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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________
FORM 10-K
_________________________________________
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-37793
 _________________________________________
ATKR-20210930_G1.JPG
Atkore Inc.
(Exact name of registrant as specified in its charter)
Delaware 90-0631463
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)

16100 South Lathrop Avenue, Harvey, Illinois 60426
(Address of principal executive offices) (Zip Code)
708-339-1610
(Registrant's telephone number, including area code)

Atkore International Group Inc.
(Former name )
Securities registered pursuant to Section 12(b) of the Act:
(Title of Each Class) Trading symbol (Name of Each Exchange on which Registered)
Common stock, par value $0.01 per share ATKR New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes    No   ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ☐  No  
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    No  ☐
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   No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer 
Non-accelerated filer Smaller reporting company
Emerging growth company
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 . ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes   No  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No 
The aggregate market value of the voting and non-voting common equity of Atkore Inc. held by non-affiliates as of the close of business as of March 26, 2021 was $3.3 billion.
The number of shares of the registrant's common stock outstanding as of November 12, 2021 was 46,016,923 shares of common stock, par value $0.01 per share.
Documents incorporated by reference:
Portions of the registrant's proxy statement to be filed with the United States Securities and Exchange Commission in connection with the registrant's 2022 annual meeting of stockholders (the "Proxy Statement") are incorporated by reference into Part III hereof. Such Proxy Statement will be filed within 120 days of the registrant's fiscal year ended September 30, 2021.





Table of Contents
 
  Page No.
PART I
Item 1. Business
5
Item 1A. Risk Factors
12
Item 1B. Unresolved Staff Comments
28
Item 2. Properties
29
Item 3. Legal Proceedings
29
Item 4. Mine Safety Disclosures
29
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
30
Item 6. [Reserved]
32
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
32
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
47
Item 8. Financial Statements and Supplementary Data
49
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
88
Item 9A. Controls and Procedures
88
Item 9B. Other Information
90
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
90
PART III
Item 10. Directors, Executive Officers and Corporate Governance
91
Item 11. Executive Compensation
91
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
91
Item 13. Certain Relationships and Related Transactions, and Director Independence
91
Item 14. Principal Accounting Fees and Services
91
PART IV
Item 15. Exhibits and Financial Statement Schedules
92
Item 16. Form 10-K Summary
92
Exhibit Index
93
Signatures
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Summary Risk Factors

The following is a summary of the principal risks described below in this Annual Report on Form 10-K. The following summary should not be considered an exhaustive summary of the material risks facing us, and it should be read in conjunction with the “Risk Factors” section and the other information contained in this Annual Report on Form 10-K.

Our performance may be impacted by general business and economic conditions, which could materially and adversely affect our business, financial position, results of operations or cash flows.
The non-residential construction industry accounts for a significant portion of our business, and a downturn in the non-residential construction industry could materially and adversely affect our business, financial position, results of operations or cash flows.
Widespread public health conditions, and specifically the COVID-19 pandemic, have had and could continue to have a material adverse impact on our business, financial position, results of operations and cash flows.
The raw materials on which we depend in our production process may be subject to price increases which we may not be able to pass through to our customers, or to price decreases which may decrease the prices of our products. As a result, such price fluctuations could materially and adversely affect our business, financial position, results of operations or cash flows.
We operate in a competitive landscape, and increased competition could materially and adversely affect our business, financial position, results of operations or cash flows.
Our operating results are sensitive to the availability and cost of freight and energy, which are important in the manufacture and transport of our products.
Interruptions in the proper functioning of our information technology (“IT”) systems, including from cybersecurity threats, could disrupt operations and cause unanticipated increases in costs or decreases in revenues, or both.
Our business, financial position, results of operations or cash flows could be materially and adversely affected by the importation of similar products into the United States, as well as U.S. trade policy and practices.
We are indirectly subject to regulatory changes that may affect demand for our products.
Our results of operations could be adversely affected by weather.
We have incurred and continue to incur significant costs to comply with current and future environmental and health and safety laws and regulations, and our operations expose us to the risk of material environmental and health and safety laws liability.
We rely on several customers for a significant portion of our net sales, and the loss of such customers, or their inability or unwillingness to pay our invoices on time could materially and adversely affect our business, financial position, results of operations or cash flows.
Our working capital requirements could result in us having lower cash available for, among other things, capital expenditures and acquisition financing.
Labor disputes, increased labor costs or work stoppages could adversely affect our operations and impair our financial performance.
We have financial obligations relating to pension plans that we maintain in the United States.
Unplanned outages at our facilities and other unforeseen disruptions could materially and adversely affect our business, financial position, results of operations or cash flows.
We rely on the efforts of agents and distributors to generate sales of our products.
We may be required to recognize goodwill, intangible assets or other long-lived asset impairment charges.
We are subject to certain safety and labor risks associated with the manufacturing and testing of our products.
The nature of our business exposes us to product liability, construction defect and warranty claims and litigation as well as other legal proceedings, which could materially and adversely affect our business, financial position, results of operations or cash flows.
We may not be able to adequately protect our intellectual property rights, and we may become involved in intellectual property disputes.
We face risks associated with our international operations which could materially and adversely affect our business, financial position, results of operations or cash flows.
Changes in foreign laws and legal systems could materially impact our business.
Our inability to introduce new products effectively or implement our innovation strategies could adversely affect our ability to compete.
Our business, financial position or results of operations could be materially and adversely affected by our inability to acquire or import raw materials, component parts or finished goods from existing suppliers and significant increases in government regulation or restrictions relating to such imports.
In connection with acquisitions, joint ventures or divestitures, we may become subject to liabilities and required to issue additional debt or equity.
Our indebtedness may adversely affect our financial health.
Despite our indebtedness levels, we and our subsidiaries may incur substantially more indebtedness, which may increase the risks created by our indebtedness.
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Increases in interest rates would increase the cost of servicing our indebtedness and could reduce our profitability.
A lowering or withdrawal of the ratings, outlook or watch assigned to our indebtedness by rating agencies may increase our future borrowing costs and reduce our access to capital.
The agreements and instruments governing our indebtedness contain restrictions and limitations that could significantly impact our ability to operate our business.
Our ability to generate the significant amount of cash needed to pay interest and principal on our indebtedness and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control.

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PART I
Item 1. Business
    
The following discussion of our business contains “forward-looking statements,” as discussed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” below. Our business, operations and financial position are subject to various risks as set forth in Part I, Item 1A, “Risk Factors” below. The following information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Financial Statements and Supplementary Data and related notes and the Risk Factors included elsewhere in this Annual Report on Form 10-K.

Company Overview

Atkore Inc. (collectively with all its subsidiaries referred to in this Annual Report on Form 10-K as “Atkore,” the “Company,” “we,” “us,” and “our”) was incorporated in the State of Delaware on November 4, 2010. Atkore is the sole stockholder of Atkore International Holdings Inc. (“AIH”), which in turn is the sole stockholder of Atkore International, Inc. (“AII”).

We are a leading manufacturer of Electrical products primarily for the non-residential construction and renovation markets, as well as residential markets, and Safety & Infrastructure products for the construction and industrial markets. The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable, and installation accessories. This segment serves contractors in partnership with the electrical wholesale channel. The Safety & Infrastructure segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security, and cable management for the protection and reliability of critical infrastructure. These solutions are marketed to contractors, original equipment manufacturers (“OEMs”), and end-users. We believe we hold #1 or #2 positions in the United States by net sales in the vast majority of our products. The quality of our products, strength of our brands, our scale and national presence provide what we believe to be a unique set of competitive advantages that position us for profitable growth.

Our mission is to be the customer’s first choice by providing unmatched quality, delivery, and value based on sustainable excellence in strategy, people, and processes.

Effective in the first quarter of fiscal 2021, Atkore made the decision to rename and reorganize its two segments to better reflect each segment’s value proposition and go-to-market approach. The Electrical segment was formerly named the Electrical Raceway segment. The Safety & Infrastructure segment was formerly named the Mechanical Products & Solutions segment.

Effective in the first quarter of fiscal 2021, the Company also implemented the realignment of its segment financial reporting structure such that its domestic cable management and prefabrication businesses are now reflected in the Safety & Infrastructure segment.

Effective in the second quarter of fiscal 2021, the Company changed its name from Atkore International Group Inc. to Atkore Inc.

Our Products

Atkore is committed to providing our customers with a safe, sustainable, and innovative portfolio of high quality electrical, mechanical, safety, and infrastructure products and solutions. In total, we serve several end-markets, including new non-residential construction, repair and remodel (“MR&R”), residential, OEM, and international markets.

We continuously seek to improve our product offerings and develop innovative new products that meet the changing needs of our customers, which include industry trends toward digital design tools and labor saving solutions. The majority of Atkore products have Building Information Modeling (“BIM”) models available for our customers’ use.

Significant product categories within our Electrical segment include metal electrical conduit and fittings, plastic pipe and conduit, electrical cable and flexible conduit, and international cable management systems, which are critical components of the electrical infrastructure for new construction and maintenance, MR&R markets. Significant product categories within our Safety & Infrastructure segment include mechanical pipe, metal framing & fittings, and perimeter security. Our metal framing products are used in the installation of electrical systems and various support structures, and our mechanical tube products can commonly be found in solar applications.

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Atkore continues to invest to add capabilities and capacity to develop innovative products and solutions to make installation faster and easier. Recent examples of our innovation include MC Glide armored cable, which facilitates faster and smoother pull through during installations; Eagle Basket, which quickly latches together; and Cellular Core Conduit, which bends easier than PVC conduit.
Customers

We are acutely aware of the importance of our equipment operating reliably, and we strive to deliver the safest, highest quality products. Our sales and marketing processes are primarily focused on serving our customers, including electrical, industrial and specialty distributors, who sell to contractors, and OEMs. We believe customers view Atkore as offering a strong value proposition based on our broad product offering, strong brands, short order cycle times, reliability and consistent product quality. For each of fiscal 2021, 2020 and 2019, approximately 90%, 89%, and 88% respectively, of our net sales were sold to customers located in the United States. Our net sales by geographic area were as follows:
Fiscal Year Ended
(in millions) September 30, 2021 September 30, 2020 September 30, 2019
United States $ 2,637  $ 1,563  $ 1,689 
International 291  202  228 
Total $ 2,928  $ 1,765  $ 1,917 

Atkore has a well-established customer base, which includes many of the largest companies in their categories. In fiscal 2021, our top ten customers accounted for approximately 37% of net sales. No single customer, even after consolidating all branches of such customer, which often make independent purchasing decisions, accounted for more than 10% of our net sales in fiscal 2021, 2020 or 2019.

Our customers include global electrical distributors (such as Consolidated Electrical Distributors, Inc., Graybar Electric Company, Rexel, Sonepar S.A. and Wesco International, Inc.), independent electrical distributors including super-regional electrical distributors (such as U.S. Electrical Services Inc., Crescent Electric Supply Co. and United Electric Supply Company, Inc.) and members of buying groups (such as Affiliated Distributors, Inc., IMARK Group, Inc. and STAFDA) as well as industrial distributors and big-box retailers (such as The Home Depot, Inc.). We also support alternative energy OEMs, with many applications used in solar system infrastructure.

Manufacturing

We currently manufacture products in 42 facilities and operate a total footprint of approximately 6.3 million square feet of manufacturing and distribution space in eight countries. Our headquarters are located in Harvey, Illinois, which is also the location of our largest manufacturing facility. Similar to our distribution footprint, our manufacturing footprint is currently concentrated in the United States, with additional facilities in Australia, Belgium, Canada, New Zealand, Russia and the United Kingdom.
    
With respect to our tube and conduit products, we believe we are a technology leader in the in-line galvanizing manufacturing process and have developed specialized equipment that enables us to produce a variety of low-cost high-quality galvanized tube products. For example, our subsidiary, Allied Tube & Conduit Corporation, or “Allied Tube,” developed an in-line galvanizing technique (Flo-Coat) in which zinc is applied in a continuous process when the tube and pipe are formed. The Flo-Coat galvanizing process provides superior zinc coverage of fabricated metal products for rust prevention and lower cost manufacturing than traditional hot-dip galvanizing. Another example is our Cellular Core conduit, which employs a co-extrusion process to create three firmly bonded layers with the inner layer as a cellular core, creating a conduit that weighs less and is more flexible while meeting UL standards.

Suppliers and Raw Materials

We use a variety of raw materials in manufacturing our products. Our primary raw materials are steel, copper and polyvinyl chloride (“PVC”) resin. We believe that sources for these raw materials are well-established, generally available and are in sufficient quantity that we may avoid disruption to our business if we encounter an interruption from one of our existing suppliers. Our primary suppliers of steel are Cleveland-Cliffs, Steel Dynamics and Nucor; our primary suppliers of copper are AmRod and Freeport McMoran; and our primary suppliers of PVC resin are Westlake, Formosa and Oxy Vinyls. We strive to maintain strong relationships with our suppliers. Notwithstanding the general availability of PVC resin, our resin suppliers declared force majeure during fiscal 2021 which constrained the availability and supply of resin.
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Responsible sourcing and supply chain management are critical to Atkore’s ability to provide high quality products to our customers. We expect our suppliers to carry out Atkore’s values and commitments by using resources responsibly, reducing the environmental footprint of their operations whenever possible, and upholding fair employment and human rights principles as outlined in our Supplier Integrity and Sustainability Standards.

Distribution

Atkore adds value to the customer experience with a comprehensive portfolio of electrical products and strategically located regional distribution centers. Additionally, we drive value for our customers through a single order across our broad product portfolio coupled with services like our ReliaRoutes hub-and-spoke fixed trucking lanes and technologies like our mobile app to track orders and schedule pickups.

We primarily sell and distribute our products through electrical, industrial and specialty distributors and OEMs. For many of the more than 12,000 electrical-distributor branches in the United States, our products are must-stock lines that form a staple of their business. We serve a diverse group of end markets, including new construction, MR&R and infrastructure, diversified industrials, alternative power generation, healthcare, data centers and government. End-users, who are typically electrical, industrial and mechanical contractors as well as OEMs, install our products during non-residential, residential and infrastructure construction and renovation projects or in assembly and manufacturing processes.

Distribution-based sales accounted for approximately 81% of our net sales in fiscal 2021. We distribute our products to electrical and industrial distributors from our manufacturing and distribution facilities as well as from over 41 dedicated distribution facilities operated by our agents. Our products are also stocked by electrical and industrial distributors who are located across the United States. Some of our products are purchased by OEMs and used as part of their products and solutions in applications such as utility solar framing, and conveyor systems. OEM sales accounted for approximately 15% of our net sales for fiscal 2021.

Our distribution footprint is concentrated in North America (the United States and Canada), with additional facilities in Australia, New Zealand and the United Kingdom.
    
Products are generally delivered to the distribution centers from our manufacturing facilities and then subsequently delivered to the customer. In some instances, a product is delivered directly from our manufacturing facility to a customer or end-user. In many cases, our products are bundled and co-loaded when shipped. We contract with a wide range of transport providers to deliver our products.

Seasonality

In a typical year, our operating results are impacted by seasonality. Weather can impact the ability to pursue non-residential construction projects at any time of the year in any geography, but historically, our slowest quarters have been the first and second fiscal quarters of each fiscal year when frozen ground and cold temperatures in many parts of the country can impede the start and pursuit of construction projects. Sales of our products have historically been higher in the third and fourth quarters of each fiscal year due to favorable weather and longer daylight conditions during these periods. Seasonal variations in operating results may also be significantly impacted by inclement weather conditions, such as cold or wet weather, which can delay construction projects.

Marketing

Our marketing efforts are focused on key stakeholder audiences including electrical and industrial distributors, contractors, engineers, government entities, and OEM customers. These combined efforts communicate the value proposition of the overall Atkore brand by bringing together complementary solutions in our portfolio while reinforcing the individual value propositions of our leading sub-brands such as Allied Tube & Conduit, AFC Cable Systems, Kaf-Tech, Heritage Plastics, Unistrut, Power-Strut, Cope, US Tray, FRE Composites, Calbond and Calpipe.

Atkore sales are enabled through external commissioned sales agents and internal sales teams that drive customer acquisition and retention. Our comprehensive portfolio of products and solutions is continually enhanced by driving innovation into our markets with new product introductions, such as the digital tools that support project design and selection.

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In 2020, prompted by evolving customer needs in an increasingly competitive, cost-and-efficiency conscious construction industry, we refreshed our branding strategy from a house of brands to a branded house, uniting all brands under one master brand, Atkore, and adopted the “Building Better Together” theme to demonstrate how we work with customers and customers’ customers. An indicator of the effectiveness of our marketing and branding strategy is the marketplace recognition Atkore has garnered through a number of awards, including the tED Best of the Best Award for best brand campaign, an AD Electrical Marketing Excellence Award, and a tED Advertising Award.

Competition

Our principal competitors range from national manufacturers to smaller regional manufacturers and differ by each of our product lines. We also face competition from manufacturers in Canada, Mexico and several other international markets, depending on the product. We believe our customers purchase from us because we provide value through the quality of our products, the breadth of our portfolio and the timeliness of our delivery. Competitive pressures are generally in the areas of product offering, product innovation, quality, service and price.

The main competitors in each of these segments are listed below:
    
Electrical: ABB Ltd., Eaton Corporation plc, nVent Electric plc, Hubbell Incorporated, Zekelman Industries, Inc., Nucor Corporation, Southwire Company, LLC, and Encore Wire Corporation plc.

Safety & Infrastructure: Zekelman Industries, Inc., Eaton Corporation plc, ABB Ltd. and Haydon Corporation

Management of Information Technology Systems

Historically, information technology has not been a significant differentiator for us in our markets, however, we believe that the ease of doing business with us will become increasingly important to our growth and are making significant investments to improve our operations and provide valuable solutions for our customers. Over the past six years, Atkore has made significant investments in technology to improve our business and provide value to our customers.

Currently, we operate our business using commercially available hardware and software products with well-developed support services. In addition to these widely available IT products, we developed a new application for our agents that we believe will improve the overall order entry process. Additionally, during fiscal 2016, we invested in installing and implementing a new general ledger and financial reporting system for the entire Company replacing a number of systems used in various parts of the Company. We have also chosen to migrate our email service and various other information technology services to a cloud computing platform hosted by Microsoft. During fiscal 2019, we completed the implementation of an integrated system for order management, advanced warehouse management, finished goods inventory management and accounts receivable.

We are in the final stages of a customer-facing technology investment that streamlines the process of designing installation plans, ordering, and managing the process through delivery, providing speed and accuracy not available from our competitors.

In today’s business environment, cybersecurity is of paramount importance and Atkore has also invested significantly to strengthen our cybersecurity posture.

Human Capital Resources

Culture

Atkore believes that a strong culture of engagement and alignment drives continuous improvement, enhances our customers’ experience, and delivers strong performance.

We aim to foster a workplace where our employees feel aligned with our mission, proud of our culture and engaged in their work. Our annual Employee Engagement and Alignment Survey is one of our primary tools to assess our performance as an employer of choice and to measure employee engagement and satisfaction.

Atkore operates under a set of core values of Accountability, Teamwork, Integrity, Respect and Excellence and the Atkore Business System, which prioritizes Strategy, People and Processes, the fundamentals of how we Build Better Together. Our culture provides employees with opportunities for personal and professional development as well as community
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engagement, all of which contribute to our Company’s overall success. In addition to many other awards, in 2020, Atkore was recognized as a Great Place to Work-CertifiedTM company.

Employee Base

As of September 30, 2021, we employed approximately 4,000 full-time equivalent employees of whom approximately 15% are temporary or contract workers. Our employees are primarily located in the United States, with about 18% employed at our international locations in Australia, Belgium, Canada, China, New Zealand, Russia, and the United Kingdom.

As of September 30, 2021, approximately 21% of our domestic and international employees were represented by a union under a collective bargaining agreement. All unions are either located in the United States or Canada with no unions or Worker’s Councils at any of our other locations abroad.

From time to time, our collective bargaining agreements expire and come up for re-negotiations. On July 14, 2020, the Company and the United Steelworkers Union, representing approximately 350 employees, reached an agreement on the terms of a new collective bargaining agreement for our largest facility in Harvey, Illinois, which expires in April 2024. We believe our relationship with our employees is good.

Safety, Health and Well-Being

At Atkore, nothing is more important than the safety and well-being of our people. We seek to ensure that employees, customers, contractors, and visitors to our facilities go home safely at the end of each day, and we empower everyone to proactively identify and eliminate risks to promote an injury-free and incident-free workplace.

In 2021, we launched our new safety brand “Let’s Make It Home,” a safety program encompassing our commitment to safety and reinforcing the importance of living our values in order to create a workplace where everyone feels respected, appreciated and safe. Developed by and for employees, Let’s Make It Home makes safety at Atkore personal and reminds everyone that safety is integral to every action.

In 2021, we also introduced updates to our Life Saving Rules, which provide additional guidance on the actions every employee must take to ensure safe practices across our operations. Our employees are required to receive Atkore Kore Training and Safety Alerts, which cover high-hazard occupational safety concerns and compliance with both internal and external safety and environmental permits. Every one of our sites completes a self-assessment and certification of completion.

We believe Atkore’s investments in safety, health and well-being are critical to supporting and protecting our most important asset: our people.

Diversity, Equity and Inclusion

At Atkore, we believe that diversity of all types contributes to our success and that our differences make us better. We believe that supporting a diverse, equitable and inclusive workplace fosters a culture of openness and innovation. Our commitment to Diversity, Equity and Inclusion (“DE&I”) is embedded throughout the company with a range of programs driven by our DE&I Roadmap, which helps us identify and execute specific actions and monitor our progress toward a workplace where all employees feel they belong and are empowered to do their best work.

In 2021, we integrated DE&I topics into our employee onboarding process and rolled out unconscious bias training for salaried employees. We include the importance of building diverse and inclusive teams in manager training and structure the interview process to minimize implicit biases. All employees are required to complete anti-harassment training.

We regularly evaluate our progress on DE&I across the company. Our longstanding DE&I Steering Committee leads many of our programs and internal efforts, evaluating how we can continue to improve and create a more inclusive culture. Each employee is encouraged to bring their uniqueness to the Company, which unlocks their individual potential and Atkore’s organizational potential.

Talent Development and Retention

Our ability to successfully operate, grow and implement key business strategies is dependent upon our ability to attract, develop and retain talented employees at all levels of our Company. As part of our human capital resource objectives, we support our employees by using strategic workforce planning to forecast future needs, building, and leveraging an inclusive leadership mindset, and applying a robust talent management process, including our onboarding and immersion program and our monthly organizational leadership review cadence.

We provide opportunities for advancement through rotational and stretch assignments and best practice leadership roles. In fiscal 2021, approximately 40% of our total positions filled came from internal promotions, highlighting our commitment to developing our employees.
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The Company rewards employees with competitive compensation and benefits packages, including attractive medical plans, retirement plans, opportunities for annual bonuses and, for eligible employees, long-term incentives and equity-based compensation. The Company believes our compensation program allows us to attract and retain talented employees.

Engagement and Alignment

We have a culture of engagement and alignment and believe fully engaged employees stay focused on being a standout leader, support the decisions of the leadership team and strive for breakthrough results. An aligned employee lives our mission and values, learns our strategic priorities and links their individual goals to those priorities. Our 2021 engagement and alignment survey had an overall participation rate of 72%. In fiscal 2021, 61% of our hourly workforce participated in the survey, compared to 37% of hourly employees in fiscal 2020. The result of the survey showed the following favorable percentages: Engagement 83%; Alignment 83%; Safety 91%; and Diversity Equity & Inclusion 80%.

Human Rights

Atkore is committed to supporting human rights and fair labor practices for all our employees, suppliers, contractors, business partners and in the communities where we operate. We will not tolerate human rights abuses of any kind, including human trafficking, child labor or incidents of corruption within our company or supply chain. Employees are encouraged to report any potential violations or concerns, and all reports are promptly and impartially investigated.

Our Human Rights Policy defines our dedication to protecting human rights and is driven by our core values and is aligned with national and international principles of human rights.

Atkore’s Supplier Integrity and Sustainability Standards set forth our expectation that suppliers uphold our commitment to human rights. In 2021, we launched our Supplier Business Review Agenda with several of our largest suppliers to ensure our partners could conduct business in alignment with our values.

Response to COVID-19 Pandemic

In response to the evolving impacts of the novel coronavirus (“COVID-19”) pandemic, we took proactive steps to help protect the safety and well-being of our employees, as well as maintain the continuity of our business. We quickly created a cross-functional, COVID-19 Response Committee to track and address COVID-19 cases and impacts in the locations around the world where our employees live and work. We implemented various safety protocols, such as personal protective equipment and facemasks, social distancing, enhanced cleaning, health screens and a vaccination wellness incentive to foster a safe working environment for our employees, customers, and vendors. In addition, we have increased the level of communication from our leaders to better inform and support our employees. Atkore continues to monitor and is prepared to take action on the COVID-19 pandemic. The measures we have taken have allowed us to continue our manufacturing operations and allow office employees to return to in-person work.

Intellectual Property

Patents and other proprietary rights can be important to our business. We also rely on trade secrets, manufacturing know-how, continuing technological innovations, and licensing opportunities to maintain and improve our competitive position. We periodically review third-party proprietary rights, including patents and patent applications, in an effort to avoid infringement of third-party proprietary rights, identify licensing opportunities and monitor the intellectual property claims of others.

We own a portfolio of patents and trademarks. Other than licenses to commercially available third-party software, we do not believe that any of our licenses to third-party intellectual property are material to our business taken as a whole. Patents for individual products extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection is obtained. We rely on both trademark registration and common law protection for trademarks. Trademark rights may potentially extend indefinitely and are dependent upon national laws and use of the trademarks.

While we consider our patents and trademarks to be valuable assets, we do not believe that our competitive position is dependent on patent or trademark protection or that our operations are dependent upon any single patent or group of related patents. We nevertheless face intellectual property-related risks. For more information on these risks, see Item 1A, “Risk Factors—Risks Related to Our Business—We may not be able to adequately protect our intellectual property rights in foreign countries, and we may become involved in intellectual property disputes.”

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Regulatory Matters

Our facilities are subject to various federal, state, local and non-U.S. regulations including the protection of human health, safety and the environment. Among other things, these laws govern the use, storage, treatment, transportation, disposal and management of hazardous substances and wastes; regulate emissions or discharges of pollutants or other substances into the air, water, or otherwise into the environment; impose liability for the costs of investigating and remediating, and damages resulting from, present and past releases of hazardous substances and protect the health and safety of our employees.

We have incurred, and expect to continue to incur, capital expenditures in addition to ordinary course costs to comply with applicable current and future environmental, health and safety laws, such as those governing air emissions and wastewater discharges. In addition, government agencies could impose conditions or other restrictions in our environmental permits which increase our costs. These laws are subject to change, which can be frequent and material. More stringent federal, state or local environmental rules or regulations could increase our operating costs and expenses.

The cost of compliance with environmental, health and safety laws and capital expenditures required to meet regulatory requirements is not anticipated to have a material effect on our financial position, results of operations, cash flows or competitive position.
    
In October 2013, the State of Illinois filed a complaint against our subsidiary Allied Tube, alleging violations of the Illinois Environmental Protection Act, or the “IEPA,” relating to discharges to a storm sewer system that terminates at Allied Tube’s Harvey, Illinois manufacturing facility. The State sought an injunction ordering Allied Tube to take immediate corrective action to abate the alleged violations and civil penalties as permitted by applicable law. Allied Tube has reviewed management practices and made improvements to its diesel fuel storage and truck maintenance areas to resolve the State’s claims. We entered into a consent order that required Allied Tube to pay a nominal penalty, install base low-flow oil and water separation equipment and take certain additional remedial actions to resolve the State’s claim. The installation of the low-flow oil and water separation equipment is complete and certain additional remediation activities are in progress. We do not currently expect that any remaining obligations would have a material effect on our financial position, results of operations or cash flows.

In August 2014, we received from the IEPA the terms of a proposed new stormwater discharge permit for our Harvey, Illinois manufacturing facility. Because the facility did not meet the zinc limit set forth in the proposed permit, the Company commenced negotiations with the IEPA to agree upon mutually acceptable discharge limits. During these negotiations, the facility was operating under an extension of the terms of our existing stormwater discharge permit. In October 2016, we received the final permit. A mutually agreed upon compliance plan is part of the permit, which was modified in December 2019 to accommodate trials of a metal coating technology that would nearly eliminate the largest source of zinc emissions from our galvanizing operations. Although the metal coating trials were not successful, we are in the final stages of installing zinc treatment systems for both the storm water discharges, but also further reducing the zinc emitted from the galvanizing manufacturing operations. A new permit was issued August 5, 2021 that includes a less stringent permit limit based on the receiving stream evaluation, which also includes a one-year start-up / shake-down period to meet the new zinc limit. The compliance plan includes studies to reduce zinc emitted from galvanizing manufacturing operations, implementation of more rigorous management practices, evaluation of the installation of passive/cost effective stormwater treatment and receiving stream studies to determine if a less stringent permit limit will be as protective of the water system as the current permit limit. We continue to work towards compliance and have kept the IPEA informed on our progress. Given the scope and time frame of the compliance plan, we do not expect that achieving compliance with either the stormwater discharge permit or the plan will have a material effect on our financial position, results of operations or cash flows.

We are continually investigating, remediating or addressing contamination at our current and former facilities. For example, we are currently monitoring groundwater contamination at our Wayne, Michigan facility. Future remediation activities may be required to address contamination at or migrating from the Wayne, Michigan site. Many of our current and former facilities have a history of industrial usage for which additional investigation and remediation obligations could arise in the future and which could materially adversely affect our business, financial position, results of operations or cash flows.

Available Information

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We make available free of charge through our website, http://investors.atkore.com/sec-filings, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, other reports filed under the Securities Exchange Act of 1934 (“Exchange Act”), and all amendments to those reports simultaneously or as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Our reports are also available free of charge on the SEC’s website, www.sec.gov. References to our website in this Annual Report on Form 10-K do not constitute an incorporation by reference of any of the information found on our website, and such information is not a part of this or any other report we file with or furnish to the SEC.


Item 1A. Risk Factors

You should carefully consider the factors described below, in addition to the other information set forth in this Annual Report on Form 10-K. These risk factors are important to understanding the contents of this Annual Report on Form 10-K and of other reports. Our reputation, business, financial position, results of operations and cash flows are subject to various risks. The risks and uncertainties described below are not the only ones relevant to us. Additional risks and uncertainties not currently known to us or that we currently believe are immaterial may also adversely impact our reputation, business, financial position, results of operations and cash flows.

Risks Related to Our Business
    
Our performance may be impacted by general business and economic conditions, which could materially and adversely affect our business, financial position, results of operations or cash flows.

The success of our business is affected by a number of general business and economic conditions. Our primary end markets are new non-residential construction, repair and remodel (“MR&R”), residential, OEM, and international markets. Decrease in global economic activity may result in downturns or periods of economic weakness in our primary end markets. Such decreases may be instigated by factors beyond our control, including economic recessions, the COVID-19 pandemic, supply chain disruptions, availability of raw materials and other items sourced for production and delivery of finished product, changes in end-user preferences, consumer confidence, inflation, availability of credit, fluctuations in interest and currency exchange rates and changes in the fiscal or monetary policies of governments in the regions in which we operate. In turn, we may experience diminished demand for our products, which could create excess capacity and reduce the prices which we are able to charge for our products. The materialization of any of these risks could have a material adverse effect on our business, financial position, results of operations and cash flows.

During the United States economic recession which began in the second half of 2007 and continued through June of 2009, demand for our products declined significantly. Another economic downturn in any of the markets we serve may result in a reduction of sales and pricing for our products. Any such economic downturn could also adversely affect the creditworthiness of our customers. If the creditworthiness of our customers declines, we could face increased credit risk and some, or many, of our customers may not be able to pay us amounts when they become due. Economic downturns may also result in restructuring actions and associated expenses and the impairment of long-lived assets, including goodwill and other intangibles. In particular, we may be forced to close underperforming facilities. Any such restructuring actions, combined with reduced demand and excess capacity, could negatively impact our business, financial position, results of operations or cash flows.    

We cannot predict economic conditions, or the timing or strength of demand in our markets. Weakness in the markets in which we operate could have a material adverse effect on our business, financial position, results of operations or cash flows.

The non-residential construction industry accounts for a significant portion of our business, and a downturn in the non-residential construction industry could materially and adversely affect our business, financial position, results of operations or cash flows.
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Our business is largely dependent on the non-residential construction industry. Approximately 33% of our net sales in fiscal 2021 were directly related to United States new non-residential construction. For new construction, we estimate that our product installation typically lags United States non-residential starts by six to twelve months. The United States non-residential construction industry is cyclical, with product demand based on numerous factors such as availability of credit, interest rates, general economic conditions, consumer confidence and other factors that are beyond our control. United States non-residential construction starts, as reported by Dodge, reached a historic low of 690 million square feet in our fiscal 2010 and increased to 1,243 million square feet in our fiscal 2021, which remains below historical levels.

From time to time we have been adversely affected in various parts of the country by declines in non-residential building construction starts due to, among other things, supply chain disruptions and availability of construction labor and materials, changes in tax laws affecting the real estate industry, interest rate increases and governmental restrictions relating to the COVID-19 pandemic. Continued uncertainty about current economic conditions will continue to pose a risk to our business, financial position, results of operations and cash flows, as participants in this industry may postpone spending in response to negative financial news or declines in income or asset values, which could have a continued material negative effect on the demand for our products.
    
Widespread public health conditions, and specifically the COVID-19 pandemic, have had and could continue to have a material adverse impact on our business, financial position, results of operations and cash flows.

We are closely monitoring developments related to the COVID-19 pandemic to assess its impact on our business. While we have implemented risk management and contingency plans and taken preventive measures and other precautions, no predictions of specific scenarios can be made with respect to the COVID-19 pandemic and such measures may not adequately protect our business from the impact of such events. These impacts include disruptions or restrictions on our employees’ ability to travel as well as temporary closures of our facilities or the facilities of our customers, suppliers and other constituents of our supply chain.

As of the date of this filing, we have seen volume declines in our business across several product categories, as customers and end markets face some uncertainty and delays in timing of work. In particular, some construction site closures or project delays have occurred, and job sites have had to adjust to increased physical distancing, and shortages of labor and construction materials and health-related precautions. Given the continued uncertainty with respect to impacts of the pandemic, it is unknown how significant this will become. Further uncertainty and delays in our end-markets could have a material adverse impact on the demand for our products, some jurisdictions may raise taxes to help cover pandemic-related costs and disruptions to or adverse conditions in the financial industry could affect our ability to obtain financing on favorable terms or at all.

While our operations are currently considered an “essential business”, the extent and duration of the COVID-19 pandemic’s impact remain highly uncertain and dependent on future developments that cannot be accurately predicted, such as the availability and effectiveness of vaccines, future mutations of the COVID-19 virus and any resulting impact of the effectiveness of vaccines, the severity of the COVID-19 pandemic, the extent and effectiveness of containment actions, and the impacts of these and other factors on our operations and the global economy. We also cannot predict how legal and regulatory responses to concerns about the COVID-19 pandemic and related public health issues will impact our business. These and other factors could have a material adverse impact on our business, financial position, results of operations and cash flows and may cause us to revisit or revise estimates of future earnings or other guidance we have previously provided to the markets.

Furthermore, the heightened uncertainty within the macroeconomic environment has caused our stock price to be volatile which could include declines in the future, due in part to the volatility of the stock market and any general economic downturn.

The raw materials on which we depend in our production process may be subject to price increases which we may not be able to pass through to our customers, or to price decreases which may decrease the prices of our products. As a result, such price fluctuations could materially and adversely affect our business, financial position, results of operations or cash flows.
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Our results of operations are impacted by changes in commodity prices, primarily steel, copper and PVC resin. Historically, we have not engaged in material hedging strategies for raw material purchases. Substantially all of the products we sell (such as steel conduit, tubing and framing, copper wiring in our cables, and PVC conduit) are subject to price fluctuations because they are composed primarily of steel, copper or PVC resin, three industrial commodities that are subject to price volatility. This volatility can significantly affect our gross profit. We also watch the market trends of certain other commodities, such as zinc (used in the galvanization process for a number of our products), electricity, natural gas and diesel fuel, as such commodities can be important to us as they impact our cost of sales, both directly through our plant operations and indirectly through transportation and freight expense.

We may not always be completely successful in managing raw material market fluctuations in the future. We generally sell our products on a spot basis (and not under long-term contracts). Accordingly, in periods of declining raw material prices, we may face pricing pressure from our customers to reduce our products’ prices. Conversely, in periods of increasing raw material prices, we may not be able to pass on such increases to our customers. Our inability to maintain established price levels in an environment of declining raw material prices, or offset increasing raw material prices by our products’ prices, could materially and adversely affect our business, financial position, results of operations or cash flows.

We operate in a competitive landscape, and increased competition could materially and adversely affect our business, financial position, results of operations or cash flows.

The principal markets that we serve are highly competitive. Competition is based primarily on product offering, product innovation, quality, service and price. Our principal competitors range from national manufacturers to smaller regional manufacturers and differ by each of our product lines. See Item 1, “Business—Competition.” Some of our competitors may have greater financial and other resources than we do and some may have more established brand names in the markets we serve. The actions of our competitors may encourage us to lower our prices or to offer additional services or enhanced products at a higher cost to us, which could reduce our gross profit, net income or cash flows or may cause us to lose market share. Any of these consequences could materially and adversely affect our business, financial position, results of operations or cash flows.

Our operating results are sensitive to the availability and cost of freight and energy, which are important in the manufacture and transport of our products.

We are dependent on third-party freight carriers to transport many of our products. Our access to third-party freight carriers is not guaranteed, and we may be unable to transport our products at economically attractive rates in certain circumstances, particularly in cases of adverse market conditions or disruptions to transportation infrastructure. Our business, financial position, results of operations or cash flows could be materially and adversely affected if we are unable to pass all of the cost increases on to our customers, if we are unable to obtain the necessary energy supplies or if freight carrier capacity in our geographic markets were to decline significantly or otherwise become unavailable.

Interruptions in the proper functioning of our information technology (“IT”) systems, including from cybersecurity threats, could disrupt operations and cause unanticipated increases in costs or decreases in revenues, or both.

We use our IT systems to, among other things, run and manage our manufacturing operations, manage inventories and accounts receivable, make purchasing decisions and monitor our results of operations, and process, transmit and store sensitive electronic data, including employee, supplier and customer records. As a result, the proper functioning of our IT systems is critical to the successful operation of our business. Our information systems include proprietary systems developed and maintained by us. In addition, we depend on IT systems of third parties, such as suppliers, retailers and OEMs to, among other things, market and distribute our products, develop new products and services, operate our website, host and manage our services, store data, process transactions, respond to customer inquiries and manage inventory and our supply chain. Although our IT systems are protected through physical and software safeguards and remote processing capabilities exist, our IT systems or those of third parties whom we depend upon are still vulnerable to natural disasters, power losses, unauthorized access, telecommunication failures and other problems. If critical proprietary or third-party IT systems fail or are otherwise unavailable, including as a result of system upgrades and transitions, our ability to manufacture, process orders, track credit risk, identify business opportunities, maintain proper levels of inventories, collect accounts receivable, pay expenses and otherwise manage our business would be adversely affected.

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Our business is also vulnerable to cyberattacks. Cyber incidents can result from deliberate attacks or unintentional events. Cybersecurity attacks in particular are becoming more sophisticated and more frequent and include, but are not limited to, malicious software, attempts to gain unauthorized access to data (either directly or through our vendors) for purposes of misappropriating assets or sensitive information, corrupting data, or causing operational disruption, “denial of service” attacks, phishing, untargeted but sophisticated and automated attacks and other disruptive software campaigns. We have been, and likely will continue to be, subject to potential damage from cybersecurity attacks. Despite our security measures, our IT systems and infrastructure or those of our third parties may be vulnerable to such cyber incidents. The result of these incidents could include, but are not limited to, disrupted operations, misstated or misappropriated financial data, theft of our intellectual property or other confidential information (including of our customers, suppliers and employees), liability for stolen assets or information, increased cyber security protection costs and reputational damage adversely affecting customer or investor confidence. In addition, if any information about our customers, including payment information, were the subject of a successful cybersecurity attack against us, we could be subject to litigation or other claims by the affected customers. We have incurred costs and may incur significant additional costs in order to implement the security measures we feel are appropriate to protect our IT systems.

Our business, financial position, results of operations or cash flows could be materially and adversely affected by the importation of similar products into the United States, as well as U.S. trade policy and practices.

A substantial portion of our revenue is generated through our operations in the United States. Imports of products similar to those manufactured by us may reduce the volume of products sold by domestic producers and depress the selling prices of our products and those of our competitors.

We believe import levels are affected by, among other things, overall worldwide product demand, the trade practices of the U.S. and foreign governments, the cost of freight, the challenges involved in shipping, government subsidies to foreign producers and governmentally imposed trade restrictions, such as quotas, tariffs, and other trade barriers in the United States. Increased imports of products similar to those manufactured by us in the United States could materially and adversely affect our business, financial position, results of operations or cash flows.

We are indirectly subject to regulatory changes that may affect demand for our products.

The markets for certain of our products are influenced by federal, state, local and international governmental regulations, trade policies and trade groups (such as the Buy America regulations, American Recovery and Reinvestment Act of 2009, Underwriters Laboratories, National Electrical Code and American Society of Mechanical Engineers) as well as other policies, including those imposed on the non-residential construction industry (such as the National Electrical Code and corresponding state and local laws based on the National Electrical Code). These regulations and policies are subject to change. Any changes to such regulations, laws and policies could materially and adversely affect our business, financial position, results of operations or cash flows. Specifically, changes to the National Electrical Code and any similar state, local or non-U.S. laws, including changes that would allow for alternative products to be used in the non-residential construction industry or that would render less restrictive or otherwise reduce the current requirements under such laws and regulations, could expand the scope of products which could serve as alternatives to our products. As a result, competition in the industries in which we operate could increase, with a potential corresponding decrease in the demand for our products. To remain competitive, we may be forced to reduce the prices of our products.

In addition, in the event that changes in such laws would render current requirements more restrictive, we may be required to change our products or production processes to meet such increased restrictions, which could result in increased costs and cause us to lose market share.

The materialization of any of these risks may have a material adverse effect on our business, financial position, results of operations or cash flows.

Our results of operations could be adversely affected by weather.

Although weather patterns affect our operating results throughout the year, adverse weather historically has reduced construction activity in our first and second fiscal quarters as construction activity declines due to inclement weather, frozen ground and shorter daylight hours. In contrast, our highest volume of net sales historically has occurred in our third and fourth fiscal quarters. If hurricanes, severe storms, floods, other natural disasters or similar events occur in the geographic regions in which we or our suppliers operate or through which deliveries must travel, our results of operations may be adversely affected.
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We have incurred and continue to incur significant costs to comply with current and future environmental and health and safety laws and regulations, and our operations expose us to the risk of material environmental and health and safety laws liability.

We are subject to numerous federal, state, local and non-U.S. environmental laws governing, among other things, the generation, use, storage, treatment, transportation, disposal and management of hazardous substances and wastes, emissions or discharges of pollutants or other substances into the environment, investigation and remediation of, and damages resulting from, releases of hazardous substances.

Our failure to comply with applicable environmental laws, regulations and permit requirements could result in civil or criminal fines or penalties, enforcement actions, and regulatory or judicial orders enjoining or curtailing operations or requiring corrective measures such as the installation of pollution control equipment, which could materially and adversely affect our business, financial position, results of operations or cash flows. Accordingly, compliance with these laws, regulations, permits and approvals is a significant factor in our business. We have incurred, and expect to continue to incur, capital expenditures in addition to ordinary course costs to comply with applicable current and future environmental laws, such as those governing air emissions and wastewater discharges. These laws are subject to change, which could be frequent and material. The imposition of more stringent federal, state or local environmental rules or regulations could increase our operating costs and expenses. In addition, government agencies could impose conditions or other restrictions in our environmental permits which increase our costs.

From time to time, we may be held liable for the costs to address contamination at any real property we have ever owned, operated or used as a disposal site. We are currently, and may in the future be, required to investigate, remediate or otherwise address contamination at our current or former facilities. Many of our current and former facilities have a history of industrial usage for which additional investigation, remediation or other obligations could arise in the future and that could materially and adversely affect our business, financial position, results of operations or cash flows. For example, as we sell, close or otherwise dispose of facilities, we may need to address environmental issues at such sites, including any previously unknown contamination.
    
We could be subject to third-party claims for property damage and nuisance or otherwise as a result of violations of, or liabilities under, environmental laws or in connection with releases of hazardous or other materials at any current or former facility. We could also be subject to environmental indemnification or other claims in connection with assets and businesses that we have divested.

We are also subject to various federal, state, local and foreign requirements concerning health and safety conditions at our manufacturing facilities, including those promulgated by the U.S. Occupational Safety and Health Administration (“OSHA”). The operation of manufacturing facilities involves many risks, including the failure or substandard performance of equipment, suspension of operations and new governmental statues, regulations, guidelines and policies. Our and our customers’ operations are also subject to various hazards incidental to the production, use, handling, processing, storage and transportation of certain hazardous materials. These hazards can cause personal injury, severe damage to and destruction of property and equipment and environmental damage. Furthermore, we may become subject to claims with respect to workplace exposure, personal injury, workers’ compensation and other matters. We may be subject to material financial penalties or liabilities for noncompliance with health and safety requirements, as well as potential business disruption, if any of our facilities or a portion of any facility is required to be temporarily closed as a result of any significant injury or any noncompliance with applicable requirements. Moreover, we have sustained capital expenditure in complying with applicable health and safety laws and regulations, and any changes to such laws and regulations could increase our costs of operations.

We cannot assure you that any costs relating to future capital and operating expenditures to maintain compliance with environmental, health and safety laws, as well as costs to address contamination or environmental claims, will not exceed any current estimates or adversely affect our business, financial position, results of operations or cash flows. Any unanticipated liabilities or obligations arising, for example, out of discovery of previously unknown conditions or changes in law or enforcement policies, could materially and adversely affect our business, financial position, results of operations or cash flows.

We rely on several customers for a significant portion of our net sales, and the loss of such customers, or their inability or unwillingness to pay our invoices on time could materially and adversely affect our business, financial position, results of operations or cash flows.
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Certain of our customers, in particular buying groups representing consortia of independent electrical distributors, national electrical distributors, OEMs, data centers and medical center general contractors are material to our business, financial position, results of operations and cash flows because they account for a significant portion of our net sales. In fiscal 2021, although no single customer accounted for more than 10% of our net sales, our ten largest customers (including buyers and distributors in buying groups) accounted for approximately 37% of our net sales. Our percentage of sales to our major customers may increase if we are successful in our strategy of expanding the range of products which we sell to existing customers. In such an event, or in the event of any consolidation in certain segments we serve, including retailers selling building products, our sales may be increasingly sensitive to deterioration in the financial condition of, or other adverse developments with respect to, one or more of our top customers. Our top customers may also be able to exert influences on us with respect to pricing, delivery, payment or other terms. Any termination of a business relationship with, or a significant sustained reduction in business received from, one or more of our largest customers could have a material adverse effect on our business, financial position, results of operations or cash flows.

The majority of our net sales are facilitated through the extension of credit to our customers, and a significant asset included in our working capital is accounts receivable from customers. As of September 30, 2021, CED National represented 11% of the Company’s accounts receivable, with no significant amounts past due. As of September 30, 2020, one customer, Sonepar Management US, Inc., represented 11% of the Company’s accounts receivable balance due to increased sales in the last 60 days of the year. See Note 17, “Segment Information” to the accompanying consolidated financial statements included elsewhere in this Annual Report. If customers responsible for a significant amount of accounts receivable become insolvent or otherwise unable to pay for products and services, or become unwilling or unable to make payments in a timely manner, our business, financial position, results of operations or cash flows could be materially and adversely affected.

Our working capital requirements could result in us having lower cash available for, among other things, capital expenditures and acquisition financing.
    
Our working capital needs fluctuate based on economic activity and the market prices for our main raw materials, which are predominantly steel, copper and PVC resin. We require significant working capital to purchase these raw materials and sell our products efficiently and profitably to our customers. Our cash collection cycle is generally one to two months longer than our cash payment cycle. If our working capital requirements increase and we are unable to finance our working capital on terms and conditions acceptable to us, we may not be able to obtain raw materials to respond to customer demand, which could result in a loss of sales.

If our working capital needs increase, the amount of liquidity we have at our disposal to devote to other uses will decrease. A decrease in liquidity could, among other things, limit our flexibility, including our ability to make capital expenditures and to complete acquisitions that we have identified, thereby materially and adversely affecting our business, financial position, results of operations and cash flows.
    
Labor disputes, increased labor costs or work stoppages could adversely affect our operations and impair our financial performance.

As of September 30, 2021, approximately 21% of our domestic and international employees were represented with a collective bargaining agreement by labor unions. Work stoppages or production interruptions could occur at our facilities or our suppliers’ facilities. Such disputes may arise under existing collective bargaining agreements with labor unions or in connection with negotiations of new collective bargaining agreements, as a result of supplier financial distress or for other reasons. Any amendments to existing collective bargaining agreements, or the implementation of new collective bargaining agreements, could result in increased labor costs.

Any organizing efforts, significant work stoppages or increases in labor costs could materially and adversely affect our business, financial position, results of operations or cash flows. See Item 1, “Business—Human Capital Resources.”

Our business requires skilled labor, and we may be unable to attract and retain qualified employees.

The Company’s success is dependent on our employees, so it’s critical that we continue to attract and retain talent. To accomplish this, the Company needs to offer a total rewards package that includes competitive benefits and pay, reflecting our long-term commitment to the well-being of our employees. Efforts to attract talent to fill open roles in light of recent constrained labor availability may take more time than in the past and may cost the Company significantly more than in recent years. Moreover, the constrained labor conditions may mean that retention of existing talent may require significant additional pay and incentives.
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We have financial obligations relating to pension plans that we maintain in the United States.

We provide pension benefits through a number of noncontributory and contributory defined benefit retirement plans covering eligible United States employees. As of September 30, 2021, we estimated that our pension plans were underfunded by approximately $2.7 million, both of which are frozen and do not accrue any additional service cost. As such, the funded status is primarily impacted by the performance of the underlying assets supporting the plan and changes in interest rates or other factors, which may trigger additional cash contributions. Our pension obligations are calculated annually and are based on several assumptions, including then-prevailing conditions, which may change from year to year. If in any year our assumptions are inaccurate, we could be required to expend greater amounts than anticipated.

Unplanned outages at our facilities or those of our suppliers and other unforeseen disruptions could materially and adversely affect our business, financial position, results of operations or cash flows.
    
Our business depends on the operation of our manufacturing and distribution facilities as well as those of our suppliers. It is possible that we or they could experience prolonged periods of reduced production or distribution capacity due to interruptions in the operations of our facilities or those of our key suppliers. It is also possible that operations may be disrupted due to other unforeseen circumstances such as power outages, explosions, fires, floods, accidents, effects of the pandemic and severe weather conditions. Availability of raw materials and delivery of products to customers could be affected by logistical disruptions. To the extent that lost production or distribution capacity could not be compensated for at unaffected facilities and depending on the length of the outage, our sales and production costs could be adversely affected.

We rely on the efforts of agents and distributors to generate sales of our products.

We utilize various third-party agents and distributors to market, sell and distribute our products and to directly interact with our customers and end-users by providing customer service and support. No single agent or distributor accounts for a material percentage of our annual net sales. We do not have long-term contracts with our third-party agents and distributors, who could cease offering our products. In addition, many of our third-party agents and distributors with whom we transact business also offer the products of our competitors to our ultimate customers and they could begin offering our products with less prominence. The loss of a substantial number of our third-party agents or distributors or a dramatic deviation from the amount of sales they generate, including due to an increase in their sales of our competitors’ products, could reduce our sales and could materially and adversely affect our business, financial position, results of operations or cash flows.

We may be required to recognize goodwill, intangible assets or other long-lived asset impairment charges.

As of September 30, 2021, we had goodwill of $199.0 million, intangible assets of $241.2 million, and other long-lived assets of $316.7 million. Goodwill and indefinite-lived intangible assets are not amortized and are subject to impairment testing at least annually. Future events, such as declines in our cash flow projections or customer demand, may cause impairments of our goodwill or long-lived assets based on factors such as the price of our common stock, projected cash flows, assumptions used or other variables.

In addition, if we divest long-lived assets at prices below their asset value, we must write them down to fair value resulting in long-lived asset impairment charges, which could adversely affect our financial position or results of operations. See Note 12, “Goodwill and Intangible Assets” to the accompanying consolidated financial statements included elsewhere in this Annual Report. We cannot accurately predict the amount and timing of any impairment of assets, and we may be required to recognize goodwill or other asset impairment charges which could materially and adversely affect our results of operations. See “Item 8. Financial Statements and Supplementary Data”.
    
We are subject to certain safety and labor risks associated with the manufacturing and testing of our products.

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As of September 30, 2021, we employed approximately 4,000 total full-time equivalent employees, a significant percentage of whom work at our 42 manufacturing facilities. Our business involves complex manufacturing processes and there is a risk that an accident resulting in property damage, personal injury or death could occur in one of our facilities. In addition, prior to the introduction of new products, our employees test such products under rigorous conditions, which could potentially result in injury or death. The outcome of any personal injury, wrongful death or other litigation is difficult to assess or quantify and the cost to defend litigation can be significant. As a result, the costs to defend any action or the potential liability resulting from any such accident or death or arising out of any other litigation, and any negative publicity associated therewith or negative effects on employee morale, could have a negative effect on our business, financial position, results of operations or cash flows. In addition, any accident could result in manufacturing or product delays, which could negatively affect our business, financial position, results of operations or cash flows. See Item 8, “Financial Statements and Supplementary Data”.

The nature of our business exposes us to product liability, construction defect and warranty claims and litigation as well as other legal proceedings, which could materially and adversely affect our business, financial position, results of operations or cash flows.

We are exposed to construction defect and product liability claims relating to our various products if our products do not meet customer expectations. Such claims and liabilities may arise out of the quality of raw materials or component parts we purchase from third-party suppliers, over which we do not have direct control, or due to our fabrication, assembly, or damage in shipment of our products. In addition, we warrant certain of our products to be free of certain defects and could incur costs related to paying warranty claims in connection with defective products. We cannot assure you that we will not experience material losses or that we will not incur significant costs to defend or pay for such claims.

While we currently maintain insurance coverage to address a portion of these types of liabilities, we cannot make assurances that we will be able to obtain such insurance on acceptable terms in the future, if at all, or that any such insurance will provide adequate coverage against potential claims. Further, while we intend to seek indemnification against potential liability for product liability claims from relevant parties, we cannot guarantee that we will be able to recover under any such indemnification agreements. Any claims that result in liability exceeding our insurance coverage and rights to indemnification by third parties could materially and adversely affect our business, financial position, results of operations or cash flows. Product liability claims can be expensive to defend and can divert the attention of management and other personnel for significant time periods, regardless of the ultimate outcome. For example, certain of our subsidiaries have been named as defendants in product liability lawsuits claiming that our ABF II anti-microbial coated sprinkler pipe allegedly caused environmental stress cracking in chlorinated PVC pipe. See Note 15, “Commitments and Contingencies” to the accompanying consolidated financial statements included elsewhere in this Annual Report. An unsuccessful product liability defense could be highly costly and accordingly result in a decline in revenues and profitability.

From time to time, we are also involved in government inquiries and investigations, as well as consumer, employment, tort proceedings and other litigation. We cannot predict with certainty the outcomes of these legal proceedings and other contingencies. The outcome of some of these legal proceedings and other contingencies could require us to take actions which would adversely affect our operations or could require us to pay substantial amounts of money. Additionally, defending against these lawsuits and proceedings may involve significant expense and diversion of management’s attention and resources from other matters.

We may not be able to adequately protect our intellectual property rights, and we may become involved in intellectual property disputes.

Our use of contractual provisions, confidentiality procedures and agreements, and patent, trademark, copyright, unfair competition, trade secret and other laws to protect our intellectual property and other proprietary rights may not be adequate. We have registered intellectual property (mainly trademarks and patents) in more than 75 countries. Because of the differences in foreign trademark, patent and other intellectual property or proprietary rights laws, we may not receive the same protection in foreign countries as we would in the United States.

Any failure of various measures to protect our technology and intellectual property, the independent discovery by third parties of our trade secrets and proprietary know-how and the independent development of substantially equivalent proprietary information or techniques by third parties could impair our competitive advantage. In particular, the infringement, expiration or other loss of these methods and other proprietary information could reduce the barriers to entry into our existing lines of business and may result in a loss of market share, which could have a material adverse effect on our business, financial position, results of operations and cash flows.

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Litigation may be necessary to enforce our intellectual property rights or to defend against claims by third parties that our products infringe their intellectual property rights. Any litigation or claims brought by or against us could result in substantial costs and diversion of our resources. A successful intellectual property infringement suit against us could prevent us from manufacturing or selling certain products in a particular area, which could materially and adversely affect our business, financial position, results of operations or cash flows.

We face risks associated with our international operations which could materially and adversely affect our business, financial position, results of operations or cash flows.

Our business operates and serves customers in certain foreign countries, including Australia, Belgium, Canada, China, New Zealand, Russia and the United Kingdom. There are certain risks inherent in doing business internationally, including economic volatility and sustained economic downturns, difficulties in enforcing contractual and intellectual property rights, currency exchange rate fluctuations and currency exchange controls, import or export restrictions, sanctions and changes in trade regulations, difficulties in developing, staffing, and simultaneously managing a number of foreign operations as a result of distance, issues related to occupational safety and adherence to local labor laws and regulations, potentially adverse tax developments, longer payment cycles, exposure to different legal standards, political or social unrest, including terrorism, risks related to government regulation and uncertain protection and enforcement of our intellectual property rights, the presence of corruption in certain countries and higher than anticipated costs of entry.

One or more of these factors could materially and adversely affect our business, financial position, results of operations or cash flows.

Changes in foreign laws and legal systems could materially impact our business.

Evolving foreign laws and legal systems, including those that will occur as a result of the United Kingdom’s withdrawal from the European Union (“Brexit”), may adversely affect global economic and market conditions and could contribute to volatility in the foreign exchange markets. 

The United Kingdom left the E.U. on January 31, 2020. On May 1, 2021, the E.U.-U.K. Trade and Cooperation Agreement (the “TCA”) became effective. The TCA provides the United Kingdom and E.U. members with preferential access to each other’s markets, without tariffs or quotas on imported products between the jurisdictions, provided that certain rules of origin requirements are complied with. However, economic relations between the United Kingdom and the E.U. will now be on more restricted terms than existed prior to Brexit. It is difficult to predict the severity of the impact of these changes on our United Kingdom and E.U. based operations. Goods moving between the United Kingdom and any member of the E.U. will be subject to additional customs requirements and documentation checks, leading to possible higher transportation and regulatory costs, as well as delays at ports of entry and departure. Such delays could adversely impact elements of our supply chain and also our ability to meet customers’ delivery schedules. The United Kingdom has yet to determine which E.U. laws and regulations to replace or replicate and compliance with any amended or additional laws and regulations could increase our costs. To the extent that higher costs are incurred which cannot be passed on to our customers, this could decrease the profitability of our United Kingdom and E.U. operations.

Our inability to introduce new products effectively or implement our innovation strategies could adversely affect our ability to compete.

We continually seek to develop products and solutions that allow us to stay at the forefront of developments in the Electrical and Safety & Infrastructure markets. The success of new products depends on a variety of factors, including but not limited to, timely and successful product development, the effective consummation of strategic acquisitions, market acceptance and demand, competitive response, protection of associated intellectual property and avoidance of third-party infringement of the Company’s intellectual property, our ability to manage risks associated with product life cycles, the effective management of inventory and purchase commitments, the availability and cost of raw materials and the quality of our initial products during the initial period of introduction. Some of the foregoing factors are beyond our control and we cannot fully predict the ultimate success of the introduction of new products, especially in the early stages of innovation. In introducing new products and implementing our innovation strategies, any delays, unexpected costs, diversion of resources, loss of key employees or other setbacks could materially and adversely affect our business, financial position, results of operations or cash flows.
    
Our business, financial position or results of operations could be materially and adversely affected by our inability to acquire or import raw materials, component parts or finished goods from existing suppliers and significant increases in government regulation or restrictions relating to such imports.

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Our business, financial position or results of operations could be materially and adversely affected by our inability to import raw materials, component parts or finished goods under the regulatory regimes applicable to our business. Although we seek to have alternate sources and recover increases in input costs through price increases in our products, regulatory changes or other governmental actions could result in the need to change suppliers or incur cost increases that cannot, in the short term, or in some cases even the long term, be offset by our prices. Such changes could reduce our gross profit, net income and cash flow. Any of these consequences could materially and adversely affect our business, financial position, results of operations or cash flows.

We rely on materials, components and finished goods, such as Cpic fiber, steel and aluminum, that are sourced from or manufactured in foreign countries. Import tariffs and potential import tariffs have resulted or may result in increased prices for these imported goods and materials and, in some cases, may result or have resulted in price increases for domestically sourced goods and materials. Changes in U.S. trade policy have resulted and could result in additional reactions from U.S. trading partners, including adopting responsive trade policies making it more difficult or costly for us to export our products or import goods and materials from those countries. These measures could also result in increased costs for goods imported into the U.S. or may cause us to adjust our worldwide supply chain. Either of these could require us to increase prices to our customers which may reduce demand, or, if we are unable to increase prices, result in lowering our margin on products sold.

Additionally, anti-terrorism measures and other disruptions to the raw material supply network could impact our operations and those of our suppliers. In the aftermath of terrorist attacks in the United States, federal, state and local authorities have implemented and continue to implement various security measures that affect the raw material supply network in the United States and abroad. If security measures disrupt or impede the receipt of sufficient raw materials to us and our suppliers, we may fail to meet the needs of our customers or may incur increased expenses to do so.

In connection with acquisitions, joint ventures or divestitures, we may become subject to liabilities and required to issue additional debt or equity.     
    
In connection with any acquisitions or joint ventures and agreements relating to Tyco’s 2010 sale of a greater than 50% stake in the Company, we may acquire or become subject to liabilities such as legal claims, including but not limited to third-party liability and other tort claims; claims for breach of contract; employment-related claims; environmental liabilities, conditions or damage; permitting, regulatory or other compliance with law issues; liability for hazardous materials; or tax liabilities. If any of these liabilities are not adequately covered by insurance or an enforceable indemnity or similar agreement from a creditworthy counterparty, we may be responsible for significant out-of-pocket expenditures. In connection with any divestitures, we may incur liabilities for breaches of representations and warranties or failure to comply with operating covenants under any agreement for a divestiture. In addition, we may have to indemnify a counterparty in a divestiture for certain liabilities of the subsidiary or operations subject to the divestiture transaction. These liabilities, if they materialize, could materially and adversely affect our business, financial position, results of operations or cash flows.

In addition, if we were to undertake a substantial acquisition for cash, the acquisition would likely need to be financed in part through additional financing from banks, through public offerings or private placements of debt or equity securities or through other arrangements. Such acquisition financing might decrease our ratio of earnings to fixed charges and adversely affect other leverage criteria and our credit rating. We cannot assure you that the necessary acquisition financing would be available to us on acceptable terms if and when required. Moreover, acquisitions financed through the issuance of equity securities could cause our stockholders to experience dilution.

We may be unable to identify, acquire, close or integrate acquisition targets successfully.

Acquisitions are a component of our growth strategy; however, there can be no assurance that we will be able to continue to grow our business through acquisitions as we have done historically or that any businesses acquired will perform in accordance with expectations or that business judgments concerning the value, strengths and weaknesses of businesses acquired will prove to be correct. We will continue to analyze and evaluate the acquisition of strategic businesses or product lines with the potential to strengthen our industry position or enhance our existing product offering. We cannot assure you that we will identify or successfully complete transactions with suitable acquisition candidates in the future, nor can we assure you that completed acquisitions will be successful. If an acquired business fails to operate as anticipated or presents greater than expected liability profile or cannot be successfully integrated with our existing business, our business, financial position, results of operations or cash flows could be materially and adversely affected.
    
Regulations related to “conflict minerals” may force us to incur additional expenses, create complexities in our supply chain and damage our reputation with customers.
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As a public company, we are subject to the requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the “Dodd-Frank Act.” The SEC has adopted requirements under the Dodd-Frank Act for companies that use certain minerals and metals, known as conflict minerals, in their products, whether or not these products are manufactured by third parties. These requirements require companies to conduct due diligence and disclose whether or not such minerals originate from the Democratic Republic of Congo and adjoining countries. There are costs associated with complying with these disclosure requirements, including for efforts to determine the sources of conflict minerals used in our products and other potential changes to products, processes or sources of supply as a consequence of such verification activities.

In addition, compliance with these requirements could adversely affect the sourcing, supply and pricing of materials used in our products. Specifically, such requirements could limit the pool of suppliers who can provide conflict-free minerals and as a result, we may not be able to obtain these conflict-free minerals at competitive prices. We may also face reputational challenges if we are unable to verify the origins for all “conflict minerals” used in our products through the procedures we have implemented. We may also encounter challenges to satisfy customers that may require all of the components of products purchased to be certified as conflict free. If we are not able to meet customer requirements, customers may choose to disqualify us as a supplier, or we may be forced to reduce our prices to compensate for this lack of certification.

Risks Related to Our Indebtedness

Our indebtedness may adversely affect our financial health.

As of September 30, 2021, we had approximately $771.1 million of total long-term consolidated indebtedness outstanding (including current portion) under AI and AII’s credit facilities (“Credit Facilities”), which consist of: (i) an asset-based credit facility (“ABL Credit Facility”); (ii) the new senior secured term loan facility (the “New Senior Secured Term Loan Facility”); and (iii) the 4.25% Senior Notes due 2031 (the “Senior Notes”). As of September 30, 2021, AII had $315.5 million of available borrowing capacity under the ABL Credit Facility and there were no outstanding borrowings (excluding $9.5 million of letters of credit issued under the facility). Our indebtedness could have important consequences for you. Because of our indebtedness:

our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or general corporate purposes and our ability to satisfy our obligations with respect to our indebtedness may be impaired in the future;
a large portion of our cash flow from operations may be dedicated to the payment of principal and interest on our indebtedness, thereby reducing the funds available to us for other purposes;
we are exposed to the risk of increased interest rates because a significant portion of our borrowings are at variable rates of interest;
it may be more difficult for us to satisfy our obligations to other creditors, resulting in possible defaults on, and acceleration of, such indebtedness;
we may be more vulnerable to general adverse economic and industry conditions;
we may be at a competitive disadvantage compared to our competitors with proportionately less indebtedness or with comparable indebtedness on more favorable terms and, as a result, they may be better positioned to withstand economic downturns;
our ability to refinance indebtedness may be limited or the associated costs may increase;
our flexibility to adjust to changing market conditions and ability to withstand competitive pressures could be limited; and
we may be prevented from carrying out capital spending and restructurings that are necessary or important to our growth strategy and efforts to improve our operating margins.

Despite our indebtedness levels, we and our subsidiaries may incur substantially more indebtedness, which may increase the risks created by our indebtedness.
    
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We and our subsidiaries may incur substantial additional indebtedness in the future. The terms of the credit agreements and indenture governing the Credit Facilities do not fully prohibit us or our subsidiaries from incurring additional debt. If our subsidiaries are in compliance with certain leverage or coverage ratios set forth in the agreements governing the Credit Facilities, they may be able to incur substantial additional indebtedness, which may increase the risks created by our current indebtedness. Subject to certain conditions and without the consent of the then existing lenders, the loans under the New Senior Secured Term Loan Facility may be expanded (or a new term loan facility, revolving credit facility or letter of credit facility added) by up to $235.0 million, plus an additional amount not to exceed specified leverage or coverage ratios. In addition, subject to certain conditions and without the consent of the then existing lenders, the loans under the ABL Credit Facility may be expanded by up to $150 million, and the credit agreements governing the Credit Facilities allow for up to $50.0 million of second lien facilities. As of September 30, 2021, we had an additional $315.5 million in availability under the ABL Credit Facility.

Increases in interest rates would increase the cost of servicing our indebtedness and could reduce our profitability.

A portion of our outstanding indebtedness bears interest or will bear interest at variable rates. As a result, increases in interest rates would increase the cost of servicing our indebtedness and could materially and adversely affect our business, financial position, results of operations or cash flows. As of September 30, 2021, each one percentage point change in interest rates would have resulted in a change of approximately $3.8 million in the annual interest expense on the New Senior Secured Term Loan Facility. As of September 30, 2021, assuming availability was fully utilized, each one percentage point change in interest rates would have resulted in a change of approximately $3.3 million in annual interest expense on the ABL Credit Facility. Additionally, if the ABL Credit Facility were fully utilized, the margin we pay on borrowings would increase by 0.5% from the current level and we would incur additional interest expense of $1.6 million. The impact of increases in interest rates could be more significant for us than it would be for some other companies because of our indebtedness, thereby affecting our profitability.

In addition, a transition away from LIBOR as a benchmark for establishing the applicable interest rate may affect the cost of servicing our debt under the New Senior Secured Term Loan Facility and the ABL Credit Facility. The potential consequences from discontinuation, modification, or reform of LIBOR, implementation of alternative reference rates, and any interest rate transition process cannot be fully predicted and may have an adverse impact on values of LIBOR-linked securities and other financial obligations or extensions of credit and may involve among other things, increased volatility or illiquidity in markets for instruments that rely on LIBOR, reductions in effectiveness of related transactions such as hedges, increased borrowing costs or uncertainty under applicable documentation. For example, if any alternative base rate or means of calculating interest with respect to our outstanding variable rate indebtedness leads to an increase in the interest rates charged, it could result in an increase in the cost of such indebtedness, impact our ability to refinance some or all of our existing indebtedness or otherwise have a material adverse impact on our business, financial position, results of operations or cash flows.

A lowering or withdrawal of the ratings, outlook or watch assigned to our indebtedness by rating agencies may increase our future borrowing costs and reduce our access to capital.

Our indebtedness currently has a non-investment grade rating, and any rating, outlook or watch assigned could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, current or future circumstances relating to the basis of the rating, outlook or watch, such as adverse changes to our business, so warrant. Any future lowering of our ratings, outlook or watch likely would make it more difficult or more expensive for us to obtain additional debt financing.

The agreements and instruments governing our indebtedness contain restrictions and limitations that could significantly impact our ability to operate our business.

The Credit Facilities contain covenants that, among other things, restrict the ability of AII and its subsidiaries to incur additional indebtedness and create liens, pay dividends and make other distributions or to purchase, redeem or retire capital stock, purchase, redeem or retire certain junior indebtedness, make loans and investments, enter into agreements that limit AII’s or its subsidiaries' ability to pledge assets or to make distributions or loans to us or transfer assets to us, sell assets, enter into certain types of transactions with affiliates, consolidate, merge or sell substantially all assets, make voluntary payments or modifications of junior indebtedness and enter into new lines of business.

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The restrictions in the Credit Facilities may prevent us from taking actions that we believe would be in the best interest of our business and may make it difficult for us to execute our business strategy successfully or effectively compete with companies that are not similarly restricted. We may also incur future debt obligations that might subject us to additional restrictive covenants that could affect our financial and operational flexibility. Additionally, we may be required to make accelerated payments due to the covenants and restrictions contained in the Credit Facilities. We may be unable to refinance our indebtedness, at maturity or otherwise, on terms acceptable to us or at all.

The ability of AII to comply with the covenants and restrictions contained in the Credit Facilities may be affected by economic, financial and industry conditions beyond our control including credit or capital market disruptions. The breach of any of these covenants or restrictions could result in a default that would permit the applicable lenders to declare all amounts outstanding thereunder to be due and payable, together with accrued and unpaid interest. If we are unable to repay indebtedness, lenders having secured obligations, such as the lenders under the Credit Facilities, could proceed against the collateral securing the indebtedness. In any such case, we may be unable to borrow under the Credit Facilities and may not be able to repay the amounts due under such facilities. This could materially and adversely affect our business, financial position, results of operations or cash flows and could cause us to become bankrupt or insolvent.

Our ability to generate the significant amount of cash needed to pay interest and principal on our indebtedness and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control.

Atkore Inc. (“AI”), AIH, and AII are each holding companies, and as such they have no independent operations or material assets other than ownership of equity interests in their respective subsidiaries. AI, AIH and AII each depend on their respective subsidiaries to distribute funds to them so that they may pay obligations and expenses, including satisfying obligations with respect to indebtedness. Our ability to make scheduled payments on, or to refinance our obligations under, our indebtedness depends on the financial and operating performance of our subsidiaries and their ability to make distributions and dividends to us, which, in turn, depends on their results of operations, cash flows, cash requirements, financial position and general business conditions and any legal and regulatory restrictions on the payment of dividends to which they may be subject, many of which may be beyond our control.

We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal and interest on our indebtedness. If our cash flow and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek to obtain additional equity capital or restructure our indebtedness. In the future, our cash flow and capital resources may not be sufficient for payments of interest on and principal of our indebtedness, and such alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.

The outstanding borrowings under the ABL Credit Facility are scheduled to mature on May 26, 2026, the New Senior Secured Term Loan Facility has a maturity date of May 26, 2028, and the Senior Notes mature on June 1, 2031. We may be unable to refinance any of our indebtedness or obtain additional financing, particularly because of our indebtedness. Market disruptions, such as those experienced in relation to the COVID-19 pandemic, as well as our indebtedness levels, may increase our cost of borrowing or adversely affect our ability to refinance our obligations as they become due. If we are unable to refinance our indebtedness or access additional credit, or if short-term or long-term borrowing costs dramatically increase, our ability to finance current operations and meet our short-term and long-term obligations could be adversely affected.

If our subsidiary AII cannot make scheduled payments on its indebtedness, it will be in default and the lenders under the Credit Facilities could terminate their commitments to loan money or foreclose against the assets securing their borrowings, and we could be forced into bankruptcy or liquidation.

Risks Related to Our Common Stock

AI is a holding company with no operations of its own, and it depends on its subsidiaries for cash to fund all of its operations and expenses, including to make future dividend payments, if any.
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Our operations are conducted entirely through our subsidiaries, and our ability to generate cash to fund our operations and expenses, to pay dividends or to meet debt service obligations is highly dependent on the earnings and the receipt of funds from our subsidiaries through dividends or intercompany loans. Deterioration in the financial condition, earnings or cash flow of AII and its subsidiaries for any reason could limit or impair their ability to pay such distributions. Additionally, to the extent our subsidiaries are restricted from making such distributions under applicable law or regulation or under the terms of our financing arrangements, or are otherwise unable to provide funds to the extent of our needs, there could be a material adverse effect on our business, financial position, results of operations or cash flows.

For example, the agreements governing the Credit Facilities significantly restrict the ability of our subsidiaries to pay dividends, make loans or otherwise transfer assets to us. Furthermore, our subsidiaries are permitted under the terms of the Credit Facilities to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to us.

The timing and amount of the Company’s share repurchases are subject to a number of uncertainties.
On November 16, 2021, the board of directors approved a share repurchase program for the repurchase of up to an aggregate amount of $400 million of the Company’s common stock over a two-year period. We expect that share repurchases under the program will be funded with cash on hand. The amount and timing of share repurchases will be based on a variety of factors. Important factors that could cause the Company to limit, suspend or delay its share repurchases include unfavorable trading market conditions, the price of the Company’s common stock, the nature of other investment opportunities presented to us from time to time, the ability to obtain financing at attractive rates and the availability of U.S. cash. The share repurchase program does not obligate us to acquire any particular amount of common stock, and it may be terminated at any time at the Company’s discretion.

Anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated by-laws could discourage, delay or prevent a change of control of our company and may affect the trading price of our common stock.

Our third amended and restated certificate of incorporation (“amended and restated certificate of incorporation”)
and our third amended and restated by-laws, (“amended and restated by-laws”) include a number of provisions that may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. For example, our amended and restated certificate of incorporation and amended and restated by-laws collectively:

authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to thwart a takeover attempt;
limit the ability of stockholders to remove directors;
provide that vacancies on our board of directors, including vacancies resulting from an enlargement of our board of directors, may be filled only by a majority vote of directors then in office;
prohibit stockholders from calling special meetings of stockholders;
prohibit stockholder action by written consent, thereby requiring all actions to be taken at a meeting of stockholders; and
establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders.

These provisions may prevent our stockholders from receiving the benefit from any premium to the market price of our common stock offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our common stock if the provisions are viewed as discouraging takeover attempts in the future.

Our amended and restated certificate of incorporation and amended and restated by-laws may also make it difficult for stockholders to replace or remove our management. Furthermore, the existence of the foregoing provisions could limit the price that investors might be willing to pay in the future for shares of our common stock. These provisions may facilitate management entrenchment that may delay, deter, render more difficult or prevent a change in our control, which may not be in the best interests of our stockholders.

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We do not currently intend to pay dividends on our common stock for the foreseeable future and, consequently, your ability to achieve a return on your investment depends on appreciation in the price of our common stock.

