party authorizes Agent to, enter into all Loan Documents to which Agent is intended to be a party and accept all Security Documents. Any action taken by Agent in accordance with the provisions of the Loan Documents, and the exercise by Agent of any rights or remedies set forth therein, together with all other powers reasonably incidental thereto, shall be authorized by and binding upon all Secured Parties. Without limiting the generality of the foregoing, Agent, together with the Security Trustees, as applicable, shall have the sole and exclusive authority to (i) act as the disbursing and collecting agent for Lenders with respect to all payments and collections arising in connection with the Loan Documents; (ii) execute and deliver as Agent each Loan Document, including any intercreditor or subordination agreement, and accept delivery of each Loan Document; (iii) act as collateral agent and security trustee, as applicable, for Secured Parties for purposes of perfecting and administering Liens under the Loan Documents, and for all other purposes stated therein; (iv) manage, supervise or otherwise deal with Collateral; and (v) take any Enforcement Action or otherwise exercise any rights or remedies with respect to any Collateral or under any Loan Documents, Applicable Law or otherwise. Agent alone shall be authorized to determine eligibility and applicable advance rates under any Borrowing Base, whether to impose or release any reserve, or whether any conditions to funding or issuance of a Letter of Credit have been satisfied, which determinations and judgments, if exercised in good faith, shall exonerate Agent from liability to any Secured Party or other Person for any error in judgment.

(b)        In its capacity as Agent, for the purposes of holding any hypothec granted pursuant to the laws of the Province of Québec, each of the Secured Parties hereby irrevocably appoints and authorizes Agent and, to the extent necessary, ratifies the appointment and authorization of Agent, to act as the hypothecary representative of the applicable Secured Parties as contemplated under Article 2692 of the Civil Code of Québec, and to enter into, to take

 

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and to hold on their behalf, and for their benefit, any hypothec, and to exercise such powers and duties that are conferred upon Agent under any related Deed of Movable Hypothec. Agent shall have the sole and exclusive right and authority to exercise, except as may be otherwise specifically restricted by the terms hereof, all rights and remedies given to Agent pursuant to any such Deed of Movable Hypothec and Applicable Law. Any person who becomes a Secured Party shall, by its execution of an Assignment, be deemed to have consented to and confirmed Agent as the person acting as hypothecary representative holding the aforesaid hypothecs as aforesaid and to have ratified, as of the date it becomes a Secured Party, all actions taken by Agent in such capacity. The substitution of Agent pursuant to the provisions of this Section  12 also constitutes the substitution of Agent as hypothecary representative as aforesaid.

(c)          In addition, for Mexican law purposes, each Secured Party (c)  hereby grants to Bank of America, as Agent, a comisi ó n mercantil con representaci ó n in accordance with Articles 273, 274, and other applicable articles of the Commerce Code of Mexico (C ó digo de Comercio) to act on its behalf as its agent in connection with this Agreement and the Loan Documents, on the terms and for the purposes set forth in this Agreement and the other Loan Documents.

12.1.2         Duties . The title of “Agent” is used solely as a matter of market custom and the duties of Agent are administrative in nature only. Agent has no duties except those expressly set forth in the Loan Documents, and in no event does Agent have any agency, fiduciary or implied duty to or relationship with any Secured Party or other Person by reason of any Loan Document or related transaction. The conferral upon Agent of any right shall not imply a duty to exercise such right, unless instructed to do so by Lenders in accordance with this Agreement.

12.1.3         Agent Professionals . Agent may perform its duties through agents and employees. Agent may consult with and employ Agent Professionals, and shall be entitled to act upon, and shall be fully protected in any action taken in good faith reliance upon, any advice given by an Agent Professional. Agent shall not be responsible for the negligence or misconduct of any agents, employees or Agent Professionals selected by it with reasonable care.

12.1.4         Instructions of Required Lenders . The rights and remedies conferred upon Agent under the Loan Documents may be exercised without the necessity of joining any other party, unless required by Applicable Law. In determining compliance with a condition for any action hereunder, including satisfaction of any condition in Section  6 , Agent may presume that the condition is satisfactory to a Secured Party unless Agent has received notice to the contrary from such Secured Party before Agent takes the action. Agent may request instructions from Required Lenders or other Secured Parties with respect to any act (including the failure to act) in connection with any Loan Documents or Collateral, and may seek assurances to its satisfaction from Secured Parties of their indemnification obligations against Claims that could be incurred by Agent. Agent may refrain from any act until it has received such instructions or assurances, and shall not incur liability to any Person by reason of so refraining. Instructions of Required Lenders shall be binding upon all Secured Parties, and no Secured Party shall have any right of action whatsoever against Agent as a result of Agent acting or refraining from acting pursuant to instructions of Required Lenders. Notwithstanding the foregoing, instructions by and consent of specific parties shall be required to the extent provided in Section  14.1.1 . In no event shall Agent be required to take any action that it determines in its discretion is contrary to Applicable Law or any Loan Documents or could subject any Agent Indemnitee to liability.

12.2         Security Trustees .

12.2.1     Appointment .

 

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(a)        The Secured Parties hereby appoint the UK Security Trustee to hold (i) any security interest created by any UK Security Agreement; and (ii) the covenants and undertakings of the relevant UK Security Agreements, with respect to any jurisdiction where the concept of trust is appropriate, in trust for the Secured Parties and with respect to any jurisdiction where the concept of trust is not appropriate, as security agent for the Secured Parties, and, in each case, the UK Security Trustee accepts that appointment.

(b)        Each Security Trustee, its subsidiaries and associated companies may each retain for its own account and benefit any fee, remuneration and profits paid to it in connection with (i) its activities under the Loan Documents and (ii) its engagement in any kind of banking or other business with any Obligor.

12.2.2     Delegation . Each Security Trustee may delegate to any Person on such terms (which may include the power to sub-delegate) and subject to such conditions as it thinks fit, all or any of the rights, powers, authorities and discretions vested in it by any of the Loan Documents.

12.2.3     Separate Security Trustees .

(a)        Each Security Trustee may (whether for the purpose of complying with any law or regulation of any overseas jurisdiction, or for any other reason) appoint any Person to act jointly with such Security Trustee either as a separate trustee or as a co-trustee (each an “ Appointee ”) on such terms and subject to such conditions as such Security Trustee thinks fit and with such of the rights, powers, authorities and discretions vested in such Security Trustee by any Loan Document as may be conferred by the instrument of appointment of the Appointee.

(b)        Each Security Trustee may pay reasonable remuneration to any Appointee, together with any costs and expenses (including legal fees) reasonably incurred by the Appointee in connection with its appointment. All such remuneration, costs and expenses shall be treated, for the purposes of this Agreement, as paid or incurred by the applicable Security Trustee.

 

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12.2.4     The UK Security Agreements .

(a)        Each Secured Party confirms its approval of the relevant UK Security Agreements and of any security interest intended to be created under it, and authorizes and instructs the UK Security Trustee to execute and deliver the relevant UK Security Agreements.

(b)        The UK Security Trustee may accept without enquiry the title (if any) which any Person may have to any assets over which security interest is intended to be created by the relevant UK Security Agreements, and shall not be liable to any other party for any defect in or failure of any such title.

(c)        The UK Security Trustee shall not be (i) liable or responsible to any Secured Party for any failure to perfect, protect, register, make any filing or give notice in respect of the security interest intended to be created by the relevant UK Security Agreements, unless that failure arises directly from its own gross negligence or willful misconduct; (ii) obliged to insure any assets over which security interest is intended to be created by the relevant UK Security Agreements, to require any other person to maintain any such insurance, or to make any enquiry or conduct any investigation into the legality, validity, effectiveness, adequacy or enforceability of any insurance existing over any such asset; or (iii) obliged to hold in its own possession the relevant UK Security Agreements, title deed or other document relating to any assets over which security interest is intended to be created by the relevant UK Security Agreements.

12.2.5     Security Trustee as Proprietor . Each Secured Party confirms that it does not wish to be registered as a joint proprietor of any mortgage or charge created pursuant to the relevant UK Security Agreements and accordingly (a) authorizes the UK Security Trustee to hold such mortgages and charges in its sole name as trustee for the relevant Secured Parties; and (b) requests the UK Land Registry (or other relevant registry) to register the UK Security Trustee as a sole proprietor (or heritable creditor, as the case may be) of any such mortgage or charge.

12.2.6     Investments . Except to the extent that this Agreement or a UK Security Agreement otherwise requires, any monies received by the UK Security Trustee under or pursuant to a UK Security Agreement may be (a) invested in any investments which it may select and which are authorized by Applicable Law; or (b) placed on deposit at any bank or institution (including itself) on such terms as it may think fit, in each case in the name or under the control of the UK Security Trustee, and those monies, together with any accrued income (net of any applicable Tax) shall be held by the UK Security Trustee to the order of Agent, and shall be payable to Agent on demand.

12.2.7 Secured Parties’ Indemnity to the UK Security Trustee . Each Secured Party shall indemnify the UK Security Trustee, its delegates and sub-delegates and Appointees (each an “ Indemnified Party ”), within three (3) Business Days of demand, against any cost, loss or liability incurred by the UK Security Trustee or the relevant Indemnified Party (otherwise than by reason of the gross negligence or willful misconduct of the UK Security Trustee or that Indemnified Party) in acting as UK Security Trustee or its delegate, sub-delegate or Appointee under the relevant UK Security Agreements (except to the extent that the UK Security Trustee or the relevant Indemnified Party has been reimbursed by any Obligor pursuant to the relevant UK Security Agreements).

12.2.8     Conduct of business by the UK Security Trustee . No provision of this Agreement will (a) interfere with the right of the UK Security Trustee to arrange its affairs (tax or otherwise) in whatever manner it thinks fit; (b) oblige the UK Security Trustee to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or (c) oblige the UK Security Trustee to disclose any information relating to its affairs (tax or otherwise) or any computations in

 

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respect of tax.

12.2.9     Liability of UK Security Trustee .

(a)        The UK Security Trustee shall not nor shall any of its officers, employees or agents from time to time be responsible for: (i) the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by any Obligor or any other person given in or in connection with the relevant UK Security Agreements; or (ii) the legality, validity, effectiveness, adequacy or enforceability of the relevant UK Security Agreements or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with the relevant UK Security Agreements.

(b)        Without limiting Section  12.2.9(a) , the UK Security Trustee shall not be liable for any action taken by it or not taken by it under or in connection with the relevant UK Security Agreements, unless directly caused by its gross negligence or willful misconduct.

(c)        No party (other than the UK Security Trustee) may take any proceedings against any officer, employee or agent of the UK Security Trustee in respect of any claim it might have against the UK Security Trustee or in respect of any act or omission of any kind by that officer, employee or agent in relation to the relevant UK Security Agreements and any officer, employee or agent of the UK Security Trustee may rely on this Section  12.2.9 and the provisions of the Contracts (Rights of Third Parties) Act 1999, as amended.

(d)        The UK Security Trustee shall not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Loan Documents to be paid by the UK Security Trustee, if the UK Security Trustee has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by the UK Security Trustee for that purpose.

(e)        Without affecting the responsibility of the Obligors for information supplied by them or on their behalf in connection with any Loan Document, each Secured Party confirms to the UK Security Trustee that it has been, and shall continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with the relevant UK Security Agreements, including but not limited to: (i) the financial condition, status and nature of the Obligors; (ii) the legality, validity, effectiveness, adequacy or enforceability of the relevant UK Security Agreements and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the relevant UK Security Agreements; (iii) whether such Secured Party has recourse, and the nature and extent of that recourse, against any party or any of its respective assets under or in connection with any Loan Document, the transactions contemplated by the UK Security Agreements or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the relevant UK Security Agreements; and (iv) the adequacy, accuracy and/or completeness of any information provided by any person under or in connection with the relevant UK Security Agreements, the transactions contemplated by the relevant UK Security Agreements or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with the relevant UK Security Agreements.

 

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12.2.10     Other UK Security Agreement Matters .

(a)        The UK Security Trustee shall accept without investigation, requisition or objection, such title as any person may have to the assets which are subject to the relevant UK Security Agreements and shall not (i) be bound or concerned to examine or enquire into the title of any person; (ii) be liable for any defect or failure in the title of any person, whether that defect or failure was known to the UK Security Trustee or might have been discovered upon examination or enquiry and whether capable of remedy or not; or (iii) be liable for any failure on its part to give notice of the relevant UK Security Agreements to any third party or otherwise perfect or register the security interests created by the relevant UK Security Agreements (unless such failure arises directly from the UK Security Trustee’s gross negligence or willful misconduct).

(b)        The UK Security Trustee shall hold the relevant UK Security Agreements and all proceeds of enforcement of them in trust for the Secured Parties on the terms and conditions of this Agreement.

(c)        The relevant UK Security Agreements shall rank as continuing security interest for the discharge of the liabilities secured by it.

12.2.11   Disposals .

(a)        Subject to Section  12.3.1 , the UK Security Trustee is authorized by each of the Secured Parties to execute on behalf of itself and each such Secured Party without the need for any further referral to or authority from such Secured Party, any release of the security interests created by the relevant UK Security Agreements over that asset and, if such asset comprises all of the shares in any Obligor, the UK Security Trustee is further authorized, without the need for any further referral to or authority from such Secured Party, to execute a release of any security interests granted by such Obligor over its assets pursuant to any of the UK Security Agreements provided that in each such case the proceeds are applied in the manner provided for in this Agreement as if they were realizations pursuant to the relevant UK Security Agreements.

(b)        Each Secured Party undertakes to execute such releases and other documents as may be necessary to give effect to the releases specified in Section  12.2.11(a) .

12.2.12 Trust . The perpetuity period for each trust created by this Agreement shall be 80 years.

12.2.13 Appointment and Retirement of UK Security Trustee . The UK Security Trustee (a) subject to the appointment of a successor (provided that no Default exists, in consultation with the Borrower Agent) may, and must if Agent requires, retire at any time from its position as UK Security Trustee under the Loan Documents without assigning any reason, and (b) must give notice of its intention to retire by giving to the other Secured Parties and the Borrower Agent not less than 30 days’ nor more than 60 days’ notice.

12.2.14 Appointment of Successor . Agent may (provided that no Default exists, in consultation with the Borrower Agent) appoint a successor to the UK Security Trustee, during the period of notice set forth in Section  12.2.13 . If no successor is appointed by Agent, the UK Security Trustee may appoint (after consultation with Agent and, provided that no Default exists, the Borrower Agent) its successor. The Secured Parties shall promptly enter into any agreements that the successor may reasonably require to effect its appointment.

 

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12.2.15   Discharge of UK Security Trustee . From the date that the appointment of a successor is effected under Section  12.2.14 , the retiring UK Security Trustee must be discharged from any further obligations under the Loan Documents as UK Security Trustee, and the successor to the UK Security Trustee and each of the other Secured Parties have the same rights and obligations between themselves as they would have had if the successor had been a party to those Loan Documents.

12.3       Agreements Regarding Collateral and Borrower Materials .

12.3.1         Lien Releases; Care of Collateral .

(a)         Canadian Facility  Secured Parties hereby authorize Agent and any Security Trustee to release any Lien with respect to any Canadian Facility  Collateral (i) upon Full Payment of the Canadian Facility  Obligations; (ii) that is the subject of a disposition or Lien that Borrower Agent certifies in writing is an asset disposition permitted by Section  10.2.5 or a Permitted Encumbrance entitled to priority over Agent’s or Security Trustees’ Liens, as applicable (and Agent and Security Trustees may rely conclusively on any such certificate without further inquiry); (iii) that does not constitute a material part of the  Canadian Facility Collateral; (iv)  that is required to be released pursuant to the terms of any  intercreditor agreement pertaining to any Canadian Facility Collateral; or (v)  subject to  Section 14.1 , with the consent of Required Lenders. Canadian Facility Secured Parties hereby authorize Agent and Security Trustees to subordinate their Liens to any Purchase Money Lien or other Lien entitled to priority under this  Agreement.

(b)        UK Facility Secured Parties hereby authorize Agent and any Security Trustee to release any Lien with respect to any UK Facility Collateral (i)  upon Full Payment of the UK Facility Obligations; (ii)  that is the subject of a disposition or Lien that Borrower Agent certifies in writing is an asset disposition permitted by  Section 10.2.5  or a Permitted Encumbrance entitled to priority over Agent ’ s or Security Trustees ’ Liens, as applicable (and Agent and Security Trustees may rely conclusively on any such certificate without further inquiry); (iii) that does not constitute a material part of the UK Facility Collateral; (iv)  that is required to be released pursuant to the terms of any intercreditor agreement pertaining to any UK Facility Collateral; or (v)  subject to  Section 14.1 , with the consent of Required Lenders. UK Facility Secured Parties hereby authorize Agent and Security Trustees to subordinate their Liens to any Purchase Money Lien or other Lien entitled to priority under this Agreement. (c)  U.S. Facility Secured Parties hereby authorize Agent and any Security Trustee to release any Lien with respect to any U.S. Facility Collateral (i)  upon Full Payment of the Obligations; (ii)  that is the subject of a disposition or Lien that Borrower Agent certifies in writing is an asset disposition permitted by  Section 10.2.5  or a Permitted Encumbrance entitled to priority over Agent ’ s or Security Trustees ’ Liens, as applicable (and Agent and Security Trustees may rely conclusively on any such certificate without further inquiry); (iii) that does not constitute a material part of the U.S. Facility  Collateral; (iv) that is required to be released pursuant to the terms of the Intercreditor Agreement or any other intercreditor agreement pertaining to any Collateral ; or (v) subject to Section  14.1 , with the consent of Required Lenders.  The U.S. Facility  Secured Parties hereby authorize Agent and Security Trustees to subordinate their Liens to any Purchase Money Lien or other Lien entitled to priority under this Agreement.

(b)          [reserved];

(c)          [reserved];

 

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(d)         Agent has no obligation to assure that any Collateral exists or is owned by an Obligor, or is cared for, protected or insured, nor to assure that Agent’s Liens have been properly created, perfected or enforced, or are entitled to any particular priority, nor to exercise any duty of care with respect to any Collateral.

(e)         In each case as specified in this Section  12.3.1 , Agent and any Security Trustee will (and each Secured Party authorizes Agent and Security Trustee to), at the Borrowers’ expense, execute and deliver to the applicable Obligor such documents as such Obligor 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 Guaranties, in each case in accordance with the terms of the Loan Documents and this Section  12.3.1 . This Agreement and the security interest of the Secured Parties in the Collateral provided hereunder shall terminate upon the Full Payment of the Obligations (other than contingent obligations for indemnification, expense reimbursement, tax gross-up or yield protection in each case as to which no claim has been asserted or is reasonably expected to be asserted). A Guarantor shall automatically be released from its obligations under the Loan Documents and the security interest of the Secured Parties in the Collateral of such Guarantor shall be automatically released in the event that all the Equity Interests of such Guarantor shall be sold, transferred or otherwise disposed of to a person that is not an Affiliate of a Borrower in accordance with the terms of this Agreement and the other Loan Documents; provided that the Required Lenders (or, if required by the terms of this Agreement, such Lenders specified in this Agreement) shall have consented to such sale, transfer or other disposition (to the extent required by this Agreement and the other Loan Documents) and the terms of such consent did not provide otherwise. The security interest of the Secured Parties in any Collateral that is sold, transferred or otherwise disposed of in accordance with this Agreement and the other Loan Documents (including pursuant to a waiver or amendment of the terms hereof) shall automatically terminate and be released, and such Collateral shall be sold free and clear of the security interest created by the Loan Documents.

12.3.2         Possession of Collateral .

(a)        Agent and   Canadian  Facility  Secured Parties hereby appoint each Canadian  Lender as agent (for the benefit of Canadian Facility  Secured Parties) for the purpose of perfecting Liens on any Canadian Facility  Collateral held or controlled by such Canadian  Lender, to the extent such Liens are perfected by possession or control.

(b)         Agent   and  UK   Facility  Secured   Parties  hereby   appoint  each  UK  Lender as agent (for the benefit of UK Facility Secured Parties) for the purpose of perfecting Liens on any UK Facility Collateral held or controlled by such UK Lender, to the extent such Liens are perfected by possession or control.  [reserved].

(c)         Agent and U.S. Facility Secured Parties hereby appoint each U.S.   Lender as agent (for the benefit of U.S. Facility Secured Parties) for the purpose of perfecting Liens on any U.S. Facility Collateral held or controlled by such U.S. Lender, to the extent such Liens are perfected by possession or control.  [reserved].

(d)        If any Lender obtains possession or control of any Collateral, it shall notify Agent thereof and, promptly upon Agent’s request, deliver such Collateral to Agent or otherwise deal with it in accordance with Agent’s instructions.

 

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12.3.3         Reports . Agent shall promptly provide to each Applicable Lender, when complete, any field examination, audit or appraisal report prepared for Agent with respect to any Obligor or Collateral (“ Report ”). Reports and other Borrower Materials may be made available to Lenders by providing access to them on the Platform, but Agent shall not be responsible for system failures or access issues that may occur from time to time. Each Lender agrees (a) that Reports are not intended to be comprehensive audits or examinations, and that Agent or any other Person performing an audit or examination will inspect only limited information and will rely significantly upon Borrowers’ books, records and representations; (b) that Agent makes no representation or warranty as to the accuracy or completeness of any Borrower Materials and shall not be liable for any information contained in or omitted from any Borrower Materials, including any Report; and (c) to keep all Borrower Materials confidential and strictly for such Lender’s internal use, not to distribute any Report or other Borrower Materials (or the contents thereof) to any Person (except to such Lender’s Participants, attorneys and accountants), and to use all Borrower Materials solely for administration of the Obligations. Each Lender shall indemnify and hold harmless Agent and any other Person preparing a Report from any action such Lender may take as a result of or any conclusion it may draw from any Borrower Materials, as well as from any Claims arising as a direct or indirect result of Agent furnishing same to such Lender, via the Platform or otherwise.

12.4          Reliance By Agent . Agent shall be entitled to rely, and shall be fully protected in relying, upon any certification, notice or other communication (including those by telephone, telex, telegram, telecopy or e-mail) believed by it to be genuine and correct and to have been signed, sent or made by the proper Person. Agent shall have a reasonable and practicable amount of time to act upon any instruction, notice or other communication under any Loan Document, and shall not be liable for any delay in acting.

12.5         Action Upon Default . Agent shall not be deemed to have knowledge of any Default or Event of Default, or of any failure to satisfy any conditions in Section  6 , unless it has received written notice from Borrower Agent or Required Lenders specifying the occurrence and nature thereof. If any Lender acquires knowledge of a Default, Event of Default or failure of such conditions, it shall promptly notify Agent and the other Lenders thereof in writing. Each Secured Party agrees that, except as otherwise provided in any Loan Documents or with the written consent of Agent and Required Lenders, it will not take any Enforcement Action, accelerate Obligations (other than Secured Bank Product Obligations) or assert any rights relating to any Collateral.

12.6         Ratable Sharing . If any Lender obtains any payment or reduction of any Obligation, whether through set-off or otherwise, in excess of its ratable share of such Obligation, such Lender shall forthwith purchase from Secured Parties participations in the affected Obligation as are necessary to share the excess payment or reduction on a Pro Rata basis or in accordance with Section  5.5.2 , as applicable. If any of such payment or reduction is thereafter recovered from the purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. Notwithstanding the foregoing, if a Defaulting Lender obtains a payment or reduction of any Obligation, it shall immediately turn over the full amount thereof to Agent for application under Section  4.2.2 and it shall provide a written statement to Agent describing the Obligation affected by such payment or reduction. No Lender shall set off against a Controlled Account or a Dominion Account without Agent’s prior consent.

12.7         Indemnification .    EACH SECURED PARTY SHALL INDEMNIFY AND HOLD HARMLESS AGENT INDEMNITEES AND ISSUING BANK INDEMNITEES, TO THE EXTENT NOT REIMBURSED BY OBLIGORS, ON A PRO RATA BASIS, AGAINST ALL CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY SUCH INDEMNITEE, PROVIDED

 

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THAT ANY CLAIM AGAINST AN AGENT INDEMNITEE RELATES TO OR ARISES FROM ITS ACTING AS OR FOR AGENT (IN THE CAPACITY OF AGENT). In Agent’s Permitted Discretion, it may reserve for any Claims made against an Agent Indemnitee or Issuing Bank Indemnitee, and may satisfy any judgment, order or settlement relating thereto, from proceeds of Collateral prior to making any distribution of Collateral proceeds to Secured Parties. If Agent is sued by any Creditor Representative, debtor-in-possession or other Person for any alleged preference or fraudulent transfer, then any monies paid by Agent in settlement or satisfaction of such proceeding, together with all interest, costs and expenses (including attorneys’ fees) incurred in the defense of same, shall be promptly reimbursed to Agent by each Secured Party to the extent of its Pro Rata share.

12.8         Successor Agent and Co-Agents .

12.8.1         Resignation; Successor Agent . Agent may resign at any time by giving at least 30 days written notice thereof to Lenders and Borrower Agent. Required Lenders may appoint a successor to replace the resigning Agent, which successor shall be (a) a U.S. Lender or an Affiliate of a U.S. Lender; or (b) a financial institution that is organized under the laws of the U.S. or any state or district thereof and reasonably acceptable to Required Lenders and (provided no Default exists) Borrower Agent. If no successor agent is appointed prior to the effective date of Agent’s resignation, then Agent may appoint a successor agent that is a financial institution that is organized under the laws of the U.S. or any state or district thereof and acceptable to Agent (which shall be a Lender unless no Lender accepts the role) or in the absence of such appointment, Required Lenders shall on such date assume all rights and duties of Agent hereunder. Upon acceptance by any successor Agent of its appointment hereunder, such successor Agent shall thereupon succeed to and become vested with all the powers and duties of the retiring Agent without further act. On the effective date of its resignation, the retiring Agent shall be discharged from its duties and obligations hereunder but shall continue to have all rights and protections under the Loan Documents with respect to actions taken or omitted to be taken by it while Agent, including the indemnification set forth in Sections 12.7 , 12.17 and 14.2 , and all rights and protections under this Section  12 . Any successor to Bank of America by merger or acquisition of stock or this loan shall continue to be Agent hereunder without further act on the part of any Secured Party or Obligor.

12.8.2         Co-Collateral Agent . It is the intent of the parties that there shall be no violation of any Applicable Law denying or restricting the right of financial institutions to transact business in any jurisdiction. If appropriate under Applicable Law (including, without limitation, any situation in which Agent believes that it may be limited in the exercise of any rights or remedies under the Loan Documents due to any Applicable Law), Agent may appoint a Person to serve as a separate security trustee, co-collateral agent or separate collateral agent under any Loan Document. Each right, remedy and protection intended to be available to Agent under the Loan Documents shall also be vested in such agent. Secured Parties shall execute and deliver any instrument, agreement or other document that Agent may request to effect such appointment. If any such separate security trustee, co-collateral agent or separate collateral agent shall die, dissolve, become incapable of acting, resign or be removed, then all the rights and remedies of such agent, to the extent permitted by Applicable Law, shall vest in and be exercised by Agent until appointment of a new agent.

12.9         Limitation on Responsibilities of Agent . Agent shall not be liable to any Secured Party for any action taken or omitted to be taken under the Loan Documents, except for losses directly and solely caused by Agent’s gross negligence or willful misconduct. Agent does not assume any responsibility for any failure or delay in performance or any breach by any Obligor, Lender or other Secured Party of any obligations under the Loan Documents. Agent does not make any express or implied representation, warranty or guarantee to Secured Parties with respect to any Obligations, Collateral, Liens, Loan Documents or Obligor. No Agent Indemnitee shall be responsible to Secured

 

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Parties for any recitals, statements, information, representations or warranties contained in any Loan Documents or Borrower Materials; the execution, validity, genuineness, effectiveness or enforceability of any Loan Documents; the genuineness, enforceability, collectability, value, sufficiency, location or existence of any Collateral, or the validity, extent, perfection or priority of any Lien therein; the validity, enforceability or collectability of any Obligations; or the assets, liabilities, financial condition, results of operations, business, creditworthiness or legal status of any Obligor or Account Debtor. No Agent Indemnitee shall have any obligation to any Secured Party to ascertain or inquire into the existence of any Default or Event of Default, the observance by any Obligor of any terms of the Loan Documents, or the satisfaction of any conditions precedent contained in any Loan Documents.

12.10        Due Diligence and Non-Reliance . Each Lender acknowledges and agrees that it has, independently and without reliance upon Agent or any other Lenders, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of each Obligor and its own decision to enter into this Agreement and to fund Loans and participate in LC Obligations hereunder. Each Secured Party has made such inquiries as it feels necessary concerning the Loan Documents, Collateral and Obligors. Each Secured Party acknowledges and agrees that the other Secured Parties have made no representations or warranties concerning any Obligor, any Collateral or the legality, validity, sufficiency or enforceability of any Loan Documents or Obligations. Each Secured Party will, independently and without reliance upon any other Secured Party, and based upon such financial statements, documents and information as it deems appropriate at the time, continue to make and rely upon its own credit decisions in making Loans and participating in LC Obligations, and in taking or refraining from any action under any Loan Documents. Except for notices, reports and other information expressly requested by a Lender, Agent shall have no duty or responsibility to provide any Secured Party with any notices, reports or certificates furnished to Agent by any Obligor or any credit or other information concerning the affairs, financial condition, business or Properties of any Obligor (or any of its Affiliates) which may come into possession of Agent or its Affiliates.

12.11        Remittance of Payments and Collections .

12.11.1         Remittances Generally . All payments by any Lender to Agent shall be made by the time and on the day set forth in this Agreement, in immediately available funds. If no time for payment is specified or if payment is due on demand by Agent and request for payment is made by Agent by 1:00 p.m. (Local Time) on a Business Day, payment shall be made by Lender not later than 3:00 p.m. (Local Time) on such day, and if request is made after 1:00 p.m. (Local Time), then payment shall be made by 11:00 a.m. (Local Time) on the next Business Day. Payment by Agent to any Secured Party shall be made by wire transfer, in the type of funds received by Agent. Any such payment shall be subject to Agent’s right of offset for any amounts due from such payee under the Loan Documents.

12.11.2         Failure to Pay . If any Secured Party fails to pay any amount when due by it to Agent pursuant to the terms hereof, such amount shall bear interest, from the due date until paid in full, at the greater of the Federal Funds Rate or the rate determined by Agent as customary for interbank compensation for two Business Days and thereafter at the Default Rate for U.S. Base Rate Loans. In no event shall Borrowers be entitled to credit for any interest paid by a Secured Party to Agent, nor shall a Defaulting Lender be entitled to interest on amounts held by Agent pursuant to Section  4.2 .

12.11.3         Recovery of Payments . If Agent pays an amount to a Secured Party in the expectation that a related payment will be received by Agent from an Obligor and such related payment is not received, then Agent may recover such amount from the Secured Party. If Agent determines that an amount received by it must be returned or paid to an Obligor or other Person pursuant to Applicable Law or otherwise, then Agent shall not be required to distribute such amount to any Secured Party. If any

 

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amounts received and applied by Agent to Obligations held by a Secured Party are later required to be returned by Agent pursuant to Applicable Law, such Secured Party shall pay to Agent, on demand , its share of the amounts required to be returned.

12.12         Individual Capacities . As a Lender, Bank of America shall have the same rights and remedies under the Loan Documents as any other Lender, and the terms “Lenders,” “Required Lenders” or any similar term shall include Bank of America in its capacity as a Lender. Agent, Lenders and their Affiliates may accept deposits from, lend money to, provide Bank Products to, act as financial or other advisor to, and generally engage in any kind of business with, Obligors and their Affiliates, as if they were not Agent or Lenders hereunder, without any duty to account therefor to any Secured Party. In their individual capacities, Agent, Lenders and their Affiliates may receive information regarding Obligors, their Affiliates and their Account Debtors (including information subject to confidentiality obligations), and shall have no obligation to provide such information to any Secured Party.

12.13         Titles . Each Lender, other than Bank of America, that is designated in connection with this credit facility as an “Arranger,” “Bookrunner” or “Agent” of any kind shall have no right or duty under any Loan Documents other than those applicable to all Lenders, and shall in no event have any fiduciary duty to any Secured Party.

12.14         Bank Product Providers . Each Secured Bank Product Provider, by delivery of a notice to Agent of a Bank Product, agrees to be bound by the Loan Documents, including Sections 5.5 , 14.3.3 and 12 . Each Secured Bank Product Provider shall indemnify and hold harmless Agent Indemnitees, to the extent not reimbursed by Obligors, against all Claims that may be incurred by or asserted against any Agent Indemnitee in connection with such provider’s Secured Bank Product Obligations.

12.15         No Third Party Beneficiaries . This Section  12 is an agreement solely among Secured Parties and Agent, and shall survive Full Payment of the Obligations. This Section  12 does not confer any rights or benefits upon Borrowers or any other Person. As between Borrowers and Agent, any action that Agent may take under any Loan Documents or with respect to any Obligations shall be conclusively presumed to have been authorized and directed by Secured Parties.

12.16         Authorization Regarding Intercreditor Agreement . Each Lender hereby (a) consents to the subordination of Liens provided for in the Intercreditor Agreement, (b) agrees that it will be bound by, and will take no actions contrary to, the provisions of the Intercreditor Agreement, (c) authorizes and instructs Agent to enter into the Intercreditor Agreement on behalf of such Lender and agrees that Agent may take such actions on its behalf as is contemplated by the terms of the Intercreditor Agreement, and (d) acknowledges (or is deemed to acknowledge) that a copy of the Intercreditor Agreement was delivered, or made available, to such Lender and it has received and reviewed the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and any of the other Loan Documents, the terms of the Intercreditor Agreement shall govern and control except as expressly set forth in the Intercreditor Agreement.

12.17         Withholding Taxes . To the extent required by any Applicable Law, and subject to Section 5.8.4, Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. If the IRS or any other Governmental Authority asserts a claim that Agent did not properly withhold Tax from amounts paid to or for the account of any Lender because (a) the appropriate form was not delivered or was not properly executed by such Lender, (b) such Lender failed to notify Agent of a change in circumstance which rendered the exemption from, or reduction of, withholding Tax ineffective or for any other reason or (c) such Lender otherwise failed to comply with Section  5.9 , or if Agent reasonably determined that a payment was made to a Lender pursuant to this

 

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Agreement without deduction or applicable withholding Tax from such payment, such Lender shall indemnify Agent fully for all amounts paid, directly or indirectly, by Agent as Tax or otherwise, including any expenses (including legal expenses) incurred

12.18    Lender Representations and Warranties .

(a)        Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Agent and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Obligor, that at least one of the following is and will be true:

(i)        such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments,

(ii)        the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,

(iii)        (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement, or

(iv)        such other representation, warranty and covenant as may be agreed in writing between the Agent, in its sole discretion, and such Lender.

(b)        In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Agent and the Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower or any other Obligor, that:

 

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(i)        none of the Agent or the Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Agent under this Agreement, any Loan Document or any documents related to hereto or thereto),

(ii)        the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

(iii)        the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations),

(iv)        the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

(v)        no fee or other compensation is being paid directly to the Agent or the Arranger or any their respective Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement.

(c)        The Agent and the Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

 

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SECTION 13

BENEFIT OF AGREEMENT; ASSIGNMENTS

13.1        Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of Obligors, Agent, Lenders, Secured Parties, and their respective successors and assigns, except that (a) no Obligor shall have the right to assign its rights or delegate its obligations under any Loan Documents; and (b) any assignment by a Lender must be made in compliance with Section  13.3 . Agent may treat the Person which made any Loan as the owner thereof for all purposes until such Person makes an assignment in accordance with Section  13.3 . Any authorization or consent of a Lender shall be conclusive and binding on any subsequent transferee or assignee of such Lender.

13.2        Participations .

13.2.1         Permitted Participants; Effect .    Subject to Section  13.3.3 , any Lender may sell to a financial institution (“ Participant ”) a participating interest in the rights and obligations of such Lender under any Loan Documents. Despite any sale by a Lender of participating interests to a Participant, such Lender’s obligations under the Loan Documents shall remain unchanged, it shall remain solely responsible to the other parties hereto for performance of such obligations, it shall remain the holder of its Loans and Borrower Group Commitments for all purposes, all amounts payable by the applicable Obligor Group shall be determined as if it had not sold such participating interests, and the applicable Obligor Group and Agent shall continue to deal solely and directly with such Lender in connection with the Loan Documents. Each Lender shall be solely responsible for notifying its Participants of any matters under the Loan Documents, and Agent and the other Lenders shall not have any obligation or liability to any such Participant. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Sections 3.7 or 5.8 unless Borrower Agent agrees otherwise in writing to the grant of such participating interest.

13.2.2         Voting Rights . Each Lender shall retain the sole right to approve, without the consent of any Participant, any amendment, waiver or other modification of a Loan Document other than that which forgives principal, interest or fees, reduces the stated interest rate or fees payable with respect to any Loan or Commitment in which such Participant has an interest, postpones the Commitment Termination Date in respect of a Borrower Group in which such Participant has an interest or any date fixed for any regularly scheduled payment of principal, interest or fees on such Loan or Commitment, or releases any Borrower, Guarantor or other Obligor or substantially all Collateral.

13.2.3         Participant Register . Each Lender that sells a participation shall, acting as a non-fiduciary agent of Borrowers (solely for tax purposes), maintain a register in which it enters the Participant’s name, address and interest in Commitments, Loans (and stated interest) and LC Obligations. Entries in the register shall be conclusive, absent manifest error, and such Lender shall treat each Person recorded in the register as the owner of the participation for all purposes, notwithstanding any notice to the contrary. No Lender shall have an obligation to disclose any information in such register except to the extent necessary to establish that a Participant’s interest is in registered form under the Code.

13.2.4         Benefit of Setoff . Obligors agree that each Participant shall have a right of set-off in respect of its participating interest to the same extent as if such interest were owing directly to a Lender, and each Lender shall also retain the right of set-off with respect to any participating interests sold by it. By exercising any right of set-off, a Participant agrees to share with Lenders all amounts received through its set-off, in accordance with Section  12.6 as if such Participant were a Lender.

 

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13.3       Assignments .

13.3.1          Permitted Assignments . A Lender may assign to an Eligible Assignee any of its rights and obligations under the Loan Documents, as long as (a) each assignment is of a constant, and not a varying, percentage of the transferor Lender’s rights and obligations under the Loan Documents and, in the case of a partial assignment, is in a minimum principal amount of $5,000,000 (unless otherwise agreed by Agent in its discretion) and integral multiples of $5,000,000 in excess of that amount; (b) except in the case of an assignment in whole of a Lender’s rights and obligations, the aggregate amount of the Commitments retained by the transferor Lender is at least $5,000,000 (unless otherwise agreed by Agent in its discretion); and (c) the parties to each such assignment shall execute and deliver an Assignment to Agent for acceptance and recording. Nothing herein shall limit the right of a Lender to pledge or assign any rights under the Loan Documents to secure obligations of such Lender, including a pledge or assignment to a Federal Reserve Bank; provided, however, that no such pledge or assignment shall release the Lender from its obligations hereunder nor substitute the pledge or assignee for such Lender as a party hereto.

13.3.2         Effect; Effective Date . Upon delivery to Agent of an assignment notice in the form of Exhibit B and a processing fee of $3,500 (unless otherwise agreed by Agent in its discretion), the assignment shall become effective as specified in the notice, if it complies with this Section  13.3 . From such effective date, the Eligible Assignee shall for all purposes be a Lender under the Loan Documents, and shall have all rights and obligations of a Lender thereunder. Upon consummation of an assignment, the transferor Lender, Agent and Borrowers shall make appropriate arrangements for issuance of replacement and/or new notes, if applicable. The transferee Lender shall comply with Section 5.9 and deliver, upon request, an administrative questionnaire satisfactory to Agent. The assigning Lender shall deliver a copy of such assignment notice to Borrower Agent concurrently with the delivery of the same to Agent.

13.3.3         Certain Assignees . No assignment or participation may be made to a Borrower, Affiliate of a Borrower, Defaulting Lender or natural person. Agent has no obligation to determine whether any assignee is permitted under the Loan Documents. Assignment by a Defaulting Lender shall be effective only if there is concurrent satisfaction of all outstanding obligations of the Defaulting Lender under the Loan Documents in a manner satisfactory to Agent, including payment by the Eligible Assignee or Defaulting Lender to Agent of an aggregate amount sufficient upon distribution (through direct payment, purchases of participations or other methods acceptable to Agent) to satisfy all funding and payment liabilities of the Defaulting Lender. If assignment by a Defaulting Lender occurs (by operation of law or otherwise) without compliance with the foregoing sentence, the assignee shall be deemed a Defaulting Lender for all purposes until compliance occurs.

13.3.4         Register . Agent, acting as a non-fiduciary agent of Borrowers (solely for tax purposes), shall maintain (a) a copy (or electronic equivalent) of each Assignment and Acceptance delivered to it, and (b) a register for recordation of the names, addresses and Commitments of, and the Loans, interest and LC Obligations owing to, each Lender. Entries in the register shall be conclusive, absent manifest error, and Borrowers, Agent and Lenders shall treat each Person recorded in such register as a Lender for all purposes under the Loan Documents, notwithstanding any notice to the contrary. Agent may choose to show only one Borrower as the borrower in the register, without any effect on the liability of any Obligor with respect to the Obligations. The register shall be available for inspection by Borrowers or any Lender, from time to time upon reasonable notice.

13.4        Replacement of Certain Lenders . If a Lender (a) within the last 120 days failed to give its consent to any amendment, waiver or action for which consent of all Lenders was required and

 

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Required Lenders consented, (b) is a Defaulting Lender, or (c) within the last 120 days gave a notice under Section  3.5 or requested payment or compensation under Section  3.7 or 5.8 (and has not designated a different Lending Office pursuant to Section  3.8 ), then Agent or Borrower Agent may, upon 10 days’ notice to such Lender, require it to assign its rights and obligations under the Loan Documents to Eligible Assignee(s), pursuant to appropriate Assignment(s), within 20 days after the notice. Agent is irrevocably appointed as attorney-in-fact to execute any such Assignment if the Lender fails to execute it. Such Lender shall be entitled to receive, in cash, concurrently with such assignment, all amounts owed to it under the Loan Documents through the date of assignment.

SECTION 14

MISCELLANEOUS

14.1       Consents, Amendments and Waivers .

14.1.1           Amendment .     No modification of any Loan Document, including any extension or amendment of a Loan Document or any waiver of a Default or Event of Default, shall be effective without the prior written agreement of Agent (with the consent of Required Lenders) and each Obligor party to such Loan Document; provided, however, that

(a)         without the prior written consent of Agent, no modification shall alter any provision in a Loan Document that relates to any rights, duties or discretion of Agent;

(b)         (i) without the prior written consent of Canadian Issuing Bank, no modification shall alter Section 2.2 or any other provision in a Loan Document that relates to Canadian Letters of Credit or any rights, duties or discretion of Canadian Issuing Bank, (ii) without the prior written consent of UK Issuing Bank, no modification shall alter Section  2.3 or any other provision in a Loan Document that relates to UK Letters of Credit or any rights, duties or discretion of UK Issuing Bank and (iii) without the prior written consent of U.S. Issuing Bank, no modification shall alter Section  2.4 or any other provision in a Loan Document that relates to U.S. Letters of Credit or any rights, duties or discretion of U.S. Issuing Bank;

(c)         without the prior written consent of each affected Lender, including a Defaulting Lender, no modification shall (i) increase the Borrower Group Commitment of such Lender; (ii) reduce the amount of, or waive or delay payment of, any principal, interest or fees payable to such Lender (except as provided in Section  4.2 ); (iii) extend the Commitment Termination Date applicable to such Lender’s Obligations; or (iv) amend this clause (c);

(d)         without the prior written consent of all Lenders (except any Defaulting Lender), no modification shall (i) alter Section  5.5.2, or 14.1.1 ; (ii) amend the definition of any Borrowing Base, FILO Amount,  any Accounts Formula Amount or any Inventory Formula Amount (or any defined term used in such definitions) if the effect of such amendment is to increase borrowing availability, Pro Rata or Required Lenders; (iii) release all or substantially all Collateral; (iv) except in connection with a merger, disposition or similar transaction expressly permitted hereby, release any Obligor from liability for any Obligations; or  (v) increase the Maximum Facility Amount , or (vi)  amend the definition of U.S. Special Availability Block ;

(e)         without the prior written consent of a Secured Bank Product Provider, no modification shall affect its relative payment priority under Section  5.5.2 ;

 

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(f)        Agent and the applicable Obligors may amend, modify or supplement any Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any ambiguity, inconsistency or defect or correct any typographical error or other manifest error in any Loan Document; and

(g)        Agent and the Borrowers may amend this Agreement without the consent of any Lender or Required Lenders in order to provide the Lenders with the benefits of any additional covenants, additional events of default, more restrictive covenants or more restrictive events of default that are added to  Senior Term Loan Documents and/or  the Term Loan Documents.

Notwithstanding anything in this Section  14.1.1 to the contrary, (a) this Agreement may be amended (or amended and restated) with the written consent of only Agent, the Borrower Agent and each Lender to add one or more additional credit facilities to this Agreement for a new jurisdiction and to permit the extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share in the benefits of this Agreement and the other Loan Documents and (b) the consent of all Lenders (except any Defaulting Lender) is required for an increase in the Maximum Facility Amount. By their execution of this Agreement, the Required Lenders consent to the execution of the amendments to the Intercreditor Agreement and the Amended and Restated ABL Guarantee and Collateral Agreement that are referred to in Section  10.1.15 .

14.1.2         Limitations . The agreement of Obligors shall not be required for any modification of a Loan Document that deals solely with the rights and duties of Lenders, Agent, Security Trustees and/or Issuing Banks as among themselves. Only the consent of the parties to any agreement relating to fees or a Bank Product shall be required for modification of such agreement, and no Bank Product provider (in such capacity) shall have any right to consent to modification of any Loan Document other than its Bank Product agreement. Any waiver or consent granted by Agent or Lenders hereunder shall be effective only if in writing and only for the matter specified.

14.1.3         Payment for Consents . No Obligor will, directly or indirectly, pay any remuneration or other thing of value, whether by way of additional interest, fee or otherwise, to any Lender (in its capacity as a Lender hereunder) as consideration for agreement by such Lender with any modification of any Loan Documents, unless such remuneration or value is concurrently paid, on the same terms, on a Pro Rata basis to all Lenders providing their consent.

14.2       Indemnity . EACH OBLIGOR SHALL INDEMNIFY AND HOLD HARMLESS THE INDEMNITEES AGAINST ANY CLAIMS THAT MAY BE INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE, INCLUDING CLAIMS ASSERTED BY ANY OBLIGOR OR OTHER PERSON OR ARISING FROM THE NEGLIGENCE OF AN INDEMNITEE. In no event shall any party to a Loan Document have any obligation thereunder to indemnify or hold harmless an Indemnitee with respect to a Claim that is determined in a final, non-appealable judgment by a court of competent jurisdiction to result from the gross negligence or willful misconduct of such Indemnitee.

14.3        Notices and Communications .

14.3.1          Notice Address . Subject to Section  4.1.4 , all notices and other communications by or to a party hereto shall be in writing and shall be given to any Obligor, at Borrower Agent’s address shown on the signature pages hereof, and to any other Person at its address shown on the signature pages hereof (or, in the case of a Person who becomes a Lender after the Closing Date, at the address shown on its Assignment), or at such other address as a party may hereafter specify by notice in

 

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accordance with this Section  14.3 . Each communication shall be effective only (a) if given by facsimile transmission, when transmitted to the applicable facsimile number, if confirmation of receipt is received; (b) if given by mail, three Business Days after deposit in the local mail system of the recipient, with first-class postage pre-paid, addressed to the applicable address; or (c) if given by personal delivery, when duly delivered to the notice address with receipt acknowledged. Notwithstanding the foregoing, no notice to Agent pursuant to Section  2.1.4 , 2.2 , 2.3 , 2.4 , 3.1.2 or 4.1.1 shall be effective until actually received by the individual to whose attention at Agent such notice is required to be sent. Any written communication that is not sent in conformity with the foregoing provisions shall nevertheless be effective on the date actually received by the noticed party. Any notice received by Borrower Agent shall be deemed received by all Obligors.

14.3.2         Communications . Electronic communications (including e-mail, messaging and websites) may be used only in a manner acceptable to Agent and only for routine communications, such as delivery of Borrower Materials, administrative matters, distribution of Loan Documents and matters permitted under Section  4.1.4 . Secured Parties make no assurance as to the privacy or security of electronic communications. E-mail and voice mail shall not be effective notices under the Loan Documents.

14.3.3         Platform . Borrower Materials shall be delivered pursuant to procedures approved by Agent, including electronic delivery (if possible) upon request by Agent to an electronic system maintained by Agent (“ Platform ”). Borrower Agent shall notify Agent of each posting of Borrower Materials on the Platform and the materials shall be deemed received by Agent only upon its receipt of such notice. Borrower Materials and other information relating to this credit facility may be made available to Secured Parties on the Platform. The Platform is provided “as is” and “as available.” Agent does not warrant the accuracy or completeness of any information on the Platform nor the adequacy or functioning of the Platform, and expressly disclaims liability for any errors or omissions in the Borrower Materials or any issues involving the Platform. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS, OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY AGENT WITH RESPECT TO BORROWER MATERIALS OR THE PLATFORM. No Agent Indemnitee shall have any liability to Obligors, Secured Parties or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) relating to use by any Person of the Platform, including any unintended recipient, nor for delivery of Borrower Materials and other information via the Platform, internet, e-mail, or any other electronic platform or messaging system.

14.3.4         Public Information . Obligors and Secured Parties acknowledge that “public” information may not be segregated from material non-public information on the Platform. Secured Parties acknowledge that Borrower Materials may include Obligors’ material non-public information, and should not be made available to personnel who do not wish to receive such information or may be engaged in investment or other market-related activities with respect to an Obligor’s securities.

14.3.5         Non-Conforming Communications . Agent and Lenders may rely upon any communications purportedly given by or on behalf of any Obligor even if they were not made in a manner specified herein, were incomplete or were not confirmed, or if the terms thereof, as understood by the recipient, varied from a later confirmation. Each Obligor shall indemnify and hold harmless each Indemnitee from any liabilities, losses, costs and expenses arising from any electronic or telephonic communication purportedly given by or on behalf of an Obligor.

 

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14.4          Performance of Obligors’ Obligations . Agent may, in its Permitted Discretion at any time and from time to time, at the expense of the applicable Obligor Group, pay any amount or do any act required of an Obligor under any Loan Documents or otherwise lawfully requested by Agent to (a) enforce any Loan Documents or collect any Obligations; (b) protect, insure, maintain or realize upon any Collateral; or (c) defend or maintain the validity or priority of Agent’s or any Security Trustee’s Liens in any Collateral, including any payment of a judgment, insurance premium, warehouse charge, finishing or processing charge, or landlord claim, or any discharge of a Lien. All payments, costs and expenses (including Extraordinary Expenses) of Agent under this Section shall be reimbursed to Agent by Obligors, on demand, with interest from the date incurred until paid in full, at the Default Rate applicable to U.S. Base Rate Loans. Any payment made or action taken by Agent under this Section shall be without prejudice to any right to assert an Event of Default or to exercise any other rights or remedies under the Loan Documents.

14.5          Credit Inquiries . Agent and Lenders may (but shall have no obligation) to respond to usual and customary credit inquiries from third parties concerning any Obligor or Subsidiary.

14.6          Severability . Wherever possible, each provision of the Loan Documents shall be interpreted in such manner as to be valid under Applicable Law. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of the Loan Documents shall remain in full force and effect.

14.7          Cumulative Effect; Conflict of Terms . The provisions of the Loan Documents are cumulative. The parties acknowledge that the Loan Documents may use several limitations or measurements to regulate similar matters, and they agree that these are cumulative and that each must be performed as provided. Except as otherwise provided in another Loan Document (by specific reference to the applicable provision of this Agreement), if any provision contained herein is in direct conflict with any provision in another Loan Document, the provision herein shall govern and control.

14.8          Counterparts; Execution . Any Loan Document may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement shall become effective when Agent has received counterparts bearing the signatures of all parties hereto. Agent may (but shall have no obligation to) accept any signature, contract formation or record-keeping through electronic means, which shall have the same legal validity and enforceability as manual or paper-based methods, to the fullest extent permitted by Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar state law based on the Uniform Electronic Transactions Act.

14.9          Entire Agreement . Time is of the essence with respect to all Loan Documents and Obligations. The Loan Documents constitute the entire agreement, and supersede all prior understandings and agreements, among the parties relating to the subject matter thereof.

14.10       Relationship with Lenders . The obligations of each Lender hereunder are several, and no Lender shall be responsible for the obligations or Commitments of any other Lender. Amounts payable hereunder to each Lender shall be a separate and independent debt. It shall not be necessary for Agent or any other Lender to be joined as an additional party in any proceeding for such purposes. Nothing in this Agreement and no action of Agent, Lenders or any other Secured Party pursuant to the Loan Documents or otherwise shall be deemed to constitute Agent and any Secured Party to be a partnership, joint venture or similar arrangement, nor to constitute control of any Obligor.

 

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14.11     No Advisory or Fiduciary Responsibility . In connection with all aspects of each transaction contemplated by any Loan Document, Obligors acknowledge and agree that (a)(i) this credit facility and any arranging or other services by Agent, any Lender, any of their Affiliates or any arranger are arm’s-length commercial transactions between Obligors and their Affiliates, on one hand, and Agent, any Lender, any of their Affiliates or any arranger, on the other hand; (ii) Obligors have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate; and (iii) Obligors are capable of evaluating, and understand and accept, the terms, risks and conditions of the transactions contemplated by the Loan Documents; (b) each of Agent, Lenders, their Affiliates and any arranger is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for Obligors, their Affiliates or any other Person, and has no obligation with respect to the transactions contemplated by the Loan Documents except as expressly set forth therein; and (c) Agent, Lenders, their Affiliates and any arranger may be engaged in a broad range of transactions that involve interests that differ from those of Obligors and their Affiliates, and have no obligation to disclose any of such interests to Obligors or their Affiliates. To the fullest extent permitted by Applicable Law, each Obligor hereby waives and releases any claims that it may have against Agent, Lenders, their Affiliates and any arranger with respect to any breach of agency or fiduciary duty in connection with any transaction contemplated by a Loan Document.

14.12     Confidentiality . Each of Agent, Lenders and Issuing Banks shall maintain the confidentiality of all Information (as defined below), except that Information may be disclosed (a) to its Affiliates, and to its and their partners, directors, officers, employees, agents, advisors and representatives (provided they are informed of the confidential nature of the Information and instructed to keep it confidential); (b) to the extent requested by any governmental, regulatory or self-regulatory authority purporting to have jurisdiction over it or its Affiliates; (c) to the extent required by Applicable Law or by any subpoena or other legal process; (d) to any other party hereto; (e) in connection with any action or proceeding relating to any Loan Documents or Obligations; (f) subject to an agreement containing provisions substantially the same as this Section, to any Transferee or any actual or prospective party (or its advisors) to any Bank Product or to any swap, derivative or other transaction under which payments are to be made by reference to an Obligor or Obligor’s obligations; (g) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) is available to Agent, any Lender, any Issuing Bank or any of their Affiliates on a nonconfidential basis from a source other than Obligors; (h) on a confidential basis to a provider of a Platform; or (i) with the consent of Borrower Agent. Notwithstanding the foregoing, Agent and Lenders may publish or disseminate general information concerning this credit facility for league table, tombstone and advertising purposes, and may use Obligors’ logos, trademarks or product photographs in advertising materials. As used herein, “Information” means information received from an Obligor or Subsidiary relating to it or its business that is identified as confidential when delivered. A Person required to maintain the confidentiality of Information pursuant to this Section shall be deemed to have complied if it exercises a degree of care similar to that accorded its own confidential information. Each of Agent, Lenders and Issuing Banks acknowledges that (i) Information may include material non-public information; (ii) it has developed compliance procedures regarding the use of such information; and (iii) it will handle the material non-public information in accordance with Applicable Law.

14.13     Certifications Regarding   Senior Term Loan Documents and Term Loan Documents . Obligors certify to Agent and Lenders that neither the execution or performance of the Loan Documents nor the incurrence of any Obligations by Obligors violates  the Senior Term Loan Documents or  the Term Loan Documents. Obligors further certify that the Commitments and Obligations constitute “Indebtedness” permitted under each of the  Senior  Term Loan Documents and the Term Loan Agreement Agreements . Agent may condition Borrowings, Letters of Credit and other credit accommodations under the Loan Documents from time to time upon Agent’s receipt of evidence that the

 

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Commitments and Obligations continue to constitute “Indebtedness” permitted under each of the   Senior  Term Loan Agreement and the Term Loan Agreement Agreements at such time.

14.14       GOVERNING LAW . UNLESS EXPRESSLY PROVIDED IN ANY LOAN DOCUMENT, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND ALL CLAIMS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES EXCEPT FEDERAL LAWS RELATING TO NATIONAL BANKS.

14.15       Consent to Forum .

14.15.1         Forum . EACH OBLIGOR HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE COURT SITTING IN NEW YORK COUNTY, NEW YORK OR THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, IN ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY DISPUTE, ACTION, LITIGATION OR OTHER PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH OBLIGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING ANY SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 . A final judgment in any proceeding of any such court shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or any other manner provided by Applicable Law.

14.15.2         Other Jurisdictions . Nothing herein shall limit the right of Agent, any Security Trustee or any Lender to bring proceedings against any Obligor (other than a Mexican Domiciled Obligor) in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law (except with respect to service of process to Mexican Domiciled Obligors). Nothing in this Agreement shall be deemed to preclude enforcement by Agent or any Security Trustee of any judgment or order obtained in any forum or jurisdiction. Final judgment against an Obligor in any action, suit or proceeding shall be conclusive and may be enforced in any other jurisdiction, including the country in which such Obligor is domiciled, by suit on the judgment.

14.16      Waivers by Obligors . To the fullest extent permitted by Applicable Law, each Obligor waives (a) the right to trial by jury (which Agent, each Security Trustee and each Lender hereby also waives) in any proceeding or dispute of any kind relating in any way to any Loan Documents, Obligations or Collateral; (b) presentment, demand, protest, notice of presentment, default, non-payment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, documents, instruments, chattel paper and guaranties at any time held by Agent or any Security Trustee on which an Obligor may in any way be liable, and hereby ratifies anything Agent and/or such Security Trustee may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Agent or any Security Trustee to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against Agent, any Security Trustee, any Issuing Bank or any Lender, on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof. Each Obligor acknowledges that the foregoing waivers are a material inducement to Agent, Security Trustees, Issuing Banks and Lenders entering into this Agreement and that

 

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they are relying upon the foregoing in their dealings with Obligors. Each Obligor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. Notwithstanding the above, each Mexican Domiciled Obligor further waives any right to any jurisdiction (other than as provided under Sections 14.14 and 14.15 above) to which they may be entitled under Applicable Law, by reason of its present or future domicile, or otherwise, for the purposes of proceedings against or involving any of the Mexican Domiciled Obligors, and waives any objection to those courts on the ground of venue or forum non conveniens .

14.17      Patriot Act Notice and “Know Your Client/Customer” Checks . Agent and Lenders hereby notify Obligors that pursuant to the Patriot Act, the Proceeds of Crime Act, the Money Laundering Regulations 2007 (UK), Proceeds of Crime Act 2002 (UK), Terrorism Act 2000 (UK) and other applicable anti-money laundering, anti-terrorist financing, economic or trade sanctions and “know your client” or “know your customer” policies, regulations, laws or rules (the Proceeds of Crime Act and such other applicable policies, regulations, laws or rules, collectively, including any guidelines or orders thereunder, “ AML Legislation ”), Agent and Lenders are required to obtain, verify and record information that identifies each Obligor, including its legal name, address, tax ID number and other information that will allow Agent and Lenders to identify it in accordance with the Patriot Act and the AML Legislation. Agent and Lenders will also require information regarding each personal guarantor, if any, and may require information regarding Obligors’ management and owners, such as legal name, address, social security number and date of birth. Obligors shall, promptly upon request, provide all documentation and other information as Agent, any Issuing Bank or any Lender may request from time to time in order to comply with any obligations under the Patriot Act and/or the AML Legislation.

14.18      Canadian Anti-Money Laundering Legislation . If Agent has ascertained the identity of any Canadian Facility Obligor or any authorized signatories of any Canadian Facility Obligor for the purposes of applicable AML Legislation, then Agent:

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

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

Notwithstanding the preceding sentence and except as may otherwise be agreed in writing, each of the Canadian Lenders agrees that Agent has no obligation to ascertain the identity of the Canadian Facility Obligors or any authorized signatories of the Canadian Facility Obligors on behalf of any Canadian Lender, or to confirm the completeness or accuracy of any information it obtains from any Canadian Facility Obligor or any such authorized signatory in doing so.

14.19      NO ORAL AGREEMENT . THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

14.20      Process Agent . Without prejudice to any other mode of service allowed under any relevant law, each Foreign Domiciled Obligor (a) irrevocably appoints the Borrower Agent, as its agent for service of process in relation to any action or proceeding arising out of or relating to any Loan Documents, and (b) agrees that failure by a process agent to notify such Obligor of any process will not

 

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invalidate the proceedings concerned. For purposes of clarity, nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. Notwithstanding the above, each Mexican Domiciled Obligor shall appoint the Borrower Agent as its agent for service of process in relation to any action or proceeding arising out of or relating to any Loan Document in the form of an instrument containing a special irrevocable power of attorney granted before a Mexican notary public, in the form attached hereto as Exhibit E or otherwise in form and substance satisfactory to Agent.

14.21      Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)        the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any Lender that is an EEA Financial Institution; and

(b)        the effects of any Bail-in Action on any such liability, including, if applicable:

 

  (i)

a reduction in full or in part or cancellation of any such liability;

 

 

  (ii)

a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

 

 

  (iii)

the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

 

[Remainder of page intentionally left blank; signatures begin on following page]

 

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IN WIT NESS WHEREOF, this Agreement has been executed and delivered as of the date set forth above.

 

   OBLIGORS:
   HORIZON GLOBAL CORPORATION,
  

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor, a UK Facility Obligor and the Borrower Agent

   By:                                                                   
   Name:                                                              
   Title:                                                                
   Address:
  

39400 Woodward Avenue, 260 0 Wes t Big Beave r Rd .. Suite 100 555

      Bloomfield Hills, MI 48304 Troy, MI 48084
      Attn:                                                      
      Telecopy:                                              
   CEQUENT PERFORMANCE PRODUCTS, INC.,
  

a Delaware corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor 1

   By:                                                                   
   Name:                                                              
   Title:                                                                
  

Address:

  

39400 Woodward Avenue, 260 0 Wes t Big Beave r Rd.. Suite 100 555

     

Bloomfield Hills, MI 48304 Troy, MI 48084

      Attn:                                                      
      Telecopy:                                              

 

 

1  

Name changed to Horizon Global Americas Inc.

  

CEQUENT CONSUMER PRODUCTS, INC.,

  

an Ohio corporation, as a U.S. Borrower, a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor 2

  

By:                                                                    

  

Name:                                                              

  

Title:                                                                

  

Address:

  

39400 Woodward Avenue, 260 0 West Big Beaver Rd .. Suite 100 555

     

Bloomfield Hills, MI 48304 Troy, MI 48084

     

Attn:                                                      

     

Telecopy:                                              

  

CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641, as UK Borrower, a UK Facility Obligor, a Canadian Facility Guarantor and a Canadian Facility Obligor

  

By:                                                                    

  

Name:                                                              

  

Title:                                                                

  

Address:

     

                                                             

     

                                                             

     

Attn:                                                     

     

Telecopy:                                             

  

CEQUENT TOWING PRODUCTS OF CANADA

  

LTD., a company formed under the laws of the Province of Ontario, as Canadian Borrower, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

  

By:                                                                    

  

Name:                                                              

  

Title:                                                                

  

Address:

     

                                                             

     

                                                             

     

Attn:                                                     

 

2  

Merged into Cequent Performance Products, Inc .

 

Telecopy:                                     

  HORIZON GLOBAL COMPANY LLC,
 

a Delaware limited liability company, as a U.S. Facility Guarantor, a U.S. Facility Obligor, a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

  By:                                                              
  Name:                                                         
  Title:                                                           
  Address:
 

39400 Woodward Avenue, 260 0 West Big Beaver Rd .. Suite 100 555

 

Bloomfield Hills, MI 48304 Troy, MI 48084

 

Attn:                                              

 

Telecopy:                                     

 

HORIZON INTERNATIONAL HOLDINGS LLC , a Delaware limited liability company, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

  By:                                                              
  Name:                                                         
  Title:                                                           
  Address:
 

                                                      

 

                                                      

 

Attn:                                              

 

Telecopy:                                     

  CEQUENT NEDERLAND HOLDINGS B.V.,
 

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

  By:                                                              
  Name:                                                         
  Title:                                                           
  Address:
 

3062 Rotterdam

       

Max Euwelaan 35

the Netherlands

       

Attn:                                                      

       

Telecopy:                                              

    

CEQUENT MEXICO HOLDINGS B.V.,

a company formed under the laws of the Netherlands, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

    

By:                                                                    

    

Name:                                                              

    

Title:                                                                

    

Address:

       

3062 Rotterdam

       

Max Euwelaan 35

the Netherlands

       

Attn:                                                      

       

Telecopy:                                              

    

CEQUENT SALES COMPANY DE MEXICO, S. DE

    

R.L. de C.V.,

    

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

    

By:                                                                    

    

Name:                                                              

    

Title:                                                                

    

Address:

       

                                                              

       

                                                              

       

Attn:                                                      

       

Telecopy:                                              

    

CEQUENT TRAILER PRODUCTS, S. DE R.L. de

 

C.V.,

    

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor 3

 

3  

Merged into Cequent Electrical Products de Mexico, S. DE R.L. de C.V.

  

By:                                                                     

  
  

Name:                                                               

  
  

Title:                                                                 

  
  

Address:

  
     

                                                           

  
  

          

  

                                                           

  
     

Attn:                                                    

  
     

Telecopy:                                            

  

 

CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V.,

 

            

 

a limited liability company formed under the laws of Mexico, as a Canadian Facility Guarantor, a Canadian Facility Obligor, a UK Facility Guarantor and a UK Facility Obligor

   

By:                                                                        

   

Name:                                                                   

   

Title:                                                                     

   

Address:

      

                                                              

      

                                                              

      

Attn:                                                      

      

Telecopy:                                              

AGENT AND LENDERS :   

BANK OF AMERICA, N.A.,

as Agent, a U.S. Lender, a UK Lender and UK Swingline Lender

By:                                                                          
Name:                                                                     
Title:                                                                       
Address:     

             Bank of America, N.A.