We do not currently intend to declare and pay dividends on our common stock for the foreseeable future. We currently intend to use our future earnings, if any, to fund our growth, to develop our business, for working capital needs, for general corporate purposes, to repurchase shares and to repay debt. Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future, and the success of an investment in shares of our common stock depends upon any future appreciation in their value. There is no guarantee that shares of our common stock will appreciate in value or even maintain the price at which our stockholders have purchased their shares. Payments of dividends, if any, are at the sole discretion of our board of directors after taking into account various factors, including general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications of the payment of dividends by us to our stockholders or by our subsidiaries (including AII) to us, and such other factors as our board of directors may deem relevant. In addition, our operations are conducted almost entirely through our subsidiaries. As such, to the extent that we determine in the future to pay dividends on our common stock, none of our subsidiaries will be obligated to make funds available to us for the payment of dividends. Further, the agreements governing the Credit Facilities significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. In addition, Delaware law imposes additional requirements that may restrict our ability to pay dividends to holders of our common stock.

Our amended and restated certificate of incorporation includes provisions limiting the personal liability of our directors for breaches of fiduciary duty under the DGCL.

Our amended and restated certificate of incorporation contains provisions relating to the liability of directors in response to claims arising under the General Corporation Law of the State of Delaware (“DGCL”). These provisions eliminate a director’s personal liability to the fullest extent permitted by the DGCL for monetary damages resulting from a breach of fiduciary duty, except in circumstances involving:

any breach of the director’s duty of loyalty;
acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law;
Section 174 of the DGCL (unlawful dividends); or
any transaction from which the director derives an improper personal benefit.

The principal effect of the limitation on liability provision is that a stockholder will be unable to prosecute an action for monetary damages against a director unless the stockholder can demonstrate a basis for liability for which indemnification is not available under the DGCL. These provisions, however, should not limit or eliminate our rights or any stockholder’s rights to seek non-monetary relief, such as an injunction or rescission, in the event of a breach of a director’s fiduciary duty. These provisions do not alter a director’s liability under federal securities laws. The inclusion of this provision in our amended and restated certificate of incorporation may discourage or deter stockholders or management from bringing a lawsuit against directors for a breach of their fiduciary duties, even though such an action, if successful, might otherwise have benefited us and our stockholders.
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Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or stockholders.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is, to the fullest extent permitted by law, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our directors, officers, other employees, agents or stockholders, (iii) any action asserting a claim arising out of or under the DGCL, or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware (including, without limitation, any action asserting a claim arising out of or pursuant to our amended and restated certificate of incorporation or our amended and restated by-laws) or (iv) any action asserting a claim that is governed by the internal affairs doctrine. As a stockholder in our company, you are deemed to have notice of and have consented to the provisions of our amended and restated certificate of incorporation related to choice of forum. The choice of forum provision in our amended and restated certificate of incorporation may limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or any of our directors, officers, other employees, agents or stockholders, which may discourage lawsuits with respect to such claims. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially and adversely affect our business, financial position, results of operations or cash flows.

General Risk Factors

The market price of our common stock may be volatile and could decline.

The market price of our common stock may fluctuate significantly. Among the factors that could affect our stock price are:
industry or general market conditions;
availability of labor and raw materials;
domestic and international economic factors unrelated to our performance;
changes in our customers’ preferences;
new regulatory pronouncements and changes in regulatory guidelines;
lawsuits, enforcement actions and other claims by third parties or governmental authorities;
actual or anticipated fluctuations in our quarterly operating results;
changes in securities analysts’ estimates of our financial performance or lack of research coverage and reports by industry analysts;
action by institutional stockholders or other large stockholders, including future sales of our common stock;
failure to meet any guidance given by us or any change in any guidance given by us, or changes by us in our guidance practices;
announcements by us of significant impairment charges;
speculation in the press or investment community;
investor perception of us and our industry;
changes in market valuations or earnings of similar companies;
announcements by us or our competitors of significant contracts, acquisitions, dispositions or strategic partnerships;
war, terrorist acts and epidemic disease;
any future sales of our common stock or other securities;
additions or departures of key personnel; and
misconduct or other improper actions of our employees.

Stock markets have experienced extreme volatility in recent years, most recently due to the COVID-19 pandemic, that has been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. In the past, following periods of volatility in the market price of a company’s securities, class action litigation has often been instituted against the affected company. Any litigation of this type brought against us could result in substantial costs and a diversion of our management’s attention and resources, which could materially and adversely affect our business, financial position, results of operations or cash flows.
    
If securities or industry analysts do not publish research or publish misleading or unfavorable research about our business, our stock price and trading volume could decline.
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The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts that covers our common stock downgrades our stock or publishes misleading or unfavorable research about our business, our stock price would likely decline. If one or more of the analysts ceases coverage of our common stock or fails to publish reports on us regularly, demand for our common stock could decrease, which could cause our common stock price or trading volume to decline.

If we are unable to hire, engage and retain key personnel, our business, financial position, results of
operations or cash flows could be materially and adversely affected.

We are dependent, in part, on our continued ability to hire, engage and retain key employees at our operations around the world. Additionally, we rely upon experienced managerial, marketing and support personnel to effectively manage our business and to successfully promote our wide range of products. If we do not succeed in engaging and retaining key employees and other personnel, or if we do not succeed in facilitating transitions of new key personnel, we may be unable to meet our objectives and, as a result, our business, financial position, results of operations or cash flows could be materially and adversely affected.

Future tax legislation could materially impact our business.

Changes in international and domestic tax laws, including the reaction by states to federal legislation or the costs of responding to the COVID-19 pandemic, and changes in tax law enforcement, could negatively impact our tax provision, cash flow, or tax related balance sheet amounts. In particular, it is possible that U.S. federal income or other tax laws or the interpretation of tax laws will change, including as a result of possible tax legislation that may be proposed by the Biden Administration. It is difficult to predict whether and when there will be tax law changes having a material adverse effect on our business, financial position, results of operations and cash flows.

Changes in U.S. tax law could also have broader implications, including impacts to the economy, currency markets, inflation environment, consumer behavior or competitive dynamics, which are difficult to predict, and may positively or negatively impact our business, financial position, results of operations or cash flows.

Future offerings of debt or equity securities which would rank senior to our common stock may adversely affect the market price of our common stock.

If, in the future, we decide to issue debt or equity securities that rank senior to our common stock, it is likely that such securities will be governed by an indenture or other instrument containing covenants restricting our operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock and may result in dilution to owners of our common stock. We and, indirectly, our stockholders, will bear the cost of issuing and servicing such securities. Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our common stock will bear the risk of our future offerings reducing the market price of our common stock and diluting the value of their stock holdings in us.

We may need to raise additional capital, and we cannot be sure that additional financing will be available.

To satisfy existing obligations and support the development of our business, we depend on our ability to generate cash flow from operations and to borrow funds and issue securities in the capital markets. We may require additional financing for liquidity, capital requirements or growth initiatives. We may not be able to obtain financing on terms and at interest rates that are favorable to us or at all. Any inability by us to obtain financing in the future could materially and adversely affect our business, financial position, results of operations or cash flows.

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties
    
Our corporate headquarters are located in owned premises at 16100 South Lathrop Avenue, Harvey, Illinois. We and our operating companies own and lease a variety of facilities, principally in the United States, for manufacturing, distribution and light assembly. Our manufacturing, distribution and assembly centers are strategically located to optimize route efficiency, market coverage and overhead. The following chart identifies the number of owned and leased facilities used by each of our reportable segments as of September 30, 2021. We believe that these facilities, when considered with our corporate headquarters, offices and warehouses are suitable and adequate to support the current needs of our business.

Reportable Segment
Owned Facilities
Leased Facilities
Electrical 13  39 
Safety & Infrastructure 12 

We believe that our facilities are well-maintained and are sufficient to meet our current and projected needs. We also have an ongoing process to continually review and update our real estate portfolio to meet changing business needs. Our two principal facilities are located in Harvey, Illinois and New Bedford, Massachusetts. Our owned manufacturing facility in Harvey, Illinois supports both our Electrical and Safety & Infrastructure segments. Our owned facility in New Bedford, Massachusetts supports our Electrical segment.

Item 3. Legal Proceedings
    
See Note 15, “Commitments and Contingencies” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Item 4. Mine Safety Disclosures

None.
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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Common Stock Market Prices

Shares of our common stock have traded on the NYSE under the symbol ATKR since June 10, 2016.


ATKR-20210930_G2.JPG
** Assumes $100 invested on October 3, 2016 in stock or index, including reinvestment of dividends.

The following group of 10 public companies represents the Company's peer group:
Acuity Brands Encore Wire Corporation
AZZ Inc. Hubbell Incorporated Class B
Belden Inc. Littelfuse, Inc.
Cornerstone Building Brands, Inc. nVent Electric plc
Eaton Corp. Plc Valmont Industries, Inc.

Holders

As of November 12, 2021, there was one stockholder of record of our common stock. This number excludes stockholders whose stock is held in nominee or street name by brokers.

Dividend Policy

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We have not and do not currently intend to declare or pay dividends on our common stock for the foreseeable future. We currently intend to use our future earnings, if any, to fund our growth, to develop our business, for working capital needs, for general corporate purposes, to repurchase shares and to repay debt. Our ability to pay dividends to holders of our common stock is significantly limited as a practical matter by the Credit Facilities insofar as we may seek to pay dividends out of funds made available to us by AII or its subsidiaries, because AII's debt instruments directly or indirectly restrict AII's ability to pay dividends or make loans to us. Any future determination to pay dividends on our common stock will be subject to the discretion of our board of directors and depends upon various factors, including our results of operations, financial condition, liquidity requirements, capital requirements, level of indebtedness, contractual restrictions with respect to payment of dividends, restrictions imposed by Delaware law, general business conditions and other factors that our board of directors may deem relevant.

Issuer Purchases of Equity Securities

The following table shows our share repurchase programs, on a trade date basis, for each of our fiscal months for the quarter ended September 30, 2021 (in thousands, except per share data):
Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Program(1) Maximum Value of Shares that May Yet Be Purchased Under the Program(1)
June 27, 2021 to July 23, 2021 —  $ —  —  $ 24,974 
July 24, 2021 to August 27, 2021 270  $ 92.85  270  $ — 
August 28, 2021 - September 30, 2021 —  $ —  —  $ — 
Total 270  270 

(1) On January 28, 2021, the board of directors approved a share repurchase program, under which the Company may repurchase up to $100.0 million of its outstanding common stock. As of September 30, 2021, there were no authorized repurchases remaining. On November 16, 2021, the board of directors approved a share repurchase program, under which the Company may repurchase up to $400 million of its outstanding common stock. These share repurchase programs were funded from the Company's available cash balances. Under the share repurchase programs, the Company was not obligated to acquire any particular amount of common stock, and it may have been terminated at any time at the Company's discretion.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table contains information, as of September 30, 2021, about the amount of common shares to be issued upon the exercise of outstanding options, performance share options (“PSUs”) and restricted stock units (“RSUs”) granted under the 2020 Omnibus Incentive Plan and the 2016 Omnibus Incentive Plan (together, the “Omnibus Incentive Plan”).
Equity Compensation Plan Information
(share amounts in thousands) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in (1))
(1)
Equity compensation plans approved by shareholders 1,606  $ 19.95  4,353 
Equity compensation plans not approved by shareholders —  —  — 
Total 1,606  $ 19.95  4,353 

(1) Includes 769 stock options, 453 PSUs and 384 RSUs granted to officers pursuant to the Omnibus Incentive Plan. Shares underlying RSUs and PSUs are deliverable without payment of any consideration, and therefore these awards have not been taken into account in calculating the weighted-average exercise price of outstanding options. PSUs are reflected at the target level of performance. For a description of the Omnibus Incentive Plan, see Note 5, “Stock Incentive Plan” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Recent Sales of Unregistered Securities

There were no sales of unregistered equity securities in fiscal 2021.
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Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with the accompanying consolidated financial statements and related notes included in this Annual Report.
The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this report, particularly in “Special Note Regarding Forward-Looking Statements and Information” and “Risk Factors” included elsewhere in this Annual Report. The percentages provided below reflect rounding adjustments. Accordingly, figures expressed as percentages when aggregated may not be the arithmetic sum of the percentages that precede them.
Business Factors Influencing our Results of Operations
    
We are a leading manufacturer of Electrical products primarily for the non-residential construction and renovation markets and Safety & Infrastructure for the construction and industrial markets. The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable and installation accessories. The Safety & Infrastructure segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security and cable management for the protection and reliability of critical infrastructure. We believe we hold #1 or #2 positions in the United States by net sales in the vast majority of our products. The quality of our products, the strength of our brands and our scale and presence provide what we believe to be a unique set of competitive advantages that position us for profitable growth.
    
The following factors may affect our results of operations in any given period:
    
Economic Conditions. Our business depends on demand from customers across various end markets, including wholesale distributors, OEMs, retail distributors and general contractors. Our products are primarily used by trade contractors in the construction and renovation of non-residential structures such as commercial office buildings, healthcare facilities and manufacturing plants. In fiscal 2021, 90% of our net sales were to customers located in the United States. As a result, our business is heavily dependent on the health of the United States economy, in general, and on United States non-residential construction activity, in particular. A stronger United States economy and robust non-residential construction generally increase demand for our products. In fiscal 2021, our sales and cost of sales were impacted by sharp increases in the prices of the raw materials used in our products. We generally sell our products on a spot basis and as such, were able to pass some of these increases on to our customers. Additionally, we participated in the broader economic recovery from the COVID-19 pandemic as our customers began to resume their operations at pre-pandemic levels of activity.
    
We believe that our business and demand for our products is influenced by two main economic indicators: United States gross domestic product, or “GDP,” and non-residential construction starts, measured in square footage. The United States non-residential construction market has experienced modest growth over the past few years, in line with United States GDP. Our historic results have been positively impacted by growth in the non-residential construction market, as such growth leads to greater demand for our products. MR&R activity generally increases and represents a greater share of non-residential construction activity during challenging periods in the economic or construction cycle. During those periods, our MR&R demand as a percentage of total demand typically increases, providing a more consistent revenue stream for our business.
    
Impacts of COVID-19. The outbreak of COVID-19 has continued to spread and is currently classified as a pandemic which is contributing to significant volatility and uncertainty in markets and the global economy. This heightened volatility and uncertainty makes it difficult for us to predict the extent of COVID-19’s impact on our operations going forward.

As of the date of this filing, customers and end markets face some uncertainty and delays in the timing of work. In particular, some construction site closures or project delays have occurred, and job sites have had to adjust to increased physical distancing and health-related precautions. Given the continued volatility within the economic impacts of the pandemic it is too difficult to make any judgment on how significant COVID-19 effects could become.

Factors that contribute to our ability to adjust to the outbreak include currently being deemed an “essential business,” benefiting from mostly localized supply chains, and continuing to take actions within our control to minimize the disruptive impacts of the outbreak. However, there can be no assurance that we will not be materially and adversely impacted in the
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future. The extent to which COVID-19 will impact our business will depend on future developments and public health advancements, which are highly uncertain and cannot be predicted with confidence.

Currently, we have no COVID-19 related facility closures as we look to serve our current levels of demand. In response to COVID-19, we have implemented a variety of countermeasures to promote the health and safety of our employees during this pandemic, including health screening, physical distancing practices, enhanced cleaning, use of personal protective equipment, business travel restrictions, and remote work capabilities.

Raw Materials. We use a variety of raw materials in the manufacture of our products, which primarily include steel, copper and PVC resin. We believe that sources for these raw materials are well established, generally available and are in sufficient quantity that we may avoid disruption in our business. The cost to procure these raw materials is subject to price fluctuations, often as a result of macroeconomic conditions. Our cost of sales may be affected by changes in the market price of these materials, and to a lesser extent, other commodities, such as zinc, aluminum, electricity, natural gas and diesel fuel. The prices at which we sell our products may adjust upward or downward based on raw material price changes. We believe several factors drive the pricing of our products, including the quality of our products, the ability to meet customer delivery expectations and co-loading capabilities, as well as the prices of our raw material inputs. Historically, we have not engaged in hedging strategies for raw material purchases. Our results may be impacted by inventory sales at costs higher or lower than current prices we pay for similar items.
    
Working Capital. Our working capital requirements are impacted by our operational activities. Our inventory levels may be impacted from time to time, due to delivery lead times from our suppliers. Our cash collection cycle is generally one to two months longer than our cash payment cycle. If our working capital requirements increase and we are unable to finance our working capital on terms and conditions acceptable to us, we may not be able to obtain raw materials to respond to customer demand, which could result in a loss of sales.
    
Labor Cost and Availability. Labor costs are a direct input into the manufacture of our products. Labor costs are capitalized as a cost of inventory.

Seasonality. In a typical year, our operating results are impacted by seasonality. Historically, sales of our products have been higher in the third and fourth quarters of each fiscal year due to favorable weather for construction-related activities.
    
Recent Acquisitions. In addition to our organic growth, we have transformed the Company through acquisitions in recent years, allowing us to expand our product offerings with existing and new customers. In accordance with accounting principles generally accepted in the United States of America (“GAAP”), the results of our acquisitions are reflected in our financial statements from the date of each acquisition forward.
    
Our acquisition strategy has focused primarily on growing market share by complementing our existing portfolio with synergistic products and expanding into end-markets that we have not previously served. In total, we have invested $145.0 million in acquisitions since 2019.
        
We expect to continue to pursue synergistic acquisitions as part of our growth strategy to expand our product offerings. See Note 3, “Acquisitions” to the accompanying consolidated financial statements included elsewhere in this Annual Report.
    
Foreign Currencies. In fiscal 2021, approximately 10% of our net sales came from customers located outside the United States, most of which were foreign currency sales denominated in British pounds sterling, European euros, Canadian dollars, Australian dollars, Chinese yuan, Russian rubles and New Zealand dollars. The functional currency of our operations outside the United States is generally the local currency. Assets and liabilities of our non-U.S. subsidiaries are translated into United States dollars using period-end exchange rates. Foreign revenue and expenses are translated at the monthly average exchange rates in effect during the period. Foreign currency translation adjustments are included as a component of other comprehensive income (loss) within our statements of comprehensive income. See “Quantitative and Qualitative Disclosures about Market Risk—Foreign Currency Risk.”
    
See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

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Emerging Industry Trends. Pressure from regulators, and expectations from customers, to combat climate change may accelerate the move to more renewable power generation, the electrification of buildings and transportation, and the use of more sustainable methods in construction in our markets. The rapid market growth for the use of digital technologies may continue to drive the need for more digital infrastructure such as data centers and the need for advanced warehousing and distribution centers to support e-commerce. Atkore offers products including electrical conduit & fittings, electrical cable & cable management, metal framing and racking structures that are commonly used in the construction of new and renovated buildings, infrastructure, renewable power systems, data centers, warehouses, and to connect electric vehicle charging stations to the electrical grid. Increases in demand for these applications in our markets may drive an increased demand for Atkore products.

Reportable Segments
    
We operate our business through two operating segments which are also our reportable segments: Electrical and Safety & Infrastructure. Our operating segments are organized based on primary market channel and, in most instances, the end use of products. We review the results of our operating segments separately for the purposes of making decisions about resource allocation and performance assessment. We evaluate performance on the basis of net sales and Adjusted EBITDA
    
Effective in the first quarter of fiscal 2021, the Company renamed and redefined its reportable segments.
    
The Electrical Raceway segment was renamed as the Electrical segment. The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable, and installation accessories. This segment serves contractors in partnership with the electrical wholesale channel.
    
The Mechanical Products & Solutions segment was renamed as the Safety & Infrastructure segment. This segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security, and cable management for the protection and reliability of critical infrastructure. These solutions are marketed to contractors, original equipment manufacturers and end users.

Effective in the first quarter of fiscal 2021, the Company also implemented the Realignment of its segment financial reporting structure such that its domestic cable management and prefabrication modular businesses are now reflected in its Safety & Infrastructure segment. These businesses were previously reflected within the Electrical segment. See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” for additional information. Prior year results have been revised for the impact of the Realignment for comparability.

Both segments use Adjusted EBITDA as the primary measure of profit and loss. Segment Adjusted EBITDA is the income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, loss on extinguishment of debt, restructuring charges, stock-based compensation, certain legal matters, transaction costs, gain on purchase of business, gain on sale of a business and other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives. See Note 17, “Segment Information” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Fiscal Periods
    
The Company has a fiscal year that ends on September 30. The Company’s fiscal quarters typically end on the last Friday in December, March and June as it follows a 4-5-4 calendar.

Key Components of Results of Operations

Net sales

Net sales represents external sales of Electrical products to the non-residential construction and MR&R markets and Safety & Infrastructure products and solutions to the commercial and industrial markets. Net sales includes gross product sales and freight billed to our customers, net of allowances for rebates, sales incentives, trade promotions, product returns and discounts.

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Cost of sales

Cost of sales includes all costs directly related to the production of goods for sale. These costs include direct material, direct labor, production related overheads, excess and obsolescence costs, lower-of-cost-or-market provisions, freight and distribution costs and the depreciation and amortization of assets directly used in the production of goods for sale.

Selling, general and administrative expenses

Selling, general and administrative expenses include payroll related expenses including salaries, wages, employee benefits, payroll taxes, variable cash compensation for both administrative and selling personnel and consulting and professional services fees. Also included are compensation expense for share-based awards, restructuring-related charges, third-party professional services and translation gains or losses for foreign currency trade transactions.


Results of Operations
    
Fiscal 2021 Compared to Fiscal 2020

The results of operations for the fiscal years ended September 30, 2021 and September 30, 2020 were as follows:
Fiscal year ended
($ in thousands) September 30, 2021 September 30, 2020 Change ($) Change (%)
Net sales $ 2,928,014  $ 1,765,421  $ 1,162,593  65.9  %
Cost of sales 1,802,401  1,274,107  528,294  41.5  %
Gross profit 1,125,613  491,314  634,299  129.1  %
Selling, general and administrative 293,019  219,496  73,523  33.5  %
Intangible asset amortization 33,644  32,262  1,382  4.3  %
Operating income 798,950  239,556  559,394  233.5  %
Interest expense, net 32,899  40,062  (7,163) (17.9) %
Loss on extinguishment of debt 4,202  273  3,929  1,439.2  %
Other income, net (18,152) (2,777) (15,375) 553.7  %
Income before income taxes 780,001  201,998  578,003  286.1  %
Income tax expense 192,144  49,696  142,448  286.6  %
Net income $ 587,857  $ 152,302  $ 435,555  286.0  %

Net sales
Change (%)
Volume 5.0  %
Average selling prices 55.4  %
Foreign exchange 1.0  %
Acquisitions 4.5  %
Net sales 65.9  %

Net sales for fiscal 2021 increased $1,162.6 million to $2,928.0 million, an increase of 65.9%, compared to $1,765.4 million for fiscal 2020. The increase in net sales is primarily attributed to increased average selling prices of $977.9 million which were mostly driven by the plastic pipe and conduit category within the Electrical segment and increased net sales of $79.1 million due to the acquisitions of Queen City Plastics and FRE Composites Group. Pricing for PVC products, as well as other parts of the business, are expected to return to more normal historical levels over time, but that time is uncertain. The increase in net sales was also driven by an increase in sales volume of $88.4 million across the majority of product categories within both the Electrical and the Safety & Infrastructure segments.

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Cost of sales
Change (%)
Volume 5.0  %
Average input costs 30.4  %
Foreign exchange 1.2  %
Acquisitions 2.6  %
Other 2.3  %
Cost of sales 41.5  %

Cost of sales increased $528.3 million, or 41.5%, to $1,802.4 million for fiscal 2021 compared to $1,274.1 million for fiscal 2020. The increase was primarily due to higher input costs of steel, copper and PVC resin of $386.5 million, higher sales volume of $64.0 million and the acquisitions of Queen City Plastics and FRE Composites Group of $32.5 million.

Selling, general and administrative

Selling, general and administrative expenses increased $73.5 million, or 33.5%, to $293.0 million for fiscal 2021 compared to $219.5 million for fiscal 2020. The increase was primarily due to higher variable compensation of $24.1 million, higher sales commission expense of $22.4 million, increased general spending on business improvement initiatives of $10.8 million, the acquisitions of Queen City Plastics and the FRE Composites Group of $5.4 million, and higher stock compensation expense of $3.5 million partially offset by productivity efficiencies of $4.1 million. The majority of the remaining increase was primarily driven by the tight controls on expenditures put into place in the prior year at the onset of the COVID-19 pandemic.

Intangible asset amortization

Intangible asset amortization expense increased $1.4 million, or 4.3%, to $33.6 million for fiscal 2021 compared to $32.3 million for fiscal 2020. The increase in intangible asset amortization is primarily due to the 2021 acquisition of FRE Composites Group.

Interest expense, net

Interest expense, net, decreased $7.2 million, or 17.9% to $32.9 million for fiscal 2021, compared to $40.1 million for fiscal 2020. The decrease is primarily due to a lower average principal balance in fiscal 2021 from which interest expense was derived. See Note 13, “Debt” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Other income, net
    
Other income, net increased $15.4 million to income of $18.2 million for fiscal 2021, compared to income of $2.8 million for fiscal 2020. The increase was primarily due to a $15.5 million business interruption insurance recovery from a flood at one of the Company’s manufacturing facilities. See Note 15, “Commitments and Contingencies” and Note 6, “Other Income, net” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Income tax expense

Income tax expense increased $142.4 million to $192.1 million, compared to $49.7 million for fiscal 2020. The Company's income tax rate remained consistent at 24.6% for fiscal 2021, compared to 24.6% for fiscal 2020. The increase in tax expense is due to higher income before taxes. See Note 7, “Income Taxes” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

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Segment results
        
    Electrical
Fiscal year ended
($ in thousands) September 30, 2021 September 30, 2020 Change ($) Change (%)
Net sales $ 2,233,299  $ 1,270,547  $ 962,752  75.8  %
Adjusted EBITDA 873,868  292,809  581,059  198.4  %
Adjusted EBITDA Margin 39.1  % 23.0  %

Net sales
Change (%)
Volume 3.8  %
Average selling prices 64.4  %
Foreign exchange 1.5  %
Acquisitions 6.1  %
Net sales 75.8  %

Net sales increased by $962.8 million, or 75.8%, to $2,233.3 million for fiscal 2021 compared to $1,270.5 million for fiscal 2020. The increase in net sales is primarily attributed to increased average selling prices of $817.4 million which were mostly driven by the plastic pipe and conduit and the metal electrical conduit and fittings product categories, increased sales volume across most product categories and increased net sales of $78.8 million from the acquisitions of Queen City Plastics and FRE Composites Group.

Adjusted EBITDA

Adjusted EBITDA increased $581.1 million, or 198.4%, to $873.9 million for fiscal 2021 compared to $292.8 million for fiscal 2020. The increase in Adjusted EBITDA was largely due to the increase in sales volume and average selling prices discussed above.

Safety & Infrastructure
Fiscal year ended
($ in thousands) September 30, 2021 September 30, 2020 Change ($) Change (%)
Net sales $ 698,320  $ 497,523  $ 200,797  40.4  %
Adjusted EBITDA $ 81,827  $ 67,821  $ 14,006  20.7  %
Adjusted EBITDA Margin 11.7  % 13.6  %

Net sales
Change (%)
Volume 8.1  %
Average selling prices 32.3  %
Net sales 40.4  %

Net sales increased $200.8 million, or 40.4%, to $698.3 million for fiscal 2021 compared to $497.5 million for fiscal 2020. The increase is primarily attributed to increased average selling prices of $160.4 million primarily driven by higher input costs of steel as well as increases in sales volumes across most product categories.

Adjusted EBITDA

Adjusted EBITDA increased $14.0 million, or 20.7%, to $81.8 million for fiscal 2021 compared to $67.8 million for fiscal 2020. The Adjusted EBITDA increase was primarily due to the increase in average selling prices and volume discussed above.
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Fiscal 2020 Compared to Fiscal 2019

The results of operations for the fiscal years ended September 30, 2020 and September 30, 2019 were as follows:
Fiscal year ended
($ in thousands) September 30, 2020 September 30, 2019 Change ($) Change (%)
Net sales $ 1,765,421  $ 1,916,538  $ (151,117) (7.9) %
Cost of sales 1,274,107  1,419,338  (145,231) (10.2) %
Gross profit 491,314  497,200  (5,886) (1.2) %
Selling, general and administrative 219,496  240,660  (21,164) (8.8) %
Intangible asset amortization 32,262  32,876  (614) (1.9) %
Operating income 239,556  223,664  15,892  7.1  %
Interest expense, net 40,062  50,473  (10,411) (20.6) %
Loss on extinguishment of debt 273  —  273  100.0  %
Other income, net (2,777) (11,478) 8,701  (75.8) %
Income before income taxes 201,998  184,669  17,329  9.4  %
Income tax expense 49,696  45,618  $ 4,078  8.9  %
Net income $ 152,302  $ 139,051  $ 13,251  9.5  %

Net sales     
Change (%)
Volume (7.3) %
Average selling prices (2.0) %
Foreign exchange (0.1) %
Acquisitions 1.5  %
Net sales (7.9) %

Net sales for fiscal 2020 decreased $151.1 million to $1,765.4 million, a decrease of 7.9%, compared to $1,916.5 million for fiscal 2019. The decrease is primarily attributed to lower volume of $140.3 million predominantly due to the impacts of COVID-19. The Company experienced volume declines in most of its product categories with the exception of the plastic pipe and conduit product category within the Electrical segment and the mechanical pipe product category within the Safety & Infrastructure segment. Additionally, net sales decreased $37.7 million due to lower average selling prices resulting from lower input costs of steel, which was partially offset by higher average selling prices resulting from higher input costs of PVC resin and copper. The decrease in net sales was partially offset by $28.5 million of sales from the 2019 acquisitions.
    
Cost of sales
Change (%)
Volume (7.3) %
Average input costs (3.9) %
Foreign exchange (0.3) %
Acquisitions 1.9  %
Other (0.6) %
Cost of sales (10.2) %

Cost of sales increased $145.2 million, or 10.2%, to $1,274.1 million for fiscal 2020 compared to $1,419.3 million for fiscal 2019. The decrease was primarily due to lower volume of $103.8 million, the lower input costs of steel in excess of higher input costs of resin and copper of $54.9 million, and $10.3 million, respectively, from favorable inventory adjustments related to changes in market prices. The decrease was partially offset by incremental costs related to the 2019 acquisitions of $26.7 million.
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Selling, general and administrative

Selling, general and administrative expenses decreased $21.2 million or 8.8%, to $219.5 million for fiscal 2020 compared to $240.7 million for fiscal 2019. The decrease was primarily due to cost savings as a result of COVID-19, in particular lower variable compensation of $6.0 million, reduced travel costs of $5.1 million and lower insurance costs of $3.0 million. Additionally, due to sales volume declines associated with COVID-19, commissions expense decreased $2.4 million. Lastly, the Company had a gain on the sale of property and equipment of $3.8 million offsetting expenses during fiscal 2020.

Intangible asset amortization

Intangible asset amortization expense decreased $0.6 million, or 1.9%, to $32.3 million for fiscal 2020 compared to $32.9 million for fiscal 2019. The decrease in intangible asset amortization is primarily due to certain assets that reached the end of their amortized lives by the conclusion of fiscal 2019, partially offset by additional amortization resulting from the fiscal 2019 acquisitions.

Interest expense, net

Interest expense, net, decreased $10.4 million, or 20.6% to $40.1 million for fiscal 2020, compared to $50.5 million for fiscal 2019. The decrease is primarily due to lower interest rates and the Company's principal payments in fiscal 2019 and 2020 resulting in a lower principal balance in fiscal 2020 from which interest expense was derived. See Note 13, “Debt” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Other income, net

Other income, net decreased $8.7 million to income of $2.8 million for fiscal 2020, compared to income of $11.5 million for fiscal 2019, primarily due to the $7.4 million of income generated from a bargain purchase gain on the acquisition of Cor-Tek in fiscal 2019. See Note 3, “Acquisitions” and Note 6, “Other Income, net” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Income tax expense

Income tax expense increased $4.1 million, to $49.7 million, compared to $45.6 million for fiscal 2019. The Company's income tax rate decreased to 24.6% for fiscal 2020, compared to 24.7% for fiscal 2019. The decrease in the effective tax rate was primarily due to a larger benefit from the exercise of stock options. The increase in tax expense, despite the decrease in the rate, is due to higher income before taxes. See Note 7, “Income Taxes” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

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Segment results
        
Electrical
Fiscal year ended
($ in thousands) September 30, 2020 September 30, 2019 Change ($) Change (%)
Net sales $ 1,270,547  $ 1,390,327  $ (119,780) (8.6) %
Adjusted EBITDA 292,809  285,217  7,592  2.7  %
Adjusted EBITDA Margin 23.0  % 20.5  %

Net sales
Change (%)
Volume (9.6) %
Average selling prices (0.6) %
Foreign exchange (0.1) %
Acquisitions 2.0  %
Other (0.4) %
Net sales (8.6) %

Net sales decreased $119.8 million, or 8.6%, to $1,270.5 million for fiscal 2020 compared to $1,390.3 million for fiscal 2019. Net sales decreased by $132.9 million due to lower volume primarily attributed to the impacts of COVID-19. The Electrical segment experienced declines predominately in the armored cable and fittings and the metal electrical conduit and fittings product categories, partially offset by volume gains in the plastic pipe and conduit product category. Additionally, net sales decreased by $8.6 million as a result of lower average selling prices resulting from lower input costs of steel, partially offset by higher input costs for resin and copper. The decrease in net sales was also partially offset by the 2019 acquisitions, which contributed $28.5 million in sales for fiscal 2020.

Adjusted EBITDA

Adjusted EBITDA increased $7.6 million, or 2.7%, to $292.8 million for fiscal 2020 compared to $285.2 million for fiscal 2019. The increase in Adjusted EBITDA was largely due to the benefit of lower material costs, operational efficiencies, and the contributions from the 2019 acquisitions, in excess of volume declines attributed to COVID-19.

Safety & Infrastructure
Fiscal year ended
($ in thousands) September 30, 2020 September 30, 2019 Change ($) Change (%)
Net sales $ 497,523  $ 527,511  $ (29,988) (5.7) %
Adjusted EBITDA $ 67,821  $ 77,407  $ (9,586) (12.4) %
Adjusted EBITDA Margin 13.6  % 14.7  %

Net sales    
Change (%)
Volume (1.4) %
Average selling prices (5.5) %
Other 1.2  %
Net sales (5.7) %

Net sales decreased $30.0 million, or 5.7%, to $497.5 million for fiscal 2020 compared to $527.5 million for fiscal 2019. The decrease was primarily due to lower average selling prices driven by lower input prices for steel of $29.1 million. Additionally, net sales decreased from lower sales volume of $7.5 million as a result of the impacts of COVID-19 for most product categories with the exception of the mechanical pipe product category.

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Adjusted EBITDA

Adjusted EBITDA decreased $9.6 million, or 12.4%, to $67.8 million for fiscal 2020 compared to $77.4 million for fiscal 2019. The Adjusted EBITDA decrease is primarily due to the lower volume and the mix of products sold in the prior year period, partially offset by cost reductions in response to the impacts of COVID-19 on volume.

Liquidity and Capital Resources

We believe we have sufficient liquidity to support our ongoing operations and to invest in future growth and create value for stockholders. Our cash and cash equivalents were $576.3 million as of September 30, 2021, of which $75.5 million was held at non-U.S. subsidiaries. Those cash balances at foreign subsidiaries may be subject to withholding or local country taxes if the Company's intention to permanently reinvest such income were to change and cash was repatriated to the United States. Our cash and cash equivalents increased $291.8 million from September 30, 2020, primarily due to cash provided from operating activities, partially offset by debt repayments, capital expenditures and share repurchases.

In general, we require cash to fund working capital investments, acquisitions, capital expenditures, debt repayment, interest payments, taxes and share repurchases. We have access to the ABL Credit Facility to fund our operational needs. As of September 30, 2021, there were no outstanding borrowings under the ABL Credit Facility (excluding $9.5 million of standby letters of credit issued under the ABL Credit Facility). The borrowing base was estimated to be $325.0 million and approximately $315.5 million was available under the ABL Credit Facility as of September 30, 2021.

Our use of cash may fluctuate during the year and from year to year due to differences in demand and changes in economic conditions primarily related to the prices of commodities we purchase.

Capital expenditures have historically been necessary to expand and update the production capacity and improve the productivity of our manufacturing operations and IT initiatives aimed to facilitate the ease of doing business with Atkore.

We have purchase commitments of $247.2 million and $5.3 million for the years 2022 and 2023, which represent purchases of raw materials in the normal course of business for which all significant terms have been confirmed.

As of September 30, 2021, we had $73.0 million of income tax liability, gross unrecognized tax benefits of $0.7 million and gross interest and penalties of $0.1 million. Of these amounts, $0.7 million is classified as a non-current liability in the consolidated balance sheet.

The projected company pension contribution for fiscal 2022 is $0.2 million.

Servicing of our existing debt instruments includes the following estimated cash outflows:

($ in thousands) Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Total
Senior Notes due June 2031 $ —  $ —  $ —  $ 400,000  $ 400,000 
New Senior Secured Term Loan Facility Due May 2028 —  —  —  $ 371,095  $ 371,095 
Interest payments (a) 27,868  55,889  55,601  98,592  237,950 
Total $ 27,868  $ 55,889  $ 55,601  $ 869,687  $ 1,009,045 
(a) Interest expense is estimated based on outstanding loan balances assuming principal payments are made according to the payment schedule and interest rates as of September 30, 2021 (4.25% for the Senior Notes, 2.5% for the New Senior Secured Term Loan Facility).
    
Our ongoing liquidity needs are expected to be funded by cash on hand, net cash provided by operating activities and, as required, borrowings under the Credit Facilities. We expect that cash provided from operations and available capacity under the ABL Credit Facility will provide sufficient funds to operate our business, make expected capital expenditures and meet our liquidity requirements for at least the next twelve months, including payment of interest and principal on our debt.

We do not have any off-balance sheet financing arrangements that we believe are reasonably likely to have a material current or future effect on our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
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Limitations on Distributions and Dividends by Subsidiaries

AI, AII, and AIH are each holding companies, and as such have no independent operations or material assets other than ownership of equity interests in their respective subsidiaries. Each company depends on its respective subsidiaries to distribute funds to them so that they may pay obligations and expenses, including satisfying obligations with respect to indebtedness. The ability of our subsidiaries to make distributions and dividends to us depends on their operating results, cash requirements and financial and general business conditions, as well as restrictions under the laws of our subsidiaries' jurisdictions.

The agreements governing the Credit Facilities significantly restrict the ability of our subsidiaries, including AII, to pay dividends, make loans or otherwise transfer assets from AII and, in turn, to us. Further, AII's subsidiaries are permitted under the terms of the Credit Facilities to incur additional indebtedness that may restrict or prohibit the making of distributions, the payment of dividends or the making of loans by such subsidiaries to AII and, in turn, to us. The Senior Secured Term Loan Facility requires AII to meet a certain consolidated coverage ratio on an incurrence basis in connection with additional indebtedness. The ABL Credit Facility contains limits on additional indebtedness based on various conditions for incurring the additional debt. AII has been in compliance with the covenants under the agreements for all periods presented. See Note 13, “Debt” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Cash Flows    

The table below summarizes cash flow information derived from our statements of cash flows for the fiscal years ended September 30, 2021 and September 30, 2020.
Fiscal year ended
(in thousands) September 30, 2021 September 30, 2020 Change ($) Change (%)
Cash flows provided by (used in):
Operating activities $ 572,902  $ 248,762  $ 324,140  130.3  %
Investing activities (97,961) (27,513) (70,448) 256.1  %
Financing activities (184,456) (61,179) (123,277) 201.5  %

Operating activities

During fiscal 2021, operating activities provided $572.9 million of cash, compared to $248.8 million during fiscal year 2020. The $324.1 million increase was primarily driven by improved operating income of $559.4 million year over year was partially offset by an increase of $137.7 million in net working capital balances.
        
Investing activities

During fiscal 2021, we used $98.0 million of cash for investing activities compared to $27.5 million during fiscal 2020. The $70.4 million increase in cash used by investing activities was primarily driven by $43.2 million in cash used for acquisitions in fiscal 2021 as well as increased capital expenditures of $30.7 million primarily driven by additional investments in productivity and digital initiatives.

Financing Activities

During fiscal 2021, we used $184.5 million for financing activities compared to $61.2 million during fiscal 2020. Cash used for financing activities during fiscal 2021 was primarily driven by payments of debt of $839.1 million and repurchases of shares of $135.1 million offset by proceeds from the issuance of debt of $798.0 million. For additional discussion of the debt transactions, see Note 13, “Debt” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

The table below summarizes cash flow information derived from our statements of cash flows for the fiscal years ended September 30, 2020 and September 30, 2019.
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Fiscal year ended
(in thousands) September 30, 2020 September 30, 2019 Change ($) Change (%)
Cash flows provided by (used in):
Operating activities $ 248,762  $ 209,694  $ 39,068  18.6  %
Investing activities (27,513) (133,101) 105,588  (79.3) %
Financing activities (61,179) (78,180) 17,001  (21.7) %

Operating activities

During fiscal 2020, operating activities provided $248.8 million of cash, compared to $209.7 million during fiscal year 2019. The $39.1 million increase was primarily due to lower spending on working capital of $19.2 million driven by improved collections and reduced purchases of inventory at lower prices as well as improved operating income of $15.9 million.

Investing activities

During fiscal 2020, we used $27.5 million of cash for investing activities compared to $133.1 million during fiscal 2019. The $105.6 million decrease in cash used by investing activities is due primarily to $98.0 million in cash used for acquisitions in fiscal 2019 as well as the cash received from the sale of a property, plant and equipment in fiscal 2020 of $3.9 million.

Financing Activities

During fiscal 2020, we used $61.2 million for financing activities compared to $78.2 million during fiscal 2019. Financing activities decreased $17.0 million due to a reduction in debt repayments of $21.0 million compared to fiscal 2019.

Critical Accounting Policies and Estimates
        
The preparation of financial statements requires management to make estimates and assumptions relating to the reporting of results of operations, financial condition and related disclosure of contingent assets and liabilities at the date of the financial statements. Actual results may differ from those estimates under different assumptions or conditions. The following are our most critical accounting policies, which are those that require management's most difficult, subjective and complex judgments, requiring the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
    
The following discussion is not intended to represent a comprehensive list of our accounting policies. For a detailed discussion of the application of these and other accounting policies, see Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Revenue Recognition
    
The Company’s revenue arrangements primarily consist of a single performance obligation to transfer promised goods which is satisfied at a point in time when title, risks and rewards of ownership, and subsequently control have transferred to the customer. This generally occurs when the product is shipped to the customer, with an immaterial amount of transactions in which control transfers upon delivery. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations.
    
The Company has certain arrangements that require it to estimate at the time of sale the amounts of variable consideration that should not be recorded as revenue as certain amounts are not expected to be collected from customers, as well as an estimate of the value of products to be returned. The Company principally relies on historical experience, specific customer agreements, and anticipated future trends to estimate these amounts at the time of sale and to reduce the transaction price. These arrangements include sales discounts and allowances, volume rebates, and returned goods. Historically, adjustments related to these estimates have not been material.

Income Taxes

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In determining income for financial statement purposes, we must make certain estimates and judgments. These estimates and judgments affect the calculation of certain tax liabilities and the determination of the recoverability of certain deferred tax assets, which arise from temporary differences between the tax and financial statement recognition of revenue and expense. Certain deferred tax assets are reviewed for recoverability and valued accordingly, considering available positive and negative evidence, including our past results, estimated future taxable income streams and the impact of tax planning strategies in the applicable tax paying jurisdiction. A valuation allowance is established to reduce deferred tax assets to the amount that is considered more likely than not to be realized. Valuations related to tax accruals and assets can be impacted by changes in accounting regulations, changes in tax codes and rulings, changes in statutory tax rates, and changes in our forecasted future taxable income. Any reduction in future taxable income, including but not limited to any future restructuring activities, may require that we record an additional valuation allowance against our deferred tax assets. An increase in the valuation allowance could result in additional income tax expense in such period and could have a significant impact on our future earnings.

In addition, the calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across our global operations. Certain tax positions may be considered uncertain requiring an assessment of whether an allowance should be recorded. Our provision for uncertain tax positions provides a recognition threshold based on an estimate of whether it is more likely than not that a position will be sustained upon examination. We measure our uncertain tax position as the largest amount of benefit that has greater than a 50% likelihood of being realized upon ultimate settlement. We record interest and penalties related to unrecognized tax benefits as a component of provision for income taxes.
    
We recognize potential liabilities and record tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on our estimate of whether, and the extent to which, additional taxes will be due. These tax liabilities are reflected net of related tax loss carryforwards. We adjust these reserves in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. If our estimate of tax liabilities proves to be less than the ultimate assessment, an additional charge to expense would result. If payment of these amounts ultimately proves to be less than the recorded amounts, the reversal of the liabilities would result in tax benefits being recognized in the period when we determine the liabilities are no longer necessary. See Note 7, “Income Taxes” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Indefinite-Lived Intangible Assets and Goodwill Impairments

Goodwill and other intangible assets primarily result from business acquisitions. The Company assesses the recoverability of goodwill and indefinite-lived trade names on an annual basis in accordance with Accounting Standards Codification (“ASC”) 350 “Intangibles - Goodwill and Other.” The measurement date is the first day of the fourth fiscal quarter, or more frequently, if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit or the respective indefinite-lived trade name is less than the carrying value. The Company can elect to perform a quantitative or qualitative test of impairment.
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For fiscal 2021, 2020 and 2019 the Company performed a quantitative impairment assessment for goodwill. The Company calculated the fair value of its six reporting units considering three valuation approaches: (a) the income approach; (b) the guideline public company method; and (c) the comparable transaction method.  The income approach calculates the fair value of the reporting unit using a discounted cash flow approach. Internally forecasted future cash flows, which the Company believes reasonably approximate market participant assumptions, are discounted using a weighted average cost of capital (Discount Rate) developed for each reporting unit. The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance.  The key uncertainties in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance, including revenue growth and EBITDA margins, as well as the perceived risk associated with those forecasts. Fair value under the guideline public company method is determined for each reporting unit by applying market multiples for comparable public companies to the reporting unit’s financial results. Fair value under the comparable transaction method is determined based on exchange prices in actual transactions and on asking prices for controlling interests in public or private companies currently offered for sale by applying market multiples for comparable public companies to the unit’s financial results. The key uncertainties in the guideline public company method and the comparable transaction method calculations are the assumptions used in determining the reporting unit's comparable public companies, comparable transactions and the selection of the market multiples.   
    
The Company did not record any goodwill impairments in fiscal 2021, 2020 or 2019. As of September 30, 2021, the fair values of the reporting units exceeded their respective carrying amount by 10% or more. A 10% decrease in the discounted cash flows utilized in quantitative impairment assessment for each of the reporting units would not have changed our determination that the fair value of each reporting unit was in excess of its carrying value.
    
As noted above, ASC 350 also requires that the Company test the indefinite-lived intangible assets for impairment at least annually. Under ASC 350, if the carrying value of the indefinite-lived asset is higher than its fair value, then the asset is deemed to be impaired and the impairment charge is estimated as the excess carrying value over the fair value. The Company calculated the fair value of its indefinite-lived intangible assets using the income approach, specifically the relief-from-royalty method. The relief-from-royalty method is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. Internally forecasted revenues, which the Company believes reasonably approximate market participant assumptions, are multiplied by a royalty rate to arrive at the estimated net after tax cost savings. The royalty rate used in the analysis is based on an analysis of empirical, market-derived royalty rates for guideline intangible assets. The net after tax cost savings are discounted using the Discount Rate. The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific indefinite lived intangible assets' forecasted performance.  The key uncertainties in these calculations are the assumptions used in determining the revenue associated with each indefinite-lived intangible asset and the royalty rate.
    
During fiscal year 2021, 2020, and 2019 the results indicated all indefinite-lived intangible assets had significant excess of fair value over the carrying value. A reasonably possible change in the estimated revenues associated with the indefinite-lived intangible assets, selected royalty rates or the residual growth rate would not result in an impairment of any of these assets.

Inventories
    
We account for inventory valuation for a majority of the Company using the last-in, first-out (“LIFO”) method measured at the lower of cost or market value. We utilize the LIFO method of valuing inventories because it reflects how we monitor and manage our business and it matches current costs and revenues. Valuation of inventory using the LIFO method is made at the end of our fiscal year based on inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on estimates of expected year-end inventory levels and costs. Other inventories, consisting mostly of foreign inventories, are measured using first-in, first-out (“FIFO”) costing methods. Inventory cost, regardless of valuation method, includes direct material, direct labor and manufacturing overhead costs. In circumstances where inventory levels are in excess of anticipated market demand, where inventory is deemed technologically obsolete or not marketable due to its condition or where the inventory cost for an item exceeds its market value, we record a charge to cost of goods sold and reduce the inventory to its market value.

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Recent Accounting Pronouncements
    
See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” to the accompanying consolidated financial statements included elsewhere in this Annual Report.

Special Note Regarding Forward-Looking Statements and Information
    
This Annual Report on Form 10-K contains forward-looking statements and cautionary statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's beliefs and assumptions and information currently available to management. Some of the forward-looking statements can be identified by the use of forward-looking terms such as “believes,” “expects,” “may,” “will,” “shall,” “should,” “would,” “could,” “seeks,” “aims,” “projects,” “is optimistic,” “intends,” “plans,” “estimates,” “anticipates” or other comparable terms. Forward-looking statements include, without limitation, all matters that are not historical facts. They appear in a number of places throughout this Annual Report and include, without limitation, statements regarding our intentions, beliefs, assumptions or current expectations concerning, among other things, financial position; results of operations; cash flows; prospects; growth strategies or expectations; customer retention; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action litigation; and the impact of prevailing economic conditions.
    
Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of the market in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this Annual Report. In addition, even if our results of operations, financial condition and cash flows, and the development of the market in which we operate, are consistent with the forward-looking statements contained in this Annual Report, those results or developments may not be indicative of results or developments in subsequent periods. A number of important factors, including, without limitation, the risks and uncertainties discussed or referenced under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, could cause actual results and outcomes to differ materially from those reflected in the forward-looking statements. Additional factors that could cause actual results and outcomes to differ from those reflected in forward-looking statements include, without limitation:
declines in, and uncertainty regarding, the general business and economic conditions in the United States and international markets in which we operate;
weakness or another downturn in the United States non-residential construction industry;
widespread outbreak of diseases, such as the novel coronavirus (COVID-19) pandemic;
changes in prices of raw materials;
pricing pressure, reduced profitability, or loss of market share due to intense competition;
availability and cost of third-party freight carriers and energy;
high levels of imports of products similar to those manufactured by us;
changes in federal, state, local and international governmental regulations and trade policies;
adverse weather conditions;
increased costs relating to future capital and operating expenditures to maintain compliance with environmental, health and safety laws;
reduced spending by, deterioration in the financial condition of, or other adverse developments, including inability or unwillingness to pay our invoices on time, with respect to one or more of our top customers;
increases in our working capital needs, which are substantial and fluctuate based on economic activity and the market prices for our main raw materials, including as a result of failure to collect, or delays in the collection of, cash from the sale of manufactured products;
work stoppage or other interruptions of production at our facilities as a result of disputes under existing collective bargaining agreements with labor unions or in connection with negotiations of new collective bargaining agreements, as a result of supplier financial distress, or for other reasons;
changes in our financial obligations relating to pension plans that we maintain in the United States;
reduced production or distribution capacity due to interruptions in the operations of our facilities or those of our key suppliers;
loss of a substantial number of our third-party agents or distributors or a dramatic deviation from the amount of sales they generate;
security threats, attacks, or other disruptions to our information systems, or failure to comply with complex network security, data privacy and other legal obligations or the failure to protect sensitive information;
46


possible impairment of goodwill or other long-lived assets as a result of future triggering events, such as declines in our cash flow projections or customer demand and changes in our business and valuation assumptions;
safety and labor risks associated with the manufacture and in the testing of our products;
product liability, construction defect and warranty claims and litigation relating to our various products, as well as government inquiries and investigations, and consumer, employment, tort and other legal proceedings;
our ability to protect our intellectual property and other material proprietary rights;
risks inherent in doing business internationally;
changes in foreign laws and legal systems, including as a result of Brexit;
our inability to introduce new products effectively or implement our innovation strategies;
our inability to continue importing raw materials, component parts and/or finished goods;
the incurrence of liabilities and the issuance of additional debt or equity in connection with acquisitions, joint ventures or divestitures and the failure of indemnification provisions in our acquisition agreements to fully protect us from unexpected liabilities;
failure to manage acquisitions successfully, including identifying, evaluating, and valuing acquisition targets and integrating acquired companies, businesses or assets;
the incurrence of additional expenses, increase in complexity of our supply chain and potential damage to our reputation with customers resulting from regulations related to “conflict minerals”;
disruptions or impediments to the receipt of sufficient raw materials resulting from various anti-terrorism security measures;
restrictions contained in our debt agreements;
failure to generate cash sufficient to pay the principal of, interest on, or other amounts due on our debt;
challenges attracting and retaining key personnel or high-quality employees;
future changes to tax legislation;
failure to generate sufficient cash flow from operations or to raise sufficient funds in the capital markets to satisfy existing obligations and support the development of our business; and
other risks and factors described in this report and from time to time in documents that we file with the SEC.
    
You should read this Annual Report completely and with the understanding that actual future results may be materially different from expectations. All forward-looking statements attributable to us or persons acting on our behalf that are made in this Annual Report are qualified in their entirety by these cautionary statements. These forward-looking statements are made only as of the date of this Annual Report, and we do not undertake any obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, and changes in future operating results over time or otherwise.
    
Comparisons of results for current and any prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
    
In the normal course of conducting business, we are exposed to certain risks associated with potential changes in market conditions. These risks include fluctuations in interest rates, credit risks, commodity prices, including price fluctuations related to our primary raw materials and foreign currency translation rates.
 
Interest Rate Risk
    
The Credit Facilities, excluding our Senior Notes, bear interest at a floating rate. The ABL Credit Facility bears interest at a floating rate of LIBOR plus an applicable margin.  The Senior Secured Term Loan Facility bears interest at the greater of LIBOR or 1.00% plus an applicable margin. As a result, we are exposed to fluctuations in interest rates to the extent of our net borrowings under the New Senior Secured Term Loan, which were $373.0 million at September 30, 2021. As of September 30, 2021, LIBOR exceeded 1.00%; therefore, each one percentage point change in interest rates would result in an approximately $3.8 million change in the annual interest expense on our Senior Secured Term Loan Facility. As of September 30, 2021, assuming availability was fully utilized, each one percentage point change in interest rates would result in an approximately $3.3 million change in annual interest expense on the ABL Credit Facility. Additionally, if the ABL Credit Facility were fully utilized, the margin we pay on borrowings would increase by 0.5% from the current level and we would incur additional interest expense of $1.6 million.

Credit Risk
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We are exposed to credit risk on accounts receivable balances. This risk is mitigated due to our large, diverse customer base. In fiscal 2021, our ten largest customers (including buyers and distributors in buying groups) accounted for approximately 37% of our net sales. However, no single customer comprised more than 10% of our consolidated net sales in fiscal 2021, 2020 or 2019. As of September 30, 2021, CED National represented 11% of the Company’s accounts receivable, with no significant amounts past due. As of September 30, 2020, one customer, Sonepar Management US, Inc., represented 11% of the Company’s accounts receivable balance due to increased sales in the last 60 days of the year. See Note 17, “Segment Information” to the accompanying consolidated financial statements included elsewhere in this Annual Report.
    
We maintain provisions for potential credit losses and such losses to date have normally been within our expectations. We evaluate the solvency of our customers on an ongoing basis to determine if additional allowances for doubtful accounts receivable need to be recorded. We have historically not been exposed to a material amount of uncollectible receivable balances.

Commodity Price Risk
    
We are exposed to price fluctuations for our primary raw material commodities such as steel, copper and PVC resin. Our operating performance may be affected by both upward and downward price fluctuations. We are also exposed to fluctuations in petroleum costs as we deliver a substantial portion of the products we sell by truck. We seek to minimize the effects of inflation and changing prices through economies of purchasing and inventory management resulting in cost reductions and productivity improvements as well as price increases to maintain reasonable gross margins. Such commodity price fluctuations continue to cause volatility in our financial performance and could do so in the future. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further details.

Foreign Currency Risk
    
Because we conduct our business on an international basis in multiple currencies, we may be adversely affected by foreign exchange rate fluctuations. Although we report financial results in United States dollars, approximately 10% of our net sales and expenses are denominated in currencies other than the United States dollar, particularly British pounds sterling, European euros, Canadian dollars, Australian dollars, Chinese yuan, Russian rubles and New Zealand dollars. Fluctuations in exchange rates could therefore significantly affect our reported results from period to period as we translate results in local currencies into United States dollars. With the exception of certain foreign denominated intercompany loans, we generally do not use derivative instruments to hedge translation risks in the ordinary course of business, including the risk related to earnings of foreign subsidiaries. Due to limited cross border transactions, we do not experience material foreign exchange transactional gains or losses.
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Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Atkore Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Atkore Inc. (formerly Atkore International Group Inc.) and subsidiaries (the “Company”) as of September 30, 2021 and 2020, the related consolidated statements of operations, comprehensive income, cash flows, and shareholders’ equity, for each of the three years in the period ended September 30, 2021, and the related notes and the schedules listed in the Index at Part IV, Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2021, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 18, 2021, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2 to the financial statements, the Company has changed its method of accounting for leases in 2020 due to the adoption of Financial Accounting Standards Board Accounting Standards Codification 842, Leases, using the modified retrospective method.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill - Refer to Notes 1 and 12 to the financial statements
Critical Audit Matter Description
The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company’s goodwill balance was $199.0 million as of September 30, 2021. The Company considers three
49


valuation approaches: (a) the income approach; (b) the guideline public company method; and (c) the comparable transaction method to estimate the fair value of its reporting units. With respect to the income approach, management makes significant estimates and assumptions related to forecasts of future cash flows, including revenue growth, earnings before interest, income taxes, depreciation, and amortization (EBITDA) margins, and discount rates. The fair value of all reporting units exceeded their respective carrying values and, therefore, no impairment was recognized for the year ended September 30, 2021.
We identified goodwill for the Company’s Europe, Middle East, and Africa reporting unit as a critical audit matter because the excess fair value over carrying value is low in relation to the Company’s other reporting units and changes to management’s estimates and assumptions could result in an impairment being recognized. This required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of revenue growth, EBITDA margins, and the selection of the discount rate.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the forecasts of revenue growth and EBITDA margins (“forecasts”), and the selection of the discount rate for this reporting unit included the following, among others:
We tested the design and operating effectiveness of controls over the annual goodwill impairment assessment, including those over the forecasts and the selection of the discount rate.
We performed inquiries of the Company’s executives and those outside of the accounting and finance functions to evaluate the forecasts.
We evaluated management’s ability to accurately forecast by comparing actual results to management’s historical forecasts.
We evaluated the reasonableness of management’s forecasts by comparing the forecasts to:
Historical results
Internal communications to management and the Board of Directors.
Industry reports.
With the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by:
Testing the source information and the mathematical accuracy of the calculations underlying the determination of the discount rate and developing a range of independent estimates and comparing those to the discount rate selected by management.
/s/ Deloitte & Touche LLP

Chicago, Illinois  
November 18, 2021

We have served as the Company’s auditor since 2011.





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ATKORE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 
Fiscal Year Ended
(in thousands, except per share data) Note September 30, 2021 September 30, 2020 September 30, 2019
Net sales $ 2,928,014  $ 1,765,421  $ 1,916,538 
Cost of sales 1,802,401  1,274,107  1,419,338 
Gross profit 1,125,613  491,314  497,200 
Selling, general and administrative 293,019  219,496  240,660 
Intangible asset amortization 12 33,644  32,262  32,876 
Operating income 798,950  239,556  223,664 
Interest expense, net 32,899  40,062  50,473 
Loss on extinguishment of debt 13 4,202  273  — 
Other income, net 6 (18,152) (2,777) (11,478)
Income before income taxes 780,001  201,998  184,669 
Income tax expense 7 192,144  49,696  45,618 
Net income $ 587,857  $ 152,302  $ 139,051 
Net income per share
Basic 8 $ 12.38  $ 3.15  $ 2.91 
Diluted 8 $ 12.19  $ 3.10  $ 2.83 
See Notes to Consolidated Financial Statements

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ATKORE INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Fiscal Year Ended
(in thousands) Note September 30, 2021 September 30, 2020 September 30, 2019
Net income $ 587,857  $ 152,302  $ 139,051 
Other comprehensive income, net of tax:
Change in foreign currency translation adjustment 2,385  6,087  (7,490)
Change in unrecognized (loss) income related to pension benefit plans 11,443  (6,943) (15,437)
Total other comprehensive (loss) income 9 13,828  (856) (22,927)
Comprehensive income $ 601,685  $ 151,446  $ 116,124 
See Notes to Consolidated Financial Statements


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ATKORE INC.
CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data) Note September 30, 2021 September 30, 2020
Assets
Current Assets:
Cash and cash equivalents $ 576,289  $ 284,471 
Accounts receivable, less allowance for current and expected credit losses of $2,510 and $3,168, respectively
524,926  298,242 
Inventories, net 10 285,989  199,095 
Prepaid expenses and other current assets 34,248  46,868 
Total current assets 1,421,452  828,676 
Property, plant and equipment, net 11 275,622  243,891 
Intangible assets, net 12 241,204  255,349 
Goodwill 12 199,048  188,239 
Right-of-use assets, net 2 41,113  38,692 
Deferred income taxes 7 29,693  687 
Other long-term assets 1,967  2,991 
Total Assets $ 2,210,099  $ 1,558,525 
Liabilities and Equity
Current Liabilities:
Accounts payable $ 243,164  $ 142,601 
Income tax payable 72,953  1,360 
Accrued compensation and employee benefits 57,437  32,836 
Customer liabilities 80,324  35,802 
Lease obligations 2 11,785  15,786 
Other current liabilities 59,273  47,785 
Total current liabilities 524,936  276,170 
Long-term debt 13 758,386  803,736 
Long-term lease obligations 2 30,236  24,143 
Deferred income taxes 7 16,746  22,525 
Other long-term tax liabilities 735  1,619 
Pension liabilities 4 3,819  40,023 
Other long-term liabilities 10,505  11,899 
Total Liabilities 1,345,363  1,180,115 
Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 45,997,159 and 47,407,023 shares issued and outstanding, respectively
461  475 
Treasury stock, held at cost, 260,900 and 260,900 shares, respectively
(2,580) (2,580)
Additional paid-in capital 506,921  487,223 
Retained earnings 388,660  (64,154)
Accumulated other comprehensive loss 9 (28,726) (42,554)
Total Equity 864,736  378,410 
Total Liabilities and Equity $ 2,210,099  $ 1,558,525 
See Notes to Consolidated Financial Statements

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ATKORE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
Fiscal year ended
(in thousands) Note September 30, 2021 September 30, 2020 September 30, 2019
Operating activities
Net income $ 587,857  $ 152,302  $ 139,051 
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 78,557  74,470  72,347 
Amortization of debt issuance costs and original issue discount 2,497  1,876  1,804 
Deferred income taxes 7 (43,306) 4,483  (796)
Loss on extinguishment of debt 13 4,202  273  — 
Provision for losses on accounts receivable and inventory 645  5,014  4,656 
Stock-based compensation expense 5 17,047  13,064  11,798 
Amortization of right-of-use assets 2 14,515  14,803  — 
Loss on disposal of property, plant & equipment, net 141  3,001  — 
Gain on purchase of business 3 (731) —  (7,384)
Other adjustments to net income 382  (844) (1,938)
Changes in operating assets and liabilities, net of effects from acquisitions
Accounts receivable (219,659) 16,920  6,026 
Inventories (81,544) 24,642  9,002 
Prepaid expenses and other current assets (6,462) (11,164) (3,054)
Accounts payable 98,444  (5,835) (21,981)
Income taxes 80,291  (6,261) 4,511 
Accrued and other liabilities 63,459  (32,942) (2,782)
Other, net (23,433) (5,040) (1,566)
Net cash provided by operating activities 572,902  248,762  209,694 
Investing activities
Capital expenditures (64,474) (33,770) (34,860)
Insurance proceeds for properties, plant and equipment 9,627  2,337  — 
Proceeds from sale of properties, plant and equipment 81  3,920  80 
Acquisitions of businesses, net of cash acquired 3 (43,195) —  (97,999)
Other, net —  —  (322)
Net cash used for investing activities (97,961) (27,513) (133,101)
Financing activities
Borrowings under credit facility 13 —  —  39,000 
Repayments under credit facility 13 —  —  (39,000)
Repayments of short-term debt 13 (4,000) —  (20,980)
Issuance of long-term debt 13 798,000  —  — 
Repayments of long-term debt 13 (835,120) (40,000) (40,000)
Issuance of common stock, net of taxes withheld 5 2,660  (2,972) 7,374 
Repurchase of common stock (135,066) (15,011) (24,419)
Payments for debt financing costs and fees 13 (10,930) (3,204) — 
Other, net —  (155)
Net cash used for financing activities (184,456) (61,179) (78,180)
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Fiscal year ended
(in thousands) Note September 30, 2021 September 30, 2020 September 30, 2019
Effects of foreign exchange rate changes on cash and cash equivalents 1,333  986  (1,660)
Increase (decrease) in cash and cash equivalents 291,818  161,056  (3,247)
Cash and cash equivalents at beginning of period 284,471  123,415  126,662 
Cash and cash equivalents at end of period $ 576,289  $ 284,471  $ 123,415 
Supplementary Cash Flow information
Interest paid $ 23,726  $ 38,791  $ 49,879 
Income taxes paid, net of refunds 155,114  50,993  38,698 
Capital expenditures, not yet paid 1,094  1,278  3,719 
Operating cash flows from cash paid on operating lease liabilities 13,035  12,939  — 
Operating lease right-of-use assets obtained in exchange for lease liabilities 13,538  15,278  — 
See Notes to Consolidated Financial Statements

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ATKORE INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the three year period ended September 30, 2021  
Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Total Equity
(in thousands) Shares Amount Amount
Balance as of September 30, 2018 47,080  $ 472  $ (2,580) $ 457,978  $ (317,373) $ (16,438) $ 122,059 
Net income —  —  —  —  139,051  —  139,051 
Other comprehensive loss —  —  —  —  —  $ (22,927) (22,927)
Reclassification of stranded tax benefits (1)
2,333  (2,333) — 
Stock-based compensation —  —  —  11,798  —  —  11,798 
Issuance of common stock, net of shares withheld for tax 1,105  11  —  7,363  —  —  7,374 
Repurchase of common stock (1,230) (12) —  —  (24,407) —  (24,419)
Balance as of September 30, 2019 46,955  471  (2,580) 477,139  (200,396) (41,698) 232,936 
Net income —  —  —  —  152,302  —  152,302 
Other comprehensive loss —  —  —  —  —  (856) (856)
ASU 2016-02 modified retrospective adoption —  —  —  —  (1,053) —  (1,053)
Stock-based compensation —  —  —  13,064  —  —  13,064 
Issuance of common stock, net of shares withheld for tax 846  —  (2,980) —  —  (2,972)
Repurchase of common stock (394) (4) —  —  (15,007) —  (15,011)
Balance as of September 30, 2020 47,407  475  (2,580) 487,223  (64,154) (42,554) 378,410 
Net income —  —  —  —  587,857  —  587,857 
Other comprehensive loss —  —  —  —  —  13,828  13,828 
Stock-based compensation —  —  —  17,047  —  —  17,047 
Issuance of common stock, net of shares withheld for tax 918  —  2,651  —  —  2,660 
Repurchase of common stock (2,328) (23) —  —  (135,043) —  (135,066)
Balance as of September 30, 2021 45,997  $ 461  $ (2,580) $ 506,921  $ 388,660  $ (28,726) $ 864,736 
(1) Due to the adoption of ASU 2018-02.
See Notes to Consolidated Financial Statements

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ATKORE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share and per share data)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

Organization and Ownership Structure — Atkore Inc. (the “Company” or “Atkore”) is a leading manufacturer of Electrical products primarily for the non-residential construction and renovation markets and Safety & Infrastructure for the construction and industrial markets. The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable, and installation accessories. The Safety & Infrastructure segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security, and cable management for the protection and reliability of critical infrastructure.

The Company was incorporated in the State of Delaware on November 4, 2010 under the name Atkore International Group Inc. Atkore is the sole stockholder of Atkore International Holdings Inc. (“AIH”), which in turn is the sole stockholder of Atkore International Inc. (“AII”).

Holders of common stock are entitled to cast one vote for each share held of record on all matters submitted to a vote of the stockholders. Additionally, holders of common stock are entitled to receive, on a pro rata basis, dividends and distributions, if any, that the Company’s board of directors may declare out of legally available funds.

Share Repurchase Program — On February 5, 2019, the board of directors approved a share repurchase program, under which the Company may repurchase up to $50.0 million of its outstanding common stock. As of December 25, 2020, there were no authorized repurchases remaining on that program.

On January 28, 2021, the board of directors approved a share repurchase program, under which the Company may repurchase up to $100.0 million of its outstanding common stock. As of September 30, 2021, there were no authorized repurchases remaining.

On November 16, 2021, the board of directors approved a share repurchase program, under which the Company may repurchase up to $400 million of its outstanding common stock.

Segment Redefinition Effective in the first quarter of fiscal 2021, the Company renamed and redefined its reportable segments.

The Electrical Raceway segment was renamed as the Electrical segment. The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable, and installation accessories. This segment serves contractors, in partnership with the electrical wholesale channel.

The Mechanical Products & Solutions segment was renamed as the Safety & Infrastructure segment. This segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security, and cable management for the protection and reliability of critical infrastructure. These solutions are marketed to contractors, original equipment manufacturers and end users.

Segment Realignment & Reclassifications Effective in the first quarter of fiscal 2021, the Company implemented a realignment (the “Realignment”) of its segment financial reporting structure. The Company’s domestic cable management and prefabrication modular businesses had historically been reported in the Electrical segment. Due to transitions in the Company’s Executive Leadership Team, these businesses are now reported in the Safety & Infrastructure segment. The Realignment reflects how the Company’s Chief Operating Decision Maker now assesses the operating performance and allocates resources to the Safety & Infrastructure segment. Goodwill was also reallocated on a relative fair value basis between the applicable reporting units.

The Company reflected these changes to its segment information retrospectively to the earliest period presented which resulted in a transfer of external net sales, intersegment sales, total assets, and Adjusted EBITDA from the Electrical segment to the Safety & Infrastructure segment. These changes had no impact on the Company’s previously reported consolidated net sales, operating income, net income or earnings per share. See Note 17, “Segment Information” for additional details.

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Basis of Presentation — The accompanying audited consolidated financial statements of the Company and all of its subsidiaries included herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

The audited consolidated financial statements include the assets and liabilities used in operating the Company's business. All intercompany balances and transactions have been eliminated in consolidation. The results of companies acquired or disposed of are included in the audited consolidated financial statements from the effective date of acquisition or up to the date of disposal.
 

Fiscal Periods — The Company has a fiscal year that ends on September 30. The Company's fiscal quarters typically end on the last Friday in December, March and June as it follows a 4-5-4 calendar.

Use of Estimates — The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclose contingent assets and liabilities at the date of the consolidated financial statements and report the associated amounts of revenues and expenses. Actual results could differ materially from these estimates.

Summary of significant accounting policies

Revenue Recognition — The Company’s revenue arrangements primarily consist of a single performance obligation to transfer promised goods which is satisfied at a point in time when title, risks and rewards of ownership, and subsequently control have transferred to the customer. This generally occurs when the product is shipped to the customer, with an immaterial amount of transactions in which control transfers upon delivery. The Company primarily offers assurance-type standard warranties that do not represent separate performance obligations.

The Company has certain arrangements that require it to estimate at the time of sale the amounts of variable consideration that should not be recorded as revenue as certain amounts are not expected to be collected from customers, as well as an estimate of the value of products to be returned. The Company principally relies on historical experience, specific customer agreements, and anticipated future trends to estimate these amounts at the time of sale and to reduce the transaction price. These arrangements include sales discounts and allowances, volume rebates, and returned goods.

The Company has elected to utilize certain practical expedients available under GAAP. The Company records amounts billed to customers for reimbursement of shipping and handling costs within revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of sales. Sales taxes and other usage-based taxes are excluded from revenue. The practical expedient not to disclose information about remaining performance obligations has also been elected as these obligations have an original duration of one year or less. The Company does not evaluate whether the selling price includes a financing interest component for contracts that are less than a year. The Company also expenses costs incurred to obtain a contract, primarily sales commissions, as all obligations will be settled in less than one year.

The Company typically receives payment 30 to 60 days from the point it has satisfied the related performance obligation. See Note 17, “Segment Information” for revenue disaggregated by geography and product categories.

Cost of Sales — The Company includes all costs directly related to the production of goods for sale in cost of sales in the statement of operations. These costs include direct material, direct labor, production related overheads, excess and obsolescence costs, lower of cost or market provisions, freight and distribution costs, and the depreciation and amortization of assets directly used in the production of goods for sale.

Selling, General and Administrative Expenses — These amounts primarily include payroll-related expenses for both administrative and selling personnel, compensation expense from stock-based awards, restructuring-related charges, third-party professional services and transactional gains or losses for foreign currency transactions, excluding the foreign exchange exposure for intercompany loan transactions, which is included in Other income, net.

Cash and Cash Equivalents — The Company considers all highly liquid investments with a maturity of three months or less, when purchased, to be cash equivalents.

Accounts Receivable and Allowance for current and expected credit losses — The Company carries its accounts receivable at their face amounts less an allowance for current and expected credit losses. The allowance for current and expected credit losses reflects the best estimate of current and expected losses inherent in the Company’s accounts receivable
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portfolio determined on the basis of historical experience, specific allowances for known troubled accounts and other available evidence.

Inventories — Inventories are recorded at the lower of cost (primarily LIFO) or market value. The Company estimates losses for excess and obsolete inventory through an assessment of its net realizable value based on the aging of the inventory and an evaluation of the likelihood of recovering the inventory costs based on anticipated demand and selling price. See Note 10, “Inventories, net.”

Property, Plant and Equipment — Property, plant and equipment, net, is recorded at cost less accumulated depreciation. Maintenance and repair expenditures are charged to expense when incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows:
Buildings
4 to 40 years
Building improvements
3 to 20 years
Machinery and equipment
1 to 20 years
Leasehold improvements Lesser of remaining term of the lease or useful life
Software
2 to 10 years
    
The internal and external costs incurred to develop internal use computer software during the application development stage of the implementation, including the design of the chosen path, are capitalized. Other costs, including expenses incurred during the preliminary project stage, training expenses, data conversion costs and expenses incurred in the post implementation stage are expensed in the period incurred. Capitalized costs are amortized ratably over the useful life of the software when the software becomes operational. Upgrades and enhancements to internal use software are capitalized only if the costs result in additional functionality. The Company does not plan to sell or market its internal use computer software to third parties.

Long-Lived Asset and Finite - Lived Intangible Asset Impairments — The Company reviews long-lived assets, including property, plant and equipment and finite-lived intangible assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the asset may not be fully recoverable.

The Company groups assets at the lowest level for which cash flows are separately identified in order to measure an impairment. Recoverability of an asset or asset group is first measured by a comparison of the carrying amount to its estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying amount exceeds its estimated undiscounted future cash flows, an impairment charge is recognized as the amount by which the carrying amount of the asset or asset group exceeds the estimated fair value. If impairment is determined to exist, any related impairment loss is calculated based on the estimated fair value. Impairment losses on assets to be disposed of or held for sale, if any, are based on the estimated proceeds to be received, less costs of disposal.

The Company also considers potential impairment indicators associated with other finite-lived intangible assets, including its customer relationships, patents, and non-compete agreements. An impairment is recognized if the carrying value of an asset or asset group exceeds the estimated undiscounted future cash flows expected to result from the use of the asset or asset group and its eventual disposition. The Company's key customers are primarily wholesale and national distributors. The terms of these relationships are based on purchase orders and are not contractually based. Customer relationships are amortized on a straight-line basis over their useful lives, ranging from 6 to 14 years. The Company evaluates the appropriateness of remaining useful lives based on customer attrition rates. Other intangible assets are amortized on a straight-lined basis over their estimated useful lives, ranging from 1 to 20 years. The Company did not have a triggering event during fiscal 2021, 2020 and 2019.

Goodwill and Indefinite-Lived Intangible Asset Impairments — The Company assesses the recoverability of goodwill and indefinite-lived trade names on an annual basis in accordance with Accounting Standards Codification (“ASC”) 350 “Intangibles - Goodwill and Other.” The measurement date is the first day of the fourth fiscal quarter, or more frequently, if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit or the respective indefinite-lived trade name is less than the carrying value. The Company can elect to perform a quantitative or qualitative test of impairment.

For fiscal 2021, 2020 and 2019 the Company performed a quantitative impairment assessment for goodwill. The Company calculated the fair value of its six reporting units considering three valuation approaches: (a) the income approach; (b) the guideline public company method; and (c) the comparable transaction method.  The income approach calculates the fair value of the reporting unit using a discounted cash flow approach. Internally forecasted future cash flows, which the Company believes reasonably approximate market participant assumptions, are discounted using a weighted average cost of capital
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(Discount Rate) developed for each reporting unit. The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific reporting unit’s forecasted performance.  The key uncertainties in these calculations are the assumptions used in determining the reporting unit’s forecasted future performance, including revenue growth and EBITDA margins, as well as the perceived risk associated with those forecasts. Fair value under the guideline public company method is determined for each reporting unit by applying market multiples for comparable public companies to the reporting unit’s financial results. Fair value under the comparable transaction method is determined based on exchange prices in actual transactions and on asking prices for controlling interests in public or private companies currently offered for sale by applying market multiples for comparable public companies to the unit’s financial results. The key uncertainties in the guideline public company method and the comparable transaction method calculations are the assumptions used in determining the reporting unit's comparable public companies, comparable transactions and the selection of the market multiples.   