             Business Capital

  

             2600 West Big Beaver Road

             Troy, Michigan 48084

             Attn: Steve Siravo

             Telecopy: 248-631-0515

  
BANK OF AMERICA, N.A. (acting through its Canada branch), as a Canadian Lender and Canadian Swingline Lender
By:                                                                          
Name:                                                                     
Title:                                                                       
Address:     
                                                                                
                                                                                
             Attn:                                                          
             Telecopy:                                                  
BANK OF AMERICA, N.A. (acting through its London branch), as UK Security Trustee
By:                                                                          
Name:                                                                     
Title:                                                                       
Address:     
                                                                                
                                                                                
             Attn:                                                          
             Telecopy:                                                  

WELLS FARGO BANK, NATIONAL
ASSOCIATION , as a U.S. Lender   
By:                                                                      
Name:                                                                 
Title:                                                                   
Address:   
                                                                            
                                                                            
                                                                            
             Attn:                                                      
             Telecopy:                                             
WELLS FARGO CAPITAL FINANCE   
CORPORATION CANADA , as a Canadian Lender   
By:                                                                      
Name:                                                                 
Title:                                                                   
Address:   
                                                                            
                                                                            
                                                                            
             Attn:                                                      
             Telecopy:                                             
WELLS FARGO BANK, NATIONAL   
ASSOCIATION, (London branch), as a UK Lender   
By:                                                                      
Name:                                                                 
Title:                                                                   
Address:   
                                                                            
                                                                            
                                                                            
             Attn:                                                      
             Telecopy:                                             

BANK OF MONTREAL , as a U.S. Lender, a Canadian
Lender and a UK Lender   
By:                                                                          
Name:                                                                     
Title:                                                                       
Address:   
                                                                                
                                                                                
                                                                                
             Attn:                                                          
             Telecopy:                                                  

EXHIBIT A

to

AMENDED AND RESTATED LOAN AGREEMENT

ASSIGNMENT AND ACCEPTANCE

Reference is made to the Amended and Restated Loan Agreement dated as of December 22, 2015, as amended (“ Loan Agreement ”), by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (“ Parent Borrower ”), CEQUENT PERFORMANCE PRODUCTS, INC. , a Delaware corporation (“ Cequent Performance ”), CEQUENT CONSUMER PRODUCTS, INC. , an Ohio corporation (“ Cequent Consumer ”), CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Cequent Performance, Cequent Consumer, and Cequent UK, collectively, “ Borrowers ”), the other Persons from time to time party thereto as Obligors (as defined therein), the financial institutions party thereto from time to time as Lenders, and BANK OF AMERICA, N.A. , a national banking association, in its capacity as agent and security trustee for itself and the other Secured Parties (as defined therein) (“ Agent ”). Terms are used herein as defined in the Loan Agreement.

                                                                                                                 (“ Assignor ”) and                                                                                 

                                          (“ Assignee ”) agree as follows:

1.        Assignor hereby assigns to Assignee and Assignee hereby purchases and assumes from Assignor (a) a principal amount of $          of Assignor’s outstanding [Canadian/UK/US] Revolver Loans and $          of Assignor’s participations in [Canadian/UK/US] LC Obligations, and (b) the amount of $          of Assignor’s [Canadian/UK/US] Revolver Commitment (which represents      % of the total [Canadian/UK/US] Revolver Commitments) (the foregoing items being, collectively, “ Assigned Interest ”), together with an interest in the Loan Documents corresponding to the Assigned Interest. This Agreement shall be effective as of the date (“ Effective Date ”) indicated in the corresponding Assignment Notice delivered to Agent, provided such Assignment Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if applicable. From and after the Effective Date, Assignee hereby expressly assumes, and undertakes to perform, all of Assignor’s obligations in respect of the Assigned Interest, and all principal, interest, fees and other amounts which would otherwise be payable to or for Assignor’s account in respect of the Assigned Interest shall be payable to or for Assignee’s account, to the extent such amounts accrue on or after the Effective Date.

2.        Assignor (a) represents that as of the date hereof, prior to giving effect to this assignment, its [Canadian/UK/US] Revolver Commitment is $          , and the outstanding balance of its [Canadian/UK/US] Revolver Loans and participations in [Canadian/UK/US] LC Obligations is $          ; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Loan Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Agreement or any other instrument or document furnished pursuant thereto, other than that Assignor is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; and (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of Borrowers or the performance by Borrowers of their obligations under the Loan Documents. [Assignor is attaching the promissory note[s] held by it and requests that Agent exchange such note[s] for new promissory notes payable to Assignee [and Assignor].]

3.        Assignee (a) represents and warrants that it is legally authorized to enter into this Assignment; (b) confirms that it has received copies of the Loan Agreement and such other Loan Documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment; (c) agrees that it shall, independently and without reliance upon Assignor and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents; (d) confirms that it is an Eligible Assignee; (e) appoints and authorizes Agent to take such action as agent on its behalf and to exercise such powers under the Loan Agreement as are delegated to Agent by the terms thereof, together with such powers as are incidental thereto; (f) agrees that it will observe and perform all obligations that are required to be performed by it as a “Lender” under the Loan Documents; (g) represents and warrants that the assignment evidenced hereby will not result in a non-exempt “prohibited transaction” under Section 406 of ERISA; and (h) represents and warrants that it is [[not a Qualifying Lender]/[a Qualifying Lender (other than a Treaty Lender)]/[a Treaty Lender]] .

4.        This Agreement shall be governed by the laws of the State of New York. If any provision is found to be invalid under Applicable Law, it shall be ineffective only to the extent of such invalidity and the remaining provisions of this Agreement shall remain in full force and effect.

5.        Each notice or other communication hereunder shall be in writing, shall be sent by messenger, by telecopy or facsimile transmission, or by first-class mail, shall be deemed given when sent and shall be sent as follows:

 

  (a)

If to Assignee, to the following address (or to such other address as Assignee may designate from time to time):

 

  

 

  
  

 

  
  

 

  

 

  (b)

If to Assignor, to the following address (or to such other address as Assignor may designate from time to time):

 

  

 

  
  

 

  
  

 

  
  

 

  

Payments hereunder shall be made by wire transfer of immediately available [Canadian Dollars/Dollars/Euros/Sterling] as follows:

If to Assignee, to the following account (or to such other account as Assignee may designate from time to time):

 

  

 

  
  

 

  
  

ABA No.                                                            

  
  

 

  
  

Account No.                                                       

  
  

Reference:                                                          

  

If to Assignor, to the following account (or to such other account as Assignor may designate from time to time):

  

 

  
  

 

  
  

ABA No.                                                            

  
  

 

  
  

Account No.                                                       

  
  

Reference:                                                          

  

IN WITNESS WHEREOF , this Assignment and Acceptance is executed as of                                    .

 

 

 

(“Assignee”)

 

By Title:

 

                      

 

(“Assignor”)

 

By Title:

 

EXHIBIT B

to

AMENDED AND RESTATED LOAN AGREEMENT

ASSIGNMENT NOTICE

Reference is made to (1) the Amended and Restated Loan Agreement dated as of December 22, 2015, as amended (“ Loan Agreement ”), by and among HORIZON GLOBAL CORPORATION , a Delaware corporation (“ Parent Borrower ”), CEQUENT PERFORMANCE PRODUCTS, INC. , a Delaware corporation (“ Cequent Performance ”), CEQUENT CONSUMER PRODUCTS, INC. , an Ohio corporation (“ Cequent Consumer ”), CEQUENT UK LIMITED , a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), CEQUENT TOWING PRODUCTS OF CANADA LTD. , a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with Parent Borrower, Cequent Performance, Cequent Consumer, and Cequent UK, collectively, “ Borrowers ”), the other Persons from time to time party thereto as Obligors (as defined therein), the financial institutions party thereto from time to time as Lenders, and BANK OF AMERICA, N.A. , a national banking association, in its capacity as agent and security trustee for itself and the other Secured Parties (as defined therein) (“ Agent ”); and (2) the Assignment and Acceptance dated as of              , 20      (“ Assignment ”), between                      (“ Assignor ”) and                      (“ Assignee ”). Terms are used herein as defined in the Loan Agreement.

Assignor hereby notifies Borrower Agent and Agent of Assignor’s intent to assign to Assignee pursuant to the Assignment (a) a principal amount of $          of Assignor’s outstanding [Canadian/UK/US] Revolver Loans and $          of Assignor’s participations in [Canadian/UK/US] LC Obligations, and (b) the amount of $          of Assignor’s [Canadian/UK/US] Revolver Commitment (which represents % of the total [Canadian/UK/US] Revolver Commitments) (the foregoing items being, collectively, the “ Assigned Interest ”), together with an interest in the Loan Documents corresponding to the Assigned Interest. This Agreement shall be effective as of the date (“ Effective Date ”) indicated below, provided this Assignment Notice is executed by Assignor, Assignee, Agent and Borrower Agent, if applicable. Pursuant to the Assignment, Assignee has expressly assumed all of Assignor’s obligations under the Loan Agreement to the extent of the Assigned Interest, as of the Effective Date.

For purposes of the Loan Agreement, Agent shall deem Assignor’s [Canadian/UK/US] Revolver Commitment to be reduced by $          , and Assignee’s [Canadian/UK/US] Revolver Commitment to be increased by $          .

[The Assignee indicates for the benefit of Agent and without liability to any Relevant Borrower that it is [not a Qualifying Lender][a Qualifying Lender (other than a Treaty Lender)][a Treaty Lender].] 4

The address of Assignee to which notices and information are to be sent under the terms of the Loan Agreement is:

 

 

                                                         

 
 

                                                         

 
 

                                                         

 
 

                                                         

 

4 To be inserted where the Assignee is participating in a UK Revolver Commitment.

The address of Assignee to which payments are to be sent under the terms of the Loan Agreement is shown in the Assignment.

This Notice is being delivered to Borrower Agent and Agent pursuant to Section  13.3 of the Loan Agreement. Please acknowledge your acceptance of this Notice by executing and returning to Assignee and Assignor a copy of this Notice.

IN WITNESS WHEREOF , this Assignment Notice is executed as of                      .

 

 

 

(“Assignee”)

 

By Title:

 

 

 

(“Assignor”)

 

By Title:

 

 

ACKNOWLEDGED AND AGREED,

AS OF THE DATE SET FORTH ABOVE:

BORROWER AGENT :*

HORIZON GLOBAL CORPORATION,

a Delaware corporation

By                                                                  

  
 

Title:

  

* No signature required if Assignee is a Lender, Affiliate of a Lender or Approved Fund, or if an Event of Default exists.

 

BANK OF AMERICA, N.A.,

as Agent

By. Title:

EXHIBIT C-1

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF IN-TRANSIT INVENTORY LIEN WAIVER

See attached.

EXHIBIT C-2

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF VENDOR LIEN WAIVER

See attached.

EXHIBIT D

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF PERFECTION CERTIFICATE

See attached.

EXHIBIT E

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF SPECIAL IRREVOCABLE POWER OF ATTORNEY

[English version for reference purposes only]

To be executed and delivered in Spanish language, by each Mexican Domiciled Obligor/Grantor in

the presence of and formalized by a Mexican notary public .

[Each Mexican Domiciled Obligor/Grantor] (the “ Grantor ”), hereby grants a special irrevocable power of attorney for litigation and collections in favor of HORIZON GLOBAL CORPORATION , a Delaware corporation (the “ Process Agent ”), in terms of the first paragraph of article 2554 of the Federal Civil Code and corresponding articles of the Civil Codes of all States of the United Mexican States and of the Federal District of Mexico. This power of attorney is limited in its scope but is as broad as necessary and may be exercised in any jurisdiction, limited pursuant to paragraph fourth of such article 2554 of the Federal Civil Code and corresponding articles of the Civil Codes of all States of the United Mexican States and of the Federal District of Mexico, so that the Process Agent, in the name and on behalf of the Grantor, carries out any of the following actions: receive any and all notices and service of process in connection with any suits, actions, proceedings and judgments of all kinds, including, without limitation, judicial, administrative or arbitration proceedings in any way relating to (i) the Amended and Restated Loan Agreement, dated December 22, 2015, as amended, amended and restated, supplemented or otherwise modified from time to time (the “ Loan Agreement ”), signed by, among others, the Grantor and Bank of America, N.A. (the “ Agent ”); and (ii) any other agreement, instrument or document related to the Loan Agreement. The Grantor hereby appoints as its conventional domicile exclusively to receive any of the notices and service of process referred above, 39400 Woodward Avenue, Suite 100, Bloomfield Hills, Michigan 48304, United States of America, or any other domicile notified in writing by the Process Agent to the Grantor and Agent. This power of attorney is granted in satisfaction of a condition set forth in the Loan Agreement, and it is therefore irrevocable.

[Spanish Translation]

[Cada sociedad mexicana parte del crédito] (la “ Sociedad ”) otorga en este acto un Poder Especial irrevocable para Pleitos y Cobranzas en favor de HORIZON GLOBAL CORPORATION , una sociedad existente de conformidad con las leyes de Delaware, Estados Unidos de Norteamérica (el “ Agente de Proceso ”), de conformidad con el primer párrafo del artículo dos mil quinientos cincuenta y cuatro del Código Civil Federal y los artículos correspondientes de los Códigos Civiles de todos los estados de los Estados Unidos Mexicanos y el Distrito Federal. Este Poder Especial es limitado en cuanto a su objeto pero tan amplio como sea necesario en Derecho, y podrá ser ejercido en cualquier jurisdicción, limitado conforme al cuarto párrafo del mencionado artículo 2554 del Código Civil Federal y los artículos correspondientes de los Códigos Civiles de todos los estados de los Estados Unidos Mexicanos y el Distrito Federal, a efecto de que el Agente de Proceso, en nombre y representación de la Sociedad, realice cualesquiera de los siguientes actos: reciba cualesquiera notificaciones, emplazamientos y cualquier otro tipo de comunicaciones y documentos relacionados con demandas, acciones, procedimientos y sentencias de todo tipo, incluyendo enunciativa más no limitativamente, derivadas de procedimientos judiciales, administrativos o arbitrales que de cualquier manera se relacionen con (i) el Contrato de Crédito ( Amended and Restated Loan Agreement ), según el mismo sea modificado, adicionado o reexpresado ocasionalmente (el “ Contrato de Crédito ”), celebrado con fecha 22 de diciembre de 2015 entre la Sociedad y Bank of America, N.A. (el “ Agente ”), entre otros; y (ii) cualquier otro contrato, instrumento o documento relacionado con el Contrato de Crédito. La Sociedad designa en este acto como su domicilio convencional exclusivamente para recibir cualesquiera de las notificaciones, emplazamientos, comunicaciones y documentos mencionados con anterioridad, 39400 Avenida Woodward, Suite 100, Bloomfield Hills, Michigan 48304, Estados Unidos de Norteamérica, o cualquier otro domicilio que notifique por escrito el Agente de Proceso a la Sociedad y al Agente. Este Poder Especial se otorga en cumplimiento de una condición prevista en el Contrato de Crédito, y es por lo tanto irrevocable.

EXHIBIT F

to

AMENDED AND RESTATED LOAN AGREEMENT

FORM OF NOTICE OF BORROWING

See attached.

SCHEDULE 1.1(A)

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING LETTERS OF CREDIT

 

Instrument #    Product    Stucky    Company    Beneficiary    Outstanding Amount     Liability(In USD)     Issue Date     

Expiry

Date

   Alt Instr #  
   

LOGO 68114201

   Standby Letter
of Credit 		  

130HGC

  

HORIZON GLOBAL
CORPORATION

   NATIONAL UNION
FIRE INSURANCE
CO. 		     USD 300,000.00       300,000.00       2015/08/03     

2016/06/30

    

LOGO 68113152

   Standby Letter
of Credit 		  

130HGC

  

HORIZON GLOBAL
CORPORATION

   THE HANOVER
INSURANCE
COMPANY 		     USD 500,000.00       500,000.00       2015/06/30     

2016/06/30

    

LOGO 68120743

   Standby Letter
of Credit 		  

130HGC

  

HORIZON GLOBAL
CORPORATION

   CI BANCO
SOCIEDAD
ANONIMA 		     USD 763,980.00       763,980.00       2015/10/07     

2016/08/20

    
   

LOGO 68113141

   Standby Letter
of Credit 		  

130HGC

  

HORIZON GLOBAL
CORPORATION

   JPMORGAN CHASE
BANK N.A. 		     USD 4,486,480.31       4,486,480.31       2015/06/30     

2016/06/30

    
   

LOGO 68114766

   Standby
Letter of
Credit 		  

130HGC

  

HORIZON GLOBAL
CORPORATION

   CIBANCO SOCIEDAD
ANONIMA 		     USD 367,459.56       367,459.56       2015/08/27     

2016/08/27

        

SCHEDULE 1.1(B)

to

AMENDED AND RESTATED LOAN AGREEMENT

COMMITMENTS OF LENDERS

 

   
Canadian Lender   

 

Canadian Revolver

Commitment

Bank of America, N.A.

(acting through its

Canada branch)

  

$823,529.40

(41.176470588%)

Wells Fargo Capital

Finance Corporation

Canada

  

$588,235.29

(29.411764706%)

Bank of Montreal   

$588,235.29

(29.411764706%)

Total:    $2,000,000

 

   
UK Lender   

 

UK Revolver

Commitment

Bank of America, N.A.

(acting through its

London branch)

  

$1,235,294.12

(41.176470588%)

Wells Fargo Bank,

National Association

(London branch)

  

$882,352.94

(29.411764706%)

Bank of Montreal   

$882,352.94

(29.411764706%)

Total:    $3,000,000

 

   

 

U.S. Lender

   U.S. Revolver Commitment
Bank of America, N.A.   

$38,705,882.36 35,000,000.00

(41.176470588%)

Wells Fargo Bank,

National Association

  

$ 27,647,058.82 25,000,000.00

(29.411764706%)

Bank of Montreal    $ 27,647,058.82 25,000,000.00 (29.411764706%)
Total:    $ 94,000,000 85,000,000

SCHEDULE 9.1.3

to

AMENDED AND RESTATED LOAN AGREEMENT

GOVERNMENTAL LICENSES

SCHEDULE 9.1.5

to

AMENDED AND RESTATED LOAN AGREEMENT

REAL PROPERTY

SCHEDULE 9.1.6

to

AMENDED AND RESTATED LOAN AGREEMENT

DISCLOSED MATTERS

 

1.

Proceedings and investigations pending against Borrowers or Subsidiaries:

 

2.

Threatened proceedings or investigations of which any Borrower or Subsidiary is aware:

 

3.

Environmental matters of which any Borrower or Subsidiary is aware:

 

4.

Pending Commercial Tort Claim(s) of any Obligor:

SCHEDULE 9.1.12

to

AMENDED AND RESTATED LOAN AGREEMENT

SUBSIDIARIES

 

1.

The corporate names, jurisdictions of incorporation, and authorized and issued Equity Interests of each Borrower and Subsidiary are as follows:

 

Name

   Jurisdiction   

Number and Class of Authorized Equity

Interests

  

Number and Class

of Issued Equity Interests

                
                
                

 

2.

The record holders of Equity Interests of each Borrower and Subsidiary are as follows:

 

Name

  

Class of Equity

Interests

  

Number of Equity

Interests

   Record Owner
                
                
                
                

 

3.

All agreements binding on holders of Equity Interests of Borrowers and Subsidiaries with respect to such interests are as follows:

 

4.

In the five years preceding the Closing Date, no Borrower or Subsidiary has acquired any substantial assets from any other Person nor been the surviving entity in a merger or combination, except:

 

5.

The following Subsidiaries are Obligors:

SCHEDULE 9.1.13

to

AMENDED AND RESTATED LOAN AGREEMENT

INSURANCE

SCHEDULE 9.1.23

to

AMENDED AND RESTATED LOAN AGREEMENT

MATERIAL CONTRACTS

SCHEDULE 10.2.1

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING DEBT

SCHEDULE 10.2.2

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING LIENS

SCHEDULE 10.2.4

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING INVESTMENTS

SCHEDULE 10.2.5

to

AMENDED AND RESTATED LOAN AGREEMENT

PERMITTED ASSET DISPOSITIONS

SCHEDULE 10.2.9

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING AFFILIATE TRANSACTIONS

SCHEDULE 10.2.10

to

AMENDED AND RESTATED LOAN AGREEMENT

EXISTING RESTRICTIVE AGREEMENTS

EXHIBIT A-2

Amendment and Restatement of Certain Schedules to the Loan Agreement

{see attached}

SCHEDULE 10.2.1

EXISTING INDEBTEDNESS AS OF THE SEVENTH AMENDMENT EFFECTIVE DATE

 

 

Company

  

 

Bank

  

 

Facility

Details

 

   Outstanding
Amount as of
2/24/2019 		   Secured/
Unsecured

Westfalia-Automotive

GmbH

   N/A    Capital Lease with Portikus    $10,075,538    Secured

Cequent Industria E

Comerico Ltda., Westfalia-Automotive GmBH, Terwa Romania Srl Unit 1, Teljs Automotive Srl Unit 2, Horizon Americas, Inc.

   N/A    Capital Leases    $2,683,977    Secured

Horizon Global

Corporation Pty Ltd.

  

National Australia

Bank Ltd., Australia

   Multi Facility Agreement    $15,276,725    Secured

Terwa Romania Srl Unit 1

   ING    Overdraft Credit Facility    $2,023,801    Secured

Terwa Romania Srl Unit 1

   N/A    Other    $912,997    Secured

Note: the above schedule is subject to year-end audit adjustments

Intercompany Debt as listed below:

 

Borrower    Lender    Amount

Cequent Electrical Products

de Mexico S. de R.L. de C.V.

  

Cequent Sales Company de

Mexico, S. de R.L. de C.V.

   $1,481.19

Horizon Global (South

Africa) (PPY) LTD.

  

Cequent Nederland Holdings

B.V.

   $212,463.40

C.P. Witter Limited    Cequent Nederland Holdings B.V.    $2,428,116.42
Trimotive Germany GmbH    Cequent Nederland Holdings B.V.    $974,950.00
Kovil Oy    Cequent Nederland Holdings B.V.    $297,187.70

HG Germany Holdings

GmbH

   Cequent Nederland Holdings B.V.    $126,170,000.00
AH Forgings Proprietary Limited    Cequent Nederland Holdings B.V.    $54,320.77
Westfalia – Automotive GmbH    Cequent Nederland Holdings B.V.    $1,720,498.85
Westfalia – Automotive SAS    Cequent Nederland Holdings B.V.    $277,011.97
Westfalia – Automotive Denmark ApS    Cequent Nederland Holdings B.V.    $1,270,557.13
Westfalia – Automotive Polska Sp. Zo.o    Cequent Nederland Holdings B.V.    $556,910.94
Westfalia – Automotive Italia S.r.l    Cequent Nederland Holdings B.V.    $300,166.46
Teljs Automotive Srl Unit 2    Cequent Nederland Holdings B.V.    $1,553,635.59
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holdings LLC    $44,789,896.27
Horizon Global Corporation    Horizon International Holdings LLC    $12,502,710.00
C.P. Witter Limited    Cequent UK Limited    $637,950.00
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97
Cequent Nederland Holdings B.V.   

Horizon Global Company

LLC

   $117,280,750.00
Westfalia – Automotive GmbH   

Horizon Global Company

LLC

   $1,147,000,00

SCHEDULE 10.2.2

EXISTING LIENS AS OF THE SEVENTH AMENDMENT EFFECTIVE DATE

Liens existing on the Closing Date in respect of:

1.        Indebtedness set forth on Schedule 10.2.1 encumbering the assets described on Schedule 10.2.1, to the extent that such Indebtedness is described as secured Indebtedness on such Schedule 10.2.1.

2.        Lien evidenced by Initial Filing Number OH00161477063, filed on September 25, 2012, by Raymond Leasing Corporation against Cequent Consumer Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in Equipment Master Lease No. 305351.

3.        Lien evidenced by Initial Filing Number 2009 0236023, filed on January 23, 2009, by Air Liquide Industrial U.S. LP against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting specific equipment, including a 13 ton CO2 tank, two gas vessels, and a vaporizer, located in Goshen, IN.

4.        Lien evidenced by Initial Filing Number 2012 0866626, filed on March 6, 2012, by Wells Fargo Bank, N.A. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in Master Lease Agreement No. 9679080.

5.        Lien evidenced by Initial Filing Number 2013 2487248, filed on June 27, 2013, by Wells Fargo Financial Leasing, Inc. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.) covering certain collateral constituting five Xerox Workcentre 5855 copiers.

6.        Lien evidenced by Initial Filing Number 2013 3798981, filed on September 19, 2013, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering collateral constituting equipment specified in the Lease Agreement #122662-003.

7.        Lien evidenced by Initial Filing Number 2013 4703188, filed on November 29, 2013, by Well Fargo Financial Leasing, Inc. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting two Xerox Workcentre 5855 copiers.

8.        Lien evidenced by Initial Filing Number 2015 5309983, filed on November 12, 2015, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting equipment specified in Lease Agreement No.122662-005.

9.        Lien evidenced by Initial Filing Number 2016 7591637, filed on December 7, 2016, by Well Fargo Bank, N.A. against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting specific equipment.

10.      Lien evidenced by Initial Filing Number 2017 0850658, filed on February 7, 2017, by LCA Bank Corporation against Cequent Performance Products, Inc. (n/k/a Horizon Global Americas Inc.), covering certain collateral constituting equipment specified in Lease Agreement No.122662-06.

11.      Lien evidenced by Initial Filing Number 2016 1548856, filed on March 15, 2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Corporation, covering certain collateral constituting a Copystar CS 3051ci Copier.

12.      Lien evidenced by Initial Filing Number 2016 1812344, filed on March 28, 2016, by Leaf Capital Funding, LLC and/or its assigns against Horizon Global Corporation and Horizon Global Company LLC, as amended covering certain collateral constituting certain Herman Miller Furniture.

13.      Lien evidenced by Initial Filing Number 2016 3880422, filed on June 28, 2016, by Well Fargo Financial Leasing, Inc. against Horizon Global Company LLC, covering certain collateral constituting a Copystar CS 4551ci Copier.

14.      Lien evidenced by Initial Filing Number 2017 3151500, filed on May 12, 2017, by Mitsubishi UFJ Lease & Finance (U.S.A.) Inc., against Horizon Global Company LLC and Horizon Global Americas Inc, covering certain collateral constituting equipment specified in Master Lease Agreement No. 105854.

15.      Lien evidenced by Initial Filing Number 2017 3151542, filed on May 12, 2017, by Corporation Service Company, as representative, against Horizon Global Company LLC, covering certain collateral constituting equipment specified in Master Lease Agreement No. 105854.

16.      Lien evidenced by Initial Filing Number 2017 5703415, filed on August 28, 2017, by Summit Funding Group, Inc. against Horizon Global Company LLC, covering certain collateral constituting certain equipment, goods, assets, and other tangible and intangible property specified in Master Lease Agreement No. 2677.

17.      Lien evidenced by Initial Filing Number 2017 5906034, filed on September 6, 2017, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 1 to Master Lease 300716.

18.      Lien evidenced by Initial Filing Number 2017 8278089, filed on December 14, 2017, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 2 to Master Lease 300716.

19.      Lien evidenced by Initial Filing Number 2018 2274419, filed on April 3, 2018, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 3 to Master Lease 300716.

20.      Lien evidenced by Initial Filing Number 2018 3737521, filed on June 1, 2018, by C T Corporation System, as representative, against Horizon Global Company LLC and Horizon Global Americas Inc., covering certain collateral constituting equipment, software, and personal property specified in Schedule 4 to Master Lease 300716.

21.      Lien evidenced by Initial Filing Number 20172702832, filed on April 25, 2017, by MB Financial Bank, N.A. against Horizon Global Americas Inc., covering specific leased equipment.

22.      Lien evidenced by Initial Filing Number 20174044068, filed on June 20, 2017, by Wells Fargo Bank, N.A. against Horizon Global Americas Inc., covering specific equipment.

23.      Lien evidenced by Initial Filing Number 20174301955, filed on June 29, 2017, by the Bank of Tokyo-Mitsubishi UFJ, Ltd. against Horizon Global Americas Inc., covering certain collateral pursuant to Online Supplier Agreement, dated on or about March 20, 2017.

24.      Lien evidenced by Initial Filing Number 20175797631, filed on August 30, 2017, by Summit Funding Group, Inc. against Horizon Global Americas Inc., covering certain collateral identified in the Master Lease Agreement dated August 17, 2017.

25.      Lien evidenced by Initial Filing Number 20176070772, filed on September 13, 2017, by Bank of America, N.A. against Horizon Global Americas Inc. covering certain accounts receivables pursuant to Accounts Receivable Purchase Agreement.

26.      Lien evidenced by Initial Filing Number 20186000588, filed on August 30, 2018, by Crown Equipment Corporation against Horizon Global Americas Inc., covering certain equipment.

27.      Lien evidenced by Initial Filing Number 20189047487, filed on December 28, 2018, by Shi International Corp. against Horizon Global Americas Inc., covering certain equipment.

28.      Lien evidenced by Initial Filing Number 20190309851, filed on January 14, 2019, by Raymond Leasing Corporation against Horizon Global Americas Inc., covering certain equipment.

   

 

EXECUTION    

VERSION        

 

SCHEDULE 10.2.4

EXISTING INVESTMENTS AS OF THE SEVENTH AMENDMENT EFFECTIVE

DATE

 

  A.

Qualified Foreign Investments

 

  1.

Investments by Cequent Electrical Products de Mexico, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

 

 

  2.

Investments by Cequent Trailer Products, S. de R.L. de C.V. in certificates of deposit, banker’s acceptances and time deposits maturing within one year from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, Comerica Bank, Compass, HSBC, Grand Cayman, and in each case such investments shall be in Mexican Pesos.

 

 

  B.

Other Investments

 

  1.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Juarez, Mexico facility; the aggregate amount of loans described in this clause (B)(1) and clause (B)(2) below do not exceed $5.0 million.

 

 

  2.

Horizon Global Americas Inc.’s loan to Cequent UK Limited in connection with the purchase by Cequent UK Limited from Cequent Performance Products, Inc. of machinery, equipment and inventory to be located in the Reynosa, Mexico facility; the aggregate amount of loans described in this clause (B)(2) and clause (B)(1) above do not exceed $5.0 million.

 

 

  3.

Horizon Global Corporation’s investment in the Hong Kong Sourcing Office legal entity to provide legal restructuring and operational funding in an aggregate amount not exceeding $2.5 million.

 

  4.

Investments by Horizon Global Corporation in one or more wholly-owned foreign subsidiaries for the purpose of purchasing one or more foreign manufacturing facilities, including capital equipment and working capital, in an aggregate amount not exceeding $3.0 million.

 

 

  5.

Horizon Global Digital Limited’s investment in 20% of the issued share capital of Reckless Digital Group Holdings Limited in a total consideration of GBP 360,000 paid to Ellie Warriner (GBP 45,000) and Lindsay Reckless (GBP 315,000)

 

 

  6.

Horizon Global Digital Limited’s loan to Reckless Digital Group Holdings Limited to be used for growth initiatives and general working capital purposes, in an amount equal to GBP 300,000.

 

 

  7.

Cequent Industria e Comercio’s Ltda’s (fka Cequent Brazil Participacoes) purchase of Engetran Engenharia, Industria, Comercio de Pecas e Acessorios Veiculares Ltda from Jorge Correia Karan of which there remains about $100,000 outstanding.

 

 

  8.

Cequent Industria e Comercio Ltda’s purchase of Dhelfos Industria E Comercio De Acessorios Ltda from Ernani Mariano and Maria Luiza Gome De Goes, of which there remains about $2.5M outstanding.

 

 

  9.

Westfalia-Automotive GmbH owns 20% of EWV Management Consultancy Pty.

 

 

  10.

Vendor note from SISS Holding B.V. to Terwa Holding B.V. in connection with Terwa Holding B.V.’s divestiture of (i) all shares in Terwa B.V. to SISS Holding B.V; and (ii) construction-related assets of Terwa Romania Srl Unit 1 to Terwa Construction Systems Srl

 

Intercompany Debt as listed below:

 

Borrower    Lender    Amount
Cequent Electrical Products de Mexico S. de R.L. de C.V.    Cequent Sales Company de Mexico, S. de R.L. de C.V.    $1,481.19
Horizon Global (South Africa) (PPY) LTD.    Cequent Nederland Holdings B.V.    $212,463.40
C.P. Witter Limited    Cequent Nederland Holdings B.V.    $2,428,116.42
Trimotive Germany GmbH    Cequent Nederland Holdings B.V.    $974,950.00
Kovil Oy    Cequent Nederland Holdings B.V.    $297,187.70
HG Germany Holdings GmbH    Cequent Nederland Holdings B.V.    $126,170,000.00
AH Forgings Proprietary Limited    Cequent Nederland Holdings B.V.    $54,320.77
Westfalia – Automotive GmbH    Cequent Nederland Holdings B.V.    $1,720,498.85
Westfalia – Automotive SAS    Cequent Nederland Holdings B.V.    $277,011.97
Westfalia – Automotive Denmark ApS    Cequent Nederland Holdings B.V.    $1,270,557.13
Westfalia – Automotive Polska Sp. Zo.o    Cequent Nederland Holdings B.V.    $556,910.94
Westfalia – Automotive Italia S.r.l    Cequent Nederland Holdings B.V.    $300,166.46
Teljs Automotive Srl Unit 2    Cequent Nederland Holdings B.V.    $1,553,635.59
Horizon Global Holdings Australia Pty. Ltd.    Horizon International Holding LLC    $44,789,896.27
Horizon Global Corporation    Horizon International Holding LLC    $12,502,710.00
C.P. Witter Limited    Cequent UK Limited    $637,950.00
HG Germany Holdings GmbH    Horizon Global Corporation    $45,993,583.97
Cequent Nederland Holdings B.V.    Horizon Global Company LLC    $117,280,750.00
Westfalia – Automotive GmbH    Horizon Global Company LLC    $1,147,000,00

EXHIBIT B

Intercreditor Agreement

{see attached}

AMENDED AND RESTATED

INTERCREDITOR AGREEMENT

by and between

BANK OF AMERICA, N.A.,

as ABL Agent,

JPMORGAN CHASE BANK, N.A.,

as First Lien Term Agent

and

CORTLAND CAPITAL MARKET SERVICES LLC,

as Second Lien Term Agent

Dated as of March 15, 2019

Relating to:

Horizon Global Corporation and Affiliates

TABLE OF CONTENTS

 

         Page No.  

ARTICLE 1 DEFINITIONS

     3  

Section 1.1

 

Certain Definitions

     3  

Section 1.2

 

Other Definitions

     3  

Section 1.3

 

Rules of Construction

     16  

ARTICLE 2 LIEN PRIORITY

     16  

Section 2.1

 

Priority of Liens

     16  

Section 2.2

 

Waiver of Right to Contest Liens

     17  

Section 2.3

 

Remedies Standstill

     18  

Section 2.4

 

Exercise of Rights

     19  

Section 2.5

 

No New Liens

     20  

Section 2.6

 

Waiver of Marshalling

     21  

ARTICLE 3 ACTIONS OF THE PARTIES

     22  

Section 3.1

 

Certain Actions Permitted

     22  

Section 3.2

 

Agent for Perfection

     22  

Section 3.3

 

Insurance

     23  

Section 3.4

 

No Additional Rights For the Loan Parties Hereunder

     23  

Section 3.5

 

Inspection and Access Rights

     23  

Section 3.6

 

Tracing of and Priorities in Proceeds

     25  

Section 3.7

 

Payments Over

     25  

Section 3.8

 

Rights as Unsecured Creditors

     26  

ARTICLE 4 APPLICATION OF PROCEEDS

     26  

Section 4.1

 

Application of Proceeds

     26  

Section 4.2

 

Specific Performance

     28  

ARTICLE 5 INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS

     29  

Section 5.1

 

Notice of Acceptance and Other Waivers

     29  

Section 5.2

 

Modifications to ABL Documents and Term Documents

     30  

Section 5.3

 

Reinstatement and Continuation of Agreement

     31  

Section 5.4

 

Purchase Right

     32  

ARTICLE 6 INSOLVENCY PROCEEDINGS

     33  

Section 6.1

 

DIP Financing

     33  

Section 6.2

 

Relief From Stay

     36  

Section 6.3

 

No Contest; Adequate Protection

     36  

Section 6.4

 

Asset Sales

     37  

Section 6.5

 

Separate Grants of Security and Separate Classification

     39  

Section 6.6

 

Reorganization Securities

     39  

Section 6.7

 

[Reserved]

     39  

Section 6.8

 

ABL Obligations Unconditional

     39  

Section 6.9

 

Term Obligations Unconditional

     40  

Section 6.10

 

Claims

     40  

Section 6.11

 

Bankruptcy – Plan Support

     40  

Section 6.12

 

Applicability

     40  

Section 6.13

 

Other Bankruptcy Laws

     41  

 

i

ARTICLE 7 MISCELLANEOUS

     41  

Section 7.1

 

Rights of Subrogation

     41  

Section 7.2

 

Further Assurances

     41  

Section 7.3

 

Representations

     42  

Section 7.4

 

Amendments

     42  

Section 7.5

 

Addresses for Notices

     42  

Section 7.6

 

No Waiver; Remedies

     43  

Section 7.7

 

Continuing Agreement, Transfer of Secured Obligations

     43  

Section 7.8

 

Governing Law; Entire Agreement

     44  

Section 7.9

 

Counterparts

     44  

Section 7.10

 

No Third Party Beneficiaries

     44  

Section 7.11

 

Headings

     44  

Section 7.12

 

Severability

     44  

Section 7.13

 

[Reserved]

     44  

Section 7.14

 

VENUE; JURY TRIAL WAIVER

     44  

Section 7.15

 

Intercreditor Agreement

     45  

Section 7.16

 

No Warranties or Liability

     45  

Section 7.17

 

Conflicts

     45  

Section 7.18

 

Information Concerning Financial Condition of the Loan Parties

     46  

Section 7.19

 

Additional Loan Parties

     46  

Section 7.20

 

Amendment and Restatement

     46  

Section 7.21

 

Additional Intercreditor Agreements

     46  

 

ii

AMENDED AND RESTATED INTERCREDITOR AGREEMENT

THIS AMENDED AND RESTATED INTERCREDITOR AGREEMENT (as amended, supplemented, restated or otherwise modified from time to time pursuant to the terms hereof, this “ Agreement ”) is entered into as of March 15, 2019 between

(a) BANK OF AMERICA, N.A. , in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ ABL Agent ”) for (i) the financial institutions, Issuing Banks (as defined below) and other entities party from time to time to the ABL Credit Agreement referred to below (such financial institutions, Issuing Banks and other entities, together with their respective successors, assigns and transferees, the “ ABL Lenders ”) and (ii) any ABL Bank Product Providers (as defined below) (such ABL Bank Product Providers, together with the ABL Agent and the ABL Lenders, the “ ABL Secured Parties ”),

(b) JPMORGAN CHASE BANK, N.A ., in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ First Lien Term Agent ”) for the financial institutions and other entities party from time to time to the First Lien Term Loan Credit Agreement referred to below (such financial institutions and other entities, together with their respective successors, assigns and transferees, the “ First Lien Term Lenders ”) and

(c)         CORTLAND CAPITAL MARKET SERVICES LLC , in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ Second Lien Term Agent ”) for the financial institutions and other entities party from time to time to the Second Lien Term Loan Credit Agreement referred to below (such financial institutions and other entities, together with their respective successors, assigns and transferees, the “ Second Lien Term Lenders ”).

The First Lien Term Agent and the Second Lien Term Agent are referred to collectively herein as the “ Term Agents ” and the First Lien Term Lenders and the Second Lien Term Lenders are referred to collectively herein as the “ Term Lenders ”).

RECITALS

A.        Pursuant to that certain Amended and Restated Loan Agreement dated on or about December 22, 2015 by and among Horizon Global Corporation, a Delaware corporation (“ Company ”), Horizon Global Americas Inc., a Delaware corporation (f/k/a Cequent Performance Products, Inc., a Delaware corporation and successor by merger with Cequent Consumer Products, Inc., an Ohio corporation) (“ Horizon Americas ”), Cequent UK Limited, a company incorporated in England and Wales with company number 08081641 (“ Cequent UK ”), Cequent Towing Products of Canada Ltd., a company formed under the laws of the Province of Ontario (“ Cequent Canada ”, and together with the Company, Horizon Americas and Cequent UK, collectively, “ ABL Borrowers ”), the ABL Lenders and the ABL Agent (as amended through the Seventh Amendment thereto and as such agreement may be further Amended or Refinanced or otherwise further modified from time to time in accordance with the terms hereof and thereof, the “ ABL Credit Agreement ”), the ABL Lenders have agreed to make certain loans and provide other financial accommodations in an initial aggregate principal amount of up to $90,000,000 to or for the benefit of the ABL Borrowers.

B.        Pursuant to the ABL Credit Agreement, the ABL Guarantors (as defined below) have guaranteed the payment and performance of the ABL Obligations of the ABL Borrowers under the ABL Documents (as defined below).

C.        As a condition of the ABL Credit Agreement and to secure the ABL Obligations, the ABL Borrowers and the ABL Guarantors (together with the ABL Borrowers, collectively, the “ ABL Loan Parties ”) under and in connection with the ABL Documents have granted to the ABL Agent for the benefit of the ABL Secured Parties (as defined below) Liens on the Collateral (as defined below).

D.        Pursuant to that certain Term Loan Credit Agreement dated on or about June 30, 2015 by and among Company (the “ Term Loan Borrower ”), the First Lien Term Lenders and the First Lien Term Agent (as amended by the Sixth Amendment thereto and as such agreement may be Amended or Refinanced or otherwise further modified from time to time in accordance with the terms hereof and thereof, the “ First Lien Term Loan Credit Agreement ”), the First Lien Term Lenders have made a term loan to the Term Loan Borrower having a principal balance as of the date hereof of $190,524,141.07.

E.        Pursuant to the First Lien Term Loan Credit Agreement, the Term Guarantors (as defined below) have guaranteed the payment and performance of the First Lien Term Obligations (as defined below) of the Company under the First Lien Term Documents (as defined below).

F.        As a condition of the First Lien Term Loan Credit Agreement and to secure the First Lien Term Obligations, the Term Loan Borrower and the Term Guarantors (together with the Term Loan Borrowers, collectively, the “ Term Loan Parties ”) under and in connection with the First Lien Term Documents have granted to the First Lien Term Agent for the benefit of the applicable First Lien Term Secured Parties (as defined below) Liens on the Collateral (as defined below).

G.        Pursuant to that certain Term Loan Credit Agreement dated on or about the date hereof by and among the Term Loan Borrower, the Second Lien Term Lenders and the Second Lien Term Agent (as such agreement may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof, the “ Second Lien Term Loan Credit Agreement ”), the Second Lien Term Lenders have agreed to make a term loan in the original principal amount of $51,020,408 to the Term Loan Borrower.

E.        Pursuant to the Second Lien Term Loan Credit Agreement, the Term Guarantors have guaranteed the payment and performance of the Second Lien Term Obligations (as defined below) of the Company under the Second Lien Term Documents (as defined below).

F.        As a condition to the effectiveness of the Second Lien Term Loan Credit Agreement and to secure the Second Lien Term Obligations, the Term Loan Parties under and in connection with the Second Lien Term Documents have granted to the Second Lien Term Agent for the benefit of the applicable Second Lien Term Secured Parties (as defined below) Liens on the Collateral (as defined below).

G.        ABL Agent, First Lien Agent, the Company, and certain of Company’s subsidiaries party thereto have entered into that certain Intercreditor Agreement dated as of June 30, 2015 (as amended from time to time prior to the date of this Agreement, the “ Prior Intercreditor Agreement ”)

H.        Each of the ABL Agent (on behalf of the ABL Secured Parties), the First Lien Term Agent (on behalf of the First Lien Term Secured Parties) and the Second Lien Term Agent (on behalf of the Second Lien Term Secured Parties) desires to agree to the relative priority of Liens on the Collateral and certain other rights, priorities and interests as provided herein and to amend and restate the Prior Intercreditor Agreement in its entirety to read as provided in this Agreement.

 

2

NOW THEREFORE , in consideration of the foregoing and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1          Certain Definitions . Unless otherwise defined herein, all capitalized terms used herein shall have the same meaning herein as in the Uniform Commercial Code.

Section  1.2          Other Definitions . Subject to Section 1.1, as used in this Agreement, the following terms shall have the meanings set forth below:

“ ABL Agent ” shall have the meaning assigned to that term in the introduction to this Agreement and shall include any successors thereto as well as any Person designated as the “Agent”, “Administrative Agent”, “Collateral Agent”, “Trustee”, “Security Trustee”, “Collateral Trustee” or similar term under any ABL Credit Agreement.

“ ABL Bank Product Provider ” shall mean any ABL Lender or any Affiliate (or any Person that was an ABL Lender or an Affiliate of an ABL Lender at the time it entered into a Bank Product with an ABL Loan Party) of any ABL Lender that has entered into a Bank Product or agreement relating to any Bank Products with an ABL Loan Party with the obligations of such ABL Loan Party thereunder being secured by one or more ABL Collateral Documents, together with their respective successors, assigns and transferees.

“ ABL Borrowers ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ ABL Collateral Documents ” shall mean the Security Documents (as defined in the ABL Credit Agreement) and all security agreements, pledge agreements, hypothecs, charges, debentures, account control agreements, bailment agreements, freight forwarder and/or customs broker’s agreements, collateral access agreements, mortgages, deeds of trust, and other collateral documents executed and delivered in connection with the ABL Credit Agreement, in each case as Amended or Refinanced or otherwise modified from time to time, in accordance with the terms hereof.

“ ABL Credit Agreement ” shall have the meaning assigned to such term in the recitals to this Agreement and any other agreements or facilities which Amend or Refinance all or any portion of the ABL Obligations under any then extant ABL Credit Agreement (including without limitation under any agreement with respect to ABL DIP Financing provided by any or all of the ABL Secured Parties, including any use, whether consensual or non-consensual, of cash collateral constituting the Proceeds of the ABL Priority Collateral); provided that at the time of any refinancing or replacement of the then extant ABL Credit Agreement (other than the Non-US Loan Parties Restructuring), the Company shall have delivered to each Term Agent an officer’s certificate certifying that such refinancing or replacement ABL Credit Agreement is permitted to be incurred under the Term Loan Credit Agreement and each Additional Term Debt Facility.

“ ABL Deposit and Security Accounts ” shall mean any and all deposit accounts and securities accounts of the ABL Loan Parties subject to a control agreement in favor of or otherwise controlled by the ABL Agent.

“ ABL DIP Financing ” shall have the meaning set forth in Section 6.1(a).

 

3

“ ABL Documents ” shall mean the ABL Credit Agreement, ABL Guaranty, the ABL Collateral Documents, those other ancillary agreements to which any ABL Secured Party is a party or beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any ABL Loan Party and delivered to the ABL Agent or any other ABL Secured Party, in connection with any of the foregoing or with the ABL Credit Agreement, ABL Guaranty or the ABL Collateral Documents, in each case, as the same may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ ABL Guarantors ” shall mean the collective reference to any direct or indirect Subsidiary or direct or indirect parent of the ABL Borrowers who is or becomes a guarantor under the ABL Guaranty with respect to the ABL Borrowers’ ABL Obligations.

“ ABL Guaranty ” shall mean the collective reference to the “Guaranties” (as defined in the ABL Credit Agreement”) entered into by the ABL Guarantors and any other guarantee of the ABL Obligations entered into in connection with an Amendment or Refinancing of the ABL Credit Agreement, whether by the same or any other agent, lender or group of lenders.

“ ABL Lenders ” shall have the meaning assigned to that term in the introduction to this Agreement, as well as any Person which is a “lender” or “issuing bank” under any ABL Credit Agreement.

“ ABL Loan Parties ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ ABL Obligations ” shall mean all obligations of every nature of each ABL Loan Party from time to time owed to the ABL Secured Parties, or any of them, under any ABL Document or in respect of any “Secured Bank Product Obligations” (as defined in the ABL Credit Agreement), including, without limitation, all “Obligations” of each ABL Loan Party or similar term as defined in any ABL Credit Agreement, whether for principal, interest, reimbursement of amounts drawn under Letters of Credit, fees, expenses, indemnification, or otherwise, and all other amounts owing or due under the terms of the ABL Documents (including interest, fees, indemnification payments, expense reimbursements and other amounts which, but for the commencement of an Insolvency Proceeding with respect to such ABL Loan Party, would have accrued on or been payable with respect to the ABL Obligations, whether or not a claim is allowed or allowable against such ABL Loan Party for such interest, fees, indemnification payments, expense reimbursements and other amounts in the related Insolvency Proceeding), as the same may be Amended or Refinanced in whole or in part or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ ABL Priority Collateral ” shall mean all Collateral consisting of the following:

(1)        all Accounts (and including for this purpose all amounts payable by the issuer or processor thereof in connection with the use of a credit card, debit card or similar instrument, whether deemed to be an Account or a Payment Intangible) and other receivables (other than Accounts and other receivables arising from the sale or other Disposition of Term Priority Collateral);

(2)        cash, money and cash equivalents, other than identifiable cash Proceeds from the sale or Disposition of Term Priority Collateral;

(3)        all (i) Deposit Accounts (other than the Term Collateral Proceeds Account), (ii) Securities Accounts (other than the Term Collateral Proceeds Account), Security Entitlements and Securities credited to such a Securities Account (other than Equity Interests in any Loan Party or its Subsidiaries), or (iii) all Commodity Accounts (other than the Term Collateral Proceeds

 

4

Account) and commodity contracts and, in each case, all cash, money, cash equivalents, checks and other property held therein or credited thereto, other than identifiable Proceeds of Term Priority Collateral;

(4)        all Inventory;

(5)        all proceeds of business interruption insurance (which, for the avoidance of doubt, shall not include proceeds of any casualty insurance relating to Term Priority Collateral);

(6)        to the extent relating to or arising from, evidencing or governing any of the items referred to in the preceding clauses (1) through (5) constituting ABL Priority Collateral, all Documents, General Intangibles (including all rights under contracts but excluding any Intellectual Property and any Equity Interests in any Loan Party or its Subsidiaries), Instruments (including Promissory Notes other than any Promissory Notes constituting Term Priority Collateral), Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper), and Commercial Tort Claims, insurance proceeds, Supporting Obligations and Letter-of-Credit Rights relating thereto; provided that to the extent any of the foregoing also relates to Term Priority Collateral only that portion related to the items referred to in the preceding clauses (1) through (5) shall be included in the ABL Priority Collateral;

(7)        all books and Records relating to the items referred to in the preceding clauses (1) through (6) constituting ABL Priority Collateral (including all books, databases, customer lists, engineer drawings, and Records, whether tangible or electronic, which contain any information relating to any of the items referred to in the preceding clauses (1) through (6) constituting ABL Priority Collateral but, in each case, excluding any Intellectual Property); and

(8)        to the extent not otherwise included, all Proceeds (including all insurance proceeds) of any and all of the foregoing described in clauses (1) through (7) and all collateral security and guarantees with respect to any of the foregoing.

“ ABL Recovery ” shall have the meaning set forth in Section 5.3(a).

“ ABL Secured Parties ” shall have the meaning to that term in the introduction to this Agreement.

“ ABL Standstill Period ” has the meaning set forth in Section 2.3(b).

“ Additional Term Joinder ” means a Joinder Agreement substantially in the form of Exhibit I hereto or such other form as agreed by the ABL Agent and each Term Agent.

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

“ Agent(s) ” means individually the ABL Agent or any Term Agent and collectively means both the ABL Agent and each Term Agent.

“ Agreement ” shall have the meaning assigned to that term in the introduction to this Agreement.

“ Amended or Refinanced ” shall mean, in respect of any obligation, or the agreement or contract pursuant to which such obligation is incurred, (a) such obligation (or any portion thereof) or related agreement or contract as extended, renewed, defeased, amended, amended and restated, supplemented,

 

5

modified, restructured, consolidated, refinanced, replaced, refunded or repaid from time to time and (b) any other obligation issued in exchange or replacement for or to refinance such obligation, in whole or in part, whether with same or different lenders, arrangers and/or agents and whether with a larger or smaller aggregate principal amount, in each case to the extent not prohibited under the terms of this Agreement and the ABL Documents or the Term Documents, as applicable, then in effect. “ Amend or Refinance ” and “ Amendment or Refinancing ” shall have correlative meanings and, for the avoidance of doubt, the parties hereto agree that “Amended or Refinanced”, when applicable to any ABL Document shall include such ABL Document as amended, amended and restated, supplemented, modified or restructured by, and after giving effect to, any Non-US Loan Parties Restructuring.

“ Bank Products ” shall have the meaning assigned to such term in the ABL Credit Agreement.

“ Bankruptcy Code ” shall mean Title 11 of the United States Code, as now or hereafter in effect or any successor thereto.

“ Borrower ” shall mean the ABL Borrowers and the Term Loan Borrower.

“ Business Day ” shall mean any day other than (a) Saturday or Sunday; (b) any day on which banks in Chicago, Illinois or New York City, New York, generally are not open to the general public for the purpose of conducting commercial banking business; or (c) a day on which the principal office of any Term Agent or any ABL Agent is not open to the general public to conduct business.

“ Collateral ” shall mean (a) with respect to any Term Agent or any Term Secured Party, all Property now owned or hereafter acquired by any Term Loan Party in or upon which a Lien is granted or purported to be granted to any Term Agent under any of the Term Collateral Documents, together with all substitutions, additions, products and Proceeds thereof and (b) with respect to the ABL Agent or any ABL Secured Party, all Property now owned or hereafter acquired by any ABL Loan Party in or upon which a Lien is granted or purported to be granted to the ABL Agent under any of the ABL Collateral Documents, together with all substitutions, additions, products and Proceeds thereof.

“ Company ” shall have the meaning assigned to that term in the introduction to this Agreement.

“ Control Collateral ” shall mean any Collateral consisting of any Deposit Account, Securities Account, Commodities Accounts, Instruments, Equity Interests and any other Collateral as to which a Lien may be perfected through possession or control by the secured party, or any agent therefor.

“ Copyrights ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all copyrights, rights and interests in copyrights, works protectable by copyright, copyright registrations, and copyright applications; (b) all renewals of any of the foregoing; (c) all income, royalties, damages, and payments now or hereafter due and/or payable under any of the foregoing, including, without limitation, damages or payments for past or future infringements for any of the foregoing; (d) the right to sue for past, present, and future infringements of any of the foregoing; and (e) all rights corresponding to any of the foregoing throughout the world.

“ Credit Documents ” shall mean the ABL Documents and the Term Documents.

“ Debtor Relief Laws ” shall mean the Bankruptcy Code, as now or hereafter in effect or any successors thereto, as well as all other liquidation, conservatorship, bankruptcy, assignment for benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or any state law or of any applicable foreign law from time to time in effect affecting the rights of creditors generally.

 

6

“ Designated Term Agent ” means (i) the First Lien Term Agent, until such time as (A) the Discharge of First Lien Term Obligations with respect to the First Lien Term Loan Credit Agreement has occurred (which occurrence shall be confirmed in writing by a Term Agent) or (B) the First Lien Term Agent has notified other parties hereto in writing that the Second Lien Term Agent shall be the Designated Term Agent, pursuant to the Term Lender Intercreditor Agreement or otherwise, and (ii) thereafter, the Second Lien Term Agent.

“ Discharge of ABL Obligations ” shall mean (a) the termination of all commitments to extend credit under the ABL Documents, and (b) the payment in full in cash or immediately available funds of all outstanding ABL Obligations (excluding contingent indemnification obligations for which a claim or demand for payment has not then been asserted) including, with respect to (i) amounts available to be drawn under outstanding Letters of Credit (or indemnities or other undertakings issued in respect of outstanding Letters of Credit), the cancellation of such Letters of Credit or the Cash Collateralization (as defined in the ABL Credit Agreement) thereof or the delivery and provision of backstop letters of credit in respect thereof in compliance with the terms of any ABL Credit Agreement (which shall not exceed an amount equal to 105% of the aggregate undrawn amount of such Letters of Credit), (other than Letters of Credit denominated in a currency other than Dollars, in which case shall not exceed 110% of the aggregate undrawn amount of such Letters of Credit) and (ii) outstanding ABL Obligations with respect to Bank Products (or indemnities or other undertakings issued pursuant thereto in respect of outstanding Bank Products), the delivery or provision of cash collateral or backstop letters of credit in respect thereof, other than (x) unasserted contingent indemnification obligations, and (y) any ABL Obligations relating to Bank Products that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or collateralized.

“ Discharge of First Lien Term Obligations ” shall mean the payment in full in cash of all outstanding First Lien Term Obligations (excluding contingent indemnification obligations for which a claim or demand for payment has not then been asserted).

“ Discharge of Second Lien Term Obligations ” shall mean the payment in full in cash of all outstanding Second Lien Term Obligations (excluding contingent indemnification obligations for which a claim or demand for payment has not then been asserted).

“ Discharge of Term Obligations ” shall mean the Discharge of First Lien Term Obligations and the Discharge of Second Lien Term Obligations shall have both occurred.

“ Disposition ” shall mean the sale, transfer, license, lease or other disposition of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith. As used herein, “Dispose” and “Disposed” shall have correlative meanings.

“ Enforcement Notice ” shall mean a written notice delivered by either the ABL Agent or the Designated Term Agent to the other applicable party announcing that an Enforcement Period has commenced.

“ Enforcement Period ” shall mean the period of time following the receipt by either the ABL Agent or any Term Agent of an Enforcement Notice from the other and continuing until the earliest of (a) in case of an Enforcement Period commenced by any Term Agent, the Discharge of Term Obligations (or the written termination of, or agreement in writing to terminate, the Enforcement Period by the applicable Term Agent) or (b) in the case of an Enforcement Period commenced by the ABL Agent, the Discharge of

 

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ABL Obligations (or the written termination of, or agreement in writing to terminate, the Enforcement Period by the ABL Agent).

“ Equity Interests ” shall mean as to any Person, the stock (common, preferred or in any other manner designated), limited liability company membership or other interest or any other right or interest (or right to acquire such interest) however designated, evidencing ownership interests in such Person.

“ Event of Default ” shall mean an Event of Default as defined in the ABL Credit Agreement or any Term Document, as applicable.

“ Exercise of Any Secured Creditor Remedies ” or “ Exercise of Secured Creditor Remedies ” shall mean, except as otherwise provided in the final sentence of this definition:

(a)    the taking by any Secured Party of any action to enforce or realize upon any Lien, including the institution of any foreclosure proceedings or the noticing of any public or private sale pursuant to Article 9 of the Uniform Commercial Code or other applicable law;

(b)    the exercise by any Secured Party of any right or remedy provided to a secured creditor on account of a Lien under any of the Credit Documents, under applicable law, in an Insolvency Proceeding or otherwise, including the election to retain any of the Collateral in satisfaction of a Lien;

(c)    the taking of any action by any Secured Party or the exercise of any right or remedy by any Secured Party in respect of the collection on, set off against, marshaling of, injunction respecting or foreclosure on the Collateral or the Proceeds thereof;

(d)    the appointment on the application of a Secured Party, of a receiver, receiver and manager or interim receiver of all or part of the Collateral;

(e)    the sale, lease, license, or other Disposition of all or any portion of the Collateral by private or public sale conducted by a Secured Party or any other means at the direction of a Secured Party permissible under applicable law (including without limitation the solicitation of any bids from third persons to conduct liquidation or Disposition of Collateral or engage any agents for purposes of valuing, marketing, promoting or selling Collateral);

(f)    the exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code or under provisions of similar effect under other applicable law the exercise by a Secured Party of any voting rights relating to any Pledged Shares; and

(g)    instituting any action or proceeding to effect any of the foregoing.

For the avoidance of doubt, none of the following shall be deemed to constitute an Exercise of Secured Creditor Remedies: (i) the filing of a proof of claim in any Insolvency Proceeding or seeking adequate protection (subject to and in accordance with Section 6.3 below), (ii) the exercise of rights by the ABL Agent during the continuance of a Dominion Trigger Period (as defined in the ABL Credit Agreement), including, without limitation, with respect to Deposit Accounts and Securities Accounts and the notification of account debtors, depository institutions, securities intermediaries, or any other Person to deliver Proceeds of ABL Priority Collateral to the ABL Agent, (iii) the consent by the ABL Agent to any Disposition by any ABL Loan Party of any of the ABL Priority Collateral (other than any such sale conducted at the direction of the ABL Agent in connection with any Exercise of Secured Creditor Remedies after the occurrence of an Event of Default under the ABL Credit Agreement), (iv) the modification of advance rates or sub-limits, or the addition or modification of eligibility criteria, by the ABL Agent, (v) the imposition or modification of any component of the Availability Reserve (as defined in the ABL Credit Agreement) by the ABL Agent, (vi) any collection, adjustment or settlement of insurance claims, or any application to a court of competent jurisdiction to make a determination as to the collection, adjustment or settlement of an insurance claim, in each case in accordance with Section 3.3, (vii) the exercise of rights by the ABL Agent under the ABL Documents to require any ABL Loan Party to take actions in the nature of “further assurances” with respect to the Collateral permitted by the ABL

 

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Documents and not inconsistent with this Agreement, (viii) the consent by any Term Agent to any Disposition by the Borrower or any Term Guarantor of any of the Term Priority Collateral (other than any such sale conducted at the direction of any Term Agent in connection with any Exercise of Secured Creditor Remedies after the occurrence of an Event of Default under the applicable Term Documents), (ix) the exercise of rights by any Term Agent under the applicable Term Documents to require any Term Loan Party to take actions in the nature of “further assurances” with respect to the Collateral permitted by the Term Documents and not inconsistent with this Agreement, (x) the exercise of any rights or remedies by the ABL Agent against any ABL Loan Party which is not a Term Loan Party or (xi) the exercise of any rights or remedies by any Term Loan Agent against any Term Loan Party which is not an ABL Loan Party.

“ First Lien Term Agent ” shall have the meaning set forth in the Preamble hereto.

“ First Lien Term Collateral Documents ” shall mean the Security Documents (as defined in the First Lien Term Loan Credit Agreement) and all security agreements, pledge agreements, hypothecs, charges, debentures, bailment agreements, account control agreements, freight forwarder and/or customs broker’s agreements, collateral access agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with the First Lien Term Loan Credit Agreement, in each case as Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ First Lien Term Documents ” shall mean the First Lien Term Loan Credit Agreement, the First Lien Term Guaranty, the First Lien Term Collateral Documents and those other ancillary agreements to which any First Lien Term Secured Party is a party or beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Term Loan Party or any of its respective Affiliates, and delivered to the applicable First Lien Term Agent or any other First Lien Term Secured Party, in connection with any of the foregoing or any First Lien Term Loan Credit Agreement, First Lien Term Guaranty or the First Lien Term Collateral Documents, in each case as the same may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ First Lien Term Guaranty ” shall mean the collective reference to the guaranty agreements, if any, entered into by the Term Guarantors and any other guarantee of the First Lien Term Obligations entered into in connection with an Amendment or Refinancing of the First Lien Term Loan Credit Agreement.

“ First Lien Term Loan Credit Agreement ” shall have the meaning assigned to such term in the recitals to this Agreement and any other agreements, indentures or facilities which Amend or Refinance all or any portion of the First Lien Term Obligations under any then extant First Lien Term Loan Credit Agreement (including, without limitation, under any agreement with respect to Term DIP Financing provided by any or all of the Term Secured Parties, including any use, whether consensual or non-consensual, of cash collateral constituting the Proceeds of the Term Priority Collateral), whether by the same or any other agent, lender or group of lenders; provided that at the time of any refinancing or replacement of the then extant First Lien Term Loan Credit Agreement, the Company shall have delivered to the ABL Agent an officer’s certificate certifying that such refinancing or replacement First Lien Term Loan Credit Agreement is permitted to be incurred under the ABL Credit Agreement and the First Lien Term Loan Agreement.

“ First Lien Term Obligations ” shall mean all obligations of every nature of each Term Loan Party from time to time owed to the First Lien Term Secured Parties, or any of them, under any First Lien Term Document, including, without limitation, all “Obligations” of each Term Loan Party or similar term as defined in any First Lien Term Document, whether for principal, prepayment premium, interest, fees,

 

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expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the First Lien Term Documents (including interest, fees, indemnification payments, expense reimbursements and other amounts which, but for the filing of an Insolvency Proceeding with respect to such Term Loan Party, would have accrued on or been payable with respect to any First Lien Term Obligation, whether or not a claim is allowed or allowable against such Term Loan Party for such interest, fees, indemnification payments, expense reimbursements and other amounts in the related Insolvency Proceeding), as the same may be Amended or Refinanced in whole or in part or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ First Lien Term Secured Parties ” shall mean each First Lien Term Agent and all First Lien Term Lenders.

“ Foreign Borrower ” means any Foreign Subsidiary that may become a party to the ABL Credit Agreement as a “Borrower” from time to time.

“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia.

“ Governmental Authority ” shall mean the government of the United States or any other nation, or any political subdivision thereof, whether state, local, provincial, territorial or municipal and any agency, authority, instrumentality, regulatory body, court, tribunal, 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).

“ Indebtedness ” shall mean (i) “Debt” as defined in the ABL Credit Agreement and (ii) “Indebtedness” as defined in the Term Loan Credit Agreement, respectively and as applicable.

“ Insolvency Proceeding ” shall mean, with respect to any Loan Party, (a) any case, action, proposal, or proceeding before any court or other Governmental Authority relating to (or any corporate action or other procedure or step being taken in relation to) such Loan Party’s bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors (whether voluntary or involuntary), or (b) any general assignment for the benefit of its creditors, composition, marshalling of assets for its creditors or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case covered by clauses (a) and (b) undertaken under any Debtor Relief Laws.

“ Intellectual Property ” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“ Issuing Bank ” shall have the meaning assigned to such term in the ABL Credit Agreement.

“ Lender(s) ” means individually, the ABL Lenders or the Term Lenders and collectively means all of the ABL Lenders and the Term Lenders.

“ Letter of Credit ” shall mean “Letter of Credit” as defined in the ABL Credit Agreement.

 

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“ Licenses ” means, with respect to any Person, all of such Person’s right, title, and interest in and to (a) any and all licensing agreements or similar arrangements in and to its Patents, Copyrights, or Trademarks, (b) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future breaches thereof, and (c) all rights to sue for past, present, and future breaches thereof.

“ Lien ” shall mean any mortgage, pledge, hypothecation, collateral assignment, encumbrance, lien (statutory or other), charge or other security interest or any other security agreement of any kind or nature whatsoever (including any conditional sale or other title retention agreement and any capital lease having substantially the same economic effect as any of the foregoing).

“ Lien Priority ” shall mean with respect to any Lien of the ABL Secured Parties or the Term Secured Parties in the Collateral, the order of priority of such Lien as specified in Section 2.1.

“ Loan Parties ” shall mean the ABL Loan Parties and the Term Loan Parties.

“ Non-US Loan Parties ” any Foreign Borrower and/or any Foreign Subsidiary that may from time to time guaranty the obligations under the ABL Credit Agreement.

“ Non-US Loan Parties (Existing) ” shall mean (a) CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641 (b) CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario, (c) CEQUENT NEDERLAND HOLDINGS B.V., a company formed under the laws of the Netherlands, (d) CEQUENT MEXICO HOLDINGS B.V., a company formed under the laws of the Netherlands, (e) CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico, and (f) CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V., a limited liability company formed under the laws of Mexico.

“ Non-US Loan Parties Restructuring ” shall mean the amendment, amendment and restatement, and/or other modification of the ABL Documents solely to implement (a) the addition of certain Non-US Loan Parties and (b) the granting of Liens in favor of the ABL Secured Parties on certain assets of the Non-US Obligors and/or the ABL Loan Parties as security for the ABL Obligations as contemplated by the ABL Credit Agreement, such restructuring to include the addition of terms and provisions and additional loan documentation for the Non-US Obligors as contemplated by the ABL Credit Agreement.

“ Patents ” means, with respect to any Person, all of such Person’s right, title, and interest in and to: (a) any and all patents and patent applications; (b) all inventions and improvements described and claimed therein; (c) all reissues, divisions, continuations, renewals, extensions, and continuations-in-part thereof; (d) all income, royalties, damages, claims, and payments now or hereafter due or payable under and with respect thereto, including, without limitation, damages and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements thereof; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Person ” shall mean an individual, partnership, corporation, limited liability company, unlimited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

“ Pledged Shares ” shall mean any Equity Interests of, or other equity interests in, any Loan Party, any Subsidiary thereof or any other Person, to the extent, in each case, constituting part of the Collateral.

 

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“ Priority Collateral ” shall mean the ABL Priority Collateral or the Term Priority Collateral, as applicable.

“ Proceeds ” shall mean (a) all “proceeds,” as defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, and (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily.

“ Property ” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

“ Purchasing ABL Secured Parties ” shall have the meaning set forth in Section 5.4(a)(ii).

“ Purchasing Term Secured Parties ” shall have the meaning set forth in Section 5.4(a)(i).

“ Real Property ” means any right, title or interest in and to real property, including any fee interest, leasehold interest, easement, or license and any other right to use or occupy real property, including any right arising by contract.