The Company did not record any goodwill impairments in fiscal 2021, 2020 or 2019.

As noted above, ASC 350 also requires that the Company test the indefinite-lived intangible assets for impairment at least annually. Under ASC 350, if the carrying value of the indefinite-lived asset is higher than its fair value, then the asset is deemed to be impaired and the impairment charge is estimated as the excess carrying value over the fair value. The Company calculated the fair value of its indefinite-lived intangible assets using the income approach, specifically the relief-from-royalty method. The relief-from-royalty method is used to estimate the cost savings that accrue to the owner of an intangible asset who would otherwise have to pay royalties or license fees on revenues earned through the use of the asset. Internally forecasted revenues, which the Company believes reasonably approximate market participant assumptions, are multiplied by a royalty rate to arrive at the estimated net after tax cost savings. The royalty rate used in the analysis is based on an analysis of empirical, market-derived royalty rates for guideline intangible assets. The net after tax cost savings are discounted using the Discount Rate. The Discount Rate is developed using market observable inputs, as well as considering whether or not there is a measure of risk related to the specific indefinite lived intangible assets' forecasted performance.  The key uncertainties in these calculations are the assumptions used in determining the revenue associated with each indefinite-lived intangible asset and the royalty rate.

The Company did not record any indefinite-lived asset impairments in fiscal 2021, 2020 or 2019.
    
Fair Value Measurements — Authoritative guidance for fair value measurements establishes a three-level hierarchy that ranks the quality and reliability of information used in developing fair value estimates. The hierarchy gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. In cases where two or more levels of inputs are used to determine fair value, a financial instrument's level is determined based on the lowest level input that is considered significant to the fair value measurement in its entirety. The three levels of the fair value hierarchy are summarized as follows:

Level 1-inputs are based upon quoted prices (unadjusted) in active markets for identical assets or liabilities which are accessible as of the measurement date.

Level 2-inputs are based upon quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations for the asset or liability that are derived principally from or corroborated by market data for which the primary inputs are observable, including forward interest rates, yield curves, credit risk and exchange rates.

Level 3-inputs for the valuations are unobservable and are based on management's estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques such as option pricing models and discounted cash flow models.

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Income Taxes and Uncertain Tax Positions — The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities using enacted tax rates in effect for the year it is expected the differences will reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period of the enactment date.

The Company periodically assesses the realizability of the deferred tax assets. In making this determination management considers all available evidence, both positive and negative, including earnings history, expectations of future taxable income and available tax planning strategies. A valuation allowance is recorded to reduce the Company’s deferred tax assets to the amount that is considered more likely than not to be realized. Changes in the required valuation allowance are recorded in income in the period such determination is made.

Certain tax positions may be considered uncertain requiring an assessment of whether an allowance should be recorded. Provisions for uncertain tax positions provide a recognition threshold based on an estimate of whether it is more likely than not that a position will be sustained upon examination. The Company measures its uncertain tax positions as the largest amount of benefit that is greater than a 50% likelihood of being realized upon examination. Interest and penalties related to unrecognized tax benefits are recorded as a component of income tax expense. See Note 7, “Income Taxes.”

On December 22, 2017, “H.R.1,” also known as the Tax Cuts and Jobs Act (“TCJA”) was signed into law.
As part of the enactment of TCJA, the Company recorded a global intangible low-taxed income (“GILTI”) provision for the first time beginning in fiscal 2019. The GILTI provision of TCJA requires certain income earned by controlled foreign corporations (“CFCs”) to be included currently in the gross income of the CFCs controlling U.S. shareholder. In accordance with accounting standards applicable to income taxes, there is allowed an accounting policy choice of either (1) treating taxes due on U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the “period cost method”) or (2) factoring such amounts into the Company’s measurement of its deferred taxes (the “deferred method”). The Company has elected the period method.

Leases — Starting in fiscal 2020, as a result of the adoption of ASC 842 “Leases,” the Company recognizes if an arrangement is a lease at the inception of the contract. The Company determines which party has the right to control an asset during the contract term and recognizes a Right of Use (“ROU”) asset and lease obligations based on the present value of the future minimum lease payments over the term of the lease. Refer to Note 2, “Leases” for further discussion of the Company’s accounting policy for leases.

Translation of Foreign Currency — For the Company's non-U.S. subsidiaries that report in a functional currency other than United States dollars, assets and liabilities are translated into United States dollars using period end exchange rates. Revenue and expenses are translated at the monthly average exchange rates in effect during the reporting period. Foreign currency translation adjustments are included as a component of accumulated other comprehensive loss within the consolidated statements of comprehensive income.

Recent Accounting Pronouncements

    A summary of recently adopted Accounting Standards Update ("ASU")s are as follows. Adoption dates are on the first day of the fiscal year indicated below, unless otherwise specified.
Adopted Guidance
ASU Description of ASU Impact to Atkore Adoption Date
2016-13 Financial Instruments - Credit Losses (Topic 326) The ASU adds to GAAP an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which the FASB believes will result in more timely recognition of such losses. The Company adopted this standard in the first quarter of 2021. The adoption of the standard did not have a material impact on the Company’s consolidated financial statements. 2021


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    A summary of guidance not yet adopted are as follows:
Guidance not yet adopted
ASU Description of ASU Impact to Atkore Effective Date
2019-12, Simplifying the accounting for income taxes (Topic 740)
The ASU eliminates certain existing exceptions related to the general approach in ASC 740 relating to franchise taxes, reducing complexity in the interim period accounting for year to date loss limitations and changes in tax laws, and clarifying the accounting for transactions outside of business combination that result in a step up in the tax basis of goodwill. The Company will adopt the new standard on October 1, 2021. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements. 2022

2. LEASES

The Company engages in leasing transactions to meet the needs of the business. The Company leases certain manufacturing facilities, warehouses and distribution centers, office space, forklifts, vehicles and other machinery and equipment. The determination to lease, rather than purchase, an asset is primarily contingent upon capital requirements, duration of the forecasted business investment, and asset availability.

The Company determines if an arrangement is a lease at inception and all arrangements deemed to be leases are subject to an assessment to determine the classification between finance and operating leases. The Company's significant assumptions and judgments in determining whether a contract is or contains a lease include establishing whether the supplier has the ability to use other assets to fulfill its service or whether the terms of the agreement enable the Company to control the use of a dedicated property, plant and equipment asset during the contract term. In the majority of the Company's contracts where it must identify whether a lease is present, it is readily determinable that the Company controls the use of the assets and obtains substantially all of the economic benefit during the term of the contract. In those contracts where identification is not readily determinable, the Company has determined that the supplier has either the ability to use another asset to provide the service or the terms of the contract give the supplier the rights to operate the asset at its discretion during the term of the contract, in which case the arrangement would not constitute a lease.

Right-of-use assets and lease obligations are recognized based on the present value of the future minimum lease payments over the lease term as of the commencement date. The Company’s lease agreements have terms that include both lease and non-lease components. Lease component fees are included in the present value of future minimum lease payments. Conversely, non-lease components are not subject to capitalization and are expensed as incurred. Per ASC 842 “Leases,” the contractual interest rate is used to calculate the present value of the future minimum lease payments. However, the majority of the Company’s leases do not provide an implicit rate. Therefore, the Company's significant assumption and judgments in determining the discount rate include determining the incremental borrowing rate. The Company’s incremental borrowing rates are based on the term of the lease, the economic environment of the lease and the effect of collateralization. The valuation of the ROU asset also includes lease payments made in advance of the lease commencement date and initial direct costs incurred to secure the lease and is reduced for lease incentives. The lease terms include options to extend or terminate the lease when it is reasonably certain the Company will exercise the options. Leases with an initial term of 12 months or less are classified as short-term leases and are not recorded on the consolidated balance sheets. The lease expense for short-term leases is recognized on a straight-line basis over the lease term.

The Company has certain leasing agreements, related to leased vehicles available to our sales personnel, that contain guaranteed residual value terms, which are not expected to be triggered. The Company’s leasing portfolio does not contain any material restrictive covenants.

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Leases
(in thousands) September 30, 2021 September 30, 2020
Assets  
Operating lease assets $ 38,569  $ 37,666 
Finance lease assets   4,966  2,999 
Right-of-use assets, at cost $ 43,535  $ 40,665 
Less: accumulated amortization (2,422) (1,973)
Right-of-use assets, net $ 41,113  $ 38,692 
Liabilities  
Current liabilities:
Current portion of operating lease liabilities   $ 10,873  $ 15,356 
Current portion of finance lease liabilities 912  430 
Current lease obligations $ 11,785  $ 15,786 
Noncurrent liabilities:  
Operating lease liabilities $ 28,434  $ 23,354 
Finance lease liabilities   1,802  789 
Long-term lease obligations $ 30,236  $ 24,143 
Total lease obligations $ 42,021  $ 39,929 

Lease Cost

The following table summarizes lease costs by type of cost for the fiscal year ended September 30, 2021, and the fiscal year ended September 30, 2020. In the consolidated statements of operations, cost of sales and selling, general and administrative expenses included lease costs of $14,536 and $2,781 for the fiscal year ended September 30, 2021 and $14,295 and $2,714 for the fiscal year end September 30, 2020.

Fiscal year ended
(in thousands) September 30, 2021 September 30, 2020
Amortization of right-of-use assets $ 14,515  $ 14,803 
Interest on lease liabilities 49  41 
Variable lease costs 938  714 
Short term lease costs 1,815  1,451 
Total lease costs $ 17,317  $ 17,009 

Maturity of Lease Liabilities

The Company's maturity analysis of its lease liabilities as of September 30, 2021 is as follows:
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(in thousands) Financing Leases Operating Leases
2022   $ 951  $ 12,047 
2023 874  9,094 
2024   565  7,393 
2025 257  4,879 
2026   157  3,127 
2027 and after 6,957 
Total lease payments   $ 2,812  $ 43,497 
Less: Interest (98) (4,190)
Present value of lease liabilities   $ 2,714  $ 39,307 

Lease Term and Discount Rate

Fiscal year ended
  September 30, 2021 September 30, 2020
Weighted-average remaining lease term (years)    
Operating leases 5.2 4.4
Finance leases   3.3 3.2
Weighted-average discount rate
Operating leases   4.0  % 3.6  %
Finance leases 2.5  % 3.1  %

3. ACQUISITIONS

From time to time, the Company enters into strategic acquisitions in an effort to better service existing customers and to attain new customers. The Company had no acquisitions in fiscal 2020.

Fiscal 2021

On February 24, 2021, Atkore Southwest, LLC, a wholly-owned subsidiary of the Company acquired the assets of FRE Composites USA Inc. and separately the Company acquired all of the outstanding stock of FRE Composites Inc., collectively described as FRE Composites Group (“FRE Composites”), for a purchase price of $36,993, net of cash received. FRE Composites is a leading manufacturer of fiberglass conduit for the electrical and industrial market. The purchase price was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values.

On October 22, 2020, Atkore Plastics Southeast, LLC, a wholly-owned subsidiary of the Company acquired the assets of Queen City Plastics, Inc. (“Queen City Plastics”), a leading manufacturer of PVC conduit, elbows and fittings for the electrical market. The purchase price was allocated to tangible assets acquired and liabilities assumed based on their fair values. The purchase price of $6,214 was deemed immaterial to the Company.

Fiscal 2019

On August 21, 2019, Atkore Plastic Pipe Corporation, a wholly-owned subsidiary of the Company acquired the assets of Rocky Mountain Pipe (“Cor-Tek”), a manufacturer of PVC conduit for electrical applications, and considered a leading innovator in cellular core extrusion technology for a purchase price of $14,835. In connection with this acquisition, the Company recorded a bargain purchase gain of $7,384, which is reported within other income, net in the Consolidated Statements of Operations. The Company believes that it was able to acquire the net assets of Cor-Tek for less than fair value as a result of Cor-Tek’s financial difficulties.

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On June 3, 2019, AFC Cable Systems, Inc., a wholly-owned subsidiary of the Company acquired the assets of United Structural Products, LLC. (“U.S. Tray”), a manufacturer of welded aluminum and engineered-to-order cable trays for a purchase price of $25,507, net of cash received. Net sales and net income of the acquired company included in the consolidated statement of operations for fiscal 2019 were insignificant. As a result of the acquisition, the Company recognized $7,295 of goodwill, $14,800 of identifiable intangible assets and $3,412 of working capital and other tangible assets.

On October 1, 2018, Allied Luxembourg S.a.r.l, a wholly-owned subsidiary of the Company acquired all of the outstanding stock of Vergokan International NV (“Vergokan”) for a purchase price of $57,899, net of cash received. Vergokan is a leading manufacturer of cable tray and cable ladder systems, underfloor installations and industrial floor trunking that serves industrial, power and energy, commercial and infrastructure sectors in more than 45 countries.

The following section provides purchase price allocation disclosures and other financial disclosures for significant acquisitions for the applicable fiscal years.

Fiscal 2021

The purchase price for FRE Composites, which was finalized during the fourth quarter of fiscal 2021, was allocated to tangible and intangible assets acquired and liabilities assumed, based on their fair values. The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date for fiscal 2021:

(in thousands)   FRE Composites
Fair value of consideration transferred:    
Cash consideration   $ 36,993 
Fair value of assets acquired and liabilities assumed:    
Cash   437 
Accounts receivable   2,163 
Inventories   3,355 
Intangible assets   18,300 
Fixed assets   8,509 
Accounts payable   (1,186)
Income Taxes (4,293)
Other   (240)
Net assets acquired   27,045 
Excess purchase price attributed to goodwill acquired   $ 9,948 

The Company estimates $1.6 million of the goodwill recognized from the FRE Composites acquisition is deductible for tax purposes. The goodwill consists largely of the synergies and economies of scale from integrating this company with existing businesses.

The following table summarizes the fair value of intangible assets as of the acquisition date:
    FRE Composites
($ in thousands)   Fair Value   Weighted Average Useful Life (Years)
Customer relationships   $ 14,700    12.0
Other   3,600    6.0
Total intangible assets   $ 18,300   

Net sales and net income of FRE Composites and Queen City Plastics are included in the consolidated statement of operations for fiscal 2021 for the post-acquisition period. Due to the immaterial nature of these acquisitions, both individually, and in the aggregate, the Company did not include the full year pro forma results of operations for the acquisition year.

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Fiscal 2019

The following table summarizes the Level 3 fair values assigned to the net assets acquired and liabilities assumed as of the acquisition date for fiscal 2019:

(in thousands) Vergokan Other Total
Fair value of consideration transferred:      
Cash consideration $ 58,728  $ 41,641  $ 100,369 
Other liability consideration —  1,400  1,400 
Total consideration transferred 58,728  43,041  101,769 
Fair value of assets acquired and liabilities assumed:      
Cash 829  1,541  2,370 
Accounts receivable 8,761  8,217  16,978 
Inventories 11,434  7,494  18,928 
Intangible assets 12,621  16,400  29,021 
Fixed assets 32,490  19,298  51,788 
Accounts payable (18,716) (7,608) (26,324)
Gain on purchase of business —  (7,384) (7,384)
Other 1,680  (3,412) (1,732)
Net assets acquired 49,099  34,546  83,645 
Excess purchase price attributed to goodwill acquired $ 9,629  $ 8,495  $ 18,124 

Goodwill recognized from the Vergokan acquisition is non-deductible for tax purposes. Goodwill recognized from the other acquisitions is tax-deductible and is amortized over 15 years for income tax purposes. The goodwill consists largely of the synergies and economies of scale from integrating these companies with existing businesses.

The following table summarizes the fair value of intangible assets acquired in fiscal 2019 as of the acquisition dates:
    Vergokan   Other
($ in thousands)   Fair Value   Weighted Average Useful Life (Years)   Fair Value   Weighted Average Useful Life (Years)
Customer relationships   $ 10,535    12.0   $ 15,400    10.0
Other   2,086    9.0   1,000    9.0
Total intangible assets   $ 12,621      $ 16,400   

Net sales and net income of the companies acquired during fiscal 2019 are included in the consolidated statement of operations for fiscal 2019 for the post-acquisition period. Due to the immaterial nature of these acquisitions, both individually, and in the aggregate, the Company did not include the full year pro forma results of operations for the acquisition year.

4. POSTRETIREMENT BENEFITS
The Company has a number of non-contributory and contributory defined benefit retirement plans covering certain United States employees. Net periodic pension benefit cost is based on periodic actuarial valuations that use the projected unit credit method of calculation and is charged to the statements of operations on a systematic basis over the expected average remaining service lives of current participants. The benefits under the defined benefit plans are based on various factors, such as years of service and compensation. For all periods presented, all defined pension benefit plans are frozen, whereby participants no longer accrue credited service. The net periodic cost for the periods presented was as follows: 
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Fiscal Year Ended
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Interest cost 2,729  3,739  4,665 
Expected return on plan assets (6,424) (6,331) (6,372)
Amortization of actuarial loss 1,327  888  101 
Net periodic cost $ (2,368) $ (1,704) $ (1,606)

The weighted-average assumptions used to determine net periodic pension cost during the period were as follow:
September 30, 2021 September 30, 2020 September 30, 2019
Discount rate 2.5  % 3.1  % 4.2  %
Expected return on plan assets 6.2  % 6.3  % 6.3  %
Rate of compensation increase N/a N/a N/a

The change in the benefit obligations, plan assets and the amounts recognized on the consolidated balance sheets was as follows (in thousands):
Change in benefit obligations:
Balance as of September 30, 2019 $ 137,960 
Interest cost 3,739 
Actuarial loss 10,476 
Benefits and administrative expenses paid (5,416)
Balance as of September 30, 2020 146,759 
Interest cost 2,729 
Actuarial gain (3,170)
Benefits and administrative expenses paid (5,573)
Balance as of September 30, 2021 $ 140,745 
 
Change in plan assets:
Balance as of September 30, 2019 103,451 
Actual return on plan assets 6,587 
Employer contributions 2,114 
Benefits and administrative expenses paid (5,416)
Balance as of September 30, 2020 106,736 
Actual return on plan assets 17,258 
Employer contributions 19,635 
Benefits and administrative expenses paid (5,573)
Balance as of September 30, 2021 $ 138,056 
Funded status:
Funded status as of September 30, 2020 $ (40,023)
Funded status as of September 30, 2021 $ (2,689)
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(in thousands) September 30, 2021 September 30, 2020
Amounts recognized in the consolidated balance sheets consist of:
Pension Non-Current Assets $ 1,130  $ — 
Pension liabilities $ (3,819) $ (40,023)
Net amount recognized $ (2,689) $ (40,023)
   
Amounts recognized in accumulated other comprehensive loss (before income taxes) consist of:
Net actuarial loss $ (27,036) $ (42,367)
Total loss recognized $ (27,036) $ (42,367)
   
Weighted-average assumptions used to determine pension benefit obligations at year end:
Discount rate 2.7  % 2.5  %
Rate of compensation increase N/a N/a

For the fiscal year ended 2021, the net obligation decreased primarily as a result of employer contributions of $18 million over the prior year contributions and an actuarial gain of $3.2 million that was a result of an increase in the discount rate from fiscal year 2020 to 2021.

The following table summarizes the defined benefit pension plans with accumulated benefit obligations in excess of plan assets:
(in thousands) September 30, 2021 September 30, 2020
Accumulated benefit obligation $ 122,655  $ 146,759 
Fair value of plan assets 118,843  106,736 

The following table summarizes the defined benefit pension plans with projected benefit obligations in excess of plan assets:
(in thousands) September 30, 2021 September 30, 2020
Projected benefit obligation $ 122,655  $ 146,759 
Fair value of plan assets 118,843  106,736 

In determining the expected return on plan assets, the Company considers the relative weighting of plan assets by class, historical performance of asset classes over long-term periods, asset class performance expectations as well as current and future economic conditions. The Company’s investment strategy for its pension plans is to manage the plans on a going-concern basis. Current investment policy is to maximize the return on assets, subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for participants. For the pension plans, this policy targets a 60% allocation to equity securities and a 40% allocation to debt securities.

Pension plans have the following weighted-average asset allocations:
Asset Category: September 30, 2021 September 30, 2020
Equity securities 56% 58%
Debt securities 43% 39%
Cash and cash equivalents 1% 3%
Total 100% 100%

The Company evaluates its defined benefit plans’ asset portfolios for the existence of significant concentrations of risk, such as investments in a single entity, industry, foreign country and individual fund manager. As of September 30, 2021, there were no significant concentrations of risk in the Company’s defined benefit plan assets.
    
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The Company’s plan assets are accounted for at fair value and are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value of assets and their placement within the fair value hierarchy levels. The Company’s asset allocations are presented in the table below:
(in thousands) September 30, 2021 September 30, 2020
Level 1 Level 2 Total Level 1 Level 2 Total
United States equity securities $ 48,274  $ —  $ 48,274  $ 30,738  $ 6,796  $ 37,534 
Non-U.S. equity securities   28,787  —  28,787  21,509  2,659  24,168 
Fixed income securities 59,488  —  59,488  34,857  7,253  42,110 
Cash and cash equivalents   1,507  —  1,507  2,924  —  2,924 
Total $ 138,056  $ —  $ 138,056  $ 90,028  $ 16,708  $ 106,736 

Equity securities consist primarily of publicly traded United States and non-U.S. equities. Publicly traded securities are valued at the last trade or closing price reported in the active market in which the individual securities are traded. Certain equity securities are held within commingled funds, which are valued at the unitized net asset value (“NAV”) or percentage of the NAV as determined by the custodian of the fund. These values are based on the fair value of the underlying net assets owned by the fund.

Fixed income securities consist primarily of government and agency securities, corporate debt securities, and mortgage and other asset-backed securities. When available, fixed income securities are valued at the closing price reported in the active market in which the individual security is traded. Government and agency securities and corporate debt securities are valued using the most recent bid prices or occasionally the mean of the latest bid and ask prices when markets are less liquid. Asset-backed securities including mortgage-backed securities are valued using broker/dealer quotes when available. When quotes are not available, fair value is determined by utilizing a discounted cash flow approach, which incorporates other observable inputs such as cash flows, underlying security structure and market information including interest rates and bid evaluations of comparable securities. As of September 30, 2021 and September 30, 2020, the Company did not have any Level 3 pension assets. Certain fixed income securities are held within commingled funds, which are valued utilizing NAV as determined by the custodian of the fund. These values are based on the fair value of the underlying net assets owned by the fund.

Cash and cash equivalents consist primarily of short-term commercial paper, and other cash or cash-like instruments including settlement proceeds due from brokers, stated at cost, which approximates fair value.

Transfers between levels of the fair value hierarchy are recognized on the actual date of the event or circumstance giving rise to the transfer, which generally coincides with the Company’s valuation process.

Contribution amounts are determined and funded based on laws and regulations and with the assistance of professionally qualified actuaries. The Company contributed $19,635 and $2,114 to its pension plans for the fiscal years ended September 30, 2021 and September 30, 2020. The Company anticipates that it will contribute at least the minimum required contribution of $218 to its pension plans in fiscal 2022.

Benefit payments, which reflect future expected service as appropriate, are expected to be paid in each fiscal year as follows:
(in thousands)
2022 $ 6,411 
2023 6,632 
2024 6,868 
2025 7,115 
2026 7,344 
2027 to 2031 37,674 

Defined Contribution Retirement Plans — The Company also sponsors several defined contribution retirement plans - the 401(k) matching programs. Expense for the defined contribution plans is computed as a percentage of participants’
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compensation and was $3,400, $3,718 and $3,572 for the fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019, respectively.

Multi-Employer Plan — The Company has a liability of $5,021 as of September 30, 2021 and $5,345 as of September 30, 2020 representing the Company’s proportionate share of a multi-employer pension plan which was exited prior to fiscal 2017.

5. STOCK INCENTIVE PLAN

On November 21, 2019, the Company's board of directors approved the Atkore International Group Inc. 2020 Omnibus Incentive Plan (the “2020 Omnibus Incentive Plan”), which was subsequently approved by the Company’s shareholders on January 30, 2020. The 2020 Omnibus Incentive Plan provides for stock purchases and grants of other equity awards, including non-qualified stock options, stock purchase rights, restricted stock, restricted stock units (“RSUs”), performance shares, performance stock units (“PSUs”), stock appreciation rights, dividend equivalents and other stock-based awards to directors, officers, other employees and consultants. The 2020 Omnibus Incentive Plan replaces and succeeds the Atkore International Group Inc. 2016 Omnibus Incentive Plan (the “2016 Omnibus Incentive Plan”). The Company no longer grants awards from the 2016 Omnibus Incentive Plan. Awards previously granted under the 2016 Omnibus Incentive Plan were unaffected by the termination. A maximum of 2.2 million shares of common stock is reserved for issuance under the 2020 Omnibus Incentive Plan. All stock option awards have a ten year life. All share-based awards are expected to be fulfilled with new shares of common stock. Stock compensation expense is included in selling, general and administrative in the Company's consolidated statements of operations and was $17,047, $13,064 and $11,798 for fiscal years 2021, 2020 and 2019, respectively. The total income tax benefit recognized for share-based compensation arrangements was $2,073, $3,014 and $2,949 for fiscal years 2021, 2020 and 2019, respectively.

    Stock Options

In accordance with ASC 718 Compensation - Stock Compensation, stock compensation expense for stock options is recorded on a straight-line basis over the requisite service period (generally the vesting period), net of actual forfeitures based on the grant-date fair value of the option under the equity accounting method.

The assumptions used in the Black-Scholes option pricing model to value the options granted were as follows:    
Fiscal Year Ended
  September 30, 2021 September 30, 2020 September 30, 2019
Expected dividend yield —  % —  % —  %
Expected volatility 59  % 36  % 45  %
Range of risk-free interest rates 0.52  % 1.67  %
2.94% - 3.00%
Range of expected option lives 6 years 6 years
6 to 10 years

Dividends are not paid on the Company’s common stock. For grants during fiscal year ended 2021 and 2020, the expected volatility is based on the Company’s stock price volatility. For grants and modifications during fiscal years ended 2019, expected volatility is based on historical volatilities of comparable companies. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for periods corresponding with the expected life of the options. The expected life of options is estimated using the simplified method due to limited historical exercise activity. The Company does not estimate forfeitures, which are accounted for as they occur.
    
Stock option activity for the period September 30, 2018 to September 30, 2021 was as follows: 
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Shares
(in thousands)
Weighted-Average Exercise Price Weighted-Average Grant Date Fair Value Aggregate Intrinsic Value
(in thousands)
Weighted-Average Remaining Contractual Term (in years)
Outstanding as of September 30, 2018 2,605  9.91  $ 43,302 
Granted 342  23.45  $ 11.35 
Exercised (985) 8.62  $ 16,453 
Forfeited (126) 12.64 
Outstanding as of September 30, 2019 1,836  12.94  $ 31,957 
Granted 67  37.24  $ 14.05 
Exercised (508) 8.55  $ 14,548 
Forfeited (20) 19.13 
Outstanding as of September 30, 2020 1,375  15.66  $ 11,443 
Granted 72  29.80  $ 13.46 
Exercised (678) 12.30  $ 33,075 
Forfeited —  — 
Outstanding as of September 30, 2021 769  19.95 51,441  5.64
Exercisable as of September 30, 2021 484  $ 15.25  $ 34,715  4.41

As of September 30, 2021, there was $786 of total unrecognized compensation expense related to non-vested options granted expected to be recognized over a weighted-average period of approximately 5.6 years. The total fair value of shares vested during fiscal years 2021, 2020 and 2019 was $1,465, $1,894 and $3,038, respectively.
    
Cash received from stock option exercises for the fiscal years 2021, 2020 and 2019 was $8,535, $4,347 and $7,374, respectively. The actual tax benefit for the tax deductions from stock option exercises totaled $8,228, $3,681 and $4,031, respectively, for fiscal years 2021, 2020 and 2019. The Company does not settle any option exercises, under its current stock incentive plan, in cash.

    Restricted Stock Units
    
Generally, RSUs granted under the 2020 Omnibus Incentive Plan vest ratably over three years. The fair value of RSU grants was based on the closing price of the Company's common stock on the date of grant. RSU compensation expense is recorded on a straight-line basis over the remaining vesting period.

Changes to the Company’s nonvested RSU awards for the year ended September 30, 2021 were as follows:
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Shares
(in thousands)
Weighted-average grant-date fair value
Nonvested as of September 30, 2018 650  $ 19.91 
Granted 361  19.23 
Vested (195) 21.51 
Forfeited (142) 18.52 
Nonvested as of September 30, 2019 674  19.37 
Granted 166  37.24 
Vested (403) 19.43 
Forfeited (32) 22.29 
Nonvested as of September 30, 2020 405  26.44 
Granted 218  32.01 
Vested (229) 23.78 
Forfeited (10) 28.48 
Nonvested as of September 30, 2021 384  $ 30.30 

As of September 30, 2021, there was $5,589 of total unrecognized compensation expense related to non-vested RSUs granted, expected to be recognized over a weighted-average period of approximately 1.40 years. The total fair value of RSUs vested during fiscal years 2021, 2020 and 2019 was $8,897, $14,513 and $4,271, respectively.

    Performance Share Units

The Company awards PSUs whose vesting is contingent upon meeting or exceeding certain market and performance conditions. The performance condition, which was based on an adjusted net income, represented 70% of the award and the market condition, which was based on Total Shareholder Return (“TSR”) of the Company's common stock relative to a peer group represented the remaining 30%. All PSUs cliff vest at the end of three years based on the satisfaction of the performance conditions. Expense for the performance condition based award is recorded when the achievement of the performance condition is considered probable of achievement and is recorded on a straight-line basis over the requisite service period. If such performance criteria are not met, no compensation cost is recognized and any recognized compensation cost is reversed. Expense for the market condition based award is recorded on a straight-line basis over the explicit service period.

The grant-date fair value for the performance condition based awards represents the closing stock price on the date of grant. For the grants in fiscal 2021, 2020, and 2019, the closing stock price on the date of grant was $29.80, $37.24 and $17.90, respectively. The grant-date fair value for the market condition based awards was determined using the Monte-Carlo method. The assumptions used in the Monte-Carlo method to value the performance share awards granted during the fiscal year ended September 30, 2021 were as follows: 
September 30, 2021 September 30, 2020 September 30, 2019
Expected dividend yield —  % —  % —  %
Expected volatility 61  %
21% - 53%
21% - 74%
Risk free interest rates 0.21  % 1.59  % 2.84%
Expected life 3 years 3 years 3 years
Fair value $33.80 $44.22 $18.84

Dividends are not paid on the Company’s common stock. For grants during fiscal year ended 2021 and 2020, the expected volatility is based on the Company’s stock price volatility. For grants during fiscal year 2019, expected volatility is based on historical volatilities of comparable companies. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for periods corresponding with the expected life of the award. The expected life of the award represents the weighted-average period of time that awards granted are expected to be outstanding, giving consideration to vesting schedules and expected exercise patterns. The Company does not estimate forfeitures, which are accounted for as they occur.

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Changes to the Company’s non-vested PSU awards for the year ended September 30, 2021 were as follows:
Shares
(in thousands)
Weighted-average grant-date fair value
Nonvested as of September 30, 2018 307  $ 21.22 
Granted 242  18.17 
Forfeited (94) 20.55 
Nonvested as of September 30, 2019 455  $ 21.11 
Granted 115  40.43 
Vested (162) 25.21 
Adjustment for achieved performance upon issuance 31  21.68 
Forfeited (14) 22.82 
Nonvested as of September 30, 2020 425  $ 25.15 
Granted 156  31.67 
Vested (171) 21.55 
Adjustment for achieved performance upon issuance 57  22.95 
Forfeited (14) 29.43 
Nonvested as of September 30, 2021 453  $ 28.07 

As of September 30, 2021, there was $4,316 of total unrecognized compensation expense related to non-vested PSUs granted, expected to be recognized over a weighted-average period of approximately 1.1 years. There were no PSUs vested during fiscal year 2019.

6. OTHER INCOME, NET

Other income, net consisted of the following:
Fiscal Year Ended
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Gain on purchase of business $ (731) $ —  $ (7,384)
Undesignated foreign currency derivative instruments 2,201  1,269  (5,384)
Business interruption insurance recovery (15,500) —  — 
Foreign exchange loss (gain) on intercompany loans (1,534) (2,342) 2,975 
Pension-related benefits (2,368) (1,704) (1,606)
Other (220) —  (79)
Other income, net $ (18,152) $ (2,777) $ (11,478)

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7. INCOME TAXES

Significant components of income before income taxes and income tax expense for the fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019 consisted of the following:
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Components of income before income taxes:
United States $ 770,350  $ 201,784  $ 170,780 
Non-U.S 9,651  214  13,889 
Income before income taxes $ 780,001  $ 201,998  $ 184,669 
Income tax expense:
Current:
United States:
Federal $ 182,105  $ 32,335  $ 31,431 
State 46,913  9,668  9,800 
Non-U.S: 6,432  3,210  5,183 
Current income tax expense $ 235,450  $ 45,213  $ 46,414 
Deferred:
United States:
Federal $ (35,442) $ 5,102  $ 1,123 
State (7,281) 49  (340)
Non-U.S: (583) (668) (1,579)
Deferred income (benefit) tax expense (43,306) 4,483  (796)
Income tax expense $ 192,144  $ 49,696  $ 45,618 

Differences between the statutory federal income tax rate and effective income tax rate are summarized below:
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Statutory federal tax 21  % 21  % 21  %
Adjustments to reconcile to the effective income tax rate:
State income taxes % % %
Stock-based compensation (1) % (2) % (1) %
Other % % %
Effective income tax rate 25  % 25  % 25  %

The Company’s effective tax rate for fiscal 2021 differs from the statutory rate primarily due to state income taxes of $30,680, current year valuation allowance expense of $2,190 and limitations on executive compensation of $2,587 partially offset by $7,352 of excess tax benefit from share-based compensation.

The Company’s effective tax rate for fiscal 2020 differs from the statutory rate primarily due to state income taxes of $7,690, valuation allowance expense of $2,099 and limitations on executive compensation of $1,243, partially offset by $4,203 of excess tax benefit from share-based compensation.

The Company’s effective tax rate for fiscal 2019 differs from the statutory rate primarily due to state income taxes of $7,566, along with GILTI provisions of $953 and withholding taxes of $635, offset by the disallowed gain on the purchase of Cor-Tek of $1,551 and $1,537 of excess tax benefit from share-based compensation.

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Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax assets are as follows:
(in thousands) September 30, 2021 September 30, 2020
Deferred tax assets:
Accrued liabilities and reserves $ 42,932  $ 26,783 
Tax loss and credit carryforwards 16,096  15,637 
Postretirement benefits 2,057  11,751 
Inventory 36,021  5,240 
Lease obligations 10,616  9,966 
Other 633  174 
$ 108,355  $ 69,551 
Deferred tax liabilities:
Property, plant and equipment $ (21,784) $ (17,648)
Intangible assets (43,657) (44,774)
Loss on investment (5,102) (5,153)
Right-of-use assets, net (10,247) (9,546)
Other (3,095) (4,065)
$ (83,885) $ (81,186)
Net deferred tax liability before valuation allowance 24,470  (11,635)
Valuation allowance (11,523) (10,203)
Net deferred tax liability $ 12,947  $ (21,838)

As of September 30, 2021, the Company has $33,651 of state net operating loss carryforwards which expire beginning in 2021 through 2036. In certain non-U.S. jurisdictions, the Company has net operating loss carryforwards of $55,022 which have an expiration period ranging from five years to unlimited.

Valuation allowances have been established on net operating losses and other deferred tax assets in Luxembourg, Australia, France, China, and other foreign and United States state jurisdictions, as a result of the Company's determination that there is less than 50% likelihood that these assets will be realized. Evidence for this determination includes three year cumulative loss positions, future reversal of temporary differences, and expectations of future losses. For fiscal 2021, the Company assessed the need for a valuation allowance against deferred tax assets in the Company’s China business based on recent taxable income and the expected future performance of the business. As a result, the Company has established a $1,195 valuation allowance against the deferred tax assets of the China business.

As of September 30, 2021, and September 30, 2020, the Company had unrecognized tax benefits of $3,333 and $1,614 which, if recognized, would positively benefit the effective tax rate. The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense. As of September 30, 2021 and September 30, 2020, the Company had accrued interest and penalties of $260 and $188, respectively, in the consolidated balance sheets.
    
A reconciliation of the beginning and ending amount of unrecognized tax benefit, excluding interest and penalties, is as follows:
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(in thousands) For the period from September 30, 2018 to September 30, 2021
Balance as of September 30, 2018 $ 1,364 
Additions based on tax positions related to prior years 244 
Settlements (814)
Balance as of September 30, 2019 794 
Additions based on tax positions related to prior years 925 
Additions based on tax positions related to current year 122 
Settlements (227)
Balance as of September 30, 2020 1,614 
Additions based on tax positions related to prior years 291 
Additions based on tax positions related to current year 1,658 
Settlements (230)
Balance as of September 30, 2021 $ 3,333 

During fiscal 2021, the balance of unrecognized tax benefits increased by $1,949 as a result of federal and various state jurisdictions' uncertain tax positions, partially offset by a decrease of $230 as result of completing tax audits and the expiration of the statute of limitations in various state jurisdictions. The related accrued penalties and interest for uncertain tax positions increased by $72.

During fiscal 2020, the balance of unrecognized tax benefits increased by $1,047 as a result of federal and various state jurisdictions’ uncertain tax positions, partially offset by a decrease of $227 as a result of completing tax audits and the expiration of the statute of limitations in various state jurisdictions. The related accrued penalties and interest for uncertain tax positions increased by $134.

During fiscal 2019, the balance of unrecognized tax benefits decreased by $814 as of completing state tax audits and the expiration of the statute of limitations in various state jurisdictions, partially offset by an increase of $244, primarily related to various state jurisdictions’ uncertain tax positions. The related accrued penalties and interest for uncertain tax positions decreased by $25.

Many of the Company’s uncertain tax positions relate to tax years that remain subject to audit by the taxing authorities. The following tax years remain subject to examination by the major tax jurisdictions as follows:
Jurisdiction Years Open to Audit
United States 2018, 2019, 2020 and 2021

The Company's income tax returns are examined periodically by various taxing authorities. The Company is currently under examination in various state jurisdictions. Based on the current status of its income tax audits, the Company believes that it is reasonably possible that there would be no material changes to the unrecognized tax benefits in the next twelve months.

Other Income Tax Matters—Prior to the passage of the TCJA, foreign undistributed earnings were generally subject to U.S. taxation when repatriated. The TCJA imposed a one-time transition tax on previously untaxed accumulated earnings of foreign subsidiaries. The Company has accumulated earnings and profits deficit, therefore did not record an additional tax liability for the transition tax. The TCJA adopts a new quasi-territorial tax regime that eliminates U.S income taxes on dividends from foreign subsidiaries. The Company may still be liable for foreign taxes, such as withholding taxes, if earnings are repatriated.

For the fiscal year ended September 30, 2021, the Company recorded no additional liability for United States or non-U.S. income taxes on the undistributed income of subsidiaries or for unrecognized deferred tax liabilities for temporary differences related to basis differences in investments in subsidiaries, as such income is expected to be indefinitely reinvested, the investments are essentially permanent in duration, or the Company has concluded that no additional tax liability will arise as a result of the distribution of such income.

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For the fiscal year ended September 30, 2020, the Company did not record income tax or non-income tax expense related to the remaining foreign earnings, and did not record any deferred tax liabilities for any basis differences in investments in subsidiaries as the earnings are expected to be indefinitely reinvested, the investments are essentially permanent in duration, or the Company has concluded that there will be no additional tax liability as a result of the distribution of the income.

As of September 30, 2021, certain subsidiaries had approximately $74,813 of undistributed income that the Company intends to permanently reinvest. A liability could arise if the Company's intention to permanently reinvest such income were to change and amounts are distributed by such subsidiaries or if such subsidiaries are ultimately disposed of. It is not practicable to estimate the additional income taxes related to permanently reinvested income or the basis differences related to investments in subsidiaries.

The calculation of the Company's tax liabilities involves dealing with uncertainties in the application of complex tax regulations in a multitude of jurisdictions across its global operations. The Company records tax liabilities for anticipated tax audit issues in the United States and other tax jurisdictions based on the Company's estimate of whether, and the extent to which, additional taxes will be due. These tax liabilities are reflected net of related tax loss carry-forwards. The Company adjusts these reserves in light of changing facts and circumstances. However, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company's current estimate of the tax liabilities.

As a result of the 2010 transactions that lead to the Company becoming an independent, stand-alone entity, the Company and Tyco entered into an investment agreement in which Tyco has agreed to indemnify and hold harmless the Company and its subsidiaries and their respective affiliates from and against any taxes of the Company with respect to any tax period ending on or before the closing of the 2010 transactions, as well as all tax liabilities relating to events or transactions occurring on or prior to the closing date of the 2010 transactions. In addition, the Company has agreed to indemnify and hold harmless Tyco and its affiliates from and against any liability for any taxes of the Company with respect to any tax period after the 2010 transactions.

8. EARNINGS PER SHARE

The Company calculates basic and diluted earnings per common share using the two-class method. Under the two-class method, net earnings are allocated to each class of common stock and participating securities as if all of the net earnings for the period had been distributed. The Company's participating securities consist of share-based payment awards that contain a non-forfeitable right to receive dividends and therefore are considered to participate in undistributed earnings with common stockholders.
 

Basic earnings per common share excludes dilution and is calculated by dividing the net earnings allocable to common stock by the weighted-average number of common stock outstanding for the period. Diluted earnings per common share is calculated by dividing net earnings allocated to common stock by the weighted-average number of shares outstanding for the period, as adjusted for the potential dilutive effect of non-participating share-based awards.

The following table sets forth the computation of basic and diluted earnings per share:
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Fiscal Year Ended
(in thousands, except per share data) September 30, 2021 September 30, 2020 September 30, 2019
Numerator:
Net income $ 587,857  $ 152,302  $ 139,051 
Less: Undistributed earnings allocated to participating securities 11,380  3,356  3,726 
Net income available to common shareholders $ 576,477  $ 148,946  $ 135,325 
Denominator:
Basic weighted average common shares outstanding 46,569  47,265  46,577 
Effect of dilutive securities: Non-participating employee stock options (1) 737  779  1,200 
Diluted weighted average common shares outstanding 47,306  48,044  47,777 
Basic earnings per share $ 12.38  $ 3.15  $ 2.91 
Diluted earnings per share $ 12.19  $ 3.10  $ 2.83 
(1) Stock options to purchase approximately 0.0 million, 0.3 million, and 0.4 million shares of common stock were outstanding during the years ended September 30, 2021, September 30, 2020, and September 30, 2019, respectively, but were not included in the calculation of diluted earnings per share as the impact of these would have been anti-dilutive.

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9. ACCUMULATED OTHER COMPREHENSIVE LOSS

The following table presents the changes in accumulated other comprehensive loss by component, net of tax:
(in thousands) Defined benefit pension items Currency translation adjustments Total
Balance as of September 30, 2019 $ (23,818) $ (17,880) $ (41,698)
Other comprehensive (loss) income before reclassifications (7,604) 6,087  (1,517)
Amounts reclassified from accumulated other comprehensive loss 661  —  661 
Net current period other comprehensive (loss) income (6,943) 6,087  (856)
Balance as of September 30, 2020 $ (30,761) $ (11,793) $ (42,554)
Other comprehensive income (loss) before reclassifications 10,453  2,385  12,838 
Amounts reclassified from accumulated other comprehensive loss 990  —  990 
Net current period other comprehensive income (loss) 11,443  2,385  13,828 
Balance as of September 30, 2021 $ (19,318) $ (9,408) $ (28,726)

The following is a summary of the amounts reclassified from accumulated other comprehensive loss to net income:
Fiscal Year Ended
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Amortization of defined benefit pension items:
Amortization of net loss (included within other income, net) $ 1,327  $ 888  $ 101 
Tax expense (337) (227) (25)
Net reclassifications for the period $ 990  $ 661  $ 76 
    

10. INVENTORIES, NET
    
A majority of the Company records inventory at the lower of cost (primarily last in, first out, or “LIFO”) or market or net realizable value, as applicable. Approximately 81% and 73% of the Company's inventories are valued at the lower of LIFO cost or market at September 30, 2021 and September 30, 2020, respectively.
(in thousands) September 30, 2021 September 30, 2020
Purchased materials and manufactured parts, net $ 105,460  $ 49,192 
Work in process, net 35,043  24,113 
Finished goods, net 145,486  125,790 
Inventories, net $ 285,989  $ 199,095 

Total inventories would be $108,911 higher and $4,418 lower than reported as of September 30, 2021 and September 30, 2020, respectively, if the first-in, first-out method was used for all inventories. During the years ended September 30, 2021 and September 30, 2020, inventory quantities in specific pools were lower at the end of the period than the quantities at the beginning of the period. This reduction resulted in a liquidation of LIFO inventory quantities carried at net lower costs prevailing in the respective prior years as compared with the cost of respective current year purchases. The effect of this inventory reduction resulted in decreased cost of goods sold and increased operating income of approximately $6,592 and $1,837.

As of September 30, 2021 and September 30, 2020, the excess and obsolete inventory reserve was $11,780 and $14,533, respectively.

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11. PROPERTY, PLANT AND EQUIPMENT

As of September 30, 2021 and September 30, 2020, property, plant and equipment at cost and accumulated depreciation were as follows:
(in thousands) September 30, 2021 September 30, 2020
Land $ 23,043  $ 20,460 
Buildings and related improvements 136,680  129,538 
Machinery and equipment 372,503  332,260 
Leasehold improvements 9,720  9,862 
Software 28,288  27,028 
Construction in progress 43,055  22,736 
Property, plant and equipment, at cost 613,289  541,884 
Accumulated depreciation (337,667) (297,993)
Property, plant and equipment, net $ 275,622  $ 243,891 

Depreciation expense for fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019 was $44,913, $42,208 and $39,471, respectively.

12. GOODWILL AND INTANGIBLE ASSETS
    
Goodwill Changes in the carrying amount of goodwill are as follows:
Segment
(in thousands) Electrical Safety & Infrastructure Total
Balance as of September 30, 2019 $ 142,654  $ 43,577  $ 186,231 
Exchange rate effects 2,008  —  2,008 
Balance as of September 30, 2020 $ 144,662  $ 43,577  $ 188,239 
Goodwill acquired during year 9,948  —  9,948 
Exchange rate effects 861  —  861 
Balance as of September 30, 2021 $ 155,471  $ 43,577  $ 199,048 

Goodwill balances include $3,924 and $43,000 of accumulated impairment losses within the Electrical and Safety & Infrastructure segments, respectively, as of September 30, 2021 and September 30, 2020.

Intangible Assets — The following table provides the gross carrying value, accumulated amortization, and net carrying value for each major class of intangible assets:
    September 30, 2021 September 30, 2020
(in thousands) Weighted Average Useful Life (Years) Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value
Amortizable Intangible Assets:
Customer relationships 11 $ 371,048  $ (234,946) $ 136,102  $ 355,735  $ (202,677) $ 153,058 
Other 8 23,633  (11,411) 12,222  19,086  (9,675) 9,411 
Total 394,681  (246,357) 148,324  374,821  (212,352) 162,469 
Indefinite-lived Intangible Assets:
Trade names 92,880  —  92,880  92,880  —  92,880 
Total $ 487,561  $ (246,357) $ 241,204  $ 467,701  $ (212,352) $ 255,349 
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Amortization expense for the fiscal years ended September 30, 2021, September 30, 2020 and September 30, 2019 was $33,644, $32,262 and $32,876, respectively. Expected amortization expense for intangible assets over the next five years and thereafter is as follows (in thousands):
2022 $ 32,723 
2023 32,684 
2024 28,110 
2025 15,623 
2026 14,133 
2027 and thereafter 25,051 

Actual amounts of amortization may differ from estimated amounts due to additional intangible asset acquisitions, changes in estimated useful lives, impairment of intangible assets, and other events.    

13. DEBT

Debt as of September 30, 2021 and September 30, 2020 was as follows:
(in thousands) September 30, 2021 September 30, 2020
First Lien Term Loan Facility due December 22, 2023 $ —  $ 811,540 
New Senior Secured Term Loan Facility due May 26, 2028 371,095  — 
Senior Notes Due June 1, 2031 400,000  — 
ABL Credit Facility —  — 
Deferred financing costs (12,709) (7,804)
Long-term debt $ 758,386  $ 803,736 

During the three months ended September 30, 2020, the Company made a voluntary payment of principal on the First Lien Loan of $40,000. During the three months ended December 25, 2020 and the three months ended September 30, 2021, the Company made voluntary prepayments of principal on the First Lien Loan of $40,000 and the New Senior Secured Term Loan Facility of $26,000, respectively. The voluntary prepayment on the New Senior Secured Term Loan Facility resulted in the removal of all principal payment requirements until the contractual maturity of the debt in fiscal 2028.

As of September 30, 2021, future contractual maturities of long-term debt are as follows (in thousands):
2022 $ — 
2023 — 
2024 — 
2025 — 
2026 — 
2027 and thereafter $ 773,000 

New Senior Secured Term Loan Facility - On May 26, 2021, the Company entered into a new $400 million senior secured term loan facility (the “New Senior Secured Term Loan Facility”). The New Senior Secured Term Loan Facility will mature on May 26, 2028 and borrowings thereunder bear interest at the rate of either (x) LIBOR (with a floor of 0.50%) plus 2.00%, or (y) an alternate base rate (with a floor of 1.50%) plus 1.00%. The New Senior Secured Term Loan Facility has an annual amortization rate of 1.00%.

Senior Notes - On May 26, 2021, the Company completed the issuance and sale of the $400 million aggregate principal amount of 4.25% Senior Notes due 2031 (the “Senior Notes”) in a private offering. The Senior Notes were sold only to qualified institutional buyers in compliance with Rule 144A of the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons outside of the United States in compliance with Regulation S of the Securities Act.

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ABL Credit Facility — On August 28 2020, AII amended the ABL Credit Facility (the “Amended ABL Facility”). The amendment, among other things, extended the maturity of the facility to August 28, 2023, and increased the interest rate margins applicable to loans under the facility to (i) in the case of United States dollar-denominated loans, either (x) LIBOR plus an applicable margin ranging from 1.75% to 2.25%, or (y) an alternate base rate plus an applicable margin ranging from 0.75% to 1.25%, each based on available loan commitments or (ii) in the case of Canadian dollar-denominated loans, either (x) the BA rate plus an applicable margin ranging from 1.75% to 2.25% or (y) a Canadian prime rate plus an applicable margin ranging from 0.75% to 1.25%, each based on available loan commitments. The Amended ABL Credit Facility bears a commitment fee, payable quarterly in arrears, of 0.375% per annum. The Amended ABL Credit Facility also bears customary letter of credit fees. The revisions to the ABL Credit Facility were accounted for as a debt extinguishment, resulting in immediate expensing of unamortized financing costs of $273 for the year ended September 30, 2020.    

On May 26, 2021, the Company entered into an amendment to the ABL Credit Facility. The amendment (i) extends the maturity of the facility to the earlier of five years from entering into the amendment or 91 days prior to the maturity date of the New Senior Secured Term Loan Facility if at least $100 million of obligations remain outstanding under the New Senior Secured Term Loan Facility on such date (ii) decreases the interest rate margins applicable to loans under the facility to (a) in the case of United States dollar-denominated loans, either (x) LIBOR plus an applicable margin ranging from 1.25% to 1.75%, or (y) an alternate base rate plus an applicable margin ranging from 0.25% to 0.75% or (b) in the case of Canadian dollar-denominated loans, either (x) the bankers acceptance rate plus an applicable margin ranging from 1.25% to 1.75% or (y) a Canadian prime rate plus an applicable margin ranging from 0.25% to 0.75%. (iii) decreases the fee payable with respect to unutilized availability under the facility from 0.375% to 0.30%, depending on the remaining availability under the ABL Credit Facility the rate may decrease to 0.25% and (iv) made certain other changes agreed with the lenders under the ABL Credit Facility.

The Amended ABL Credit Facility has aggregate commitments of $325,000 and is guaranteed by AIH, the United States subsidiaries owned directly or indirectly by AII and certain other restricted subsidiaries of AII that AII causes to be a subsidiary guarantor from time to time including as of the closing date for the Amended ABL Credit Facility, Columbia-MBF, Inc., a corporation formed by amalgamation under the laws of Canada (“Columbia-MBF”). AII's availability under the ABL Credit Facility was $315,499 and $265,899 as of September 30, 2021 and September 30, 2020, respectively. Availability under the ABL Credit Facility is subject to a borrowing base equal to the sum of 85% of eligible accounts receivable plus the lesser of (i) 80% of eligible inventory of each borrower and guarantor, valued at the lower of cost and fair market value and (ii) 85% of the net orderly liquidation value of eligible inventory, subject to certain limitations. There were no borrowings outstanding under the ABL Credit Facility as of September 30, 2021 and September 30, 2020, respectively.

The New Senior Secured Term Loan Facility and the ABL Credit Facility are secured by all of the assets of AII and the guarantors under such facilities. The New Senior Secured Term Loan Facility has priority over all real property, plant and equipment, intellectual property and capital stock of AII and any guarantor and any documents or instruments evidencing the foregoing assets. The ABL Credit Facility has second priority over the foregoing assets. The ABL Credit Facility has first priority over cash and cash equivalents, accounts receivable, inventory and other documents and instruments evidencing the foregoing assets. The New Senior Secured Term Loan Facility has second priority over the foregoing assets.

The aforementioned debt instruments contain customary covenants typical for this type of financing, including limitations on indebtedness, restricted payments including dividends, liens, restrictions on distributions from restricted subsidiaries, sales of assets, affiliate transactions and mergers and consolidations. Many of these covenants are only applicable when the Company has surpassed certain thresholds relating to its indebtedness. Additionally, these debt instruments include customary events of default, including, among other things, payment default, covenant default, payment defaults and accelerations under other indebtedness, judgment defaults and bankruptcy, insolvency or reorganization affecting the Company or certain of its subsidiaries.

Use of Proceeds - The proceeds from the Senior Notes and the New Senior Secured Term Loan Facility were used to repay the remaining principal of the existing First Lien Term Loan Facility of $772.0 million and $4.0 million of accrued interest. The Company accounted for the repayment of the First Lien Term Loan Facility as an extinguishment of debt and recorded a $4.2 million loss on extinguishment of debt. The Company accounted for the amendment to the ABL Credit Facility as a modification of debt.

14. FAIR VALUE MEASUREMENTS
    
Certain assets and liabilities are required to be recorded at fair value on a recurring basis.

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The Company uses forward currency contracts to hedge the effects of foreign exchange relating to certain of the Company's intercompany receivables denominated in a foreign currency. These derivative instruments are not formally designated as hedges by the Company and the terms of these instruments range from six months to one year. Short-term forward currency contracts are recorded in prepaid expenses and other current assets or other current liabilities and long-term forward currency contracts are recorded in other long-term assets or other long-term liabilities in the consolidated balance sheets. The fair value gains and losses are included in other income, net within the consolidated statements of operations. See Note 6, “Other Income, net” for further detail.

The total notional amounts of undesignated forward currency contracts were £37.4 million, £43.3 million and £45.0 million as of September 30, 2021, September 30, 2020 and September 30, 2019. Cash flows associated with derivative financial instruments are recognized in the operating section of the consolidated statements of cash flows. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

The following table presents the recurring assets and liabilities measured at fair value as of September 30, 2021 and September 30, 2020 in accordance with the fair value hierarchy:
  September 30, 2021 September 30, 2020
(in thousands)
Level 1 
Level 2 
Level 3 
Level 1 
Level 2  
Level 3 
Assets            
Cash equivalents $ 489,987  $ —  $ —  $ 209,421  $ —  $ — 
     Forward currency contracts —  127  —  —  2,209  — 
Liabilities
Forward currency contracts —  $ 183  —  —  $ 102  — 

The Company’s remaining financial instruments consist primarily of cash, accounts receivable and accounts payable whose carrying value approximate their fair value due to their short-term nature.

The estimated fair value of financial instruments not carried at fair value in the consolidated balance sheets were as follows:
September 30, 2021 September 30, 2020
(in thousands) Carrying Value Fair Value Carrying Value Fair Value
First Lien Term Loan Facility due December 22, 2023 $ —  $ —  $ 812,120  $ 808,060 
New Senior Secured Term Loan Facility due May 26, 2028 373,000  371,486  —  — 
Senior Notes due June 2031 400,000  415,828  —  — 
Total debt $ 773,000  $ 787,314  $ 812,120  $ 808,060 

    
In determining the approximate fair value of its long-term debt, the Company used the trading value among financial institutions, which were classified within Level 2 of the fair value hierarchy. The carrying value of the ABL Credit Facility approximates fair value due to it being market-linked variable rate debt.

15. COMMITMENTS AND CONTINGENCIES

The Company has obligations related to commitments to purchase certain goods. As of September 30, 2021, such obligations were $247,166 for fiscal 2022, $5,333 for fiscal 2023 and $5,600 thereafter. These amounts represent open purchase orders for materials used in production.

Insurable Liabilities — The Company maintains policies with various insurance companies for its workers’ compensation, product, property, general, auto, and executive liability risks. The insurance policies that the Company maintains have various retention levels and excess coverage limits. The establishment and update of liabilities for unpaid claims, including claims incurred but not reported, is based on management's estimate as a result of the assessment by the Company's claim administrator of each claim and an independent actuarial valuation of the nature and severity of total claims. The Company utilizes a third-party claims administrator to pay claims, track and evaluate actual claims experience, and ensure consistency in the data used in the actuarial valuation.
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Legal Contingencies — Historically, a number of lawsuits have been filed against the Company and the Company has also received other claim demand letters alleging that the Company's anti-microbial coated steel sprinkler pipe, which the Company has not manufactured or sold for several years, is incompatible with chlorinated polyvinyl chloride and caused stress cracking in such pipe manufactured by third parties when installed together in the same sprinkler system, which the Company refers to collectively as the “Special Products Claims.” During fiscal 2019, after a court judgment was issued in one case between the Company and Tyco regarding the indemnification of expenses, fees and settlement amounts relating to the incompatibility issue, the Company and Tyco entered into a global settlement regarding the issue. The Company agreed to fund the total settlement in exchange for Tyco's agreement to cap the Company’s Special Products Claim deductible at $12,000, as opposed to the $13,000 cap negotiated within the original indemnity agreement. In conjunction with the payment of that settlement, Tyco and the Company examined the Company’s total Special Products Claim payments and agreed that with that settlement payment and payment of a few other legal fee invoices, all of which have now been paid, the Company had met its $12,000 deductible obligation related to these Special Products Claims. Tyco, now Johnson Controls, Inc. (“JCI”), has a contractual obligation to indemnify the Company in respect of all remaining and future claims of incompatibility between the Company's antimicrobial coated steel sprinkler pipe and CPVC pipe used in the same sprinkler system. JCI is currently defending the Company in a few such Special Product Claims and since 2019 has defended and indemnified the Company on Special Products Claims as required.

As of September 30, 2021, the Company believes that the range of reasonably possible losses for Special Products Claims and other product liabilities is between $1,000 and $8,000.

At this time, the Company does not expect the outcome of the Special Products Claims proceedings, either individually or in the aggregate, to have a material adverse effect on its business, financial condition, results of operations or cash flows, and the Company believes that its reserves are adequate for all remaining contingencies for Special Products Claims.

During the year ended September 30, 2020, one of the Company’s manufacturing facilities experienced a flood which resulted in damages to certain property, plant and equipment.  This facility is covered under the Company’s property and casualty loss and business interruption insurance policies.  During the year ended September 30, 2021, the Company settled the related insurance claim and received $15,500 of business interruption recovery proceeds related to this incident. The amount was recorded as other income within the consolidated statements of operations for the year ended September 30, 2021.

In addition to the matters discussed above, from time to time, the Company is subject to a number of disputes, administrative proceedings and other claims arising out of the ordinary conduct of the Company's business. These matters generally relate to disputes arising out of the use or installation of the Company’s products, product liability litigation, contract disputes, patent infringement accusations, employment matters, personal injury claims and similar matters. On the basis of information currently available to the Company, it does not believe that existing proceedings and claims will have a material adverse effect on its business, financial condition, results of operations or cash flows. However, litigation is unpredictable, and the Company could incur judgments or enter into settlements for current or future claims that could adversely affect its business, financial condition, results of operations or cash flows.
16. GUARANTEES

The Company has outstanding letters of credit totaling $9,501 supporting workers’ compensation and general liability insurance policies and surety bonds primarily related to performance guarantees on supply agreements and construction contracts, and payment of duties and taxes totaling $1,857 as of September 30, 2021.

In disposing of assets or businesses, the Company often provides representations, warranties and indemnities to cover various risks including unknown damage to the assets, environmental risks involved in the sale of real estate, liability to investigate and remediate environmental contamination at waste disposal sites and manufacturing facilities, and unidentified tax liabilities and legal fees related to periods prior to disposition. The Company does not have the ability to estimate the potential liability from such indemnities because they relate to unknown conditions. However, the Company has no reason to believe that these uncertainties would have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

In the normal course of business, the Company is liable for product performance and contract completion. In the opinion of management, such obligations will not have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

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17. SEGMENT INFORMATION

Effective in the first quarter of fiscal 2021, the Company renamed and redefined its reportable segments.
        
The Electrical Raceway segment was renamed as the Electrical segment. The Electrical segment manufactures high quality products used in the construction of electrical power systems including conduit, cable, and installation accessories. This segment serves contractors in partnership with the electrical wholesale channel.

The Mechanical Products & Solutions segment was renamed as the Safety & Infrastructure segment. This segment designs and manufactures solutions including metal framing, mechanical pipe, perimeter security, and cable management for the protection and reliability of critical infrastructure. These solutions are marketed to contractors, original equipment manufacturers and end users.

Effective in the first quarter of fiscal 2021, the Company also implemented the Realignment of its segment financial reporting structure such that its domestic cable management and prefabrication modular businesses are now reflected in its Safety & Infrastructure segment. These businesses were previously reflected within the Electrical segment. See Note 1, “Basis of Presentation and Summary of Significant Accounting Policies” for additional information. Prior year results have been revised for the impact of the Realignment for comparability.

 
Both segments use Adjusted EBITDA as the primary measure of profit and loss. Segment Adjusted EBITDA is the income (loss) before income taxes, adjusted to exclude unallocated expenses, depreciation and amortization, interest expense, net, loss on extinguishment of debt, restructuring charges, stock-based compensation, certain legal matters, transaction costs, gain on purchase of business, gain on sale of a business and other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions, and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans and related forward currency derivatives.

Intersegment transactions primarily consist of product sales at designated transfer prices on an arm's-length basis. Gross profit earned and reported within the segment is eliminated in the Company’s consolidated results. Certain manufacturing and distribution expenses are allocated between the segments on a pro rata basis due to the shared nature of activities. Recorded amounts represent a proportional amount of the quantity of product produced for each segment. Certain assets, such as machinery and equipment and facilities, are not allocated to each segment despite serving both segments. These shared assets are reported within the Safety & Infrastructure segment. We allocate certain corporate operating expenses that directly benefit our operating segments, such as insurance and information technology, on a basis that reasonably approximates an estimate of the use of these services.
Fiscal year ended
  September 30, 2021 September 30, 2020 September 30, 2019
(in thousands) External Net Sales Inter- segment Sales Adjusted EBITDA External Net Sales Inter- segment Sales Adjusted EBITDA External Net Sales Inter- segment Sales Adjusted EBITDA
Electrical $ 2,229,862  $ 3,437  $ 873,868  $ 1,267,988  $ 2,559  $ 292,809  $ 1,389,056  $ 1,271  $ 285,217 
Safety & Infrastructure 698,152  168  $ 81,827  497,433  90  $ 67,821  527,482  29  $ 77,407 
Eliminations —  (3,605) —  (2,649) —  (1,300)
Consolidated operations $ 2,928,014  $ —  $ 1,765,421  $ —  $ 1,916,538  $ — 

Capital Expenditures Total Assets
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019 September 30, 2021 September 30, 2020 September 30, 2019
Electrical $ 34,995  $ 16,067  $ 19,394  $ 1,122,835  $ 794,931  $ 828,119 
Safety & Infrastructure 22,407  15,470  14,396  482,942  255,903  296,369 
Unallocated 7,072  2,233  1,070  604,322  507,691  312,507 
Consolidated operations $ 64,474  $ 33,770  $ 34,860  $ 2,210,099  $ 1,558,525  $ 1,436,995 
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Presented below is a reconciliation of operating segment Adjusted EBITDA to Income before income taxes:
Fiscal Year Ended
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Operating segment Adjusted EBITDA
Electrical $ 873,868  $ 292,809  $ 285,217 
Safety & Infrastructure 81,827  67,821  77,407 
Total $ 955,695  $ 360,630  $ 362,624 
Unallocated expenses (a) (58,148) (33,995) (38,216)
Depreciation and amortization (78,557) (74,470) (72,347)
Interest expense, net (32,899) (40,062) (50,473)
Loss on extinguishment of debt (4,202) (273) — 
Stock-based compensation (17,047) (13,064) (11,798)
Gain on purchase of business 731  —  7,384 
Other (b) 14,428  3,232  (12,505)
Income before income taxes $ 780,001  $ 201,998  $ 184,669 
(a) Represents unallocated selling, general and administrative activities and associated expenses including, in part, executive, legal, finance, human resources, information technology, business development and communications, as well as certain costs and earnings of employee-related benefits plans, such as stock-based compensation and a portion of self-insured medical costs.
(b) Represents other items, such as inventory reserves and adjustments, loss on disposal of property, plant and equipment, insurance recovery related to damages of property, plant and equipment, release of indemnified uncertain tax positions and realized or unrealized gain (loss) on foreign currency impacts of intercompany loans, restructuring charges and related forward currency derivatives.

The Company’s long-lived assets and net sales by geography were as follows:
Long-lived assets Net sales
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019 September 30, 2021 September 30, 2020 September 30, 2019
United States $ 258,069  $ 203,694  $ 219,614  $ 2,637,118  $ 1,563,258  $ 1,689,194 
Other Americas 6,180  146  147  53,151  26,421  33,485 
Europe 45,917  41,283  43,207  183,985  132,299  142,279 
Asia-Pacific 6,569  1,759  1,998  53,760  43,443  51,580 
Total $ 316,735  $ 246,882  $ 264,966  $ 2,928,014  $ 1,765,421  $ 1,916,538 
86



The table below shows the amount of net sales from external customers for each of the Company’s product categories which accounted for 10% or more of consolidated net sales in any of the last three fiscal years:
Fiscal Year Ended
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Metal Electrical Conduit and Fittings $ 612,137  $ 484,476  $ 546,533 
Plastic Pipe and Conduit 893,199  308,561  292,243 
Electrical Cable and Flexible Conduit 424,411  322,888  382,464 
Other Electrical products
300,115  152,063  167,816 
Electrical 2,229,862  1,267,988  1,389,056 
Mechanical Pipe 395,289  244,902  259,613 
Other Safety & Infrastructure products
302,863  252,531  267,869 
Safety & Infrastructure 698,152  497,433  527,482 
Net sales $ 2,928,014  $ 1,765,421  $ 1,916,538 

Risks and Concentrations

Concentration of Credit Risk — The Company extends credit to various customers in the retail and construction industries. Collection of trade receivables may be affected by changes in economic or other industry conditions and may, accordingly, impact the Company's overall credit risk. Although the Company generally does not require collateral, the Company performs ongoing credit evaluations of customers and maintains reserves for potential credit losses. As of September 30, 2021, CED National represented 11% of the Company’s accounts receivable, with no significant amounts past due. As of September 30, 2020, one customer, Sonepar Management US, Inc., represented 11% of the Company’s accounts receivable balance due to increased sales in the last 60 days of the year. For fiscal 2021, 2020 and 2019, no single customer accounted for more than 10% of sales.

Concentration of Employees — As of September 30, 2021, approximately 21% of the Company's employees were represented by a union under a collective bargaining agreement. All unions are located in either the United States or Canada, with no unions or Worker's Councils at any of the other locations abroad. On July 14, 2020, the Company and the United Steelworkers Union, representing approximately 350 employees, reached agreement on the terms of a new collective bargaining agreement for our largest facility in Harvey, Illinois, which expires in April 2024. The Company believes its relationship with its employees is good.
87



Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures
    
Our President and CEO, William E. Waltz, and our Vice President and CFO, David P. Johnson, have evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K as required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act. Messrs. Waltz and Johnson have concluded that both the design and operation of our disclosure controls and procedures were effective as of September 30, 2021.

Changes in Internal Control over Financial Reporting

No changes in the Company’s internal control over financial reporting, as defined in Rule 13a-15(f) or Rule 15d-15(f) under the Exchange Act, occurred during the fourth quarter of fiscal 2021 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. 
    
Management’s Report on Internal Control over Financial Reporting 

The Company’s management is responsible for establishing and maintaining adequate internal controls over financial reporting. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company’s management assessed, under the supervision and with the participation of our President and CEO, William E. Waltz, and our Vice President and CFO, David P. Johnson, the effectiveness of the Company’s internal control over financial reporting as of September 30, 2021. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013). Based on this assessment, management concluded that, as of September 30, 2021, the Company’s internal control over financial reporting is effective based on those criteria.

The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has issued an audit report on the Company’s internal control over financial reporting for fiscal 2021.
88



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of Atkore Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Atkore Inc. (formerly Atkore International Group Inc.) and subsidiaries (the “Company”) as of September 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended September 30, 2021, of the Company and our report dated November 18, 2021, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP

Chicago, Illinois  
November 18, 2021
  





    
89


Item 9B. Other Information
    
None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.
90


PART III
Item 10. Directors, Executive Officers and Corporate Governance
    
    
The information required by this Item for Atkore will be set forth in Atkore’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated by reference. Atkore has omitted the information required by this Item pursuant to General Instruction G to the Form 10-K.

Item 11. Executive Compensation
    
The information required by this Item for Atkore will be set forth in Atkore’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated by reference. Atkore has omitted the information required by this Item pursuant to General Instruction G to the Form 10-K.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
The information required by this Item for Atkore will be set forth in Atkore’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated by reference. Atkore has omitted the information required by this Item pursuant to General Instruction G to the Form 10-K.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this Item for Atkore will be set forth in Atkore’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated by reference. Atkore has omitted the information required by this Item pursuant to General Instruction G to the Form 10-K.

Item 14. Principal Accounting Fees and Services

The information required by this Item for Atkore will be set forth in Atkore’s Proxy Statement for the 2021 Annual Meeting of Stockholders, which information is hereby incorporated by reference. Atkore has omitted the information required by this Item pursuant to General Instruction G to the Form 10-K.

91


PART IV

Item 15. Exhibits and Financial Statement Schedules

(a).         Financial Statements, Schedules and Exhibits.
1.           Financial Statements
Report of Independent Registered Public Accounting Firm contained in Item 8 of this Annual Report on Form 10-K.  
49
Consolidated Statements of Operations for the years ended September 30, 2021, September 30, 2020, and September 30, 2019 contained in Item 8 of this Annual Report on Form 10-K.  
51
Consolidated Statements of Comprehensive Income for the years ended September 30, 2021, September 30, 2020, and September 30, 2019 contained in Item 8 of this Annual Report on Form 10-K.  
52
Consolidated Balance Sheets for the years ended September 30, 2021, and September 30, 2020 contained in Item 8 of this Annual Report on Form 10-K.  
53
Consolidated Statements of Cash Flows for the years ended September 30, 2021, September 30, 2020, and September 30, 2019 contained in Item 8 of this Annual Report on Form 10-K.  
54
Consolidated Statements of Shareholders’ Equity for the three year period ended September 30, 2021 contained in Item 8 of this Annual Report on Form 10-K.
56
Notes to the Consolidated Financial Statements contained in Item 8 of this Annual Report on Form 10-K.  
57
2.           Financial Statements Schedules
The following information is filed as part of this Annual Report on Form 10-K and should be read in conjunction with the financial statements contained in Item 8 of this Annual Report on Form 10-K:
Schedule I-Atkore Inc. (Parent) Condensed Financial Information  
97
Schedule II-Valuation and Qualifying Accounts  
101
 3.           Exhibits
 
93
The exhibits filed with this report are listed on the Exhibit Index. Entries marked by the symbol † next to the exhibit's number identify management compensatory plans, contracts or arrangements.

Item 16. Form 10-K Summary

None.
92


Exhibit Index
Exhibit Number Exhibit Description
3.1
3.1.1
3.2
4.1
4.2
4.3
10.1

10.1.1
10.2*
10.3*
10.4

10.5*

10.6*

93


10.7*
10.8†
10.9†
10.10†
10.11†
10.12†
10.12.1†*
10.13†
10.14†
10.14.1†*
10.14.2†*
10.15†*


10.16†
10.17†
10.18†
10.19†
10.20†
10.21
10.22†
10.22.1†
94


10.22.2†
10.22.3†*
21.1*
23.1*
31.1*
31.2*
32.1*
32.2*
101.INS* XBRL Instance Document (formatted as inline XBRL)
101.SCH* XBRL Taxonomy Extension Schema (formatted as inline XBRL)
101.CAL* XBRL Taxonomy Extension Calculation Linkbase
101.DEF* XBRL Taxonomy Extension Definition Linkbase
101.LAB* XBRL Taxonomy Extension Label Linkbase
101.PRE* XBRL Extension Presentation Linkbase
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Filed herewith.
† Identifies each management contract or compensatory plan or arrangement.

 

95


SIGNATURES

    Pursuant to the requirements of Section 13 or 15(d) 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.
ATKORE INC.
(Registrant)
Date: November 18, 2021 By: /s/ David P. Johnson
Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

    Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.  
Date: November 18, 2021 By: /s/ Michael V. Schrock
    Name: Michael V. Schrock
    Title: Director and Chairman of the Board
     
Date: November 18, 2021 By: /s/ William E. Waltz
    Name: William E. Waltz
    Title: President and Chief Executive Officer, Director (Principal Executive Officer)
     
Date: November 18, 2021 By: /s/ David P. Johnson
    Name: David P. Johnson
    Title: Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
     
Date: November 18, 2021 By: /s/ Betty R. Johnson
    Name: Betty R. Johnson
    Title: Director
     
Date: November 18, 2021 By: /s/ Jeri L. Isbell
    Name: Jeri L. Isbell
    Title: Director
     
Date: November 18, 2021 By: /s/ Wilbert W. James Jr.
    Name: Wilbert W. James Jr.
    Title: Director
Date: November 18, 2021 By: /s/ Justin A. Kershaw
    Name: Justin A. Kershaw
    Title: Director
Date: November 18, 2021 By: /s/ Scott H. Muse
    Name: Scott H. Muse
    Title: Director
     
Date: November 18, 2021 By: /s/ William VanArsdale
    Name: William VanArsdale
    Title: Director
     
Date: November 18, 2021 By: /s/ A. Mark Zeffiro
    Name: A. Mark Zeffiro
    Title: Director

96


SCHEDULE I
ATKORE INC. (PARENT)
CONDENSED FINANCIAL INFORMATION
CONDENSED BALANCE SHEETS
(in thousands, except share and per share data) September 30, 2021 September 30, 2020
Assets
Investment in subsidiary $ 864,736  $ 378,410 
Total Assets 864,736  378,410 
Liabilities and Equity
Total Liabilities $ —  $ — 
Equity:
Common stock, $0.01 par value, 1,000,000,000 shares authorized, 45,997,159 and 47,407,023 shares issued and outstanding, respectively
$ 461  $ 475 
Treasury stock, held at cost, 260,900 and 260,900 shares, respectively
(2,580) (2,580)
Additional paid-in capital 506,921  487,223 
Retained earnings 388,660  (64,154)
Accumulated other comprehensive loss (28,726) (42,554)
Total Equity 864,736  378,410 
Total Liabilities and Equity $ 864,736  $ 378,410 

See Notes to Condensed Financial Information
97



SCHEDULE I
ATKORE INC. (PARENT)
CONDENSED FINANCIAL INFORMATION
CONDENSED STATEMENTS OF OPERATIONS
Fiscal Year Ended
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Equity in net income of subsidiary $ 587,857  $ 152,302  $ 139,051 
Net income 587,857  152,302  139,051 
Other comprehensive (loss) income of subsidiary, net of tax 13,828  (856) (22,927)
Comprehensive income $ 601,685  $ 151,446  $ 116,124 

See Notes to Condensed Financial Information
98


SCHEDULE I
ATKORE INC. (PARENT)
CONDENSED FINANCIAL INFORMATION
CONDENSED STATEMENTS OF CASH FLOWS

For the Year Ended
(in thousands) September 30, 2021 September 30, 2020 September 30, 2019
Cash Flows from Operating Activities:
Net cash provided by operating activities $ —  $ —  $ — 
Cash Flows from Investing Activities:
Distribution received from subsidiary 135,066  15,011  24,419 
Distribution paid to subsidiary (2,660) 2,972  (7,374)
Net cash provided by investing activities 132,406  17,983  17,045 
Cash Flows from Financing Activities:
Issuance of common stock, net of taxes withheld 2,660  (2,972) 7,374 
Repurchase of common shares (135,066) (15,011) (24,419)
Net cash used in financing activities (132,406) (17,983) (17,045)
Net change in cash and cash equivalents —  —  — 
Cash and cash equivalents:
Beginning —  —  — 
Ending $ —  $ —  $ — 

See Notes to Condensed Financial Information
99


SCHEDULE I
ATKORE INC. (PARENT)
CONDENSED FINANCIAL INFORMATION
NOTES TO CONDENSED FINANCIAL INFORMATION
(dollars in thousands)

1. Description of Atkore Inc.

Atkore Inc. (the “Company,” “Parent” or “Atkore”) was incorporated in the State of Delaware on November 4, 2010 under the name Atkore International Group Inc. The Company is the stockholder of Atkore International Holdings Inc. (“AIH”), which is the sole stockholder of Atkore International Inc. (“AII”). Prior to the transactions described below, all of the capital stock of AII was owned by Tyco International Ltd. (“Tyco”). The business of AII was operated as the Tyco Electrical and Metal Products (“TEMP”) business of Tyco. Atkore was initially formed by Tyco as a holding company to hold ownership of TEMP.