“ Second Lien Term Agent ” shall have the meaning set forth in the Preamble hereto.

“ Second Lien Term Collateral Documents ” shall mean the Security Documents (as defined in the Second Lien Term Loan Credit Agreement) and all security agreements, pledge agreements, hypothecs, charges, debentures, bailment agreements, account control agreements, freight forwarder and/or customs broker’s agreements, collateral access agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with the Second Lien Term Loan Credit Agreement, in each case as Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Second Lien Term Documents ” shall mean the Second Lien Term Loan Credit Agreement, the Second Lien Term Guaranty, the Second Lien Term Collateral Documents and those other ancillary agreements to which any Second Lien Term Secured Party is a party or beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Term Loan Party or any of its respective Affiliates, and delivered to the applicable Second Lien Term Agent or any other Second Lien Term Secured Party, in connection with any of the foregoing or any Second Lien Term Loan Credit Agreement, Second Lien Term Guaranty or the Second Lien Term Collateral Documents, in each case as the same may be Amended or Refinanced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Second Lien Term Guaranty ” shall mean the collective reference to the guaranty agreements, if any, entered into by the Term Guarantors and any other guarantee of the Second Lien Term Obligations entered into in connection with an Amendment or Refinancing of the Second Lien Term Loan Credit Agreement.

“ Second Lien Term Loan Credit Agreement ” shall have the meaning assigned to such term in the recitals to this Agreement and any other agreements, indentures or facilities which Amend or Refinance all or any portion of the Second Lien Term Obligations under any then extant Second Lien Term Loan Credit Agreement (including, without limitation, under any agreement with respect to Term DIP Financing provided by any or all of the Term Secured Parties, including any use, whether consensual or non-consensual, of cash collateral constituting the Proceeds of the Term Priority Collateral), whether by the same or any other agent, lender or group of lenders; provided that at the time of any refinancing or replacement of the then extant Second Lien Term Loan Credit Agreement, the Company shall have

 

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delivered to the ABL Agent an officer’s certificate certifying that such refinancing or replacement Second Lien Term Loan Credit Agreement is permitted to be incurred under the ABL Credit Agreement and the First Lien Term Loan Agreement.

“ Second Lien Term Obligations ” shall mean all obligations of every nature of each Term Loan Party from time to time owed to the Second Lien Term Secured Parties, or any of them, under any Second Lien Term Document, including, without limitation, all “Obligations” of each Term Loan Party or similar term as defined in any Second Lien Term Document, whether for principal, prepayment premium, interest, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Second Lien Term Documents (including interest, fees, indemnification payments, expense reimbursements and other amounts which, but for the filing of an Insolvency Proceeding with respect to such Term Loan Party, would have accrued on or been payable with respect to any Second Lien Term Obligation, whether or not a claim is allowed or allowable against such Term Loan Party for such interest, fees, indemnification payments, expense reimbursements and other amounts in the related Insolvency Proceeding), as the same may be Amended or Refinanced in whole or in part or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Second Lien Term Secured Parties ” shall mean each Second Lien Term Agent and all Second Lien Term Lenders.

“ Secured Bank Product Obligations ” shall have the meaning assigned to such term in the ABL Credit Agreement.

“ Secured Parties ” shall mean the ABL Secured Parties and the Term Secured Parties.

“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company, unlimited liability company or other business entity of which a majority of the shares of Equity Interests having ordinary voting power for the election of directors or other governing body are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of a Loan Party.

“ Term Agents ” shall have the meaning set forth in the Preamble hereto.

“ Term Collateral Documents ” shall mean the First Lien Term Collateral Document and the Second Lien Term Collateral Documents.

“ Term Collateral Proceeds Account ” shall mean the deposit account identified in writing to the ABL Agent from time to time in the name of any Designated Term Agent or the Company which contains (or was established to contain) only Proceeds of Term Priority Collateral.

“ Term DIP Financing ” shall have the meaning set forth in Section 6.1(b).

“ Term Documents ” shall mean the First Lien Term Loan Documents and the Second Lien Term Loan Documents.

“ Term Guarantors ” shall mean the collective reference to each direct or indirect Subsidiary or direct or indirect parent of the Term Loan Borrower who is or becomes a guarantor under any Term Guaranty with respect to the Term Loan Borrowers’ Term Obligations.

“ Term Guaranty ” shall mean the First Lien Term Guaranty and the Second Lien Term Guaranty.

 

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“ Term Lender Intercreditor Agreement ” shall mean that certain Term Lender Intercreditor Agreement dated as of the date hereof by and between the First Lien Term Agent and the Second Lien Term Agent, as amended, supplemented or replaced from time to time.

“ Term Lenders ” shall mean the First Lien Term Lenders and the Second Lien Term Lenders.

“ Term Loan Credit Agreements ” shall mean the First Lien Term Loan Credit Agreement and the Second Lien Term Loan Credit Agreement.

“ Term Loan Borrower ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ Term Loan Parties ” shall have the meaning assigned to that term in the recitals to this Agreement.

“ Term Obligations ” shall mean the First Lien Term Obligations and the Second Lien Term Obligations.

“ Term Priority Collateral ” shall mean all Collateral, other than ABL Priority Collateral, including the following:

(1)        Pledged Shares;

(2)        Equipment;

(3)        Intellectual Property;

(4)        Real Property;

(5)        Payment intangibles of, and promissory notes in favor of, any Term Loan Party (other than payments in respect of business interruption insurance constituting ABL Priority Collateral);

(6)        all Goods other than Inventory;

(7)        General intangibles, including goodwill, not constituting ABL Priority Collateral;

(8)        the Term Collateral Proceeds Account; provided, however, that to the extent that identifiable Proceeds of ABL Priority Collateral are deposited into such account, any such identifiable Proceeds shall be treated as ABL Priority Collateral;

(9)        all specifically identifiable Proceeds of Term Priority Collateral contained in any Deposit Account (other than the Term Collateral Proceeds Account), Securities Account or Commodity Account;

(10)        tax refunds or rebates;

(11)        all Documents, Instruments, Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper), Letters of Credit Rights, Commercial Tort Claims, and books and Records, in each case relating to the items referred to in the preceding clauses (including all books,

 

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databases, and Records, whether tangible or electronic, which contain any information relating to any of the items referred to in the preceding clauses);

(12)        to the extent not otherwise included, all Proceeds (including all insurance proceeds), Supporting Obligations and products of any of the foregoing described in clauses (1) through (11) and all collateral security and guarantees with respect to any of the foregoing; and

(13)        all other Collateral other than ABL Priority Collateral.

“ Term Recovery ” shall have the meaning set forth in Section 5.3(b).

“ Term Standstill Period ” shall have the meaning set forth in Section 2.3(a).

“ Term Secured Parties ” means, collectively, the First Lien Term Secured Parties and the Second Lien Term Secured Parties.

“ Trademarks ” means, with respect to any Person, all of such Person’s right, title, and interest in and to the following: (a) all trademarks (including service marks), trade names, trade dress, and trade styles and the registrations and applications for registration thereof and the goodwill of the business symbolized by the foregoing; (b) all licenses of the foregoing, whether as licensee or licensor; (c) all renewals of the foregoing; (d) all income, royalties, damages, and payments now or hereafter due or payable with respect thereto, including, without limitation, damages, claims, and payments for past and future infringements thereof; (e) all rights to sue for past, present, and future infringements of the foregoing, including the right to settle suits involving claims and demands for royalties owing; and (f) all rights corresponding to any of the foregoing throughout the world.

“ Uniform Commercial Code ” shall mean the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided that to the extent that the Uniform Commercial Code is used to define any term in any security document and such term is defined differently in differing Articles of the Uniform Commercial Code, the definition of such term contained in Article 9 shall govern; provided further that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, publication or priority of, or remedies with respect to, Liens of any party is governed by the Uniform Commercial Code or foreign personal property security laws as enacted and in effect in a jurisdiction other than the State of New York, the term “Uniform Commercial Code” will mean the Uniform Commercial Code or such foreign personal property security laws as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

“ Use Period ” means, with respect to each parcel or item of Term Priority Collateral, the period, following the commencement of any Exercise of Any Secured Creditor Remedies, which begins on the earlier of (a) the day on which the ABL Agent provides the Designated Term Agent with the notice of its election to request access to such parcel or item of Term Priority Collateral pursuant to Section 3.5(b) and (b) the fifth Business Day after the Designated Term Agent provides the ABL Agent with notice that the any Term Agent (or its agent) has obtained possession or control of such parcel or item of Term Priority Collateral and ends on the earliest of (i) the day which is 180 days after the date on which the ABL Agent initially obtains the ability to take physical possession of, remove or otherwise control physical access to, or actually uses, such parcel or item of Term Priority Collateral, plus such number of days, if any, during such 180 day period that it is stayed or otherwise prohibited by law or court order from exercising remedies with respect to associated ABL Priority Collateral, (ii) the date on which (A) all or substantially all of the ABL Priority Collateral associated with such parcel or item of Term Priority Collateral is sold, collected or liquidated or (B) the ABL Agent has abandoned the ABL Priority Collateral at such parcel or permanently

 

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ceases efforts to liquidate, complete, sell, prepare for sale, store or otherwise exercise the rights provided under Section 3.5(b) with respect to the ABL Priority Collateral with respect to any item or parcel of Term Priority Collateral and confirms in writing such facts to the Designated Term Agent (or fails to respond within ten (10) Business Days to a written request from the Designated Term Agent to so confirm) or, (iii) the Discharge of ABL Obligations and (iv) the date on which the default which resulted in such Exercise of Any Secured Creditor Remedies has been waived in writing.

Section  1.3          Rules of Construction . Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the term “including” is not limiting and shall be deemed to be followed by the phrase “without limitation,” and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, schedule and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, Amendments or Refinancings, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, Amendments and Refinancings, changes, restatements, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any reference herein to the repayment in full of an obligation shall mean the payment in full in cash of such obligation, or in such other manner as may be approved in writing by the requisite holders or representatives in respect of such obligation. Any reference herein to a time of day means Eastern time. Any term referenced herein by cross-reference to a defined term in the ABL Credit Agreement shall be deemed to be a cross-reference to a defined term in the ABL Credit Agreement or the same or comparable term in any other ABL Credit Agreement. Any term referenced herein by cross-reference to a defined term in the Term Loan Credit Agreement shall be deemed to be a cross-reference to a defined term in the Term Loan Credit Agreement or the same or comparable term in any other Term Loan Credit Agreement.

ARTICLE 2

LIEN PRIORITY

Section 2.1         Priority of Liens .

(a)        Notwithstanding (i) the date, time, method, manner, or order of grant, attachment, or perfection of, or any defect or deficiency in, or failure to perfect, any Liens granted to the ABL Secured Parties in respect of all or any portion of the Collateral or any Liens granted to the Term Secured Parties in respect of all or any portion of the Collateral and regardless of how any such Lien was acquired (whether by grant, statute, operation of law, subrogation or otherwise), (ii) the order or time of filing or recordation of any document or instrument for perfecting the Liens in favor of the ABL Agent for the benefit of the ABL Secured Parties or any Term Agent for the benefit of the Term Secured Parties in any Collateral, (iii) any provision of the Uniform Commercial Code, Debtor Relief Laws or any other applicable law, or of the ABL Documents or the Term Documents, (iv) whether the ABL Agent or any Term Agent, in each case, either directly or through agents, holds possession of, or has control over, all or any part of the Collateral, (v) the date on which the ABL Obligations or the Term Obligations are advanced or made available to the Loan Parties, or (vi) any failure of the ABL Agent or any Term Agent to perfect its Lien in the Collateral, the subordination of any Lien on the Collateral securing any ABL Obligations or Term Obligations, as applicable, to any Lien securing any other obligation of any Borrower or Term Guarantor, or the avoidance, invalidation or lapse of any Lien on the Collateral securing any ABL Obligations or Term Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, and each Term Agent, on behalf of itself and

 

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the applicable Term Secured Parties, hereby agree that the following priorities apply to the Liens upon and right to payment from Proceeds of the ABL Priority Collateral and the Term Priority Collateral:

(1)        any Lien on the ABL Priority Collateral securing any ABL Obligations now or hereafter held by or on behalf of the ABL Agent or any ABL Secured Party or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien now or hereafter held by any Term Secured Party on the ABL Priority Collateral securing any Term Obligations; and

(2)        any Lien on the Term Priority Collateral securing any Term Obligations now or hereafter held by or on behalf of any Term Agent, any Term Secured Party or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Liens now or hereafter held by the ABL Secured Parties on the Term Priority Collateral securing any ABL Obligations.

(b)        Each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, acknowledges and agrees that, concurrently herewith, the ABL Agent, for the benefit of itself and the other ABL Secured Parties, has been, or may be, granted Liens upon all of the Term Priority Collateral and each Term Agent hereby consents thereto. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, acknowledges and agrees that, concurrently herewith, each Term Agent, for the benefit of itself and the other Term Secured Parties represented by it, has been, or may be, granted Liens upon all of the ABL Priority Collateral and the ABL Agent hereby consents thereto. The subordination of Liens by each Term Agent and the ABL Agent in favor of one another as set forth herein shall not be deemed to subordinate any Term Agent’s Liens or the ABL Agent’s Liens to the Liens of any other Person.

Section 2.2         Waiver of Right to Contest Liens .

(a)        Each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the ABL Agent and the ABL Secured Parties in respect of the Collateral or the provisions of this Agreement. Each Term Agent, for itself and on behalf of the applicable Term Secured Parties, agrees that none of the Term Agents or the Term Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent or any ABL Secured Party under the ABL Documents with respect to the ABL Priority Collateral. Each Term Agent, for itself and on behalf of the applicable Term Secured Parties, hereby waives any and all rights it or the Term Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the ABL Agent or any ABL Lender seeks to enforce its Liens in any ABL Priority Collateral. The foregoing shall not be construed to prohibit any Term Agent from enforcing the provisions of this Agreement or otherwise acting in accordance with this Agreement.

(b)        The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that it shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of any Term Agent or any Term Secured Parties in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in Section 3.5 of this Agreement, the ABL Agent, for

 

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itself and on behalf of the ABL Secured Parties, agrees that none of the ABL Agent or the ABL Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Term Agent under the Term Documents with respect to the Term Priority Collateral. The ABL Agent, for itself and on behalf of the ABL Secured Parties, hereby waives any and all rights it or the ABL Secured Parties may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Term Agent seeks to enforce its Liens in any Term Priority Collateral. The foregoing shall not be construed to prohibit the ABL Agent from enforcing the provisions of this Agreement or otherwise acting in accordance with this Agreement.

Section 2.3         Remedies Standstill .

(a)        Each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees that, from the date hereof until the date upon which the Discharge of ABL Obligations shall have occurred, no Term Agent nor any Term Secured Party will Exercise Any Secured Creditor Remedies with respect to any of the ABL Priority Collateral; provided , however , that the Designated Term Agent or any person authorized by it may Exercise Any Secured Creditor Remedies with respect to any ABL Priority Collateral (but not rights the exercise of which is otherwise prohibited by this Agreement including Article 6 hereof) after a period (the “ Term Standstill Period ”) of 180 consecutive days has elapsed from the date of delivery of written notice from the Designated Term Agent to the ABL Agent stating that (i) an Event of Default (as defined under the applicable Term Documents) has occurred and is continuing thereunder, (ii) the Term Obligations under the Term Documents are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of such Term Documents, and (iii) the Designated Term Agent intends to exercise its rights to the Exercise of Secured Creditor Remedies; provided , further , that the Term Agents shall not be entitled to Exercise Any Secured Creditor Remedies with respect to any ABL Priority Collateral in the event (x) the ABL Agent or any ABL Secured Parties are then diligently pursuing their rights and remedies with respect to all or a material portion of the ABL Priority Collateral or diligently attempting to vacate any stay or prohibition against such exercise or (y) a Loan Party is then a debtor under or with respect to (or otherwise subject to) any Insolvency Proceeding. From and after the date that is the earlier of (x) the date upon which the Discharge of ABL Obligations shall have occurred and (y) the date the Term Standstill Period shall have expired (subject to the second proviso in the preceding sentence), any Term Agent may Exercise Any Secured Creditor Remedies under the Term Documents or applicable law as to any ABL Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any ABL Priority Collateral by any Term Agent is at all times subject to the provisions of this Agreement, including the provisions of Section 4.1.

(b)        The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, from the date hereof until the date upon which the Discharge of Term Obligations shall have occurred, neither the ABL Agent nor any ABL Secured Party will Exercise Any Secured Creditor Remedies with respect to any of the Term Priority Collateral; provided , however , that the ABL Agent may Exercise Any Secured Creditor Remedies with respect to any Term Priority Collateral (but not rights the exercise of which is otherwise prohibited by this Agreement including Article 6 hereof) after a period (the “ ABL Standstill Period ”) of 180 consecutive days has elapsed from the date of delivery of written notice from the ABL Agent to each Term Agent stating that (i) an Event of Default (as defined under the applicable ABL Documents) has occurred and is continuing thereunder, (ii) the ABL Obligations under such ABL Documents are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of such ABL Documents, and (iii) the ABL Agent intends to exercise its rights to the Exercise of Secured Creditor Remedies; provided , further , that the ABL Agent shall not be entitled to Exercise Any Secured Creditor Remedies with respect to any Term Priority Collateral in the event (x) any Term Agent or any Term Secured Parties are then diligently pursuing their rights and remedies with respect to all or a material portion of the Term Priority Collateral or diligently attempting to vacate any stay

 

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or prohibition against such exercise or (y) a Loan Party is then a debtor under or with respect to (or otherwise subject to ) any Insolvency Proceeding. From and after the date that is the earlier of (A) the date upon which the Discharge of Term Obligations shall have occurred and (B) the date the ABL Standstill Period shall have expired (subject to the second proviso in the preceding sentence), the ABL Agent or any ABL Secured Party may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any Term Priority Collateral; provided , however , that any Exercise of Secured Creditor Remedies with respect to any Term Priority Collateral by the ABL Agent or the ABL Secured Parties is at all times subject to the provisions of this Agreement, including the provisions of Section 4.1.

(c)        Notwithstanding the provisions of Sections 2.3(a), 2.3(b) or any other provision of this Agreement, nothing contained herein shall be construed to prevent any Agent or any Secured Party from (i) filing a claim or statement of interest with respect to the ABL Obligations or Term Obligations owed to it in any Insolvency Proceeding commenced by or against any Loan Party, (ii) taking any action (not adverse to the Lien Priority of the Liens of the other Agent or other Secured Parties on the Collateral in which such other Agent or other Secured Party has a priority Lien or the rights of the other Agent or any of the other Secured Parties to Exercise Any Secured Creditor Remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce) its Lien on any Collateral, (iii) filing any necessary or responsive pleadings in opposition to any motion, adversary proceeding or other pleading filed by any Person objecting to or otherwise seeking disallowance of the claim or Lien of such Agent or Secured Party, (iv) filing any pleadings, objections, motions, or agreements which assert rights available to unsecured creditors of the Loan Parties arising under any Insolvency Proceeding or applicable non-bankruptcy law to the extent not inconsistent with the terms of this Agreement, (v) Subject to Section  6.11 , voting on any plan of reorganization or filing any proof of claim in any Insolvency Proceeding of any Loan Party, or (vi) bidding for and purchasing Collateral at any private or judicial foreclosure sale of such Collateral initiated by the applicable Agent (so long as such bid is subject to the limitations on credit bidding set forth in Section  6.4(a) and Section  6.4(b) ), in each case (i) through (vi) above to the extent not inconsistent with the terms of this Agreement.

Section 2.4         Exercise of Rights .

(a)         No Other Restrictions . The ABL Agent may enforce the provisions of the ABL Documents, each Term Agent may enforce the provisions of the applicable Term Documents and each may Exercise Any Secured Creditor Remedies, all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of this Agreement; provided , however , that each of the ABL Agent and each Term Agent agrees to provide to the other (x) an Enforcement Notice prior to the commencement of an Exercise of Secured Creditor Remedies and (y) copies of any notices that it is required under applicable law to deliver to any Loan Party; provided further , however , that the ABL Agent’s failure to provide any such copies to each Term Agent shall not impair any of the ABL Agent’s rights hereunder or under any of the ABL Documents and any Term Agent’s failure to provide any such copies to the ABL Agent shall not impair any of such Term Agent’s rights hereunder or under any of the applicable Term Documents. Each of the Term Agents (on behalf of itself and the applicable Term Secured Parties) and the ABL Agent (on behalf of itself and the ABL Secured Parties) agrees (i) that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim, in the case of each of the Term Agents and the applicable Term Secured Parties, against the ABL Agent or any other ABL Secured Party, and in the case of the ABL Agent and each other ABL Secured Party, against the Term Agents or any other Term Secured Party, seeking damages from or other relief by way of specific performance, instructions or otherwise, with respect to, any action taken or omitted to be taken by such Person with respect to the Collateral which is consistent with the terms of this Agreement, and none of such parties shall be liable for any such action taken or omitted to be taken, or (ii) without the other Agent’s prior

 

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written consent, it will not be a petitioning creditor or otherwise assist in the filing of an involuntary Insolvency Proceeding.

(b)         Release of Liens .

(i)        In the event of (A) any private or public sale of all or any portion of the ABL Priority Collateral in connection with any Exercise of Secured Creditor Remedies by the ABL Agent or any Disposition by the ABL Loan Parties with the consent of the ABL Agent while an Event of Default under the ABL Documents has occurred and is continuing (so long as the proceeds of such sale or Disposition are applied in accordance with Section  4.1(b) ), or (B) any sale, transfer or other Disposition of all or any portion of the ABL Priority Collateral (other than in connection with an Amendment or Refinancing as described in Section  5.2(c) ), so long as such sale, transfer or other Disposition is then permitted by the ABL Documents and the Term Documents or consented to by the requisite ABL Lenders and the requisite Term Lenders, as applicable, each Term Agent agrees, on behalf of itself and the applicable Term Secured Parties that such sale, transfer or other Disposition will be free and clear of the Liens on such ABL Priority Collateral securing the applicable Term Obligations, and such Term Agent’s and the applicable Term Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, or disposed shall terminate and be automatically released without further action concurrently with, and to the same extent as, the release of the ABL Secured Parties’ Liens on such ABL Priority Collateral; provided , that the Liens of the parties shall attach to the Proceeds of any such Disposition of the ABL Priority Collateral with the same relative priority as the Liens which attached to the ABL Priority Collateral so released. In furtherance of, and subject to, the foregoing, each Term Agent agrees that it will promptly execute and deliver any and all Lien releases or other documents reasonably requested by the ABL Agent in connection therewith.

(ii)        In the event of (A) any private or public sale of all or any portion of the Term Priority Collateral in connection with any Exercise of Secured Creditor Remedies by any Term Agent or any Disposition by the Term Loan Parties with the consent of the applicable Term Agent while an Event of Default under the Term Documents has occurred and is continuing (so long as the proceeds of such sale or Disposition are applied in accordance with Section  4.1(c) ), or (B) any sale, transfer or other Disposition of all or any portion of the Term Priority Collateral (other than in connection with an Amendment or Refinancing as described in Section  5.2(c) ), so long as such sale, transfer or other Disposition is then permitted by the applicable Term Documents and the ABL Documents or consented to by the requisite applicable Term Lenders and the requisite ABL Lenders, as applicable, the ABL Agent agrees, on behalf of itself and the ABL Lenders, that such sale, transfer or Disposition will be free and clear of the Liens on such Term Priority Collateral securing the ABL Obligations and the ABL Agent’s and the ABL Secured Parties’ Liens with respect to the Term Priority Collateral so sold, transferred, or disposed shall terminate and be automatically released without further action concurrently with, and to the same extent as, the release of the applicable Term Secured Parties’ Liens on such Term Priority Collateral; provided , that the Liens of the parties shall attach to the Proceeds of any such Disposition of the Term Priority Collateral with the same relative priority as the Liens which attached to the Term Priority Collateral so released. In furtherance of, and subject to, the foregoing, the ABL Agent agrees that it will promptly execute and deliver any and all Lien releases or other documents reasonably requested by the applicable Term Agent in connection therewith.

Section 2.5         No New Liens .

(a)        Subject to Article 6, until the Discharge of ABL Obligations, and for so long as the Term Obligations are secured by any ABL Priority Collateral, the parties hereto agree that no Loan Party shall grant any Lien on any assets of any Loan Party securing any Term Obligation which assets are

 

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not also subject to the Lien of the ABL Agent under the ABL Documents. If any Term Secured Party shall nonetheless acquire or hold any Lien on any assets of any Loan Party securing any Term Obligation which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, then the applicable Term Agent (or the relevant Term Secured Party) shall, without the need for any further consent of any other Term Secured Party or any Term Loan Party and notwithstanding anything to the contrary in any other Term Document, be deemed to also hold and have held such Lien as agent or bailee for the benefit of the ABL Agent as security for the ABL Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the ABL Agent in writing of the existence of such Lien.

(b)        Subject to Article 6 and the proviso at the end of this sentence, until the Discharge of Term Obligations, and for so long as the ABL Obligations are secured by any Term Priority Collateral, the parties hereto agree that no Loan Party shall grant any Lien on any of its assets securing any ABL Obligation which assets are not also subject to the Lien of each Term Agent under the applicable Term Documents; provided , that , the parties acknowledge and agree that prior to the date of this agreement, Non-US Loan Parties (Existing) previously granted Liens on assets of such Non-US Loan Parties (Existing) to secure the ABL Obligations and such prior grant of Liens shall not be deemed to be a violation of this Section 2.5(a). If any ABL Secured Party shall nonetheless acquire or hold any Lien on any assets of any such Loan Party (other than Non-US Loan Parties (Existing)) securing any ABL Obligation which assets are not also subject to the Lien of each Term Agent under the applicable Term Documents, then the ABL Agent (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party or any ABL Loan Party and notwithstanding anything to the contrary in any other ABL Document, be deemed to also hold and have held such Lien as agent or bailee for the benefit of each Term Agent as security for the Term Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Term Agent in writing of the existence of such Lien.

(c)        Each of the Secured Parties acknowledges and agrees that the Agents and Secured Parties may obtain Liens on certain of the assets of Non-US Loan Parties (including Equity Interests owned by such Non-US Loan Parties) which assets will not constitute Collateral for purposes of this Agreement if the applicable Loan Party is not both an ABL Loan Party and a Term Loan Party.

Section 2.6         Waiver of Marshalling .

(a)        Until the Discharge of ABL Obligations, each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the ABL Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.

(b)        Until the Discharge of Term Obligations, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to assert and hereby waives, to the fullest extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise claim the benefit of, any marshalling, appraisal, valuation or other similar right that may otherwise be available under applicable law with respect to the Term Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.

 

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ARTICLE 3

ACTIONS OF THE PARTIES

Section  3.1          Certain Actions Permitted . Each Term Agent and the ABL Agent may make such demands or file such claims in respect of the Term Obligations or the ABL Obligations, as applicable, as are necessary to prevent the waiver or bar of such claims under applicable statutes of limitations or other statutes, court orders, or rules of procedure at any time; provided that any judgment lien obtained in connection with such action shall be subject to the terms of this Agreement.

Section 3.2          Agent for Perfection .

(a)        The ABL Agent, for and on behalf of itself and each ABL Secured Party, and each Term Agent, for and on behalf of itself and each applicable Term Secured Party, as applicable, each agrees to hold all Collateral in its respective possession, custody, or control (including as defined in Sections 9-104, 9-105, 9-106, 9-107 and 8-106 of the UCC) (or in the possession, custody, or control of agents or bailees for either) as agent for each other Agent solely for the purpose of perfecting the security interest granted to each in such Collateral, subject to the terms and conditions of this Section 3.2. The ABL Agent agrees to act as agent of each Term Agent for and on behalf of itself and each applicable Term Secured Party under each ABL Deposit and Security Account solely for the purpose of perfection of each applicable Term Secured Parties’ security interest therein. In furtherance thereof, (i) each Term Agent and the Term Secured Parties hereby appoint the ABL Agent as their agent for the purposes of perfecting their security interest in all ABL Deposit and Security Accounts of any ABL Loan Party and the ABL Agent hereby accepts such appointment and acknowledges and agrees that it shall act for the benefit of each Term Agent and the other Term Secured Parties under each control agreement and (ii) each ABL Loan Party hereby grants a security interest to the ABL Agent for the benefit of the Term Secured Parties in all ABL Deposit and Security Accounts as security for the Term Obligations. Each Term Agent agrees to act as agent of the ABL Agent for and on behalf of itself and each ABL Secured Party under the Term Collateral Proceeds Account solely for the purpose of perfection of each applicable ABL Secured Parties’ security interest therein. In furtherance thereof, (i) the ABL Agent and the ABL Secured Parties hereby appoint each Term Agent as their agent for the purposes of perfecting their security interest in the Term Collateral Proceeds Account and each Term Agent hereby accepts such appointment and acknowledges and agrees that it shall act for the benefit of the ABL Agent and the other ABL Secured Parties under each control agreement and (ii) each Term Loan Party hereby grants a security interest to each Term Agent for the benefit of the ABL Secured Parties in the Term Collateral Proceeds Account as security for the ABL Obligations. None of the ABL Agent, the other ABL Secured Parties, the Term Agents, or the other Term Secured Parties, as applicable, shall have any obligation whatsoever to the others to assure that the Collateral is genuine or owned by any Loan Party or any other Person or to preserve rights or benefits of any Person. The duties or responsibilities of the ABL Agent and each Term Agent under this Section 3.2 are and shall be limited solely to holding or maintaining control of the Control Collateral as agent for the other party for purposes of perfecting the Lien held by each Term Agent or the ABL Agent, as applicable. The ABL Agent is not and shall not be deemed to be a fiduciary of any kind for the Term Secured Parties or any other Person. Each Term Agent is not and shall not be deemed to be a fiduciary of any kind for the ABL Secured Parties, or any other Person. Each Agent, for itself and on behalf of each Secured Party represented by it, hereby waives and releases each other Agent from all claims and liabilities arising pursuant to its role under this Section 3.2 as agent and bailee with respect to the Collateral. Without limiting the generality of the foregoing, (A) other than as set forth in Section 3.6(b), the ABL Secured Parties shall not be obligated to ensure or otherwise see to the application of any Proceeds of the Term Priority Collateral deposited into any ABL Deposit and Security Account or be answerable in any way for the misapplication thereof and (B) other than as set forth in Section 3.6(c), the Term Secured Parties shall not be obligated to ensure or

 

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otherwise see to the application of any Proceeds of the ABL Priority Collateral deposited into the Term Collateral Proceeds Account or be answerable in any way for the misapplication thereof.

(b)        The ABL Agent agrees on behalf of itself and the other ABL Secured Parties that all mortgages, deeds of trust, deeds and similar instruments (collectively, “mortgages”) now or thereafter filed against Real Property in favor of or for the benefit of the ABL Agent shall contain the following notation: “The lien created by this mortgage on the property described herein is junior and subordinate to the lien on such property created by any mortgage, deed of trust or similar instrument now or hereafter granted to JPMorgan Chase Bank, N.A., as First Lien Term Agent, or Cortland Capital Market Services LLC, as Second Lien Term Agent, in accordance with the provisions of the Amended and Restated Intercreditor Agreement dated as of March 15, 2019, as amended from time to time.”

Section  3.3          Insurance . Proceeds of Collateral include insurance proceeds and, therefore, the Lien Priority shall govern the ultimate disposition of casualty insurance proceeds. The ABL Agent and each Term Agent shall each be named as additional insured or lender loss payee, as applicable, with respect to all insurance policies relating to the Collateral as set forth in the ABL Credit Agreement or any Term Loan Credit Agreement, as applicable. Until Discharge of ABL Obligations, the ABL Agent shall have the sole and exclusive right, as against each Term Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ABL Priority Collateral and take other such actions with respect to insurance covering the ABL Priority Collateral as set forth in the ABL Credit Agreement. Until Discharge of the Term Obligations, the Term Agents shall have the sole and exclusive right, as against the ABL Agent, to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of Term Priority Collateral and take other such actions with respect to insurance covering the Term Priority Collateral as set forth in the Term Documents. To the extent that an insured claim covers both ABL Priority Collateral and Term Priority Collateral, then the ABL Agent and each Term Agent will work jointly and in good faith to collect, adjust and/or settle under the insurance policy, as applicable. If the parties are unable after negotiating in good faith to agree on the collection, adjustment or settlement for such claim and the insurer will not settle such claim separately with respect to ABL Priority Collateral and Term Priority Collateral, either party may apply to a court of competent jurisdiction to make a determination as to the settlement of such claim, and the court’s determination shall be binding upon the parties. All proceeds of such insurance shall be remitted to the ABL Agent or the Designated Term Agent, as the case may be, and each of the Term Agents and ABL Agent shall cooperate (if necessary) in a reasonable manner in effecting the payment of insurance proceeds in accordance with Section 4.1 hereof.

Section  3.4          No Additional Rights For the Loan Parties Hereunder . If any ABL Secured Party or Term Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, the Loan Parties shall not be entitled to use such violation as a defense to any action by any ABL Secured Party or Term Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any ABL Secured Party or Term Secured Party.

Section 3.5         Inspection and Access Rights .

(a)        In the event that the ABL Agent shall, in the exercise of its rights under the ABL Documents or otherwise, receive possession or control of any books and Records of any Loan Party which contain information identifying or pertaining to the Term Priority Collateral, the ABL Agent shall, upon request from any Term Agent and as promptly as practicable thereafter, either make available to such Term Agent such books and records for inspection and duplication or provide to such Term Agent copies thereof. In the event that any Term Agent shall, in the exercise of its rights under the Term Documents or otherwise, receive possession or control of any books and records of any Loan Party which contain information identifying or pertaining to any of the ABL Priority Collateral, such Term Agent shall, upon request from

 

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the ABL Agent and as promptly as practicable thereafter, either make available to the ABL Agent such books and records for inspection and duplication or provide the ABL Agent copies thereof. Each Term Agent hereby irrevocably grants the ABL Agent a non-exclusive worldwide license and/or right, to the maximum extent permitted by applicable law, exercisable without payment of royalty or other compensation, to use, license or sublicense any of the Intellectual Property (including the right to access to all media in which any of the Intellectual Property may be recorded or stored and to all computer software and programs used for the compilation or printout thereof) now or hereafter owned by, licensed to, or otherwise used by the Loan Parties in order for ABL Agent and ABL Secured Parties to purchase, use, market, repossess, possess, store, assemble, manufacture, process, sell, transfer, distribute or otherwise Dispose of any asset included in the ABL Priority Collateral in connection with liquidation, Disposition or Realization upon the ABL Priority Collateral in accordance with the terms of this Agreement. Each Term Agent agrees that any sale, transfer or other disposition of any of the Loan Parties’ Intellectual Property (whether by foreclosure or otherwise) will be subject to the ABL Agent’s rights as set forth in this Section  3.5 .