On November 9, 2010, Tyco announced that it had entered into an agreement to sell a majority interest in TEMP to CD&R Allied Holdings, L.P. (the “CD&R Investor”), an affiliate of the private equity firm Clayton Dubilier & Rice, LLC (“CD&R”). On December 22, 2010, the transaction was completed and CD&R acquired shares of a newly created class of cumulative convertible preferred stock (the “Preferred Stock”) of the Company. The Preferred Stock initially represented 51% of the Company's outstanding capital stock (on an as-converted basis). On December 22, 2010, the Company also issued common stock (the “Common Stock”) to Tyco's wholly owned subsidiary, Tyco International Holding S.à.r.l. (“Tyco Seller”), that initially represented the remaining 49% of the Company's outstanding capital stock. Subsequent to December 22, 2010, the Company has operated as an independent, stand-alone entity.

On March 6, 2014, the Company entered into a non-binding letter of intent (the “Letter of Intent”) with Tyco for the acquisition (the “Acquisition”) of 40.3 million shares of Common Stock held by Tyco Seller. On April 9, 2014, the Company paid $250,000 to Tyco Seller to redeem the shares, which were subsequently retired. The Company paid $2,000 of expenses related to the share redemption.

In a separate transaction on the same date, the CD&R Investor converted its Preferred Stock and accumulated Preferred Dividends into Common Stock. As a result, Common Stock is the Company's sole issued and outstanding class of securities.

The Parent has no significant operations or assets other than its indirect ownership of the equity of AII. Accordingly, the Parent is dependent upon distributions from AII to fund its obligations. However, under the terms of the agreements governing AII's borrowings, AII's ability to pay dividends or lend to Atkore Holding or the Parent, is restricted. While certain exceptions to the paying dividends or lending funds restrictions exist, these restrictions have resulted in the restricted net assets (as defined in Rule 4-08(e)(3) of Regulation S-X) of the Company's subsidiaries exceeding 25% of the consolidated net assets of the Company and its subsidiaries. Atkore Holding has no obligations to pay dividends to the Parent except to pay specified amounts to Parent in order to fund the payment of the Parent's tax obligations.

2. Basis of Presentation

The accompanying condensed Parent only financial statements are required in accordance with Rule 4-08(e)(3) of Regulation S-X. The financial statements include the amounts of the Parent and its investment in its subsidiaries under the equity method and does not present the financial statements of the Parent and its subsidiaries on a consolidated basis. Under the equity method, investment in its subsidiaries is stated at cost plus contributions and equity in undistributed income (loss) of subsidiary less distributions received since the date of acquisition. These condensed Parent only financial statements should be read in conjunction with the Atkore Inc. consolidated financial statements and their accompanying notes.

3. Dividends and Distributions from Subsidiaries

The Company received distributions of $135,066, $15,011, and $24,419 from its subsidiaries for the years ended September 30, 2021, September 30, 2020 and September 30, 2019, respectively. The distributions received in fiscal 2021, 2020 and 2019 were used to repurchase shares of the Company's common stock. These dividends were permissible under an exception to the net asset restrictions of the agreements governing AII's borrowings, which allow for dividend payments from AII to AIH or the Parent for the purpose of repurchasing shares of Parent's common stock.

100


SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS
(in thousands) Balance at Beginning of Year Additional (Charges)/Benefit to Income Write offs and Other Balance at End of Year
Accounts Receivable Allowance for Current and Expected Credit Losses:
For the fiscal year ended:
2021 $ (3,167) (339) 996  $ (2,510)
2020 $ (2,608) (1,990) 1,431  $ (3,167)
2019 $ (1,762) (970) 124  $ (2,608)
Deferred Tax Valuation Allowance:
For the fiscal year ended:
2021 $ (10,203) (2,190) 870  $ (11,523)
2020 $ (7,764) (2,047) (392) $ (10,203)
2019 $ (7,427) (346) $ (7,764)

101
LEGAL_US_E # 155827293.3 Execution Version 1006148456v9 SECOND AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT made by ATKORE INC., ATKORE INTERNATIONAL HOLDINGS INC., ATKORE INTERNATIONAL, INC., and certain of its Subsidiaries, in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent and Administrative Agent Dated as of May 26, 2021


 
LEGAL_US_E # 155827293.3 i 1006148456v9 TABLE OF CONTENTS Section 1. DEFINED TERMS ..................................................................................................2 1.1 Definitions................................................................................................................2 1.2 Other Definitional Provisions ................................................................................10 Section 2. GUARANTEE .......................................................................................................11 2.1 Guarantee ...............................................................................................................11 2.2 Right of Contribution .............................................................................................12 2.3 No Subrogation ......................................................................................................13 2.4 Amendments, etc. with respect to the Obligations ................................................13 2.5 Guarantee Absolute and Unconditional .................................................................14 2.6 Reinstatement .........................................................................................................15 2.7 Payments ................................................................................................................15 Section 3. GRANT OF SECURITY INTEREST ...................................................................16 3.1 Grant ......................................................................................................................16 3.2 Pledged Collateral ..................................................................................................17 3.3 Certain Limited Exceptions ...................................................................................17 3.4 Intercreditor Relations ...........................................................................................21 3.5 No New Liens ........................................................................................................22 Section 4. REPRESENTATIONS AND WARRANTIES......................................................22 4.1 Representations and Warranties of Each Guarantor ..............................................22 4.2 Representations and Warranties of Each Grantor ..................................................23 4.3 Representations and Warranties of Each Pledgor ..................................................26 Section 5. COVENANTS .......................................................................................................27 5.1 Covenants of Each Guarantor ................................................................................27 5.2 Covenants of Each Grantor ....................................................................................27 5.3 Covenants of Each Pledgor ....................................................................................32 Section 6. REMEDIAL PROVISIONS ..................................................................................34 6.1 Certain Matters Relating to Accounts ....................................................................34 6.2 Communications with Obligors; Grantors Remain Liable ....................................35 6.3 Pledged Stock.........................................................................................................36 6.4 Proceeds to be Turned Over to the Collateral Agent .............................................37 6.5 Application of Proceeds .........................................................................................37 6.6 Code and Other Remedies .....................................................................................38 6.7 Registration Rights.................................................................................................39 6.8 Waiver; Deficiency ................................................................................................40 6.9 License ...................................................................................................................40 Section 7. THE COLLATERAL AGENT ..............................................................................40 7.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc. ....................................40


 
LEGAL_US_E # 155827293.3 ii 1006148456v9 7.2 Duty of Collateral Agent ........................................................................................42 7.3 Financing Statements .............................................................................................43 7.4 Authority of Collateral Agent ................................................................................43 7.5 Right of Inspection .................................................................................................43 Section 8. NON-LENDER SECURED PARTIES .................................................................44 8.1 Rights to Collateral ................................................................................................44 8.2 Appointment of Agent ...........................................................................................45 8.3 Waiver of Claims ...................................................................................................45 8.4 Bank Products Affiliates, Hedging Affiliates, Management Credit Affiliates and Vendor Affiliates.............................................................................46 Section 9. MISCELLANEOUS ..............................................................................................46 9.1 Amendments in Writing .........................................................................................46 9.2 Notices ...................................................................................................................46 9.3 No Waiver by Course of Conduct; Cumulative Remedies ....................................47 9.4 Enforcement Expenses; Indemnification ...............................................................47 9.5 Successors and Assigns..........................................................................................47 9.6 Set-Off....................................................................................................................48 9.7 Counterparts ...........................................................................................................48 9.8 Severability ............................................................................................................48 9.9 Section Headings ...................................................................................................48 9.10 Integration ..............................................................................................................48 9.11 GOVERNING LAW ..............................................................................................49 9.12 Submission to Jurisdiction; Waivers ......................................................................49 9.13 Acknowledgments..................................................................................................50 9.14 WAIVER OF JURY TRIAL ..................................................................................50 9.15 Additional Granting Parties ...................................................................................50 9.16 Releases..................................................................................................................50 9.17 Judgment ................................................................................................................53 9.18 Amendment and Restatement ................................................................................54 9.19 Transfer Tax Acknowledgment .............................................................................54 SCHEDULES 1 Notice Addresses of Granting Parties 2 Pledged Securities 3 Perfection Matters 4 Location of Jurisdiction of Organization 5 Intellectual Property 6 [Reserved] 7 Commercial Tort Claims


 
LEGAL_US_E # 155827293.3 iii 1006148456v9 ANNEXES 1 Acknowledgement and Consent of Issuers who are not Granting Parties 2 Assumption Agreement 3 Supplemental Agreement 4 Joinder and Release


 
LEGAL_US_E # 155827293.3 1006148456v9 SECOND AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT SECOND AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 26, 2021, made by ATKORE INC., a Delaware corporation (“Ultimate Parent”) ATKORE INTERNATIONAL HOLDINGS INC., a Delaware corporation (the “Holdings”), ATKORE INTERNATIONAL INC., a Delaware corporation (the “Parent Borrower”), and certain Subsidiaries of the Parent Borrower from time to time party hereto, in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral agent (in such capacity, the “Collateral Agent”) and administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions (collectively, the “Lenders”; individually, a “Lender”) from time to time parties to the Credit Agreement described below. W I T N E S S E T H: WHEREAS, pursuant to that certain Amended and Restated Credit Agreement, dated as of August 28, 2020 (as amended, supplemented, waived or otherwise modified from time to time, together with any agreement extending the maturity of, or restructuring, refunding, refinancing or increasing the Indebtedness under such agreement or successor agreements, the “Credit Agreement”), among the Parent Borrower, the Subsidiary Borrowers (as defined in the Credit Agreement) (together with the Parent Borrower, jointly and severally, collectively the “Borrowers” and each individually a “Borrower”) from time to time party thereto, the Collateral Agent, the Administrative Agent, and the other parties party thereto, the Lenders have severally agreed to make extensions of credit to the Borrowers upon the terms and subject to the conditions set forth therein; WHEREAS, the Borrowers are members of an affiliated group of companies that includes the other Granting Parties (as defined below); WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrowers to make valuable transfers to one or more of the other Granting Parties in connection with the operation of their respective businesses; WHEREAS, the Borrowers and the other Granting Parties are engaged in related businesses, and each such Granting Party will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; WHEREAS, it is a condition to the obligation of the Lenders to make their respective extensions of credit under the Credit Agreement that the Granting Parties shall execute and deliver this Agreement to the Collateral Agent for the benefit of the Secured Parties; WHEREAS, the certain parties hereto are parties to that certain Amended and Restated Guarantee and Collateral Agreement, dated as of August 28, 2020 (as amended, supplemented, waiver or otherwise modified from time to time prior to the date hereof, the “Existing Collateral Agreement”); WHEREAS, each party to the Existing Collateral Agreement desires to amend and restate the Existing Collateral Agreement in its entirety on the terms and conditions set forth herein, it


 
LEGAL_US_E # 155827293.3 2 1006148456v9 being understood that no novation of the obligations under the Existing Collateral Agreement is being effected hereby, but merely an amendment and restatement in accordance with the terms hereof; WHEREAS, pursuant to that certain Guarantee and Collateral Agreement, dated as of the date hereof (as amended, supplemented, waived or otherwise modified from time to time, the “Term Loan Collateral Agreement”), among Holdings, Parent Borrower, certain of their subsidiaries and the Term Loan Agent (as defined herein), the Parent Borrower and such subsidiaries have granted a first priority Lien to the Term Loan Agent for the benefit of the Term Loan Lenders (as defined herein) on the Term Loan Priority Collateral (as defined herein) and a second priority Lien for the benefit of the Term Loan Lenders (as defined herein) on the ABL Priority Collateral (as defined herein) (subject in each case to Permitted Liens); and WHEREAS, the Collateral Agent and the Term Loan Agent are party to an Intercreditor Agreement, acknowledged by Ultimate Parent, Holdings, the Parent Borrower and the Granting Parties, dated as of the date hereof (as amended, supplemented, waived or otherwise modified from time to time (subject to Section 9.1 hereof), the “Intercreditor Agreement”). NOW, THEREFORE, in consideration of the premises and to induce the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each Granting Party hereby agrees with the Administrative Agent and the Collateral Agent, for the benefit of the Secured Parties (as defined below), as follows: SECTION 1. DEFINED TERMS 1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms that are defined in the Code (as in effect on the date hereof) are used herein as so defined: Cash Proceeds, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, General Intangibles, Letter-of-Credit Rights, Money, Promissory Notes, Records, Securities, Securities Accounts, Security Entitlements, Supporting Obligations and Tangible Chattel Paper. (b) The following terms shall have the following meanings: “ABL Priority Collateral”: as defined in the Intercreditor Agreement. “Accounts”: all accounts (as defined in the Code) of each Grantor, all Accounts (as defined in the Credit Agreement) and all Accounts Receivable of such Grantor. “Accounts Receivable”: any right to payment for goods sold or leased or for services rendered. “Additional Agent”: as defined in the Intercreditor Agreement. “Additional Collateral Documents”: as defined in the Intercreditor Agreement.


 
LEGAL_US_E # 155827293.3 3 1006148456v9 “Additional Obligations”: as defined in the Intercreditor Agreement. “Adjusted Net Worth”: of any Guarantor at any time, shall mean the greater of (x) $0 and (y) the amount by which the fair saleable value of such Guarantor’s assets on the date of the respective payment hereunder exceeds its debts and other liabilities (including contingent liabilities, but without giving effect to any of its obligations under this Agreement or any other Loan Document, or pursuant to its guarantee with respect to any Indebtedness then outstanding under the Term Loan Agreement or any Assumed Indebtedness) on such date. “Administrative Agent”: as defined in the preamble hereto. “Agreement”: this Second Amended and Restated Guarantee and Collateral Agreement, as the same may be amended, supplemented, waived or otherwise modified from time to time. “Applicable Law”: as defined in Section 9.8 hereto. “Bankruptcy Case”: (i) Holdings or any of its Subsidiaries commencing any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Holdings or any of its Subsidiaries making a general assignment for the benefit of its creditors; or (ii) there being commenced against Holdings or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days. “Borrower Obligations”: with respect to any Borrower, the collective reference to: (i) the Obligations (as defined in the Credit Agreement), and (ii) all other obligations and liabilities of such Borrower in respect of the unpaid principal of and interest on (including, without limitation, interest and fees accruing after the maturity of the Loans and Reimbursement Obligations and interest and fees accruing after (or would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Borrower, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding) the Loans, the Reimbursement Obligations, and all other obligations and liabilities of such Borrower to the Secured Parties, 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, the Loans, the Letters of Credit, the other Loan Documents, any Interest Rate Protection Agreement, Permitted Hedging Arrangement, Bank Products Agreement or Vendor Financing Arrangement entered into with (x) Wells Fargo Bank, National Association or any affiliate thereof (including, for the avoidance of doubt, prior to the Closing Date) or (y) any other Person who was at the time of entry into such agreement a Lender or an affiliate of any Lender (provided that such Lender or affiliate is designated as a “Hedging Affiliate” with respect to such Interest Rate Protection Agreement or Permitted


 
LEGAL_US_E # 155827293.3 4 1006148456v9 Hedging Arrangement, a “Bank Products Affiliate” with respect to such Bank Products Agreement or a “Vendor Affiliate” with respect to such Vendor Financing Arrangement by the Parent Borrower in accordance with Section 8.4 hereof) (provided, however, that the definition of “Borrower Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Granting Party to support, as applicable) any Excluded Swap Obligations of a Borrower or any other Loan Party for purposes of determining any obligations of any Guarantor or other Granting Party), any Guarantee Obligation of Holdings or any of its Subsidiaries as to which any Secured Party is a beneficiary, the provision of cash management services by any Lender or an Affiliate thereof to the Parent Borrower or any Subsidiary thereof (provided that such Lender or affiliate is designated as a “Bank Products Affiliate” with respect to such Bank Products Agreement by the Parent Borrower in accordance with Section 8.4 hereof), or any other document made, delivered or given in connection therewith, in each case whether on account of principal, interest, reimbursement obligations, amounts payable in connection with the provision of such cash management services or a termination of any transaction entered into pursuant to any such Interest Rate Protection Agreement or Permitted Hedging Arrangement, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees, expenses and disbursements of counsel to the Administrative Agent or any other Secured Party that are required to be paid by such Borrower pursuant to the terms of the Credit Agreement or any other Loan Document). “Borrowers”: has the meaning provided in the recitals hereto. “Code”: the Uniform Commercial Code as from time to time in effect in the State of New York. “Collateral”: as defined in Section 3; provided that, for purposes of Subsection 6.5, Section 8 and Subsection 9.16(b), “Collateral” shall have the meaning assigned to such term in the Credit Agreement. “Collateral Account Bank”: a bank which at all times is a Lender or an affiliate thereof as selected by the relevant Grantor and consented to in writing by the Collateral Agent (such consent not to be unreasonably withheld or delayed). “Collateral Agent”: as defined in the preamble hereto. “Collateral Proceeds Account”: a non-interest bearing cash collateral account established and maintained by the relevant Grantor at an office of the Collateral Account Bank in the name, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Parties. “Collateral Representative”: as defined in the Term Loan Collateral Agreement. “Commercial Tort Action”: any action, other than an action primarily seeking declaratory or injunctive relief with respect to claims asserted or expected to be asserted by Persons other than the Grantors, that is commenced by a Grantor in the courts of the United States of America, any state or territory thereof or any political subdivision of any such state or territory, in which


 
LEGAL_US_E # 155827293.3 5 1006148456v9 any Grantor seeks damages arising out of torts committed against it that would reasonably be expected to result in a damage award to it exceeding $7,500,000. “Contracts”: with respect to any Grantor, all contracts, agreements, instruments and indentures in any form and portions thereof, to which such Grantor is a party or under which such Grantor or any property of such Grantor is subject, as the same may from time to time be amended, supplemented, waived or otherwise modified, including, without limitation, (i) all rights of such Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of such Grantor to damages arising thereunder and (iii) all rights of such Grantor to perform and to exercise all remedies thereunder. “Copyright Licenses”: with respect to any Grantor, all United States written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any United States copyright of such Grantor, other than agreements with any Person who is an Affiliate or a Subsidiary of the Parent Borrower or such Grantor, including, without limitation, any material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses. “Copyrights”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all United States copyrights, whether or not the underlying works of authorship have been published or registered, all United States copyright registrations and copyright applications, including, without limitation, any copyright registrations and copyright applications listed on Schedule 5 hereto, and (i) all renewals thereof, (ii) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof and (iii) the right to sue or otherwise recover for past, present and future infringements and misappropriations thereof. “Credit Agreement”: has the meaning provided in the recitals hereto. “Excluded Assets”: as defined in Section 3.3. “Foreign Intellectual Property”: any right, title or interest in or to any copyrights, copyright licenses, patents, patent applications, patent licenses, trade secrets, trade secret licenses, trademarks, trademark applications, trade names, trademark licenses, technology, know-how and processes or any other intellectual property governed by or arising or existing under, pursuant to or by virtue of the laws of any jurisdiction other than the United States of America or state thereof. “Granting Parties”: Ultimate Parent, Holdings (unless and until Holdings is released from all of its obligations hereunder pursuant to Subsection 9.16(h)), the Borrowers, the Guarantors, the Parent Borrower’s other Subsidiaries that are party hereto and any other Subsidiary of the Parent Borrower that becomes a party hereto from time to time after the date hereof.


 
LEGAL_US_E # 155827293.3 6 1006148456v9 “Grantor”: Holdings (unless and until Holdings is released from all of its obligations hereunder pursuant to Subsection 9.16(h)), Ultimate Parent, the Borrowers, the Parent Borrower’s other Subsidiaries that are party hereto and any other Subsidiary of the Borrowers that becomes a party hereto from time to time after the date hereof. “Guarantor Obligations”: with respect to any Guarantor, the collective reference to (i) the Borrower Obligations guaranteed by such Guarantor pursuant to Section 2, and (ii) all other obligations and liabilities of such Guarantor, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under or in connection with this Agreement or any other Loan Document to which such Guarantor is a party, any Interest Rate Protection Agreement, Permitted Hedging Arrangement, Bank Products Agreement or Vendor Financing Arrangement entered into with (x) Wells Fargo Bank, National Association or any affiliate thereof (including, for the avoidance of doubt, prior to the Closing Date) or (y) any other Person who was at the time of entry into such agreement a Lender or an affiliate of any Lender (provided that such Lender or affiliate is designated as a “Hedging Affiliate” with respect to such Interest Rate Protection Agreement or Permitted Hedging Arrangement, a “Bank Products Affiliate” with respect to such Bank Products Agreement or a “Vendor Affiliate” with respect to such Vendor Financing Arrangement by the Parent Borrower in accordance with Section 8.4 hereof) (provided, however, that the definition of “Guarantor Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Granting Party to support, as applicable) any Excluded Swap Obligations of a Borrower or any other Loan Party for purposes of determining any obligations of any Guarantor or other Granting Party), any Guarantee Obligation of Holdings or any of its Subsidiaries as to which any Secured Party is a beneficiary, the provision of cash management services by any Lender or an Affiliate thereof to the Parent Borrower or any Subsidiary thereof (provided that such Lender or affiliate is designated as a “Bank Products Affiliate” with respect to such Bank Products Agreement by the Parent Borrower in accordance with Section 8.4 hereof), or any other document made, delivered or given in connection therewith of such Guarantor, in each case whether on account of guarantee obligations, reimbursement obligations, amounts payable in connection with the provision of such cash management services or a termination of any transaction entered into pursuant to any such Interest Rate Protection Agreement or Permitted Hedging Agreement, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees, expenses and disbursements of counsel to the Administrative Agent or any other Secured Party that are required to be paid by such Guarantor pursuant to the terms of this Agreement or any other Loan Document and interest and fees accruing after (or would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Guarantor, whether or not a claim for post- filing or post-petition interest or fees is allowed in such proceeding). “Guarantors”: the collective reference to each Granting Party, other than each Borrower as to its Borrower Obligations. “Holdings”: as defined in the recitals hereto. “Instruments”: has the meaning specified in Article 9 of the Code, but excluding the Pledged Securities.


 
LEGAL_US_E # 155827293.3 7 1006148456v9 “Intellectual Property”: with respect to any Grantor, the collective reference to such Grantor’s Copyrights, Copyright Licenses, Patents, Patent Licenses, Trade Secrets, Trade Secret Licenses, Trademarks and Trademark Licenses. “Intercompany Note”: with respect to any Grantor, any promissory note in a principal amount in excess of $7,500,000 evidencing loans made by such Grantor to Holdings, the Parent Borrower or any of its Restricted Subsidiaries. “Intercreditor Agreement”: as defined in the recitals hereto. “Inventory”: with respect to any Grantor, all inventory (as defined in the Code) of such Grantor, including, without limitation, all Inventory (as defined in the Credit Agreement) of such Grantor. “Investment Property”: the collective reference to (i) all “investment property” as such term is defined in Section 9-102(a)(49) of the Code (other than any Capital Stock of any Foreign Subsidiary (other than a Foreign Subsidiary that is or becomes a Loan Party) in excess of 65% of any series of such stock in such Foreign Subsidiary and other than any Capital Stock excluded from the definition of “Pledged Stock”) and (ii) whether or not constituting “investment property” as so defined, all Pledged Securities. “Issuers”: the collective reference to the Persons identified on Schedule 2 as the issuers of Pledged Stock, together with any successors to such companies (including, without limitation, any successors contemplated by Subsection 8.2 of the Credit Agreement). “Lender”: as defined in the preamble hereto. “Management Loans”: Indebtedness (including any extension, renewal or refinancing thereof) outstanding at any time incurred by any Management Investors in connection with any Management Subscription Agreements or other purchases by them or Capital Stock of any Parent Entity or Holdings, which Indebtedness is entitled to the benefit of any Guarantee Obligation of the Parent Borrower or any of its Restricted Subsidiaries. “Non-Lender Secured Parties”: the collective reference to any person who, at the time of entering into any Interest Rate Protection Agreement, Permitted Hedging Arrangement, Banks Products Agreement, Management Loan or Vendor Financing Arrangement secured hereby, was a Lender or an affiliate of any Lender and who has been designated a “Hedging Affiliate” with respect to such Interest Rate Protection Agreement or Permitted Hedging Arrangement, a “Bank Products Affiliate” with respect to such Bank Products Agreement, a “Management Credit Affiliate” with respect to such Management Loan, or a “Vendor Affiliate” with respect to such Vendor Financing Arrangement, in each case in accordance with Section 8.4, for so long as so designated by the Parent Borrower, and their respective successors and assigns. “Obligations”: (i) in the case of each Borrower, its Borrower Obligations and (ii) in the case of each other Guarantor, its Guarantor Obligations. “Parent Borrower”: as defined in the preamble hereto.


 
LEGAL_US_E # 155827293.3 8 1006148456v9 “Patent Licenses”: with respect to any Grantor, all United States written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any United States patent, patent application, or patentable invention other than agreements with any Person who is an Affiliate or a Subsidiary of the Parent Borrower or such Grantor, including, without limitation, the material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses. “Patents”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all United States patents, patent applications and patentable inventions and all reissues and extensions thereof, including, without limitation, all patents and patent applications identified in Schedule 5 hereto, and including, without limitation, (i) all inventions and improvements described and claimed therein, (ii) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof), and (iv) all other rights corresponding thereto in the United States and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon, and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto. “Pledged Collateral”: as to any Pledgor, the Pledged Securities now owned or at any time hereafter acquired by such Pledgor, and any Proceeds thereof. “Pledged Notes”: with respect to any Pledgor, all Intercompany Notes at any time issued to, or held or owned by, such Pledgor. “Pledged Securities”: the collective reference to the Pledged Notes and the Pledged Stock. “Pledged Stock”: with respect to any Pledgor, the shares of Capital Stock listed on Schedule 2 as held by such Pledgor, together with any other shares of Capital Stock required to be pledged by such Pledgor pursuant to Subsection 7.9 of the Credit Agreement, as well as any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Issuer that may be issued or granted to, or held by, such Pledgor while this Agreement is in effect, in each case unless and until such time as the respective pledge of such Capital Stock under this Agreement is released in accordance with the terms hereof and of the Credit Agreement (provided that in no event shall there be pledged, nor shall any Pledgor be required to pledge, directly or indirectly, (i) more than 65% of any series of the outstanding Capital Stock (including for these purposes any investment deemed to be Capital Stock for U.S. tax purposes) of any Foreign Subsidiary, (ii) any of the Capital Stock of a Subsidiary of a Foreign Subsidiary, (iii) de minimis shares of a Foreign Subsidiary held by any Pledgor as a nominee or in a similar capacity, (iv) any Capital Stock of any Excluded Subsidiary (other than, but without limiting clause (i) above, a Subsidiary defined in clause (d) of the definition thereof) and (v) without duplication, any Excluded Assets).


 
LEGAL_US_E # 155827293.3 9 1006148456v9 “Pledgor”: Holdings (with respect to the Pledged Stock held by Holdings in the Parent Borrower and all other Pledged Collateral of Holdings (unless and until Holdings is released from all of its obligations hereunder pursuant to Subsection 9.16(h))), the Borrowers (with respect to Pledged Stock of the entities listed on Schedule 2 hereto held by the applicable Borrower and all other Pledged Collateral of such applicable Borrower) and each other Granting Party (with respect to Pledged Securities held by such Granting Party and all other Pledged Collateral of such Granting Party). “Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the Code and, in any event, Proceeds of Pledged Securities shall include, without limitation, all dividends or other income from the Pledged Securities, collections thereon or distributions or payments with respect thereto. “Restrictive Agreements”: as defined in Subsection 3.3(a). “Secured Parties”: the collective reference to (i) the Administrative Agent, the Collateral Agent and each Other Representative, (ii) the Lenders (including, without limitation, the Issuing Lenders and the Swingline Lender), (iii) the Non-Lender Secured Parties and (v) their respective successors and assigns and their permitted transferees and endorsees. “Security Collateral”: with respect to any Granting Party, means, collectively, the Collateral (if any) and the Pledged Collateral (if any) of such Granting Party. “Specified Asset”: as defined in Subsection 4.2.2 hereof. “Term Loan Agent”: as defined in the Intercreditor Agreement. “Term Loan Agreement”: the Term Loan Credit Agreement, dated as of the date hereof, among the Ultimate Parent, Parent Borrower, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, as may be amended, supplemented, waived or otherwise modified from time to time. “Term Loan Collateral Agreement”: as defined in the recitals hereto. “Term Loan Priority Collateral”: as defined in the Intercreditor Agreement. “Term Loan Lenders”: as defined in the Intercreditor Agreement. “Trade Secret Licenses”: with respect to any Grantor, all United States written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any United States trade secrets, including, without limitation, know how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, other than agreements with any Person who is an Affiliate or a Subsidiary of the Parent Borrower or such Grantor, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.


 
LEGAL_US_E # 155827293.3 10 1006148456v9 “Trade Secrets”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all United States trade secrets, including, without limitation, know-how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, including, without limitation, (i) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses, non-disclosure agreements and memoranda of understanding entered into in connection therewith, and damages and payments for past or future misappropriations thereof, and (ii) the right to sue or otherwise recover for past, present or future misappropriations thereof. “Trademark Licenses”: with respect to any Grantor, all United States written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, other than agreements with any Person who is an Affiliate or a Subsidiary of the Parent Borrower or such Grantor, including, without limitation, the material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses. “Trademarks”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, trademark and service mark registrations, and applications for trademark or service mark registrations (except for “intent to use” applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed, it being understood and agreed that the carve out in this parenthetical shall be applicable only if and for so long as a grant of a security interest in such intent to use application would invalidate or otherwise jeopardize Grantor’s rights therein), and any renewals thereof, including, without limitation, each registration and application identified in Schedule 5 hereto, and including, without limitation, (i) the right to sue or otherwise recover for any and all past, present and future infringements or dilutions thereof, (ii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof), and (iii) all other rights corresponding thereto and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto in the United States, together in each case with the goodwill of the business connected with the use of, and symbolized by, each such trademark, service mark, trade name, trade dress or other indicia of trade origin or business identifiers. “Vehicles”: all cars, trucks, trailers, construction and earth moving equipment and other vehicles covered by a certificate of title law of any state and all tires and other appurtenances to any of the foregoing. 1.2 Other Definitional Provisions. (a) The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section,


 
LEGAL_US_E # 155827293.3 11 1006148456v9 Schedule and Annex references are to this Agreement unless otherwise specified. The words “include”, “includes”, and “including” shall be deemed to be followed by the phrase “without limitation”. (b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms. (c) Where the context requires, terms relating to the Collateral, Pledged Collateral or Security Collateral, or any part thereof, when used in relation to a Granting Party shall refer to such Granting Party’s Collateral, Pledged Collateral or Security Collateral or the relevant part thereof. (d) All references in this Agreement to any of the property described in the definition of the term “Collateral” or “Pledged Collateral”, or to any Proceeds thereof, shall be deemed to be references thereto only to the extent the same constitute Collateral or Pledged Collateral, respectively. SECTION 2. 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 applicable Secured Parties, the prompt and complete payment and performance by each Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of the Borrower Obligations; provided, however, that nothing herein or in the definition of “Borrower Obligations” shall create any guarantee by any Guarantor of (or grant of security interest by any Granting Party to support, as applicable) any Excluded Swap Obligations of a Loan Party for purposes of determining any obligations of such Guarantor (or Granting Party) hereunder owed to the applicable Secured 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 that can be guaranteed by such Guarantor under applicable law, including applicable federal and state laws relating to the insolvency of debtors; provided that, to the maximum extent permitted under applicable law, it is the intent of the parties hereto that the rights of contribution of each Guarantor provided in following Subsection 2.2 be included as an asset of the respective Guarantor in determining the maximum liability of such Guarantor hereunder. (c) Each Guarantor agrees that the Borrower Obligations guaranteed by it hereunder 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 Section 2 or affecting the rights and remedies of the Administrative Agent or any other Secured Party hereunder. (d) The guarantee contained in this Section 2 shall remain in full force and effect until the earlier to occur of (i) the first date on which all the Loans, any Reimbursement Obligations, and all other Borrower Obligations then due and owing, and the


 
LEGAL_US_E # 155827293.3 12 1006148456v9 obligations of each Guarantor under the guarantee contained in this Section 2 then due and owing shall have been satisfied by payment in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized in a manner satisfactory to the applicable Issuing Lenders) and the Commitments shall be terminated, notwithstanding that from time to time during the term of the Credit Agreement any of the Borrowers may be free from any Borrower Obligations, (ii) as to any Guarantor, the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Holdings, the Parent Borrower or any Restricted Subsidiary), or, in the case of any Guarantor that is a Subsidiary of the Parent Borrower, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case, that is permitted under the Credit Agreement, (iii) as to any Guarantor that is a Subsidiary of the Parent Borrower, such Guarantor becoming an Excluded Subsidiary and (iv) as to Holdings, Holdings is released from its obligations hereunder pursuant to Subsection 9.16(h). (e) The liability of each Guarantor hereunder is primary and independent of any security for or other guaranty of the Guarantor Obligations, whether executed by any other Guarantor or by any other Person. No payment made by any Borrower, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any other Secured Party from any of the Borrowers, 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 any of the Borrower 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 Borrower Obligations or any payment received or collected from such Guarantor in respect of any of the Borrower Obligations), remain liable for the Borrower Obligations of each Borrower guaranteed by it hereunder up to the maximum liability of such Guarantor hereunder until the earlier to occur of (i) the first date on which all the Loans, any Reimbursement Obligations and all other Borrower Obligations then due and owing are paid in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized in a manner satisfactory to the applicable Issuing Lenders) and the Commitments are terminated, (ii) the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Holdings, the Parent Borrower or any Restricted Subsidiary), or, if such Guarantor is a Subsidiary of the Parent Borrower, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the Credit Agreement, (iii) as to any Guarantor, such Guarantor becoming an Excluded Subsidiary and (iv) as to Holdings, Holdings is released from its obligations hereunder pursuant to Subsection 9.16(h). 2.2 Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share (based, to the maximum extent permitted by law, on the respective Adjusted Net Worths of the Guarantors on the date the respective payment is made) of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder that has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Subsection 2.3. The provisions of this Subsection 2.2 shall in no


 
LEGAL_US_E # 155827293.3 13 1006148456v9 respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the other Secured Parties, and each Guarantor shall remain liable to the Administrative Agent and the other 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 Administrative Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any other Secured Party against any Borrower or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any other Secured Party for the payment of the Borrower Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any Borrower or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and the other Secured Parties by the Borrowers on account of the Borrower Obligations are paid in full in cash, no Letter of Credit shall be outstanding 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 Borrower Obligations shall not have been paid in full in cash or any Letter of Credit shall remain outstanding (and shall not have been cash collateralized in a manner satisfactory to the applicable Issuing Lenders) or any of the Commitments shall remain in effect, such amount shall be held by such Guarantor in trust for the Administrative 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 Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be held as collateral security for all of the Borrower Obligations (whether matured or unmatured) guaranteed by such Guarantor and/or then or at any time thereafter may be applied against any Borrower Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine. 2.4 Amendments, etc. with respect to the Obligations. To the maximum extent permitted by law, 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 Borrower Obligations made by the Collateral Agent, the Administrative Agent or any other Secured Party may be rescinded by the Collateral Agent, the Administrative Agent or such other Secured Party and any of the Borrower Obligations continued, and the Borrower Obligations, 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, waived, modified, accelerated, compromised, subordinated, waived, surrendered or released by the Collateral Agent, the Administrative 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, waived, modified, supplemented or terminated, in whole or in part, as the Collateral Agent or the Administrative Agent (or the Required Lenders or the applicable Lenders(s), 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, the Administrative Agent or any other Secured Party for the payment of any of the Borrower Obligations may be sold, exchanged, waived, surrendered or released. None of the Collateral Agent, the Administrative Agent and each other Secured Party shall have any obligation to


 
LEGAL_US_E # 155827293.3 14 1006148456v9 protect, secure, perfect or insure any Lien at any time held by it as security for any of the Borrower Obligations or for the guarantee contained in this Section 2 or any property subject thereto, except to the extent required by applicable law. 2.5 Guarantee Absolute and Unconditional. Each Guarantor waives, to the maximum extent permitted by applicable law, any and all notice of the creation, renewal, extension or accrual of any of the Borrower Obligations and notice of or proof of reliance by the Collateral Agent, the Administrative Agent or any other Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; each of the Borrower Obligations, and any obligation contained therein, 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 Section 2; and all dealings between any of the Borrowers and any of the Guarantors, on the one hand, and the Collateral Agent, the Administrative 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 Section 2. Each Guarantor waives, to the maximum extent permitted by applicable law, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon any Borrower or any of the other Guarantors with respect to any of the Borrower Obligations. Each Guarantor understands and agrees, to the extent permitted by law, that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and not of collection. The obligations of each of the Guarantors hereunder are independent of the obligations of any other Guarantor or Grantor or any other Person and a separate action or actions may be brought and prosecuted against one or more of the Guarantors whether or not action is brought against any other Guarantor or Grantor or any other Person and whether or not any other Guarantor or Grantor or any other Person be joined in any such action or actions. Each Guarantor hereby waives, to the maximum extent permitted by applicable law, any and all defenses (other than any claim against a Secured Party alleging breach of a contractual provision of any of the Loan Documents) that it may have arising out of or in connection with any and all of the following: (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Borrower Obligations 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, the Administrative Agent or any other Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by any of the Borrowers against the Collateral Agent, the Administrative Agent or any other Secured Party, (c) any change in the time, place, manner or place of payment, amendment, or waiver or increase in any of the Obligations, (d) any exchange, taking, release or non-perfection of Security Collateral, (e) any change in the structure or existence of any of the Borrowers, (f) any application of Security Collateral to any of the Obligations, (g) any law, regulation or order of any jurisdiction, or any other event, affecting any term of any Obligation or the rights of the Collateral Agent, the Administrative Agent or any other Secured Party with respect thereto, including, without limitation: (i) the application of any such law, regulation, decree or order, including any prior approval, which would prevent the exchange of any currency (other than Dollars) for Dollars or the remittance of funds outside of such jurisdiction or the unavailability of Dollars in any legal exchange market in such jurisdiction in accordance with normal commercial practice, (ii) a declaration of banking moratorium or any suspension of


 
LEGAL_US_E # 155827293.3 15 1006148456v9 payments by banks in such jurisdiction or the imposition by such jurisdiction or any Governmental Authority thereof of any moratorium on, the required rescheduling or restructuring of, or required approval of payments on, any indebtedness in such jurisdiction, (iii) any expropriation, confiscation, nationalization or requisition by such country or any Governmental Authority that directly or indirectly deprives any Borrower of any assets or their use, or of the ability to operate its business or a material part thereof, or (iv) any war (whether or not declared), insurrection, revolution, hostile act, civil strife or similar events occurring in such jurisdiction which has the same effect as the events described in clause (i), (ii) or (iii) above (in each of the cases contemplated in clauses (i) through (iv) above, to the extent occurring or existing on or at any time after the date of this Agreement), or (h) any other circumstance whatsoever (other than payment in full in cash of the Borrower Obligations guaranteed by it hereunder) (with or without notice to or knowledge of any of the Borrowers or such Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of any of the Borrowers for the Borrower Obligations, or of such Guarantor under the guarantee contained in this Section 2, 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, the Administrative Agent and 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 any of the Borrowers, any other Guarantor or any other Person or against any collateral security or guarantee for the Borrower Obligations guaranteed by such Guarantor hereunder or any right of offset with respect thereto, and any failure by the Collateral Agent, the Administrative Agent or any other Secured Party to make any such demand, to pursue such other rights or remedies or to collect any payments from any Borrower, 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 any of the Borrowers, 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, the Administrative 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 of any Guarantor contained in this Section 2 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 Borrower Obligations guaranteed by such Guarantor hereunder is rescinded or must otherwise be restored or returned by the Collateral Agent, the Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of any Borrower 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, any Borrower 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 Administrative Agent without set-off or counterclaim, in Dollars (or in the case of any amount required to be paid in any other currency pursuant to the requirements of the Credit Agreement or other agreement relating to the respective Obligations, such other currency), at the Administrative Agent’s office specified in Subsection 11.2 of the Credit Agreement or


 
LEGAL_US_E # 155827293.3 16 1006148456v9 such other address as may be designated in writing by the Administrative Agent to such Guarantor from time to time in accordance with Subsection 11.2 of the Credit Agreement. SECTION 3. GRANT OF SECURITY INTEREST 3.1 Grant. Each Grantor hereby unconditionally grants, collaterally assigns, and pledges to the Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in all of such Grantor’s right, title, and interest in and to the Collateral of such Grantor, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations (provided, however, that nothing herein or in the definition of “Obligations” shall grant any security interest to secure any obligations or liabilities of a Loan Party under or in connection with any Excluded Swap Obligations for purposes of determining any obligations of a Grantor hereunder) of such Grantor. The term “Collateral”, as to any Grantor, means the following property (wherever located) now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest, except as provided in Subsection 3.3: (a) all Accounts; (b) all Money and all cash; (c) all Cash Equivalents; (d) all Chattel Paper; (e) all Contracts; (f) all Deposit Accounts (including, for the avoidance of doubt, DDAs and Concentration Accounts); (g) all Documents; (h) all Equipment; (i) all General Intangibles; (j) all Goods; (k) all Instruments; (l) all Intellectual Property; (m) all Inventory; (n) all Investment Property; (o) all letters of credit or Letter-of-Credit Rights;


 
LEGAL_US_E # 155827293.3 17 1006148456v9 (p) all Fixtures; (q) all Commercial Tort Claims constituting Commercial Tort Actions described in Schedule 7 (together with any Commercial Tort Actions subject to a further writing provided in accordance with Subsection 5.2.12); (r) all accessions to, substitutions for and replacements, proceeds, 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 Intangible at any time evidencing or relation to any of the foregoing; (s) all books and records pertaining to any of the foregoing; (t) the Collateral Proceeds Account; and (u) to the extent not otherwise included, all Proceeds and products of any and all of the foregoing, and all Supporting Obligations, collateral security and guarantees given by any Person with respect to any of the foregoing; provided that, in the case of each Grantor, Collateral shall not include any Pledged Collateral (which, for the avoidance of doubt, is subject to the security interest granted pursuant to Subsection 3.2). 3.2 Pledged Collateral. Each Granting Party that is a Pledgor, hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a security interest in all of the Pledged Collateral of such Pledgor now owned or at any time hereafter acquired by such Pledgor, and any Proceeds thereof, as collateral security for the prompt and complete performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations of such Pledgor, except as provided in Subsection 3.3. 3.3 Certain Limited Exceptions. No security interest is or will be granted pursuant to this Agreement or any other Security Document other than the security interest granted in the Canadian Guarantee and Collateral Agreement in any right, title or interest of any Granting Party under or in and “Collateral” and “Pledged Collateral” shall not include the following (subject to the last sentence of this Section 3.3, collectively, the “Excluded Assets”): (a) any Instruments, Contracts, Chattel Paper, General Intangibles, Copyright Licenses, Patent Licenses, Trademark Licenses, Trade Secret Licenses or other contracts or agreements with or issued by Persons other than Ultimate Parent, a Subsidiary of Ultimate Parent or an Affiliate thereof, (collectively, “Restrictive Agreements”) that would otherwise be included in the Security Collateral (and such Restrictive Agreements shall not be deemed to constitute a part of the Security Collateral) for so long as, and to the extent that, the granting of such a security interest pursuant hereto would result in a breach, default or termination of such Restrictive Agreements (in each case, except to the extent that, pursuant to the Code or other applicable law, the granting of security interests therein can be made without resulting in a breach, default or termination of such Restrictive Agreements); provided, that (A)


 
LEGAL_US_E # 155827293.3 18 1006148456v9 the foregoing exclusions of this clause (a) shall in no way be construed to apply to the extent that (1) any described breach, default or termination is ineffective under Section 9-406, 9-407, 9-408 or 9-409 of the Code or other applicable law or (2) any consent or waiver has been obtained that would permit Collateral Agent’s security interest or lien to attach notwithstanding the breach, default, or termination of such Restrictive Agreement (it being understood and agreed that Holdings and its Subsidiaries shall not be required to seek any such consent or waiver) and (B) the foregoing exclusions of this clause (a) shall in no way be construed to limit, impair or otherwise affect Collateral Agent’s or any other Secured Party’s continuing security interests in and liens upon any rights or interests of any Grantor in or to (1) monies due or to become due under or in connection with any described Restrictive Agreement or (2) any proceeds from the sale, license, lease or other dispositions of any such Restrictive Agreement; (b) (1) any Equipment that would otherwise be included in the Security Collateral (and such Equipment shall not be deemed to constitute a part of the Security Collateral) if such Equipment (A) is subject to a Lien described in Subsection 8.14(d) or (e) (with respect to a Lien described in Subsection 8.14(d)) of the Credit Agreement or (B) clause (h) or (o) (with respect to a Lien described in clause (h)) of the definition of “Permitted Liens” in the Term Loan Agreement as in effect on the date hereof (or any corresponding provision of the Credit Agreement, the Term Loan Agreement or any Additional Credit Facility; provided that such provision (other than any as in effect on the date hereof) is not materially less favorable to the Lenders than the corresponding provision in the Credit Agreement (but in each case only for so long as such Liens are in place)); or (2) any other property consisting solely of (i) cash, Cash Equivalents, Temporary Cash Investments or Investment Grade Securities, together with proceeds, dividends and distributions in respect thereof, (ii) any assets relating to such assets, proceeds, dividends or distributions or to Hedging Obligations that are the subject of a Lien as described in this clause, and/or (iii) any other assets consisting of, relating to or arising under or in connection with (1) Hedging Obligations that are the subject of a Lien as described in this clause or (2) any agreements, instruments or documents governing or evidencing Hedging Obligations that are the subject of a Lien as described in this clause or to any of the assets referred to in any of subclauses (i) through (iii), that would otherwise be included in the Security Collateral (and such other property shall not be deemed to constitute a part of the Security Collateral) if such other property (A) is subject to any Lien in described in Subsection 8.14(v) of the Credit Agreement or (B) is subject to any Lien in respect of Hedging Obligations (as defined in the Term Loan Agreement as in effect on the date hereof) permitted by Section 8.6 of the Term Loan Agreement as in effect on the date hereof as a “Permitted Lien” pursuant to clause (h), or (with respect to such a Lien described clause (h) of such term) clause (o) of the definition of such term (or any corresponding provision of the Credit Agreement, the Term Loan Agreement or any Additional Credit


 
LEGAL_US_E # 155827293.3 19 1006148456v9 Facility; provided that such provision (other than any as in effect on the date hereof) is not materially less favorable to the Lenders than the corresponding provision in the Credit Agreement (but in each case only for so long as such Liens are in place)); (c) any property that would otherwise be included in the Security Collateral (and such property shall not be deemed to constitute a part of the Security Collateral) if such property (x) has been sold or otherwise transferred in connection with a Special Purpose Financing (as defined in the Term Loan Agreement as in effect on the date hereof), or (y) constitutes the proceeds or products of any property that has been sold or otherwise transferred pursuant to such Special Purpose Financing (other than any payments received by any Granting Party in payment for the sale and transfer of such property in such Special Purpose Financing), or (z) is subject to any Liens securing Indebtedness incurred in compliance with Section 8.1(b)(ix) of the Term Loan Agreement as in effect on the date hereof or permitted by Section 8.6 of the Term Loan Agreement as in effect on the date hereof as “Permitted Liens” permitted pursuant to clause (r) of the definition of such term (or any corresponding provision of the Credit Agreement, the Term Loan Agreement or any Additional Credit Facility; provided that such provision (other than any as in effect on the date hereof) is not materially less favorable to the Lenders than the corresponding provision in the Credit Agreement (but in each case only for so long as such Liens are in place)); (d) any property that would otherwise be included in the Security Collateral (and such property shall not be deemed to constitute a part of the Security Collateral) if such property has been sold or otherwise transferred in connection with a sale and leaseback transaction permitted under (x) Subsection 8.5 of the Credit Agreement, or is subject to any Liens permitted under Subsection 8.14 of the Credit Agreement and consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (or any corresponding provision of the Credit Agreement, the Term Loan Agreement or any Additional Credit Facility; provided that such provision (other than any as in effect on the date hereof) is not materially less favorable to the Lenders than the corresponding provision in the Credit Agreement (but in each case only for so long as such Liens are in place)) or (y) Section 8.4 of the Term Loan Agreement as in effect on the date hereof, or is subject to any Liens permitted under Section 8.6 of the Term Loan Agreement as in effect on the date hereof and consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (or any corresponding provision of the Credit Agreement, the Term Loan Agreement or any Additional Credit Facility; provided that such provision (other than any as in effect on the date hereof) is not materially less favorable to the Lenders than the corresponding provision in the Credit Agreement in any material respect which relate to property subject to any such sale and leaseback transaction or general intangibles related thereto (but in each case only for so long as such Liens are in place)); provided that, notwithstanding the foregoing, the security interest of the Collateral Agent shall attach to any money, securities or other consideration received by any Grantor as consideration for the sale or other disposition of such property as and to the extent such consideration would otherwise constitute Collateral;


 
LEGAL_US_E # 155827293.3 20 1006148456v9 (e) Capital Stock (including for these purposes any investment deemed to be Capital Stock for United States tax purposes) which is described in the proviso to the definition of Pledged Stock; (f) any Money, cash, checks, other negotiable instruments, funds and other evidence of payment held in any Deposit Account of the Parent Borrower or any of its Subsidiaries constituting a security deposit constituting a Permitted Lien with respect to obligations not in violation of the Credit Agreement for the benefit of the Parent Borrower or any of its Subsidiaries, which must be held for or returned to the applicable counterparty under applicable law or pursuant to Contractual Obligations; (g) Excluded Accounts; (h) any interest in leased real property; (i) any fee interest in owned real property; (j) any Vehicles and any assets subject to certificate of title; (k) Letter-of-Credit Rights and Commercial Tort Claims individually with a value of less than $7,500,000; (l) assets to the extent the granting or perfecting of a security interest in such assets would result in costs or other consequences to Ultimate Parent or any of its Subsidiaries as reasonably determined in writing by the Parent Borrower and the Collateral Agent is excessive in view of the benefits that would be obtained by the Secured Parties; (m) those assets over which the granting of security interests in such assets would be prohibited by contract permitted under the Credit Agreement, applicable law or regulation or the organizational or joint venture documents of any non-wholly owned Subsidiary (including permitted liens, leases and licenses) (in each case, after giving effect to the applicable anti-assignment provisions of the Code and in each case, for the avoidance of doubt, Collateral shall include proceeds and receivables of the assets described in this clause (m) to the extent that their assignment is expressly deemed effective under the Code notwithstanding such prohibitions, other than proceeds and receivables thereof to the extent that their assignment is expressly deemed effective under the Code notwithstanding such prohibitions) (provided, that (A) the foregoing exclusions of this clause (m) shall in no way be construed to apply to the extent that (1) any described breach, default or termination is ineffective under Section 9-406, 9-407, 9-408 or 9-409 of the Code or other applicable law or (2) any consent or waiver has been obtained that would permit Collateral Agent’s security interest or lien to attach notwithstanding the breach, default, or termination of such contract or document (it being understood and agreed that Ultimate Parent and its Subsidiaries shall not be required to seek any such consent or waiver) and (B) the foregoing exclusions of this clause (m) shall in no way be construed to limit, impair or otherwise affect Collateral Agent’s or any other Secured Party’s continuing security interests in and liens upon any rights or interests of any Grantor in or to (1) monies due or to become due under or in connection with any such contract or document or (2) any proceeds from the sale,


 
LEGAL_US_E # 155827293.3 21 1006148456v9 license, lease or other dispositions of any such contract or document), or to the extent that such security interests would result in material adverse tax consequences to Ultimate Parent, Holdings, or any one or more of its Subsidiaries as reasonably determined in writing by the Parent Borrower and notified in writing to the Collateral Agent (it being understood that the Lenders shall not require Ultimate Parent or any of its subsidiaries to enter into any security agreements or pledge agreements governed by foreign law (other than the laws of Canada and any of its provinces)); (n) Foreign Intellectual Property; (o) any aircrafts, airframes, aircraft engines, helicopters, vessels or rolling stock or any Equipment or other assets constituting a part thereof; (p) [reserved]; (q) any Capital Stock and other securities of a Subsidiary to the extent that the pledge of or grant of any other Lien on such Capital Stock or other securities for the benefit of any holders of securities results in Ultimate Parent or any of its Subsidiaries being required to file separate financial statements for such Subsidiary with the Securities and Exchange Commission (or any other governmental authority) pursuant to either Rule 3-10 or 3- 16 of Regulation S-X under the Securities Act, or any other law, rule or regulation as in effect from time to time, but only to the extent necessary to not be subject to such requirement; and (r) Margin Stock. For purposes of this Subsection 3.3, the terms “Cash Equivalents”, “Hedging Obligations” and “Investment Grade Securities” shall have the meanings given to such terms in the Term Loan Agreement as in effect on the date hereof. Notwithstanding the foregoing clauses (a) through (r), prior to the Discharge of the Term Loan Obligations (as defined in the Intercreditor Agreement), “Excluded Assets” shall not include any property or asset that is Term Loan Priority Collateral at any time such property or asset (i) constitutes “Collateral” or “Pledged Collateral” under the Term Loan Collateral Agreement and (ii) for the avoidance of doubt, is not an “Excluded Asset” under the Term Loan Collateral Agreement. 3.4 Intercreditor Relations. Notwithstanding anything herein to the contrary, it is the understanding of the parties that the Liens granted pursuant to Subsection 3.1 and 3.2 herein shall with respect to all Security Collateral other than Security Collateral constituting ABL Priority Collateral, (x) prior to the Discharge of the Term Loan Obligations (as defined in the Intercreditor Agreement), be subject and subordinate to the Liens granted to the Term Loan Agent for the benefit of the Term Loan Lenders to secure the Indebtedness under the applicable Term Loan Agreement pursuant to the Term Loan Collateral Agreement and (y) prior to the applicable Discharge of Additional Obligations (as defined in the Intercreditor Agreement), be subject and subordinate to the Liens granted to any Additional Agent for the benefit of the holders of the applicable Additional Obligations to secure such Additional Obligations pursuant


 
LEGAL_US_E # 155827293.3 22 1006148456v9 to the applicable Additional Collateral Documents. The Collateral Agent acknowledges and agrees that the relative priority of the Liens granted to the Collateral Agent, the Term Loan Agent and any Additional Agent may be determined solely pursuant to the Intercreditor Agreement, and not by priority as a matter of law or otherwise. Notwithstanding anything herein to the contrary, the Liens and security interest granted to the Collateral Agent 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. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control as among the Collateral Agent, the Term Loan Agent and any Additional Agent. In the event of any such conflict, each Grantor may act (or omit to act) in accordance with such Intercreditor Agreement, and shall not be in breach, violation or default of its obligations hereunder by reason of doing so. Notwithstanding any other provision hereof, prior to the Discharge of the Term Loan Obligations (as defined in the Intercreditor Agreement) and the Discharge of Additional Obligations (as defined in the Intercreditor Agreement), any obligation hereunder to deliver to the Collateral Agent any Security Collateral constituting Term Loan Priority Collateral shall be satisfied by causing such Term Loan Priority Collateral to be delivered to the Term Loan Agent, or the applicable Collateral Representative or any Additional Agent, as applicable, to be held in accordance with the Intercreditor Agreement. 3.5 No New Liens. Notwithstanding anything herein to the contrary, to the extent that the Collateral Agent receives a security interest in any Security Collateral as a result of any discrepancies between Subsection 3.1 and Subsection 3.3 herein and Subsection 3.1 and Subsection 3.3 of the Term Loan Collateral Agreement, which assets are not also subject to the Lien of the Term Loan Agent under the Term Loan Collateral Agreement, each Granting Party hereby grants a security interest in such Security Collateral to the Term Loan Agent to secure the Term Loan Obligations (as defined in the Intercreditor Agreement) and the Collateral Agent shall be deemed to also hold and have held a security interest on such assets for the benefit of the Term Loan Agent (which security interest shall be subject to the terms of the Intercreditor Agreement) as security for the Term Loan Obligations (as defined in the Intercreditor Agreement) and shall promptly notify the Term Loan Agent in writing of the existence of such Lien in accordance with Section 2.5 of the Intercreditor Agreement. SECTION 4. REPRESENTATIONS AND WARRANTIES 4.1 Representations and Warranties of Each Guarantor. 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 Borrowers thereunder, each Guarantor hereby represents and warrants to the Collateral Agent and each other Secured Party that the representations and warranties set forth in Section 5 of the Credit Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which representations and warranties is hereby incorporated herein by reference, are true and correct in all material respects, and the Collateral Agent and each other Secured Party shall be entitled to rely on each of such representations and warranties as if fully set forth herein; provided that each reference in each such representation and warranty to the Parent Borrower’s knowledge shall, for the purposes of this Subsection 4.1, be deemed to be a reference to such Guarantor’s knowledge.


 
LEGAL_US_E # 155827293.3 23 1006148456v9 4.2 Representations and Warranties of Each Grantor. 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 Borrowers thereunder, each Grantor hereby represents and warrants to the Collateral Agent and each other Secured Party that, in each case after giving effect to the Transactions: 4.2.1 Title; No Other Liens. Except for the security interests granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on such Grantor’s Collateral by the Credit Agreement, such Grantor owns each item of such Grantor’s Collateral free and clear of any and all Liens. Except as set forth on Schedule 3, (x) in the case of the ABL Priority Collateral, no currently effective financing statement or other similar public notice with respect to all or any part of such Grantor’s ABL Priority Collateral is on file or of record in any public office in the United States of America, any state, territory or dependency thereof or the District of Columbia and (y) in the case of the Term Loan Priority Collateral, to the knowledge of such Grantor, no currently effective financing statement or other similar public notice with respect to any Lien securing Indebtedness on all or any part of such Grantor’s Term Loan Priority Collateral is on file or of record in any public office in the United States of America, any state, territory or dependency thereof or the District of Columbia, except, in each case, such as have been filed in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement or as are permitted by the Credit Agreement or any other Loan Document or for which termination statements will be delivered on the Closing Date. 4.2.2 Perfected First Priority Liens (a) This Agreement is effective to create, as collateral security for the Obligations of such Grantor, valid and enforceable Liens on such Grantor’s Security Collateral in favor of the Collateral Agent for the benefit of the Secured Parties, except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. (b) Except with regard to (i) Liens (if any) on Specified Assets and (ii) any rights in favor of the United States government as required by law (if any), upon the completion of the Filings and, with respect to Instruments, Chattel Paper and Documents upon the earlier of such Filing or the delivery to and continuing possession by the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, of all Instruments, Chattel Paper and Documents a security interest in which is perfected by possession, and the obtaining and maintenance of “control” (as described in the Code) by the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable (or their respective agents appointed for purposes of perfection), in accordance with the Intercreditor Agreement of all Deposit Accounts, Blocked Accounts, the Collateral Proceeds Account, Electronic Chattel Paper and Letter-of-Credit Rights a security interest in which is perfected by “control” and in the case of Commercial Tort Actions (other than such Commercial Tort Actions listed on Schedule 7 on the date of this Agreement), the taking of the actions required by


 
LEGAL_US_E # 155827293.3 24 1006148456v9 Subsection 5.2.12 herein, the Liens created pursuant to this Agreement will constitute valid Liens on and (to the extent provided herein) perfected security interests in such Grantor’s Collateral in favor of the Collateral Agent for the benefit of the Secured Parties, and will be prior to all other Liens of all other Persons securing Indebtedness, in each case other than Permitted Liens (and subject to the Intercreditor Agreement), and enforceable as such as against all other Persons other than Ordinary Course Transferees, except to the extent that the recording of an assignment or other transfer of title to the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent (in accordance with the applicable Intercreditor Agreement) or the recording of other applicable documents in the United States Patent and Trademark Office or United States Copyright Office may be necessary for perfection or enforceability, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. As used in this Subsection 4.2.2(b), the following terms shall have the following meanings: “Filings”: the filing or recording of (i) the Financing Statements as set forth in Schedule 3, (ii) this Agreement or a notice thereof with respect to Intellectual Property as set forth in Schedule 3, and (iii) any filings after the Closing Date in any other jurisdiction as may be necessary under any Requirement of Law. “Financing Statements”: the financing statements delivered to the Collateral Agent by such Grantor on the Closing Date for filing in the jurisdictions listed in Schedule 4. “Ordinary Course Transferees”: (i) with respect to goods only, buyers in the ordinary course of business and lessees in the ordinary course of business to the extent provided in Section 9-320(a) and 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction, (ii) with respect to general intangibles only, licensees in the ordinary course of business to the extent provided in Section 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction and (iii) any other Person who is entitled to take free of the Lien pursuant to the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction. “Specified Assets”: the following property and assets of such Grantor: (1) Patents, Patent Licenses, Trademarks and Trademark Licenses to the extent that (a) Liens thereon cannot be perfected by the filing of financing statements under the Uniform Commercial Code or by the filing and acceptance thereof in the United States Patent and Trademark Office or (b) such Patents, Patent Licenses, Trademarks and Trademark Licenses are not, individually or in the aggregate, material to the business of the Parent Borrower and its Subsidiaries taken as a whole; (2) Copyrights and Copyright Licenses with respect thereto and Accounts or receivables arising therefrom to the extent that the


 
LEGAL_US_E # 155827293.3 25 1006148456v9 Uniform Commercial Code as in effect from time to time in the relevant jurisdiction is not applicable to the creation or perfection of Liens thereon; (3) Collateral for which the perfection of Liens thereon requires filings in or other actions under the laws of jurisdictions outside of the United States of America, any State, territory or dependency thereof or the District of Columbia; (4) Goods included in Collateral received by any Person from any Grantor for “sale or return” within the meaning of Section 2-326 of the Uniform Commercial Code of the applicable jurisdiction, to the extent of claims of creditors of such Person; (5) Fixtures, Vehicles, any other assets subject to certificates of title and Money; and Cash Equivalents (except to the extent maintained in a Blocked Account and other than Cash Equivalents constituting Investment Property to the extent a security interest is perfected by the filing of a financing statement); (6) Proceeds of Accounts or Inventory which do not themselves constitute Collateral or which do not constitute identifiable Cash Proceeds or which have not yet been transferred to or deposited in the Collateral Proceeds Account (if any) or to a Blocked Account; and, (7) Uncertificated securities (to the extent a security interest is not perfected by the filing of a financing statement). 4.2.3 Jurisdiction of Organization. On the date hereof, such Grantor’s jurisdiction of organization is specified on Schedule 4. 4.2.4 Farm Products. None of such Grantor’s Collateral constitutes, or is the Proceeds of, Farm Products. 4.2.5 Accounts Receivable. The amounts represented by such Grantor to the Administrative Agent or the other Secured Parties from time to time as owing by each account debtor or by all account debtors in respect of such Grantor’s Accounts Receivable constituting Security Collateral will at such time be the correct amount, in all material respects, actually owing by such account debtor or debtors thereunder, except to the extent that appropriate reserves therefor have been established on the books of such Grantor in accordance with GAAP. Unless otherwise indicated in writing to the Administrative Agent, each Account Receivable of such Grantor arises out of a bona fide sale and delivery of goods or rendition of services by such Grantor. Such Grantor has not given any account debtor any deduction in respect of the amount due under any such Account, except in the ordinary course of business or as such Grantor may otherwise advise the Administrative Agent in writing. 4.2.6 Patents, Copyrights and Trademarks. Schedule 5 lists all material Trademarks, material Copyrights and material Patents, in each case, registered in the United


 
LEGAL_US_E # 155827293.3 26 1006148456v9 States Patent and Trademark Office or the United States Copyright Office, as applicable, and owned by such Grantor in its own name as of the date hereof, and all material Trademark Licenses, all material Copyright Licenses and all material Patent Licenses (including, without limitation, material Trademark Licenses for registered Trademarks, material Copyright Licenses for registered Copyrights and material Patent Licenses for registered Patents) owned by such Grantor in its own name as of the date hereof, in each case, that is solely United States Intellectual Property. 4.3 Representations and Warranties of Each Pledgor. To induce the Collateral Agent, the Administrative Agent and the Lenders to enter into the Credit Agreement and to induce the Lenders to make their respective extensions of credit to the Borrowers thereunder, each Pledgor hereby represents and warrants to the Collateral Agent and each other Secured Party that: 4.3.1 Except as provided in Subsection 3.3, the shares of Pledged Stock pledged by such Pledgor hereunder constitute (i) in the case of shares of a Domestic Subsidiary, all the issued and outstanding shares of all classes of the Capital Stock of such Domestic Subsidiary owned by such Pledgor and (ii) in the case of any Pledged Stock constituting Capital Stock of any Foreign Subsidiary (other than a Foreign Subsidiary that is or becomes a Loan Party), such percentage (not more than 65%) as is specified on Schedule 2 of all the issued and outstanding shares of all classes of the Capital Stock of each such Foreign Subsidiary owned by such Pledgor. 4.3.2 [Reserved]. 4.3.3 Such Pledgor is the record and beneficial owner of, and has good title to, the Pledged Securities pledged by it hereunder, free of any and all Liens securing Indebtedness owing to any other Person, except the security interest created by this Agreement and Permitted Liens. 4.3.4 Upon the delivery to the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, of the certificates evidencing the Pledged Securities held by such Pledgor together with executed undated stock powers or other instruments of transfer, the security interest created in such Pledged Securities constituting certificated securities by this Agreement, assuming the continuing possession of such Pledged Securities by the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, will constitute a valid, perfected first priority (subject, in terms of priority only, to the priority of the Liens of the Term Loan Agent, the applicable Collateral Representative and any Additional Agent) security interest in such Pledged Securities to the extent provided in and governed by the Code, enforceable in accordance with its terms against all creditors of such Pledgor and any Persons purporting to purchase such Pledged Securities from such Pledgor to the extent provided in and governed by the Code, in each case subject to Permitted Liens (and the Intercreditor Agreement), and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting


 
LEGAL_US_E # 155827293.3 27 1006148456v9 creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. 4.3.5 Upon the earlier of (x) (to the extent a security interest in uncertificated securities may be perfected by the filing of a financing statement) the filing of the financing statements listed on Schedule 3 hereto and (y) the obtaining and maintenance of “control” (as described in the Code) by the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent (or their respective agents appointed for purposes of perfection), as applicable, in accordance with the Intercreditor Agreement, of all Pledged Securities that constitute uncertificated securities, the security interest created by this Agreement in such Pledged Securities that constitute uncertificated securities, will constitute a valid, perfected first priority (subject, in terms of priority only, to the priority of the Liens of the Term Loan Agent, the applicable Collateral Representative and any Additional Agent) security interest in such Pledged Securities constituting uncertificated securities to the extent provided in and governed by the Code, enforceable in accordance with its terms against all creditors of such Pledgor and any persons purporting to purchase such Pledged Securities from such Pledgor, to the extent provided in and governed by the Code, in each case subject to Permitted Liens (and the Intercreditor Agreement), and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. SECTION 5. COVENANTS 5.1 Covenants of Each Guarantor. Each Guarantor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of (i) the date upon which the Loans, any Reimbursement Obligations, and all other Obligations then due and owing, shall have been paid in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized in a manner satisfactory to the applicable Issuing Lenders) and the Commitments shall have terminated, (ii) the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Holdings, the Parent Borrower or any Restricted Subsidiary), or, if such Guarantor is a Subsidiary of the Parent Borrower, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the Credit Agreement, (iii) such Guarantor becoming an Excluded Subsidiary, such Guarantor 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 Guarantor or any of its Restricted Subsidiaries or (iv) as to Holdings, Holdings is released from its obligations hereunder pursuant to Subsection 9.16(h). 5.2 Covenants of Each Grantor. Each Grantor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of (i) the date upon which the Loans, any Reimbursement Obligations, and all other Obligations then due and owing shall have been paid in full in cash, no Letter of


 
LEGAL_US_E # 155827293.3 28 1006148456v9 Credit shall be outstanding (except for Letters of Credit that have been cash collateralized in a manner satisfactory to the applicable Issuing Lenders) and the Commitments shall have terminated, (ii) a sale or other disposition of all of the Capital Stock of such Grantor (other than to Holdings, the Parent Borrower or any Restricted Subsidiary), or, if such Grantor is a Subsidiary of the Parent Borrower, any other transaction or occurrence as a result of which such Grantor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the Credit Agreement, (iii) such Grantor becoming an Excluded Subsidiary or (iv) as to Holdings, Holdings is released from its obligations hereunder pursuant to Subsection 9.16(h). 5.2.1 Delivery of Instruments and Chattel Paper. If any amount payable under or in connection with any of such Grantor’s Collateral shall be or become evidenced by any Instrument or Chattel Paper, such Grantor shall (except as provided in the following sentence) be entitled to retain possession of all Collateral of such Grantor evidenced by any Instrument or Chattel Paper, and shall hold all such Collateral in trust for the Collateral Agent, for the benefit of the Secured Parties. In the event that an Event of Default shall have occurred and be continuing, upon the request of the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, such Instrument or Chattel Paper shall be promptly delivered to the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, duly indorsed in a manner reasonably satisfactory to the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, to be held as Collateral pursuant to this Agreement. Such Grantor shall not permit any other Person to possess any such Collateral at any time other than in connection with any sale or other disposition of such Collateral in a transaction permitted by the Credit Agreement or as contemplated by the Intercreditor Agreement. 5.2.2 [Reserved]. 5.2.3 Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon such Grantor’s Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, material claims for labor, materials and supplies) against or with respect to such Grantor’s Collateral, except that no such tax, assessment, charge, levy or claim need be paid or satisfied if the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor and except to the extent that the failure to do so, in the aggregate, would not reasonably be expected to have a Material Adverse Effect. 5.2.4 Maintenance of Perfected Security Interest; Further Documentation. (a) Such Grantor shall use commercially reasonable efforts to maintain the security interest created by this Agreement in such Grantor’s Collateral as a perfected security interest as described in Subsection 4.2.2 and to defend the security interest created by this Agreement in


 
LEGAL_US_E # 155827293.3 29 1006148456v9 such Grantor’s Collateral against the claims and demands of all Persons whomsoever (subject to the other provisions hereof). (b) Such Grantor will furnish to the Collateral Agent from time to time statements and schedules further identifying and describing such Grantor’s ABL Priority Collateral and such other reports in connection with such Grantor’s ABL Priority Collateral, in each case, as the Collateral Agent may reasonably request in writing, all in reasonable detail. (c) At any time and from time to time, upon the written request of the Collateral Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such Grantor, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any United States jurisdiction with respect to the security interests created hereby; provided that the Parent Borrower or such Grantor will not be required to (x) take any action in any jurisdiction other than the United States of America, or required by the laws of any such jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of the United States of America or to perfect any security interests (or other Liens) in any Collateral (other than with respect to a Foreign Subsidiary which is a Subsidiary Guarantor as of the date hereof or becomes a Subsidiary Guarantor pursuant to Subsection 7.9(b) of the Credit Agreement), (y) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except (A) as required by Subsection 4.16 of the Credit Agreement and (B) in the case of Collateral that constitutes Capital Stock or Pledged Notes in certificated form, delivering such Capital Stock or Pledged Notes to the Collateral Agent (or another Person as required under the Intercreditor Agreement) or (z) deliver landlord lien waivers, estoppels or collateral access letters. (d) The Collateral Agent may grant extensions of time for the creation and perfection of security interests in, or the obtaining a delivery of documents or other deliverables with respect to, particular assets of any Grantor where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or any other Security Documents. 5.2.5 Changes in Name, Jurisdiction of Organization, etc. Such Grantor will give prompt written notice to the Collateral Agent, of any change in its name or jurisdiction of organization (whether by merger of otherwise) (and in any event within 30 days of such change); provided that, promptly thereafter such Grantor shall deliver to the Collateral Agent copies (or other evidence of filing) of all additional filed financing statements and other documents reasonably necessary to maintain the validity, perfection and priority of the security interests created hereunder and other documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests as and to the extent provided for herein.


 
LEGAL_US_E # 155827293.3 30 1006148456v9 5.2.6 Notices. Such Grantor will advise the Administrative Agent promptly, in reasonable detail, of: (a) any Lien (other than security interests created hereby or Permitted Liens) on any of such Grantor’s ABL Priority Collateral which would materially adversely affect the ability of the Collateral Agent to exercise any of its remedies hereunder; and (b) the occurrence of any other event which would reasonably be expected to have a material adverse effect on the security interests in the ABL Priority Collateral created hereby. 5.2.7 Pledged Stock. In the case of each Grantor that is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Stock issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Collateral Agent promptly in writing of the occurrence of any of the events described in Subsection 5.3.1 with respect to the Pledged Stock issued by it and (iii) the terms of Subsections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Subsection 6.3(c) or 6.7 with respect to the Pledged Stock issued by it. 5.2.8 Accounts Receivable. (a) With respect to Accounts Receivable constituting ABL Priority Collateral, other than in the ordinary course of business or as permitted by the Loan Documents, such Grantor will not (i) grant any extension of the time of payment of any of such Grantor’s Accounts Receivable, (ii) compromise or settle any such Account Receivable for less than the full amount thereof, (iii) release, wholly or partially, any Person liable for the payment of any Account Receivable, (iv) allow any credit or discount whatsoever on any such Account Receivable or (v) amend, supplement or modify any Account Receivable unless such extensions, compromises, settlements, releases, credits or discounts would not reasonably be expected to materially adversely affect the value of the Accounts Receivable constituting ABL Priority Collateral taken as a whole. (b) Such Grantor will deliver to the Collateral Agent a copy of each material demand, notice or document received by it from any obligor under the Accounts Receivable constituting ABL Priority Collateral that disputes the validity or enforceability of more than 5% of the aggregate amount of the then outstanding Accounts Receivable. 5.2.9 Maintenance of Records. (a) Such Grantor will keep and maintain at its own cost and expense reasonably satisfactory and complete records of its Collateral, including, without limitation, a record of all payments received and all credits granted with respect to such Collateral; provided that with respect to the Term Loan Priority Collateral, the satisfactory maintenance of such records shall be determined in good faith by such Grantor or the Parent Borrower. (b) In the case of ABL Priority Collateral, such Grantor shall mark the records referred to in the preceding clause (a) to evidence this Agreement and the Liens and the security interests created hereby.


 
LEGAL_US_E # 155827293.3 31 1006148456v9 5.2.10 Acquisition of Intellectual Property. Concurrently with the delivery of the annual Compliance Certificate pursuant to Subsection 7.2(b) of the Credit Agreement, such Grantor will notify the Collateral Agent of any acquisition by such Grantor of (i) any registration of any material United States Copyright, Patent or Trademark or (ii) any exclusive rights under a material United States Copyright License, Patent License or Trademark License constituting Collateral, and shall take such actions as may be reasonably necessary (but only to the extent such actions are within such Grantor’s control) to perfect the security interest granted to the Collateral Agent and the other Secured Parties therein, to the extent provided herein in respect of any United States Copyright, Patent or Trademark constituting Collateral on the date hereof, by (x) the execution and delivery of an amendment or supplement to this Agreement (or amendments to any such agreement previously executed or delivered by such Grantor) and/or (y) the making of appropriate filings (I) of financing statements under the Uniform Commercial Code of any applicable jurisdiction and/or (II) in the United States Patent and Trademark Office, or with respect to Copyrights and Copyright Licenses, another applicable United States office). 5.2.11 [Reserved]. 5.2.12 Commercial Tort Actions. All Commercial Tort Actions of each Grantor in existence on the date of this Agreement in an amount of $7,500,000 or greater, known to such Grantor on the date hereof, are described in Schedule 7 hereto. If any Grantor shall at any time after the date of this Agreement acquire a Commercial Tort Action in an amount of $7,500,000, such Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement. 5.2.13 Deposit Accounts; Etc. Such Grantor shall take, or 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 breach of Subsection 4.16 of the Credit Agreement is caused by the failure to take such action or to refrain from taking such action by such Grantor or any of its Subsidiaries. 5.2.14 Protection of Trademarks. Such Grantor shall, with respect to any Trademarks that are material to the business of such Grantor, use commercially reasonable efforts not to cease the use of any of such Trademarks or fail to maintain the level of the quality of products sold and services rendered under any of such Trademarks at a level at least substantially consistent with the quality of such products and services as of the date hereof, and shall use commercially reasonable efforts to take all steps reasonably necessary to ensure that licensees of such Trademarks use such consistent standards of quality, except as would not reasonably be expected to have a Material Adverse Effect. 5.2.15 Protection of Intellectual Property. Subject to and except as permitted by the Term Loan Agreement as in effect on the date hereof, such Grantor shall use commercially reasonable efforts not to do any act or omit to do any act whereby any of the Intellectual Property that is material to the business of Grantor may lapse, expire, or become abandoned, or unenforceable, except as would not reasonably be expected to have a Material Adverse Effect.