(b)        If any Term Agent, or any agent or representative of any Term Agent, or any receiver, shall, after the commencement of any Exercise of Any Secured Creditor Remedies, obtain possession or physical control of any of the Term Priority Collateral, such Term Agent shall promptly notify the ABL Agent in writing of that fact, and the ABL Agent shall, within ten Business Days thereafter, notify such Term Agent in writing as to whether the ABL Agent desires to exercise access rights under this Agreement. In addition, the ABL Agent shall promptly notify such Term Agent that the ABL Agent is exercising its access rights under this Agreement and its rights under Section  3.5 under either circumstance. Upon delivery of such notice by the ABL Agent to such Term Agent, ABL Agent shall have (i) an irrevocable, non-exclusive right to have access to, and a rent-free right to use, the relevant parcel or item the Term Priority Collateral and (ii) the right during normal business hours during the Use Period, and with reasonable prior notice, to use the Term Priority Collateral in order to assemble, inspect, copy or download information stored on, take action to perfect its Liens on, complete a production run of inventory, take possession of, move, prepare and advertise for sale, sell (by public auction, private sale or a “going out of business” or similar sale, whether in bulk, in lots or to customers in the ordinary course of business or otherwise and which sale may include augmented Inventory of the same type sold in any ABL Loan Party’s business), store or otherwise deal with the ABL Priority Collateral, in each case without liability to any Term Secured Party, except as set forth herein. Consistent with the definition of “ Use Period ,” access rights will apply to differing parcels or items of Term Priority Collateral at differing times, in which case, a differing Use Period will apply to each such parcel or items. The Term Agents may not sell, assign or otherwise transfer the related Term Priority Collateral prior to the expiration of the Use Period applicable thereto unless such sale, assignment or transfer is subject to the ABL Agent’s rights of access pursuant to the terms of this Agreement (including the Use Period afforded to the ABL Agent hereunder).

(c)        The ABL Agent shall take proper and reasonable care under the circumstances of any Term Priority Collateral that is used by the ABL Agent during the Use Period and repair and replace any damage (ordinary wear-and-tear excepted) caused by the ABL Agent or its agents, representatives or designees and the ABL Agent shall comply with all applicable laws in all material respects in connection with its use or occupancy or possession of the Term Priority Collateral. The ABL Agent shall indemnify and hold harmless the Term Agents and the Term Secured Parties for any injury or damage to Persons or property (ordinary wear-and-tear excepted) caused directly by the acts or omissions of Persons under its control and except for injury or damage arising from the gross negligence or willful misconduct of any Term Secured Party as determined by a final non-appealable judgment by a court of competent jurisdiction; provided , however , that the ABL Agent and the ABL Secured Parties will not be liable for any diminution in the value of Term Priority Collateral caused by the absence of the ABL Priority Collateral therefrom. Notwithstanding the foregoing, in no event shall the ABL Secured Parties or the ABL Agent have any

 

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liability to the Term Secured Parties and/or to any Term Agent pursuant to this Section 3.5 as a result of any condition (including any environmental condition, claim or liability) on or with respect to the Term Priority Collateral existing prior to the date of the exercise by the ABL Secured Parties (or the ABL Agent, as the case may be) of their rights under this Section 3.5 and the ABL Secured Parties shall have no duty or liability to maintain the Term Priority Collateral in a condition or manner better than that in which it was maintained prior to the use thereof by the ABL Secured Parties. The ABL Agent and each Term Agent shall cooperate and use reasonable efforts to ensure that their activities during the Use Period as described in this Section 3.5 do not interfere materially with the activities of the other as described in this Section 3.5, including the right of the Term Agents to show the Term Priority Collateral to prospective purchasers and to ready the Term Priority Collateral for sale.

Section 3.6         Tracing of and Priorities in Proceeds .

(a)        The ABL Agent, for itself and on behalf of the ABL Secured Parties, and each Term Agent, for itself and on behalf of the applicable Term Secured Parties, agree that prior to an issuance of any Enforcement Notice by such Secured Party, any Proceeds of Collateral, whether or not deposited under control agreements, which are used by any Loan Party to acquire other property which is Collateral shall not (solely as between the Agents and the Lenders) be treated as Proceeds of Collateral for purposes of determining the relative priorities in the Collateral which was so acquired.

(b)        Notwithstanding anything to the contrary in this Agreement, each Term Agent on behalf of the Term Secured Parties agrees that, unless (and only to the extent that) the ABL Agent has prior actual knowledge (as a result of written notice from a Term Agent or otherwise) that any deposit in, funds credited to or other payment into, any of the ABL Deposit and Security Accounts (other than the Term Collateral Proceeds Account) include Term Priority Collateral or Proceeds thereof, such deposits or payments may be treated as ABL Priority Collateral and swept, applied and otherwise dealt with in accordance with the terms of the ABL Documents. In accordance with the foregoing and the other terms of this Agreement, each ABL Secured Party shall segregate and pay over to the Term Agents upon written request after delivery of an Enforcement Notice by any Term Agent, in the same form as received and with any necessary endorsements, all Term Priority Collateral and/or identifiable Proceeds of Term Priority Collateral contained in any ABL Deposit and Security Account (and the ABL Loan Parties hereby authorize and direct the ABL Agent to pay over to the applicable Term Agent such amounts to the extent required hereunder).

(c)        Notwithstanding anything to the contrary in this Agreement, the ABL Agent on behalf of the ABL Secured Parties agrees that, unless (and only to the extent that) a Term Agent has prior actual knowledge (as a result of written notice from the ABL Agent or otherwise) that any deposit in, funds credited to or other payment into, the Term Collateral Proceeds Account include ABL Priority Collateral or Proceeds thereof, such deposits or payments may be treated as Term Priority Collateral and swept, applied and otherwise dealt with in accordance with the terms of the Term Documents. In accordance with the foregoing and the other terms of this Agreement, each Term Secured Party shall segregate and pay over to the ABL Agent upon written request after delivery of an Enforcement Notice by the ABL Agent, in the same form as received and with any necessary endorsements, all ABL Priority Collateral and/or identifiable Proceeds of ABL Priority Collateral contained in the Term Collateral Proceeds Account (and the Term Loan Parties hereby authorize and direct the Term ABL Agents to pay over to the ABL Agent such amounts to the extent required hereunder).

Section 3.7          Payments Over .

 

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(a)       So long as the Discharge of ABL Obligations has not occurred, any ABL Priority Collateral or Proceeds thereof not constituting Term Priority Collateral received by any Term Agent or any Term Secured Parties in connection with any Exercise of Secured Creditor Remedies relating to the ABL Priority Collateral shall be segregated and held in trust and forthwith paid over to the ABL Agent for the benefit of the ABL Secured Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The ABL Agent is hereby authorized to make any such endorsements as agent for any Term Agent or any such Term Secured Parties. This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

(b)       So long as the Discharge of Term Obligations has not occurred, any Term Priority Collateral or Proceeds thereof not constituting ABL Priority Collateral received by the ABL Agent or any other ABL Secured Party in connection with any Exercise of Secured Creditor Remedies relating to the Term Priority Collateral shall be segregated and held in trust and forthwith paid over to the Designated Term Agent for the benefit of the Term Secured Parties in the same form as received, with any necessary endorsements or as a court of competent jurisdiction may otherwise direct. The Designated Term Agent is hereby authorized to make any such endorsements as agent for the ABL Agent or any such other ABL Secured Parties. This authorization is coupled with an interest and is irrevocable until such time as this Agreement is terminated in accordance with its terms.

(c)       Nothing in this Agreement shall prohibit the receipt by the ABL Agent or any Term Agent or any Secured Party of payments of interest, principal and other amounts owed in respect of the ABL Obligations or the Term Obligations so long as such receipt is not the direct or indirect result of the Exercise of Any Secured Creditor Remedies by the ABL Agent or any Term Agent or any Secured Party in contravention of this Agreement.

Section  3.8         Rights as Unsecured Creditors . The Secured Parties may, in accordance with the terms of the Term Documents or the ABL Documents (as applicable) and applicable law, enforce rights and exercise remedies against the Company and any other Loan Party as unsecured creditors so long as such action is not prohibited by or inconsistent with the terms of this Agreement (including the limitations set forth in Article 6) or any other provisions prohibiting, limiting or restricting certain actions or objections by the Term Secured Parties or the ABL Secured Parties, as applicable; provided further that in the event any Secured Party becomes a judgment Lien creditor in respect of any Collateral as a result of its enforcement of its rights as an unsecured creditor with respect to any of its obligations, such judgment Lien shall be subject to the terms of this Agreement, including the relative Lien priorities set forth in Section 2.1 and Section 4.1.

ARTICLE 4

APPLICATION OF PROCEEDS

Section 4.1         Application of Proceeds .

(a)        Revolving Nature of ABL Obligations . Each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, expressly acknowledges and agrees that (i) the ABL Credit Agreement includes a revolving commitment, that in the ordinary course of business the ABL Agent and the ABL Lenders will apply payments and make advances thereunder, and that no application of any Collateral or the release of any Lien by the ABL Agent upon any portion of the Collateral in connection with a permitted Disposition by the ABL Loan Parties under any ABL Credit Agreement shall constitute the Exercise of Secured Creditor Remedies under this Agreement; (ii) the amount of the ABL Obligations that may be outstanding at any time or from time to time may be increased or reduced and subsequently

 

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reborrowed; and (iii) all Collateral or Proceeds thereof received by the ABL Agent may be applied, reversed, reapplied, reborrowed or credited, in whole or in part, to the ABL Obligations at any time; provided , however , that from and after the date on which the ABL Agent (or any ABL Secured Party) or any Term Agent (or any Term Secured Party) commences the Exercise of Any Secured Creditor Remedies, all amounts received by the ABL Agent or any ABL Lender or any Term Agent or any Term Secured Party as a result of such enforcement shall be applied as specified in Sections 4.1(b) and (c). The Lien Priority shall not be altered or otherwise affected by any such Amendment or Refinancing, repayment, reborrowing, or increase of either the ABL Obligations or the Term Obligations, or any portion thereof.

(b)         Application of Proceeds of ABL Priority Collateral . The ABL Agent and each Term Agent hereby agree that all ABL Priority Collateral and all Proceeds thereof, received by any of them in connection with any Exercise of Secured Creditor Remedies with respect to the ABL Priority Collateral shall be applied,

first , (i) to the payment of costs and expenses of the ABL Agent in connection with such Exercise of Secured Creditor Remedies to the extent provided in the ABL Documents and (ii) in an Insolvency Proceeding and in connection with ABL DIP Financing that otherwise complies with Section 6.1(a) hereof, to the payment of any reasonable administrative claim, professional fee and U.S. trustee or clerk of the court fee “carveouts”, in each case under this clause (ii), consented to in writing by the ABL Agent to be paid prior to the Discharge of ABL Obligations,

second , to the payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred,

third , to the Designated Term Agent to be applied to the payment of the Term Obligations in accordance with the Term Documents and the Term Lender Intercreditor Agreement until the Discharge of Term Obligations shall have occurred, and

fourth , the balance, if any, to the Loan Parties or as a court of competent jurisdiction may direct.

(c)         Application of Proceeds of Term Priority Collateral . The ABL Agent and each Term Agent hereby agree that all Term Priority Collateral and all Proceeds thereof, received by either of them in connection with any Exercise of Secured Creditor Remedies with respect to the Term Priority Collateral shall be applied,

first , (i) to the payment of costs and expenses of each Term Agent in connection with such Exercise of Secured Creditor Remedies to the extent provided in the Term Documents and (ii) in an Insolvency Proceeding and in connection with Term DIP Financing that otherwise complies with Section 6.1(b) hereof, to the payment of any reasonable administrative claim, professional fee and U.S. trustee or clerk of the court fee “carveouts”, in each case under this clause (ii), consented to in writing by the Designated Term Agent to be paid prior to the Discharge of Term Obligations,

second , to the payment of the Term Obligations in accordance with the Term Documents and the Term Lender Intercreditor Agreement until the Discharge of Term Obligations shall have occurred,

third , to the payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred, and

 

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  fourth , the balance, if any, to the Loan Parties or as a court of competent jurisdiction may direct.

(d)        Limited Obligation or Liability . In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent shall have no obligation or liability to any Term Agent or to any Term Secured Party, and no Term Agent shall have any obligation or liability to the ABL Agent or any ABL Secured Party, regarding the adequacy of any Proceeds or for any action or omission, except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement.

(e)        Turnover of Collateral after Discharge . Upon the Discharge of ABL Obligations, the ABL Agent shall deliver to the Designated Term Agent or shall execute such documents as any Term Agent may reasonably request (at the expense of the ABL Borrowers) to enable each Term Agent to have control over, any Control Collateral of the Term Loan Parties still in the ABL Agent’s possession, custody, or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, subject to the reinstatement provisions of Section 5.3 below. The ABL Agent also agrees to deliver notices to landlords, bailees, warehousemen, credit card processors, shippers and other third parties that the ABL Agent is no longer a “secured party” and, if applicable, the “controlling party” (or comparable concepts) under the applicable landlord agreement, collateral access agreement, credit card processor agreement, shipper waiver or other third party document. Upon the Discharge of Term Obligations, each Term Agent shall deliver to the ABL Agent or shall execute such documents as the ABL Agent may reasonably request (at the expense of the Term Loan Borrower) to enable the ABL Agent to have control over any Control Collateral still in such Term Agent’s possession, custody or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct, subject to the reinstatement provisions of Section 5.3 below. Each Term Agent also agrees to deliver notices to landlords, bailees, warehousemen, credit card processors, shippers and other third parties that such Term Agent is no longer a “secured party” or, if applicable, the “controlling party” (or comparable concepts) under the applicable landlord agreement, collateral access agreement, credit card processor agreement, shipper waiver or other third party document.

(f)       Notwithstanding anything to the contrary contained above or in the definition of the ABL Priority Collateral or Term Loan Priority Collateral, in the event that Proceeds of Collateral are received from (or are otherwise attributable to the value of) any collection, sale, foreclosure or other realization upon or any other Enforcement Action that involves a combination of ABL Priority Collateral and Term Loan Priority Collateral, the ABL Agent and the Designated Term Agent shall use commercially reasonable efforts in good faith to allocate such Proceeds to the ABL Priority Collateral and the Term Loan Priority Collateral. If the ABL Agent and the Designated Term Agent are unable to agree on such allocation within five (5) Business Days (or such other period of time as the ABL Agent and the Designated Term Agent agree) of the consummation of such collection, sale, foreclosure or other realization upon or any other Enforcement Action, the portion of such Proceeds that shall be allocated as Proceeds of ABL Priority Collateral for purposes of this Agreement shall be an amount equal to (i) the net book value of such ABL Priority Collateral consisting of Accounts, (ii) the orderly liquidation value of such ABL Priority Collateral consisting of Inventory based on and consistent with the then most current appraisal thereof received by the ABL Agent with respect thereto, and (iii) to the extent the Proceeds of ABL Priority Collateral include Proceeds of Collateral other than Accounts and Inventory, the appraised value of such other Collateral based on and consistent with the then most current satisfactory appraisal received by the ABL Agent with respect thereto

Section  4.2          Reinstatement .

 

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(a)       The ABL Agent agrees that if at any time all or part of any payment with respect to any Term Loan Obligation secured by any Term Priority Collateral previously received by any Term Secured Party shall be rescinded or required to be repaid or turned over to any Term Loan Party for any reason whatsoever, the ABL Agent will upon request promptly pay over to the Designated Term Agent any payment received by it in respect of any such Term Priority Collateral and shall promptly turn over to the Designated Term Agent any such Term Priority Collateral then held by it and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of such Term Loan Obligation.

(b)       Each Term Agent agrees that if at any time all or part of any payment with respect to any ABL Obligation secured by any ABL Priority Collateral previously received by any ABL Secured Party shall be rescinded or required to be repaid or turned over to any ABL Loan Party for any reason whatsoever, the applicable Term Agent will upon request promptly pay over to the ABL Agent any payment received by it in respect of any such ABL Priority Collateral and shall promptly turn over to the ABL Agent any such ABL Priority Collateral then held by it and the provisions set forth in this Agreement will be reinstated as if such payment had not been made, until the payment and satisfaction in full of such ABL Obligation.

Section  4.3          Specific Performance . Each of the ABL Agent and each Term Agent is hereby authorized to demand specific performance of this Agreement, whether or not any Loan Party shall have complied with any of the provisions of any of the Credit Documents, at any time when the other party shall have failed to comply with any of the provisions of this Agreement applicable to it. Each of the ABL Agent, for and on behalf of itself and the ABL Secured Parties, and each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, hereby irrevocably waives any defense based on the adequacy of a remedy at law that might be asserted as a bar to such remedy of specific performance.

ARTICLE 5

INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS

Section 5.1         Notice of Acceptance and Other Waivers .

(a)       All ABL Obligations at any time made or incurred by any ABL Borrower or ABL Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and any Term Agent, on behalf of itself and the applicable Term Secured Parties, hereby waives notice of acceptance, or proof of reliance by the ABL Agent or any ABL Secured Party of this Agreement and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the ABL Obligations. All Term Obligations at any time made or incurred by the Term Loan Borrower or any Term Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and the ABL Agent, on behalf of itself and the ABL Secured Parties, hereby waives notice of acceptance, or proof of reliance, by any Term Agent or any Term Secured Party of this Agreement and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the Term Obligations.

(b)       None of the ABL Agent, any ABL Secured Party, or any of their respective Affiliates, directors, officers, employees, or agents shall be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If the ABL Agent or any ABL Secured Party honors (or fails to honor) a request by any ABL Borrower for an extension of credit pursuant to any ABL Credit Agreement or any of the other ABL Documents, whether the ABL Agent or any ABL Secured Party have knowledge that the honoring of (or failure to honor) any

 

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such request would constitute or result in a default under the terms of any Term Loan Credit Agreement or any other Term Document or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute or result in such a default, or if the ABL Agent or any ABL Secured Party otherwise should exercise any of its contractual rights or remedies under any ABL Documents (subject to the express terms and conditions hereof), neither the ABL Agent nor any ABL Secured Party shall have any liability whatsoever to any Term Agent or any Term Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The ABL Agent and the ABL Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under any ABL Credit Agreement and any of the other ABL Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that any Term Agent or any of the Term Secured Parties have in the Collateral, except as otherwise expressly set forth in this Agreement. Each Term Agent, on behalf of itself and the Term Secured Parties, agrees that neither the ABL Agent nor any ABL Secured Party shall incur any liability as a result of a sale, lease, license, application, or other Disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so long as such Disposition does not breach the provisions of this Agreement.

(c)       None of the Term Agents, any Term Secured Party or any of their respective Affiliates, directors, officers, employees, or agents shall be liable for failure to demand, collect, or realize upon any of the Collateral or any Proceeds, or for any delay in doing so, or shall be under any obligation to sell or otherwise dispose of any Collateral or Proceeds thereof or to take any other action whatsoever with regard to the Collateral or any part or Proceeds thereof, except as specifically provided in this Agreement. If an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute or result in a default under any ABL Document, or if any Term Agent or any Term Secured Party otherwise should exercise any of its contractual rights or remedies under the Term Documents (subject to the express terms and conditions hereof), neither the Term Agents nor any Term Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Secured Party as a result of such action, omission, or exercise (so long as any such exercise does not breach the express terms and provisions of this Agreement). The Term Agents and the Term Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Term Documents as they may, in their sole discretion, deem appropriate, and may manage their loans and extensions of credit without regard to any rights or interests that the ABL Agent or any ABL Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement. The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that none of the Term Agents or the Term Secured Parties shall incur any liability as a result of a sale, lease, license, application, or other Disposition of the Collateral or any part or Proceeds thereof, pursuant to the Term Documents, so long as such Disposition does not breach the provisions of this Agreement.

Section 5.2         Modifications to ABL Documents and Term Documents .

(a)       Each Term Agent, on behalf of itself and the applicable Term Secured Parties, hereby agrees that, without affecting the obligations of such Term Agent and the applicable Term Secured Parties hereunder, the ABL Agent and the ABL Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to any Term Agent or any Term Secured Party, and without incurring any liability to any Term Agent or any Term Secured Party or impairing or modifying the Lien Priority provided for herein, Amend or Refinance any of the ABL Documents in any manner whatsoever, other than in a manner which would have the effect of contravening the terms of this Agreement.

(b)       The ABL Agent, on behalf of itself and the ABL Secured Parties, hereby agrees that, without affecting the obligations of the ABL Agent and the ABL Secured Parties hereunder, each Term

 

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Agent and the Term Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to the ABL Agent or any ABL Secured Party, and without incurring any liability to the ABL Agent or any ABL Secured Party or impairing or modifying the Lien Priority provided for herein, Amend or Refinance any of the Term Documents other than in a manner which would have the effect of contravening the terms of this Agreement.

(c)       Subject to (i) Section 5.2(a) and (b) above and (ii) the applicable requirements set forth in the defined terms “ABL Credit Agreement” and “Term Loan Credit Agreement,” the ABL Obligations and the Term Obligations may be Amended or Refinanced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is required under any ABL Document or any Term Document to permit the Amendment or Refinancing transaction) of the ABL Agent, the ABL Secured Parties, the Term Agents or the Term Secured Parties, as the case may be, all without affecting the Lien Priority provided for herein or the other provisions hereof, provided , however , such amendment or refinancing transaction shall be in accordance with any applicable provisions of both the ABL Documents and the Term Documents (to the extent such documents survive the amendment or refinancing and, unless the agent, trustee or other representative with respect to such Amended or Refinanced facility is already a party to this Agreement, such agent, trustee or other representative shall have executed and delivered an Additional Term Joinder (with such changes as may be reasonably approved by such agent, trustee or other representative and each other party hereto).

Section 5.3         Reinstatement and Continuation of Agreement .

(a)       If the ABL Agent or any ABL Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Loan Party, or any other Person any payment made in satisfaction of all or any portion of the ABL Obligations (an “ ABL Recovery ”), then the ABL Obligations shall be reinstated to the extent of such ABL Recovery. If this Agreement shall have been terminated prior to such ABL Recovery, this Agreement shall be reinstated in full force and effect in the event of such ABL Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties from such date of reinstatement. All rights, interests, agreements, and obligations of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Loan Party or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Loan Party in respect of the ABL Obligations or the Term Obligations. No priority or right of the ABL Agent or any ABL Secured Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Loan Party or by the noncompliance by any Person with the terms, provisions, or covenants of any of the ABL Documents, regardless of any knowledge thereof which the ABL Agent or any ABL Secured Party may have.

(b)       If any Term Agent or any Term Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Borrower, any Term Guarantor, or any other Person any payment made in satisfaction of all or any portion of the Term Obligations (a “ Term Recovery ”), then the Term Obligations shall be reinstated to the extent of such Term Recovery. If this Agreement shall have been terminated prior to such Term Recovery, this Agreement shall be reinstated in full force and effect in the event of such Term Recovery, and such prior termination shall not diminish, release, discharge, impair, or otherwise affect the obligations of the parties from such date of reinstatement. All rights, interests, agreements, and obligations of the ABL Agent, the Term Agents, the ABL Secured Parties, and the Term Secured Parties under this Agreement shall remain in full force and effect and shall continue irrespective of the commencement of, or any discharge, confirmation, conversion, or dismissal of, any Insolvency Proceeding by or against any Borrower or any Term Guarantor or any other circumstance

 

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which otherwise might constitute a defense available to, or a discharge of any Borrower or any Term Guarantor in respect of the ABL Obligations or the Term Obligations. No priority or right of any Term Agent or any Term Secured Party shall at any time be prejudiced or impaired in any way by any act or failure to act on the part of any Borrower or any Term Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of any of the Term Documents, regardless of any knowledge thereof which any Term Agent or any Term Secured Party may have.

Section 5.4         Purchase Right .

(a)        Notice of Exercise .

(i)        On or after the occurrence and during the continuance of (A) the acceleration of all of the ABL Debt, (B) the commencement of an Insolvency Proceeding as to any ABL Loan Party or (C) the termination of any ABL Standstill Period (unless the ABL Agent or any ABL Secured Party shall have commenced and be diligently pursuing the exercise of their rights or remedies with respect to substantially all or any material portion of the ABL Priority Collateral) (the events listed in subparts (A) through (C) hereof, each being a “ Term Purchase Option Trigger Event ”), all or a portion of the Term Secured Parties, acting as a single group (the “ Purchasing Term Secured Parties ”), shall have the option, which must be exercised within thirty (30) days of the occurrence of a Term Purchase Option Trigger Event by delivery of notice to the ABL Agent and the Company, to purchase all of the ABL Obligations from the ABL Secured Parties. Such notice from such Term Secured Parties to the ABL Agent shall be irrevocable.

(ii)        On or after the occurrence and during the continuance of (A) the acceleration of all of the First Lien Term Debt and/or Second Lien Term Debt, (B) the commencement of an Insolvency Proceeding as to any Term Loan Party or (C) the termination of any Term Standstill Period (unless a Term Agent or any Term Secured Party shall have commenced and be diligently pursuing the exercise of their rights or remedies with respect to substantially all or any material portion of the Term Priority Collateral) (the events listed in subparts (A) through (C) hereof, each being an “ ABL Purchase Option Trigger Event ”), all or a portion of the ABL Secured Parties, acting as a single group (the “ Purchasing ABL Secured Parties ”), shall have the option, which must be exercised within thirty (30) days of the occurrence of an ABL Purchase Option Trigger Event by delivery of notice to the applicable Term Agent(s) and the Company, to purchase all of the First Lien Term Obligations or Second Lien Term Obligations , as applicable, from the applicable Term Secured Parties. Such notice from such ABL Secured Parties to Designated Term Agent shall be irrevocable.

(b)        Purchase and Sale .

(i)        On the date specified by the Purchasing Term Secured Parties in the notice contemplated by Section 5.4(a)(i) above (which shall not be less than five (5) Business Days, nor more than ten (10) Business Days, after the receipt by the ABL Agent of the notice of the relevant Term Secured Parties’ election to exercise such option), the ABL Secured Parties shall sell (which obligation shall be several and not joint) to the Purchasing Term Secured Parties, and the relevant Term Secured Parties shall purchase from the ABL Secured Parties, the ABL Obligations, provided that, the ABL Agent and the ABL Secured Parties shall retain all rights to be indemnified or held harmless by the Loan Parties in accordance with the terms of the ABL Documents but shall not retain any rights to the security therefor.

(ii)        On the date specified by the Purchasing ABL Secured Parties in the notice contemplated by Section 5.4(a)(ii) above (which shall not be less than five (5) Business Days, nor more than ten (10) Business Days, after the receipt by the applicable Term Agent(s) of the notice of the relevant ABL Secured Party’s election to exercise such option), the Term Secured Parties shall sell (which obligation

 

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shall be several and not joint) to the relevant ABL Secured Parties, and the relevant ABL Secured Parties shall purchase from the Term Secured Parties, the Term Obligations, provided that, the Term Agents and the Term Secured Parties shall retain all rights to be indemnified or held harmless by the Loan Parties in accordance with the terms of the Term Documents but shall not retain any rights to the security therefor.

(c)        [Reserved.]

(d)        Payment of Purchase Price . Upon the date of such purchase and sale, the relevant Term Secured Parties or the relevant ABL Secured Parties, as applicable, shall (i) pay to the ABL Agent for the benefit of the ABL Secured Parties (with respect to a purchase of the ABL Obligations) or to the applicable Term Agent(s) for the benefit of the applicable Term Secured Parties (with respect to a purchase of the Term Obligations) as the purchase price therefor the full amount of all the ABL Obligations or Term Obligations, as applicable, then outstanding and unpaid (including principal, interest, fees and expenses, including reasonable attorneys’ fees and legal expenses but specifically excluding any prepayment premium, termination or similar fees), (ii) with respect to a purchase of the ABL Obligations, furnish cash collateral to the ABL Agent in a manner and in such amounts as the ABL Agent determines is reasonably necessary to secure the ABL Agent and the ABL Secured Parties with respect to issued and outstanding letters of credit and Secured Bank Product Obligations, (iii) with respect to a purchase of the ABL Obligations, agree to reimburse the ABL Agent, the ABL Secured Parties for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit as described above and any checks or other payments provisionally credited to the ABL Obligations, and/or as to which the ABL Agent has not yet received final payment, (iv) agree to reimburse the ABL Secured Parties or the Term Secured Parties, as applicable, in respect of indemnification obligations of the Loan Parties under the ABL Documents or the Term Documents, as applicable, as to matters or circumstances known to the ABL Agent or the applicable Term Agent(s), as applicable, at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the ABL Secured Parties, the Term Secured Parties or letter of credit issuing banks, as applicable, and (v) agree to indemnify and hold harmless the ABL Secured Parties or the Term Secured Parties, as applicable, from and against any loss, liability, claim, damage or expense (including reasonable fees and expenses of legal counsel) arising out of any claim asserted by a third party in respect of the ABL Obligations or the Term Obligations, as applicable, as a direct result of any acts by any Purchasing Term Secured Party or any Purchasing ABL Secured Party, as applicable, occurring after the date of such purchase. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account in New York, New York as the ABL Agent or the applicable Term Agent(s), as applicable, may designate in writing for such purpose.

(e)        Limitation on Representations and Warranties . Such purchase shall be expressly made without representation or warranty of any kind by any selling party (or the applicable representative or the Term Agent) and without recourse of any kind, except that the selling party shall represent and warrant: (i) the amount of the ABL Obligations or Term Obligations, as applicable, being purchased from it, (ii) that such ABL Secured Party or Term Secured Party, as applicable, owns the ABL Obligations or Term Obligations, as applicable, free and clear of any Liens or encumbrances and (iii) that such ABL Secured Party or Term Secured Party, as applicable, has the right to assign such ABL Obligations or Term Obligations, as applicable, and the assignment is duly authorized.

ARTICLE 6

INSOLVENCY PROCEEDINGS

Section 6.1         DIP Financing .

 

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(a)       If any Loan Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of ABL Obligations, and the ABL Agent or any of the ABL Secured Parties shall seek to provide any Loan Party with, or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code or consent to any order for the use of cash collateral constituting ABL Priority Collateral under Section 363 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws or under a court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws, (which may include a “roll-up” or “roll-over” of all or any of the ABL Obligations), whether provided by any ABL Secured Party or any other Person (each, including any such order for the use of cash collateral, an “ ABL DIP Financing ”), with such ABL DIP Financing to be secured by all or any portion of the Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code would be ABL Priority Collateral), then each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees that (i) it will raise no objection and will not support any objection to such ABL DIP Financing or use of cash collateral or to the Liens securing the same on any basis, including, without limitation, on the grounds of a failure to provide “adequate protection” for the Liens of such Term Agent securing the Term Obligations (and will not request any adequate protection solely as a result of such ABL DIP Financing or use of cash collateral that is ABL Priority Collateral, and will not offer or support any debtor-in-possession financing which would compete with such ABL DIP Financing), and (ii) it will subordinate (and will be deemed hereunder to have subordinated) the Liens of such applicable Term Agent or any other Term Secured Parties on the ABL Priority Collateral (but not the Term Priority Collateral) to (1) the Liens on the ABL Priority Collateral pursuant to such ABL DIP Financing (to the extent the Liens securing the ABL DIP Financing are pari passu or senior in priority to the ABL Obligations), (2) any adequate protection provided to the ABL Secured Parties and (3) any reasonable administrative claim, professional fee and U.S. trustee or clerk of the court fee “carve-outs”, in each case, consented to in writing by the ABL Agent to be paid prior to the Discharge of ABL Obligations, in each case, on the same terms as the Liens of the Term Secured Parties are subordinated to the Liens granted with respect to such ABL DIP Financing (and such subordination will not alter in any manner the terms of this Agreement); provided that (A) each Term Agent retains its Lien on the ABL Priority Collateral to secure the Term Obligations (in each case, including Proceeds thereof arising after the commencement of the case under any Debtor Relief Laws), (B) unless it shall otherwise consent, each Term Agent shall retain its Lien on the Term Priority Collateral with the same priority as existed prior to the commencement of the case under the subject Debtor Relief Laws and any Lien of the ABL Agent (or other provider of ABL DIP Financing) on the Term Priority Collateral securing such ABL DIP Financing shall be junior and subordinate to the Lien of each Term Agent on the Term Priority Collateral, (C) all Liens on ABL Priority Collateral securing any such ABL DIP Financing, shall be senior to or on a parity with the Liens of the ABL Agent and the ABL Secured Parties securing the ABL Obligations on ABL Priority Collateral and (D) the foregoing provisions of this Section 6.1(a) shall not prevent any Term Agent or the other Term Secured Parties from objecting to any provision in any ABL DIP Financing (x) relating to any provision or content of a plan of reorganization or other plan of similar effect under any Debtor Relief Laws or (y) that provides for the use of any Term Priority Collateral or Proceeds thereof other than for the payment of the Term Obligations.

(b)       If any Loan Party shall be subject to any Insolvency Proceeding at any time prior to the Discharge of Term Obligations, and any Term Agent or any of the Term Secured Parties shall seek to provide any Loan Party with, or consent to a third party providing, any financing under Section 364 of the Bankruptcy Code or consent to any order for the use of cash collateral constituting Term Priority Collateral under Section 363 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws or under a court order in respect of measures granted with similar effect under any foreign Debtor Relief Laws, (which may include a “roll-up” or “roll-over” of all or any of the Term Obligations), whether provided by any Term Secured Party or any other Person (each, including any such order for the use of cash collateral, a “ Term DIP Financing ”), with such Term DIP Financing to be secured by all or any portion of the Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code would

 

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be Term Priority Collateral), then the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that (i) it will raise no objection and will not support any objection to such Term DIP Financing or use of cash collateral or to the Liens securing the same on any basis, including, without limitation, on the grounds of a failure to provide “adequate protection” for the Liens of the ABL Agent securing the ABL Obligations (and will not request any adequate protection solely as a result of such Term DIP Financing or use of cash collateral that is Term Priority Collateral, and will not offer or support any debtor-in-possession financing which would compete with such Term DIP Financing), and (ii) it will subordinate (and will be deemed hereunder to have subordinated) the Liens of the ABL Agent or any other ABL Secured Parties on the Term Priority Collateral (but not the ABL Priority Collateral) to (1) the Liens on the Term Priority Collateral pursuant to such Term DIP Financing (to the extent the Liens securing the Term DIP Financing are pari passu or senior in priority to the Term Obligations), (2) any adequate protection provided to the Term Secured Parties and (3) any reasonable administrative claim, professional fee and U.S. trustee or clerk of the court fee “carve-outs”, in each case, consented to in writing by any Term Agent to be paid prior to the Discharge of Term Obligations, in each case, on the same terms as the Liens of the ABL Secured Parties are subordinated to the Liens granted with respect to such Term DIP Financing (and such subordination will not alter in any manner the terms of this Agreement); provided that (A) the ABL Agent retains its Lien on the Term Priority Collateral to secure the ABL Obligations (in each case, including Proceeds thereof arising after the commencement of the case under any Debtor Relief Laws), (B) unless it shall otherwise consent, the ABL Agent shall retain its Lien on the ABL Priority Collateral with the same priority as existed prior to the commencement of the case under the subject Debtor Relief Laws and any Lien of any Term Agent (or other provider of Term DIP Financing) on the ABL Priority Collateral securing such Term DIP Financing shall be junior and subordinate to the Lien of the ABL Agent on the ABL Priority Collateral, (C) all Liens on Term Priority Collateral securing any such Term DIP Financing, shall be senior to or on a parity with the Liens of each Term Agent and the Term Secured Parties securing the Term Obligations on Term Priority Collateral and (D) the foregoing provisions of this Section 6.1(b) shall not prevent the ABL Agent or the other ABL Secured Parties from objecting to any provision in any Term DIP Financing (x) relating to any provision or content of a plan of reorganization or other plan of similar effect under any Debtor Relief Laws or (y) that provides for the use of any ABL Priority Collateral or Proceeds thereof other than for the payment of the ABL Obligations.

(c)       All Liens granted to the ABL Agent or any Term Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended by the parties to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this Agreement. For clarity, none of the Term Agents or the Term Secured Parties shall seek to “prime” the Lien of the ABL Agent and the ABL Secured Parties on the ABL Priority Collateral or request, seek or receive a Lien on the ABL Priority Collateral pursuant to Section 364(d) or 363(c)(4) of the Bankruptcy Code on the ABL Priority Collateral. For clarity, the ABL Agent and the ABL Secured Parties shall not seek to “prime” the Liens of the Term Agents or the Term Secured Parties on the Term Priority Collateral or request, seek or receive a Lien on the Term Priority Collateral pursuant to Section 364(d) or 363(c)(4) of the Bankruptcy Code on the Term Priority Collateral.

(d)       No ABL Secured Party shall, directly or indirectly, provide, or seek to provide, or support any other Person providing or seeking to provide, any ABL DIP Financing secured by Liens on the Term Priority Collateral equal or senior in priority to the Liens on the Term Priority Collateral (including any assets or property arising after the commencement of a case under the Bankruptcy Code) of any Term Agent, without the prior written consent of such Term Agent. No Term Secured Party shall, directly or indirectly, provide, or seek to provide, or support any other Person providing or seeking to provide, any Term DIP Financing secured by Liens on the ABL Priority Collateral equal or senior in priority to the Liens on the ABL Priority Collateral (including any assets or property arising after the commencement of a case under the Bankruptcy Code) of the ABL Agent, without the prior written consent of the ABL Agent. For

 

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purposes hereof, all references to Collateral shall include any assets or property of Loan Parties arising after the commencement of any Insolvency Proceeding that are subject to the Liens of Agents.

Section  6.2          Relief From Stay . Until the Discharge of ABL Obligations has occurred, each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the ABL Priority Collateral without the ABL Agent’s express written consent. Until the Discharge of Term Obligations has occurred, the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees not to seek relief from the automatic stay or any other stay in any Insolvency Proceeding in respect of any portion of the Term Priority Collateral without each Term Agent’s express written consent. In addition, none of the Term Agents nor the ABL Agent shall seek any relief from the automatic stay with respect to any Collateral without providing three (3) days’ prior written notice to the other, unless such period is agreed by both the ABL Agent and each Term Agent to be modified or unless the ABL Agent or any Term Agent, as applicable, makes a good faith determination that either (A) the ABL Priority Collateral or the Term Priority Collateral, as applicable, will decline speedily in value or (B) the failure to take any action will have a reasonable likelihood of endangering the ABL Agent’s or any Term Agent’s ability to realize upon its Collateral.

Section 6.3         No Contest; Adequate Protection .

(a)       Each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees that, prior to the Discharge of ABL Obligations, none of them shall contest (or support any other Person contesting) (i) any request by the ABL Agent or any ABL Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(b) or Section 6.3(b) or if the adequate protection sought is in the form of a cash payment, periodic cash payments or otherwise, in each case to the extent such payments are made from the Proceeds of the Term Priority Collateral), (ii) subject to Section 6.1(a) above, any proposed provision of ABL DIP Financing, including any consensual use of cash collateral constituting ABL Priority Collateral, by the ABL Agent and the ABL Secured Parties (or any other Person proposing to provide ABL DIP Financing with the consent of the ABL Agent), (iii) any objection by the ABL Agent or any ABL Secured Party to any motion, relief, action, or proceeding based on a claim by the ABL Agent or any ABL Secured Party that its interests in the Collateral are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to the ABL Agent as adequate protection of its interests are subject to this Agreement (unless in contravention of Section 6.1(b) or Section 6.3(b)), or (iv) any request by the ABL Agent or any ABL Secured Party for payment of interest (including post-petition interest), fees, expenses or other amounts to any ABL Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or other applicable law (unless in contravention of Section 6.1(b) or Section 6.3(b) or to the extent such payments are to be made from the Proceeds of the Term Priority Collateral or from the proceeds of Term DIP Financing).

(b)       The ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that, prior to the Discharge of Term Obligations, none of them shall contest (or support any other Person contesting) (i) any request by any Term Agent or any Term Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(a) or 6.3(a) or if the adequate protection sought is in the form of a cash payment, periodic cash payments or otherwise, in each case to the extent such payments are made from the Proceeds of the ABL Priority Collateral), (ii) subject to Section 6.1(b) above, any proposed provision of Term DIP Financing, including any consensual use of cash collateral constituting Term Priority Collateral, by any Term Agent and the applicable Term Secured Parties (or any other Person proposing to provide Term DIP Financing with the consent of any Term Agent), (iii) any objection by any Term Agent or any Term Secured Party to any motion, relief, action or proceeding based on a claim by any Term Agent

 

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or any Term Secured Party that its interests in the Collateral are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to any Term Agent as adequate protection of its interests are subject to this Agreement (unless in contravention of Section 6.1(a) or Section 6.3(a)), or (iv) any request by any Term Agent or any Term Secured Party for payment of interest (including post-petition interest), fees, expenses or other amounts to any Term Secured Party under Section 506(b) or 506(c) of the Bankruptcy Code or other applicable law (unless in contravention of Section 6.1(a) or Section 6.3(a) or to the extent such payments are to be made from the Proceeds of the ABL Priority Collateral or from the proceeds of ABL DIP Financing).

(c)       Notwithstanding the foregoing provisions in this Section 6.3, in any Insolvency Proceeding:

(i)        if the ABL Secured Parties (or any subset thereof) are granted adequate protection with respect to the ABL Priority Collateral in the form of additional or replacement collateral (even if such collateral is not of a type which would otherwise have constituted ABL Priority Collateral) and/or a superpriority claim, then the ABL Agent, on behalf of itself and the ABL Secured Parties, agrees that each Term Agent, on behalf of itself or any of the applicable Term Secured Parties, may seek or request (and the ABL Secured Parties will not oppose such request), as applicable, adequate protection with respect to its interests in such Collateral in the form of a Lien on the same additional or replacement collateral, which Lien will be subordinated to the Liens securing the ABL Obligations on the same basis as the other Liens of each Term Agent on ABL Priority Collateral or a superpriority claim junior in all respects to such superpriority claim granted to the ABL Secured Parties; and

(ii)        if any Term Secured Parties (or any subset thereof), are granted adequate protection in respect of Term Priority Collateral in the form of additional or replacement collateral (even if such collateral is not of a type which would otherwise have constituted Term Priority Collateral) and/or a superpriority claim, then each Term Agent, on behalf of itself and the applicable Term Secured Parties, agrees that the ABL Agent on behalf of itself or any of the ABL Secured Parties, may seek or request (and the Term Secured Parties will not oppose such request), as applicable, adequate protection with respect to its interests in such Collateral in the form of a Lien on the same additional or replacement collateral, which Lien will be subordinated to the Liens securing the Term Obligations on the same basis as the other Liens of the ABL Agent on Term Priority Collateral or a superpriority claim junior in all respects to such superpriority claim granted to the Term Secured Parties

(d)       The Term Loan Parties shall not be entitled to, and shall not seek, adequate protection in the form of cash payment to the extent such payment is sought to be paid from an ABL DIP Financing or the ABL Priority Collateral or the Proceeds (or advances) in respect thereof. The ABL Secured Parties shall not be entitled to, and shall not seek, adequate protection in the form of cash payment to the extent such payment is sought to be paid from a Term Loan DIP Financing or the Term Priority Collateral or the Proceeds (or advances) in respect thereof.

Section 6.4         Asset Sales .

(a)       Until the Discharge of ABL Obligations has occurred, each Term Agent, for itself and on behalf of the other Term Secured Parties agrees that in the event of any Insolvency Proceeding, the Term Secured Parties will not object or oppose (or support any Person in objecting or opposing), and will be deemed to have consented to pursuant to Section 363(f) of the Bankruptcy Code or any other applicable law, (i) a motion to sell or otherwise Dispose of any ABL Priority Collateral under Sections 363, 365 or 1129 of the Bankruptcy Code or any similar provisions under any other applicable Debtor Relief Laws, free and clear of any Liens or other claims, (ii) a motion establishing notice, sale or bidding procedures for such

 

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Disposition (including any break-up fee or other bidder protections) or (iii) a motion to permit a credit bid on all or any portion of the claims of the ABL Secured Parties against ABL Priority Collateral under Section 363(k) of the Bankruptcy Code, in each case, if the ABL Agent has consented to such sale or other Disposition of such ABL Priority Collateral; provided, that, (A) the terms of any proposed order approving such transaction provide for the parties’ respective Liens to attach to the proceeds of the ABL Priority Collateral that is the subject of such sale or Disposition, subject to the Lien Priorities in Section  2.1 and the other terms and conditions of this Agreement; (B) such proceeds are applied among the ABL Obligations or the Term Obligations in accordance with Section  4.1 ; and (C) such motion to sell or otherwise Dispose of any ABL Priority Collateral does not impair the rights of the Term Secured Parties under Section 363(k) of the Bankruptcy Code (except that (1) the Term Secured Parties will be permitted to “credit bid” their claims against ABL Priority Collateral (including under Section 363, 365 or 1129 of the Bankruptcy Code, or any comparable provision of other applicable Debtor Relief Laws) in such sale only if the cash proceeds of such bid result in Discharge of ABL Obligations on the closing date of such sale, including all principal of and accrued and unpaid interest and fees on and all prepayment or acceleration penalties and premiums in respect of all ABL Obligations outstanding at the time of any Disposition, and (2) the Term Secured Parties will be permitted to “credit bid” their claims against Term Priority Collateral (including under Section 363, 365 or 1129 of the Bankruptcy Code, or any comparable provision of other applicable Debtor Relief Laws) in such sale and in accordance with the terms of the Term Documents and the Term Lender Intercreditor Agreement. Each Term Agent for itself and the applicable Term Secured Parties further agree that they will not object to or oppose, or support any party in opposing, the right of the ABL Secured Parties to credit bid under Section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Debtor Relief Laws) with respect to the ABL Priority Collateral, subject to the provision of the immediately preceding sentence; provided, that, the Term Secured Parties shall not be deemed to have agreed to any credit bid in connection with a single sale or other Disposition of both Term Priority Collateral and ABL Priority Collateral unless such credit bid would result in the Discharge of Term Obligations on the closing date of such sale.

(b)       Until the Discharge of all Term Obligations has occurred, the ABL Agent, for itself and on behalf of the other ABL Secured Parties agrees that in the event of any Insolvency Proceeding, the ABL Secured Parties will not object or oppose (or support any Person in objecting or opposing), and will be deemed to have consented to pursuant to Section 363(f) of the Bankruptcy Code or any other applicable law, (i) a motion to sell or otherwise Dispose of any Term Priority Collateral under Sections 363, 365 or 1129 of the Bankruptcy Code or any similar provisions under any other applicable Debtor Relief Laws, free and clear of any Liens or other claims, (ii) a motion establishing notice, sale or bidding procedures for such Disposition (including any break-up fee or other bidder protections) or (iii) a motion to permit a credit bid all or any portion of the claims of the Term Secured Parties against Term Priority Collateral under Section 363(k) of the Bankruptcy Code, in each case, if Term Agents have consented to such sale or Disposition of such Term Priority Collateral; provided, that, (A) the terms of any proposed order approving such transaction provide for the parties’ respective Liens to attach to the proceeds of the Term Priority Collateral that is the subject of such sale or Disposition, subject to the Lien Priorities in Section  2.1 and the other terms and conditions of this Agreement, (B) such proceeds are applied among the ABL Obligations and the Term Obligations in accordance with Section  4.1 ; and (C) such motion to sell or otherwise Dispose of any Term Priority Collateral does not impair the rights of the ABL Secured Parties under Section 363(k) of the Bankruptcy Code (except that (1) the ABL Secured Parties will be permitted to “credit bid” their claims against Term Priority Collateral (including under Section 363, 365 or 1129 of the Bankruptcy Code, or any comparable provision of other applicable Debtor Relief Laws) in such sale only if such bid results in a Discharge of Term Obligations in cash on the closing date of such sale, including all principal of and accrued and unpaid interest and fees on and all prepayment or acceleration penalties and premiums in respect of all Term Obligations outstanding at the time of any Disposition, and (2) the ABL Secured Parties will be permitted to “credit bid” their claims against ABL Priority Collateral (including under Section 363,

 

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365 or 1129 of the Bankruptcy Code, or any comparable provision of other applicable Debtor Relief Laws) in such sale and in accordance with the terms of the ABL Documents. The ABL Agent for itself and the other ABL Secured Parties further agree that it will not object to or oppose, or support any party in opposing, the right of the Term Secured Parties to credit bid under Section 363(k) of the Bankruptcy Code (or any similar provision under any other applicable Debtor Relief Laws) with respect to the Term Priority Collateral, subject to the provision of the immediately preceding sentence; provided, that, the ABL Secured Parties shall not be deemed to have agreed to any credit bid in connection with a single sale or other Disposition of both ABL Priority Collateral and Term Priority Collateral unless such credit bid would result in the Discharge of ABL Obligations on the closing date of such sale.

Section  6.5          Separate Grants of Security and Separate Classification . Each Term Secured Party and each ABL Secured Party acknowledges and agrees that (i) the grants of Liens pursuant to the ABL Collateral Documents and the Term Collateral Documents constitute at least two separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Term Obligations are fundamentally different from the ABL Obligations and must be separately classified in any plan of reorganization (or other plan of similar effect under any Debtor Relief Laws) proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the ABL Secured Parties and the Term Secured Parties in respect of the Collateral constitute only one secured claim (rather than separate classes of senior and junior secured claims), then the ABL Secured Parties and the Term Secured Parties hereby acknowledge and agree that all distributions from the Collateral shall be made as if there were separate classes of ABL Obligation claims and Term Obligation claims against the Loan Parties, with the effect being that, to the extent that the aggregate value of the ABL Priority Collateral or Term Priority Collateral is sufficient (for this purpose ignoring all claims held by the other Secured Parties), the ABL Secured Parties or the Term Secured Parties, respectively, shall be entitled to receive, in addition to amounts distributed to them in respect of principal, pre-petition interest and other claims, all amounts owing in respect of post-petition interest, fees and expenses that is available from each pool of Priority Collateral for each of the ABL Secured Parties and the Term Secured Parties, respectively, (whether or not allowed or allowable in any such Insolvency Proceeding) before any distribution is made in respect of the claims held by the other Secured Parties from such Priority Collateral, with the other Secured Parties hereby acknowledging and agreeing to turn over to the respective other Secured Parties amounts otherwise received or receivable by them from such Priority Collateral to the extent necessary to effectuate the intent of this sentence, even if such turnover has the effect of reducing the aggregate recoveries of the Secured Parties turning over such amounts.

Section  6.6          Reorganization Securities . If, in any Insolvency Proceeding, debt obligations of the reorganized debtor secured by Liens on any property of the reorganized debtor are distributed pursuant to a plan of reorganization or a similar dispositive restructuring plan, both on account of the ABL Obligations and on account of the Term Obligations, then to the extent that the debt obligations distributed on account of the ABL Obligations and on account of the Term Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

Section 6.7         [Reserved] .

Section  6.8          ABL Obligations Unconditional . All rights of the ABL Agent hereunder, and all agreements and obligations of each Term Agent hereunder, shall, except as otherwise specifically provided herein, remain in full force and effect irrespective of:

(i)        any lack of validity or enforceability of any ABL Document;

 

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(ii)        any change in the time, place or manner of payment of, or in any other term of, all or any portion of the ABL Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any ABL Document (but solely to the extent permitted pursuant to Section 5.2(a) hereof);

(iii)        any exchange, release, voiding, avoidance or nonperfection of any security interest in any Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the ABL Obligations or any guarantee or guaranty thereof; or

(iv)        any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the ABL Obligations, or of any Term Agent or any Loan Party, to the extent applicable, in respect of this Agreement.

Section  6.9          Term Obligations Unconditional . All rights of each Term Agent hereunder, all agreements and obligations of the ABL Agent hereunder, shall, except as otherwise specifically provided herein, remain in full force and effect irrespective of:

(i)        any lack of validity or enforceability of any Term Document;

(ii)        any change in the time, place or manner of payment of, or in any other term of, all or any portion of the Term Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Term Document (but solely to the extent permitted pursuant to Section 5.2(b) hereof);

(iii)        any exchange, release, voiding, avoidance or nonperfection of any security interest in any Collateral, or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the Term Obligations or any guarantee or guaranty thereof; or

(iv)        any other circumstances that otherwise might constitute a defense available to, or a discharge of, any Loan Party in respect of the Term Obligations, or of the ABL Agent or any Loan Party, to the extent applicable, in respect of this Agreement.

Section  6.10          Claims . Each Agent, for itself and on behalf of the respective applicable Secured Parties, agrees not to object to (or support any other Person objecting) and hereby waives any objection to any election under Section 1111(b)(2) of the Bankruptcy Code by any ABL Secured Party (to any claims of such ABL Secured Party in respect of the ABL Priority Collateral) or Term Secured Party (to any claims of such Term Secured Party in respect of the Term Priority Collateral), as applicable, in or from such Insolvency or Liquidation Proceeding.

Section  6.11          Bankruptcy – Plan Support . Without the consent of the ABL Secured Parties prior to the Discharge of ABL Obligations, the Term Secured Parties will not propose, support or vote, directly or indirectly (including by any restructuring plan support agreement) for any Plan that is inconsistent with this Agreement. Without the consent of the Term Secured Parties prior to the Discharge of Term Obligations, the ABL Secured Parties will not propose, support or vote, directly or indirectly (including by any restructuring plan support agreement) for any Plan that is inconsistent with this Agreement.

Section  6.12      Applicability . This Agreement shall be applicable both before and after the institution of any Insolvency Proceeding involving any Borrower or any other Loan Party, including,

 

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without limitation, the filing of any petition by or against any Borrower or any other Loan Party under any Debtor Relief Laws and all converted or subsequent cases in respect thereof, and all references herein to any Loan Party shall be deemed to apply to the trustee for such Loan Party and such Loan Party as debtor-in- possession. The relative rights of the ABL Secured Parties and the Term Secured Parties in or to any distributions from or in respect of any Collateral or Proceeds shall continue after the institution of any Insolvency Proceeding involving any Borrower or any other Loan Party, including, without limitation, the filing of any petition by or against any Borrower or any other Loan Party under any Debtor Relief Laws and all converted cases and subsequent cases, on the same basis as prior to the date of such institution, subject to any court order approving the financing of, or use of cash collateral by any Borrower or other Loan Party as debtor-in-possession, or any other court order affecting the rights and interests of the parties hereto not inconsistent with this Agreement. This Agreement shall constitute a subordination agreement for the purposes of Section 510(a) of the Bankruptcy Code and shall be enforceable in any Insolvency Proceeding in accordance with its terms.

Section  6.13          Other Bankruptcy Laws . In the event that an Insolvency Proceeding is filed in a jurisdiction other than the United States or is governed by any Debtor Relief Laws other than the Bankruptcy Code, each reference in this Agreement to a section of the Bankruptcy Code shall be deemed to refer to the substantially similar or corresponding provision of the Debtor Relief Laws applicable to such Insolvency Proceeding, or, in the absence of any specific similar or corresponding provision of such Debtor Relief Laws, such other general Debtor Relief Law as may be applied in order to achieve substantially the same result as would be achieved under each applicable section of the Bankruptcy Code.

ARTICLE 7

MISCELLANEOUS

Section  7.1          Rights of Subrogation . Each Term Agent, for and on behalf of itself and the applicable Term Secured Parties, agrees that no payment to the ABL Agent or any ABL Secured Party pursuant to the provisions of this Agreement shall entitle any Term Agent or any Term Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations. Thereafter, the ABL Agent agrees to execute such documents, agreements, and instruments as any Term Agent or any Term Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the ABL Obligations resulting from payments to the ABL Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the ABL Agent are paid by such Person upon request for payment thereof. The ABL Agent, for and on behalf of itself and the ABL Secured Parties, agrees that no payment to any Term Agent or any Term Secured Party pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of Term Obligations. Thereafter, each Term Agent agrees to execute such documents, agreements, and instruments as the ABL Agent or any ABL Secured Party may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Term Obligations resulting from payments to any Term Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Term Agent are paid by such Person upon request for payment thereof.

Section  7.2          Further Assurances . The parties will, at their own expense and at any time and from time to time, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that either party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable the ABL Agent or any Term Agent to exercise and enforce their rights and remedies hereunder; provided , however , that no party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any

 

41

other action referred to in this Section 7.2, to the extent that such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 7.2.

Section  7.3          Representations . Each Term Agent represents and warrants to the ABL Agent that it has the requisite power and authority under the applicable Term Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the applicable Term Secured Parties and that this Agreement shall be binding obligations of such Term Agent and the applicable Term Secured Parties, enforceable against each Term Agent and the applicable Term Secured Parties in accordance with its terms. The ABL Agent represents and warrants to each Term Agent that it has the requisite power and authority under the ABL Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the ABL Secured Parties and that this Agreement shall be binding obligations of the ABL Agent and the ABL Secured Parties, enforceable against the ABL Agent and the ABL Secured Parties in accordance with its terms.

Section  7.4          Amendments . No amendment or waiver of any provision of this Agreement nor consent to any departure by any party hereto shall be effective unless it is in a written agreement executed by each Term Agent and the ABL Agent and, in the case of any amendment adversely affecting the rights or obligations of any Loan Party, the applicable Loan Party, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. It is understood that the ABL Agent and each Term Agent, without the consent of any other ABL Secured Party or Term Secured Party, may in their discretion determine that a supplemental agreement (which may take the form of an amendment and restatement of this Agreement) is necessary or appropriate to facilitate having additional Indebtedness or other obligations of any of the Loan Parties become ABL Obligations or Term Obligations, as the case may be, under this Agreement, which supplemental agreement shall specify whether such additional Indebtedness constitutes ABL Obligations or Term Obligations; provided that such additional Indebtedness is permitted to be incurred under any ABL Credit Agreement and any Term Loan Credit Agreement then extant in accordance with the terms thereof and the Company shall have delivered an officer’s certificate to the ABL Agent and each Term Agent certifying to such and the holders of such additional Indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to such documents as shall be reasonably requested by, and in a form reasonably acceptable to, the ABL Agent and each Term Agent.

Section  7.5          Addresses for Notices . Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, or sent by overnight express courier service or United States mail and shall be deemed to have been given when delivered in person or by courier service, upon receipt of a telecopy or three (3) days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) shall be as set forth below or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

 

ABL Agent:

  

Bank of America, N.A.

  

Business Capital

  

2600 West Big Beaver Road

  

Troy, Michigan 48084

  

Attn: Kindra Mullarky

Telecopy: 248-631-0515

 

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With a copy to:

  

McGuireWoods LLP

  

77 West Wacker Drive, Suite 4100

  

Chicago, Illinois 60601

  

Attention: Philip J. Perzek

  

Email: pperzek@mcguirewoods.com

First Lien

  

Term Agent:

  

JPMorgan Chase Bank, N.A.

  

10 South Dearborn, Floor 7

  

Chicago, Illinois 60603

  

Attention: Joyce King

  

Telecopy: 888-292-9533

  

With a copy to:

  

                                 

  

                           

  

                             

  

Attention:                     

  

Email:                     

Second Lien

  

Term Agent:

  

Cortland Capital Market Services LLC

  

225 W. Washington St., 9th Floor

  

Chicago, Illinois 60606

  

Attention: Legal Department and Frances Real

  

Email: legal@cortlandglobal.com and CPCAgency@cortlandglobal.com

  

Telecopy: (312) 376-0751

  

With a copy to (which shall not constitute notice):

  

Holland & Knight LLP

  

131 South Dearborn Street, 30th Floor

  

Chicago, IL 60603

  

Attention: Joshua M. Spencer

  

Email: Joshua.Spencer@hklaw.com

Section  7.6          No Waiver; Remedies . No failure on the part of any Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Section  7.7          Continuing Agreement, Transfer of Secured Obligations . This Agreement is a continuing agreement and shall (a) remain in full force and effect until the earlier of the Discharge of ABL Obligations or the Discharge of Term Obligations, (b) be binding upon the parties and their successors and

 

43

assigns, and (c) inure to the benefit of and be enforceable by the parties and their respective successors, transferees and assigns. Nothing herein is intended, or shall be construed to give, any other Person any right, remedy or claim under, to or in respect of this Agreement or any Collateral. All references to any Loan Party shall include any Loan Party as debtor-in-possession and any receiver or trustee for such Loan Party in any Insolvency Proceeding. Without limiting the generality of the foregoing clause (c), the ABL Agent or any Term Agent may resign as ABL Agent or Term Agent, as applicable, and any ABL Secured Party or any Term Secured Party may assign or otherwise transfer all or any portion of the ABL Obligations or the Term Obligations, as applicable, to any other Person (other than any Loan Party or any Subsidiary or Affiliate of any Loan Party), and such successor ABL Agent or successor Term Agent, or other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to the ABL Agent, any Term Agent, any ABL Secured Party, or any Term Secured Party, as the case may be, herein or otherwise. The ABL Secured Parties and the Term Secured Parties may continue, at any time and without notice to the other parties hereto, to extend credit and other financial accommodations, lend monies and provide Indebtedness to, or for the benefit of, any Loan Party on the faith hereof.

Section  7.8          Governing Law; Entire Agreement . The validity, performance, and enforcement of this Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to conflicts of laws principles thereof but including Section 5-1401 and 5-1402 of the New York General Obligations Law. This Agreement constitutes the entire agreement and understanding among the parties with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.

Section  7.9          Counterparts . This Agreement may be executed in any number of counterparts, and it is not necessary that the signatures of all parties be contained on any one counterpart hereof, each counterpart will be deemed to be an original, and all together shall constitute one and the same document. Delivery of an executed signature page to this Agreement by facsimile or other electronic transmission (in .pdf or similar format) shall be as effective as delivery of a manually signed counterpart of this Agreement.

Section  7.10          No Third Party Beneficiaries . This Agreement is solely for the benefit of the ABL Agent, ABL Secured Parties, each Term Agent and Term Secured Parties. Except as set forth in Section 7.4, no other Person (including any Loan Party or any Subsidiary or Affiliate of any Loan Party) shall be deemed to be a third party beneficiary of this Agreement; provided that the Loan Parties and their respective Subsidiaries are intended beneficiaries and third party beneficiaries with respect to Sections 7.4 and 7.20 hereof.

Section  7.11          Headings . The headings of the articles and sections of this Agreement are inserted for purposes of convenience only and shall not be construed to affect the meaning or construction of any of the provisions hereof.

Section  7.12          Severability . If any of the provisions in this Agreement shall, for any reason, be held invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement and shall not invalidate the Lien Priority or the application of Proceeds and other priorities set forth in this Agreement.

Section  7.13          [Reserved] .

Section  7.14          VENUE; JURY TRIAL WAIVER .

(a)      EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW

 

44

YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. 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 ANY ABL SECURED PARTY OR ANY TERM SECURED PARTY MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY TERM DOCUMENTS, OR ANY ABL DOCUMENTS AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(b)        EACH PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION 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 PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND IT 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.

(c)        EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 7.5. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

Section  7.15          Intercreditor Agreement . This Agreement is the Intercreditor Agreement referred to in the ABL Credit Agreement and the Term Loan Credit Agreement. Nothing in this Agreement shall be deemed to subordinate the obligations due to (i) any ABL Secured Party to the obligations due to any Term Secured Party or (ii) any Term Secured Party to the obligations due to any ABL Secured Party (in each case, whether before or after the occurrence of an Insolvency Proceeding), it being the intent of the Parties that this Agreement shall effectuate a subordination of Liens but not a subordination of Indebtedness.

Section  7.16          No Warranties or Liability . Each Term Agent and the ABL Agent acknowledge and agree that neither has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other ABL Document or any Term Document. Except as otherwise provided in this Agreement, each Term Agent and the ABL Agent will be entitled to manage and supervise their respective extensions of credit to any Loan Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.

Section  7.17         Conflicts . In the event of any conflict between the provisions of this Agreement and the provisions of any ABL Document or any Term Document, the provisions of this Agreement shall govern; provided that nothing in this Agreement shall permit any Loan Party to incur Indebtedness or Liens not otherwise permitted by the ABL Documents and Term Documents.

 

45

Section 7.18         Information Concerning Financial Condition of the Loan Parties .

(a)        Each of the Term Agent, any other Term Agent and the ABL Agent hereby assumes responsibility for keeping itself informed of the financial condition of the Loan Parties and all other circumstances bearing upon the risk of nonpayment of the ABL Obligations or the Term Obligations. Each Term Agent and the ABL Agent hereby agree that no party shall have any duty to advise any other party of information known to it regarding such condition or any such circumstances. In the event any Term Agent or the ABL Agent, in their sole discretion, undertakes at any time or from time to time to provide any information to any other party to this Agreement, (a) they shall be under no obligation (i) to provide any such information to such other party or any other party on any subsequent occasion, (ii) to undertake any investigation not a part of its regular business routine, or (iii) to disclose any other information, (b) they make no representation as to the accuracy or completeness of any such information and shall not be liable for any information contained therein, and (c) the party receiving such information hereby agrees to hold the providing party harmless from any action the receiving party may take or conclusion the receiving party may reach or draw from any such information, as well as from and against any and all losses, claims, damages, liabilities, and expenses to which such receiving party may become subject arising out of or in connection with the use of such information.

(b)        The Loan Parties agree that any information provided to the ABL Agent, any Term Agent, any ABL Secured Party or any Term Secured Party may be shared by such Person with any ABL Secured Party, any Term Secured Party, the ABL Agent or any Term Agent notwithstanding a request or demand by such Loan Party that such information be kept confidential; provided that such information shall otherwise be subject to the respective confidentiality provisions in the ABL Credit Agreement and the Term Loan Credit Agreement, as applicable.

Section  7.19          Additional Loan Parties . The Company agrees that if any Subsidiary shall become both an ABL Loan Party and a Term Loan Party after the date hereof, it will promptly cause such Subsidiary to execute and deliver to the ABL Agent and each Term Agent an instrument in the form of the Acknowledgement attached hereto. The execution and delivery of such Acknowledgement shall not require the consent of any other party hereunder.

Section  7.20          Amendment and Restatement . This Agreement amends and restates the Prior Intercreditor Agreement in its entirety. This Agreement shall supersede the Prior Intercreditor Agreement. The parties acknowledge and agree that this Agreement does not constitute a termination of the rights and obligations under the Prior Intercreditor Agreement, all of which are in all respects continuing under this Agreement with only the terms being modified from and after the date hereof as provided in this Agreement.

Section  7.21         Additional Term Lender Intercreditor Agreements ; ABL Agent Reliance .

(a)        Notwithstanding anything to the contrary contained in this Agreement, each party hereto agrees that the Term Secured Parties (as among themselves) may enter into the Term Lender Intercreditor Agreement or other intercreditor agreements (or similar arrangements) with the Term Agents governing the rights, benefits and privileges of Term Secured Parties with respect to the Term Obligations or a portion thereof (as among themselves), in respect of any or all of the Collateral and the applicable Term Documents, including as to the application of Proceeds of any Collateral, voting rights, control of any Collateral and waivers with respect to any Collateral, in each case so long as the terms thereof do not violate or conflict with the provisions of this Agreement.