 
LEGAL_US_E # 155827293.3 32 1006148456v9 5.2.16 Assignment of Letter-of-Credit Rights. In the case of any Letter-of-Credit Rights of any Grantor in any letter of credit exceeding $7,500,000 in value acquired following the Closing Date, such Grantor shall use its commercially reasonable efforts to promptly obtain the consent of the issuer thereof and any nominated person thereon to the assignment of the proceeds of the related letter of credit in accordance with Section 5-114(c) of the UCC. 5.3 Covenants of Each Pledgor. Each Pledgor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earlier to occur of (i) the Loans, any Reimbursement Obligations, and all other Obligations then due and owing shall have been paid in full in cash, no Letter of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized in a manner satisfactory to the applicable Issuing Lenders) and the Commitments shall have terminated, (ii) the sale or other disposition of all of the Capital Stock of such Pledgor (other than to Holdings, the Parent Borrower or any Restricted Subsidiary), or, if such Pledgor is a Subsidiary of the Parent Borrower, any other transaction or occurrence as a result of which such Pledgor ceases to be a Restricted Subsidiary of the Parent Borrower, in each case that is permitted under the Credit Agreement, (iii) such Pledgor becoming an Excluded Subsidiary or (iv) as to Holdings, Holdings is released from its obligations hereunder pursuant to Subsection 9.16(h). 5.3.1 Additional Shares. If such Pledgor shall, as a result of its ownership of its Pledged Stock, become entitled to receive or shall receive any stock certificate (including, without limitation, any stock certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), stock option or similar rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Pledgor shall accept the same as the agent of the Collateral Agent and the other Secured Parties, hold the same in trust for the Collateral Agent and the other Secured Parties and deliver the same forthwith to the Collateral Agent (who will hold the same on behalf of the Secured Parties), or the Term Loan Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, in the exact form received, duly indorsed by such Pledgor to the Collateral Agent, or the Term Loan Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor, to be held by the Collateral Agent, or the Term Loan Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, subject to the terms hereof, as additional collateral security for the Obligations (subject to Subsection 3.3 and provided that in no event shall there be pledged, nor shall any Pledgor be required to pledge, more than 65% of any series of the outstanding Capital Stock of any Foreign Subsidiary (other than a Foreign Subsidiary that is or becomes a Loan Party) pursuant to this Agreement). If an Event of Default shall have occurred and be continuing, any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer (except any liquidation or dissolution of any Subsidiary of the Parent Borrower in accordance with the Credit Agreement) shall be paid over to the Collateral Agent, or the Term Loan Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement to be held by the Collateral Agent, or


 
LEGAL_US_E # 155827293.3 33 1006148456v9 the Term Loan Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement subject to the terms hereof as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Collateral Agent, be delivered to the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, to be held by the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement subject to the terms hereof as additional collateral security for the Obligations, in each case except as otherwise provided by the Intercreditor Agreement. If any sums of money or property so paid or distributed in respect of the Pledged Stock shall be received by such Pledgor, such Pledgor shall, until such money or property is paid or delivered to the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement hold such money or property in trust for the Secured Parties, segregated from other funds of such Pledgor, as additional collateral security for the Obligations. 5.3.2 [Reserved]. 5.3.3 Pledged Notes. Such Pledgor shall, on the date of this Agreement (or on such later date upon which it becomes a party hereto pursuant to Subsection 9.15), deliver to the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, all Pledged Notes then held by such Pledgor (excluding any Pledged Note the principal amount of which does not exceed $7,500,000), endorsed in blank or, at the request of the Collateral Agent, endorsed to the Collateral Agent. Furthermore, within ten Business Days (or such longer period as may be agreed by the Collateral Agent in its sole discretion) after any Pledgor obtains a Pledged Note with a principal amount in excess of $7,500,000, such Pledgor shall cause such Pledged Note to be delivered to the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, endorsed in blank or, at the request of the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement, endorsed to the Collateral Agent, or the Term Loan Agent, or the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the Intercreditor Agreement. 5.3.4 Maintenance of Security Interest. Such Pledgor shall use commercially reasonable efforts to defend the security interest created by this Agreement in such Pledgor’s Pledged Collateral against the claims and demands of all Persons whomsoever. At any time and from time to time, upon the written request of the Collateral Agent and at the sole expense of such Pledgor, such Pledgor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such Pledgor provided further that the Parent Borrower or such Pledgor


 
LEGAL_US_E # 155827293.3 34 1006148456v9 will not be required to (x) take any action in any jurisdiction other than the United States of America, or required by the laws of any such jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of the United States of America or to perfect any security interests (or other Liens) in any Collateral (other than with respect to a Foreign Subsidiary which is a Subsidiary Guarantor as of the date hereof or becomes a Subsidiary Guarantor pursuant to Subsection 7.9(b) of the Credit Agreement), (y) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except (A) as required by Subsection 4.16 of the Credit Agreement and (B) in the case of Collateral that constitutes Capital Stock or intercompany notes in certificated form, delivering such Capital Stock or intercompany notes (in the case of intercompany notes, limited to any such note with a principal amount in excess of $7,500,000) to the Collateral Agent (or another Person as required under the Intercreditor Agreement) or (z) deliver landlord lien waivers, estoppels or collateral access letters. SECTION 6. REMEDIAL PROVISIONS 6.1 Certain Matters Relating to Accounts. (a) At any time and from time to time after the occurrence and during the continuance of an Event of Default, the Collateral Agent shall have the right to make test verifications of the Accounts Receivable constituting Collateral in any reasonable manner and through any reasonable medium that it reasonably considers advisable, and the relevant Grantor shall furnish all such assistance and information as the Collateral Agent may reasonably require in connection with such test verifications. At any time and from time to time after the occurrence and during the continuance of an Event of Default, upon the Collateral Agent’s reasonable request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others reasonably satisfactory to the Collateral Agent to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts Receivable constituting Collateral. (b) The Collateral Agent hereby authorizes each Grantor to collect such Grantor’s Accounts Receivable constituting Collateral and the Collateral Agent may curtail or terminate said authority at any time, without limiting the Collateral Agent’s rights under Subsection 4.16 of the Credit Agreement, after the occurrence and during the continuance of an Event of Default. If required by the Collateral Agent at any time, without limiting the Collateral Agent’s rights under Subsection 4.16 of the Credit Agreement, after the occurrence and during the continuance of an Event of Default, any Proceeds constituting payments or other cash proceeds of Accounts Receivables constituting Collateral, when collected by such Grantor, (i) shall be forthwith (and, in any event, within two (2) Business Days of receipt by such Grantor) deposited in, or otherwise transferred by such Grantor to, the Collateral Proceeds Account, subject to withdrawal by the Collateral Agent for the account of the Secured Parties only as provided in Subsection 6.5, and (ii) until so turned over, shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties, segregated from other funds of such Grantor. All Proceeds constituting collections or other cash proceeds of Accounts Receivable constituting Collateral while held by the Collateral Account Bank (or by any Grantor in trust for the benefit of the Collateral Agent and the other Secured Parties) shall continue to be collateral security for all of the Obligations and shall not constitute payment thereof until applied as hereinafter provided. At any time when an Event of Default has occurred and is continuing, at the Collateral


 
LEGAL_US_E # 155827293.3 35 1006148456v9 Agent’s election, each of the Collateral Agent and the Administrative Agent may apply all or any part of the funds on deposit in the Collateral Proceeds Account established by the relevant Grantor to the payment of the Obligations of such Grantor then due and owing, such application to be made as set forth in Subsection 6.5 hereof. So long as no Event of Default has occurred and is continuing, the funds on deposit in the Collateral Proceeds Account shall be remitted as provided in Subsection 6.1(d) hereof. (c) At any time and from time to time after the occurrence and during the continuance of an Event of Default, at the Collateral Agent’s request, each Grantor shall deliver to the Collateral Agent copies or, if required by the Collateral Agent for the enforcement thereof or foreclosure thereon, originals of all documents held by such Grantor evidencing, and relating to, the agreements and transactions which gave rise to such Grantor’s Accounts Receivable constituting Collateral, including, without limitation, all statements relating to such Grantor’s Accounts Receivable constituting Collateral and all orders, invoices and shipping receipts. (d) So long as no Event of Default has occurred and is continuing, the Collateral Agent shall instruct the Collateral Account Bank to promptly remit any funds on deposit in each Grantor’s Collateral Proceeds Account to a Blocked Account of such Grantor, maintained in compliance with the provisions of Subsection 4.16 of the Credit Agreement. In the event that an Event of Default has occurred and is continuing, the Collateral Agent and the Grantors agree that the Collateral Agent, at its option, may require that each Collateral Proceeds Account of each Grantor be established at the Collateral Agent. Subject to Subsection 4.16 of the Credit Agreement, each Grantor shall have the right, at any time and from time to time, to withdraw such of its own funds from its own Blocked Accounts, and to maintain such balances in its Blocked Accounts, as it shall deem to be necessary or desirable. 6.2 Communications with Obligors; Grantors Remain Liable (a) The Collateral Agent in its own name or in the name of others, may at any time and from time to time after the occurrence and during the continuance of an Event of Default, communicate with obligors under the Accounts Receivable constituting Collateral and parties to the Contracts (in each case, to the extent constituting Collateral) to verify with them to the Collateral Agent’s satisfaction the existence, amount and terms of any Accounts Receivable or Contracts. (b) Upon the request of the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default, each Grantor shall notify obligors on such Grantor’s Accounts Receivable and parties to such Grantor’s Contracts (in each case, to the extent constituting Collateral) that such Accounts Receivable and such Contracts have been assigned to the Collateral Agent, for the benefit of the Secured Parties, and that payments in respect thereof shall be made directly to the Collateral Agent. (c) Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of such Grantor’s Accounts Receivable to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. None of the Collateral Agent, the Administrative Agent or any other Secured Party shall have any obligation or liability under any Account


 
LEGAL_US_E # 155827293.3 36 1006148456v9 Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating thereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Account Receivable (or any agreement giving rise thereto) to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times. 6.3 Pledged Stock (a) Unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given notice to the relevant Pledgor of the Collateral Agent’s intent to exercise its corresponding rights pursuant to Subsection 6.3(b), each Pledgor shall be permitted to receive all cash dividends and distributions paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes, and to exercise all voting and corporate rights with respect to the Pledged Stock. (b) If an Event of Default shall occur and be continuing and the Collateral Agent shall give written notice of its intent to exercise such rights to the relevant Pledgor or Pledgors (which notice may be delivered substantially concurrently with any such exercise), (i) the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of the Intercreditor Agreement, shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Obligations of the relevant Pledgor as provided in the Credit Agreement consistent with Subsection 6.5, and (ii) any or all of the Pledged Stock shall be registered in the name of the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent or the respective nominee thereof, and the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable or acting through its respective nominee, if applicable, in accordance with the terms of the Intercreditor Agreement, may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise (including, for the avoidance of doubt, by written consent in lieu of a meeting) and (y) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the relevant Pledgor or the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of the Intercreditor Agreement, of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of the Intercreditor Agreement, may reasonably determine), all without liability to the maximum extent permitted by applicable law (other than


 
LEGAL_US_E # 155827293.3 37 1006148456v9 for its gross negligence or willful misconduct) except to account for property actually received by it, but the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of the Intercreditor Agreement, shall have no duty, to any Pledgor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing, provided that the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of the Intercreditor Agreement, shall not exercise any voting or other consensual rights pertaining to the Pledged Stock in any way that would constitute an exercise of the remedies described in Subsection 6.6 other than in accordance with Subsection 6.6. (c) Each Pledgor hereby authorizes and instructs each Issuer or maker of any Pledged Securities pledged by such Pledgor hereunder to (i) comply with any instruction received by it from the Collateral Agent in writing with respect to Capital Stock in such Issuer that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Pledgor, and each Pledgor agrees that each Issuer or maker shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Securities directly to the Collateral Agent. 6.4 Proceeds to be Turned Over to the Collateral Agent. In addition to the rights of the Collateral Agent specified in Subsection 6.1 with respect to payments of Accounts Receivable constituting Collateral, if an Event of Default shall occur and be continuing, and the Collateral Agent shall have instructed any Grantor to do so, all Proceeds of Collateral received by such Grantor consisting of cash, checks and other Cash Equivalent items shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties hereto, or the Term Loan Agent and the other Secured Parties (as defined in the Term Loan Collateral Agreement) or any Additional Agent and the other applicable Additional Secured Parties (as defined in the Intercreditor Agreement), or the applicable Collateral Representative, as applicable, in accordance with the terms of the Intercreditor Agreement, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent, or the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of the Intercreditor Agreement (or their respective agents appointed for purposes of perfection), in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, the Term Loan Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the terms of the Intercreditor Agreement, if required). All Proceeds of Collateral received by the Collateral Agent hereunder shall be held by the Collateral Agent in the relevant Collateral Proceeds Account maintained under its sole dominion and control. All Proceeds of Collateral while held by the Collateral Agent in such Collateral Proceeds Account (or by the relevant Grantor in trust for the Collateral Agent and the other Secured Parties) shall continue to be held as collateral security for all the Obligations of such Grantor and shall not constitute payment thereof until applied as provided in Subsection 6.5. 6.5 Application of Proceeds. It is agreed that if an Event of Default shall occur and be continuing, any and all Proceeds of the relevant Granting Party’s Collateral (as defined in


 
LEGAL_US_E # 155827293.3 38 1006148456v9 the Credit Agreement) received by the Collateral Agent (whether from the relevant Granting Party or otherwise) shall be held by the Collateral Agent for the benefit of the Secured Parties as collateral security for the Obligations of the relevant Granting Party (whether matured or unmatured), and/or then or at any time thereafter may, in the sole discretion of the Collateral Agent, subject to the Intercreditor Agreement, shall be applied by the Collateral Agent against the Obligations of the relevant Granting Party then due and owing in the order of priority set forth in the Credit Agreement. 6.6 Code and Other Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations to the extent permitted by applicable law, all rights and remedies of a secured party under the Code and under any other applicable law and in equity. Without limiting the generality of the foregoing, to the extent permitted by applicable law, the Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Granting Party or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances, forthwith collect, receive, appropriate and realize upon the Security Collateral, or any part thereof, and/or may forthwith, subject to any existing reserved rights or licenses, sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Security Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Collateral Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. To the extent permitted by law, the Collateral Agent or any other Secured Party shall have the right, upon any such sale or sales, to purchase the whole or any part of the Security Collateral so sold, free of any right or equity of redemption in such Granting Party, which right or equity is hereby waived and released. Each Granting Party further agrees, at the Collateral Agent’s request (subject to the Intercreditor Agreement), to assemble the Security Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such Granting Party’s premises or elsewhere. The Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Subsection 6.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Security Collateral or in any way relating to the Security Collateral or the rights of the Collateral Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations of the relevant Granting Party then due and owing, in the order of priority specified in Subsection 6.5 above, and only after such application and after the payment by the Collateral Agent of any other amount required by any provision of law, including, without limitation, Section 9-615(a)(3) of the Code, need the Collateral Agent account for the surplus, if any, to such Granting Party. To the extent permitted by applicable law, (i) such Granting Party waives all claims, damages and demands it may acquire against the Collateral Agent or any other Secured Party arising out of the repossession, retention or sale of the Security Collateral, other than any such claims, damages and demands that may arise from


 
LEGAL_US_E # 155827293.3 39 1006148456v9 the gross negligence or willful misconduct of any of the Collateral Agent or such other Secured Party (as determined by a court of competent jurisdiction in a final and non-appealable decision), and (ii) if any notice of a proposed sale or other disposition of Security Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition. 6.7 Registration Rights (a) If the Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Subsection 6.6, and if in the reasonable opinion of the Collateral Agent it is necessary or reasonably advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Pledgor will use its reasonable best efforts to cause the Issuer thereof to (i) execute and deliver, and use its reasonable best efforts to cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the reasonable opinion of the Collateral Agent, necessary or advisable to register such Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its reasonable best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of not more than one year from the date of the first public offering of such Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the reasonable opinion of the Collateral Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Such Pledgor agrees to use its reasonable best efforts to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all states and the District of Columbia that the Collateral Agent shall reasonably designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) that will satisfy the provisions of Section 11(a) of the Securities Act. (b) Such Pledgor recognizes that the Collateral Agent may be unable to effect a public sale of any or all such Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Such Pledgor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, to the extent permitted by applicable law, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall not be under any obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so. (c) Such Pledgor agrees to use its reasonable best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of such Pledged Stock pursuant to this Subsection 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Such Pledgor further agrees that a breach of any of the covenants contained in this Subsection 6.7 will cause irreparable injury to the


 
LEGAL_US_E # 155827293.3 40 1006148456v9 Collateral Agent and the Lenders, that the Collateral Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Subsection 6.7 shall be specifically enforceable against such Pledgor, and to the extent permitted by applicable law, such Pledgor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred or is continuing under the Credit Agreement. 6.8 Waiver; Deficiency. Each Granting Party shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Security Collateral are insufficient to pay in full, the Loans, Reimbursement Obligations constituting Obligations of such Granting Party and, to the extent then due and owing, all other Obligations of such Granting Party and the reasonable fees and disbursements of any attorneys employed by the Collateral Agent or any other Secured Party to collect such deficiency. 6.9 License. Each Granting Party hereby grants to the Collateral Agent a royalty-free license and right to use the Intellectual Property, including but not limited to, any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, and advertising matter, whether owned by such Granting Party or with respect to which such Granting Party has rights under license, sublicense, or other agreements (including any Intellectual Property license), but only to the extent (i) such license, sublicense or agreement does not prohibit such license to or use by the Collateral Agent, and (ii) such Grantor will not be in default under such license, sublicense, or other agreement as a result of such license to or use by the Collateral Agent, solely for the purposes of preparing for sale, advertising for sale and selling or otherwise disposing of any Collateral after the occurrence of an Event of Default that is continuing, and each Granting Party’s rights under all licenses and all franchise agreements shall inure to the benefit of Collateral Agent. SECTION 7. THE COLLATERAL AGENT 7.1 Collateral Agent’s Appointment as Attorney-in-Fact, etc. (a) Each Granting Party hereby irrevocably constitutes and appoints the Collateral Agent and any authorized officer or agent thereof, 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 Granting Party and in the name of such Granting Party or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be reasonably necessary or desirable to accomplish the purposes of this Agreement to the extent permitted by applicable law, provided that the Collateral Agent agrees not to exercise such power except upon the occurrence and during the continuance of any Event of Default, and in accordance with and subject to the Intercreditor Agreement. Without limiting the generality of the foregoing, at any time when an Event of Default has occurred and is continuing (in each case to the extent permitted by applicable law and subject to the Intercreditor Agreement), (x) each Pledgor hereby gives the Collateral Agent the power and right, on behalf of such Pledgor, without notice or assent by such Pledgor, to execute, in connection with any sale provided for in Subsection 6.6(a) or 6.7, any indorsements, assessments or other instruments of conveyance or transfer with respect to such Pledgor’s Pledged Collateral, and (y) each Grantor hereby gives the Collateral Agent the power and right,


 
LEGAL_US_E # 155827293.3 41 1006148456v9 on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following: (i) in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Account Receivable of such Grantor that constitutes Collateral or with respect to any other Collateral of such Grantor and file any claim or take any other action or institute any proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any and all such moneys due under any Account Receivable of such Grantor that constitutes Collateral or with respect to any other Collateral of such Grantor whenever payable; (ii) in the case of any Copyright, Patent, or Trademark constituting Collateral of such Grantor, execute and deliver any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to such Grantor to evidence the Collateral Agent’s and the Lenders’ security interest in such Copyright, Patent, or Trademark and the goodwill and general intangibles of such Grantor relating thereto or represented thereby, and such Grantor hereby consents to the non-exclusive royalty free use by the Collateral Agent of any Copyright, Patent or Trademark owned by such Grantor included in the Collateral for the purposes of disposing of any ABL Priority Collateral; (iii) pay or discharge taxes and Liens, other than Liens permitted under this Agreement or the other Loan Documents, levied or placed on the Collateral of such Grantor, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof; and (iv) (A) direct any party liable for any payment under any of the Collateral of such Grantor to make payment of any and all moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; (B) ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral of such Grantor; (C) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral of such Grantor; (D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral of such Grantor or any portion thereof and to enforce any other right in respect of any Collateral of such Grantor; (E) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral of such Grantor; (F) settle, compromise or adjust any such suit, action or proceeding described in clause (E) above and, in


 
LEGAL_US_E # 155827293.3 42 1006148456v9 connection therewith, to give such discharges or releases as the Collateral Agent may deem appropriate; (G) subject to any existing reserved rights or licenses, assign any Copyright, Patent or Trademark constituting Collateral of such Grantor (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (H) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral of such Grantor as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral of such Grantor and the Collateral Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do. (c) The reasonable expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Subsection 7.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due ABR Loans that are Revolving Credit Loans under the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Granting Party, shall be payable by such Granting Party to the Collateral Agent on demand. (d) Each Granting Party hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable as to the relevant Granting Party until this Agreement is terminated as to such Granting Party, and the security interests in the Security Collateral of such Granting Party created hereby are released. 7.2 Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Security Collateral in its possession, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. None of the Collateral Agent or any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Security Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Security Collateral upon the request of any Granting Party or any other Person or, except as otherwise provided herein, to take any other action whatsoever with regard to the Security Collateral or any part thereof. The powers conferred on the Collateral Agent and the other Secured Parties hereunder are solely to protect the Collateral Agent’s and the other Secured Parties’ interests in the Security Collateral and shall not impose any duty upon the Collateral Agent or any other Secured Party to exercise any such powers. The Collateral Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and to the maximum extent permitted by applicable law, neither they nor any of their officers, directors, employees or agents shall be responsible to any Granting Party for any act or failure to act hereunder, except as otherwise provided herein or for their own gross negligence or


 
LEGAL_US_E # 155827293.3 43 1006148456v9 willful misconduct (as determined by a court of competent jurisdiction in a final and non- appealable decision). 7.3 Financing Statements. Pursuant to any applicable law, each Granting Party authorizes the Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to such Granting Party’s Security Collateral without the signature of such Granting Party in such form and in such filing offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent under this Agreement. Each Granting Party authorizes the Collateral Agent to use any collateral description reasonably determined by the Collateral Agent, including, without limitation, the collateral description “all personal property” or “all assets” or words of similar meaning in any such financing statements. The Collateral Agent agrees to use its commercially reasonable efforts to notify the relevant Granting Party of any financing or continuation statement filed by it, provided that any failure to give such notice shall not affect the validity or effectiveness of any such filing. 7.4 Authority of Collateral Agent. Each Granting Party acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement or any amendment, supplement or other modification of this Agreement shall, as between the Collateral Agent and the Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Granting Parties, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Granting Party shall be under any obligation, or entitlement, to make any inquiry respecting such authority. 7.5 Right of Inspection. Upon reasonable written advance notice to any Grantor and as often as may reasonably be desired, or at any time and from time to time after the occurrence and during the continuation of an Event of Default, the Collateral Agent shall have access at reasonable times during normal business hours to all the books, correspondence and records of such Grantor, and the Collateral Agent and its representatives may examine the same, and to the extent reasonable take extracts therefrom and make photocopies thereof, and such Grantor agrees to render to the Collateral Agent at such Grantor’s reasonable cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. The Collateral Agent and its representatives shall also have the right, upon reasonable advance written notice to such Grantor subject to any lease restrictions, to enter during normal business hours into and upon any premises owned, leased or operated by such Grantor where any of such Grantor’s Inventory or Equipment is located for the purpose of inspecting the same, observing its use or otherwise protecting its interests therein to the extent not inconsistent with the provisions of the Credit Agreement.


 
LEGAL_US_E # 155827293.3 44 1006148456v9 SECTION 8. NON-LENDER SECURED PARTIES 8.1 Rights to Collateral (a) The Non-Lender Secured Parties shall not have any right whatsoever to do any of the following: (i) exercise any rights or remedies with respect to the Collateral (such term, as used in this Section 8, having the meaning assigned to it in the Credit Agreement) or to direct the Collateral Agent to do the same, including, without limitation, the right to (A) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, (B) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election, notify account debtors or make collections with respect to all or any portion of the Collateral or (C) release any Granting Party under this Agreement or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; (ii) demand, accept or obtain any Lien on any Collateral (except for Liens arising under, and subject to the terms of, this Agreement); (iii) vote in any Bankruptcy Case or similar proceeding in respect of Holdings or any of its Subsidiaries (any such proceeding, for purposes of this clause (a), a “Bankruptcy”) with respect to, or take any other actions concerning the Collateral; (iv) receive any proceeds from any sale, transfer or other disposition of any of the Collateral (except in accordance with this Agreement); (v) oppose any sale, transfer or other disposition of the Collateral; (vi) object to any debtor-in-possession financing in any Bankruptcy which is provided by one or more Lenders among others (including on a priming basis under Section 364(d) of the Bankruptcy Code); (vii) object to the use of cash collateral in respect of the Collateral in any Bankruptcy; or (viii) seek, or object to the Lenders seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy. (b) Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, agrees that in exercising rights and remedies with respect to the Collateral, the Collateral Agent and the Lenders, with the consent of the Collateral Agent, may enforce the provisions of the Security Documents and exercise remedies thereunder and under any other Loan Documents (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment. Such exercise and enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction. The Non-Lender Secured Parties by their acceptance of the benefits of this Agreement and the other Security Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral. Whether or not a Bankruptcy Case has been commenced, the Non-Lender Secured Parties shall be deemed to have consented to any sale or other disposition of any property, business or assets of Holdings or any of its Subsidiaries and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith. (c) Notwithstanding any provision of this Subsection 8.1, the Non- Lender Secured Parties shall be entitled subject to the Intercreditor Agreement to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleadings (A) in order to prevent any Person from seeking to foreclose on


 
LEGAL_US_E # 155827293.3 45 1006148456v9 the Collateral or supersede the Non-Lender Secured Parties’ claim thereto or (B) in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Non-Lender Secured Parties. Each Non- Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees to be bound by and to comply with each applicable Intercreditor Agreement and authorizes the Collateral Agent to enter into the Interest Agreement on its behalf. (d) Each Non-Lender Secured Party, by its acceptance of the benefit of this Agreement, agrees that the Collateral Agent and the Lenders may deal with the Collateral, including any exchange, taking or release of Collateral, may change or increase the amount of the Borrower Obligations and/or the Guarantor Obligations, and may release any Granting Party from its Obligations hereunder, all without any liability or obligation (except as may be otherwise expressly provided herein) to the Non-Lender Secured Parties. 8.2 Appointment of Agent. Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, shall be deemed irrevocably to make, constitute and appoint the Collateral Agent, as agent under the Credit Agreement (and all officers, employees or agents designated by the Collateral Agent) as such Person’s true and lawful agent and attorney-in-fact, and in such capacity, the Collateral Agent shall have the right, with power of substitution for the Non-Lender Secured Parties and in each such Person’s name or otherwise, to effectuate any sale, transfer or other disposition of the Collateral. It is understood and agreed that the appointment of the Collateral Agent as the agent and attorney-in-fact of the Non-Lender Secured Parties for the purposes set forth herein is coupled with an interest and is irrevocable. It is understood and agreed that the Collateral Agent has appointed the Administrative Agent as its agent for purposes of perfecting certain of the security interests created hereunder and for otherwise carrying out certain of its obligations hereunder. 8.3 Waiver of Claims. To the maximum extent permitted by law, each Non- Lender Secured Party waives any claim it might have against the Collateral Agent or the Lenders with respect to, or arising out of, any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of the Collateral Agent or the Lenders or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Loan Documents or any transaction relating to the Collateral (including, without limitation, any such exercise described in Subsection 8.1(b) above), except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person (as determined by a court of competent jurisdiction in a final and non-appealable decision). To the maximum extent permitted by applicable law, none of the Collateral Agent or any Lender or any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Holdings, any Subsidiary of Holdings, any Non-Lender Secured Party or any other Person or to take any other action or forbear from doing so whatsoever with regard to the Collateral or any part thereof, except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person (as determined by a court of competent jurisdiction in a final and non-appealable decision).


 
LEGAL_US_E # 155827293.3 46 1006148456v9 8.4 Bank Products Affiliates, Hedging Affiliates, Management Credit Affiliates and Vendor Affiliates. The Parent Borrower may from time to time designate a Person as a “Hedging Affiliate”, “Bank Products Affiliate”, “Management Credit Affiliate” or “Vendor Affiliate” for purposes hereof by written notice to the Collateral Agent; provided that, at the time of such designation, the obligations of the relevant Grantor under the applicable Interest Rate Protection Agreement, Permitted Hedging Agreement, Bank Products Agreement, Management Loans or Vendor Financing Arrangement (as the case may be) have not been designated as Term Loan Obligations (as defined in the Intercreditor Agreement) or Additional Obligations. Following any such designation by the Parent Borrower, the Parent Borrower shall not rescind such designation without (x) the prior written consent of the applicable “Hedging Affiliate”, “Bank Products Affiliate”, “Management Credit Affiliate” or “Vendor Affiliate” or (y) with respect to any such Person described in clause (x) which is not a Lender or an Affiliate of a Lender, evidence satisfactory to the Collateral Agent that the obligations owing to any such Person have been satisfied and discharged in full. As of the Closing Date, each of Wells Fargo Bank, National Association and each of its affiliates constituting a Hedging Party or Cash Management Party shall be “Hedging Affiliates” or “Bank Products Affiliates”, as applicable. SECTION 9. MISCELLANEOUS 9.1 Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by each affected Granting Party and the Collateral Agent, provided that (a) any provision of this Agreement imposing obligations on any Granting Party may be waived by the Collateral Agent in a written instrument executed by the Collateral Agent and (b) notwithstanding anything to the contrary in Subsection 11.1 of the Credit Agreement, no such waiver and no such amendment or modification shall amend, modify or waive the definition of “Secured Party” or Subsection 6.5 if such waiver, amendment, or modification would adversely affect a Secured Party without the written consent of each such affected Secured Party. For the avoidance of doubt, it is understood and agreed that any amendment, amendment and restatement, waiver, supplement or other modification of or to the Intercreditor Agreement that would have the effect, directly or indirectly, through any reference herein to the Intercreditor Agreement or otherwise, of waiving, amending, supplementing or otherwise modifying this Agreement, or any term or provision hereof, or any right or obligation of any Granting Party hereunder or in respect hereof, shall not be given such effect except pursuant to a written instrument executed by each affected Granting Party and the Collateral Agent in accordance with this Subsection 9.1. 9.2 Notices. All notices, requests and demands to or upon the Collateral Agent or any Granting Party hereunder shall be effected in the manner provided for in Subsection 11.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Granting Party shall be addressed to such Granting Party at its notice address set forth on Schedule 1, unless and until such Granting Party shall change such address by notice to the Collateral Agent and the Administrative Agent given in accordance with Subsection 11.2 of the Credit Agreement.


 
LEGAL_US_E # 155827293.3 47 1006148456v9 9.3 No Waiver by Course of Conduct; Cumulative Remedies. None of the Collateral Agent or any other Secured Party shall by any act (except by a written instrument pursuant to Subsection 9.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Collateral Agent or such other Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 9.4 Enforcement Expenses; Indemnification (a) Each Granting Party jointly and severally agrees to pay or reimburse each Secured Party and the Collateral Agent for all their respective reasonable costs and expenses incurred in collecting against such Granting Party under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement against such Granting Party and the other Loan Documents to which such Granting Party is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Secured Parties, the Collateral Agent and the Administrative Agent. (b) Each Grantor jointly and severally agrees to pay, and to save the Collateral Agent, the Administrative Agent and the other Secured Parties harmless from, (x) any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other similar taxes which may be payable or determined to be payable with respect to any of the Security Collateral or in connection with any of the transactions contemplated by this Agreement and (y) any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement (collectively, the “indemnified liabilities”), in each case to the extent the Parent Borrower would be required to do so pursuant to Subsection 11.5 of the Credit Agreement, and in any event excluding any taxes or other indemnified liabilities arising from gross negligence, bad faith or willful misconduct of the Collateral Agent or any other Secured Party (as determined by a court of competent jurisdiction in a final and non-appealable decision). (c) The agreements in this Subsection 9.4 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents. 9.5 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Granting Parties, the Collateral Agent and the Secured Parties and their respective successors and assigns; provided that no Granting Party may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent, except as permitted by the Credit Agreement.


 
LEGAL_US_E # 155827293.3 48 1006148456v9 9.6 Set-Off. Each Granting Party hereby irrevocably authorizes each of the Administrative Agent and the Collateral Agent and each other Secured Party at any time and from time to time without notice to such Granting Party or any other Granting Party, any such notice being expressly waived by each Granting Party, to the extent permitted by applicable law, upon the occurrence and during the continuance of an Event of Default so long as any amount remains unpaid after it becomes due and payable by such Granting Party hereunder, to set-off and appropriate and apply against any such amount any and all deposits (general or special, time or demand, provisional or final) (other than the Collateral Proceeds Account), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Collateral Agent, the Administrative Agent or such other Secured Party to or for the credit or the account of such Granting Party, or any part thereof in such amounts as the Collateral Agent, the Administrative Agent or such other Secured Party may elect. The Collateral Agent, the Administrative Agent and each other Secured Party shall notify such Granting Party promptly of any such set-off and the application made by the Collateral Agent, the Administrative Agent or such other Secured Party of the proceeds thereof; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Collateral Agent, the Administrative Agent and each other Secured Party under this Subsection 9.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent, the Administrative Agent or such other Secured Party may have. 9.7 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 9.8 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided that, with respect to any Pledged Stock issued by a Foreign Subsidiary, all rights, powers and remedies provided in this Agreement may be exercised only to the extent that they do not violate any provision of any law, rule or regulation of any Governmental Authority applicable to any such Pledged Stock or affecting the legality, validity or enforceability of any of the provisions of this Agreement against the Pledgor (such laws, rules or regulations, “Applicable Law”) and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any Applicable Law. 9.9 Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof. 9.10 Integration. This Agreement and the other Loan Documents represent the entire agreement of the Granting Parties, the Collateral Agent and the other Secured Parties with respect to the subject matter hereof, and there are no promises, undertakings, representations or


 
LEGAL_US_E # 155827293.3 49 1006148456v9 warranties by the Granting Parties, the Collateral Agent or any other Secured Party relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents. 9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 9.12 Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally: (b) submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party to the exclusive general jurisdiction of the Supreme Court of the State of New York for the County of New York (the “New York Supreme Court”), and the United States District Court for the Southern District of New York (the “Federal District Court,” and together with the New York Supreme Court, the “New York Courts”) and appellate courts from either of them; provided that nothing in this Agreement shall be deemed or operate to preclude (i) the Collateral Agent from bringing suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations (in which case any party shall be entitled to assert any claim or defense, including any claim or defense that this Subsection 9.12 would otherwise require to be asserted in a legal action or proceeding in a New York Court), or to enforce a judgment or other court order in favor of the Administrative Agent or the Collateral Agent, (ii) any party from bringing any legal action or proceeding in any jurisdiction for the recognition and enforcement of any judgment, (iii) if all such New York Courts decline jurisdiction over any Person, or decline (or in the case of the Federal District Court, lack) jurisdiction over any subject matter of such action or proceeding, a legal action or proceeding may be brought with respect thereto in another court having jurisdiction and (iv) in the event a legal action or proceeding is brought against any party hereto or involving any of its assets or property in another court (without any assistance by such party or any of its Subsidiaries or Affiliates), such party from asserting a claim or defense (including any claim or defense that this Subsection 9.12(a) would otherwise require to be asserted in a legal proceeding in a New York Court) in any such action or proceeding; (c) 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; (d) 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 party at its address referred to in Subsection 9.2 or at such other address of which the Collateral Agent and the Administrative Agent (in the case of


 
LEGAL_US_E # 155827293.3 50 1006148456v9 any other party hereto) or the Parent Borrower (in the case of the Collateral Agent and the Administrative Agent) shall have been notified pursuant thereto; (e) agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or (subject to clause (a) above) shall limit the right to sue in any other jurisdiction; and (f) 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 any consequential or punitive damages. 9.13 Acknowledgments. Each Granting Party hereby acknowledges that: (b) it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party; (c) none of the Collateral Agent, the Administrative Agent or any other Secured Party has any fiduciary relationship with or duty to any Granting Party arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Granting Parties, on the one hand, and the Collateral Agent, the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and (d) no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Granting Parties and the Secured Parties. 9.14 WAIVER OF JURY TRIAL. EACH PARTY HERETO 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. 9.15 Additional Granting Parties. Each new Subsidiary of the Parent Borrower that is required to become a party to this Agreement pursuant to Subsection 7.9(b) of the Credit Agreement shall become a Granting Party for all purposes of this Agreement upon execution and delivery by such Subsidiary of an Assumption Agreement substantially in the form of Annex 2 hereto. Each existing Granting Party that is required to become a Pledgor with respect to Capital Stock of any new Subsidiary of the Parent Borrower pursuant to Subsection 7.9(b) of the Credit Agreement shall become a Pledgor with respect thereto upon execution and delivery by such Granting Party of a Supplemental Agreement substantially in the form of Annex 3 hereto. 9.16 Releases. (a) At such time as the Loans, the Reimbursement Obligations and the other Obligations (other than any Obligations owing to a Non-Lender Secured Party) then due and owing shall have been paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding (except for Letters of Credit that have been cash collateralized or otherwise provided for in a manner reasonably satisfactory to the applicable Issuing Lenders), all Security Collateral shall be released from the Liens created hereby, and this


 
LEGAL_US_E # 155827293.3 51 1006148456v9 Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Granting Party hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Security Collateral shall revert to the Granting Parties. At the request and sole expense of any Granting Party following any such termination, the Collateral Agent shall execute, acknowledge and deliver to such Granting Party any Security Collateral held by the Collateral Agent hereunder, and execute, acknowledge and deliver to such Granting Party such releases, instruments and other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as such Granting Party shall reasonably request to evidence such termination. (b) Upon any sale or other disposition of Security Collateral permitted by the Credit Agreement (other than any sale or disposition to another Grantor), the Lien pursuant to this Agreement on such sold or disposed of Security Collateral shall be automatically released. In connection with the sale or other disposition of all of the Capital Stock of any Granting Party (other than to Holdings, the Parent Borrower or any Restricted Subsidiary) or any other transaction or occurrence as a result of which such Granting Party ceases to be a Restricted Subsidiary of the Parent Borrower, or the sale or other disposition of Security Collateral (other than a sale or disposition to another Grantor) permitted under the Credit Agreement, the Collateral Agent shall, upon receipt from the Parent Borrower of a written request for the release of such Granting Party from its Guarantee or the release of the Security Collateral subject to such sale, disposition or other transaction, identifying such Granting Party or the relevant Security Collateral, together with a certification by the Parent Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents, deliver to the Parent Borrower or the relevant Granting Party, at the sole cost and expense of such Granting Party, any Security Collateral of such relevant Granting Party held by the Collateral Agent, or the Security Collateral subject to such sale or disposition (as applicable), and, at the sole cost and expense of such Granting Party, execute, acknowledge and deliver to the Parent Borrower or such Granting Party such releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as the Parent Borrower or such Granting Party shall reasonably request (x) to evidence or effect the release of such Granting Party from its Guarantee (if any) and of the Liens created hereby (if any) on such Granting Party’s Security Collateral or (y) to evidence the release of the Security Collateral subject to such sale or disposition. (c) Upon any Granting Party becoming an Excluded Subsidiary in accordance with the provisions of the Credit Agreement, the Lien pursuant to this Agreement on all Security Collateral of such Granting Party (if any) shall be automatically released, and the Guarantee (if any) of such Granting Party, and all obligations of such Granting Party hereunder, shall, terminate, all without delivery of any instrument or performance of any act by any party, and the Collateral Agent shall, upon the request of the Parent Borrower or such Granting Party, deliver to the Parent Borrower or such Granting Party any Security Collateral of such Granting Party held by the Collateral Agent hereunder and the Collateral Agent and the Administrative Agent shall execute, acknowledge and deliver to the Parent Borrower or such Granting Party (at the sole cost and expense of the Parent Borrower or such Granting Party) all releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, necessary or reasonably desirable for the release of such


 
LEGAL_US_E # 155827293.3 52 1006148456v9 Granting Party from its Guarantee (if any) or the Liens created hereby (if any) on such Granting Party’s Security Collateral, as applicable, as the Borrower or such Granting Party may reasonably request. (d) Upon any Security Collateral being or becoming an Excluded Asset, the Lien pursuant to this Agreement on such Security Collateral shall be automatically released. At the request and sole expense of any Granting Party, the Collateral Agent shall deliver such Security Collateral (if held by the Collateral Agent) to such Granting Party and execute, acknowledge and deliver to such Granting Party such releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as such Granting Party shall reasonably request to evidence such release. (e) Notwithstanding any other provision of this Agreement or any other Loan Document, Holdings shall have the right to transfer all of the Capital Stock of the Parent Borrower held by it (including, for the avoidance of doubt, any such transfer in connection with any change in the Parent Borrower’s legal structure to a corporation, limited liability company or other entity) to any Parent Entity (including Holdings) or any Subsidiary of any Parent Entity (a “Successor Holding Company”) that (i) is a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and (ii) assumes all of the obligations of Holdings under this Agreement and the other Loan Documents to which Holdings is a party by executing and delivering to the Administrative Agent and the Collateral Agent a joinder substantially in the form of Annex 4 hereto, or one or more other documents or instruments, together with a financing statement in appropriate form for filing under the Uniform Commercial Code of the relevant jurisdiction, in form and substance reasonably satisfactory to the Collateral Agent, upon which (x) such Successor Holding Company will succeed to, and be substituted for, and may exercise every right and power of Holdings under this Agreement and the other Loan Documents, and shall thereafter be deemed to be “Holdings” for purposes of this Agreement and the other Loan Documents, (y) Holdings, as predecessor to the Successor Holding Company (“Predecessor Holding Company”), shall be irrevocably and unconditionally released from its Guarantee and all other obligations hereunder and under the other Loan Documents, and (z) the Lien pursuant to this Agreement on all Security Collateral of Predecessor Holding Company, and any Lien pursuant to any other Loan Document on any other property or assets of Predecessor Holding Company, shall be automatically released (it being understood that such transfer of Capital Stock of the Parent Borrower to and assumption of rights and obligations of Holdings by such Successor Holding Company shall not constitute a Change of Control under clause (ii) of the definition of “Change of Control” in the Credit Agreement). At the request and the sole expense of Predecessor Holding Company or the Parent Borrower, the Collateral Agent shall deliver to Predecessor Holding Company any Security Collateral and other property or assets of Predecessor Holding Company held by the Collateral Agent that is not required to be pledged under this Agreement or any other Loan Document by Successor Holding Company (including the Capital Stock of the Parent Borrower) and execute, acknowledge and deliver to Predecessor Holding Company (subject to Subsection 7.2, without recourse and without representation or warranty) such releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as Predecessor Holding Company or the Parent Borrower shall reasonably request to evidence or effect the release of Predecessor Holding Company from its Guarantee and other obligations hereunder and


 
LEGAL_US_E # 155827293.3 53 1006148456v9 under the other Loan Documents, and the release of the Liens created hereby on Predecessor Holding Company’s Security Collateral (other than the Capital Stock of the Parent Borrower) and by any other Loan Document on any other property or assets of Predecessor Holding Company. (f) So long as no Event of Default has occurred and is continuing, the Collateral Agent and the Administrative Agent shall at the direction of any applicable Granting Party return to such Granting Party any proceeds or other property received by it during any Event of Default pursuant to either Subsection 5.3.1 or 6.4 and not otherwise applied in accordance with Subsection 6.5. (g) The Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Security Collateral by it in accordance with (or which the Collateral Agent in good faith believes to be in accordance with) this Subsection 9.16. (h) Upon the listing of the Capital Stock of the Parent Borrower on a nationally recognized stock exchange in the U.S. (whether through a Qualified IPO or otherwise), the Lien pursuant to this Agreement on all of the shares of Capital Stock of the Parent Borrower, as well as any other shares, stock certificates, options or rights of any nature whatsoever in respect of the capital stock of the Parent Borrower, owned by Holdings shall be automatically released, and the Guarantee of Holdings, and all obligations of Holdings hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and the Administrative Agent and the Collateral Agent shall, upon the request of the Parent Borrower or Holdings, deliver to the Parent Borrower, or Holdings (subject to Subsection 7.2, without recourse and without representation or warranty) any Pledged Stock of Holdings held by the Collateral Agent hereunder and the Collateral Agent and the Administrative Agent shall execute, acknowledge and deliver to the Parent Borrower or Holdings (at the sole cost and expense of the Parent Borrower or Holdings) all releases, instruments or other documents (including UCC termination statements), and do or cause to be done all other acts, necessary or reasonably desirable for the release of Holdings from its Guarantee (if any) or the Liens created hereby (if any) on Holdings’ Pledged Stock, as applicable, as the Parent Borrower or Holdings may reasonably request. 9.17 Judgment. (a) If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Collateral Agent could purchase the first currency with such other currency on the Business Day preceding the day on which final judgment is given. (b) The obligations of any Granting Party in respect of this Agreement to the Collateral Agent, for the benefit of each holder of Secured Obligations, shall, notwithstanding any judgment in a currency (the “judgment currency”) other than the currency in which the sum originally due to such holder is denominated (the “original currency”), be discharged only to the extent that on the Business Day following receipt by the Collateral Agent of any sum adjudged to be so due in the judgment currency, the Collateral Agent may in


 
LEGAL_US_E # 155827293.3 54 1006148456v9 accordance with normal banking procedures purchase the original currency with the judgment currency; if the amount of the original currency so purchased is less than the sum originally due to such holder in the original currency, such Granting Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Collateral Agent for the benefit of such holder, against such loss, and if the amount of the original currency so purchased exceeds the sum originally due to the Collateral Agent, the Collateral Agent agrees to remit to the Parent Borrower, such excess. This covenant shall survive the termination of this Agreement and payment of the Obligations and all other amounts payable hereunder. 9.18 Amendment and Restatement. This Agreement amends and restates the Existing Collateral Agreement in its entirety and, upon the date hereof, the terms and provisions of the Existing Collateral Agreement shall be superseded hereby. Upon the date hereof: (i) all terms and conditions of the Existing Collateral Agreement, as amended and restated by this Agreement, shall be and remain in full force and effect, as so amended, and shall constitute the legal, valid, binding and enforceable obligations of the Granting Parties; (ii) the terms and conditions of the Existing Collateral Agreement shall be amended as set forth herein and, as so amended and restated, shall be restated in their entirety, but shall be amended only with respect to the rights, duties and obligations among the Granting Parties accruing from and after the date hereof; (iii) this Agreement shall not in any way release or impair the rights, duties, Obligations, Liens or security interests created pursuant to the Existing Collateral Agreement or affect the relative priorities thereof, in each case to the extent in force and effect thereunder as of the date hereof, except as modified hereby or by documents, instruments and agreements executed and delivered in connection herewith, and all of such rights, duties, Obligations and Liens are assumed, ratified and affirmed by the Granting Parties; (iv) this Agreement shall not constitute a substitution or novation of any Granting Parties’ Obligations or any of the other rights, duties and obligations of the parties hereunder; (v) the execution, delivery and effectiveness of this Agreement shall not operate as a waiver of any right, power or remedy of Agent or any other Secured Party under the Existing Collateral Agreement, nor constitute a waiver of any covenant, agreement or obligation under the Existing Collateral Agreement, except to the extent that any such covenant, agreement or obligation is no longer set forth herein or is modified hereby; (vi) any and all references in the Loan Documents to the Existing Collateral Agreement shall, without further action of the parties, be deemed a reference to the Existing Collateral Agreement, as amended and restated by this Agreement, and as this Agreement shall be further amended, restated, modified, supplemented or amended and restated from time to time hereafter in accordance with the terms of this Agreement; and (vii) each Granting Party represents and warrants that, as of the date hereof, there are no claims or offsets against, or defenses or counterclaims to, its obligations under the Existing Collateral Agreement 9.19 Transfer Tax Acknowledgment. Each party hereto acknowledges that the shares delivered hereunder are being transferred to and deposited with the Collateral Agent (or other Person in accordance with the Intercreditor Agreement) as security for the Obligations and that this Subsection 9.19 is intended to be the certificate of exemption from the New York stock transfer taxes for the purposes of complying with Section 270.5(b) of the Tax Law of the State of New York.


 
LEGAL_US_E # 155827293.3 55 1006148456v9 [Remainder of page left blank intentionally; Signature page to follow.]


 


 


 


 


 
1 Schedule 1 Notice Addresses of Granting Parties Guarantor Notice Address Atkore Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel AFC Cable Systems, Inc. 960 Flaherty Drive New Bedford, Massachusetts 02745 Attn: General Counsel Allied Tube & Conduit Corporation 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel Atkore International Holdings, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel Atkore International, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel Atkore Plastic Pipe Corporation c/o Atkore International, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel Atkore Plastics Southeast, LLC c/o Atkore International, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel Atkore Southwest, LLC c/o Atkore International, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel Atkore RMCP, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel Atkore Steel Components, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel Calpipe Industries, LLC 12160 Woodruff Avenue Downey, CA 90241 Attn: General Counsel


 
2 Guarantor Notice Address Georgia Pipe Company c/o Atkore International, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel TKN, INC. c/o Atkore International, Inc. 960 Flaherty Drive New Bedford, Massachusetts 02745 Attn: General Counsel Unistrut International Corporation c/o Atkore International, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel US Tray, Inc. c/o Atkore International, Inc. 16100 S. Lathrop Avenue Harvey, IL 60426 Attn: General Counsel WPFY, Inc. c/o Atkore International, Inc. 960 Flaherty Drive New Bedford, Massachusetts 02745 Attn: General Counsel


 
LEGAL_US_E # 150343706.2 3 Schedule 2 Pledged Securities 1. Pledged Stock Pledgor Issuer Class of Stock/ Type of Interest Owned Certificate Number Par Value Number of shares outstanding Percentage Pledged Atkore Inc. Atkore International Holdings Inc. Common Stock 1 $0.01 100 100 Atkore International Holdings Inc. Atkore International, Inc. Common Stock 1 $0.01 100 100 Atkore International, Inc. Atkore Plastic Pipe Corporation Common Stock 1 $0.01 100 100 Atkore International, Inc. Allied Tube & Conduit Corporation Common Stock 9 $1.00 1000 100 Atkore International, Inc. Unistrut International Corporation Common Stock 7 $0.01 1 100 Atkore International, Inc. Atkore Steel Components, Inc. Common Stock 1 $0.01 100 100 Atkore International, Inc. AFC Cable Systems, Inc. Common Stock 1 $0.01 100 100 Atkore International, Inc. Calpipe Industries, LLC Membership Interests N/A N/A N/A 100 Atkore Plastic Pipe Corporation Atkore RMCP, Inc. Common Stock 1 $0.01 100 100 Atkore Plastic Pipe Corporation Atkore Plastic Southeast, LLC Membership Interests N/A N/A N/A 100 Atkore Plastic Pipe Corporation Atkore Southwest, LLC Membership Interests N/A N/A N/A 100 AFC Cable Systems, Inc. WPFY, Inc. Common Stock 2 $0.01 100 100 AFC Cable Systems, Inc. TKN, INC. Common Stock 6 $1.00 90 100 AFC Cable Systems, Inc. Georgia Pipe Company Common Stock 11 no par value 1,000 100


 
LEGAL_US_E # 150343706.2 4 Pledgor Issuer Class of Stock/ Type of Interest Owned Certificate Number Par Value Number of shares outstanding Percentage Pledged Atkore Inc. Atkore International Holdings Inc. Common Stock 1 $0.01 100 100 AFC Cable Systems, Inc. US Tray, Inc. Common Stock 1 $0.01 100 100


 
LEGAL_US_E # 150343706.2 5 2. Pledged Notes 1. unsecured Promissory Note, dated December 22, 2010, issued by Atkore International (NV) Inc. f/k/a Tyco International (NV) Inc. to Atkore International, Inc. in the original principal amount of $159,515,092. 2. unsecured Promissory Note, dated December 22, 2010, issued by Allied Tube & Conduit Corporation to Atkore International, Inc. in the original principal amount of $240,484,908.


 
LEGAL_US_E # 150343706.2 6 Schedule 3 Perfection Matters I. Existing Security Interests Debtor/Defendant Search Jurisdiction Scope of Search Type of Filing Found Secured Party/Plaintiff Collateral Type Original File Date Original File # Amdt. File Date Amdt. File # 1. AFC Cable Systems, Inc. Delaware UCC Debtor Search UCC1 Arbill Industries, Inc. Inventory 7/2/2014 2014 2633154 6/13/2019 2019 4072604 2. Allied Tube & Conduit Corporation Delaware UCC Debtor Search UCC1 Samuel Strapping Systems, Inc. Inventory 7/20/2015 2015 3124525 N/A N/A


 
LEGAL_US_E # 150343706.2 7 Debtor/Defendant Search Jurisdiction Scope of Search Type of Filing Found Secured Party/Plaintiff Collateral Type Original File Date Original File # Amdt. File Date Amdt. File # 3. Allied Tube & Conduit Corporation Delaware UCC Debtor Search UCC1 Arcelormittal Burns Harbor LLC Arcelormittal Cleveland LLC Arcelormittal USA LLC Arcelormittal Indiana Harbor LLC Arcelormittal Plate LLC Bank of America, N.A., as Agent Inventory 11/14/2017 2017 7547419 11/14/2017 2017 7565031 4. Allied Tube & Conduit Corporation; Atkore International, Inc. Delaware UCC Debtor Search UCC1 Kloeckner Metals Corporation Wells Fargo Bank, N.A., as Agent Inventory 6/21/2018 2018 4253569 N/A N/A


 
LEGAL_US_E # 150343706.2 8 Debtor/Defendant Search Jurisdiction Scope of Search Type of Filing Found Secured Party/Plaintiff Collateral Type Original File Date Original File # Amdt. File Date Amdt. File # 5. Allied Tube & Conduit Corporation Delaware UCC Debtor Search UCC1 Steel Warehouse of Illinois LLC Inventory 7/31/2019 2019 5305771 N/A N/A 6. Allied Tube & Conduit Corporation Delaware UCC Debtor Search UCC1 Mitsui & Co. (U.S.A.), Inc. Inventory 12/17/2019 2019 8996873 N/A N/A 7. Atkore Plastic Pipe Corporation Delaware UCC Debtor Search UCC1 Formosa Plastics Corporation, U.S.A. Formosa Plastics Corporation, Louisiana Formosa Plastics Corporation, Texas Inventory 1/2/2018 2018 0037644 N/A N/A II. Closing Date UCC Filings Granting Party State Filing Office Document Filed Atkore International Holdings Inc. Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment


 
LEGAL_US_E # 150343706.2 9 Granting Party State Filing Office Document Filed Atkore International, Inc. Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment Allied Tube & Conduit Corporation Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment Unistrut International Corporation Nevada Secretary of State UCC-1 financing statement and UCC-3 assignment AFC Cable Systems, Inc. Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment WPFY, Inc. Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment TKN, INC. Rhode Island Secretary of State UCC-1 financing statement and UCC-3 assignment Georgia Pipe Company Georgia Thomas County Superior Court Clerk UCC-1 financing statement and UCC-3 assignment Atkore Plastic Pipe Corporation Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment Atkore RMCP, Inc. Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment Atkore Steel Components, Inc. Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment


 
LEGAL_US_E # 150343706.2 10 Granting Party State Filing Office Document Filed Calpipe Industries, LLC California Secretary of State UCC-1 financing statement and UCC-3 assignment US Tray, Inc. Delaware Secretary of State UCC-1 financing statement and UCC-3 assignment III. First Amendment Effective Date Intellectual Property Filings Notice and Confirmation of Grant of Security Interest in Trademarks, dated as of May 26, 2021 made by the Grantors party thereto in favor of Wells Fargo National Association as collateral agent, to be filed with the Trademark Division of the United States Patent and Trademark Office. Notice and Confirmation of Grant of Security Interest in Patents, dated as of May 26, 2021 made by the Grantors party thereto in favor of Wells Fargo National Association as collateral agent, to be filed with the Patent Division of the United States Patent and Trademark Office.


 
LEGAL_US_E # 150343706.2 11 Schedule 4 Jurisdiction of Organization Granting Party Location Atkore Inc. Delaware AFC Cable Systems, Inc. Delaware Allied Tube & Conduit Corporation Delaware Atkore International Holdings Inc. Delaware Atkore International, Inc. Delaware Atkore Plastic Pipe Corporation Delaware Atkore Plastics Southeast, LLC Delaware Atkore Southwest, LLC Delaware Atkore RMCP, Inc. Delaware Atkore Steel Components, Inc. Delaware Calpipe Industries, LLC California Georgia Pipe Company Georgia TKN, INC. Rhode Island Unistrut International Corporation Nevada US Tray, Inc. Delaware WPFY, Inc. Delaware


 
LEGAL_US_E # 150343706.2 12 Schedule 5 Intellectual Property Patents, Copyrights, and Trademarks I. COPYRIGHTS GRANTOR: Allied Tube & Conduit Corporation Title of Work Registration Number Registration Date Let’s Build A Fence, the Easy Way! TX-640-457 02-Mar-1981 GRANTOR: Unistrut International Corporation Title of Work Registration Number Registration Date UNISTRUT Diversified Products Company: Technical Bulletin TX3-981-792 03-Mar-1995 II. PATENTS GRANTOR: Atkore Steel Components, Inc.


 
LEGAL_US_E # 150343706.2 13 Title Status App. No. File Date Patent No. Issue Date NON-METALLIC LIQUID-TIGHT CONDUIT CONNECTOR Granted 15/914278 3/7/2018 10851926 01-Dec-2020 COUPLING FOR ELECTRICAL METALLIC TUBING Granted 15/879574 1/25/2018 10879681 29-Dec-2020 Conduit support assembly Granted 15/471746 3/28/2017 10320173 11-Jun-2019 Conduit body with super fitting Granted 15/177005 6/8/2016 10295094 21-May-2019 Conduit Fitting Suited for Wet Locations Granted 15/665490 8/1/2017 10683953 16-Jun-2020 Coupling assembly with watertight feature for securing conduits together Granted 14/723741 5/28/2015 9995419 12-Jun-2018 Compression coupling assembly for securing conduits together Granted 14/556534 12/1/2014 9920867 20-Mar-2018 Electrical conduit connector with two- point engagement Granted 12/756,610 4/8/2010 8,646,813 2/11/2014 Connector assembly suited for wet locations Granted 13/114,527 5/24/2011 8,586,881 11/19/2013 Cam lock mechanism for securing a conduit cover to a conduit body Granted 13/446,330 4/13/2012 8,586,877 11/19/2013 Connector assembly suited for wet locations Granted 12/725,502 3/17/2010 8,129,633 3/6/2012 Cover for conduit body Granted 12/719,382 3/8/2010 8,129,631 3/6/2012 Liquid-tight coupling device with screw-on ferrule device and method of use Granted 11/366,308 3/2/2006 7,914,048 3/29/2011 Junction box with integrated connectors for electrical wiring Granted 12/256,222 10/22/2008 7,897,871 3/1/2011 Connector for electrical wire-carrying conduits Granted 09/849,635 5/4/2001 7,793,988 9/14/2010 Connector / bushing assembly for electrical junction boxes Granted 11/737,839 4/20/2007 7,635,816 12/22/2009 Connector for affixing cables within junction boxes Granted 11/564,362 11/29/2006 7,476,817 1/13/2009 Connector for affixing cables within junction boxes Granted 11/210,000 8/22/2005 7,126,064 10/24/2006 Bushing and sealing ring assembly Granted 10/165,057 6/7/2002 6,808,181 10/26/2004 Junction box connector Granted 09/849,634 5/4/2001 6,476,319 11/5/2002


 
LEGAL_US_E # 150343706.2 14 GRANTOR: WPFY, Inc. Title Status App. No. File Date Patent No. Issue Date Flexible Conduit and Cable (a.k.a. “Breakable Conduit”) Granted 11/003658 12/3/04 7420120 9/2/08 Indicia-coded electrical cable Granted 12/331923 12/10/08 8278554 10/2/12 METAL SHEATHED CABLE ASSEMBLY WITH NON- LINEAR BONDING/GROUNDING CONDUCTOR Granted 13/422319 3/16/12 9472320 10/18/16 METAL SHEATHED CABLE ASSEMBLY Granted 12/419607 4/7/09 8658900 2/25/14 Metal sheathed cable assembly Granted 12/419634 4/7/09 8088997 1/3/12 METAL SHEATHED CABLE ASSEMBLY Granted 13/314502 12/8/11 8946549 2/3/2015 MODULAR CABLE ASSEMBLIES Granted 09/687703 10/13/00 6663438 12/16/03 GRANTOR: Allied Tube & Conduit Corporation Title Status App. No. File Date Patent No. Issue Date ANTIPERSONNEL BARRIER SYSTEM Granted 11/313485 12/20/05 7909309 3/22/11 ARCHING METALLIC PROFILES IN CONTINUOUS IN- LINE PROCESS Pending US08/86655 12/12/08 Conduit Coupling Assembly Granted 10/328077 12/23/02 7404582 7/29/08 Conduit Coupling Assembly Pending US03/41080 12/22/03 Continuously Manufactured Colored Metallic Products and Method of Manufacture of such Products Granted 10/702625 11/6/03 7989028 8/2/11 Fencing Construction Apparatus and Method Granted 11/753252 5/24/07 7789376 9/7/10 Fire protection pipe and methods of manufacture Granted 09/955426 9/18/01 6758282 7/6/04 Metal Floor Joist System Pending 11/549360 10/13/06 JOINT CONSTRUCTION FOR COUPLING CONDUIT SECTIONS Granted 13/717110 12/17/12 8695218 4/15/14 MEDICAL DEVICE MOUNTING SYSTEM Granted 13/352563 1/18/12 8960624 2/24/15 METHOD OF MANUFACTURING A COUPLING ASSEMBLY Granted 12/144735 6/24/08 7726001 6/1/10


 
LEGAL_US_E # 150343706.2 15 Title Status App. No. File Date Patent No. Issue Date Modular Building Frame Granted1 10/267112 10/7/02 7992352 8/9/11 PICKET FENCE ASSEMBLY Granted 11/296972 12/8/05 7434789 10/14/08 RAZOR WIRE BARRIER FOR ACCESS POINT SECURITY Granted 15/865672 9-Jan-2018 RAZOR WIRE CONTAINER WITH ACCESS OPENING Pending 16/369519 29-Mar-2019 SUPPORT POST Granted 29/298903 12/14/07 D624198 9/21/10 CONDUIT COUPLING ASSEMBLY Granted 10328077 12/23/02 7404582 07/29/08 SYSTEM AND METHODS FOR FORMING BARBED TAPE PRODUCT WITH PREDETERMINED PATTERNS O... Granted 10/585,166 May 6, 2009 7883074 Apr 8, 2008 CONCERTINA TAPE PRODUCTS CONFIGURED FOR STABLE DEPLOYMENT AND RETRIEVAL Granted 10/959,530 Oct 5, 2004 7290756 Jun 23, 2009 CONCERTINA TAPE PRODUCTS CONFIGURED FOR STABLE DEPLOYMENT AND RETRIEVAL Granted 11/433,303 May 11, 2006 7481444 Aug 3, 2010 CONCERTINA TAPE PRODUCTS CONFIGURED FOR STABLE DEPLOYMENT AND RETRIEVAL Granted 11/835,761 Aug 8, 2007 7896317 Nov 14, 2007 CONCERTINA TAPE PRODUCTS CONFIGURED FOR STABLE DEPLOYMENT AND RETRIEVAL Granted 13/035,295 Feb 25, 2011 8157491 Apr 12, 2013 BARBED TAPE PRODUCT WITH A PREDETERMINED PATTERN OF ATTACHMENT POINTS AND ATTACH... Granted 10/959,531 Oct 5, 2004 7419139 Jan 14, 2020 Methods for forming barbed tape product Granted 10/959,944 Oct 5, 2004 7353576 Nov 25, 2020 SYSTEM AND METHODS FOR FORMING BARBED TAPE PRODUCT Granted 11/778,846 Jul 17, 2007 7549203 May 27, 2020 System for forming barbed tape product Granted 12/467,025 May 15, 2009 7765657 Mar 25, 2008 RAZOR WIRE CONTAINER WITH ACCESS OPENING Pending 16538952 08/13/19 PORTABLE RAZOR WIRE RAPID DEPLOYMENT UNIT Pending 16832222 03/27/20 LOW-PROFILE CABLE ARMOR Pending 29/706,679 Sep 23, 2019 1 Allied Tube & Conduit Corporation is the owner of an undivided joint interest in this patent.


 
LEGAL_US_E # 150343706.2 16 Title Status App. No. File Date Patent No. Issue Date LOW-PROFILE CABLE ARMOR Pending 16/578,842 Sep 23, 2019 MC CABLE WITH TEARABLE ASSEMBLY TAPE Pending 16/837,382 Apr 1, 2020 MC CABLE WITH TEARABLE ASSEMBLY TAPE Pending 62/986,043 Mar 6, 2020 Modular Connector for Rigid Tubing Pending 16/907,504 Jun 22, 2020 GRANTOR: Unistrut International Corporation Title Status App. No. File Date Patent No. Issue Date Corrosion Resistant Channels, Fittings And Fasteners Pending 61/970953 3/27/14 Folded Beam Clamp Granted 14/037478 9/23/13 9157574 10/13/15 Slot Nut for Securement of Channel Granted 11/453421 6/15/06 7766594 8/3/10 Solar Panel Bracket Granted 12/645641 12/23/09 8226061 7/24/12 Standing seam roof clamp Pending 13/034824 2/25/11 Barbed tape and security sensor assembly Granted 15/826934 30-Nov-2017 10535238 14-Jan-2020 ROTATABLE BEAM CLAMP Granted 15/864289 08-Jan-2018 10415616 17-Sep-2019 Heavy duty cantilever bracket Granted D/580838 13-Oct-2016 D805881 26-Dec-2017 Heavy duty cantilever bracket Granted D/580839 13-Oct-2016 D805375 19-Dec-2017 Retrofit brace fitting Granted 14/974753 18-Dec-2015 9834921 5-Dec-2017 LOCKING WASHER FOR BRACE MEMBERS Granted 15/354071 17-Nov-2016 10203000 19-Feb-2019 STANDING SEAM ROOF CLAMP Granted 14249734 04/10/2014 9834921 15/05/17 Standing seam roof clamp Granted 14249734 04/10/2014 9291370 03/22/2016 GRANTOR: AFC Cable Systems, Inc. Title Status App. No. File Date Patent No. Issue Date METAL SHEATHED CABLE WITH JACKETED, CABLED CONDUCTOR SUBASSEMBLY Granted 16/567215 11-Sept-2019 10622120 14-Apr-2020


 
LEGAL_US_E # 150343706.2 17 Title Status App. No. File Date Patent No. Issue Date Metal sheathed cable with jacketed, cabled conductor subassembly Granted 16/802892 27-Feb-2020 10847286 11/24/20 Wire spring terminal Pending D/628722 07-Dec-2017 D847097 30-Apr-2019 Electrica spring-terminal Granted 15/606036 26-May-2017 10103456 16-Oct-2018 Metal sheathed cable with jacketed, cabled conductor subassembly Granted 18/674095 31-Mar-2015 10002689 19-Jun-2018 Metal sheathed cable with jacketed, cabled conductor subassembly Granted 15/983625 18-May-2018 10431353 1-Oct-2019 GRANTOR: Atkore International, Inc. Title Status App. No. File Date Patent No. Issue Date Method & Apparatus for Connecting Loops of Barbed Tape Granted 11062710 2/22/05 7346968 3/25/08 Retractable Barbed Barrier System Granted 10692967 10/24/03 7044447 5/16/06 Standing Seam Roof Clamp Granted 13034824 2/25/11 8732917 5/27/14 Vineyard stake Granted D/506585 17-Oct-2014 D742186 3-Nov-2015 STANDING SEAM ROOF CLAMP Pending 14/249734 10-Apr-2014 9291370 22-Mar-2016 GRANTOR: Calpipe Industries, LLC Title Status App. No. File Date Patent No. Issue Date Strut Granted D607282 6/12/17 D830153 10/09/18 GRANTOR: US Tray, Inc. Title Status App. No. File Date Patent No. Issue Date Combination hold-down clamp and expansion guide apparatus for cable trays Granted 13418564 13-Mar-12 8899544 2-Dec-14


 
LEGAL_US_E # 150343706.2 18 II. TRADEMARKS GRANTOR: Allied Tube & Conduit Corporation Trademark Status App. No. File Date Reg. No. Reg. Date 50 55 Stylized Registered 73378127 04-Aug-82 1304677 13-Nov-84 A ATKORE INTERNATIONAL & design Registered 85172192 09-Nov-10 4339136 21-May-13 AICKINSTRUT Registered 74000932 16-Nov-89 1606445 17-Jul-90 Allied Circle-Triangle Logo Registered 73489964 16-Jul-84 1350298 23-Jul-85 ALLIED TUBE & CONDUIT Registered 77111074 20-Feb-07 3394192 11-Mar-08 ATKORE INTERNATIONAL Registered 85158927 22-Oct-10 4339130 21-May-13 ATKORE INTERNATIONAL Registered 85158919 22-Oct-10 4339129 21-May-13 ATKORE INTERNATIONAL Registered 85158914 22-Oct-10 4158520 12-Jun-12 ATKORE INTERNATIONAL Registered 85158906 22-Oct-10 4158519 12-Jun-12 ATKORE INTERNATIONAL Registered 85158885 22-Oct-10 4158518 12-Jun-12 BLT Registered 74294039 14-Jul-92 1755162 02-Mar-93 CENTIPEDE Registered 75690894 26-Apr-99 2460247 12-Jun-01 COBRA Registered 73642759 03-Feb-87 1454873 01-Sep-87 DETAINER HOOK Registered 75788947 31-Aug-99 2410372 05-Dec-00 DYNA-FLOW Registered 74085583 06-Aug-90 1681099 31-Mar-92 DYNA-THREAD Registered 74160560 25-Apr-91 1688940 26-May-92 E-Z PULL Registered 73790786 03-Apr-89 1657191 17-Sep-91 FIRE ALARM Registered 78226542 17-Mar-03 2887776 21-Sep-04 FLO-COAT Registered 72285181 20-Nov-67 862614 31-Dec-68 GATORSHIELD Registered 73522625 19-Feb-85 1378808 21-Jan-86 INSTABARRIER Registered 73582757 14-Feb-86 1411050 30-Sep-86 KWIK-COUPLE Registered 75536075 17-Aug-98 2537549 12-Feb-02 KWIK-FIT Registered 76422464 18-Jun-02 2749843 12-Aug-03 MAZE Registered 73433077 05-Jul-83 1291828 28-Aug-84 QWIK-COAT Registered 77228132 12-Jul-07 3381584 12-Feb-08


 
LEGAL_US_E # 150343706.2 19 Trademark Status App. No. File Date Reg. No. Reg. Date QWIK-PUNCH Registered 87927619 18-May-2018 5991826 18-Feb-20 RAZOR-RIBBON Registered 73040056 20-Dec-74 1035183 09-Mar-76 RAZOR-STRAND Registered 78931472 18-Jul-06 3273079 31-Jul-07 SILENT SWORDSMAN Registered 73693161 02-Nov-87 1565430 14-Nov-89 SS 15 Registered 87421006 21-Apr-17 5932455 10-Dec-19 SS 20 Registered 87421015 21-Apr-17 5932456 10-Dec-19 SS 40 Registered 87421047 21-Apr-2017 5932457 10-Dec-19 TECTRON Registered 74650382 22-Mar-95 2089604 19-Aug-97 TECTRON TUBE & design Registered 77743858 25-May-09 3725505 15-Dec-09 TOPGRIP NUT Registered 72343890 18-Nov-69 904149 15-Dec-70 XL Registered 76526337 27-Jun-03 2844584 25-May-04 COBRA COIL - Wordmark Registered 87466256 26-May-12 5355179 12-Dec-17 COBRA design Registered 87572340 17-Aug-17 6158491 22-Sep-20 COBRASYSTEMSINC & Design Registered 87572351 17-Aug-17 6158492 22-Sep-20 KONKORE FITTINGS - Wordmark Registered 86915811 22-Feb-16 5168022 21-Mar-17 RACEWAY. YOUR WAY. (Logo) Registered 86371929 20-Aug-14 5590515 23-Oct-18 RACEWAY. YOUR WAY. (Wordmark) Registered 86371876 20-Aug-14 55905143 23-Oct-18 RAZOR RIBBON & Design Registered 87799782 15-Feb-18 60968373 07-Jul-20 SUPER KWIK-COUPLE (Wordmark) Registered 87540552 24-Jul-17 6042944 28-Apr-20 FLO 90 Registered 86347005 24-Jul-14 4703399 17-Mar-15 BUILDING BETTER TOGETHER Pending 88839224 18-Mar-20 BUILDING BETTER TOGETHER Pending 88839237 18-Mar-20 EAGLE BASKET Pending 88937597 28-May-20 ATKORE Pending 90099692 07-Aug-20 A ATKORE Pending 90099696 07-Aug-20 A ATKORE Pending 90099702 07-Aug-20


 
LEGAL_US_E # 150343706.2 20 GRANTOR: Atkore Plastic Pipe Corporation Trademark Status App. No. File Date Reg. No. Reg. Date HERITAGEPLASTICS Registered 86447014 06-Nov-14 5572845 02-Oct-18 H Registered 86447048 06-Nov-14 4903739 23-Feb-16 GRANTOR: Atkore Steel Components, Inc. Trademark Status App. No. File Date Reg. No. Reg. Date UNIVERSAL SUPER FITTING Registered 87157293 31-Aug-16 5267993 15-Aug-17 GRANTOR: WPFY, Inc. Trademark Status App. No. File Date Reg. No. Reg. Date AC-90 Registered 77726387 30-Apr-09 3715075 24-Nov-09 AC-LITE Registered 74040024 19-Mar-90 1647967 18-Jun-91 AFC CABLE SYSTEMS Registered 74451176 26-Oct-93 1886593 28-Mar-95 AMERICA CABLE SYSTEMS Registered 77430965 25-Mar-08 3520199 21-Oct-08 COLORSPEC Registered 85950569 04-Jun-13 4612162 30-Sep-14 COLOR-TRAK Registered 85086166 16-Jul-10 4033591 04-Oct-11 CUSTOM CUTS Registered 73692210 23-Oct-87 1492988 21-Jun-88 HCF-90 Registered 73783546 27-Feb-89 1594970 08-May-90 HCF-LITE Registered 74717357 18-Aug-95 1988636 23-Jul-96 HCF MC CURE - Wordmark Registered 85961367 17-Jun-13 4668257 6-Jan-15 HOME RUN CABLE Registered 73481404 21-May-84 1328225 02-Apr-85 KAF-TECH Registered 77151619 09-Apr-07 3358990 25-Dec-07 MC-QUIK Registered 77573428 18-Sep-08 3713117 17-Nov-09 MC LITE Registered 73554337 19-Aug-85 1414788 28-Oct-86 MC STAT Registered 77573442 18-Sep-08 3713118 17-Nov-09 MC TUFF Registered 75876422 20-Dec-99 2404265 14-Nov-00


 
LEGAL_US_E # 150343706.2 21 Trademark Status App. No. File Date Reg. No. Reg. Date MC-PLUS Registered 77713084 14-Apr-09 3711683 17-Nov-09 Miscellaneous Design (AFC logo) (eagle) Registered 74566575 29-Aug-94 1907213 25-Jul-95 SUPER NEUTRAL CABLE Registered 74315526 21-Sep-92 1782264 13-Jul-93 THE INTELLIGENT CEILING Registered 74390582 14-May-93 1914118 22-Aug-95 THE INTELLIGENT FLOOR Registered 74390581 14-May-93 1895560 23-May-95 GRANTOR: Unistrut International Corporation Trademark Status App. No. File Date Reg. No. Reg. Date KOREFIT (design plus words) Registered 88106907 06-Sep-2018 6064988 6-May-2020 KOREFIT Registered 87643949 12-Oct-17 6329122 20-Apr-21 MR. STRUT Design (no words) Registered 72285597 24-Nov-67 862747 31-Dec-68 MR. STRUT (design plus words) Registered 72053067 06-Jun-58 688160 17-Nov-59 N-1000 Registered 75583154 05-Nov-98 2376739 15-Aug-00 P (design plus words) Pending 87292598 07-Jan-17 P1000 Registered 73314979 15-Jun-81 1274104 17-Apr-84 POWER-STRUT DEFENDER Registered 86218581 17-Jun-13 5607302 13-Nov-18 POWER-STRUT DEFENDER (design plus words) Pending 87292602 07-Jan-17 QUICK-LATCH Registered 86790897 16-Oct-15 5541357 14-Aug-18 ROOFWALKS Registered 73696046 17-Nov-87 1496545 19-Jul-88 TELESPAR Registered 73579378 22-Jan-86 1438940 12-May-87 TELESTRUT Registered 74649227 20-Mar-95 1953363 30-Jan-96 U (design plus words) Registered 86230383 24-Mar-14 5513950 10-Jul-18 UNI-CLIP Registered 72308333 26-Sep-68 881999 09-Dec-69 UNI-CUSHION Registered 73255294 24-Mar-80 1172255 06-Oct-81 UNIPIER Registered 77189472 24-May-07 3434445 27-May-08 UNIPIER and Design Registered 77191680 29-May-07 3434453 27-May-08 UNISTRUT Registered 72200395 21-Aug-64 793173 27-Jul-65


 
LEGAL_US_E # 150343706.2 22 Trademark Status App. No. File Date Reg. No. Reg. Date UNISTRUT Registered 72200397 21-Aug-64 802145 18-Jan-66 UNISTRUT Registered 72200396 21-Aug-64 793185 27-Jul-65 UNISTRUT Registered 71624800 11-Feb-52 591532 22-Jun-54 UNISTRUT DEFENDER Registered 86220011 13-Mar-14 5498012 19-Jun-18 UNITED INTERLOCK Registered 76159922 06-Nov-00 2608939 20-Aug-02 COPE Registered 77879408 24-Nov-09 3817525 13-Jul-10 COPE Registered 77879409 24-Nov-09 3817526 13-Jul-10 POWER-STRUT Registered 73527529 18-Mar-85 1370880 19-Nov-85 [cartoon design only] Pending 90660908 21-Apr-21 GRANTOR: AFC Cable Systems, Inc. Title Status App. No. File Date Patent No. Issue Date MC LUMINARY QUIK Registered 88046241 20-Jul-18 6070097 2-Jun-2020 ACS/UNI-FAB Registered 87615831 20-Sep-17 5921466 26-Nov-19 MC LUMINARY MULTIZONE Registered 87042368 18-May-16 5224495 13-Jun-17 MC LUMINARY HCF Registered 87042403 18-May-16 5262260 08-Aug-17 FLEX4 Registered 86743033 13-Aug-15 4976700 14-Jun-16 AC-PLUS Registered 86581271 30-Mar-15 5120112 10-Jan-17 PACK N’ ROLL Registered 86581314 30-Mar-15 4967360 31-May-16 MC LUMINARY Registered 86470801 03-Dec-14 4781579 28-Jul-15 MC TUFF LUMINARY Registered 86470791 03-Dec-14 4731663 05-May-15 MC LITE LUMINARY Registered 86470796 03-Dec-14 4731664 05-May-15 MC SNAPIT Registered 86403299 23-Sep-14 4830103 13-Oct-15 MC GLIDE Pending 90192168 18-Sep-20 MC GLIDE Pending 90206130 24-Sep-20 MC TUFF GLIDE Pending 90479912 21-Jan-21


 
LEGAL_US_E # 150343706.2 23 GRANTOR: Atkore RMCP, Inc. Trademark Status App. No. File Date Reg. No. Reg. Date COR-TEK Registered 88007419 20-Jun-18 6291790 16-Mar-21 GRANTOR: Calpipe Industries, LLC Trademark Status App. No. File Date Reg. No. Reg. Date BRITERAIL Registered 87886414 20-Apr-18 5717664 02-Apr-19 CALBOND Registered 85458381 27-Oct-11 4164350 26-Jun-12 CALBRITE Registered 85291702 11-Apr-11 4049260 01-Nov-11 CALCONDUIT Registered 85280210 29-Mar-11 4114043 20-Mar-12 CALPIPE SECURITY BOLLARDS Registered 85280214 29-Mar-11 4070034 13-Dec-11 Material Copyright Licenses, Patent Licenses and Trademark Licenses None. The Grantors are party to standard agreements for software and information technology used in the ordinary course of business.


 
LEGAL_US_E # 150343706.2 24 Schedule 7 Commercial Tort Claims None.


 
LEGAL_US_E # 155827293.3 ANNEX 1 1006148456v9 ACKNOWLEDGEMENT AND CONSENT The undersigned hereby acknowledges receipt of a copy of the Second Amended and Restated Guarantee and Collateral Agreement, dated as of May 26, 2021 (the “Agreement”; capitalized terms used and not otherwise defined herein shall have the meanings assigned to them in the Agreement or the Credit Agreement referred to therein, as the case may be), made by Atkore International, Inc. and the other Granting Parties party thereto in favor of Wells Fargo Bank, National Association, as Collateral Agent and Administrative Agent. The undersigned agrees for the benefit of the Collateral Agent, the Administrative Agent and the Lenders as follows: The undersigned will be bound by the terms of the Agreement applicable to it as an Issuer (as defined in the Agreement) and will comply with such terms insofar as such terms are applicable to the undersigned as an Issuer. The undersigned will notify the Collateral Agent promptly in writing of the occurrence of any of the events described in subsection 5.3.1 of the Agreement. The terms of subsections 6.3(c) and 6.7 of the Agreement shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to subsection 6.3(c) or 6.7 of the Agreement. [NAME OF ISSUER] By:_______________________________________ Name: [_____________] Title: [__________] Address for Notices: [__________________]


 
LEGAL_US_E # 155827293.3 ANNEX 2 1006148456v9 ASSUMPTION AGREEMENT ASSUMPTION AGREEMENT, dated as of _________ __, ____, made by ______________________________, a ______________ corporation (the “Additional Granting Party”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral agent (in such capacity, the “Collateral Agent”) and as administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions from time to time parties to the Credit Agreement referred to below and the other Secured Parties (as defined in the Guarantee and Collateral Agreement). All capitalized terms not defined herein shall have the meaning ascribed to them in the Guarantee and Collateral Agreement referred to below, or if not defined therein, in the Credit Agreement. W I T N E S S E T H : WHEREAS, ATKORE INTERNATIONAL, INC., a Delaware corporation (together with its successors and assigns, the “Parent Borrower”), the Subsidiary Borrowers from time to time party thereto (together with the Parent Borrower, collectively the “Borrowers” and each individually a “Borrower”), the several banks and other financial institutions from time to time party thereto (the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders thereunder and as collateral agent (in such capacity, the “Collateral Agent”) for the Secured Parties, and the other parties party thereto are parties to an Amended and Restated Credit Agreement, dated as of August 28, 2020 (as amended, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”); WHEREAS, in connection with the Credit Agreement, Atkore Inc., a Delaware corporation, Atkore International Holdings Inc., a Delaware corporation (“Holdings”), the Parent Borrower and certain of its Subsidiaries are, or are to become, parties to the Second Amended and Restated Guarantee and Collateral Agreement, dated as of May 26, 2021 (as amended, supplemented, waived or otherwise modified from time to time, the “Guarantee and Collateral Agreement”), in favor of the Collateral Agent, for the ratable benefit of the Secured Parties; WHEREAS, the Additional Granting Party is a member of an affiliated group of companies that includes the Borrower and each other Granting Party; the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Parent Borrower to make valuable transfers to one or more of the other Granting Parties (including the Additional Granting Party) in connection with the operation of their respective businesses; and the Parent Borrower and the other Granting Parties (including the Additional Granting Party) are engaged in related businesses, and each such Granting Party (including the Additional Granting Party) will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement; WHEREAS, the Credit Agreement requires the Additional Granting Party to become a party to the Guarantee and Collateral Agreement; and


 
LEGAL_US_E # 155827293.3 ANNEX 2 1006148456v9 WHEREAS, the Additional Granting Party 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 Granting Party, as provided in subsection 9.15 of the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee and Collateral Agreement as a Granting Party thereunder with the same force and effect as if originally named therein as a [Guarantor] [, Grantor and Pledgor] [and Grantor] [and Pledgor] 1 and, without limiting the generality of the foregoing, hereby expressly assumes all obligations and liabilities of a [Guarantor] [, Grantor and Pledgor] [and Grantor] [and Pledgor] 2 thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedules ____________ to the Guarantee and Collateral Agreement, and such Schedules are hereby amended and modified to include such information. The Additional Granting Party hereby represents and warrants that each of the representations and warranties of such Additional Granting Party, in its capacities as a Guarantor [, Grantor and Pledgor] [and Grantor] [and Pledgor],3 contained in Section 4 of the Guarantee and Collateral Agreement is true and correct in all material respects on and as the date hereof (after giving effect to this Assumption Agreement) as if made on and as of such date. Each Additional Granting Party hereby grants, as and to the same extent as provided in the Guarantee and Collateral Agreement, to the Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in the [Collateral (as such term is defined in Subsection 3.1 of the Guarantee and Collateral Agreement) of such Additional Granting Party] [and] [the Pledged Collateral (as such term is defined in the Guarantee and Collateral Agreement) of such Additional Granting Party, except as provided in Subsection 3.3 of the Guarantee and Collateral Agreement]. 2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 1 Indicate the capacities in which the Additional Granting Party is becoming a Grantor. 2 Indicate the capacities in which the Additional Granting Party is becoming a Grantor. 3 Indicate the capacities in which the Additional Granting Party is becoming a Grantor.


 
LEGAL_US_E # 155827293.3 ANNEX 2 ANNEX 2 1006148456v9 IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written. [ADDITIONAL GRANTING PARTY] By: _________________________________ Name: Title: Acknowledged and Agreed to as of the date hereof by: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent and Administrative Agent By:_______________________________ Name: Title:


 
LEGAL_US_E # 155827293.3 ANNEX 3 1006148456v9 SUPPLEMENTAL AGREEMENT SUPPLEMENTAL AGREEMENT, dated as of _________ __, ____, made by ______________________________, a ______________ corporation (the “Additional Pledgor”), in favor of WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral agent (in such capacity, the “Collateral Agent”) and as administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions from time to time parties to the Credit Agreement referred to below and the other Secured Parties (as defined in the Guarantee and Collateral Agreement). All capitalized terms not defined herein shall have the meaning ascribed to them in the Guarantee and Collateral Agreement referred to below, or if not defined therein, in the Credit Agreement. W I T N E S S E T H : WHEREAS, ATKORE INTERNATIONAL, INC., a Delaware corporation (together with its successors and assigns, the “Parent Borrower”), the Subsidiary Borrowers from time to time party thereto (together with the Parent Borrower, collectively the “Borrowers” and each individually a “Borrower”), the several banks and other financial institutions from time to time party thereto (the “Lenders”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent (in such capacity, the “Administrative Agent”) for the Lenders thereunder and as collateral agent (in such capacity, the “Collateral Agent”) for the Secured Parties, and the other parties party thereto are parties to an Amended and Restated Credit Agreement, dated as of August 28, 2020 (as amended, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”); WHEREAS, in connection with the Credit Agreement, Atkore Inc., a Delaware corporation, Atkore International Holdings Inc., a Delaware corporation (“Holdings”), the Parent Borrower and certain of its Subsidiaries are, or are to become, parties to the Second Amended and Restated Guarantee and Collateral Agreement, dated as of May 26, 2021 (as amended, supplemented, waived or otherwise modified from time to time, the “Guarantee and Collateral Agreement”), in favor of the Collateral Agent, for the ratable benefit of the Secured Parties; WHEREAS, the Credit Agreement requires the Additional Pledgor to become a Pledgor under the Guarantee and Collateral Agreement with respect to Capital Stock of certain new Subsidiaries of the Additional Pledgor; and WHEREAS, the Additional Pledgor has agreed to execute and deliver this Supplemental Agreement in order to become such a Pledgor under the Guarantee and Collateral Agreement;


 
LEGAL_US_E # 155827293.3 ANNEX 4 1006148456v9 NOW, THEREFORE, IT IS AGREED: 1. Guarantee and Collateral Agreement. By executing and delivering this Supplemental Agreement, the Additional Pledgor, as provided in Subsection 9.15 of the Guarantee and Collateral Agreement, hereby becomes a Pledgor under the Guarantee and Collateral Agreement with respect to the shares of Capital Stock of the Subsidiary of the Additional Pledgor listed in Annex 1-A hereto, as a Pledgor thereunder. The information set forth in Annex 1-A hereto is hereby added to the information set forth in Schedule 2 to the Guarantee and Collateral Agreement, and such Schedule 2 is hereby amended and modified to include such information. The Additional Pledgor hereby represents and warrants that each of the representations and warranties of such Additional Pledgor, in its capacities as a Pledgor, contained in Section 4.3 of the Guarantee and Collateral Agreement is true and correct in all material respects on and as the date hereof (after giving effect to this Supplemental Agreement) as if made on and as of such date. Each Additional Pledgor hereby grants, as and to the same extent as provided in the Guarantee and Collateral Agreement, to the Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in all of the Pledged Collateral of such Additional Pledgor now owned or at any time hereafter acquired by such Pledgor, and any Proceeds thereof, except as provided in Subsection 3.3 of the Guarantee and Collateral Agreement. 2. GOVERNING LAW. THIS SUPPLEMENTAL AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.


 
LEGAL_US_E # 155827293.3 ANNEX 3 1006148456v9 IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed and delivered as of the date first above written. [ADDITIONAL PLEDGOR] By:_______________________________ Name: Title: Acknowledged and Agreed to as of the date hereof by: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent and Administrative Agent By:_______________________________ Name: Title:


 
LEGAL_US_E # 155827293.3 ANNEX 4 1006148456v9 JOINDER AND RELEASE JOINDER AND RELEASE, dated as of [_________ __], [____] (this “Joinder”) by and among [ ] (“Assignor”), [________] (“Assignee”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral agent (in such capacity, the “Collateral Agent”) and as administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions (the “Lenders”) from time to time parties to the Credit Agreement referred to below and for the other Secured Parties. All capitalized terms not defined herein shall have the meaning ascribed to them in the Guarantee and Collateral Agreement referred to below. W I T N E S S E T H: WHEREAS, ATKORE INTERNATIONAL, INC., a Delaware corporation (together with its successors and assigns, the “Parent Borrower”), the several banks and other financial institutions from time to time party thereto (the “Lenders”), and the Administrative Agent, the Collateral Agent and the other parties party thereto are parties to an Amended and Restated Credit Agreement, dated as of August 28, 2020 (as amended, supplemented, waived or otherwise modified from time to time, the “Credit Agreement”); WHEREAS, in connection with the Credit Agreement, Assignor (as the direct parent of the Parent Borrower), the Parent Borrower and certain other subsidiaries of Parent Borrower entered into a Second Amended and Restated Guarantee and Collateral Agreement, dated as of May 26, 2021 (the “Guarantee and Collateral Agreement”) by and among Assignor, the Parent Borrower, certain of the Parent Borrower’s Subsidiaries and the Collateral Agent, pursuant to which, among other things, they agreed to jointly and severally, unconditionally and irrevocably, guarantee all of the obligations of the Parent Borrower under the Credit Agreement and grant security interests in and pledge property and assets, including the Pledged Collateral, in favor of the Collateral Agent, for the benefit of the Secured Parties; WHEREAS, Assignee is acquiring from Assignor all of the Capital Stock of the Parent Borrower; WHEREAS, in connection therewith, Section 9.16(e) of the Guarantee and Collateral Agreement requires Assignee to assume all of the obligations of Assignor under the Guarantee and Collateral Agreement and the other Loan Documents to which Assignor is a party; and WHEREAS, upon the assumption of Assignor’s obligations by Assignee, the Assignor shall be automatically released from its obligations under the Guarantee and Collateral Agreement and any other instrument or document furnished pursuant thereto, and pursuant to Section 9.16(e) of the Guarantee and Collateral Agreement the Collateral Agent shall, among other things, take such actions as may be reasonably requested to evidence such release.


 
LEGAL_US_E # 155827293.3 ANNEX 4 1006148456v9 NOW, THEREFORE, IT IS AGREED: 1. By executing and delivering this Joinder, Assignee hereby expressly assumes all of the obligations of Assignor under the Guarantee and Collateral Agreement and each other Loan Document to which Assignor is a party and agrees that it will be bound by the provisions of the Guarantee and Collateral Agreement and such other Loan Documents. Pursuant to Section 9.16(e) of the Guarantee and Collateral Agreement, Assignee hereby succeeds to, and is substituted for, and shall exercise every right and power of, Assignor under the Guarantee and Collateral Agreement and the other Loan Documents to which Assignor is a party, and shall be thereafter be deemed to be “Holdings” for purposes of the Guarantee and Collateral Agreement and the other Loan Documents and a “Guarantor”, “Granting Party” and “Pledgor” for purposes of the Guarantee and Collateral Agreement as if originally named therein and the Assignor is hereby expressly, irrevocably and unconditionally discharged from all debts, obligations, covenants and agreements under the Guarantee and Collateral Agreement and the other Loan Documents to which it is a party. 2. The Collateral Agent hereby confirms and acknowledges the release of Assignor from its guarantee and all other obligations under the Guarantee and Collateral Agreement and all other obligations thereunder and under the other Loan Documents. 3. The Collateral Agent hereby confirms and acknowledges that the Lien pursuant to the Guarantee and Collateral Agreement on all Security Collateral of Assignor, and any Lien pursuant to any other Loan Document on the property or assets of Assignor, has been automatically released. 4. Assignee hereby represents and warrants that each of the representations and warranties made by Assignee, in its capacity as a Guarantor, Grantor and Pledgor, in each case solely with respect to the representations and warranties made by Holdings, contained in Section 4 of the Guarantee and Collateral Agreement is true and correct in all material respects on and as the date hereof (after giving effect to this Joinder Agreement) as if made on and as of such date. Assignee hereby grants, as and to the same extent as provided in the Guarantee and Collateral Agreement, to the Collateral Agent, for the benefit of the Secured Parties, a continuing security interest in the Pledged Collateral (as such term is defined in the Guarantee and Collateral Agreement) of Assignee, except as provided in Subsection 3.3 of the Guarantee and Collateral Agreement and with the limitations as applicable to Holdings. 5. GOVERNING LAW. THIS JOINDER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD


 
LEGAL_US_E # 155827293.3 ANNEX 4 1006148456v9 REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.


 
LEGAL_US_E # 155827293.3 ANNEX 4 1006148456v9 IN WITNESS WHEREOF, the undersigned has caused this Joinder to be duly executed and delivered as of the date first above written. [ASSIGNOR] By:_______________________________ Name: Title: [ASSIGNEE] By:_______________________________ Name: Title: Acknowledged and Agreed to as of the date hereof by: WELLS FARGO BANK, NATIONAL ASSOCIATION, as Collateral Agent and Administrative Agent By:_______________________________ Name: Title:


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 
Execution Version
INTERCREDITOR AGREEMENT
by and between
WELLS FARGO BANK, NATIONAL ASSOCIATION
as ABL Agent,
and
JPMORGAN CHASE BANK, N.A.
as Term Loan Agent
Dated as of May 26, 2021



TABLE OF CONTENTS
Page No.
Article 1 DEFINITIONS
1
Section 1.1    UCC Definitions
1
Section 1.2    Other Definitions
1
Section 1.3    Rules of Construction
17
Article 2 LIEN PRIORITY
17
Section 2.1    Agreement to Subordinate
17
Section 2.2    Waiver of Right to Contest Liens
20
Section 2.3    Remedies Standstill
22
Section 2.4    Exercise of Rights
24
Section 2.5    No New Liens
29
Section 2.6    Waiver of Marshalling
32
Article 3 ACTIONS OF THE PARTIES
32
Section 3.1    Certain Actions Permitted
32
Section 3.2    Agent for Perfection
32
Section 3.3    Sharing of Information and Access
33
Section 3.4    Insurance
33
Section 3.5    No Additional Rights For the Credit Parties Hereunder
33
Section 3.6    Actions Upon Breach
34
Section 3.7    Inspection Rights
34
Article 4 APPLICATION OF PROCEEDS
35
Section 4.1    Application of Proceeds
35
Section 4.2    Specific Performance
38
Article 5 INTERCREDITOR ACKNOWLEDGEMENTS AND WAIVERS
38
Section 5.1    Notice of Acceptance and Other Waivers
38
Section 5.2    Modifications to ABL Documents and Term Loan Documents
42
Section 5.3    Reinstatement and Continuation of Agreement
47
Article 6 INSOLVENCY PROCEEDINGS
48
Section 6.1    DIP Financing
48
Section 6.2    Relief From Stay
49
Section 6.3    No Contest
49
Section 6.4    Asset Sales
51
Section 6.5    Separate Grants of Security and Separate Classification
51
Section 6.6    Enforceability
51
Section 6.7    ABL Obligations Unconditional
51
Section 6.8    Term Loan Obligations Unconditional
52
Section 6.9    Additional Obligations Unconditional
52
Section 6.10    Adequate Protection
53
Article 7 MISCELLANEOUS
53
Section 7.1    Rights of Subrogation
53
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Section 7.2    Further Assurances
54
Section 7.3    Representations
54
Section 7.4    Amendments
54
Section 7.5    Addresses for Notices
55
Section 7.6    No Waiver, Remedies
56
Section 7.7    Continuing Agreement, Transfer of Secured Obligations
56
Section 7.8    Governing Law: Entire Agreement
57
Section 7.9    Counterparts
57
Section 7.10    No Third Party Beneficiaries
57
Section 7.11    Designation of Additional Indebtedness; Joinder of Additional Agents
57
Section 7.12    Term Loan Collateral Representative; Notice of Term Loan Collateral Representative Change
58
Section 7.13    Provisions Solely to Define Relative Rights
58
Section 7.14    Headings
58
Section 7.15    Severability
58
Section 7.16    Attorneys Fees
58
Section 7.17    VENUE; JURY TRIAL WAIVER
59
Section 7.18    Intercreditor Agreement
59
Section 7.19    No Warranties or Liability
59
Section 7.20    Conflicts
59
Section 7.21    Information Concerning Financial Condition of the Credit Parties
59

EXHIBITS:
Exhibit A     Additional Indebtedness Designation
Exhibit B    Additional Indebtedness Joinder
Exhibit C     Joinder of ABL Credit Agreement or Term Loan Agreement
ii


INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (as amended, restated, supplemented, waived or otherwise modified from time to time pursuant to the terms hereof, this “Agreement”) is entered into as of May 26, 2021 between WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined herein, the “ABL Agent”) for the ABL Secured Parties and JPMORGAN CHASE BANK, N.A., in its capacity as collateral agent (together with its successors and assigns in such capacity from time to time, and as further defined herein, the “Term Loan Agent”) for the Term Loan Secured Parties, together with any Additional Parties from time to time party hereto. Capitalized terms defined in Article 1 hereof are used in this Agreement as so defined.
RECITALS
WHEREAS, Atkore International, Inc., a Delaware corporation (the “Company”), the ABL Lenders (as defined below), the ABL Representative, and certain financial institutions and other entities are parties to the Amended and Restated Credit Agreement, dated as of August 28, 2020 (as amended by that certain Amendment Number One to Credit Agreement, dated as of the date hereof, and as further amended, restated, supplemented, waived or otherwise modified from time to time, the “Original ABL Credit Agreement”), pursuant to which the ABL Lenders have agreed to make loans and extend other financial accommodations to the Company;
WHEREAS, the Company, the Term Loan Lenders (as defined below), the Term Loan Collateral Representative and certain financial institutions and other entities are parties to the Term Loan Credit Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Original Term Loan Agreement”), pursuant to which the Term Loan Lenders have agreed to make term loans to the Company;
WHEREAS, the ABL Credit Parties have granted to the ABL Agent security interests in the Collateral (as defined below) as security for payment and performance of the ABL Obligations (as defined below);
WHEREAS, the ABL Guarantors have agreed to guarantee the payment and performance of the ABL Borrowers’ obligations under the ABL Documents pursuant to the ABL Guaranties (as defined below).
WHEREAS, the Term Loan Credit Parties have granted to the Term Loan Collateral Representative security interests in the Collateral (as defined below) as security for payment and performance of the Term Loan Obligations (as defined below); and
WHEREAS, the Term Loan Guarantors have agreed to guarantee the payment and performance of the Company’s obligations under the Term Loan Documents pursuant to the Term Loan Guaranties (as defined below).
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 1.1UCC Definitions. The following terms which are defined in the Uniform Commercial Code are used herein as so defined: Accounts, Chattel Paper, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Financial Assets, Instruments, Inventory, Investment Property, Letter-of-Credit Rights, Money, Payment Intangibles, Promissory Notes, Records, Security, Securities Accounts, Security Entitlements, Supporting Obligations, and Tangible Chattel Paper.
Section 1.2Other Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:



ABL Agent” shall mean Wells Fargo Bank, National Association in its capacity as collateral agent under the ABL Credit Agreement, together with its successors and assigns in such capacity from time to time, whether under the Original ABL Credit Agreement or any subsequent ABL Credit Agreement, as well as any Person designated as the “Agent” or “Collateral Agent” under any ABL Credit Agreement.
ABL Bank Products Affiliate” shall mean any ABL Credit Agreement Lender or any Affiliate of any ABL Credit Agreement Lender that has entered into a Bank Products Agreement with an ABL Credit Party with the obligations of such ABL Credit Party thereunder being secured by one or more ABL Collateral Documents.
ABL Borrowers” shall mean the Company and certain of its Subsidiaries, in their capacities as borrowers under the ABL Credit Agreement, together with its and their respective successors and assigns.
ABL Collateral Documents” shall mean all “Security Documents” as defined in the Original ABL Credit Agreement, and all other security agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with any ABL Credit Agreement, and any other agreement, document or instrument pursuant to which a Lien is granted securing any ABL Obligations or under which rights or remedies with respect to such Liens are governed, in each case as the same may be amended, supplemented, waived or modified from time to time.
ABL Commingled Collateral” shall have the meaning set forth in Section 3.7(a) hereof.
ABL Credit Agreement” shall mean (i) the Original ABL Credit Agreement and (ii) if designated by the Company to the extent permitted under the ABL Credit Agreement, the Term Loan Credit Agreement and any Additional Credit Facilities then extant, any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to refund, refinance, restructure, replace, renew, repay, increase or extend (whether in whole or in part and whether with the original agent and creditors or other agents and creditors or otherwise) the indebtedness and other obligations outstanding under (x) the Original ABL Credit Agreement or (y) any subsequent ABL Credit Agreement (in each case, as amended, restated, supplemented, waived or otherwise modified from time to time); provided, that the requisite creditors party to such ABL Credit Agreement (or their agent or other representative on their behalf) shall agree, by a joinder agreement substantially in the form of Exhibit C attached hereto or otherwise in form and substance reasonably satisfactory to the Term Loan Agent and any Additional Agent, that the obligations under such ABL Credit Agreement are subject to the terms and provisions of this Agreement. Any reference to the ABL Credit Agreement shall be deemed a reference to any ABL Credit Agreement then in existence.
ABL Credit Agreement Lenders” shall mean the lenders, debtholders and other creditors party from time to time to the ABL Credit Agreement, together with their respective successors, assigns and transferees.
ABL Credit Parties” shall mean the ABL Borrowers, the ABL Guarantors and each other direct or indirect Subsidiary of the Company or any of its Affiliates that is now or hereafter becomes a party to any ABL Document.
ABL Documents” shall mean the ABL Credit Agreement, the ABL Guaranties, the ABL Collateral Documents, any Bank Products Agreements between any ABL Credit Party and any ABL Bank Products Affiliate, any Hedging Agreements between any ABL Credit Party and any ABL Lender, those other ancillary agreements as to which the ABL Agent or any ABL Lender is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any ABL Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to the ABL Agent, in connection with any of the foregoing or any ABL Credit Agreement, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
ABL Guaranties” shall mean (i) that certain second amended and restated guarantee and collateral agreement dated as of May 26, 2021, by the ABL Guarantors in favor of the ABL Agent, (ii) that certain Canadian guarantee and collateral agreement, dated as of August 28, 2020, by Columbia-MBF delivered to the ABL Agent and (iii) all other guarantees of any ABL Obligations of any ABL Credit Party by any other ABL Credit Party in
2


favor of any ABL Secured Party, in each case as amended, restated, supplemented, waived or otherwise modified from time to time.
ABL Guarantors” shall mean the collective reference to Holdings (so long as it is a guarantor under any of the ABL Guaranties), each of the Company’s Domestic Subsidiaries that is a guarantor under any of the ABL Guaranties and any other Person who is or becomes a guarantor under any of the ABL Guaranties.
ABL Hedging Affiliate” shall mean any ABL Credit Agreement Lender or any Affiliate of any ABL Credit Agreement Lender that has entered into a Hedging Agreement with an ABL Credit Party with the obligations of such ABL Credit Party thereunder being secured by one or more ABL Collateral Documents.
ABL Lenders” shall mean all ABL Credit Agreement Lenders, together with any Affiliates thereof in their capacity as ABL Bank Products Affiliates, ABL Hedging Affiliates or ABL Vendor Affiliates, and all successors, assigns, transferees and replacements thereof, as well as any Person designated as a “Lender” under any ABL Credit Agreement.
ABL Obligations” shall mean any and all loans and all other obligations, liabilities and indebtedness of every kind, nature and description, whether now existing or hereafter arising, whether arising before, during or after the commencement of any case with respect to any ABL Credit Party under the Bankruptcy Code or any other Insolvency Proceeding, owing by each ABL Credit Party from time to time to the ABL Agent, the “administrative agent” or “agent” under the ABL Credit Agreement, the ABL Credit Agreement Lenders or any of them, any ABL Bank Products Affiliates, any ABL Hedging Affiliates or any ABL Vendor Affiliates, under any ABL Document, whether for principal, interest (including interest and fees which, but for the filing of a petition in bankruptcy with respect to such ABL Credit Party, would have accrued on any ABL Obligation, whether or not a claim is allowed against such ABL Credit Party for such interest and fees in the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of Hedging Agreements, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the ABL Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
ABL Permitted Access Right” shall have the meaning set forth in Section 3.7(a).
ABL Priority Collateral” shall mean all Collateral consisting of the following:
(1)    all Accounts (other than Accounts which constitute identifiable proceeds of Term Loan Priority Collateral);
(2)    all Chattel Paper (including Tangible Chattel Paper and Electronic Chattel Paper);
(3)    (x) all Deposit Accounts and Money and all cash, checks, other negotiable instruments, funds and other evidences of payments held therein and (y) all Securities, Security Entitlements, and Securities Accounts, in each case, to the extent constituting cash or Cash Equivalents or representing a claim to Cash Equivalents, in each case other than the Asset Sales Proceeds Account and Capital Stock of Subsidiaries of Holdings and all cash, checks and other property held therein or credited thereto, but in any event and regardless of the foregoing clauses, but excluding the Asset Sales Proceeds Account and Proceeds of Term Loan Priority Collateral;
(4)    all Inventory;
(5)    to the extent involving or governing any of the items referred to in the preceding clauses (1) through (4), all Documents, General Intangibles (other than Intellectual Property and Capital Stock of Subsidiaries of Holdings), Instruments (including, without limitation, Promissory Notes), and Letter-of-Credit Rights, provided that to the extent any of the foregoing also relates to Term Loan Priority Collateral, only that portion related to the items referred to in the preceding clauses (1) through (4) shall be included in the ABL Priority Collateral;
3


(6)    to the extent evidencing or governing any of the items referred to in the preceding clauses (1) through (5), all Supporting Obligations; provided that to the extent any of the foregoing also relates to Term Loan 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 foregoing (including without limitation all books, databases, data processing software, customer lists, and Records, whether tangible or electronic, which contain any information relating to any of the foregoing); and
(8)    all collateral security and guarantees with respect to any of the foregoing and all cash, Money, instruments, securities (other than Capital Stock of Subsidiaries of Holdings), financial assets, Investment Property (other than Capital Stock of Subsidiaries of Holdings), insurance proceeds and deposit accounts directly received as proceeds of any ABL Priority Collateral described in the preceding clauses (1) through (5) (such proceeds, “ABL Priority Proceeds”); provided, however, that no proceeds of ABL Priority Proceeds will constitute ABL Priority Collateral unless such proceeds of ABL Priority Proceeds would otherwise constitute ABL Priority Collateral.
For the avoidance of doubt, under no circumstances shall Excluded Assets (as defined in the next succeeding sentence) be ABL Priority Collateral. As used in this definition of “ABL Priority Collateral”, the term “Excluded Assets” shall have the meaning provided in the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect) or in the ABL Collateral Documents relating thereto, or in any other ABL Credit Agreement then in effect (if the Original ABL Credit Agreement is not then in effect) or in the ABL Collateral Documents relating thereto.
ABL Recovery” shall have the meaning set forth in Section 5.3(a).
ABL Secured Parties” shall mean the ABL Agent and the ABL Lenders.
ABL Vendor Affiliate” shall mean any ABL Credit Agreement Lender or any Affiliate of any ABL Credit Agreement Lender that has entered into a Vendor Financing Arrangement (as defined in the ABL Credit Agreement as in effect on the date hereof) with an ABL Credit Party with the obligations of such ABL Credit Party thereunder being secured by one or more ABL Collateral Documents.
Additional Agent” shall mean any one or more agents, trustees or other representatives for or of any one or more Additional Credit Facility Creditors, and shall include any successor thereto, as well as any Person designated as an “Agent” under any Additional Credit Facility.
Additional Bank Products Affiliate” shall mean any Additional Credit Facility Creditor or any Affiliate of any Additional Credit Facility Creditor that has entered into a Bank Products Agreement with a Credit Party with the obligations of such Credit Party thereunder being secured by one or more Additional Collateral Documents.
Additional Bank Products Provider” shall mean any Person (other than an Additional Bank Products Affiliate) that has entered into a Bank Products Agreement with an Additional Credit Party with the obligations of such Additional Credit Party thereunder being secured by one or more Additional Collateral Documents, as designated by the Company in accordance with the terms of the Additional Collateral Documents.
Additional Borrower” shall mean any Additional Credit Party that incurs or issues Additional Indebtedness, together with its successors and assigns.
Additional Collateral Documents” shall mean all “Security Documents” as defined in any Additional Credit Facility, and in any event shall include all security agreements, mortgages, deeds of trust, pledges and other collateral documents executed and delivered in connection with any Additional Credit Facility, and any other agreement, document or instrument pursuant to which a Lien is granted securing any Additional Obligations or under which rights or remedies with respect to such Liens are governed, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
4