(b)        Except with respect to instructions or notices which this Agreement expressly provides may only be issued to the ABL Agent by the Designated Term Agent (with respect to which the

 

46

terms of this Section 7.21(b) shall not apply), each of the Loan Parties and the Secured Parties agree that ABL Agent (i) will have no obligation to determine the validity or propriety (including under the Term Lender Intercreditor Agreement or otherwise) of any Enforcement Notice or other notice or instruction it reasonably believes delivered by the Designated Term Agent or other Term Agent, as applicable, (ii) shall have no liability to any Secured Party for action based upon or in response to any such notice or instruction and (iii) if the ABL Agent receives notices or instructions from the Term Agents that it reasonably believes to be contradictory or inconsistent with other notices or instructions from any Term Agent or the terms of this Agreement, it may refuse to take any action or refuse to treat such notice or instruction as effective until and unless (1) it receives separate indemnification from a Term Agent on terms acceptable to ABL Agent or (2) a court of competent jurisdiction otherwise directs the ABL Agent to take action based upon such notice or instruction. None of the foregoing provisions of this clause (b) will limit the obligation of ABL Agent to deliver notices to any Term Agent otherwise specifically required under this Agreement.

[SIGNATURE PAGES FOLLOW]

 

47

IN WITNESS WHEREOF, the ABL Agent, for and on behalf of itself and the ABL Lenders, and each Term Agent, for and on behalf of itself and the Term Lenders, have caused this Agreement to be duly executed and delivered as of the date first above written.

 

BANK  OF  AMERICA,  N.A. , in its capacity as the

ABL Agent

By:  

/s/ Kindra M. Mullarky

  Name: Kindra M. Mullarky
  Title: SVP
JPMORGAN CHASE BANK, N.A. , in its capacity as the First Lien Term Agent
By:  

/s/ Krys Szremski

  Name: Krys Szremski
  Title: Executive Director
CORTLAND CAPITAL MARKET SERVICES LLC, in its capacity as the Second Lien Term Agent
By:  

/s/ Matthew Trybula        

  Name: Matthew Trybula
  Title: Associate Counsel

 

[Signature Page to Amended and Restated Intercreditor Agreement]

The undersigned acknowledges and agrees by its signature below that concurrent with the delivery of this counterpart that Discharge of the Term Obligations owing in respect of the Bridge Credit Agreement (as such terms are defined in the Prior Intercreditor Agreement) has occurred, it is no longer the Designated Term Agent and no longer party to the Intercreditor Agreement.
CORTLAND CAPITAL MARKET SERVICES LLC, as a Term Agent

By:

 

/s/ Matthew Trybula

 

Name: Matthew Trybula

 

Title: Associate Counsel

 

[Signature Page to Amended and Restated Intercreditor Agreement]

ACKNOWLEDGMENT

Each Borrower, each ABL Guarantor and each Term Guarantor hereby acknowledges that it has received a copy of this Agreement and consents thereto, agrees to recognize all rights granted thereby to the ABL Agent and each Term Agent, and will not do any act or perform any obligation which is not in accordance with the agreements set forth in this Agreement. Each Borrower, each ABL Guarantor and each Term Guarantor further acknowledges and agrees that, except as set forth in Section 7.10, it is not an intended beneficiary or third party beneficiary under this Agreement and (i) as between the ABL Secured Parties and the ABL Loan Parties, the ABL Documents remain in full force and effect as written and are in no way modified hereby, and (ii) as between the Term Secured Parties, the Company and Term Guarantors, the Term Documents remain in full force and effect as written and are in no way modified hereby. For the avoidance of doubt, the consent and acknowledgement of the Borrowers, the ABL Guarantors and the Term Guarantors herein, shall not constitute a waiver of any of their rights available under the Loan Documents, at law or in equity.

 

HORIZON GLOBAL CORPORATION,

a Delaware corporation

By:    /s/ Brian Whittman                                           
Name:  Brian Whittman
Title:  Vice President, Finance
HORIZON GLOBAL AMERICAS INC.,
a Delaware corporation
By:    /s/ Brian Whittman                                           
Name:  Brian Whittman
Title:  Vice President, Finance
CEQUENT UK LIMITED, a company incorporated in England and Wales with company number 08081641
By:    /s/ Jay Goldbaum                                             
Name:  Jay Goldbaum
Title:  Director
CEQUENT TOWING PRODUCTS OF CANADA LTD., a company formed under the laws of the Province of Ontario
By:   

/s/ Jay Goldbaum                                             

Name:  Jay Goldbaum
Title:  Vice President and Secretary

 

[Signature Page to Acknowledgment to Amended and Restated Intercreditor Agreement]

HORIZON GLOBAL COMPANY LLC,

a Delaware limited liability company

By: 

  /s/ Brian Whittman                                      

Name: Brian Whittman

Title: Vice President, Finance

HORIZON INTERNATIONAL HOLDINGS LLC,

a Delaware limited liability company

By:   /s/ Brian Whittman                                         

Name: Brian Whittman

Title: Vice President, Finance

CEQUENT NEDERLAND HOLDINGS B.V.,

a company formed under the laws of the Netherlands

By:

 

/s/ Jay Goldbaum                                          

Name: Jay Goldbaum

Title: Director

CEQUENT MEXICO HOLDINGS B.V.,

a company formed under the laws of the Netherlands

By:

 

/s/ Jay Goldbaum                                           

Name: Jay Goldbaum

Title: Director

CEQUENT SALES COMPANY DE MEXICO, S. DE R.L. de C.V.,

a limited liability company formed under the laws of Mexico

By:

  /s/ Jay Goldbaum                                           

Name: Jay Goldbaum

Title: Vice President and Director

 

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CEQUENT ELECTRICAL PRODUCTS DE MEXICO, S. DE R.L. de C.V.,

a limited liability company formed under the laws of Mexico

By:

 

/s/ Jay Goldbaum                                           

Name:  Jay Goldbaum

Title:  Vice President and Director

 

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EXHIBIT I

[FORM OF] JOINDER AGREEMENT

JOINDER AGREEMENT dated as of [                ], 20[    ] to the AMENDED AND RESTATED INTERCREDITOR AGREEMENT dated as of March 15, 2019 (the “ Intercreditor Agreement ”), among (I)  BANK OF AMERICA, N.A. , in its capacity as agent and collateral agent (together with its successors and assigns in such capacities, the “ ABL Agent ”), (II) JPMORGAN CHASE BANK, N.A. , in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “First Lien Term Agent ”) and (III)  CORTLAND CAPITAL MARKET SERVICES LLC , in its capacity as administrative agent and collateral agent (together with its successors and assigns in such capacities, the “ Second Lien Term Agent ” and together with the First Lien Term Agent, collectively, the “ Term Agents ”)).

A.        Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Intercreditor Agreement.

B.        As a condition to the ability of [      ] to [refinance the ABL Credit Agreement, First Lien Term Loan Credit Agreement, Second Lien Term Loan Credit Agreement or [      ]] after the date of the Intercreditor Agreement and to secure [ABL Credit Agreement, Term Loan Credit Agreement, Second Lien Term Loan Credit Agreement or [      ]] with a Lien on the Collateral, in each case under and pursuant to the collateral documents relating thereto, [the agent, trustee or other representative in respect of such [      ]] is required, unless such agent, trustee or other representative is already a party to the Intercreditor Agreement, to become a party under, and such Indebtedness and holders of such Indebtedness in respect thereof are required to become subject to and bound by, the Intercreditor Agreement. The undersigned (the “ New Representative ”) is executing this Joinder in accordance with the requirements of the ABL Documents and the Term Documents.

Accordingly, the ABL Agent, each Term Agent and each New Representative agree as follows:

Section 1.     In accordance with the Intercreditor Agreement, the New Representative by its signature below becomes a party under, and the related Indebtedness and holders of such Indebtedness become subject to and bound by, the Intercreditor Agreement as [ABL Obligations and ABL Secured Parties][ First Lien Term Obligations and First Lien Term Secured Parties][Second Lien Term Obligations and Second Lien Term Secured Parties], respectively, with the same force and effect as if the New Representative had originally been named therein as a party thereto, and the New Representative, on behalf of itself and such holders of such Indebtedness, hereby agrees to all the terms and provisions of the Intercreditor Agreement applicable to it. Each reference to a [“Term Agent”] [“ABL Agent”] in the Intercreditor Agreement shall be deemed to include the New Representative. The Intercreditor Agreement is hereby incorporated herein by reference.

Section 2.  The New Representative represents and warrants that (a) it has full power and authority to enter into this Joinder, in its capacity as [agent] [trustee] [representative] under [describe new facility] and (b) this Joinder has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of such Joinder.

Section 3.   This Joinder may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Joinder shall become effective when executed and delivered by the parties hereto. Delivery of an executed signature page to this Joinder by facsimile transmission or other electronic method shall be effective as delivery of a manually signed counterpart of this Joinder.

Section 4. Except as expressly supplemented hereby, the Intercreditor Agreement shall remain in full force and effect.

SECTION 5.     THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 6. In case any one or more of the provisions contained in this Joinder should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 7. All communications and notices hereunder to the New Representative shall be given to it at the address set forth below its signature hereto.

 

2

IN WITNESS WHEREOF, the ABL Agent, each Term Agent and each New Representative have duly executed this Joinder to the Intercreditor Agreement as of the day and year first above written.

 

[NAME  OF  NEW  REPRESENTATIVE] ,

  

        as [             ] for the holders of

  

        [                                 ],

  

By:

 

 

  
 

Name:

  
 

Title:

  
 

Address for notices:

  
 

 

  
 

 

  
 

Attention of:                                                                   

  
 

Telecopy:                                                                       

  

BANK OF AMERICA, N.A. , in its capacity as the

ABL Agent

By:      

  

 

  
  

Name:

  
  

Title:

  

JPMORGAN CHASE BANK, N.A. , in its capacity as the First Lien Term Agent

By:

  

 

  
  

Name:

  
  

Title:

  

CORTLAND CAPITAL MARKET SERVICES LLC , in its capacity as the Second Lien Term Agent

By:

  

 

  
  

Name:

  
  

Title:

  

Schedule I

Post-Closing Schedule

 

1.

The Obligors shall take all necessary actions (subject to the Agreed Security Principles) to satisfy the items described below within sixty (60) days after the Amendment Effective Date (or, in each case, such longer periods as the Agent may agree in writing):

 

  (a)

For each Subsidiary domiciled or organized in the United Kingdom:

 

  (i)

an English law guarantee and debenture over substantially all of its assets which may be by way of accession to any existing debenture;

 

  (ii)

a share mortgage entered into by its shareholder relating to the mortgage over its shares;

 

  (iii)

such perfection actions as are necessary under English law to perfect the security interests contemplated by this clause (a); and

 

  (iv)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in the United Kingdom to create a first priority perfected security interest therein, subject in each case to the Intercreditor Agreement.

 

  (b)

For each Subsidiary domiciled or organized in Germany, to the extent applicable:

 

  (i)

a German law guarantee;

 

  (ii)

a German law share pledge agreement entered into by its shareholder relating to the pledge over its shares;

 

  (iii)

security over substantially all of its assets located in Germany including but not limited to the following security documents, if applicable:

 

  (A)

a German law account pledge agreement relating to all accounts held by it with banks in Germany;

 

  (B)

a German law global assignment agreement relating to the assignment of accounts receivable from the selling of goods and the provision of services as well as other accounts receivable agreed to be assigned by it (including, but not limited to, insurance claims and intercompany loan receivables);

 

  (C)

a German law security transfer agreement relating to the security transfer of all moveable (including stock and inventory) and fixed assets over which security shall be granted;

 

  (D)

if it has any such rights, an Intellectual Property pledge agreement relating to the pledge of its Intellectual Property rights (including, but not limited to, patents,

 

designs, utility models, trademarks, know-how and other Intellectual Property rights);

 

  (E)

if it owns any German law real estate, a land charge over the real estate held by it;

 

  (F)

if it owns any real estate, a German law security purpose agreement relating to the land charge granted by it; and

 

  (G)

if it is party to any relevant intercompany agreements, a subordination agreement in relation to any shareholder and intercompany loans and any other applicable, if any, intercompany claims.;

 

  (iv)

such perfection actions as are necessary under German law to perfect the security interests contemplated by this clause (b); and

 

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties with respect to the Collateral located in Germany to create a first priority perfected security interest therein, subject in each case to the Intercreditor Agreement.

In connection with the preparation and delivery of the agreements to be furnished and other actions to be taken pursuant to this Schedule I by any German Domiciled Obligor, the Required Lenders authorize the Agent to enter into such modifications to the terms of this Schedule I and the Amended and Restated ABL Guarantee and Collateral Agreement to provide for such limitations and qualifications to the Obligations of each German Domiciled Obligor as Agent deems reasonable in its discretion.

 

  (c)

For each Subsidiary domiciled or organized in the Netherlands, to the extent applicable:

 

  (i)

A Dutch law guarantee;

 

  (ii)

a Dutch law omnibus pledge (or similar pledge agreement) over substantially all of its assets, including without limitation, bank accounts, financial instruments, insurance rights and claims, intellectual property rights, intra-group receivables, movable assets, securities accounts and trade receivables;

 

  (iii)

a share pledge agreement, membership pledge agreement or partnership pledge agreement (as appropriate) entered into by its shareholder, members or partners, respectively, relating to the pledge over its shares, membership interests or partnership interests; and

 

  (iv)

such perfection actions as are necessary under Dutch law to perfect the security interests contemplated by this clause (c);

 

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in the

 

Netherlands to create a first priority perfected security interest therein, subject in each case to the Intercreditor Agreement;

 

  (vi)

with respect to Cequent Nederland Holdings B.V., a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Mexico Holdings B.V., made between UK Borrower as pledgor and Agent as pledgee and a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Nederland Holdings B.V., made between Horizon International Holdings LLC as pledgor and Agent as pledgee, each in substantially the same form as the Dutch share pledges made between the same parties and dated 22 December 2015;

 

  (d)

For each Subsidiary domiciled or organized in Canada:

 

  (i)

(x) with respect to a Canadian Borrower, an amended and restated security agreement governed by the laws of the Province of Ontario and the laws of Canada applicable therein made by and between Canadian Borrower and Agent, in substantially the same form as the Canadian Security Agreement dated as of the Closing Date, and (y) with respect to any other Subsidiary domiciled in Canada, a security agreement governed by the laws of the applicable Canadian province and the laws of Canada applicable therein, in substantially the same form as the Canadian Security Agreement dated as of the Closing Date;

 

  (ii)

such perfection actions as are necessary under Canadian law to perfect the security interests contemplated by this clause (d); and

 

  (iii)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in Canada to create a first priority perfected security interest therein, subject in each case to the Intercreditor Agreement.

 

  (e)

For each Subsidiary domiciled or organized in Mexico:

 

  (x)

In respect of Cequent Mexico Holdings B.V. and Cequent Sales Company de México, S. de R.L. de C.V., and Cequent Electrical Products de México, S. de R.L. de C.V.

 

  (i)

an amendment agreement to that certain equity interest pledge agreement originally dated December 22, 2015, entered into by and among Cequent Mexico Holdings B.V. and Cequent Sales Company de México, S. de R.L. de C.V., as pledgors and the Agent as pledgee, with the acknowledgement and consent of Cequent Electrical Products de México, S. de R.L. de C.V. (the “Cequent Electrical Equity Pledge Amendment Agreement”) ;

 

  (ii)

a copy duly certified by the Secretary of Cequent Electrical (ii) Products de México, S. de R.L. de C.V., evidencing (i) the execution of the Cequent Electrical Equity Pledge

 

Amendment Agreement, (ii) the acknowledgement and confirmation of the pledge created pursuant to the Cequent Electrical Equity Pledge Amendment Agreement; and (iii) the power of attorney granted by the equity interest holders of Cequent Electrical Products de México, S. de R.L. de C.V. in favor of the Agent, pursuant to the Cequent Electrical Equity Pledge Amendment Agreement;

 

  (iii)

an amendment agreement to that certain equity interest pledge agreement originally dated December 22, 2015, entered into by and among Cequent Mexico Holdings B.V. and Cequent Netherland Holdings, B.V., as pledgors and the Agent as pledgee, with the acknowledgement and consent of Cequent Sales Company de México, S. de R.L. de C.V. (the “Cequent Sales Equity Pledge Amendment Agreement”);

 

  (iv)

a copy duly certified by the Secretary of Cequent Sales Company de México, S. de R.L. de C.V., evidencing (i) the execution of the Cequent Sales Equity Pledge Amendment Agreement, (ii) the acknowledgement and confirmation of the pledge created pursuant to the Cequent Sales Equity Pledge Amendment Agreement; and (iii) the power of attorney granted by the equity interest holders of Cequent Electrical Sales Company de México, S. de R.L. de C.V. in favor of the Agent, pursuant to the Cequent Sales Equity Pledge Amendment Agreement;

 

  (v)

an amendment agreement to that certain non-possessory pledge agreement originally dated December 22, 2015, entered into by Cequent Electrical Products de México, S. de R.L. de C.V., as pledgor and the Agent, as pledgee;

 

  (vi)

an amendment agreement to that certain non-possessory pledge agreement originally dated December 22, 2015, entered into by Cequent Sales Company de México, S. de R.L. de C.V., as pledgor and the Agent, as pledgee;

 

  (vii)

an amendment agreement to that certain non-possessory pledge agreement originally dated December 22, 2015, entered into by Cequent UK Limited, as pledgor and the Agent, as pledgee;

 

  (viii)

such perfection actions as are necessary under Mexican law to perfect the security interests contemplated by this clause (e);

 

  (ix)

such other resolutions, legal opinions, documents, instruments, certificates, filings registrations and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in Mexico to create or continue creating a first priority perfected security interest therein, subject in each case to the Intercreditor Agreement.

 

  (y)

In respect of any other Subsidiary domiciled in Mexico, to the extent applicable:

  (i)

an equity interest pledge agreement governed by the laws of the applicable pledgor in form and substance similar to that certain equity interest pledge agreement originally dated December 22, 2015, entered into by and among Cequent Mexico Holdings B.V. and Cequent Sales Company de México, S. de R.L. de C.V., as pledgors and the Agent as pledgee;

 

  (ii)

a non possessory pledge agreement governed by the laws of the applicable pledger in form and substance similar to that certain non-possessory pledge agreement originally dated December 22, 2015, entered into by Cequent Electrical Products de México, S. de R.L. de C.V., as pledgor and the Agent, as pledgee;;

 

  (iii)

a certificate in form and substance similar to the certificate referenced in clause (e)(x)(ii) above from the applicable Subsidiary domiciled in Mexico evidencing (a) an applicable pledge set forth in clause (y)(i) or (y)(ii) above, as applicable, (b) a confirmation of the pledge created thereby, and (c) a power of attorney granted by the applicable pledgor to the Agent; and

 

  (iv)

such perfection actions as are necessary under Mexican law to perfect the security interests contemplated by this clause (e);

 

  (v)

such other resolutions, legal opinions, documents, instruments and other actions as may be necessary to effectuate the intent of the parties over the Collateral located in Mexico to create a first priority perfected security interest therein;

 

2.

All agreements, instruments, documents and legal opinion delivered pursuant to this Post- Closing Requirements Schedule shall be in form and substance reasonably satisfactory to the Agent

 

3.

Each Subsidiary domiciled in the UK, Germany, the Netherlands, Mexico or Canada (or any political subdivision thereof) that is not already party to the Amended and Restated ABL Guarantee and Collateral Agreement shall deliver a joinder to the Amended and Restated ABL Guarantee and Collateral Agreement in form and substance satisfactory to the Agent within twenty (20) days after the Amendment Effective Date (or such longer period as the Agent may agree in writing).

 

4.

Without in anyway limiting any of the foregoing, within thirty (60) days after the Amendment Effective Date (or, in each case, such longer periods as the Agent, may agree in writing) the Loan Parties shall furnish to the Agent:

 

  (a)

an English law debenture between the UK Borrower and the UK Security Trustee and English law share mortgage between Cequent Nederland Holdings B.V. and the UK Security Trustee, each in substantially the same form as the English law debenture and English law share mortgage made between the same parties and dated 22 December 2015;

 

  (b)

a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Mexico Holdings B.V., made between UK Borrower as pledgor and Agent as pledgee and a Dutch law governed notarial deed of pledge over the shares in the capital of Cequent Nederland Holdings

 

B.V., made between Horizon International Holdings LLC as pledgor and Agent as pledgee, each in substantially the same form as the Dutch share pledges made between the same parties and dated 22 December 2015; and

 

  (c)

an amended and restated security agreement governed by the laws of the Province of Ontario and the laws of Canada applicable therein made by and between Canadian Borrower and Agent, in substantially the same form as the Canadian Security Agreement dated as of the Closing Date.

 

4.

Subject to the Intercreditor Agreement, each Obligor shall have delivered to the Agent original stock certificates and executed stock powers in blank representing 100% of the Equity Interests of each wholly-owned and direct Subsidiary of such Obligor within thirty (30) days after the Seventh Amendment Effective Date (or such longer period as the Agent, acting at the direction of the Required Lenders, may agree), in each case to the extent, (a) such Subsidiary is domiciled or organized in the United Kingdom, Germany, Canada, Mexico or the Netherlands, and (b) such Equity Interests are certificated.

 

5.

Not later than two (2) business days following the Amendment Effective Date (or, in each case, such longer period as the Agent, may agree in writing), the Loan Parties shall furnish to Agent a duly executed officer’s (or equivalent) certificate certifying and attaching resolutions duly adopted by the Directors of the UK Borrower appointing and authorizing the officer of UK Borrower who signed the Seventh Amendment, Amended and Restated ABL Guaranty and Collateral Agreement and Amended and Restated ABL Intercreditor Agreement to execute and deliver the same on behalf of the UK Borrower and ratifying all actions of such officer on behalf of the UK Borrower in connection



Exhibit 10.12         

SEVENTH AMENDMENT TO CREDIT AGREEMENT
SEVENTH AMENDMENT (this “ Amendment ”), dated as of May 7, 2019, to the Term Loan Credit Agreement dated as of June 30, 2015 (as amended, supplemented, amended and restated or otherwise modified from time to time, including by this Amendment, the “ Credit Agreement ”), among Horizon Global Corporation (the “ Borrower ”), the several banks and other financial institutions party hereto (the “ Lenders ”), and JPMorgan Chase Bank, N.A., as Administrative Agent (in such capacity, the “ Administrative Agent ”).
W I T N E S S E T H :
WHEREAS, the parties hereto are parties to the Credit Agreement; and
WHEREAS, the Borrower and the Required Lenders wish to amend the Credit Agreement as described herein.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto, which include all Loan Parties as of the date hereof, agree as follows:
SECTION 1. DEFINITIONS . Unless otherwise defined herein, capitalized terms which are defined in the Credit Agreement are used herein as therein defined.
SECTION 2. AMENDMENTS . Section 2.10(b) of the Credit Agreement is hereby amended and restated as follows:

“(b)    In addition to the scheduled repayments specified in Section 2.10(a) above, the Borrower shall repay the Loans prior to May 15, 2020 in an aggregate principal amount of not less than $100,000,000 from the Net Proceeds of sales or dispositions permitted under Section 6.05(j), Qualified Borrower Preferred Stock or issuance of Indebtedness permitted under Section 6.01(a)(xxv).”
SECTION 3. CONDITIONS PRECEDENT . This Amendment shall become effective as of the date of the satisfaction or waiver of each of the conditions precedent set forth in this Section 3.
(a) Execution and Delivery . The Administrative Agent shall have received originals, facsimiles or copies in .pdf format unless otherwise specified, of counterparts of this Amendment duly executed by each Loan Party, the Required Lenders, and the Administrative Agent.
(b) No Default . Both prior to and after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the date hereof.

For the purpose of determining compliance with the conditions specified in this Section 3, each Lender that has signed this Amendment shall be deemed to have accepted, and to be satisfied with, each document or other matter required under this Section 3.

SECTION 4. CONTINUING EFFECT . Except as expressly amended, waived or modified hereby, the Loan Documents shall continue to be and shall remain in full force and effect in accordance with their respective terms. This Amendment shall not constitute an amendment, waiver or modification of any provision of any Loan Document not expressly referred to herein and shall not be construed as an amendment, waiver or modification of any action on the part of the Borrower or the other Loan Parties that would require an amendment, waiver or consent of the Administrative Agent or the Lenders except as expressly stated herein, or be construed to indicate the willingness of the Administrative Agent or the Lenders to further amend, waive or modify any provision of any Loan Document amended, waived or modified hereby for any other period, circumstance or event. Except as expressly modified by this Amendment, the Credit Agreement and the other Loan Documents are ratified and confirmed and are, and shall continue to be, in full force and effect in accordance with their respective terms. Except as expressly set forth herein, each Lender and the Administrative Agent reserves all of its rights, remedies, powers and privileges under the Credit Agreement, the other Loan Documents, applicable law and/or equity. Any reference to the “Credit Agreement” in any Loan Document or any related documents shall be deemed to be a reference to the Credit Agreement as amended by this Amendment and the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include this Amendment.




SECTION 5. GOVERNING LAW . THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. SUCCESSORS AND ASSIGNS . This Amendment shall be binding upon and inure to the benefit of the Borrower, the other Loan Parties, the Administrative Agent, the other Agents and the Lenders, and each of their respective successors and assigns, and shall not inure to the benefit of any third parties. The execution and delivery of this Amendment by any Lender prior to the Effective Date shall be binding upon its successors and assigns and shall be effective as to any Loans or Commitments assigned to it after such execution and delivery.
SECTION 7. ENTIRE AGREEMENT . This Amendment, the Credit Agreement and the other Loan Documents represent the entire agreement of the Loan Parties, the Administrative Agent, the Agents, the Lenders and the Lenders, as applicable, with respect to the subject matter hereof and thereof, and there are no promises, undertakings, representations or warranties by the Administrative Agent, any other Agent or any Lender relative to the subject matter hereof not expressly set forth or referred to herein or in the Credit Agreement or the other Loan Documents.
SECTION 8. LOAN DOCUMENT . This Amendment is a Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.
SECTION 9. COUNTERPARTS . This Amendment may be executed by the parties hereto in any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. An executed signature page of this Amendment may be delivered by facsimile transmission or electronic PDF of the relevant signature page hereof.
SECTION 10. HEADINGS . Section headings used in this Amendment are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.


[ remainder of page intentionally left blank ]








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

 
HORIZON GLOBAL CORPORATION
 
as the Borrower
 
By: /s/ Jay Goldbaum
 
Name: Jay Goldbaum
 
Title: General Counsel, Chief Compliance Officer
 
and Corporate Secretary



 
JPMORGAN CHASE BANK, N.A., as
 
Administrative Agent
 
By: /s/ Krys Szremski
 
Name: Krys Szremski
 
Title: Executive Director
 
 



 
CORRE OPPORTUNITIES QUALIFIED MASTER FUND, LP , as a Lender
 
 
 
By: /s/ John Barrett
 
Name: John Barrett
 
Title: Authorized Signatory
 
 

 
CORRE OPPORTUNITIES II MASTER FUND, LP,
 
as a Lender
 
By: /s/ John Barrett
 
Name: John Barrett
 
Title: Authorized Signatory
 
 

 
CORRE HORIZON FUND, LP,
 
as a Lender
 
By: /s/ John Barrett
 
Name: John Barrett
 
Title: Authorized Signatory
 
 



[Signature Page to Seventh Amendment]




 
ATRIUM VIII
 
MADISON PARK FUNDING X, LTD.
 
MADISON PARK FUNDING XI, LTD.
 
MADISON PARK FUNDING XII, LTD.
 
MADISON PARK FUNDING XIII, LTD.
 
MADISON PARK FUNDING XIV, LTD.
 
MADISON PARK FUNDING XV, LTD.
 
MADISON PARK FUNDING XVI, LTD.
 
MADISON PARK FUNDING XVII, LTD.
 
MADISON PARK FUNDING XVIII, LTD.
 
MADISON PARK FUNDING XX, LTD.
 
MADISON PARK FUNDING XXI, LTD.
 
MADISON PARK FUNDING XXII, LTD.
 
MADISON PARK FUNDING XL, LTD.
 
MADISON PARK FUNDING XLI, LTD.
 
MADISON PARK FUNDING XLIII, LTD.
 
ONE ELEVEN FUNDING I, LTD.
 
ONE ELEVEN FUNDING II, LTD.
 
 
 
By: Credit Suisse Asset Management, LLC, as portfolio manager
 
 
 
BENTHAM HIGH YIELD FUND
 
 
 
By: Credit Suisse Asset Management, LLC, as agent (sub-advisor) for Challenger Investment Services Limited, the Responsible Entity for Bentham High Yield Fund
 
 
 
CREDIT SUISSE FLOATING RATE HIGH INCOME FUND
 
CREDIT SUISSE STRATEGIC INCOME FUND
 
 
 
By: Credit Suisse Asset Management, LLC, as investment advisor
 
 
 
THE CITY OF NEW YORK GROUP TRUST
 
 
 
By: Credit Suisse Asset Management, LLC, as its manager
 
as Lenders
 
By: /s/ Thomas Flannery
 
Name: Thomas Flannery
 
Title: Managing Director
 
 







[Signature Page to Seventh Amendment]




 
CREDIT SUISSE NOVA (LUX)
 
 
 
By: Credit Suisse Asset Management, LLC or Credit Suisse Asset Management Limited, each as a Co-Investment Adviser to Credit Suisse Fund Management S.A., management company for Credit Suisse Nova (Lux)
 
 
 
MADISON PARK FUNDING XIX, LTD.
 
MADISON PARK FUNDING XXIII, LTD.
 
MADISON PARK FUNDING XXIV, LTD.
 
MADISON PARK FUNDING XXV, LTD.
 
 
 
By: Credit Suisse Asset Management, LLC, as collateral manager


 
DOLLAR SENIOR LOAN FUND, LTD.
 
DOLLAR SENIOR LOAN FUND II, LTD.
 
RENAISSANCE INVESTMENT HOLDINGS LTD.
 
By: Credit Suisse Asset Management, LLC, as investment manager
 
 
 
DAVINCI REINSURANCE LTD.
 
By: Credit Suisse Asset Management, LLC, as investment manager for DaVinci Reinsurance Holdings, Ltd., the owner of DaVinci Reinsurance Ltd.

 
KP FIXED INCOME FUND
 
 
 
By: Credit Suisse Asset Management, LLC, as Sub-Adviser for Callan Associates Inc., the Adviser for the KP Funds, the Trust for KP Fixed Income Fund
 
as Lenders
 
By: /s/ Thomas Flannery
 
Name: Thomas Flannery
 
Title: Managing Director

 
NEWPORT GLOBAL CREDIT FUND LP,
 
as Lender
 
By: /s/ Anthony L. Longi, Jr.
 
Name: Anthony L. Longi, Jr.
 
Title: COO, Newport Global Advisers LP

 
NEWPORT GLOBAL OPPORTUNITIES FUND I-A LP,
 
as a Lender
 
By: /s/ Anthony L. Longi, Jr.
 
Name: Anthony L. Longi, Jr.
 
Title: COO, Newport Global Advisers LP

[Signature Page to Seventh Amendment]






 
FIDELITY NATIONAL TITLE INSURANCE COMPANY,
 
as a Lender
 
By: /s/ Anthony L. Longi, Jr.
 
Name: Anthony L. Longi, Jr.
 
Title: COO, Newport Global Advisers LP

 
COMMONWEALTH LAND TITLE INSURANCE COMPANY,
 
as a Lender
 
By: /s/ Anthony L. Longi, Jr.
 
Name: Anthony L. Longi, Jr.
 
Title: COO, Newport Global Advisers LP

 
SOLUS SENIOR HIGH INCOME FUND LP,
 
as a Lender
 
 
 
By: Solus Alternative Asset Management LP, its Investment Advisor
 
 
 
By: /s/ Gordon J. Yeager
 
Name: Gordon J. Yeager
 
Title: Executive Vice President

 
PW FOCUS FUND LLC,
 
as a Lender
 
 
 
By: Parkwood LLC, Managing Member
 
 
 
By: /s/ Karen A. Vereb
 
Name: Karen A Vereb
 
Title: Secretary
 
By: /s/ Mark A. Madeja
 
Name: Mark A. Madeja
 
Title: Vice President

 
SIMON CHARITABLE PRIVATE LLC,
 
as a Lender
 
 
 
By: /s/ Karen A. Vereb
 
Name: Karen A Vereb
 
Title: Secretary


[Signature Page to Seventh Amendment]




 
By: /s/ Mark A. Madeja
 
Name: Mark A. Madeja
 
Title: Vice President

 
SIMON MARKETABLE, L.P.
 
as a Lender
 
 
 
By: Parkwood LLC, General Partner
 
 
 
By: /s/ Karen A. Vereb
 
Name: Karen A Vereb
 
Title: Secretary
 
By: /s/ Mark A. Madeja
 
Name: Mark A. Madeja
 
Title: Vice President

 
ULYSSES PARTNERS, L.P.
 
as a Lender
 
By: /s/ Joshua Nash
 
Name: Joshua Nash LLC, a General Partner
 
Title: Joshua Nash, its Member

 
Crown Point CLO II Ltd.
 
Crown Point CLO III, Ltd.
 
as a Lender
 
By: /s/ Sajedur Rahman
 
Name: Sajedur Rahman
 
Title: Authorized Signatory





















[Signature Page to Seventh Amendment]





Exhibit 31.1
Certification
Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002
(Chapter 63, Title 18 U.S.C. Section 1350(A) and (B))

I, Carl S. Bizon, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Horizon Global Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 9, 2019
 
/s/  Carl S. Bizon
 
Carl S. Bizon
Chief Executive Officer





Exhibit 31.2
Certification
Pursuant to Section 302 of The Sarbanes-Oxley Act of 2002
(Chapter 63, Title 18 U.S.C. Section 1350(A) and (B))

I, Barry G. Steele, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Horizon Global Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 9, 2019
 
/s/ BARRY G. STEELE
 
Barry G. Steele
Chief Financial Officer





Exhibit 32.1
Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Horizon Global Corporation (the "Company") on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Carl S. Bizon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
1.
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 9, 2019
 
/s/  Carl S. Bizon
 
Carl S. Bizon
Chief Executive Officer





Exhibit 32.2
Certification Pursuant to
18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Horizon Global Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David G. Rice, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes‑Oxley Act of 2002, that to the best of my knowledge:
1.
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 9, 2019
 
/s/  BARRY G. STEELE
 
Barry G. Steele
Chief Financial Officer