Additional Credit Facilities” shall mean (a) any one or more agreements, instruments and documents under which any Additional Indebtedness is or may be incurred, including without limitation any credit agreements, loan agreements, indentures or other financing agreements, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time, together with (b) if designated by the Company, any other agreement extending the maturity of, consolidating, restructuring, refunding, replacing or refinancing all or any portion of the Additional Obligations, whether by the same or any other lender, debtholder or other creditor or group of lenders, debtholders or other creditors, or the same or any other agent, trustee or representative therefor, or otherwise, and whether or not increasing the amount of any Indebtedness that may be incurred thereunder.
Additional Credit Facility Creditors” shall mean one or more holders of Additional Indebtedness (or commitments therefor) that is or may be incurred under one or more Additional Credit Facilities.
Additional Credit Party” shall mean the Company, Parent (so long as it is a guarantor under any of the Additional Guaranties), Holdings (so long as it is a guarantor under any of the Additional Guaranties), each direct or indirect Subsidiary of the Company or any of its Affiliates that is or becomes a party to any Additional Document, and any other Person who becomes a guarantor under any of the Additional Guaranties.
Additional Creditors” shall mean one or more Additional Credit Facility Creditors and shall include all Additional Bank Products Affiliates, Additional Hedging Affiliates, Additional Bank Products Providers and Additional Hedging Providers and all successors, assigns, transferees and replacements thereof, as well as any Person designated as an “Additional Creditor” under any Additional Credit Facility; and with respect to any Additional Agent, shall mean the Additional Creditors represented by such Additional Agent.
Additional Documents” shall mean any Additional Credit Facilities, any Additional Guaranties, any Additional Collateral Documents, any Bank Products Agreements between any Credit Party and any Additional Bank Products Affiliate or Additional Bank Products Provider, any Hedging Agreements between any Credit Party and any Additional Hedging Affiliate or Additional Hedging Provider, those other ancillary agreements as to which any Additional Secured Party is a party or a beneficiary and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to any Additional Agent, in connection with any of the foregoing or any Additional Credit Facility, including any intercreditor or joinder agreement among any of the Additional Secured Parties or among any of the Term Loan Secured Parties and Additional Secured Parties, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
Additional Effective Date” shall have the meaning set forth in Section 7.11(b).
Additional Guaranties” shall mean any one or more guarantees of any Additional Obligations of any Additional Credit Party by any other Additional Credit Party in favor of any Additional Secured Party, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
Additional Guarantor” shall mean any Additional Credit Party that at any time has provided an Additional Guaranty.
Additional Hedging Affiliate” shall mean any Additional Credit Facility Creditor or any Affiliate of any Additional Credit Facility Creditor that has entered into a Hedging Agreement with any Credit Party with the obligations of such Credit Party thereunder being secured by one or more Additional Collateral Documents.
Additional Hedging Provider” shall mean any Person (other than an Additional Hedging Affiliate) that has entered into a Hedging Agreement with an Additional Credit Party with the obligations of such Additional Credit Party thereunder being secured by one or more Additional Collateral Documents, as designated by the Company in accordance with the terms of the Additional Collateral Documents.
Additional Indebtedness” shall mean any Additional Specified Indebtedness that (1) is permitted to be secured by a Lien (as hereinafter defined) on Collateral by
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(a)    prior to the Discharge of ABL Obligations, Section 8.14 of the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect) or the corresponding negative covenant restricting Liens contained in any other ABL Credit Agreement then in effect if the Original ABL Credit Agreement is not then in effect (which covenant is designated in such ABL Credit Agreement as applicable for purposes of this definition);
(b)    prior to the Discharge of Term Loan Obligations, Section 8.6 of the Original Term Loan Agreement (if the Original Term Loan Agreement is then in effect) or the corresponding negative covenant restricting Liens contained in any other Term Loan Agreement then in effect if the Original Term Loan Agreement is not then in effect (which covenant is designated in such Term Loan Agreement as applicable for purposes of this definition); and
(c)    prior to the Discharge of Additional Obligations, any negative covenant restricting Liens contained in any applicable Additional Credit Facility then in effect (which covenant is designated in such Additional Credit Facility as applicable for purposes of this definition); and
(2) is designated as “Additional Indebtedness” by the Company pursuant to an Additional Indebtedness Designation and in compliance with the procedures set forth in Section 7.11.
As used in this definition of “Additional Indebtedness”, the term “Lien” shall have the meaning set forth (x) for purposes of the preceding clause (1)(a), prior to the Discharge of ABL Obligations, in the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect), or in any other ABL Credit Agreement then in effect (if the Original ABL Credit Agreement is not then in effect), (y) for purposes of the preceding clause (1)(b), prior to the Discharge of Term Loan Obligations, in the Original Term Loan Agreement (if the Original Term Loan Agreement is then in effect), or in any other Term Loan Agreement then in effect (if the Original Term Loan Agreement is not then in effect), and (z) for purposes of the preceding clause (1)(c), prior to the Discharge of Additional Obligations, in the applicable Additional Credit Facility then in effect.
Additional Indebtedness Designation” shall mean a certificate of the Company with respect to Additional Indebtedness substantially in the form of Exhibit A attached hereto.
Additional Indebtedness Joinder” shall mean a joinder agreement executed by one or more Additional Agents in respect of the Additional Indebtedness subject to an Additional Indebtedness Designation, on behalf of one or more Additional Creditors in respect of such Additional Indebtedness, substantially in the form of Exhibit B attached hereto.
Additional Obligations” shall mean any and all loans and all other obligations, liabilities and indebtedness of every kind, nature and description, whether now existing or hereafter arising, whether arising before, during or after the commencement of any case with respect to any Additional Credit Party under the Bankruptcy Code or any other Insolvency Proceeding, owing by each Additional Credit Party from time to time to any Additional Agent, any Additional Creditors or any of them, including any Additional Bank Products Affiliates, Additional Hedging Affiliates, Additional Bank Products Provider or Additional Hedging Provider, under any Additional Document, whether for principal, interest (including interest and fees which, but for the filing of a petition in bankruptcy with respect to such Additional Credit Party, would have accrued on any Additional Obligation, whether or not a claim is allowed against such Additional Credit Party for such interest and fees in the related bankruptcy proceeding), reimbursement of amounts drawn under letters of credit, payments for early termination of Hedging Agreements, fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Additional Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
Additional Recovery” shall have the meaning set forth in Section 5.3(c).
Additional Secured Parties” shall mean any Additional Agents and any Additional Creditors.
Additional Specified Indebtedness” shall mean any Indebtedness (as hereinafter defined) that is or may from time to time be incurred by any Credit Party in compliance with:
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(a)    prior to the Discharge of ABL Obligations, Section 8.13 of the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect) or the corresponding negative covenant restricting Indebtedness contained in any other ABL Credit Agreement then in effect if the Original ABL Credit Agreement is not then in effect (which covenant is designated in such ABL Credit Agreement as applicable for purposes of this definition);
(b)    prior to the Discharge of Term Loan Obligations, Section 8.1 of the Original Term Loan Agreement (if the Original Term Loan Agreement is then in effect) or the corresponding negative covenant restricting Indebtedness contained in any other Term Loan Agreement then in effect if the Original Term Loan Agreement is not then in effect (which covenant is designated in such Term Loan Agreement as applicable for purposes of this definition); and
(c)    any negative covenant restricting Indebtedness contained in any Additional Credit Facility then in effect (which covenant is designated in such Additional Credit Facility as applicable for purposes of this definition).
As used in this definition of “Additional Specified Indebtedness”, the term “Indebtedness” shall have the meaning set forth (x) for purposes of the preceding clause (a), prior to the Discharge of ABL Obligations, in the Original ABL Credit Agreement (if the Original ABL Credit Agreement is then in effect), or in any other ABL Credit Agreement then in effect (if the Original ABL Credit Agreement is not then in effect), (y) for purposes of the preceding clause (b), prior to the Discharge of Term Loan Obligations, in the Original Term Loan Agreement (if the Original Term Loan Agreement is then in effect), or in any other Term Loan Agreement then in effect (if the Original Term Loan Agreement is not then in effect), and (z) for purposes of the preceding clause (c), prior to the Discharge of Additional Obligations, in the applicable Additional Credit Facility then in effect. In the event that any Indebtedness as defined in any such Credit Document shall not be Indebtedness as defined in any other such Credit Document, but is or may be incurred in compliance with such other Credit Document, such Indebtedness shall constitute Additional Specified Indebtedness for purposes of such other Credit Document.
Affiliate” shall mean with respect to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” of a Person shall mean the power, directly or indirectly, either to (a) vote 20% or more of the securities having ordinary voting power for the election of directors of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.
Agent” shall mean the ABL Agent, the Term Loan Agent and any Additional Agent, as applicable.
Agreement” shall mean this Intercreditor Agreement, as the same may be amended, restated, supplemented, waived or otherwise modified from time to time pursuant to the terms hereof.
Asset Sales Proceeds Account” shall mean one or more Deposit Accounts or Securities Accounts holding only the proceeds of any sale or disposition of any Term Loan Priority Collateral and the proceeds or investment thereof.
Bank Products Agreement” shall mean any agreement pursuant to which a bank or other financial institution agrees to provide treasury or cash management services (including, without limitation, controlled disbursements, automated clearinghouse transactions, return items, netting, overdrafts and interstate depository network services).
Bankruptcy Code” Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as now and hereafter in effect, or any successor statute.
Borrower” shall mean any of the ABL Borrowers, the Term Loan Borrower and any Additional Borrower.
Business Day” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close.
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Capital Stock” shall mean as to any Person, any and all shares or units of, rights to purchase, warrants or options for, or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.
Capitalized Lease Obligation” shall mean an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP.
Cash Collateral” shall mean any Collateral consisting of Money or Cash Equivalents, any Security Entitlement and any Financial Assets.
Cash Equivalents” shall mean (a) securities issued or fully guaranteed or insured by the United States of America, Canada, the United Kingdom or a member state of the European Union or any agency or instrumentality of any thereof, (b) time deposits, certificates of deposit or bankers’ acceptances of (i) any ABL Lender, Term Loan Lender or any Additional Creditor or any affiliate thereof or (ii) any commercial bank having capital and surplus in excess of $500,000,000 (or the foreign currency equivalent thereof as of the date of such investment) and the commercial paper of the holding company of which is rated at least A-2 or the equivalent thereof by Standard & Poor’s Ratings Group (a division of The McGraw Hill Companies Inc.) or any successor rating agency (“S&P”) or at least P-2 or the equivalent thereof by Moody’s Investors Service, Inc. or any successor rating agency (“Moody’s”) (or if at such time neither is issuing ratings, then a comparable rating of such other nationally recognized rating agency as shall be approved by Agent), (c) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b)(i) or (b)(ii) above, (c) commercial paper or other short-term obligations rated at least A-2 or the equivalent thereof by S&P or at least P-2 or the equivalent thereof by Moody’s (or if at such time neither is issuing ratings, then a comparable rating of such other nationally recognized rating agency as shall be approved by any Agent, in each case, in its reasonable judgment), (d) investments in money market funds complying with the risk limiting conditions of Rule 2a-7 or any successor rule of the Securities and Exchange Commission under the Investment Company Act of 1940, and (e) investments similar to any of the foregoing denominated in foreign currencies approved by the board of directors of the Company, in each case provided in clauses (a), (b), (c) and (e) above only, maturing within twelve months after the date of acquisition.
Collateral” shall mean all Property now owned or hereafter acquired by any Borrower or any Guarantor in or upon which a Lien is granted or purported to be granted to the ABL Agent, the Term Loan Agent or any Additional Agent under any of the ABL Collateral Documents, the Term Loan Collateral Documents or the Additional Collateral Documents, together with all rents, issues, profits, products, and Proceeds thereof.
Commodities Agreement” shall have the meaning assigned to such term in the Original Term Loan Agreement.
Company” shall mean Atkore International, Inc., a Delaware corporation, and any successor in interest thereto.
Control Collateral” shall mean any Collateral consisting of any certificated Security, Investment Property, Deposit Account, Instruments and any other Collateral as to which a Lien may be perfected through possession or control by the secured party, or any agent therefor.
Copyright Licenses” shall mean with respect to any Credit Party, all United States written license agreements of such Credit Party providing for the grant by or to such Credit Party of any right to use any United States copyright of such Credit Party, other than agreements with any Person who is an Affiliate or a Subsidiary of such Credit Party, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Copyrights” shall mean with respect to any Credit Party, all of such Credit Party’s right, title and interest in and to all United States copyrights, whether or not the underlying works of authorship have been published or registered, United States copyright registrations and copyright applications, and (i) all renewals thereof, (ii) all income, royalties, damages and payments now or hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for
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past or future infringements thereof and (iii) the right to sue or otherwise recover for past, present and future infringements and misappropriations thereof.
Credit Documents” shall mean the ABL Documents, the Term Loan Documents and any Additional Documents.
Credit Parties” shall mean the ABL Credit Parties, the Term Loan Credit Parties and any Additional Credit Parties.
Currency Agreement” shall have the meaning assigned to such term in the Original Term Loan Agreement.
DIP Financing” shall have the meaning set forth in Section 6.1(a).
Discharge of ABL Obligations” shall mean (a) the payment in full in cash of the applicable ABL Obligations that are outstanding and unpaid (and excluding, for the avoidance of doubt, unasserted contingent indemnification or other obligations) at the time all Indebtedness under the applicable ABL Credit Agreement is paid in full in cash, including (if applicable), with respect to amounts available to be drawn under outstanding letters of credit issued thereunder (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit), delivery or provision of cash or backstop letters of credit in respect thereof in compliance with the terms of any such ABL Credit Agreement (which shall not exceed an amount equal to 101.5% of the aggregate undrawn amount of such letters of credit) and (b) the termination of all then outstanding commitments to extend credit under the ABL Documents.
Discharge of Additional Obligations” shall mean, if any Indebtedness shall at any time have been incurred under any Additional Credit Facility, (a) the payment in full in cash of the applicable Additional Obligations that are outstanding and unpaid (and excluding, for the avoidance of doubt, unasserted contingent indemnification or other obligations) at the time all Additional Indebtedness under such Additional Credit Facility is paid in full in cash, including (if applicable), with respect to amounts available to be drawn under outstanding letters of credit issued thereunder (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit), delivery or provision of cash or backstop letters of credit in respect thereof in compliance with the terms of any such Additional Credit Facility (which shall not exceed an amount equal to 101.5% of the aggregate undrawn amount of such letters of credit) and (b) the termination of all then outstanding commitments to extend credit under the applicable Additional Credit Facility.
Discharge of Term Loan Collateral Obligations” shall mean the Discharge of Term Loan Obligations and (if applicable) the Discharge of Additional Obligations.
Discharge of Term Loan Obligations” shall mean (a) the payment in full in cash of the applicable Term Loan Obligations that are outstanding and unpaid (and excluding, for the avoidance of doubt, unasserted contingent indemnification or other obligations) at the time all Indebtedness under the applicable Term Loan Agreement is paid in full in cash, including (if applicable), with respect to amounts available to be drawn under outstanding letters of credit issued thereunder (or indemnities or other undertakings issued pursuant thereto in respect of outstanding letters of credit), delivery or provision of cash or backstop letters of credit in respect thereof in compliance with the terms of any such Term Loan Agreement (which shall not exceed an amount equal to 101.5% of the aggregate undrawn amount of such letters of credit) and (b) the termination of all then outstanding commitments to extend credit under the Term Loan Documents.
Domestic Subsidiary” shall mean any Subsidiary of the Company that is not a Foreign Subsidiary.
Event of Default” shall mean an Event of Default under any ABL Credit Agreement, any Term Loan Agreement or any Additional Credit Facility.
Exercise Any Secured Creditor Remedies” or “Exercise of Secured Creditor Remedies” shall mean:
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(a)    the taking 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;
(b)    the exercise 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 or the exercise of any right or remedy 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 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 or any other means permissible under applicable law;
(f)    the exercise of any other right of a secured creditor under Part 6 of Article 9 of the Uniform Commercial Code;
(g)    the exercise of any voting rights relating to any Capital Stock included in the Collateral; and
(h)    the delivery of any notice, claim or demand relating to the Collateral to any Person (including any securities intermediary, depository bank or landlord) in possession or control of any Collateral.
For the avoidance of doubt, filing a proof of claim in bankruptcy court or seeking adequate protection shall not be deemed to be an Exercise of Secured Creditor Remedies.
Financing Lease” shall mean any lease of property, real or personal, the obligations of the lessee in respect of which are required to be capitalized on a balance sheet of the lessee in accordance with generally accepted accounting principles as in effect in the United States.
Foreign Subsidiary” shall mean (a) any Subsidiary of the Company that is not organized under the laws of the United States of America or any state thereof or the District of Columbia and any Subsidiary of such Foreign Subsidiary and (b) any Subsidiary of the Company that has no material assets other than securities or Indebtedness of one or more of the Subsidiaries described in clause (a) above (or Subsidiaries thereof), intellectual property relating to such Subsidiaries described in clause (a) above (or Subsidiaries thereof) and other assets relating to an ownership interest in any such securities, Indebtedness, intellectual property or Subsidiaries.
General Intangibles” shall mean all “general intangibles” as such term is defined in the Uniform Commercial Code including, without limitation, with respect to any Credit Party, all contracts, agreements, instruments and indentures in any form, and portions thereof, to which such Credit Party is a party or under which such Credit Party has any right, title or interest or to which such Credit Party or any property of such Credit Party is subject, as the same may from time to time be amended, supplemented, waived or otherwise modified from time to time.
Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the European Union.
Guarantor” shall mean any of the ABL Guarantors, Term Loan Guarantors and any Additional Guarantors.
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Hedging Agreement” shall mean any interest rate, foreign currency, commodity or equity swap, collar, cap, floor or forward rate agreement, or other agreement or arrangement designed to protect against fluctuations in interest rates or currency, commodity or equity values (including, without limitation, any option with respect to any of the foregoing and any combination of the foregoing agreements or arrangements), and any confirmation executed in connection with any such agreement or arrangement.
Hedging Obligations” shall have the meaning assigned to such term in the Original Term Loan Agreement.
Holdings” shall mean Atkore International Holdings Inc., a Delaware corporation, and any successor in interest thereto.
Impairment” shall have the meaning set forth in Section 2.1(e).
Indebtedness” shall mean, with respect to any Person at any date, (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (other than trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (b) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument, (c) all obligations of such Person under Financing Leases, (d) all obligations of such Person in respect of acceptances issued or created for the account of such Person, (e) all obligations of such Person in respect of interest rate protection agreements, interest rate futures, interest rate options, interest rate caps and any other interest rate hedge arrangements, and (f) all indebtedness or obligations of the types referred to in the preceding clauses (a) through (e) to the extent secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof.
Insolvency Proceeding” shall mean (a) any case, action or proceeding before any court or other governmental authority relating to bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or (b) any general assignment for the benefit of creditors, composition, marshalling of assets for creditors or other similar arrangement in respect of its creditors generally or any substantial portion of its creditors; in each case covered by clauses (a) and (b) undertaken under United States Federal, State or foreign law, including the Bankruptcy Code.
Intellectual Property” shall mean, with respect to any Credit Party, the collective reference to such Credit Party’s Copyrights, Copyright Licenses, Patents, Patent Licenses, Trade Secrets, Trade Secret Licenses, Trademarks and Trademark Licenses.
Interest Rate Agreement” shall have the meaning assigned to such term in the Original Term Loan Agreement.
Intervening Creditor” shall have the meaning set forth in Section 4.1(g).
Inventory” shall have the meaning assigned in the Uniform Commercial Code as of the date hereof.
Investment Grade Securities” shall have the meaning assigned to such term in the Original Term Loan Agreement.
Lien” shall mean any mortgage, pledge, hypothecation, assignment for purposes of security, security deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Financing Lease having substantially the same economic effect as any of the foregoing).
Lien Priority” shall mean, with respect to any Lien of the ABL Agent, the ABL Lenders, the Term Loan Agent, the Term Loan Secured Parties, any Additional Agent or any Additional Creditors in the Collateral, the order of priority of such Lien as specified in Section 2.1.
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Management Guarantee” shall have the meaning assigned to such term in (a) with respect to the Term Loan Obligations, the Original Term Loan Agreement (if the Original Term Loan Agreement is then in effect), or in any other Term Loan Agreement then in effect (if the Original Term Loan Agreement is not then in effect) and (b) with respect to any Additional Obligations, any Additional Credit Facility.
Original ABL Credit Agreement” shall have the meaning set forth in the recitals.
Original Term Loan Agreement” shall have the meaning set forth in the recitals.
Parent” shall mean Atkore Inc., a Delaware corporation and any successor in interest thereto.
Party” shall mean, at any time, the ABL Agent, the Term Loan Agent or any Additional Agent, and “Parties” shall mean all of the ABL Agent, the Term Loan Agent and any Additional Agent, in each case if then party to this Agreement.
Patent License” shall mean, with respect to any Credit Party, all United States written license agreements of such Credit Party with any other Person that is not an Affiliate or a Subsidiary of such Credit Party, in connection with any United States patent, patent application, or patentable invention other than agreements with any Person who is an Affiliate or a Subsidiary of such Credit Party, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Patents” shall mean, with respect to any Credit Party, all of such Credit Party’s right, title and interest in and to all United States patents, patent applications and patentable inventions and all reissues and extensions thereof, including, without limitation, (i) all inventions and improvements described and claimed therein, (ii) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, (iii) all income, royalties, damages and other payments now or hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof), and (iv) all other rights corresponding thereto in the United States and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon, and all other rights of any kind whatsoever of such Credit Party accruing thereunder or pertaining thereto.
Payment Collateral” shall mean all Accounts, Instruments, Chattel Paper, Letter-Of-Credit Rights, Deposit Accounts (other than the Asset Sales Proceeds Account), Securities Accounts, and Payment Intangibles, together with all Supporting Obligations, in each case composing a portion of the Collateral.
Person” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.
Preferred Stock” shall mean, as applied to the Capital Stock of any corporation or company, Capital Stock of any class or classes (however designated) that by its terms is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation or company, over Capital Stock of any other class of such corporation or company.
Priority Collateral” shall mean the ABL Priority Collateral or the Term Loan Priority Collateral.
Proceeds” shall mean (a) all “proceeds,” as such term is defined in Article 9 of the Uniform Commercial Code, with respect to the Collateral, (b) whatever is recoverable or recovered when any Collateral is sold, exchanged, collected, or disposed of, whether voluntarily or involuntarily and (c) in the case of Proceeds of pledged securities, all dividends or other income from the pledged securities, collections thereon or distributions or payments with respect thereto.
Property” shall mean any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
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Secured Parties” shall mean the ABL Secured Parties, the Term Loan Secured Parties and the Additional Secured Parties.
Series” shall mean (a) with respect to the Term Loan Collateral Secured Parties, each of (i) the Term Loan Secured Parties (in their capacities as such) and (ii) the Additional Secured Parties that become subject to this Agreement after the date hereof that are represented by a common Additional Agent (in its capacity as such for such Additional Secured Parties) and (b) with respect to any Term Loan Collateral Obligations, each of (i) the Term Loan Obligations and (ii) the Additional Obligations incurred pursuant to any Additional Credit Facility that is to represented by a common Additional Agent (in its capacity as such for such Additional Obligations).
Specified Excluded Assets” shall mean property that is subject to any Lien in respect of Hedging Obligations consisting solely of (i) cash, Cash Equivalents, Temporary Cash Investments and Investment Grade Securities, together with proceeds, dividends and distributions in respect thereof, (ii) any assets relating to such assets, proceeds, dividends or distributions or to any Hedging Obligations, and/or (iii) any other assets consisting of, relating to or arising under or in connection with (A) any Interest Rate Agreements, Currency Agreements or Commodities Agreements or (B) any other agreements, instruments or documents related to any Hedging Obligations or to any of the assets referred to in any of subclauses (i) through (iii).
Subsidiary” of any Person shall mean a corporation, partnership, limited liability company, or other entity (a) of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned by such Person, or (b) the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person and, in the case of this clause (b), which is treated as a consolidated subsidiary for accounting purposes.
Temporary Cash Investments” shall have the meaning assigned to such term in the Original Term Loan Agreement.
Term Loan Agent” shall mean JPMorgan Chase Bank, N.A. in its capacity as collateral agent under the Original Term Loan Agreement, together with its successors and assigns in such capacity from time to time, whether under the Original Term Loan Agreement or any subsequent Term Loan Agreement, as well as any Person designated as the “Agent” or “Collateral Agent” under any Term Loan Agreement.
Term Loan Agreement” shall mean (i) the Original Term Loan Agreement and (ii) if designated by the Company to the extent permitted under the ABL Credit Agreement, the Term Loan Credit Agreement and any Additional Credit Facilities then extant, any other credit agreement, loan agreement, note agreement, promissory note, Term Loan Agreement or other agreement or instrument evidencing or governing the terms of any indebtedness or other financial accommodation that has been incurred to refund, refinance, restructure, replace, renew, repay, increase or extend (whether in whole or in part and whether with the original agent and creditors or other agents and creditors or otherwise) the indebtedness and other obligations outstanding under (x) the Original Term Loan Agreement or (y) any subsequent Term Loan Agreement (as amended, restated, supplemented, waived or otherwise modified from time to time); provided, that the requisite creditors party to such Term Loan Agreement (or their agent or other representative on their behalf) shall agree, by a joinder agreement substantially in the form of Exhibit C attached hereto or otherwise in form and substance reasonably satisfactory to the ABL Agent and any Additional Agent, that the obligations under such Term Loan Agreement are subject to the terms and provisions of this Agreement. Any reference to the Term Loan Agreement shall be deemed a reference to any Term Loan Agreement then in existence.
Term Loan Bank Products Provider” shall mean any Person that has entered into a Bank Products Agreement with a Term Loan Credit Party with the obligations of such Term Loan Credit Party thereunder being secured by one or more Term Loan Collateral Documents, as designated by the Company in accordance with the terms of the Term Loan Collateral Documents.
Term Loan Borrower” shall mean the Company, together with its successors and assigns.
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Term Loan Collateral Documents” shall mean all “Security Documents” as defined in the Term Loan Agreement, and all other security agreements, mortgages, deeds of trust and other collateral documents executed and delivered in connection with any Term Loan Agreement, in each case as the same may be amended, modified or supplemented from time to time.
Term Loan Collateral Exposure” shall mean as to any Term Loan Agreement or any Additional Credit Facility as of the date of determination, the sum of (a) as to any revolving facility thereunder, the total commitments (whether funded or unfunded) of the Term Loan Collateral Secured Parties to make loans and other extensions of credit thereunder (or after the termination of such commitments, the total outstanding principal amount of Term Loan Obligations or Additional Obligations (as applicable) thereunder) plus (b) as to any other facility, the outstanding principal amount of Term Loan Obligations or Additional Obligations (as applicable) thereunder and any undrawn commitments in respect thereof.
Term Loan Collateral Obligations” shall mean the Term Loan Obligations and any Additional Obligations.
Term Loan Collateral Representative” shall mean (a) until the Discharge of Term Loan Obligations, the Original Term Loan Agent and (b) at any time thereafter, the Term Loan Agent for the Term Loan Secured Parties with the greatest aggregate Term Loan Collateral Exposure under any Term Loan Agreement (and in any event excluding Term Loan Collateral Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees), acting for the Term Loan Collateral Secured Parties, (unless otherwise agreed in writing among Term Loan Agents), unless the aggregate Term Loan Collateral Exposure under any Additional Credit Facility in any event excluding Term Loan Collateral Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees) exceeds the aggregate Term Loan Collateral Exposure under the Term Loan Agreement (and in any event excluding Term Loan Collateral Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees), and in such case (unless otherwise agreed in writing between the Term Loan Agent and any Additional Agent or, after the Discharge of Term Loan Obligations, between any Additional Agents), the Additional Agent under such Additional Credit Facility (or, if there is more than one such Additional Credit Facility, the Additional Credit Facility under which the greatest aggregate Term Loan Collateral Exposure (and in any event excluding Term Loan Collateral Obligations in respect of Bank Products Agreements, Hedging Agreements or Management Guarantees) is outstanding at the time) acting for the Term Loan Collateral Secured Parties.
Term Loan Collateral Secured Parties” shall mean the Term Loan Secured Parties and any Additional Secured Parties.
Term Loan Credit Parties” shall mean the Term Loan Borrower, the Term Loan Guarantors and each other direct or indirect Subsidiary of the Parent or any of its Affiliates that is now or hereafter becomes a party to any Term Loan Document.
Term Loan Creditors” shall mean the Term Loan Lenders, any “Secured Parties” as defined under any Term Loan Agreement and any other holder from time to time of the Term Loan Obligations.
Term Loan Documents” shall mean the Term Loan Agreement, the Term Loan Collateral Documents, any Bank Products Agreements between any Term Loan Credit Party and any Term Loan Bank Products Provider, any Hedging Agreements between any Term Loan Credit Party and any Term Loan Hedging Provider, and all other agreements, instruments, documents and certificates, now or hereafter executed by or on behalf of any Term Loan Credit Party or any of its respective Subsidiaries or Affiliates, and delivered to the Term Loan Agent, in connection with any of the foregoing, in each case as the same may be amended, supplemented, waived or otherwise modified from time to time.
Term Loan Guaranties” shall mean the guarantees of the Term Loan Guarantors pursuant to the Term Loan Agreement and all other guarantees of any Term Loan Obligations of any Term Loan Credit Party by any other Term Loan Credit Party in favor of any Term Loan Secured Party, in each case as amended, restated, supplemented, waived or otherwise modified from time to time.
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Term Loan Guarantors” shall mean the collective reference to Parent, Holdings, each of Parent’s Domestic Subsidiaries that is a guarantor under any of the Term Loan Guaranties and any other Person who is or becomes a guarantor under any of the Term Loan Guaranties.
Term Loan Hedging Provider” shall mean any Person that has entered into a Hedging Agreement with a Term Loan Credit Party with the obligations of such Term Loan Credit Party thereunder being secured by one or more Term Loan Collateral Documents, as designated by the Company in accordance with the terms of the Term Loan Collateral Documents.
Term Loan Lenders” shall include any “Lender” (or any term of similar meaning) under any Term Loan Agreement.
Term Loan Obligations” shall mean any and all loans and all other obligations, liabilities and indebtedness of every kind, nature and description, whether now existing or hereafter arising, whether arising before, during or after the commencement of any case with respect to any Term Loan Credit Party under the Bankruptcy Code or any other Insolvency Proceeding, owing by each Term Loan Credit Party from time to time to the Term Loan Agent, the Term Loan Lenders, any Term Loan Bank Products Provider, any Term Loan Hedging Provider under any Term Loan Document, whether for principal, interest (including interest and fees which, but for the filing of a petition in bankruptcy with respect to such Term Loan Credit Party, would have accrued on any Term Loan Obligation, whether or not a claim is allowed against such Term Loan Credit Party for such interest and fees in the related bankruptcy proceeding), fees, expenses, indemnification or otherwise, and all other amounts owing or due under the terms of the Term Loan Documents, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time and shall in any event include the “Loan Document Obligations” as defined in the Term Loan Documents.
Term Loan Priority Collateral Documents” shall mean the Term Loan Documents and any Additional Documents, as applicable.
Term Loan Priority Collateral” shall mean all Collateral, other than the ABL Priority Collateral, including all real property, Equipment, Intellectual Property and Capital Stock of any Subsidiaries of any Credit Party, collateral security and guarantees with respect to any Term Loan Priority Collateral and all cash, Money, instruments, securities, financial assets and deposit accounts directly received as proceeds of any Term Loan Priority Collateral; provided, however, no proceeds of proceeds will constitute Term Loan Priority Collateral unless such proceeds of proceeds would otherwise constitute Term Loan Priority Collateral or are credited to the Asset Sales Proceeds Account. For the avoidance of doubt, under no circumstance shall Excluded Assets be Term Loan Priority Collateral. As used in this definition of “Term Loan Priority Collateral”, the term “Excluded Assets” shall have the meaning provided (x) prior to the Discharge of Term Loan Obligations, in the Original Term Loan Agreement (if the Original Term Loan Agreement is then in effect), or in any other Term Loan Agreement then in effect (if the Original Term Loan Agreement is not then in effect) or the Term Loan Collateral Documents relating thereto, and (y) from and after the Discharge of Term Loan Obligations, in the applicable Additional Credit Facility then in effect or the Additional Collateral Documents relating thereto.
Term Loan Recovery” shall have the meaning set forth in Section 5.3(b).
Term Loan Secured Parties” shall mean the Term Loan Collateral Representative, the Term Loan Creditors, any Term Loan Bank Products Provider and any Term Loan Hedging Provider.
Trade Secret Licenses” shall mean, with respect to any Credit Party, all United States written license agreements of such Credit Party providing for the grant by or to such Credit Party of any right under any United States trade secrets, including, without limitation, know how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, other than agreements with any Person who is an Affiliate or a Subsidiary of the Company or such Credit Party, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
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Trade Secrets” shall mean with respect to any Credit Party, all of such Credit Party’s right, title and interest in and to all United States trade secrets, including, without limitation, know how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, including, without limitation, (i) all income, royalties, damages and payments now or hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses, non disclosure agreements and memoranda of understanding entered into in connection therewith, and damages and payments for past or future misappropriations thereof, and (ii) the right to sue or otherwise recover for past, present or future misappropriations thereof.
Trademark License” shall mean, with respect to any Credit Party, all United States written license agreements of such Credit Party providing for the grant by or to such Credit Party of any right under any United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, with any other Person who is not an Affiliate or Subsidiary of such Credit Party, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Trademarks” shall mean, with respect to any Credit Party, all of such Credit Party’s right, title and interest in and to all United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, trademark and service mark registrations, and applications for trademark or service mark registrations (except for “intent to use” applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed, it being understood and agreed that the carve out in this parenthetical shall be applicable only if and for so long as a grant of a security interest in such intent to use application would invalidate or otherwise jeopardize such Credit Party’s rights therein), and any renewals thereof, including, without limitation, (i) the right to sue or otherwise recover for any and all past, present and future infringements or dilutions thereof, (ii) all income, royalties, damages and other payments now or hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof), and (iii) all other rights corresponding thereto in the United States and all other rights of any kind whatsoever of such Credit Party accruing thereunder or pertaining thereto in the United States, together in each case with the goodwill of the business connected with the use of, and symbolized by, each such trademark, service mark, trade name, trade dress or other indicia of trade origin or business identifiers.
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 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 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.
Section 1.3Rules 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 the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement. Article, section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, 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
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full of an obligation shall mean the payment in full in cash of such obligation, or in such other manner as may be approved in writing by the requisite holders or representatives in respect of such obligation,
Article 2
LIEN PRIORITY
Section 2.1Agreement to Subordinate.
(a)Notwithstanding (i) the date, time, method, manner, or order of grant, attachment, or perfection (including any defect or deficiency or alleged defect or deficiency in any of the foregoing) of any Liens granted to the ABL Agent or the ABL Lenders in respect of all or any portion of the Collateral, or of any Liens granted to the Term Loan Agent or the Term Loan Secured Parties in respect of all or any portion of the Collateral, or of any Liens granted to any Additional Agent or any Additional Creditors 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, the Term Loan Agent or any Additional Agent (or the ABL Lenders, the Term Loan Secured Parties or any Additional Creditors) in any Collateral, (iii) any provision of the Uniform Commercial Code, the Bankruptcy Code or any other applicable law, or of the ABL Documents, the Term Loan Documents or any Additional Documents, (iv) whether the ABL Agent, the Term Loan Agent or any Additional 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 fact that any such Liens in favor of the ABL Agent or the ABL Lenders, the Term Loan Agent or the Term Loan Secured Parties or any Additional Agent or any Additional Creditors securing any of the ABL Obligations, the Term Loan Obligations or any Additional Obligations, respectively, are (x) subordinated to any Lien securing any obligation of any Credit Party other than the Term Loan Obligations or any Additional Obligations (in the case of the ABL Obligations) or the ABL Obligations (in the case of the Term Loan Obligations or any Additional Obligations), respectively, or (y) otherwise subordinated, voided, avoided, invalidated or lapsed or (vi) any other circumstance of any kind or nature whatsoever, the ABL Agent, on behalf of itself and the ABL Lenders, the Term Loan Agent, on behalf of itself and the applicable Term Loan Secured Parties, and any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby agree that:
(1)any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the Term Loan Agent or any Term Loan Secured Party that secures all or any portion of the Term Loan Obligations, and any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of any Additional Agent or any Additional Creditor that secures all or any portion of the Additional Obligations, shall in all respects be junior and subordinate to all Liens granted to the ABL Agent and the ABL Lenders in the ABL Priority Collateral to secure all or any portion of the ABL Obligations;
(2)any Lien in respect of all or any portion of the ABL Priority Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Lender that secures all or any portion of the ABL Obligations shall in all respects be senior and prior to all Liens granted to the Term Loan Agent or any Term Loan Secured Party in the ABL Priority Collateral to secure all or any portion of the Term Loan Obligations, and all Liens granted to any Additional Agent or any Additional Creditors in the ABL Priority Collateral to secure all or any portion of the Additional Obligations;
(3)any Lien in respect of all or any portion of the Term Loan Priority Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Lender that secures all or any portion of the ABL Obligations shall in all respects be junior and subordinate to all Liens granted to the Term Loan Agent and the Term Loan Secured Parties in the Term Loan Priority Collateral to secure all or any portion of the Term Loan Obligations;
(4)any Lien in respect of all or any portion of the Term Loan Priority Collateral now or hereafter held by or on behalf of the ABL Agent or any ABL Lender that secures all or any portion of the ABL Obligations shall in all respects be junior and subordinate to all Liens granted to any Additional Agent or any Additional Creditors in the Term Loan Priority Collateral to secure
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all or any portion of any Additional Obligations (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders);
(5)any Lien in respect of all or any portion of the Term Loan Priority Collateral now or hereafter held by or on behalf of the Term Loan Agent or any Term Loan Secured Party that secures all or any portion of the Term Loan Obligations shall in all respects be senior and prior to all Liens granted to the ABL Agent or any ABL Lender in the Term Loan Priority Collateral to secure all or any portion of the ABL Obligations;
(6)any Lien in respect of all or any portion of the Term Loan Priority Collateral now or hereafter held by or on behalf of any Additional Agent or any Additional Creditor that secures all or any portion of the Additional Obligations shall in all respects be senior and prior to all Liens granted to the ABL Agent or any ABL Lender in the Term Loan Priority Collateral to secure all or any portion of the ABL Obligations (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders);
(7)any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of any Additional Agent or any Additional Creditor that secures all or any portion of the Additional Obligations shall in all respects have the priority in respect of all or any portion of the Collateral relative to the Term Loan Agent and the Term Loan Secured Parties as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties; and
(8)any Lien in respect of all or any portion of the Collateral now or hereafter held by or on behalf of any Additional Agent or any Additional Creditor that secures all or any portion of the Additional Obligations shall in all respects have the priority in respect of all or any portion of the Collateral relative to any other Additional Agent and any Additional Creditor represented by such other Additional Agent as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby.
(b)Notwithstanding any failure by any ABL Secured Party, Term Loan Secured Party or Additional Secured Party to perfect its security interests in the Collateral or any avoidance, invalidation, priming or subordination by any third party or court of competent jurisdiction of the security interests in the Collateral granted to the ABL Secured Parties, the Term Loan Secured Parties or any Additional Secured Parties:
(1)the priority and rights as between the ABL Secured Parties, on the one hand, and the Term Loan Secured Parties, on the other hand, with respect to the Collateral shall be as set forth herein;
(2)the priority and rights as between the ABL Secured Parties, on the one hand, and any Additional Secured Parties, on the other hand, with respect to the Collateral shall be as set forth herein (except as may be separately otherwise agreed in writing by and between any applicable Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders);
(3)the priority and rights as between the Term Loan Secured Parties, on the one hand, and any Additional Secured Parties, on the other hand, with respect to the Collateral shall be as set forth herein (except as may be separately otherwise agreed in writing by and between or among any applicable Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties); and
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(4)the priority and rights as between any Additional Agent and the Additional Creditors represented thereby, on the one hand, and any other Additional Agent and the Additional Creditors represented thereby, on the other hand, with respect to the Collateral shall be as set forth herein (except as may be separately otherwise agreed in writing by and between such Additional Agents, each on behalf of itself and the Additional Creditors represented thereby,).
(c)The Term Loan Agent, for and on behalf of itself and the applicable Term Loan Secured Parties, acknowledges and agrees that (x) concurrently herewith, the ABL Agent, for the benefit of itself and the ABL Lenders, has been granted Liens upon all of the Collateral in which the Term Loan Agent has been granted Liens and the Term Loan Agent hereby consents thereto and (y) any Additional Agent, on behalf of itself and any Additional Creditors, may be granted Liens upon all of the Collateral in which the Term Loan Agent has been granted Liens and the Term Loan Agent hereby consents thereto. The ABL Agent, for and on behalf of itself and the ABL Lenders, acknowledges and agrees that (x) concurrently herewith, the Term Loan Agent, for the benefit of itself and the Term Loan Secured Parties, has been granted Liens upon all of the Collateral in which the ABL Agent has been granted Liens and the ABL Agent hereby consents thereto and (y) any Additional Agent, on behalf of itself and any Additional Creditors, may be granted Liens upon all of the Collateral in which the ABL Agent has been granted Liens and the ABL Agent hereby consents thereto. Any Additional Agent, for and on behalf of itself and any Additional Creditors represented thereby, acknowledges and agrees that, concurrently herewith, (x) the ABL Agent, for the benefit of itself and the ABL Lenders, has been granted Liens upon all of the Collateral in which such Additional Agent is being granted Liens and such Additional Agent hereby consents thereto, (y) the Term Loan Agent, for the benefit of itself and the Term Loan Secured Parties, has been granted Liens upon all of the Collateral in which such Additional Agent is being granted Liens and such Additional Agent hereby consents thereto and (z) any other Additional Agent, on behalf of itself and any Additional Creditors represented thereby, may be granted Liens upon all of the Collateral in which such Additional Agent has been granted Liens and such Additional Agent hereby consents thereto. The subordination of Liens by the Term Loan Agent in favor of the ABL Agent, by the ABL Agent in favor of the Term Loan Agent and any Additional Agent, and by any Additional Agent in favor of the ABL Agent, in each case as set forth herein, shall not be deemed to subordinate the Liens of the Term Loan Agent, the ABL Agent or any Additional Agent to the Liens of any other Person. The provision of priority as between Liens of the Term Loan Agent and Liens of any Additional Agent, or as between Liens of any Additional Agent and Liens of any other Additional Agent, in each case as set forth herein, shall not be deemed (i) to subordinate the Liens of the Term Loan Agent or any Additional Agent to the Liens of any Person other than the ABL Agent as and to the extent set forth herein, (ii) to alter the priority of Liens as between (x) the Term Loan Agent and any Additional Agent as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the applicable Term Loan Secured Parties or (y) any Additional Agent and any other Additional Agent as may be separately otherwise agreed in writing by and between such Additional Agents, each on behalf of itself and the Additional Creditors represented thereby, or (iii) to provide that the Liens of the Term Loan Agent or any Additional Agent will be pari passu or of equal priority with the Liens of any other Person.
(d)Lien priority as among the ABL Obligations, the Term Loan Obligations and the Additional Obligations with respect to any Collateral will be governed solely by this Agreement, except as may be separately otherwise agreed in writing by or among any applicable Parties including, as among the Term Loan Collateral Secured Parties, pursuant to an intercreditor agreement entered into among the representatives of the applicable Parties and the Term Loan Collateral Secured Parties.
(e)The Term Loan Agent, for and on behalf of itself and the applicable Term Loan Secured Parties, and each Additional Agent, on behalf of itself and the Additional Creditors represented thereby, hereby acknowledges and agrees that (except as may be separately otherwise agreed in writing by and between any Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties or any other Additional Agent on behalf of itself and the Additional Creditors represented thereby), it is the intention of the Term Loan Collateral Secured Parties of each Series that the holders of Term Loan Collateral Obligations of such Series (and not the Term Loan Collateral Secured Parties of any other Series) bear the risk of (i) any determination by a court of competent jurisdiction that (x) any of the Term Loan Collateral Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations (other than another Series of Term Loan Collateral Obligations), (y) any of the Term Loan Collateral Obligations of such Series do not have an enforceable security interest in any of the Collateral
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securing any other Series of Term Loan Collateral Obligations and/or (z) any intervening security interest exists securing any other obligations (other than another Series of Term Loan Collateral Obligations) on a basis ranking prior to the security interest of such Series of Term Loan Collateral Obligations but junior to the security interest of any other Series of Term Loan Collateral Obligations or (ii) the existence of any Collateral for any other Series of Term Loan Collateral Obligations that is not also Collateral for the other Series of Term Loan Collateral Obligations (any such condition referred to in the foregoing clauses (i) or (ii) with respect to any Series of Term Loan Collateral Obligations, an “Impairment” of such Series). In the event of any Impairment with respect to any Series of Term Loan Collateral Obligations (except as may be separately otherwise agreed in writing by and between any Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties or any other Additional Agent on behalf of itself and the Additional Creditors represented thereby), the results of such Impairment shall be borne solely by the holders of such Series of Term Loan Collateral Obligations, and the rights of the holders of such Series of Term Loan Collateral Obligations (including, without limitation, the right to receive distributions in respect of such Series of Term Loan Collateral Obligations pursuant to Section 4.1) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such Term Loan Collateral Obligations subject to such Impairment.
Section 2.2Waiver of Right to Contest Liens.
(a)The Term Loan Agent, for and on behalf of itself and the applicable Term Loan 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 Lenders in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in this Agreement, the Term Loan Agent, for itself and on behalf of the applicable Term Loan Secured Parties, agrees that none of the Term Loan Agent or the Term Loan Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent or any ABL Lender under the ABL Documents with respect to the ABL Priority Collateral. Except to the extent expressly set forth in this Agreement, the Term Loan Agent, for itself and on behalf of the applicable Term Loan Secured Parties, hereby waives any and all rights it or the applicable Term Loan 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.
(b)The Term Loan Agent, for and on behalf of itself and the Term Loan 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 any Additional Agent and any Additional Creditors in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). Except to the extent expressly set forth in this Agreement and, for the avoidance of doubt, subject to Section 2.3(e), the Term Loan Agent, for itself and on behalf of the Term Loan Secured Parties, agrees that none of the Term Loan Agent or the Term Loan Secured Parties will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Additional Agent or any Additional Creditor under any Additional Documents with respect to the Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(e), the Term Loan Agent, for itself and on behalf of the Term Loan Secured Parties, hereby waives any and all rights it or the Term Loan Secured Parties may have as a pari passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Additional Agent or any Additional Creditor seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(c)The ABL Agent, for and on behalf of itself and the ABL Lenders, 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
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contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the Term Loan Agent or the Term Loan Secured Parties in respect of the Collateral or the provisions of this Agreement. Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Lenders, agrees that none of the ABL Agent or the ABL Lenders will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the Term Loan Agent or any Term Loan Creditor under the Term Loan Documents with respect to the Term Loan Priority Collateral. Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Lenders, hereby waives any and all rights it or the ABL Lenders may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the Term Loan Agent or any Term Loan Secured Party seeks to enforce its Liens in any Term Loan Priority Collateral.
(d)The ABL Agent, for and on behalf of itself and the ABL Lenders, 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 any Additional Agent and any Additional Creditors in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Lenders, agrees that none of the ABL Agent or the ABL Lenders will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any Additional Agent or any Additional Creditor under any Additional Documents, with respect to the Term Loan Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). Except to the extent expressly set forth in this Agreement, the ABL Agent, for itself and on behalf of the ABL Lenders, hereby waives any and all rights it or the ABL Lenders may have as a junior lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any Additional Agent or any Additional Creditor seeks to enforce its Liens in any Term Loan Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
(e)Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, 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 Lenders in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). Except to the extent expressly set forth in this Agreement, any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that none of such Additional Agent and Additional Creditors will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the ABL Agent or any ABL Lender under the ABL Documents with respect to the ABL Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). Except to the extent expressly set forth in this Agreement, any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby waives any and all rights it or such Additional Creditors 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 (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
(f)Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that it and they shall not (and hereby waives any right to) take any action to contest or challenge (or assist or support any other Person in contesting or challenging), directly or indirectly, whether or not in any proceeding (including in any Insolvency Proceeding), the validity, priority, enforceability, or perfection of the Liens of the Term Loan Agent or the Term Loan Secured Parties in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional
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Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(e), any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that none of such Additional Agent and Additional Creditors will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by the Term Loan Agent or any Term Loan Secured Party under the Term Loan Documents with respect to the Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(e), any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby waives any and all rights it or such Additional Creditors may have as a pari passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which the Term Loan Agent or any Term Loan Secured Party seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(g)Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, 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 any other Additional Agent or any Additional Creditors represented by such other Additional Agent in respect of the Collateral or the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(e), any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that none of such Additional Agent and Additional Creditors will take any action that would interfere with any Exercise of Secured Creditor Remedies undertaken by any other Additional Agent or any Additional Creditor represented by such other Additional Agent under any applicable Additional Documents with respect to the Collateral (except as may be separately otherwise agreed in writing in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby). Except to the extent expressly set forth in this Agreement, and, for the avoidance of doubt, subject to Section 2.3(e), any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby waives any and all rights it or such Additional Creditors may have as a pari passu lien creditor or otherwise to contest, protest, object to, or interfere with the manner in which any other Additional Agent or any Additional Creditor represented by such other Additional Agent seeks to enforce its Liens in any Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby).
(h)For the avoidance of doubt, the assertion of priority rights established under the terms of this Agreement shall not be considered a challenge to Lien priority of any Party prohibited by this Section 2.2.
Section 2.3Remedies Standstill.
(a)The Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, agrees that, until the date upon which the Discharge of ABL Obligations shall have occurred, neither the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, as applicable) nor any Term Loan Secured Party will Exercise Any Secured Creditor Remedies with respect to any of the ABL Priority Collateral without the written consent of the ABL Agent and will not knowingly take, receive or accept any Proceeds of ABL Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by the Term Loan Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Agent. Subject to Section 2.3(e) hereof, from and after the date upon which the Discharge of ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of the ABL Agent), the Term Loan Agent or any Term Loan Secured Party may Exercise Any Secured Creditor Remedies under the Term Loan Documents or applicable law as to any ABL Priority Collateral (except as may be separately otherwise agreed in writing by and between any Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties)); provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the Term Loan Agent or
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any Term Loan Secured Party is at all times subject to the provisions of this Agreement, including Section 4.1 hereof.
(b)The ABL Agent, on behalf of itself and the ABL Lenders, agrees that until the date upon which the Discharge of Term Loan Obligations shall have occurred, neither the ABL Agent nor any ABL Lender will Exercise Any Secured Creditor Remedies with respect to the Term Loan Priority Collateral without the written consent of the Term Loan Agent and will not knowingly take, receive or accept any Proceeds of the Term Loan Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of Term Loan Priority Collateral in a Deposit Account controlled by the ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the Term Loan Collateral Representative. Subject to Section 2.3(c) hereof, from and after the date upon which the Discharge of Term Loan Obligations shall have occurred (or prior thereto upon obtaining the written consent of the Term Loan Agent), the ABL Agent or any ABL Lender may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any Term Loan Priority Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the ABL Agent or any ABL Lender is at all times subject to the provisions of this Agreement, including Section 4.1 hereof.
(c)The ABL Agent, on behalf of itself and the ABL Lenders, agrees that until the date upon which the Discharge of Additional Obligations shall have occurred, neither the ABL Agent nor any ABL Lender will Exercise Any Secured Creditor Remedies with respect to the Term Loan Priority Collateral without the written consent of any Additional Agent and will not knowingly take, receive or accept any Proceeds of the Term Loan Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders), it being understood and agreed that the temporary deposit of Proceeds of Term Loan Priority Collateral in a Deposit Account controlled by the ABL Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the Term Loan Collateral Representative. Subject to Section 2.3(b) hereof, from and after the date upon which the Discharge of Additional Obligations shall have occurred (or prior thereto upon obtaining the written consent of each Additional Agent), the ABL Agent or any ABL Lender may Exercise Any Secured Creditor Remedies under the ABL Documents or applicable law as to any Term Loan Priority Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the ABL Agent or any ABL Lender is at all times subject to the provisions of this Agreement, including Section 4.1 hereof.
(d)Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that until the date upon which the Discharge of ABL Obligations shall have occurred, neither such Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) nor any such Additional Creditor will Exercise Any Secured Creditor Remedies with respect to any of the ABL Priority Collateral without the written consent of the ABL Agent, and will not knowingly take, receive or accept any Proceeds of ABL Priority Collateral, it being understood and agreed that the temporary deposit of Proceeds of ABL Priority Collateral in a Deposit Account controlled by such Additional Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the ABL Agent. Subject to Section 2.3(e) hereof, from and after the date upon which the Discharge of ABL Obligations shall have occurred (or prior thereto upon obtaining the written consent of the ABL Agent), any Additional Agent or any Additional Creditor may Exercise Any Secured Creditor Remedies under any Additional Documents or applicable law as to any ABL Priority Collateral (except as may be separately otherwise agreed in writing by and between any Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties or any other Additional Agent on behalf of itself and the Additional Creditors represented thereby ); provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by any Additional Agent or Additional Creditor is at all times subject to the provisions of this Agreement, including Section 4.1 hereof.
(e)Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that such Additional Agent and such Additional Creditors will not Exercise Any Secured Creditor Remedies with respect to any of the Collateral without the written consent of the Term Loan Collateral Representative, and will not knowingly take, receive or accept any Proceeds of Collateral (except as may be separately otherwise agreed in writing by and between or among each Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and (prior to the Discharge of Term Loan Obligations) the Term Loan Agent, on behalf of itself
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and the Term Loan Secured Parties), it being understood and agreed that the temporary deposit of Proceeds of Collateral in a Deposit Account controlled by such Additional Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the Term Loan Collateral Representative; provided that nothing in this sentence shall prohibit any Additional Agent from taking such actions in its capacity as Term Loan Collateral Representative, if applicable. The Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, agrees that the Term Loan Agent and the Term Loan Secured Parties will not Exercise Any Secured Creditor Remedies with respect to any of the Collateral without the written consent of the Term Loan Collateral Representative and will not knowingly take, receive or accept any Proceeds of Collateral (except as may be separately otherwise agreed in writing by and between or among each Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties), it being understood and agreed that the temporary deposit of Proceeds of Collateral in a Deposit Account controlled by the Term Loan Agent shall not constitute a breach of this Agreement so long as such Proceeds are promptly remitted to the Term Loan Collateral Representative; provided that nothing in this sentence shall prohibit the Term Loan Agent from taking such actions in its capacity as Term Loan Collateral Representative, if applicable. Subject to Sections 2.3(a) and 2.3(c) hereof, the Term Loan Collateral Representative may Exercise Any Secured Creditor Remedies under the Term Loan Priority Collateral Documents or applicable law as to any Collateral; provided, however, that any Exercise of Secured Creditor Remedies with respect to any Collateral by the Term Loan Collateral Representative is at all times subject to the provisions of this Agreement, including Section 4.1 hereof.
(f)Notwithstanding any other provision of this Agreement, nothing contained herein shall be construed to prevent (i) the ABL Agent or any ABL Lender, or any Additional Agent or any Additional Creditor, from objecting to any proposed retention of Collateral by the Term Loan Agent or any Term Loan Secured Party in full or partial satisfaction of any Term Loan Obligations, (ii) the Term Loan Agent or any Term Loan Secured Party, or any Additional Agent or any Additional Creditor, from objecting to any proposed retention of Collateral by the ABL Agent or any ABL Lender in full or partial satisfaction of any ABL Obligations, (iii) the ABL Agent or any ABL Lender, or the Term Loan Agent or any Term Loan Secured Party, from objecting to any proposed retention of Collateral by any Additional Agent or any Additional Creditor in full or partial satisfaction of any Additional Obligations, or (iv) any Additional Agent or any Additional Creditor represented thereby from objecting to any proposed retention of Collateral by any other Additional Agent or any Additional Creditor represented by such other Additional Agent in full or partial satisfaction of any Additional Obligations.
Section 2.4Exercise of Rights.
(a)Notice of ABL Agent’s Lien.
(i)Without limiting Section 2.3 hereof, the Term Loan Agent, for and on behalf of itself and the Term Loan Secured Parties, hereby agrees that, until the date upon which the Discharge of ABL Obligations shall have occurred, in connection with any Exercise of Secured Creditor Remedies by the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or any Term Loan Secured Party with respect to any ABL Priority Collateral, the Term Loan Agent or such Term Loan Secured Party, as applicable, shall advise any purchaser or transferee of any ABL Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of the ABL Agent and the ABL Lenders, unless the ABL Agent otherwise consents in writing. In addition, the Term Loan Agent agrees, for and on behalf of itself and the Term Loan Secured Parties, that, until the date upon which the Discharge of ABL Obligations shall have occurred, any notice of any proposed foreclosure or sale of any ABL Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to the ABL Agent’s and the ABL Lenders’ prior Liens and that such Liens shall continue as against the ABL Priority Collateral to be sold, unless the ABL Agent otherwise consents in writing.
(ii)Without limiting Section 2.3 hereof, any Additional Agent, for and on behalf of itself and any Additional Creditors represented thereby, hereby agrees that, until the date upon which the Discharge of ABL Obligations shall have occurred, in connection with any Exercise of Secured Creditor Remedies by such Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or any such Additional Creditor with respect to any ABL Priority Collateral, such Additional Agent or Additional Creditor, as applicable, shall advise any purchaser or transferee of any ABL Priority Collateral
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in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of the ABL Agent and the ABL Lenders, unless the ABL Agent otherwise consents in writing. In addition, any Additional Agent agrees, for and on behalf of itself and any Additional Creditors represented thereby, that, until the date upon which the Discharge of ABL Obligations shall have occurred, any notice of any proposed foreclosure or sale of any ABL Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to the ABL Agent’s and the ABL Lenders’ prior Liens and that such Liens shall continue as against the ABL Priority Collateral to be sold, unless the ABL Agent otherwise consents in writing.
(b)Notice of Term Loan Agent’s Lien.
(i)Without limiting Section 2.3 hereof, the ABL Agent, for and on behalf of itself and the ABL Lenders, hereby agrees that, until the date upon which the Discharge of Term Loan Obligations shall have occurred, in connection with any Exercise of Secured Creditor Remedies by the ABL Agent or any ABL Lender with respect to the Term Loan Priority Collateral, the ABL Agent or such ABL Lender, as applicable, shall advise any purchaser or transferee of any Term Loan Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of the Term Loan Agent and the Term Loan Secured Parties, unless the Term Loan Agent otherwise consents in writing. In addition, the ABL Agent agrees, for and on behalf of itself and the ABL Lenders, that, until the date upon which the Discharge of Term Loan Obligations shall have occurred, any notice of any proposed foreclosure or sale of any Term Loan Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to the Term Loan Agent’s and the Term Loan Secured Parties’ prior Liens and that such Liens shall continue as against the Term Loan Priority Collateral to be sold, unless the Term Loan Agent otherwise consents in writing.
(ii)Without limiting Section 2.3 hereof, any Additional Agent, for and on behalf of itself and any Additional Creditors represented thereby, hereby agrees that, until the date upon which the Discharge of Term Loan Obligations shall have occurred, in connection with any Exercise of Secured Creditor Remedies by such Additional Agent (including in its capacity as Term Loan Collateral Representative, as applicable) or any such Additional Creditor with respect to any Collateral, such Additional Agent or Additional Creditor, as applicable, shall advise any purchaser or transferee of any Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of the Term Loan Agent and the Term Loan Secured Parties (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). In addition, any Additional Agent agrees, for and on behalf of itself and any Additional Creditors represented thereby, that, until the date upon which the Discharge of Term Loan Obligations shall have occurred, any notice of any proposed foreclosure or sale of any Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to the Term Loan Agent’s and the Term Loan Secured Parties’ Liens and that such Liens shall continue as against the Collateral to be sold (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(c)Notice of Additional Agent’s Lien.
(i)Without limiting Section 2.3 hereof, the Term Loan Agent, for and on behalf of itself and the Term Loan Secured Parties, hereby agrees that, until the date upon which the Discharge of Additional Obligations shall have occurred, in connection with any Exercise of Secured Creditor Remedies by the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, as applicable) or any Term Loan Secured Party with respect to any Collateral, the Term Loan Agent or such Term Loan Secured Party, as applicable, shall advise any purchaser or transferee of any Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of any Additional Agent and any Additional Creditors (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby,
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and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). In addition, the Term Loan Agent agrees, for and on behalf of itself and the Term Loan Secured Parties, that, until the date upon which the Discharge of Additional Obligations shall have occurred, any notice of any proposed foreclosure or sale of any Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to any Additional Agent’s and any Additional Creditors’ Liens and that such Liens shall continue as against the Collateral to be sold (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(ii)Without limiting Section 2.3 hereof, the ABL Agent, for and on behalf of itself and the ABL Lenders, hereby agrees that, until the date upon which the Discharge of Additional Obligations shall have occurred, in connection with any Exercise of Secured Creditor Remedies by the ABL Agent or any ABL Lender with respect to any Term Loan Priority Collateral, the ABL Agent or such ABL Lender, as applicable, shall advise any purchaser or transferee of any Term Loan Priority Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of any Additional Agent and any Additional Creditors (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). In addition, the ABL Agent agrees, for and on behalf of itself and the ABL Lenders, that, until the date upon which the Discharge of Additional Obligations shall have occurred, any notice of any proposed foreclosure or sale of any Term Loan Priority Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to any Additional Agent’s and any Additional Creditors’ prior Liens and that such Liens shall continue as against the Term Loan Priority Collateral to be sold (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
(iii)Without limiting Section 2.3 hereof, any Additional Agent, for and on behalf of itself and any Additional Creditors represented thereby, hereby agrees that, until the date upon which the applicable Discharge of Additional Obligations shall have occurred, in connection with any Exercise of Secured Creditor Remedies by such Additional Agent or Additional Creditor with respect to any Collateral, such Additional Agent or Additional Creditor, as applicable, shall advise any purchaser or transferee of any Collateral in writing that the sale (whether public, private, by foreclosure, or otherwise) or other transfer is subject to the Liens of any other Additional Agent and any Additional Creditors represented by such other Additional Agent (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby). In addition, any Additional Agent agrees, for and on behalf of itself and any Additional Creditors represented thereby, that, until the date upon which the applicable Discharge of Additional Obligations shall have occurred, any notice of any proposed foreclosure or sale of any Collateral and any other notice in connection with the Exercise of Secured Creditor Remedies with respect thereto shall state prominently and clearly that the sale is subject to any Liens of any other Additional Agent and any Additional Creditors represented by such other Additional Agent and that such Liens shall continue as against the Collateral to be sold (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby).
(d)No Other Restrictions.
(i)Except as expressly set forth in this Agreement, each of the Term Loan Agent, the Term Loan Secured Parties, the ABL Agent, the ABL Lenders, any Additional Agent and any Additional Creditors shall have any and all rights and remedies it may have as a creditor under applicable law, including the right to the Exercise of Secured Creditor Remedies (except as may be separately otherwise agreed in writing by and between or among any applicable Parties, solely as among such Parties and the Secured Parties represented thereby), provided, however, that the Exercise of Secured Creditor Remedies with respect to the Collateral shall be subject to the Lien Priority and to the provisions of this Agreement, including Sections 2.3 and 4.1 hereof. The ABL Agent may enforce the provisions of the ABL Documents,
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the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) may enforce the provisions of the Term Loan Documents, any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) may enforce the provisions of the Additional Documents, and each may Exercise Any Secured Creditor Remedies, all in such order and in such manner as each may determine in the exercise of its sole discretion, consistent with the terms of this Agreement and mandatory provisions of applicable law (except as may be separately otherwise agreed in writing by and between or among any applicable Parties, solely as among such Parties and the Secured Parties represented thereby); provided, however, that each of the ABL Agent, the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) agrees to provide to each other such Party copies of any notices that it is required under applicable law to deliver to any Borrower or any Guarantor; provided, further, however, that the ABL Agent’s failure to provide any such copies to any other such Party shall not impair any of the ABL Agent’s rights hereunder or under any of the ABL Documents, the Term Loan Agent’s failure to provide any such copies to any other such Party shall not impair any of the Term Loan Agent’s rights hereunder or under any of the Term Loan Documents, and any failure by any Additional Agent to provide any such copies to any other such Party shall not impair any of such Additional Agent’s rights hereunder or under any of the Additional Documents.
(ii)Each of the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and the Term Loan Secured Parties agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against the ABL Agent or any other ABL 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 that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken. Each of the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and the Term Loan Secured Parties agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any Additional Agent or any other Additional 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 that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(iii)Each of the ABL Agent and the ABL Lenders agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against the Term Loan Agent or any other Term Loan 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 that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken. Each of the ABL Agent and the ABL Lenders agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any Additional Agent or any other Additional 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 that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
(iv)Each of any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and any Additional Creditors agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against the ABL Agent or any other ABL 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 that is consistent with the terms of this Agreement, and none of such
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Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). Each of any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and any Additional Creditors agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against the Term Loan Agent or any other Term Loan 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 that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). Each of any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and any Additional Creditors represented thereby agrees that it will not institute any suit or other proceeding or assert in any suit, Insolvency Proceeding or other proceeding any claim against any other Additional Agent or any Additional Creditor represented by such other Additional Agent, 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 that is consistent with the terms of this Agreement, and none of such Persons shall be liable for any such action taken or omitted to be taken (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby).
(e)Release of Liens.
(i)In the event of (A) any private or public sale of all or any portion of the ABL Priority Collateral in connection with any Exercise of Secured Creditor Remedies by or with the consent of the ABL Agent, (B) any sale, transfer or other disposition of all or any portion of the ABL Priority Collateral, so long as such sale, transfer or other disposition is then permitted by the ABL Documents or (C) the release of the ABL Secured Parties’ Lien on all or any portion of the ABL Priority Collateral, so long as such release shall have been approved by the requisite ABL Lenders (as determined pursuant to the ABL Documents), in the case of clauses (B) and (C) only to the extent prior to the date upon which the Discharge of ABL Obligations shall have occurred and not in connection with a Discharge of ABL Obligations (and irrespective of whether an Event of Default has occurred), (x) the Term Loan Agent agrees, on behalf of itself and the Term Loan Secured Parties, that so long as the net cash proceeds of any such sale, if any, described in clause (A) above are applied as provided in Section 4.1 hereof, such sale, transfer, disposition or release will be free and clear of the Liens on such ABL Priority Collateral securing the Term Loan Obligations, and the Term Loan Agent’s and the Term Loan Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action and (y) any Additional Agent agrees, on behalf of itself and any Additional Creditors represented thereby, that so long as the net cash proceeds of any such sale, if any, described in clause (A) above are applied as provided in Section 4.1 hereof, such sale, transfer, disposition or release will be free and clear of the Liens on such ABL Priority Collateral securing the Additional Obligations, and such Additional Agent’s and the applicable Additional Secured Parties’ Liens with respect to the ABL Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action. In furtherance of, and subject to, the foregoing, each of the Term Loan Agent and any Additional Agent agrees that it will execute any and all Lien releases or other documents reasonably requested by the ABL Agent in connection therewith, so long as the net cash proceeds, if any, from such sale or other disposition of such ABL Priority Collateral described in clause (A) above are applied in accordance with the terms of this Agreement. Each of the Term Loan Agent and any Additional Agent hereby appoints the ABL Agent and any officer or duly authorized person of the ABL Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of such Party and in the name of such Party or in the ABL Agent’s own name, from time to time, in the ABL Agent’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including,
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without limitation, any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).
(ii)In the event of (A) any private or public sale of all or any portion of the Term Loan Priority Collateral in connection with any Exercise of Secured Creditor Remedies by or with the consent of the Term Loan Collateral Representative, (B) any sale, transfer or other disposition of all or any portion of the Term Loan Priority Collateral, so long as such sale, transfer or other disposition is then permitted by the Term Loan Priority Collateral Documents or (C) the release of the Term Loan Collateral Secured Parties’ Liens on all or any portion of the Term Loan Priority Collateral, so long as such release shall have been approved by the requisite Term Loan Collateral Secured Parties (as determined pursuant to the applicable Term Loan Priority Collateral Documents), in the case of clauses (B) and (C) only to the extent prior to the date upon which the Discharge of Term Loan Collateral Obligations shall have occurred and not in connection with a Discharge of Term Loan Collateral Obligations (and irrespective of whether an Event of Default has occurred), the ABL Agent agrees, on behalf of itself and the ABL Lenders, that so long as the net cash proceeds of any such sale, if any, described in clause (A) above are applied as provided in Section 4.1 hereof, such sale, transfer, disposition or release will be free and clear of the Liens on such Term Loan Priority Collateral securing the ABL Obligations and the ABL Agent’s and the ABL Secured Parties’ Liens with respect to the Term Loan Priority Collateral so sold, transferred, disposed or released shall terminate and be automatically released without further action. In furtherance of, and subject to, the foregoing, the ABL Agent agrees that it will execute any and all Lien releases or other documents reasonably requested by the Term Loan Collateral Representative in connection therewith, so long as the net cash proceeds, if any, from such sale or other disposition described in clause (A) above of such Term Loan Priority Collateral are applied in accordance with the terms of this Agreement. The ABL Agent hereby appoints the Term Loan Collateral Representative and any officer or duly authorized person of the Term Loan Collateral Representative, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power of attorney in the place and stead of the ABL Agent and in the name of the ABL Agent or in the Term Loan Collateral Representative’s own name, from time to time, in the Term Loan Collateral Representative’s sole discretion, for the purposes of carrying out the terms of this paragraph, to take any and all appropriate action and to execute and deliver any and all documents and instruments as may be necessary or desirable to accomplish the purposes of this paragraph, including, without limitation, any financing statements, endorsements, assignments, releases or other documents or instruments of transfer (which appointment, being coupled with an interest, is irrevocable).
Section 2.5No New Liens. Until the date upon which the Discharge of ABL Obligations shall have occurred, the parties hereto agree that (except as may be separately otherwise agreed in writing by and between the relevant Agents, each on behalf of itself and the Secured Parties represented thereby):
(i)No Term Loan Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Term Loan Obligation (other than Excluded Assets (as defined in the ABL Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein. If any Term Loan Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Credit Party securing any Term Loan Obligation (other than Excluded Assets (as defined in the ABL Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein, then the Term Loan Agent (or the relevant Term Loan Secured Party) shall, without the need for any further consent of any other Term Loan Secured Party and notwithstanding anything to the contrary in any other Term Loan Document, be deemed to also hold and have held such lien 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. For the avoidance of doubt, this paragraph (i) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Term Loan Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Term Loan Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the ABL Documents)).
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(ii)No Additional Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Additional Obligation (other than Excluded Assets (as defined in the ABL Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein. If any Additional Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Credit Party securing any Additional Obligation (other than Excluded Assets (as defined in the ABL Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of the ABL Agent under the ABL Documents, subject to the Lien Priority set forth herein, then the relevant Additional Agent (or the relevant Additional Secured Party) shall, without the need for any further consent of any other Additional Secured Party and notwithstanding anything to the contrary in any other Additional Document, be deemed to also hold and have held such lien 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. For the avoidance of doubt, this paragraph (ii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Additional Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Additional Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the ABL Documents)).
(b)Until the date upon which the Discharge of Term Loan Obligations shall have occurred, the parties hereto agree that (except as may be separately otherwise agreed in writing by and between the relevant Agents, each on behalf of itself and the Secured Parties represented thereby):
(i)No ABL Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party (other than Excluded Assets (as defined in the Term Loan Documents) constituting Specified Excluded Assets) securing any ABL Obligation which assets are not also subject to the Lien of the Term Loan Agent under the Term Loan Documents, subject to the Lien Priority set forth herein. If any ABL Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation (other than Excluded Assets (as defined in the Term Loan Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of the Term Loan Agent under the Term Loan Documents, subject to the Lien Priority set forth herein, then the ABL Agent (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have held such lien for the benefit of the Term Loan Agent as security for the Term Loan Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify the Term Loan Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (i) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any ABL Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any ABL Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the Term Loan Documents)).
(ii)No Additional Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party securing any Additional Obligation (other than Excluded Assets (as defined in the Term Loan Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of the Term Loan Agent under the Term Loan Documents, subject to the Lien Priority set forth herein. If any Additional Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Credit Party securing any Additional Obligation (other than Excluded Assets (as defined in the Term Loan Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of the Term Loan Agent under the Term Loan Documents, subject to the Lien Priority set forth herein, then the relevant Additional Agent (or the relevant Additional Secured Party) shall, without the need for any further consent of any other Additional Secured Party and notwithstanding anything to the contrary in any other Additional Document, be deemed to also hold and have held such lien for the benefit of the Term Loan Agent as security for the Term Loan Obligations (subject to the Lien Priority and other terms hereof)
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and shall promptly notify the Term Loan Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (ii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Additional Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Additional Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the Term Loan Documents)).
(c)Until the date upon which the Discharge of Additional Obligations shall have occurred, the parties hereto agree that (except as may be separately otherwise agreed in writing by and between the relevant Agents, each on behalf of itself and the Secured Parties represented thereby):
(i)No ABL Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party (other than Excluded Assets (as defined in the applicable Additional Documents) constituting Specified Excluded Assets) securing any ABL Obligation which assets are not also subject to the Lien of each Additional Agent under the Additional Documents, subject to the Lien Priority set forth herein. If any ABL Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Credit Party securing any ABL Obligation (other than Excluded Assets (as defined in the applicable Additional Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of each Additional Agent under the Additional Documents, subject to the Lien Priority set forth herein, then the ABL Agent (or the relevant ABL Secured Party) shall, without the need for any further consent of any other ABL Secured Party and notwithstanding anything to the contrary in any other ABL Document be deemed to also hold and have held such lien for the benefit of each Additional Agent as security for the Additional Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Additional Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (i) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any ABL Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any ABL Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable Additional Documents)).
(ii)No Term Loan Secured Party shall knowingly acquire or hold any Lien on any assets of any Credit Party (other than Excluded Assets (as defined in the applicable Additional Documents) constituting Specified Excluded Assets) securing any Term Loan Obligation which assets are not also subject to the Lien of each Additional Agent under the Additional Documents, subject to the Lien Priority set forth herein. If any Term Loan Secured Party shall (nonetheless and in breach hereof) acquire or hold any Lien on any assets of any Credit Party securing any Term Loan Obligation (other than Excluded Assets (as defined in the applicable Additional Documents) constituting Specified Excluded Assets) which assets are not also subject to the Lien of each Additional Agent under the Additional Documents, subject to the Lien Priority set forth herein, then the Term Loan Agent (or the relevant Term Loan Secured Party) shall, without the need for any further consent of any other Term Loan Secured Party and notwithstanding anything to the contrary in any other Term Loan Document be deemed to also hold and have held such lien for the benefit of each Additional Agent as security for the Additional Obligations (subject to the Lien Priority and other terms hereof) and shall promptly notify each Additional Agent in writing of the existence of such Lien. For the avoidance of doubt, this paragraph (ii) shall not apply to any Lien on any property of any Credit Party securing any Purchase Money Indebtedness or Capitalized Lease Obligation owing to any Term Loan Secured Party, or any Lien on any property that has been sold or otherwise transferred in connection with a sale and leaseback transaction entered into with any Term Loan Secured Party, or that consists of property subject to any such sale and leaseback transaction or general intangibles related thereto (in each case, to the extent such property constitutes Excluded Assets (as defined in the applicable Additional Documents)).
Section 2.6Waiver of Marshalling. Until the Discharge of ABL Obligations, the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, and any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees (including in its capacity as Term Loan Collateral Representative,
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if applicable) 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.
Until the Discharge of Term Loan 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 Loan Priority Collateral or any other similar rights a junior secured creditor may have under applicable law.
Until the Discharge of Additional 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 Loan Priority Collateral or any other similar rights a junior secured creditor may have under applicable law (except as may be separately otherwise agreed in writing by and between the applicable Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
Article 3
ACTIONS OF THE PARTIES
Section 3.1Certain Actions Permitted. The Term Loan Agent, the ABL Agent and any Additional Agent may make such demands or file such claims in respect of the Term Loan Obligations, the ABL Obligations or the Additional 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.
Section 3.2Agent for Perfection. The ABL Agent, for and on behalf of itself and each ABL Lender, the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable), for and on behalf of itself and each Term Loan Secured Party, and any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable), for and on behalf of itself and each Additional Creditor represented thereby, as applicable, each agree to hold all Control Collateral and Cash Collateral that is part of the Collateral in their respective possession, custody, or control (or in the possession, custody, or control of agents or bailees for either) as agent for each other solely for the purpose of perfecting the security interest granted to each in such Control Collateral or Cash Collateral, subject to the terms and conditions of this Section 3.2. None of the ABL Agent, the ABL Lenders, the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable), the Term Loan Secured Parties, any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable), or any Additional Creditors, as applicable, shall have any obligation whatsoever to the others to assure that the Cash Collateral or the Control Collateral is genuine or owned by any Borrower, any Guarantor, or any other Person or to preserve rights or benefits of any Person. The duties or responsibilities of the ABL Agent, the Term Loan Agent and any Additional Agent under this Section 3.2 are and shall be limited solely to holding or maintaining control of the Control Collateral and the Cash Collateral as agent for the other Parties for purposes of perfecting the Lien held by the Term Loan Agent, the ABL Agent or any Additional Agent, as applicable. The ABL Agent is not and shall not be deemed to be a fiduciary of any kind for the Term Loan Agent, the Term Loan Secured Parties, any Additional Agent, any Additional Creditors, or any other Person. The Term Loan Agent is not and shall not be deemed to be a fiduciary of any kind for the ABL Agent, the ABL Lenders, any Additional Agent, any Additional Creditors, or any other Person. Any Additional Agent is not and shall not be deemed to be a fiduciary of any kind for the ABL Agent, the ABL Lenders, the Term Loan Agent, the Term Loan Secured Parties, any other Additional Agent or any Additional Creditors represented by any other Additional Agent, or any other Person. In the event that (a) the Term Loan Agent or any Term Loan Secured Party receives any Collateral or Proceeds of the Collateral in violation of the terms of this Agreement, (b) the ABL Agent or any ABL Lender receives any Collateral or Proceeds of the Collateral in violation of the terms of this Agreement, or (c) any Additional Agent or any Additional Creditor receives any Collateral or Proceeds of the Collateral in violation of the terms of this Agreement, then the Term Loan Agent, such Term Loan Secured Party, the ABL Agent, such ABL Lender, such Additional Agent, or such Additional Creditor, as applicable, shall promptly pay over such Proceeds or Collateral to (i) in the case of ABL Priority Collateral or Proceeds thereof, the ABL Agent, or (ii) in the case of
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Term Loan Priority Collateral or Proceeds thereof, the Term Loan Collateral Representative, in each case, in the same form as received with any necessary endorsements, for application in accordance with the provisions of Section 4.1 of this Agreement. Each Credit Party shall deliver all Control Collateral and all Cash Collateral required to be delivered pursuant to the Credit Documents (i) in the case of ABL Priority Collateral or Proceeds thereof, to the ABL Agent, or (ii) in the case of Term Loan Priority Collateral or Proceeds thereof, to the Term Loan Collateral Representative.
Section 3.3Sharing of Information and Access. In the event that the ABL Agent shall, in the exercise of its rights under the ABL Collateral Documents or otherwise, receive possession or control of any books and Records of any Term Loan Credit Party that contain information identifying or pertaining to the Term Loan Priority Collateral, the ABL Agent shall, upon request of the Term Loan Agent or any Additional Agent and as promptly as practicable thereafter, either make available to such Party such books and Records for inspection and duplication or provide to such Party copies thereof. In the event that the Term Loan Agent or any Additional Agent shall, in the exercise of its rights under the Term Loan Collateral Documents, the Additional Collateral Documents or otherwise, receive possession or control of any books and records of any ABL Credit Party that contain information identifying or pertaining to any of the ABL Priority Collateral, such Party shall, upon written request from the ABL Agent and as promptly as practicable thereafter, either make available to the ABL Agent such books and records for inspection and duplication or provide the ABL Agent copies thereof. Each Credit Party, the Term Loan Agent and each Additional Agent hereby consent to the non-exclusive royalty free use by the ABL Agent of any Intellectual Property included in the Collateral for the purposes of disposing of any ABL Priority Collateral and, in the event that the Term Loan Agent or any Additional Agent shall, in the exercise of its rights under the Term Loan Collateral Documents or otherwise, obtain title to any such Intellectual Property, such Party hereby irrevocably grants the ABL Agent a non-exclusive license or other right to use, without charge, such Intellectual Property as it pertains to the ABL Priority Collateral in advertising for sale and selling any ABL Priority Collateral.
Section 3.4Insurance. Proceeds of Collateral include insurance proceeds and, therefore, the Lien Priority shall govern the ultimate disposition of casualty insurance proceeds. The ABL Agent shall be named as additional insured or loss payee, as applicable, with respect to all insurance policies relating to ABL Priority Collateral and the Term Loan Collateral Representative shall be named as additional insured or loss payee, as applicable, with respect to all insurance policies relating to Term Loan Priority Collateral. The ABL Agent shall have the sole and exclusive right, as against the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable), to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of ABL Priority Collateral. The Term Loan Collateral Representative shall have the sole and exclusive right, as against the ABL Agent, the Term Loan Agent (other than in its capacity as Term Loan Collateral Representative, if applicable) and any Additional Agent (other than in its capacity as Term Loan Collateral Representative, if applicable), to adjust settlement of insurance claims in the event of any covered loss, theft or destruction of Term Loan Priority Collateral. All proceeds of such insurance shall be remitted to the ABL Agent or to the Term Loan Collateral Representative, as the case may be, and each of the Term Loan Collateral Representative and the 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 3.5No Additional Rights For the Credit Parties Hereunder. Except as provided in Section 3.6, if any ABL Secured Party, Term Loan Secured Party or Additional Secured Party shall enforce its rights or remedies in violation of the terms of this Agreement, the Credit Parties shall not be entitled to use such violation as a defense to any action by any ABL Secured Party, Term Loan Secured Party or Additional Secured Party, nor to assert such violation as a counterclaim or basis for set off or recoupment against any ABL Secured Party, Term Loan Secured Party or Additional Secured Party.
Section 3.6Actions Upon Breach. If any Term Loan Secured Party, any ABL Secured Party or any Additional Secured Party, contrary to this Agreement, commences or participates in any action or proceeding against the Credit Parties or the Collateral, the Credit Parties, with the prior written consent of the ABL Agent or the Term Loan Collateral Representative, as applicable, may interpose as a defense or dilatory plea the making of this Agreement, and any ABL Secured Party, Term Loan Secured Party or Additional Secured Party, as applicable, may intervene and interpose such defense or plea in its or their name or in the name of the Credit Parties.
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Section 3.7Inspection Rights. Without limiting any rights the ABL Agent or any other ABL Secured Party may otherwise have under applicable law or by agreement, the ABL Agent and the ABL Secured Parties may, at any time and whether or not the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or any other Term Loan Secured Party or any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or any other Additional Secured Party has commenced and is continuing to Exercise Any Secured Creditor Remedies (the “ABL Permitted Access Right”), during normal business hours on any business day, access ABL Priority Collateral that (A) is stored or located in or on, (B) has become an accession with respect to (within the meaning of Section 9-335 of the Uniform Commercial Code), or (C) has been commingled with (within the meaning of Section 9-336 of the Uniform Commercial Code), Term Loan Priority Collateral (collectively, the “ABL Commingled Collateral”), for the limited purposes of assembling, inspecting, copying or downloading information stored on, taking actions to perfect its Lien on, completing a production run of inventory involving, taking possession of, moving, selling, storing or otherwise dealing with, or to Exercise Any Secured Creditor Remedies with respect to, the ABL Commingled Collateral, in each case without notice to, the involvement of or interference by any Term Loan Secured Party or Additional Secured Party or liability to any Term Loan Secured Party or Additional Secured Party, except as specifically provided below. In addition, subject to the terms hereof, the ABL Agent may advertise and conduct public auctions or private sales of the ABL Priority Collateral without notice to, the involvement of or interference by any Term Loan Secured Party or Additional Secured Party (including the Term Loan Collateral Representative) or liability to any Term Loan Secured Party or Additional Secured Party (including the Term Loan Collateral Representative). In the event that any ABL Secured Party has commenced and is continuing to Exercise Any Secured Creditor Remedies with respect to any ABL Commingled Collateral, the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) may not sell, assign or otherwise transfer the related Term Loan Priority Collateral prior to the expiration of the 180-day period commencing on the date such ABL Secured Party begins to Exercise Any Secured Creditor Remedies, unless the purchaser, assignee or transferee thereof agrees to be bound by the provisions of this Section 3.7. If any stay or other order that prohibits the ABL Agent and other ABL Secured Parties from commencing and continuing to Exercise Any Secured Creditor Remedies with respect to ABL Commingled Collateral has been entered by a court of competent jurisdiction, such 180-day period shall be tolled during the pendency of any such stay or other order. During the period of actual occupation, use and/or control by the ABL Agent or ABL Secured Parties (or their respective employees, agents, advisers and representatives) of any Term Loan Priority Collateral, the ABL Agent and the ABL Secured Parties shall be obligated to repair at their expense any physical damage (but not any diminution in value) to such Term Loan Priority Collateral resulting from such occupancy, use or control, and to leave such Term Loan Priority Collateral in substantially the same condition as it was at the commencement of such occupancy, use or control, ordinary wear and tear excepted. The ABL Agent and ABL Secured Parties shall cooperate with the Term Loan Collateral Secured Parties and/or the Term Loan Collateral Representative in connection with any efforts made by the Term Loan Secured Parties and/or the Term Loan Collateral Representative to sell the Term Loan Priority Collateral.
(b)The Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and the other Term Loan Secured Parties and any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) and any other Additional Secured Parties shall use commercially reasonable efforts to not hinder or obstruct the ABL Agent and the other ABL Secured Parties from exercising the ABL Permitted Access Right.
(c)Subject to the terms hereof, the Term Loan Collateral Representative may advertise and conduct public auctions or private sales of the Term Loan Priority Collateral without notice to, the involvement of or interference by any ABL Secured Party or liability to any ABL Secured Party.
Article 4
APPLICATION OF PROCEEDS
Section 4.1Application of Proceeds.
(a)Revolving Nature of ABL Obligations. The Term Loan Agent, for and on behalf of itself and the Term Loan Secured Parties, and any Additional Agent, for and on behalf of itself and any Additional Creditors represented thereby, expressly acknowledge and agree that (i) any ABL Credit Agreement includes a revolving
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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 Payment Collateral or Cash Collateral or the release of any Lien by the ABL Agent upon any portion of the Collateral in connection with a permitted disposition under any ABL Credit Agreement shall constitute the Exercise of Secured Creditor Remedies under this Agreement; (ii) the amount of the ABL Obligations that may be outstanding at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of the ABL Obligations may be modified, extended or amended from time to time, and that the aggregate amount of the ABL Obligations may be increased, replaced or refinanced, in each event, without notice to or consent by the Term Loan Secured Parties (in the case of the Term Loan Agent) or the applicable Additional Secured Parties (in the case of such Additional Agent) and without affecting the provisions hereof; and (iii) all Payment Collateral or Cash Collateral received by the ABL Agent may be applied, reversed, reapplied, credited, or reborrowed, in whole or in part, to the ABL Obligations at any time; provided, however, that from and after the date on which the ABL Agent (or any ABL Lender) commences the Exercise of Any Secured Creditor Remedies (other than, prior to the acceleration of any of the Term Loan Obligations or any Additional Obligations, the exercise of its rights in accordance with Section 4.16 of the ABL Credit Agreement or any similar provision of any other ABL Credit Agreement), all amounts received by the ABL Agent or any ABL Lender shall be applied as specified in this Section 4.1. The Lien Priority shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of the ABL Obligations, the Term Loan Obligations, or any Additional Obligations, or any portion thereof.
(b)Revolving Nature of Term Loan Obligations and Additional Obligations.
(i)The ABL Agent, for and on behalf of itself and the ABL Lenders, and any Additional Agent, for and on behalf of itself and any Additional Creditors represented thereby, expressly acknowledge and agree that (i) the Term Loan Agreement may include a revolving commitment and that in the ordinary course of business the Term Loan Agent and Term Loan Secured Parties may apply payments and make advances thereunder; and (ii) the amount of Term Loan Obligations that may be outstanding thereunder at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of Term Loan Obligations thereunder may be modified, extended or amended from time to time, and that the aggregate amount of Term Loan Obligations thereunder may be increased, replaced or refinanced, in each event, without notice to or consent by the ABL Secured Parties (in the case of the ABL Agent) or the applicable Additional Secured Parties (in the case of such Additional Agent) and without affecting the provisions hereof; provided, however, that from and after the date on which the Term Loan Agent or any Term Loan Secured Party commences the Exercise of Any Secured Creditor Remedies, all amounts received by the Term Loan Agent or Term Loan Secured Party shall be applied as specified in this Section 4.1. The Lien Priority shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase, replacement, renewal, restatement or refinancing of the ABL Obligations, the Term Loan Obligations, or any Additional Obligations, or any portion thereof.
(ii)The Term Loan Agent, for and on behalf of itself and the Term Loan Secured Parties, the ABL Agent, for and on behalf of itself and the ABL Lenders and any Additional Agent, for and on behalf of itself and any Additional Creditors represented thereby, expressly acknowledge and agree that (i) Additional Credit Facilities may include a revolving commitment, and that in the ordinary course of business any Additional Agent and Additional Creditors may apply payments and make advances thereunder; and (ii) the amount of Additional Obligations that may be outstanding thereunder at any time or from time to time may be increased or reduced and subsequently reborrowed, and that the terms of Additional Obligations thereunder may be modified, extended or amended from time to time, and that the aggregate amount of Additional Obligations thereunder may be increased, replaced or refinanced, in each event, without notice to or consent by the Term Loan Secured Parties (in the case of the Term Loan Agent), the ABL Secured Parties (in the case of the ABL Agent) or any other Additional Secured Party (in the case of such Additional Agent) and without affecting the provisions hereof; provided, however, that from and after the date on which any Additional Agent or Additional Creditor commences the Exercise of Any Secured Creditor Remedies, all amounts received by any such Additional Agent or Additional Creditor shall be applied as specified in this Section 4.1. The Lien Priority shall not be altered or otherwise affected by any such amendment, modification, supplement, extension, repayment, reborrowing, increase,
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replacement, renewal, restatement or refinancing of the ABL Obligations, the Term Loan Obligations, or any Additional Obligations, or any portion thereof.
(c)Application of Proceeds of ABL Priority Collateral. The ABL Agent, the Term Loan Agent and any Additional 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 shall be applied,
first, to the payment of costs and expenses of the ABL Agent, the Term Loan Agent or any Additional Agent, as applicable, in connection with such Exercise of Secured Creditor Remedies,
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 payment of (x) the Term Loan Obligations and in accordance with the Term Loan Documents until the Discharge of Term Loan Obligations shall have occurred and (y) any Additional Obligations in accordance with the applicable Additional Documents until the Discharge of Additional Obligations shall have occurred, which payment shall be made to the Term Loan Collateral Representative to be allocated between and among the Term Loan Obligations and any Additional Obligations as may be separately otherwise agreed in writing by and between the applicable Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, and (ii) with respect to allocation of payments among Additional Agents, as may be separately otherwise agreed in writing by and between or among any applicable Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby), and
fourth, the balance, if any, to the Credit Parties or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.
(d)Application of Proceeds of Term Loan Priority Collateral. The ABL Agent, the Term Loan Agent and any Additional Agent hereby agree that all Term Loan Priority Collateral, and all Proceeds thereof, received by any of them in connection with any Exercise of Secured Creditor Remedies shall be applied, first, to the payment of costs and expenses of the ABL Agent, the Term Loan Agent or any Additional Agent, as applicable, in connection with such Exercise of Secured Creditor Remedies, second, to the payment of (x) the Term Loan Obligations in accordance with the Term Loan Documents until the Discharge of Term Loan Obligations shall have occurred and (y) any Additional Obligations in accordance with the applicable Additional Documents until the Discharge of Additional Obligations shall have occurred, which payment shall be made to the Term Loan Collateral Representative to be allocated between and among the Term Loan Obligations and any Additional Obligations as may be separately otherwise agreed in writing by and between the applicable Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, and (ii) with respect to allocation of payments among Additional Agents, as may be separately otherwise agreed in writing by and between or among any applicable Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby), third, to the payment of the ABL Obligations in accordance with the ABL Documents until the Discharge of ABL Obligations shall have occurred, and fourth, the balance, if any, to the Credit Parties or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct, except, in the case of application of Note Priority Collateral and Proceeds thereof as between Additional Obligations and ABL Obligations, as may be separately otherwise agreed in writing by and between any applicable Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders, with respect to the Additional Obligations owing to any of such Additional Agent and Additional Creditors.
(e)Limited Obligation or Liability.
(i)In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent shall have no obligation or liability to the Term Loan Agent or any Term Loan Secured Party regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement. In exercising remedies, whether as a secured creditor or otherwise, the ABL Agent shall have no obligation or liability to any Additional Agent or any Additional Creditor, regarding the adequacy of any Proceeds or for
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any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
(ii)In exercising remedies, whether as a secured creditor or otherwise, the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) shall have no obligation or liability to the ABL Agent or any ABL Lender regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement. In exercising remedies, whether as a secured creditor or otherwise, the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) shall have no obligation or liability to any Additional Agent or any Additional Creditor, regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(iii)In exercising remedies, whether as a secured creditor or otherwise, any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) shall have no obligation or liability to the ABL Agent or any ABL Lender regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). In exercising remedies, whether as a secured creditor or otherwise, any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) shall have no obligation or liability to the Term Loan Agent or any Term Loan Secured Party regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). In exercising remedies, whether as a secured creditor or otherwise, any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) shall have no obligation or liability to any other Additional Agent or any Additional Creditors represented by such other Additional Agent regarding the adequacy of any Proceeds or for any action or omission, save and except solely for an action or omission that breaches the express obligations undertaken by each Party under the terms of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby).
(f)Turnover of Cash Collateral After Discharge. Upon the Discharge of ABL Obligations, the ABL Agent shall deliver to the Term Loan Collateral Representative or shall execute such documents as the Company or the Term Loan Collateral Representative may reasonably request to enable the Term Loan Collateral Representative to have control over any Cash Collateral or Control Collateral still in the ABL Agent’s possession, custody, or control in the same form as received with any necessary endorsements, or as a court of competent jurisdiction may otherwise direct. Upon the Discharge of Term Loan Collateral Obligations, the Term Loan Collateral Representative shall deliver to the ABL Agent or shall execute such documents as the ABL Agent may reasonably request to enable the ABL Agent to have control over any Cash Collateral or Control Collateral still in the Term Loan Collateral Representative’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. As between (i) the Term Loan Collateral Representative and (ii) the Term Loan Agent and any Additional Agent (other than the Term Loan Collateral Representative), any such Cash Collateral or Control Collateral held by the Term Loan Collateral Representative shall be held by it subject to the terms and conditions of Section 2.2.
(g)Intervening Creditor. Notwithstanding anything in Sections 4.1(c) or (d) to the contrary, with respect to any Collateral for which a third party (other than a Term Loan Collateral Secured Party) has a Lien or
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security interest that is junior in priority to the Lien or security interest of any Series of Term Loan Collateral Obligations but senior (as determined by appropriate legal proceedings in the case of any dispute) to the Lien or security interest of any other Series of Term Loan Collateral Obligations (such third party an “Intervening Creditor”), except as may be separately otherwise agreed in writing by and between any Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties or any other Additional Agent on behalf of itself and the Additional Creditors represented thereby, the value of any Collateral or Proceeds which are allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Collateral or Proceeds thereof to be distributed in respect of the Series of Term Loan Collateral Obligations with respect to which such Impairment exists.
Section 4.2Specific Performance. Each of the ABL Agent, the Term Loan Agent and any Additional Agent is hereby authorized to demand specific performance of this Agreement, whether or not any Borrower or any Guarantor shall have complied with any of the provisions of any of the Credit Documents, at any time when any 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 Lenders, the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable), for and on behalf of itself and the Term Loan Secured Parties, and any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable), for and on behalf of itself and any Additional Creditors represented thereby, 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 5.1Notice of Acceptance and Other Waivers.
(a)All ABL Obligations at any time made or incurred by any Borrower or any Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, and any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby waives notice of acceptance of, or proof of reliance by the ABL Agent or any ABL Lender on, 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 Loan Obligations at any time made or incurred by any Borrower or any 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 Lenders, and any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby waives notice of acceptance, or proof of reliance, by the Term Loan Agent or any Term Loan 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 Loan Obligations. All Additional Obligations at any time made or incurred by any Borrower or any Guarantor shall be deemed to have been made or incurred in reliance upon this Agreement, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, the ABL Agent, on behalf of itself and any ABL Lenders, and any other Additional Agent, on behalf of itself and the Additional Creditors represented thereby, hereby waives notice of acceptance, or proof of reliance by any Additional Agent or any Additional Creditors of this Agreement, and notice of the existence, increase, renewal, extension, accrual, creation, or non-payment of all or any part of the Additional Obligations.
(b)None of the ABL Agent, any ABL Lender, or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the Term Loan Agent or any Term Loan Secured Party 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 Lender honors (or fails to honor) a request by any 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 Lender has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any Term Loan Agreement or any other Term Loan Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the ABL Agent or any ABL Lender 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 Lender shall have any liability whatsoever to the Term Loan Agent or any Term Loan Secured Party as a result
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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 Lenders 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 the Term Loan Agent or any Term Loan Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement. The Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, agrees that neither the ABL Agent nor any ABL Lender shall incur any liability as a result of a sale, lease, license, application, or other disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement.
(c)None of the ABL Agent, any ABL Lender, or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to any Additional Agent or any Additional Creditor 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 (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). If the ABL Agent or any ABL Lender honors (or fails to honor) a request by any 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 Lender has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any Additional Credit Facility or any other Additional Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the ABL Agent or any ABL Lender 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 Lender shall have any liability whatsoever to any Additional Agent or any Additional Creditor 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) (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). The ABL Agent and the ABL Lenders 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 Additional Agent or any Additional Creditor has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that neither the ABL Agent nor any ABL Lender shall incur any liability as a result of a sale, lease, license, application, or other disposition of all or any portion of the Collateral or Proceeds thereof, pursuant to the ABL Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
(d)None of the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable), the Term Loan Secured Parties or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the ABL Agent or any ABL Lender 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 Term Loan Agent or any Term Loan Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Term Loan Agreement or any of the other Term Loan Documents, whether the Term Loan Agent or any Term Loan Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any ABL Credit Agreement or any other ABL Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the Term Loan Agent or any Term Loan Secured Party otherwise should exercise any of its contractual rights or remedies under the Term Loan Documents (subject to the express terms and conditions hereof), neither the
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Term Loan Agent nor any Term Loan Secured Party shall have any liability whatsoever to the ABL Agent or any ABL Lender 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 Loan Agent and the Term Loan Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Term Loan 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 Lender has in the Collateral, except as otherwise expressly set forth in this Agreement. The ABL Agent, on behalf of itself and the ABL Lenders, agrees that none of the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or the Term Loan 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 Loan Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement.
(e)None of the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable), the Term Loan Secured Parties or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to any Additional Agent or any Additional Creditor 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 (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). If the Term Loan Agent or any Term Loan Secured Party honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Term Loan Agreement or any of the other Term Loan Documents, whether the Term Loan Agent or any Term Loan Secured Party has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any Additional Credit Facility or any other Additional Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if the Term Loan Agent or any Term Loan Secured Party otherwise should exercise any of its contractual rights or remedies under the Term Loan Documents (subject to the express terms and conditions hereof), neither the Term Loan Agent nor any Term Loan Secured Party shall have any liability whatsoever to any Additional Agent or any Additional Creditor 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) (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). The Term Loan Agent and the Term Loan Secured Parties shall be entitled to manage and supervise their loans and extensions of credit under the Term Loan 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 Additional Agent or any Additional Creditor has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that none of the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or the Term Loan 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 Loan Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(f)None of any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable), any Additional Creditors or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the ABL Agent or any ABL Lender 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 (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). If any Additional Agent or any Additional
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Creditor honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Additional Credit Facility or any of the other Additional Documents, whether such Additional Agent or any Additional Creditor has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any ABL Credit Agreement or any other ABL Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if any Additional Agent or any Additional Creditor otherwise should exercise any of its contractual rights or remedies under the Additional Documents (subject to the express terms and conditions hereof), neither such Additional Agent nor any Additional Creditor shall have any liability whatsoever to the ABL Agent or any ABL Lender 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) (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). Any Additional Agent and any Additional Creditors shall be entitled to manage and supervise their loans and extensions of credit under the Additional 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 Lender has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). The ABL Agent, on behalf of itself and the ABL Lenders agrees that none of any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or any Additional Creditors 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 Additional Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
(g)None of any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable), any Additional Creditors or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to the Term Loan Agent or any Term Loan Secured Party 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 (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). If any Additional Agent or any Additional Creditor honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Additional Credit Facility or any of the other Additional Documents, whether such Additional Agent or any Additional Creditor has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of the Term Loan Agreement or any other Term Loan Document (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if any Additional Agent or any Additional Creditor otherwise should exercise any of its contractual rights or remedies under the Additional Documents (subject to the express terms and conditions hereof), neither such Additional Agent nor any Additional Creditor shall have any liability whatsoever to the Term Loan Agent or any Term Loan 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) (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). Any Additional Agent and any Additional Creditors shall be entitled to manage and supervise their loans and extensions of credit under the Additional 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 Term Loan Agent or any Term Loan Secured Party has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). The Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, agrees that none of any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or any Additional Creditors 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 Additional Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this
41


Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(h)None of any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable), any Additional Creditors or any of their respective Affiliates, directors, officers, employees, or agents shall be liable to any other Additional Agent or any Additional Creditor represented thereby 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 (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby). If any Additional Agent or any Additional Creditor honors (or fails to honor) a request by any Borrower for an extension of credit pursuant to any Additional Credit Facility or any of the other Additional Documents, whether such Additional Agent or any Additional Creditor has knowledge that the honoring of (or failure to honor) any such request would constitute a default under the terms of any Additional Credit Facility or any other Additional Document to which any other Additional Agent or any Additional Creditor represented by such other Additional Agent is party or beneficiary (but not a default under this Agreement) or an act, condition, or event that, with the giving of notice or the passage of time, or both, would constitute such a default, or if any Additional Agent or any Additional Creditor otherwise should exercise any of its contractual rights or remedies under the Additional Documents (subject to the express terms and conditions hereof), neither such Additional Agent nor any Additional Creditor shall have any liability whatsoever to any other Additional Agent or any Additional Creditor represented by such other Additional Agent, 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) (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby). Any Additional Agent and any Additional Creditors shall be entitled to manage and supervise their loans and extensions of credit under the Additional 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 other Additional Agent or any Additional Creditor represented by such other Additional Agent, has in the Collateral, except as otherwise expressly set forth in this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby). Any Additional Agent, on behalf of itself and the Additional Creditors represented thereby, agrees that none of any other Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) or any Additional Creditor represented thereby 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 Additional Documents, so long as such disposition is conducted in accordance with mandatory provisions of applicable law and does not breach the provisions of this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby).
Section 5.2Modifications to ABL Documents and Term Loan Documents.
(a)The Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, hereby agrees that, without affecting the obligations of the Term Loan Agent and the Term Loan Secured Parties hereunder, the ABL Agent and the ABL Lenders may, at any time and from time to time, in their sole discretion without the consent of or notice to the Term Loan Agent or any Term Loan Secured Party (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the Term Loan Agent or any Term Loan Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner whatsoever, including, to:
(i)change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the ABL Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the ABL Obligations or any of the ABL Documents;
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(ii)retain or obtain a Lien on any Property of any Person to secure any of the ABL Obligations, and in connection therewith to enter into any additional ABL Documents;
(iii)amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the ABL Obligations;
(iv)release its Lien on any Collateral or other Property;
(v)exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi)retain or obtain the primary or secondary obligation of any other Person with respect to any of the ABL Obligations; and
(vii)otherwise manage and supervise the ABL Obligations as the ABL Agent shall deem appropriate.
(b)Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby agrees that, without affecting the obligations of such Additional Agent and such Additional Creditors hereunder, the ABL Agent and the ABL Lenders may, at any time and from time to time, in their sole discretion without the consent of or notice to such Additional Agent or any such Additional Creditor (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to such Additional Agent or any such Additional Creditor or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the ABL Documents in any manner whatsoever, including, to:
(i)change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the ABL Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the ABL Obligations or any of the ABL Documents;
(ii)retain or obtain a Lien on any Property of any Person to secure any of the ABL Obligations, and in connection therewith to enter into any additional ABL Documents;
(iii)amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the ABL Obligations;
(iv)release its Lien on any Collateral or other Property;
(v)exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi)retain or obtain the primary or secondary obligation of any other Person with respect to any of the ABL Obligations; and
(vii)otherwise manage and supervise the ABL Obligations as the ABL Agent shall deem appropriate; except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders.
(c)The ABL Agent, on behalf of itself and the ABL Lenders, hereby agrees that, without affecting the obligations of the ABL Agent and the ABL Lenders hereunder, the Term Loan Agent and the Term Loan Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to the ABL
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Agent or any ABL Lender (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the ABL Agent or any ABL Lender or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Term Loan Documents in any manner whatsoever, including, to:
(i)change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Term Loan Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Term Loan Obligations or any of the Term Loan Documents;
(ii)retain or obtain a Lien on any Property of any Person to secure any of the Term Loan Obligations, and in connection therewith to enter into any additional Term Loan Documents;
(iii)amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the Term Loan Obligations;
(iv)release its Lien on any Collateral or other Property;
(v)exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi)retain or obtain the primary or secondary obligation of any other Person with respect to any of the Term Loan Obligations; and
(vii)otherwise manage and supervise the Term Loan Obligations as the Term Loan Agent shall deem appropriate.
(d)Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby agrees that, without affecting the obligations of such Additional Agent and such Additional Creditors hereunder, the Term Loan Agent and the Term Loan Secured Parties may, at any time and from time to time, in their sole discretion without the consent of or notice to such Additional Agent or any such Additional Creditor (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement or except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties), and without incurring any liability to such Additional Agent or any such Additional Creditor or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Term Loan Documents in any manner whatsoever, including, to:
(i)change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Term Loan Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Term Loan Obligations or any of the Term Loan Documents;
(ii)retain or obtain a Lien on any Property of any Person to secure any of the Term Loan Obligations, and in connection therewith to enter into any additional Term Loan Documents;
(iii)amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the Term Loan Obligations;
(iv)release its Lien on any Collateral or other Property;
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(v)exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi)retain or obtain the primary or secondary obligation of any other Person with respect to any of the Term Loan Obligations; and
(vii)otherwise manage and supervise the Term Loan Obligations as the Term Loan Agent shall deem appropriate; except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties.
(e)The Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, hereby agrees that, without affecting the obligations of the Term Loan Agent and the Term Loan Secured Parties hereunder, any Additional Agent and any Additional Creditors may, at any time and from time to time, in their sole discretion without the consent of or notice to the Term Loan Agent or any Term Loan Secured Party or (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement or except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties), and without incurring any liability to the Term Loan Agent or any Term Loan Secured Party or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Additional Documents in any manner whatsoever, including, to:
(i)change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Additional Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Additional Obligations or any of the Additional Documents;
(ii)retain or obtain a Lien on any Property of any Person to secure any of the Additional Obligations, and in connection therewith to enter into any additional Additional Documents;
(iii)amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the Additional Obligations;
(iv)release its Lien on any Collateral or other Property;
(v)exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi)retain or obtain the primary or secondary obligation of any other Person with respect to any of the Additional Obligations; and
(vii)otherwise manage and supervise the Additional Obligations as such Additional Agent shall deem appropriate; except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties.
(f)The ABL Agent, on behalf of itself and the ABL Lenders, hereby agrees that, without affecting the obligations of the ABL Agent and the ABL Lenders hereunder, any Additional Agent and any Additional Creditors 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 Lender (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement), and without incurring any liability to the ABL Agent or any ABL Lender or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Additional Documents in any manner whatsoever, including, to:
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(i)change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Additional Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Additional Obligations or any of the Additional Documents;
(ii)retain or obtain a Lien on any Property of any Person to secure any of the Additional Obligations, and in connection therewith to enter into any additional Additional Documents;
(iii)amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the Additional Obligations;
(iv)release its Lien on any Collateral or other Property;
(v)exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
(vi)retain or obtain the primary or secondary obligation of any other Person with respect to any of the Additional Obligations; and
(vii)otherwise manage and supervise the Additional Obligations as such Additional Agent shall deem appropriate; except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders.
(g)Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, hereby agrees that, without affecting the obligations of such Additional Agent and such Additional Creditors hereunder, any other Additional Agent and any Additional Creditors represented by such other Additional Agent may, at any time and from time to time, in their sole discretion without the consent of or notice to such Additional Agent or any such Additional Creditor (except to the extent such notice or consent is required pursuant to the express provisions of this Agreement or except as may be separately otherwise agreed in writing by and between such Additional Agents, each on behalf of itself and the Additional Creditors represented thereby), and without incurring any liability to such Additional Agent or any such Additional Creditor or impairing or releasing the subordination provided for herein, amend, restate, supplement, replace, refinance, extend, consolidate, restructure, or otherwise modify any of the Additional Documents to which such other Additional Agent or any Additional Creditor represented by such other Additional Agent is party or beneficiary in any manner whatsoever, including, to:
(i)change the manner, place, time, or terms of payment or renew, alter or increase, all or any of the Additional Obligations or otherwise amend, restate, supplement, or otherwise modify in any manner, or grant any waiver or release with respect to, all or any part of the Additional Obligations or any of the Additional Documents;
(ii)retain or obtain a Lien on any Property of any Person to secure any of the Additional Obligations, and in connection therewith to enter into any additional Additional Documents;
(iii)amend, or grant any waiver, compromise, or release with respect to, or consent to any departure from, any guaranty or other obligations of any Person obligated in any manner under or in respect of the Additional Obligations;
(iv)release its Lien on any Collateral or other Property;
(v)exercise or refrain from exercising any rights against any Borrower, any Guarantor, or any other Person;
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(vi)retain or obtain the primary or secondary obligation of any other Person with respect to any of the Additional Obligations; and
(vii)otherwise manage and supervise the Additional Obligations as such other Additional Agent shall deem appropriate; except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby.
(h)The ABL Obligations, the Term Loan Obligations and any Additional Obligations may be refunded, replaced or refinanced, in whole or in part, in each case, without notice to, or the consent (except to the extent a consent is required to permit the refunding, replacement or refinancing transaction under any ABL Document, any Term Loan Document or any Additional Document) of the ABL Agent, the ABL Lenders, the Term Loan Agent or the Term Loan Secured Parties, any Additional Agent or any Additional Creditors, as the case may be, all without affecting the Lien Priorities provided for herein or the other provisions hereof; provided, however, that, if the indebtedness refunding, replacing or refinancing any such ABL Obligations, Term Loan Obligations or Additional Obligations is to constitute ABL Obligations, Term Loan Obligations or Additional Obligations governed by this Agreement, the holders of such indebtedness (or an authorized agent or trustee on their behalf) bind themselves in writing to the terms of this Agreement pursuant to a joinder agreement substantially in the form of Exhibit C attached hereto or otherwise in form and substance reasonably satisfactory to the ABL Agent, the Term Loan Agent or any Additional Agent, as the case may be, and any such refunding, replacement or refinancing transaction shall be in accordance with any applicable provisions of the ABL Documents, the Term Loan Documents and any Additional Documents. For the avoidance of doubt, any ABL Obligations, Term Loan Obligations or Additional Obligations may be refinanced, in whole or in part, in each case without notice to, or the consent (except to the extent a consent is required to permit the refinancing transaction under the ABL Documents, Term Loan Documents or Additional Documents) of, any of the ABL Agent or any other ABL Secured Party, the Term Loan Agent or any other Term Loan Secured Party or any Additional Agent or any other Additional Secured Party, through the incurrence of Additional Indebtedness, subject to Section 7.11.
Section 5.3Reinstatement and Continuation of Agreement.
(a)If the ABL Agent or any ABL Lender is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Borrower, any Guarantor, 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 Loan Agent, any Additional Agent, the ABL Lenders, the Term Loan Secured Parties and any Additional Creditors 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 Guarantor or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Borrower or any Guarantor in respect of the ABL Obligations, the Term Loan Obligations or any Additional Obligations. No priority or right of the ABL Agent or any ABL Lender 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 Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of any of the ABL Documents, regardless of any knowledge thereof which the ABL Agent or any ABL Lender may have.
(b)If the Term Loan Agent or any Term Loan Secured Party is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Borrower, any Guarantor, or any other Person any payment made in satisfaction of all or any portion of the Term Loan Obligations (a “Term Loan Recovery”), then the Term Loan Obligations shall be reinstated to the extent of such Term Loan Recovery. If this Agreement shall have been terminated prior to such Term Loan Recovery, this Agreement shall be reinstated in full force and effect in the event of such Term Loan 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 Loan Agent, any Additional Agent, the ABL Lenders, the Term Loan Secured Parties and any Additional Creditors 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
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Insolvency Proceeding by or against any Borrower or any Guarantor or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Borrower or any Guarantor in respect of the ABL Obligations, the Term Loan Obligations or any Additional Obligations. No priority or right of the Term Loan Agent or any Term Loan 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 Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of any of the Term Loan Documents, regardless of any knowledge thereof which the Term Loan Agent or any Term Loan Secured Party may have.
(c)If any Additional Agent or any Additional Creditor is required in any Insolvency Proceeding or otherwise to turn over or otherwise pay to the estate of any Borrower, any Guarantor, or any other Person any payment made in satisfaction of all or any portion of the Additional Obligations (an “Additional Recovery”), then the Additional Obligations shall be reinstated to the extent of such Additional Recovery. If this Agreement shall have been terminated prior to such Additional Recovery, this Agreement shall be reinstated in full force and effect in the event of such Additional 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 Loan Agent, any Additional Agent, the ABL Lenders, the Term Loan Secured Parties and any Additional Creditors 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 Guarantor or any other circumstance which otherwise might constitute a defense available to, or a discharge of any Borrower or any Guarantor in respect of the ABL Obligations, the Term Loan Obligations or any Additional Obligations. No priority or right of any Additional Agent or any Additional Creditor 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 Guarantor or by the noncompliance by any Person with the terms, provisions, or covenants of any of the Additional Documents, regardless of any knowledge thereof which any Additional Agent or any Additional Creditor may have.
Article 6
INSOLVENCY PROCEEDINGS
Section 6.1DIP Financing.
(a)If any Borrower or any Guarantor shall be subject to any Insolvency Proceeding in the United States at any time prior to the Discharge of ABL Obligations, and the ABL Agent or the ABL Lenders shall seek to provide any Borrower or any Guarantor 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 under Section 363 of the Bankruptcy Code (“DIP Financing”), with such 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 Collateral), then the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, agrees that it will raise no objection and will not support any objection to such DIP Financing or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens of the Term Loan Agent securing the Term Loan Obligations or on any other grounds (and will not request any adequate protection solely as a result of such DIP Financing), so long as (i) the Term Loan Agent retains its Lien on the Collateral to secure the Term Loan Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and, as to the Term Loan Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code and any Lien securing such DIP Financing is junior and subordinate to the Lien of the Term Loan Agent on the Term Loan Priority Collateral, (ii) all Liens on ABL Priority Collateral securing any such DIP Financing shall be senior to or on a parity with the Liens of the ABL Agent and the ABL Lenders securing the ABL Obligations on ABL Priority Collateral and (iii) if the ABL Agent receives an adequate protection Lien on post-petition assets of the debtor to secure the ABL Obligations, the Term Loan Agent also receives an adequate protection Lien on such post-petition assets of the debtor to secure the Term Loan Obligations, provided that (x) such Liens in favor of the ABL Agent and the Term Loan Agent shall be subject to the provisions of Section 6.1(c) hereof and (y) the foregoing provisions of this Section 6.1(a) shall not prevent the Term Loan Agent and the Term Loan Secured Parties from objecting to any provision in any DIP Financing relating to any provision or content of a plan of reorganization.
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(b)If any Borrower or any Guarantor shall be subject to any Insolvency Proceeding in the United States at any time prior to the Discharge of ABL Obligations, and the ABL Agent or the ABL Lenders shall seek to provide any Borrower or any Guarantor with, or consent to a third party providing, any DIP Financing, with such 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 Collateral), then any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that it will raise no objection and will not support any objection to such DIP Financing or to the Liens securing the same on the grounds of a failure to provide “adequate protection” for the Liens of such Additional Agent securing the Additional Obligations or on any other grounds (and will not request any adequate protection solely as a result of such DIP Financing), so long as (i) such Additional Agent retains its Lien on the Collateral to secure the Additional Obligations (in each case, including Proceeds thereof arising after the commencement of the case under the Bankruptcy Code) and, as to the Term Loan Priority Collateral only, such Lien has the same priority as existed prior to the commencement of the case under the Bankruptcy Code and any Lien securing such DIP Financing is junior and subordinate to the Lien of such Additional Agent on the Term Loan Priority Collateral (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders), (ii) all Liens on ABL Priority Collateral securing any such DIP Financing shall be senior to or on a parity with the Liens of the ABL Agent and the ABL Lenders securing the ABL Obligations on ABL Priority Collateral and (iii) if the ABL Agent receives an adequate protection Lien on post-petition assets of the debtor to secure the ABL Obligations, such Additional Agent also receives an adequate protection Lien on such post-petition assets of the debtor to secure the Additional Obligations, provided that (x) such Liens in favor of the ABL Agent and such Additional Agent shall be subject to the provisions of Section 6.1(c) hereof and (y) the foregoing provisions of this Section 6.1(b) shall not prevent any Additional Agent and any Additional Creditors from objecting to any provision in any DIP Financing relating to any provision or content of a plan of reorganization.
(c)All Liens granted to the ABL Agent, the Term Loan Agent or any Additional Agent in any Insolvency Proceeding, whether as adequate protection or otherwise, are intended by the Parties to be and shall be deemed to be subject to the Lien Priority and the other terms and conditions of this Agreement.
Section 6.2Relief From Stay. Until the Discharge of ABL Obligations has occurred, the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, and any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, 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 Loan Collateral Obligations has occurred, the ABL Agent, on behalf of itself and the ABL Lenders, 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 Loan Priority Collateral without the Term Loan Collateral Representative’s express written consent. In addition, none of the Term Loan Agent (including in its capacity as Term Loan Collateral Representative, if applicable), the ABL Agent nor any Additional Agent (including in its capacity as Term Loan Collateral Representative, if applicable) shall seek any relief from the automatic stay with respect to any Collateral without providing 30 days’ prior written notice to each other Party, unless such period is agreed in writing by the ABL Agent, the Term Loan Agent and each Additional Agent to be modified.
Section 6.3No Contest.
(a)The Term Loan Agent, on behalf of itself and the Term Loan 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 Lender for adequate protection of its interest in the Collateral, or (ii) any objection by the ABL Agent or any ABL Lender to any motion, relief, action, or proceeding based on a claim by the ABL Agent or any ABL Lender 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. Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, 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 Lender for adequate protection of its interest in the Collateral, or (ii) any objection by the ABL Agent or any ABL Lender to any motion, relief, action, or proceeding based on a claim by the ABL Agent or any ABL Lender that its interests in the Collateral are not adequately protected (or any other similar request under any law applicable to an Insolvency
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Proceeding), so long as any Liens granted to the ABL Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders).
(b)The ABL Agent, on behalf of itself and the ABL Lenders, agrees that, prior to the Discharge of Term Loan Obligations, none of them shall contest (or support any other Person contesting) (i) any request by the Term Loan Agent or any Term Loan Secured Party for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(a) hereof), or (ii) any objection by the Term Loan Agent or any Term Loan Secured Party to any motion, relief, action or proceeding based on a claim by the Term Loan Agent or any Term Loan Secured Party that its interests in the Collateral (unless in contravention of Section 6.1(a) hereof) 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 Term Loan Agent as adequate protection of its interests are subject to this Agreement. Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that, prior to the Discharge of Term Loan Obligations, none of them shall contest (or support any other Person contesting) (i) any request by the Term Loan Agent or any Term Loan Secured Party for adequate protection of its interest in the Collateral, or (ii) any objection by the Term Loan Agent or any Term Loan Secured Party to any motion, relief, action or proceeding based on a claim by the Term Loan Agent or any Term Loan 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 Term Loan Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties).
(c)The Term Loan Agent, on behalf of itself and the Term Loan Secured Parties, agrees that, prior to the Discharge of Additional Obligations, none of them shall contest (or support any other Person contesting) (i) any request by any Additional Agent or any Additional Creditor for adequate protection of its interest in the Collateral, or (ii) any objection by any Additional Agent or any Additional Creditor to any motion, relief, action, or proceeding based on a claim by any Additional Agent or any Additional Creditor 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 such Additional Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the Term Loan Agent, on behalf of itself and the Term Loan Secured Parties). The ABL Agent, on behalf of itself and the ABL Lenders, agrees that, prior to the Discharge of Additional Obligations, none of them shall contest (or support any other Person contesting) (i) any request by any Additional Agent or any Additional Creditor for adequate protection of its interest in the Collateral (unless in contravention of Section 6.1(b) hereof), or (ii) any objection by any Additional Agent or any Additional Creditor to any motion, relief, action, or proceeding based on a claim by any Additional Agent or any Additional Creditor that its interests in the Collateral (unless in contravention of Section 6.1(b) hereof) are not adequately protected (or any other similar request under any law applicable to an Insolvency Proceeding), so long as any Liens granted to such Additional Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders). Any Additional Agent, on behalf of itself and any Additional Creditors represented thereby, agrees that, prior to the applicable Discharge of Additional Obligations, none of them shall contest (or support any other Person contesting) (a) any request by any other Additional Agent or any Additional Creditor represented by such other Additional Agent for adequate protection of its interest in the Collateral, or (b) any objection by such other Additional Agent or any Additional Creditor to any motion, relief, action, or proceeding based on a claim by any Additional Agent or any Additional Creditor represented by such other Additional Agent 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 such other Additional Agent as adequate protection of its interests are subject to this Agreement (except as may be separately otherwise agreed in writing by and between such Additional Agents, in each case on behalf of itself and the Additional Creditors represented thereby).
Section 6.4Asset Sales. The Term Loan Agent agrees, on behalf of itself and the Term Loan Secured Parties, and any Additional Agent agrees, on behalf of itself and any Additional Creditors represented
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thereby, that it will not oppose any sale consented to by the ABL Agent of any ABL Priority Collateral pursuant to Section 363(f) of the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency Proceeding) so long as the proceeds of such sale are applied in accordance with this Agreement. The ABL Agent agrees, on behalf of itself and the ABL Lenders, that it will not oppose any sale consented to by the Term Loan Agent, any Additional Agent or the Term Loan Collateral Representative of any Term Loan Priority Collateral pursuant to Section 363(f) of the Bankruptcy Code (or any similar provision under the law applicable to any Insolvency Proceeding) so long as the proceeds of such sale are applied in accordance with this Agreement. If such sale of Collateral includes both ABL Priority Collateral and Term Loan Priority Collateral and the Parties are unable to agree on the allocation of the purchase price between the ABL Priority Collateral and Term Loan Priority Collateral, any Party may apply to the court in such Insolvency Proceeding to make a determination of such allocation, and the court’s determination shall be binding upon the Parties.
Section 6.5Separate Grants of Security and Separate Classification. Each Term Loan Secured Party, the Term Loan Agent, each ABL Lender, the ABL Agent, each Additional Creditor and each Additional Agent acknowledges and agrees that (i) the grants of Liens pursuant to the ABL Collateral Documents, the Term Loan Collateral Documents and the Additional Collateral Documents constitute separate and distinct grants of Liens and (ii) because of, among other things, their differing rights in the Collateral, the Term Loan Obligations and Additional Obligations are fundamentally different from the ABL Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency Proceeding. To further effectuate the intent of the parties as provided in the immediately preceding sentence, if it is held that the claims of the ABL Secured Parties, on the one hand, and the Term Loan Secured Parties and Additional Secured Parties, on the other hand, 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, the Term Loan Secured Parties and any Additional Secured Parties hereby acknowledge and agree that all distributions shall be made as if there were separate classes of ABL Obligation claims, Term Loan Obligation claims and Additional Obligation claims against the Credit Parties (with the effect being that, to the extent that the aggregate value of the ABL Priority Collateral or the Term Loan Priority Collateral is sufficient (for this purpose ignoring all claims held by the other Secured Parties), the ABL Secured Parties or the Term Loan Secured Parties and Additional 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 that is available from each pool of Priority Collateral for each of the ABL Secured Parties, on the one hand, and the Term Loan Secured Parties and Additional Secured Parties, on the other hand, before any distribution is made from the applicable pool of Priority Collateral in respect of the claims held by the other Secured Parties, 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 the applicable pool of 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. The foregoing sentence is subject to any separate agreement by and between any Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and any other Party, on behalf of itself and the Secured Parties represented thereby, with respect to the Additional Obligations owing to any of such Additional Agent and Additional Creditors.
Section 6.6Enforceability. The provisions of this Agreement are intended to be and shall be enforceable under Section 510(a) of the Bankruptcy Code.
Section 6.7ABL Obligations Unconditional. All rights of the ABL Agent hereunder, and all agreements and obligations of the Term Loan Agent, any Additional Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(i)any lack of validity or enforceability of any ABL 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 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;
(iii)any exchange, release, voiding, avoidance or non perfection of any security interest in any Collateral or any other collateral, or any release, amendment, waiver or other modification, whether by
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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 Credit Party in respect of the ABL Obligations, or of any of the Term Loan Agent, any Additional Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.8Term Loan Obligations Unconditional. All rights of the Term Loan Agent hereunder, and all agreements and obligations of the ABL Agent, any Additional Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(i)any lack of validity or enforceability of any Term Loan 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 Loan 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 Loan Document;
(iii)any exchange, release, voiding, avoidance or non perfection of any security interest in any Collateral, or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the Term Loan 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 Credit Party in respect of the Term Loan Obligations, or of any of the ABL Agent, any Additional Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.9Additional Obligations Unconditional. All rights of any Additional Agent hereunder, and all agreements and obligations of the ABL Agent, the Term Loan Agent and the Credit Parties (to the extent applicable) hereunder, shall remain in full force and effect irrespective of:
(i)any lack of validity or enforceability of any Additional 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 Additional Obligations, or any amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding or restatement of any Additional Document;
(iii)any exchange, release, voiding, avoidance or non perfection of any security interest in any Collateral, or any other collateral, or any release, amendment, waiver or other modification, whether by course of conduct or otherwise, or any refinancing, replacement, refunding, restatement or increase of all or any portion of the Additional 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 Credit Party in respect of the Additional Obligations, or of any of the ABL Agent, the Term Loan Agent or any Credit Party, to the extent applicable, in respect of this Agreement.
Section 6.10Adequate Protection. Except to the extent expressly provided in Section 6.1, nothing in this Agreement shall limit the rights of (a) the ABL Agent and the ABL Lenders, (b) the Term Loan Agent and the Term Loan Secured Parties, or (c) any Additional Agent and any Additional Creditors, respectively, from seeking or requesting adequate protection with respect to their interests in the applicable Collateral in any Insolvency Proceeding, including adequate protection in the form of a cash payment, periodic cash payments, cash payments of interest, additional collateral or otherwise; provided that (a) in the event that the ABL Agent, on behalf of itself or any of the ABL Lenders, seeks or requests adequate protection in respect of the ABL Obligations and such adequate protection is granted in the form of additional collateral comprising assets of the type of assets that constitute Term Loan Priority Collateral, then the ABL Agent, on behalf of itself and each of the ABL Lenders, agrees that the Term
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Loan Agent shall also be granted a senior Lien on such collateral as security for the Term Loan Obligations and that any Lien on such collateral securing the ABL Obligations shall be subordinate to any Lien on such collateral securing the Term Loan Obligations, (b) in the event that the ABL Agent, on behalf of itself or any of the ABL Lenders, seeks or requests adequate protection in respect of the ABL Obligations and such adequate protection is granted in the form of additional collateral comprising assets of the type of assets that constitute Term Loan Priority Collateral, then the ABL Agent, on behalf of itself and each of the ABL Lenders, agrees that any Additional Agent shall also be granted a senior Lien on such collateral as security for the Additional Obligations and that any Lien on such collateral securing the ABL Obligations shall be subordinate to any Lien on such collateral securing the Additional Obligations (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders), (c) in the event that the Term Loan Agent, on behalf of itself or any of the Term Loan Secured Parties, seeks or requests adequate protection in respect of the Term Loan Obligations and such adequate protection is granted in the form of additional collateral comprising assets of the type of assets that constitute ABL Priority Collateral, then the Term Loan Agent, on behalf of itself and each of the Term Loan Secured Parties, agrees that the ABL Agent shall also be granted a senior Lien on such collateral as security for the ABL Obligations and that any Lien on such collateral securing the Term Loan Obligations shall be subordinate to the Lien on such collateral securing the ABL Obligations and (d) in the event that any Additional Agent, on behalf of itself or any Additional Creditor, seeks or requests adequate protection in respect of the Additional Obligations and such adequate protection is granted in the form of additional collateral comprising assets of the type of assets that constitute ABL Priority Collateral, then such Additional Agent, on behalf of itself and any Additional Creditor represented thereby, agrees that the ABL Agent shall also be granted a senior Lien on such collateral as security for the ABL Obligations and that any Lien on such collateral securing the Additional Obligations shall be subordinate to the Lien on such collateral securing the ABL Obligations.
Article 7
MISCELLANEOUS
Section 7.1Rights of Subrogation. The Term Loan Agent, for and on behalf of itself and the Term Loan Secured Parties, agrees that no payment by the Term Loan Agent or any Term Loan Secured Party to the ABL Agent or any ABL Lender pursuant to the provisions of this Agreement shall entitle the Term Loan Agent or any Term Loan Secured Party to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations shall have occurred. Following the Discharge of ABL Obligations, the ABL Agent agrees to execute such documents, agreements, and instruments as the Term Loan Agent or any Term Loan 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 Lenders, agrees that no payment by the ABL Agent or any ABL Lender to the Term Loan Agent or any Term Loan Secured Party pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Lender to exercise any rights of subrogation in respect thereof until the Discharge of Term Loan Obligations shall have occurred. Following the Discharge of Term Loan Obligations, the Term Loan Agent agrees to execute such documents, agreements, and instruments as the ABL Agent or any ABL Lender may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the Term Loan Obligations resulting from payments to the Term Loan Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by the Term Loan Agent are paid by such Person upon request for payment thereof.
Any Additional Agent, for and on behalf of itself and any Additional Creditors represented thereby, agrees that no payment by such Additional Agent or any such Additional Creditor to the ABL Agent or any ABL Lender pursuant to the provisions of this Agreement shall entitle such Additional Agent or any such Additional Creditor to exercise any rights of subrogation in respect thereof until the Discharge of ABL Obligations shall have occurred. Following the Discharge of ABL Obligations, the ABL Agent agrees to execute such documents, agreements, and instruments as such Additional Agent or any such Additional Creditor 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
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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 Lenders, agrees that no payment by the ABL Agent or any ABL Lender to any Additional Agent or any Additional Creditor represented thereby pursuant to the provisions of this Agreement shall entitle the ABL Agent or any ABL Lender to exercise any rights of subrogation in respect thereof until the Discharge of Additional Obligations shall have occurred. Following the Discharge of Additional Obligations, such Additional Agent agrees to execute such documents, agreements, and instruments as the ABL Agent or any ABL Lender may reasonably request to evidence the transfer by subrogation to any such Person of an interest in the applicable Additional Obligations resulting from payments to such Additional Agent by such Person, so long as all costs and expenses (including all reasonable legal fees and disbursements) incurred in connection therewith by such Additional Agent are paid by such Person upon request for payment thereof.
Section 7.2Further 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 any Party may reasonably request, in order to protect any right or interest granted or purported to be granted hereby or to enable such Party to exercise and enforce its rights and remedies hereunder; provided, however, that no Party shall be required to pay over any payment or distribution, execute any instruments or documents, or take any other action referred to in this Section 7.2, to the extent that such action would contravene any law, order or other legal requirement or any of the terms or provisions of this Agreement, and in the event of a controversy or dispute, such Party may interplead any payment or distribution in any court of competent jurisdiction, without further responsibility in respect of such payment or distribution under this Section 7.2.
Section 7.3Representations. The Term Loan Agent represents and warrants to the ABL Agent and any Additional Agent that it has the requisite power and authority under the Term Loan Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and the Term Loan Secured Parties. The ABL Agent represents and warrants to the Term Loan Agent and any Additional 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 Lenders. Any Additional Agent represents and warrants to the Term Loan Agent, the ABL Agent and any other Additional Agent that it has the requisite power and authority under the applicable Additional Documents to enter into, execute, deliver, and carry out the terms of this Agreement on behalf of itself and any Additional Creditors represented thereby.
Section 7.4Amendments. No amendment, modification or waiver of any provision of this Agreement, and no consent to any departure by any Party hereto, shall be effective unless it is in a written agreement executed by (i) prior to the Discharge of Term Loan Obligations, the Term Loan Agent, (ii) prior to the Discharge of ABL Obligations, the ABL Agent and any (iii) prior to the Discharge of Additional Obligations in respect of any Additional Credit Facility, the applicable Additional Agent. Notwithstanding the foregoing, the Company may, without the consent of any Party hereto, amend this Agreement by (x) executing an Additional Indebtedness Joinder as provided in Section 7.11 or (y) executing a joinder agreement substantially in the form of Exhibit C attached hereto or otherwise as provided for in the definition of “ABL Credit Agreement” or “Term Loan Agreement”, as applicable. No amendment, modification or waiver of any provision of this Agreement, and no consent to any departure therefrom by any Party hereto, that changes, alters, modifies or otherwise affects any power, privilege, right, remedy, liability or obligation of, or otherwise affects in any manner, any Additional Agent that is not then a Party, or any Additional Creditor not then represented by an Additional Agent that is then a Party (including but not limited to any change, alteration, modification or other effect upon any power, privilege, right, remedy, liability or obligation of or other effect upon any such Additional Agent or Additional Creditor that may at any subsequent time become a Party or beneficiary hereof) shall be effective unless it is consented to in writing by the Company (regardless of whether any such Additional Agent or Additional Creditor ever becomes a Party or beneficiary hereof), and any amendment, modification or waiver of any provision of this Agreement that would have the effect, directly or indirectly, through any reference in any Credit Document to this Agreement or otherwise, of waiving, amending, supplementing or otherwise modifying any Credit Document, or any term or provision thereof, or any right or obligation of the Company or any other Credit Party thereunder or in respect thereof, shall not be given such effect except pursuant to a written instrument executed by the Company and each other affected Credit Party.
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(b)In the event that the ABL Agent or the requisite ABL Lenders enter into any amendment, waiver or consent in respect of or replace any ABL Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departure from any provisions of, any ABL Collateral Document relating to the ABL Priority Collateral or changing in any manner the rights of the ABL Agent, the ABL Lenders, or any ABL Credit Party with respect to the ABL Priority Collateral (including the release of any Liens on ABL Priority Collateral), then such amendment, waiver or consent shall apply automatically to any comparable provision of each Term Loan Collateral Document and each Additional Collateral Document without the consent of any Term Loan Agent or any Term Loan Secured Party or any Additional Agent or Additional Secured Party, as applicable, and without any action by any Term Loan Agent or any Term Loan Secured Party or any Additional Agent or any Additional Secured Party, as applicable; provided, that such amendment, waiver or consent does not materially adversely affect the rights of the Term Loan Secured Parties or the Additional Secured Parties, as applicable, or the interests of the Term Loan Secured Parties or the Additional Secured Parties, as applicable, in the Term Loan Priority Collateral. The ABL Agent shall give written notice of such amendment, waiver or consent to each Term Loan Agent and Additional Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any Term Loan Collateral Document or any Additional Collateral Document as set forth in this Section 7.4(b).
(c)In the event that the Term Loan Agent or the requisite Term Loan Lenders enter into any amendment, waiver or consent in respect of or replace any Term Loan Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Term Loan Collateral Document relating to the Term Loan Priority Collateral or changing in any manner the rights of the Term Loan Agent, the Term Loan Lenders, or any Term Loan Credit Party with respect to the Term Loan Priority Collateral (including the release of any Liens on Term Loan Priority Collateral), then such amendment, waiver or consent shall apply automatically to any comparable provision of each ABL Collateral Document without the consent of or any actions by the ABL Agent or any ABL Lender; provided, that such amendment, waiver or consent does not materially adversely affect the rights or interests of the ABL Lenders in the ABL Priority Collateral. The Term Loan Agent shall give written notice of such amendment, waiver or consent to the ABL Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any ABL Collateral Document as set forth in this Section 7.4(c).
(d)In the event that the Additional Agent or the requisite Additional Creditors enter into any amendment, waiver or consent in respect of or replace any Additional Collateral Document for the purpose of adding to, or deleting from, or waiving or consenting to any departures from any provisions of, any Additional Collateral Document relating to the Term Loan Priority Collateral or changing in any manner the rights of the Additional Agent, the Additional Creditors, or any Additional Credit Party with respect to the Term Loan Priority Collateral (including the release of any Liens on Term Loan Priority Collateral), then such amendment, waiver or consent shall apply automatically to any comparable provision of each ABL Collateral Document without the consent of or any actions by the ABL Agent or any ABL Lender (except as may be separately otherwise agreed in writing by and between such Additional Agent, on behalf of itself and the Additional Creditors represented thereby, and the ABL Agent, on behalf of itself and the ABL Lenders); provided, that such amendment, waiver or consent does not materially adversely affect the rights or interests of the ABL Lenders in the ABL Priority Collateral. The Additional Agent shall give written notice of such amendment, waiver or consent to the ABL Agent; provided that the failure to give such notice shall not affect the effectiveness of such amendment, waiver or consent with respect to the provisions of any ABL Collateral Document as set forth in this Section 7.4(d).
Section 7.5Addresses 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, faxed, 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 facsimile or five (5) days after deposit in the United States mail (certified, with postage prepaid and properly addressed). For the purposes hereof, the addresses of the parties hereto (until notice of a change thereof is delivered as provided in this Section) 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:            Wells Fargo Bank, National Association
Attention: Laura Nickas
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10 S. Wacker Drive, 26th Floor
Chicago, IL 60606
Facsimile: (877) 302-9116
Telephone: (312) 739-2225
Email: laura.nickas@wellsfargo.com

Term Loan Agent:        JPMorgan Chase Bank, N.A.
Mail Code IL1-0010, L2 Floor
JPM Loan & Agency Services
10 S. Dearborn Street
Chicago, IL 60603
Attention: Naveen Pattasseril
Facsimile: (302) 634 3301
Telephone: (302) 6345 634
E-mail: naveen.pattasseril@chase.com

Any ABL Agent under any ABL Credit Agreement other than the Original ABL Credit Agreement: As set forth in the joinder executed and delivered by such ABL Agent pursuant to the definition of “ABL Credit Agreement.”
Any Term Loan Agent under any Term Loan Agreement other than the Original Term Loan Agreement: As set forth in the joinder executed and delivered by such Term Loan Agent pursuant to the definition of “Term Loan Agreement.”
Any Additional Agent:
As set forth in the Additional Indebtedness Joinder executed and delivered by such Additional Agent pursuant to Section 7.11.

Section 7.6No Waiver, Remedies. No failure on the part of any Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
Section 7.7Continuing Agreement, Transfer of Secured Obligations. This Agreement is a continuing agreement and shall (a) remain in full force and effect until the Discharge of ABL Obligations, the Discharge of Term Loan Obligations and the Discharge of Additional Obligations shall have occurred, (b) be binding upon the Parties and their successors and assigns, and (c) inure to the benefit of and be enforceable by the Parties and their respective successors, transferees and assigns. 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, subject to Section 7.10 hereof. All references to any Credit Party shall include any Credit Party as debtor-in-possession and any receiver or trustee for such Credit Party in any Insolvency Proceeding. Without limiting the generality of the foregoing clause (c), the ABL Agent, any ABL Lender, the Term Loan Agent, any Term Loan Secured Party, any Additional Agent or any Additional Creditor may assign or otherwise transfer all or any portion of the ABL Obligations, the Term Loan Obligations or any Additional Obligations, as applicable, to any other Person, and such other Person shall thereupon become vested with all the rights and obligations in respect thereof granted to the ABL Agent, the Term Loan Agent, such ABL Lender, such Term Loan Secured Party, such Additional Agent or such Additional Creditor, as the case may be, herein or otherwise. The ABL Secured Parties, the Term Loan Secured Parties and any Additional Secured Parties may continue, at any time and without notice to the other Parties hereto, to extend credit and other financial accommodations, lend monies and provide indebtedness to, or for the benefit of, any Credit Party on the faith hereof.
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Section 7.8Governing 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. 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 7.9Counterparts. 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 other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement. This Agreement shall become effective when it shall have been executed by each party hereto. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Agreement and/or any document to be signed in connection with this Agreement shall be deemed to include Electronic Signatures (as defined below), deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be. “Electronic Signatures” means any electronic symbol or process attached to, or associated with, any contract or other record and adopted by a person with the intent to sign, authenticate or accept such contract or record.
Section 7.10No Third Party Beneficiaries. This Agreement and the rights and benefits hereof shall inure to the benefit of each of the parties hereto and its respective successors and assigns and shall inure to the benefit of each of the ABL Agent, the ABL Lenders, the Term Loan Agent, the Term Loan Secured Parties, each Additional Agent, the Additional Secured Parties and the Company and the other Credit Parties. No other Person shall have or be entitled to assert rights or benefits hereunder.
Section 7.11Designation of Additional Indebtedness; Joinder of Additional Agents. The Company may designate any Additional Indebtedness complying with the requirements of the definition of “Additional Indebtedness” as Additional Indebtedness for purposes of this Agreement, upon complying with the following conditions:
(i)one or more Additional Agents for one or more Additional Creditors in respect of such Additional Indebtedness shall have executed the Additional Indebtedness Joinder with respect to such Additional Indebtedness, and the Company or any such Additional Agent shall have delivered such executed Additional Indebtedness Joinder to each Agent then party to this Agreement;
(ii)at least five Business Days (unless a shorter period is agreed in writing by the Parties and the Company) prior to delivery of the Additional Indebtedness Joinder, the Company shall have delivered to each Agent then party to this Agreement complete and correct copies of any Additional Credit Facility, Additional Guaranties and Additional Collateral Documents that will govern such Additional Indebtedness upon giving effect to such designation (which may be unexecuted copies of Additional Documents to be executed and delivered concurrently with the effectiveness of such designation);
(iii)the Company shall have executed and delivered to each Agent then party to this Agreement an Additional Indebtedness Designation, with respect to such Additional Indebtedness; and
(iv)all state and local stamp, recording, filing, intangible and similar taxes or fees (if any) that are payable in connection with the inclusion of such Additional Indebtedness under this Agreement shall have been paid and reasonable evidence thereof shall have been given to each Agent then party to this Agreement;
(b)Upon satisfaction of the foregoing conditions, the designated Additional Indebtedness shall constitute “Additional Indebtedness”, any Additional Credit Facility under which such Additional Indebtedness is or may be incurred shall constitute an “Additional Credit Facility”, any holder of such Additional Indebtedness or other applicable Additional Creditor shall constitute an “Additional Creditor”, and any Additional Agent for any such Additional Creditor shall constitute an “Additional Agent”, for all purposes under this Agreement. The date on which the foregoing conditions shall have been satisfied with respect to such Additional Indebtedness is herein called the “Additional Effective Date”. Prior to the Additional Effective Date with respect to such Additional
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Indebtedness, all references herein to Additional Indebtedness shall be deemed not to take into account such Additional Indebtedness, and the rights and obligations of the ABL Agent, the Term Loan Agent and any other Additional Agent then party to this Agreement shall be determined on the basis that such Additional Indebtedness is not then designated. On and after the Additional Effective Date with respect to such Additional Indebtedness, all references herein to Additional Indebtedness shall be deemed to take into account such Additional Indebtedness, and the rights and obligations of the ABL Agent, the Term Loan Agent and any other Additional Agent then party to this Agreement shall be determined on the basis that such Additional Indebtedness is then designated.
(c)In connection with any designation of Additional Indebtedness pursuant to this Section 7.11, each of the ABL Agent, the Term Loan Agent and any Additional Agent then party hereto agrees at the Company’s expense (x) to execute and deliver any amendments, amendments and restatements, restatements or waivers of or supplements to or other modifications to, any Term Loan Collateral Documents, ABL Collateral Documents, or Additional Collateral Documents, as applicable, and any blocked account, control or other agreements relating to any security interest in Control Collateral or Cash Collateral, and to make or consent to any filings or take any other actions, as may be reasonably deemed by the Company to be necessary or reasonably desirable for any Lien on any Collateral to secure such Additional Indebtedness to become a valid and perfected Lien (with the priority contemplated by this Agreement), and (y) otherwise to reasonably cooperate to effectuate a designation of Additional Indebtedness pursuant to this Section 7.11 (including without limitation, if requested, by executing an acknowledgment of any Additional Indebtedness Joinder or of the occurrence of any Additional Effective Date).
Section 7.12Term Loan Collateral Representative; Notice of Term Loan Collateral Representative Change. The Term Loan Collateral Representative shall act for the Term Loan Collateral Secured Parties as provided in this Agreement. Until a Party (other than the existing Term Loan Collateral Representative) receives written notice from the existing Term Loan Collateral Representative, in accordance with Section 7.5 of this Agreement, of a change in the identity of the Term Loan Collateral Representative, such Party shall be entitled to act as if the existing Term Loan Collateral Representative is in fact the Term Loan Collateral Representative. Each Party (other than the existing Term Loan Collateral Representative) shall be entitled to rely upon any written notice of a change in the identity of the Term Loan Collateral Representative which facially appears to be from the then existing Term Loan Collateral Representative and is delivered in accordance with Section 7.5 and such Agent shall not be required to inquire into the veracity or genuineness of such notice. Each existing Term Loan Collateral Representative from time to time agrees to give prompt written notice to each Party of any change in the identity of the Term Loan Collateral Representative.
Section 7.13Provisions Solely to Define Relative Rights. The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the ABL Secured Parties, the Term Loan Secured Parties and any Additional Secured Parties, respectively. Nothing in this Agreement is intended to or shall impair the rights of the Company or any other Credit Party, or the obligations of the Company or any other Credit Party to pay the ABL Obligations, the Term Loan Obligations and any Additional Obligations as and when the same shall become due and payable in accordance with their terms.
Section 7.14Headings. 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 7.15Severability. 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 7.16Attorneys Fees. The Parties agree that if any dispute, arbitration, litigation, or other proceeding is brought with respect to the enforcement of this Agreement or any provision hereof, the prevailing party in such dispute, arbitration, litigation, or other proceeding shall be entitled to recover its reasonable attorneys’ fees and all other costs and expenses incurred in the enforcement of this Agreement, irrespective of whether suit is brought.
Section 7.17VENUE; JURY TRIAL WAIVER.
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(a)EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK (OR IF SUCH COURT LACKS SUBJECT MATTER JURISDICTION, SUPREME COURT OF THE STATE OF NEW YORK FOR THE COUNTY OF NEW YORK) AND APPELLATE COURTS THEREFROM; PROVIDED THAT NOTHING CONTAINED HEREIN OR IN ANY OTHER LOAN DOCUMENT WILL PREVENT ANY LENDER OR THE ADMINISTRATIVE AGENT FROM BRINGING ANY ACTION TO ENFORCE ANY AWARD OR JUDGMENT OR, SOLELY IN THE CASE OF THE ADMINISTRATIVE AGENT, EXERCISE ANY RIGHT UNDER THE SECURITY DOCUMENTS OR AGAINST ANY COLLATERAL OR ANY OTHER PROPERTY OF ANY LOAN PARTY IN ANY OTHER FORUM IN WHICH JURISDICTION CAN BE ESTABLISHED.
(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 7.18Intercreditor Agreement. This Agreement is the Intercreditor Agreement referred to in the ABL Credit Agreement as the “Intercreditor Agreement” and in any Term Loan Agreement as the “ABL/Term Loan Intercreditor Agreement”. Nothing in this Agreement shall be deemed to subordinate the right of any ABL Secured Party to receive payment to the right of any Term Loan Secured Party or any Additional Secured Party to receive payment or of any Term Loan Secured Party or any Additional Secured Party to receive payment to the right of any ABL Secured Party to receive payment (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 as between the ABL Secured Parties, on the one hand, and the Term Loan Secured Parties and any Additional Secured Parties, on the other hand, but not a subordination of Indebtedness.
Section 7.19No Warranties or Liability. The Term Loan Agent, the ABL Agent and any Additional Agent each acknowledge and agree that none of the other Parties has made any representation or warranty with respect to the execution, validity, legality, completeness, collectability or enforceability of any other ABL Document, any other Term Loan Document or any other Additional Document. Except as otherwise provided in this Agreement, the Term Loan Agent, the ABL Agent and any Additional Agent will be entitled to manage and supervise their respective extensions of credit to any Credit Party in accordance with law and their usual practices, modified from time to time as they deem appropriate.
Section 7.20Conflicts. In the event of any conflict between the provisions of this Agreement and the provisions of any ABL Document, any Term Loan Document or any Additional Document, the provisions of this Agreement shall govern. The parties hereto acknowledge that the terms of this Agreement are not intended to negate any specific rights granted to the Company or any other Credit Party in the Term Loan Documents, the ABL Documents or any Additional Documents.
Section 7.21Information Concerning Financial Condition of the Credit Parties. None of the Term Loan Agent, the ABL Agent and any Additional Agent has any responsibility for keeping any other Party informed of the financial condition of the Credit Parties or of other circumstances bearing upon the risk of nonpayment of the ABL Obligations, the Term Loan Obligations or any Additional Obligations. The Term Loan Agent, the ABL Agent and any Additional 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 the Term Loan Agent, the ABL Agent or any Additional Agent, in its sole discretion, undertakes at any time or from time to time to provide
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any information to any other party to this Agreement, it shall be under no obligation (A) to provide any such information to such other party or any other party on any subsequent occasion, (B) to undertake any investigation not a part of its regular business routine, or (C) to disclose any other information.
[Signature pages follow]
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IN WITNESS WHEREOF, the ABL Agent, for and on behalf of itself and the ABL Lenders, and the Term Loan Agent, for and on behalf of itself and the Term Loan Secured Parties, have caused this Agreement to be duly executed and delivered as of the date first above written.
WELLS FARGO BANK, NATIONAL ASSOCIATION in its capacity as the ABL Agent
By:     /s/ Laura Nickas    
Name: Laura Nickas
Title: Authorized Signatory


JPMORGAN CHASE BANK, N.A. in its capacity as the Term Loan Agent
By:     /s/ Stephanie Lis    
Name: Stephanie Lis
Title: Authorized Officer







ACKNOWLEDGMENT
Each Borrower and each 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, the ABL Lenders, the Term Loan Agent, the Term Loan Secured Parties, any Additional Agent and any Additional Creditors and will not do any act or perform any obligation which is not in accordance with the agreements set forth in this Agreement.
CREDIT PARTIES:
                        BORROWER:

ATKORE INTERNATIONAL, INC.

By /s/ John Deitzer______________
                        Name:    John Deitzer
Title:    Vice President, Treasurer and Assistant Corporate Secretary


GUARANTORS:

ATKORE INC.
ATKORE INTERNATIONAL HOLDINGS INC.
AFC CABLE SYSTEMS, INC.
ALLIED TUBE & CONDUIT CORPORATION
ATKORE PLASTIC PIPE CORPORATION
ATKORE STEEL COMPONENTS, INC.
CALPIPE INDUSTRIES, LLC
US TRAY, INC.
WPFY, INC.
ATKORE RMCP, INC.
UNISTRUT INTERNATIONAL CORPORATION
GEORGIA PIPE COMPANY
TKN, INC.
ATKORE PLASTICS SOUTHEAST, LLC
ATKORE SOUTHWEST, LLC


                        By /s/ John Deitzer_____________
                        Name:    John Deitzer
Title:    Vice President
                        

                        




COLUMBIA-MBF INC.


                        By /s/ Dan Kelly_______________
                        Name: Dan Kelly
Title: Vice President and Corporate Secretary

Execution Version

GUARANTEE AND COLLATERAL AGREEMENT

made by

ATKORE INC.,
ATKORE INTERNATIONAL HOLDINGS INC.,

ATKORE INTERNATIONAL, INC.,

and certain of its Subsidiaries,

in favor of

JPMORGAN CHASE BANK, N.A.,
as Collateral Agent

Dated as of May 26, 2021




TABLE OF CONTENTS
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SCHEDULES
1    Notice Addresses of Grantors
2    Pledged Securities
3    Perfection Matters
4    Location of Jurisdiction of Organization
5    Intellectual Property
6    [Reserved]
7    Commercial Tort Claims
ANNEXES
1    Acknowledgement and Consent of Issuers who are not Grantors
2    Assumption Agreement
3    Supplemental Agreement
4    Joinder and Release

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GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 26, 2021, made by ATKORE INC., a Delaware corporation (“Parent”), ATKORE INTERNATIONAL HOLDINGS, INC., a Delaware corporation (“Holdings”), ATKORE INTERNATIONAL, INC., a Delaware corporation (the “Borrower”) and certain Subsidiaries of Parent from time to time party hereto, in favor of JPMORGAN CHASE BANK, N.A., as collateral agent (in such capacity, the “Collateral Agent”) and administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions (collectively, the “Lenders”; individually, a “Lender”) from time to time parties to the Credit Agreement described below.
W I T N E S S E T H:
WHEREAS, pursuant to that certain Term Loan Credit Agreement, dated as of the date hereof (as amended, amended and restated, waived, supplemented or otherwise modified from time to time, together with any agreement extending the maturity of, or restructuring, refunding, refinancing or increasing the Indebtedness under such agreement or successor agreements, the “Credit Agreement”), among Parent, the Borrower, the Collateral Agent, the Administrative Agent, and the other parties party thereto, 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 the other Grantors (as defined below);
WHEREAS, the proceeds of the extensions of credit under the Credit Agreement will be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related businesses, and each such Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement;
WHEREAS, it is a condition to the obligation of the Lenders to make their respective extensions of credit under the Credit Agreement that the Grantors shall execute and deliver this Agreement to the Collateral Agent for the benefit of the Secured Parties;
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement, dated as of August 28, 2020 (as amended, amended and restated, waived supplemented or otherwise modified from time to time, together with any agreement extending the maturity of, or restructuring, refunding, refinancing or increasing the Indebtedness under such agreement or successor agreement, the “ABL Credit Agreement”), among the Borrower, the Subsidiary Borrowers (as defined therein) party thereto (collectively with the Borrower, the “ABL Borrowers”), the banks and other financial institutions lenders thereunder (collectively, the “ABL Lenders”), Wells Fargo Bank, National Association, as administrative agent and collateral agent (in such capacity, the “ABL Agent”) and the other parties party thereto, the ABL Lenders have severally agreed to make extensions of credit to the ABL Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to that certain Amended and Restated Guarantee and Collateral Agreement, dated as of August 28, 2020 (as amended, amended and restated, waived, supplemented or otherwise modified from time to time, the “ABL Guarantee and Collateral Agreement”), among Holdings, the ABL Borrowers, certain other Subsidiaries of the Borrower and the ABL Agent, Parent, the ABL Borrowers
[Signature Pages to Guarantee and Collateral Agreement]



and such Subsidiaries have granted a first priority Lien to the ABL Agent for the benefit of the holders of ABL Obligations (as defined herein) on the ABL Priority Collateral (as defined herein) and a second priority Lien for the benefit of the holders of the ABL Obligations on the Term Loan Priority Collateral (as defined herein) (subject in each case to Permitted Liens (as defined in the ABL Credit Agreement)); and
WHEREAS, the ABL Agent and the Collateral Agent are party to that certain Intercreditor Agreement, acknowledged by Parent, Holdings, the Borrower and the other Grantors, dated as of May 26, 2021, (as amended, amended and restated, waived, supplemented or otherwise modified from time to time (subject to Subsection 9.1 hereof), the “ABL Intercreditor Agreement”);
NOW, THEREFORE, in consideration of the premises and to induce the Administrative 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 Administrative Agent and the Collateral Agent, for the benefit of the Secured Parties (as defined below), as follows:
Section 1.  DEFINED TERMS
1.1Definitions. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms that are defined in the Code (as in effect on the date hereof) are used herein as so defined: Cash Proceeds, Chattel Paper, Commercial Tort Claims, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, General Intangibles, Letter of Credit Rights, Money, Promissory Notes, Records, Securities, Securities Accounts, Security Entitlements, Supporting Obligations and Tangible Chattel Paper.
(b)The following terms shall have the following meanings:
ABL Agent”: as defined in the recitals hereto.
ABL Borrowers”: as defined in the recitals hereto.
ABL Credit Agreement”: as defined in the recitals hereto.
ABL Guarantee and Collateral Agreement”: as defined in the recitals hereto.
ABL Lenders”: as defined in the recitals hereto.
ABL Priority Collateral”: as defined in the ABL Intercreditor Agreement.
Accounts”: all accounts (as defined in the Code) of each Grantor, including, without limitation, all Accounts (as defined in the Credit Agreement) and Accounts Receivable of such Grantor.
Accounts Receivable”: any right to payment for goods sold or leased or for services rendered, which is not evidenced by an instrument (as defined in the Code) or Chattel Paper.
Additional Agent”: as defined in the ABL Intercreditor Agreement.
Additional Collateral Documents”: as defined in the ABL Intercreditor Agreement.
Additional Credit Facilities”: as defined in the ABL Intercreditor Agreement.
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Additional Obligations”: as defined in the ABL Intercreditor Agreement.
Adjusted Net Worth”: of any Guarantor at any time, shall mean the greater of (x) $0 and (y) the amount by which the fair saleable value of such Guarantor’s assets on the date of the respective payment hereunder exceeds its debts and other liabilities (including contingent liabilities, but without giving effect to any of its obligations under this Agreement or any other Loan Document, or pursuant to its guarantee with respect to any Indebtedness then outstanding under the ABL Credit Agreement or any Assumed Indebtedness) on such date.
Administrative Agent”: as defined in the preamble hereto.
Agreement”: this Guarantee and Collateral Agreement, as the same may be amended, restated, supplemented, waived or otherwise modified from time to time.
Applicable Law”: as defined in Section 9.8 hereto.
Asset Sales Proceeds Account”: one or more Deposit Accounts or Securities Accounts holding only the proceeds of any sale or disposition of any Term Loan Priority Collateral and the proceeds or investment thereof.
Bank Products Provider”: shall mean any Person that has entered into a Bank Products Agreement with a Grantor with the obligations of such Grantor thereunder being secured by one or more Loan Documents, as designated by the Borrower in accordance with Section 8.4 hereof (provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Provider with respect to more than one Credit Facility).
Bankruptcy Case”: (i) Parent or any of its Subsidiaries commencing any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Parent or any of its Subsidiaries making a general assignment for the benefit of its creditors; or (ii) there being commenced against Parent or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days.
Borrower”: as defined in the preamble hereto.
Code”: the Uniform Commercial Code as from time to time in effect in the State of New York.
Collateral”: as defined in Section 3; provided that, for purposes of Subsection 6.5, Section 8 and Subsection 9.16(b), “Collateral” shall have the meaning assigned to such term in the Credit Agreement.
Collateral Account Bank”: a bank which at all times is a Collateral Agent or a Lender or an affiliate thereof as selected by the relevant Grantor and consented to in writing by the Collateral Agent (such consent not to be unreasonably withheld or delayed).
Collateral Agent”: as defined in the preamble hereto.
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Collateral Proceeds Account”: a non-interest bearing cash collateral account established and maintained by the relevant Grantor at an office of the Collateral Account Bank in the name, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Parties.
Commercial Tort Action”: any action, other than an action primarily seeking declaratory or injunctive relief with respect to claims asserted or expected to be asserted by Persons other than the Grantors, that is commenced by a Grantor in the courts of the United States of America, any state or territory thereof or any political subdivision of any such state or territory, in which any Grantor seeks damages arising out of torts committed against it that would reasonably be expected to result in a damage award to it exceeding $7,500,000.
Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute thereto.
Contracts”: with respect to any Grantor, all contracts, agreements, instruments and indentures in any form and portions thereof, to which such Grantor is a party or under which such Grantor or any property of such Grantor is subject, as the same may from time to time be amended, supplemented, waived or otherwise modified, including, without limitation, (i) all rights of such Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of such Grantor to damages arising thereunder and (iii) all rights of such Grantor to perform and to exercise all remedies thereunder.
Contractual Obligation”: as to any Person, any provision of any material security issued by such Person or of any material agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
Copyright Licenses”: with respect to any Grantor, all United States written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any United States copyright of such Grantor, other than agreements with any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor, including, without limitation, any material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Copyrights”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all United States copyrights, whether or not the underlying works of authorship have been published or registered, all United States copyright registrations and copyright applications, including, without limitation, any copyright registrations and copyright applications listed on Schedule 5 hereto, and (i) all renewals thereof, (ii) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof and (iii) the right to sue or otherwise recover for past, present and future infringements and misappropriations thereof.
Credit Agreement”: has the meaning provided in the recitals hereto.
Credit Facility”: the Credit Agreement, the ABL Credit Agreement (as defined in the ABL Intercreditor Agreement) or any Additional Credit Facility, as applicable.
DDAs”: as defined in the ABL Credit Agreement.
Discharge of ABL Obligations”: as defined in the ABL Intercreditor Agreement.
Excluded Assets”: as defined in Section 3.3.
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Excluded Swap Obligation”: with respect to any Guarantor, any obligation (a “Swap Obligation”) to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, if, and to the extent that, all or a portion of the guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof).
Foreign Intellectual Property”: any right, title or interest in or to any copyrights, copyright licenses, patents, patent applications, patent licenses, trade secrets, trade secret licenses, trademarks, trademark applications, trade names, trademark licenses, technology, know-how and processes or any other intellectual property governed by or arising or existing under, pursuant to or by virtue of the laws of any jurisdiction other than the United States of America or state thereof.
General Fund Account”: the general fund account of the relevant Grantor established at the same office of the Collateral Account Bank as the Collateral Proceeds Account.
Grantor”: Parent, Holdings, the Borrower, the Borrower’s Domestic Subsidiaries that are party hereto and any other Domestic Subsidiary of the Borrower that becomes a party hereto from time to time after the date hereof.
Guarantor Obligations”: with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with Section 2 of this Agreement, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees and disbursements of counsel to the Administrative Agent, to the Other Representatives or to the Lenders that are required to be paid by such Guarantor pursuant to the terms of this Agreement and interest and fees accruing after (or would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Guarantor, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding).
Guarantors”: the collective reference to each Grantor; provided that each such Grantor shall be considered a Guarantor only with respect to the Primary Obligations of any other Grantor.
Hedging Provider”: any Person that has entered into a Hedging Agreement with a Grantor with the obligations of such Grantor thereunder being secured by one or more Loan Documents, as designated by the Borrower in accordance with Section 8.4 hereof (provided that no Person shall, with respect to any Hedging Agreement, be at any time a Hedging Provider with respect to more than one Credit Facility).
Holdings”: as defined in the recitals hereto.
Instruments”: has the meaning specified in Article 9 of the Code, but excluding the Pledged Securities.
Intellectual Property”: with respect to any Grantor, the collective reference to such Grantor’s Copyrights, Copyright Licenses, Patents, Patent Licenses, Trade Secrets, Trade Secret Licenses, Trademarks and Trademark Licenses.
Intercompany Note”: with respect to any Grantor, any promissory note in a principal amount in excess of $7,500,000 evidencing loans made by such Grantor to Parent, Holdings, the Borrower or any of its Restricted Subsidiaries.
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Intercreditor Agreements”: the ABL Intercreditor Agreement and any Other Intercreditor Agreement that may be entered into in the future by the Collateral Agent and one or more Additional Agents and acknowledged by the Borrower and the other Grantors (each as amended, amended and restated, waived, supplemented or otherwise modified from time to time (subject to Subsection 9.1)) (upon and during the effectiveness thereof).
Inventory”: with respect to any Grantor, all inventory (as defined in the Code) of such Grantor, including, without limitation, all Inventory (as defined in the Credit Agreement) of such Grantor.
Investment Property”: the collective reference to (i) all “investment property” as such term is defined in Section 9-102(a)(49) of the Uniform Commercial Code in effect in the State of New York on the date hereof (other than any Capital Stock of any Foreign Subsidiary in excess of 65% of any series of such stock and other than any Capital Stock excluded from the definition of “Pledged Stock”) and (ii) whether or not constituting “investment property” as so defined, all Pledged Securities.
Issuers”: the collective reference to the Persons identified on Schedule 2 as the issuers of Pledged Stock, together with any successors to such companies (including, without limitation, any successors contemplated by Subsection 8.2 of the Credit Agreement).
Lender”: as defined in the preamble hereto.
Non-Lender Secured Parties”: the collective reference to all Bank Products Providers and Hedging Providers and their respective successors, assigns and transferees.
Obligations”: with respect to any Loan Party, the collective reference to its Primary Obligations and Guarantor Obligations.
Parent”: as defined in the preamble hereto.
Patent Licenses”: with respect to any Grantor, all United States written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any United States patent, patent application, or patentable invention other than agreements with any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor, including, without limitation, the material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Patents”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all United States patents, patent applications and patentable inventions and all reissues and extensions thereof, including, without limitation, all patents and patent applications identified in Schedule 5 hereto, and including, without limitation, (i) all inventions and improvements described and claimed therein, (ii) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof), and (iv) all other rights corresponding thereto in the United States and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon, and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto.
Pledged Notes”: with respect to any Grantor, all Intercompany Notes at any time issued to, or held or owned by, such Grantor.
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Pledged Securities”: the collective reference to the Pledged Notes and the Pledged Stock.
Pledged Stock”: with respect to any Grantor, the shares of Capital Stock listed on Schedule 2 as held by such Grantor, together with any other shares of Capital Stock required to be pledged by such Grantor pursuant to Subsection 7.9 of the Credit Agreement, as well as any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Issuer that may be issued or granted to, or held by, such Grantor while this Agreement is in effect, in each case unless and until such time as the respective pledge of such Capital Stock under this Agreement is released in accordance with the terms hereof and of the Credit Agreement (provided that in no event shall there be pledged, nor shall any Grantor be required to pledge, directly or indirectly, (i) more than 65% of any series of the outstanding Capital Stock (including for these purposes any investment or indebtedness deemed to be Capital Stock for U.S. tax purposes) of any Foreign Subsidiary, (ii) any of the Capital Stock of a Subsidiary of a Foreign Subsidiary, (iii) de minimis shares of a Foreign Subsidiary held by any Grantor as a nominee or in a similar capacity, (iv) any Capital Stock of any Excluded Subsidiary (other than, but without limiting clause (i) above, a Subsidiary described in clause (d) of the definition thereof) and (v) without duplication, any Excluded Assets).
Primary Obligations”: the collective reference to (a) all obligations and liabilities of the Borrower in respect of the unpaid principal of and interest on (including, without limitation, interest and fees accruing after the maturity of the Loans and interest and fees accruing after (or that would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding) the Loans, and all other obligations and liabilities of the Borrower to the Secured Parties, 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, the Loans, the other Loan Documents, any Hedging Agreement entered into with any Hedging Provider or any Bank Products Agreement entered into with any Bank Products Provider (provided, however, that the definition of “Primary Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Grantor to support, as applicable) any Excluded Swap Obligations of the Borrower or any other Loan Party for purposes of determining any obligations of any Guarantor or other Grantor), in each case whether on account of principal, interest, reimbursement obligations, amounts payable in connection with any such Bank Products Agreement or a termination of any transaction entered into pursuant to any such Hedging Agreement, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees, expenses and disbursements of counsel to the Administrative Agent or any other Secured Party that are required to be paid by the Borrower pursuant to the terms of the Credit Agreement or any other Loan Document) and (b) all obligations and liabilities of any Grantor to the Secured Parties, 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, any Hedging Agreement entered into with any Hedging Provider or any Bank Products Agreement entered into with any Bank Products Provider (provided, however, that the definition of “Primary Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Grantor to support, as applicable) any Excluded Swap Obligations of the Borrower or any other Loan Party for purposes of determining any obligations of any Guarantor or other Grantor), in each case whether on account of principal, interest, reimbursement obligations, amounts payable in connection with any such Bank Products Agreement or a termination of any transaction entered into pursuant to any such Hedging Agreement, fees, indemnities, costs, expenses or otherwise.
Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in any event, Proceeds of Pledged Securities shall include, without limitation, all dividends or other income from the Pledged Securities, collections thereon or distributions or payments with respect thereto.
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Restrictive Agreements”: as defined in Subsection 3.3(a).
Secured Parties”: the collective reference to (i) the Administrative Agent, the Collateral Agent and each Other Representative, (ii) the Lenders, (iii) the Non-Lender Secured Parties and (iv) their respective successors and assigns and their permitted transferees and endorsees.
Specified Asset”: as defined in Subsection 4.2.2 hereof.
Term Loan Priority Collateral”: the “Term Loan Priority Collateral” as defined in the ABL Intercreditor Agreement.
Trade Secret Licenses”: with respect to any Grantor, all United States written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any United States trade secrets, including, without limitation, know how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, other than agreements with any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Trade Secrets”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all United States trade secrets, including, without limitation, know-how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, including, without limitation, (i) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses, non-disclosure agreements and memoranda of understanding entered into in connection therewith, and damages and payments for past or future misappropriations thereof, and (ii) the right to sue or otherwise recover for past, present or future misappropriations thereof.
Trademark Licenses”: with respect to any Grantor, all United States written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, other than agreements with any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor, including, without limitation, the material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Trademarks”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all United States trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, trademark and service mark registrations, and applications for trademark or service mark registrations (except for “intent to use” applications for trademark or service mark registrations filed pursuant to Section 1(b) of the Lanham Act, 15 U.S.C. § 1051, unless and until an Amendment to Allege Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has been filed, it being understood and agreed that the carve out in this parenthetical shall be applicable only if and for so long as a grant of a security interest in such intent to use application would invalidate or otherwise jeopardize Grantor’s rights therein), and any renewals thereof, including, without limitation, each registration and application identified in Schedule 5 hereto, and including, without limitation, (i) the right to sue or otherwise recover for any and all past, present and future infringements or dilutions thereof, (ii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and
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payments for past or future infringements thereof), and (iii) all other rights corresponding thereto and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto in the United States, together in each case with the goodwill of the business connected with the use of, and symbolized by, each such trademark, service mark, trade name, trade dress or other indicia of trade origin or business identifiers.
Vehicles”: all cars, trucks, trailers, construction and earth moving equipment and other vehicles covered by a certificate of title law of any state and all tires and other appurtenances to any of the foregoing.
1.2Other Definitional Provisions. The words “hereof”, “herein”, “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Annex references are to this Agreement unless otherwise specified. The words “include”, “includes”, and “including” shall be deemed to be followed by the phrase “without limitation”.
(b)The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
(c)Where the context requires, terms relating to the Collateral, Pledged Collateral, or any part thereof, when used in relation to a Grantor shall refer to such Grantor’s Collateral or the relevant part thereof.
(d)All references in this Agreement to any of the property described in the definition of the term “Collateral” or “Pledged Collateral”, or to any Proceeds thereof, shall be deemed to be references thereto only to the extent the same constitute Collateral or Pledged Collateral, respectively.
Section 2.  GUARANTEE
2.1Guarantee. Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the benefit of the Secured Parties, the prompt and complete payment and performance by the Loan Parties when due and payable (whether at the stated maturity, by acceleration or otherwise) of the Primary Obligations of the Loan Parties; provided, however, that nothing herein or in the definition of “Primary Obligations” shall create any guarantee by any Guarantor of (or grant of security interest by any Grantor to support, as applicable) any Excluded Swap Obligations of a Loan Party for purposes of determining any obligations of such Guarantor (or Grantor) hereunder owed to the applicable Secured Parties.
(b)Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor (other than the Borrower) hereunder and under the other Loan Documents shall in no event exceed the amount that can be guaranteed by such Guarantor under applicable law, including applicable federal and state laws relating to the insolvency of debtors; provided that, to the maximum extent permitted under applicable law, it is the intent of the parties hereto that the rights of contribution of each Guarantor provided in the following Subsection 2.2 be included as an asset of the respective Guarantor in determining the maximum liability of such Guarantor hereunder.
(c)Each Guarantor agrees that the Primary Obligations guaranteed by it hereunder 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 Section 2 or affecting the rights and remedies of the Administrative Agent or any other Secured Party hereunder.
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(d)The guarantee contained in this Section 2 shall remain in full force and effect until the earlier to occur of (i) the first date on which all the Loans and all other Primary Obligations then due and owing, and the obligations of each Guarantor under the guarantee contained in this Section 2 then due and owing shall have been satisfied by payment in full in cash 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, (ii) as to any Guarantor, the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, in the case of any Subsidiary Guarantor, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of the Borrower, in each case, that is permitted under the Credit Agreement and (iii) as to any Guarantor, such Guarantor becoming an Excluded Subsidiary.
(e)No payment made by the Borrower, any other Loan Party with Primary Obligations, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any other Secured Party from the Borrower, any other Loan Party with Primary Obligations, 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 any 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 or any payment received or collected from such Guarantor in respect of any of the Primary Obligations), remain liable for the Primary Obligations of the Borrower guaranteed by it hereunder up to the maximum liability of such Guarantor hereunder until the earlier to occur of (i) the first date on which all the Loans and all other Primary Obligations of the Borrower then due and owing are paid in full in cash and the Commitments are terminated, (ii) the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, if such Guarantor is a Subsidiary Guarantor, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of the Borrower, in each case that is permitted under the Credit Agreement and (iii) as to any Guarantor, such Guarantor becoming an Excluded Subsidiary.
2.2Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share (based, to the maximum extent permitted by law, on the respective Adjusted Net Worths of the Guarantors on the date the respective payment is made) of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder that has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Subsection 2.3. The provisions of this Subsection 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the other Secured Parties, and each Guarantor shall remain liable to the Administrative Agent and the other Secured Parties for the full amount guaranteed by such Guarantor hereunder.
2.3No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Administrative Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any other Secured Party against the Borrower, any other Loan Party with Primary Obligations or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any other Secured Party for the payment of the Primary Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower, any other Loan Party with Primary Obligations or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and the other Secured Parties by the Loan Parties on account of the Primary Obligations are paid in full in cash and the Commitments
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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 shall not have been paid in full in cash or any of the Commitments shall remain in effect, such amount shall be held by such Guarantor in trust for the Administrative 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 Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be held as collateral security for all of the Primary Obligations (whether matured or unmatured) guaranteed by such Guarantor and/or then or at any time thereafter may be applied against any Primary Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.
2.4Amendments, etc. with respect to the Obligations. To the maximum extent permitted by law, 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 made by the Collateral Agent, the Administrative Agent or any other Secured Party may be rescinded by the Collateral Agent, the Administrative Agent or such other Secured Party and any of the Primary Obligations continued, and the Primary Obligations, 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, waived, modified, accelerated, compromised, subordinated, waived, surrendered or released by the Collateral Agent, the Administrative 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, waived, modified, supplemented or terminated, in whole or in part, as the Collateral Agent or the Administrative Agent (or the Required Lenders or the applicable Lenders(s), 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, the Administrative Agent or any other Secured Party for the payment of any of the Primary Obligations may be sold, exchanged, waived, surrendered or released. None of the Collateral Agent, the Administrative Agent and each other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for any of the Primary Obligations or for the guarantee contained in this Section 2 or any property subject thereto, except to the extent required by applicable law.
2.5Guarantee Absolute and Unconditional. Each Guarantor waives, to the maximum extent permitted by applicable law, any and all notice of the creation, renewal, extension or accrual of any of the Primary Obligations and notice of or proof of reliance by the Collateral Agent, the Administrative Agent or any other Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; each of the Primary Obligations, and any obligation contained therein, 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 Section 2; and all dealings between the Loan Parties, on the one hand, and the Collateral Agent, the Administrative 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 Section 2. Each Guarantor waives, to the maximum extent permitted by applicable law, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower, any other Loan Party with Primary Obligations or any of the other Guarantors with respect to any of the Primary Obligations. Each Guarantor understands and agrees, to the extent permitted by law, that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and not of collection. Each Guarantor hereby waives, to the maximum extent permitted by applicable law, any and all defenses (other than any claim against a Secured Party alleging breach of a contractual provision of any of the Loan Documents) that it may have arising out of or in connection with any and all of the following: (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of
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the Primary Obligations 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, the Administrative Agent or any other Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by the Borrower, any other Loan Party against the Collateral Agent, the Administrative Agent or any other Secured Party, (c) any change in the time, place, manner or place of payment, amendment, or waiver or increase in any of the Obligations, (d) any exchange, taking, or release of Collateral, (e) any change in the structure or existence of the Borrower, (f) any application of Collateral to any of the Obligations, (g) any law, regulation or order of any jurisdiction, or any other event, affecting any term of any Obligation or the rights of the Collateral Agent, the Administrative Agent or any other Secured Party with respect thereto, including, without limitation: (i) the application of any such law, regulation, decree or order, including any prior approval, which would prevent the exchange of any currency (other than Dollars) for Dollars or the remittance of funds outside of such jurisdiction or the unavailability of Dollars in any legal exchange market in such jurisdiction in accordance with normal commercial practice, (ii) a declaration of banking moratorium or any suspension of payments by banks in such jurisdiction or the imposition by such jurisdiction or any Governmental Authority thereof of any moratorium on, the required rescheduling or restructuring of, or required approval of payments on, any indebtedness in such jurisdiction, (iii) any expropriation, confiscation, nationalization or requisition by such country or any Governmental Authority that directly or indirectly deprives the Borrower of any assets or their use, or of the ability to operate its business or a material part thereof, or (iv) any war (whether or not declared), insurrection, revolution, hostile act, civil strife or similar events occurring in such jurisdiction which has the same effect as the events described in clause (i), (ii) or (iii) above (in each of the cases contemplated in clauses (i) through (iv) above, to the extent occurring or existing on or at any time after the date of this Agreement), or (h) any other circumstance whatsoever (other than payment in full in cash of the Primary Obligations guaranteed by it hereunder) (with or without notice to or knowledge of the Borrower, any other Loan Party with Primary Obligations or any Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of the Loan Parties from the Primary Obligations, or of such Guarantor under the guarantee contained in this Section 2, 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, the Administrative Agent and 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 with Primary Obligations, any other Guarantor or any other Person or against any collateral security or guarantee for the Primary Obligations guaranteed by such Guarantor hereunder or any right of offset with respect thereto, and any failure by the Collateral Agent, the Administrative 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 with Primary Obligations, 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, the Administrative Agent or any other Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.
2.6Reinstatement. The guarantee of any Guarantor contained in this Section 2 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 guaranteed by such Guarantor hereunder is rescinded or must otherwise be restored or returned by the Collateral Agent, the Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower, any other Loan Party with Primary Obligations 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 with
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Primary Obligations or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.
2.7Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim, in Dollars (or in the case of any amount required to be paid in any other currency pursuant to the requirements of the Credit Agreement or other agreement relating to the respective Obligations, such other currency), at the Administrative Agent’s office specified in Subsection 11.2 of the Credit Agreement or such other address as may be designated in writing by the Administrative Agent to such Guarantor from time to time in accordance with Subsection 11.2 of the Credit Agreement.
Section 3.  GRANT OF SECURITY INTEREST
3.1Grant. Each Grantor hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a security interest in all of the Collateral of such Grantor, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations (provided, however, that nothing herein or in the definition of “Obligations” shall grant any security interest to secure any obligations or liabilities of a Loan Party under or in connection with any Excluded Swap Obligations for purposes of determining any obligations of a Grantor hereunder) of such Grantor. The term “Collateral”, as to any Grantor, means the following property (wherever located) now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest, except as provided in Subsection 3.3:
(a)all Accounts;
(b)all Money (including all cash);
(c)all cash or Cash Equivalents;
(d)all Chattel Paper;
(e)all Contracts;
(f)all Deposit Accounts (including DDAs);
(g)all Documents;
(h)all Equipment;
(i)all General Intangibles;
(j)all Goods;
(k)all Instruments;
(l)all Intellectual Property;
(m)all Inventory;
(n)all Investment Property;
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(o)all letters of credit or Letter of Credit Rights;
(p)all Fixtures;
(q)all Commercial Tort Claims constituting Commercial Tort Actions described in Schedule 7 (together with any Commercial Tort Actions subject to a further writing provided in accordance with Subsection 5.2.12);
(r)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;
(s)all Pledged Securities;
(t)all books and records pertaining to any of the foregoing;
(u)the Collateral Proceeds Account; and
(v)to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all Supporting Obligations, collateral security and guarantees given by any Person with respect to any of the foregoing.
3.2[Reserved].
3.3Certain Limited Exceptions. No security interest is or will be granted pursuant to this Agreement or any other Security Document other than the security interest granted in the Canadian Guarantee and Collateral Agreement, in any right, title or interest of any Grantor under or in, and “Collateral” shall not include the following (subject to the last sentence of this Section 3.3, collectively, the “Excluded Assets”):
(a)any Instruments, Contracts, Chattel Paper, General Intangibles, Copyright Licenses, Patent Licenses, Trademark Licenses, Trade Secret Licenses or other contracts or agreements with or issued by Persons other than Parent, a Subsidiary of Parent or an Affiliate thereof, (collectively, “Restrictive Agreements”) that would otherwise be included in the Collateral (and such Restrictive Agreements shall not be deemed to constitute a part of the Collateral) for so long as, and to the extent that, the granting of such a security interest pursuant hereto would result in a breach, default or termination of such Restrictive Agreements (in each case, except to the extent that, pursuant to the Code or other applicable law, the granting of security interests therein can be made without resulting in a breach, default or termination of such Restrictive Agreements);
(b)any Equipment or other property that would otherwise be included in the Collateral (and such Equipment or other property shall not be deemed to constitute a part of the Collateral) if such Equipment or other property (x) is subject to a Lien described in clause (h) (with respect to Purchase Money Obligations or Capitalized Lease Obligations) or (o) (with respect to such Liens described in such clause (h)) of the definition of “Permitted Liens” in the Credit Agreement (but in each case only for so long as such Liens are in place)) or (y) is subject to any Lien in respect of Hedging Obligations permitted by Subsection 8.6 of the Credit Agreement as a “Permitted Lien” pursuant to clause (h) of the definition thereof in the Credit Agreement (but in each case only for so long as such Liens are in place)), and, in the case of such other property, such other property consists solely of (i) cash, Cash
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Equivalents, Temporary Cash Investments or Investment Grade Securities, together with proceeds, dividends and distributions in respect thereof, (ii) any assets relating to such assets, proceeds, dividends or distributions, or to such Hedging Obligations, and/or (iii) any other assets consisting of, relating to or arising under or in connection with (1) any Hedging Obligations or (2) any other agreements, instruments or documents related to any such Hedging Obligations or to any of the assets referred to in any of subclauses (i) through (iii) of this subclause (y);
(c)any property that would otherwise be included in the Collateral (and such property shall not be deemed to constitute a part of the Collateral) if such property (x) has been sold or otherwise transferred in connection with a Special Purpose Financing (as defined in the Credit Agreement), or (y) constitutes the proceeds or products of any property that has been sold or otherwise transferred pursuant to such Special Purpose Financing (other than any payments received by any Grantor in payment for the sale and transfer of such property in such Special Purpose Financing) or (z) is subject to any Liens securing Indebtedness incurred in compliance with Section 8.1(b)(ix) of the Credit Agreement or permitted by Section 8.6 of the Credit Agreement as “Permitted Liens” permitted pursuant to clause (r) of the definition of such term);
(d)any property (and/or related rights and/or assets) that would otherwise be included in the Collateral (and such property (and/or related rights and/or assets) shall not be deemed to constitute a part of the Collateral) if such property (A) has been sold or otherwise transferred in connection with a Sale and Leaseback Transaction (as defined in the definition of “Exempt Sale and Leaseback Transaction” in the Credit Agreement) permitted under clause (x) or (xviii) of the definition of “Asset Disposition” in the Credit Agreement or under Section 8.4 of the Credit Agreement), or (B) is subject to any Liens permitted under Subsection 8.6 of the Credit Agreement) which relate to property subject to any such Sale and Leaseback Transaction (as defined in the definition of “Exempt Sale and Leaseback Transaction” in the Credit Agreement) or general intangibles related thereto (but only for so long as such Liens are in place); provided that, notwithstanding the foregoing, a security interest of the Collateral Agent shall attach to any money, securities or other consideration received by any Grantor as consideration for the sale or other disposition of such property as and to the extent such consideration would otherwise constitute Collateral;
(e)Capital Stock (including for these purposes any investment or indebtedness deemed to be Capital Stock for United States tax purposes) which is described in the proviso to the definition of Pledged Stock;
(f)any Money, cash, checks, other negotiable instruments, funds and other evidence of payment held in any Deposit Account of Parent or any of its Subsidiaries in the nature of a security deposit with respect to obligations for the benefit of Parent or any of its Subsidiaries, which must be held for or returned to the applicable counterparty under applicable law or pursuant to Contractual Obligations;
(g)[reserved];
(h)any interest in leased real property (including Fixtures related thereto) (and there shall be no requirement to deliver landlord lien waivers, estoppels or collateral access letters);
(i)any fee interest in owned real property (including Fixtures related thereto) if the fair market value of such fee interest is less than $12,500,000;
(j)any Vehicles and any assets subject to certificate of title;
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(k)Letter of Credit Rights and Commercial Tort Claims individually with a value of less than $7,500,000;
(l)assets to the extent the granting or perfecting of a security interest in such assets would result in costs or other consequences to Parent or any of its Subsidiaries as reasonably determined in writing by the Borrower and the Administrative Agent, that are excessive in view of the benefits that would be obtained by the Secured Parties;
(m)those assets over which the granting of security interests in such assets would be prohibited by contract permitted under the Credit Agreement, applicable law or regulation or the organizational or joint venture documents of any non-wholly owned Subsidiary (including permitted liens, leases and licenses) (in each case, after giving effect to the applicable anti-assignment provisions of the Code, other than proceeds and receivables thereof to the extent that their assignment is expressly deemed effective under the Code notwithstanding such prohibitions), or to the extent that such security interests would result in adverse tax consequences to Parent, Holdings, Borrower or any one or more of its Subsidiaries as reasonably determined in writing by the Borrower and notified in writing to the Collateral Agent (it being understood that the Lenders shall not require Parent or any of its subsidiaries to enter into any security agreements or pledge agreements governed by foreign law (other than the laws of Canada and any of its provinces));
(n)any assets specifically requiring perfection through control (including cash, cash equivalents, deposit accounts or other bank or securities accounts), to the extent the security interest in such asset is not automatically perfected by filings under the Uniform Commercial Code of any applicable jurisdiction or, in the case of Pledged Stock, by being held by the Collateral Agent or an Additional Agent as agent for the Collateral Agent, other than (ii) prior to the Discharge of ABL Obligations, DDAs and Blocked Accounts (as defined in the ABL Credit Agreement) (in each case only to the extent required pursuant to Subsection 4.16 of the ABL Credit Agreement), and (ii) the Collateral Proceeds Account (to the extent required pursuant to this Agreement), and, prior to the Discharge of ABL Obligations, any Collateral Proceeds Account under and as defined in the ABL Guarantee and Collateral Agreement (to the extent required pursuant to the ABL Collateral Agreement);
(o)Foreign Intellectual Property;
(p)any aircrafts, airframes, aircraft engines, helicopters, vessels or rolling stock or any equipment or other asset constituting a part thereof;
(q)any property that would otherwise constitute ABL Priority Collateral but is an Excluded Asset (as such term is defined in the ABL Guarantee and Collateral Agreement); and
(r)any Capital Stock and other securities of a Subsidiary to the extent that the pledge of or grant of any other Lien on such Capital Stock or other securities for the benefit of any holders of securities results in Parent or any of its Subsidiaries being required to file separate financial statements for such Subsidiary with the Securities and Exchange Commission (or any other governmental authority) pursuant to either Rule 3-10 or 316 of Regulation S-X under the Securities Act, or any other law, rule or regulation as in effect from time to time, but only to the extent necessary to not be subject to such requirement.
Notwithstanding the foregoing clauses (a) through (r), prior to the Discharge of ABL Obligations, “Excluded Assets” shall not include any property or asset that is ABL Priority Collateral at any time such property or asset (i) constitutes “Collateral” under the ABL Guarantee and Collateral Agreement and (ii)
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for the avoidance of doubt, is not an “Excluded Asset” under the ABL Guarantee and Collateral Agreement.
3.4Intercreditor Relations. Notwithstanding anything herein to the contrary, it is the understanding of the parties that the Liens granted pursuant to Subsection 3.1 and 3.2 herein shall (x) with respect to all Collateral other than Collateral constituting Term Loan Priority Collateral, prior to the Discharge of the ABL Obligations, be subject and subordinate to the Liens granted to the ABL Agent for the benefit of the holders of the ABL Obligations to secure the ABL Obligations pursuant to the ABL Guarantee and Collateral Agreement and (y) with respect to Term Loan Priority Collateral, prior to the Discharge of the ABL Obligations, be senior in priority to the Liens granted to the ABL Agent for the benefit of the holders of the ABL Obligations to secure the ABL Obligations pursuant to the ABL Guarantee and Collateral Agreement. The Collateral Agent acknowledges and agrees that the relative priority of the Liens granted to the Collateral Agent and the ABL Agent may be determined solely pursuant to the applicable Intercreditor Agreements, and not by priority as a matter of law or otherwise. Notwithstanding anything herein to the contrary, the Liens and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the ABL Intercreditor Agreement. In the event of any conflict between the terms of the ABL Intercreditor Agreement and this Agreement, the terms of the ABL Intercreditor Agreement shall govern and control as among the Collateral Agent and the ABL Agent. In the event of any such conflict, each Grantor may act (or omit to act) in accordance with such Intercreditor Agreement, and shall not be in breach, violation or default of its obligations hereunder by reason of doing so. Notwithstanding any other provision hereof, for so long as any ABL Obligations remain outstanding, any obligation hereunder to deliver to the Collateral Agent any Collateral constituting ABL Priority Collateral shall be satisfied by causing such Collateral to be delivered to the ABL Agent to be held in accordance with the ABL Intercreditor Agreement.
Section 4.  REPRESENTATIONS AND WARRANTIES
4.1Representations and Warranties of Each Guarantor. 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 Guarantor hereby represents and warrants to the Collateral Agent and each other Secured Party that the representations and warranties set forth in Section 5 of the Credit Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which representations and warranties is hereby incorporated herein by reference, are true and correct in all material respects, and the Collateral Agent and each other Secured Party shall be entitled to rely on each of such representations and warranties as if fully set forth herein; provided that each reference in each such representation and warranty to the Borrower’s knowledge shall, for the purposes of this Subsection 4.1, be deemed to be a reference to such Guarantor’s knowledge.
4.2Representations and Warranties of Each Grantor. 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 other Secured Party that, in each case after giving effect to the Transactions:
4.2.1Title; No Other Liens. Except for the security interests granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on such Grantor’s Collateral by the Credit Agreement, such Grantor owns each item of such Grantor’s Collateral free and clear of any and all Liens securing Indebtedness. Except as set forth on Schedule 3, to the knowledge of such Grantor, no currently effective financing statement or other similar public notice with respect to any Lien securing Indebtedness on all or any part of such Grantor’s Collateral is on file or of record in any public office in the United States of America, any state, territory or
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dependency thereof or the District of Columbia, except, in each case, such as have been filed in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement or as are permitted by the Credit Agreement or any other Loan Document or for which termination statements will be delivered on the Closing Date.
4.2.2Perfected First Priority Liens. This Agreement is effective to create, as collateral security for the Obligations of such Grantor, valid and enforceable Liens on such Grantor’s Collateral in favor of the Collateral Agent for the benefit of the Secured Parties, except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
(b)Except with regard to (i) Liens (if any) on Specified Assets and (ii) any rights in favor of the United States government as required by law (if any), upon the completion of the Filings and, with respect to Instruments, Chattel Paper and Documents upon the earlier of such Filing or the delivery to and continuing possession by the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the applicable Intercreditor Agreement, of all Instruments, Chattel Paper and Documents a security interest in which is perfected by possession, and the obtaining and maintenance of “control” (as described in the Code) by the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable (or their respective agents appointed for purposes of perfection), in accordance with the applicable Intercreditor Agreement of all Deposit Accounts, Blocked Accounts, the Collateral Proceeds Account, Electronic Chattel Paper and Letter of Credit Rights a security interest in which is perfected by “control” and in the case of Commercial Tort Actions (other than such Commercial Tort Actions listed on Schedule 7 on the date of this Agreement), the taking of the actions required by Subsection 5.2.12 herein, the Liens created pursuant to this Agreement will constitute valid Liens on and (to the extent provided herein) perfected security interests in such Grantor’s Collateral in favor of the Collateral Agent for the benefit of the Secured Parties, and will be prior to all other Liens of all other Persons securing Indebtedness, in each case other than Permitted Liens (and subject to any applicable Intercreditor Agreement), and enforceable as such as against all other Persons other than Ordinary Course Transferees, except to the extent that the recording of an assignment or other transfer of title to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent (in accordance with the applicable Intercreditor Agreement) or the recording of other applicable documents in the United States Patent and Trademark Office or United States Copyright Office may be necessary for perfection or enforceability, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. As used in this Subsection 4.2.2(b), the following terms shall have the following meanings:
Filings”: the filing or recording of (i) the Financing Statements as set forth in Schedule 3, (ii) this Agreement or a form of Intellectual Property security agreement as set forth in Schedule 3, and (iii) any filings after the Closing Date in any other jurisdiction as may be necessary under any Requirement of Law.
Financing Statements”: the financing statements delivered to the Collateral Agent by such Grantor on the Closing Date for filing in the jurisdictions listed in Schedule 4.
Ordinary Course Transferees”: (i) with respect to goods only, buyers in the ordinary course of business and lessees in the ordinary course of business to the extent provided in Section 9-320(a) and
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9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction, (ii) with respect to general intangibles only, licensees in the ordinary course of business to the extent provided in Section 9-321 of the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction and (iii) any other Person who is entitled to take free of the Lien pursuant to the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction.
Permitted Liens”: Liens permitted pursuant to the Credit Agreement, including, without limitation, those permitted to exist pursuant to Section 8.6 of the Credit Agreement.
Specified Assets”: the following property and assets of such Grantor:
(1)Patents, Patent Licenses, Trademarks and Trademark Licenses to the extent that (a) Liens thereon cannot be perfected by the filing of financing statements under the Uniform Commercial Code or by the filing and acceptance thereof in the United States Patent and Trademark Office or (b) such Patents, Patent Licenses, Trademarks and Trademark Licenses are not, individually or in the aggregate, material to the business of the Borrower and its Subsidiaries taken as a whole;
(2)Copyrights and Copyright Licenses with respect thereto and Accounts or receivables arising therefrom to the extent that the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction is not applicable to the creation or perfection of Liens thereon;
(3)Collateral for which the perfection of Liens thereon requires filings in or other actions under the laws of jurisdictions outside of the United States of America, any State, territory or dependency thereof or the District of Columbia;
(4)Goods included in Collateral received by any Person from any Grantor for “sale or return” within the meaning of Section 2-326 of the Uniform Commercial Code of the applicable jurisdiction, to the extent of claims of creditors of such Person;
(5)Fixtures, Vehicles, any other assets subject to certificates of title and Money; and Cash Equivalents (other than Cash Equivalents constituting Investment Property to the extent a security interest is perfected by the filing of a financing statement);
(6)Proceeds of Accounts or Inventory which do not themselves constitute Collateral or which do not constitute identifiable Cash Proceeds or which have not yet been transferred to or deposited in the Collateral Proceeds Account (if any); and,
(7)Uncertificated securities (to the extent a security interest is not perfected by the filing of a financing statement).
4.2.3Jurisdiction of Organization. On the date hereof, such Grantor’s jurisdiction of organization is specified on Schedule 4.
4.2.4Farm Products. None of such Grantor’s Collateral constitutes, or is the Proceeds of, Farm Products.
4.2.5[Reserved]
4.2.6Patents, Copyrights and Trademarks. Schedule 5 lists all material Trademarks, material Copyrights and material Patents, in each case, registered in the United States Patent
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and Trademark Office or the United States Copyright Office, as applicable, and owned by such Grantor in its own name as of the date hereof, and all material Trademark Licenses, all material Copyright Licenses and all material Patent Licenses (including, without limitation, material Trademark Licenses for registered Trademarks, material Copyright Licenses for registered Copyrights and material Patent Licenses for registered Patents) owned by such Grantor in its own name as of the date hereof, in each case, that is solely United States Intellectual Property.
4.3Representations and Warranties of Each Grantor. To induce the Collateral Agent, the Administrative 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 other Secured Party that:
4.3.1Except as provided in Subsection 3.3, the shares of Pledged Stock pledged by such Grantor hereunder constitute (i) in the case of shares of a Domestic Subsidiary, all the issued and outstanding shares of all classes of the Capital Stock of such Domestic Subsidiary owned by such Grantor and (ii) in the case of any Pledged Stock constituting Capital Stock of any Foreign Subsidiary, as of the Closing Date such percentage (not more than 65%) as is specified on Schedule 2 of all the issued and outstanding shares of all classes of the Capital Stock of each such Foreign Subsidiary owned by such Grantor.
4.3.2[RESERVED].
4.3.3Such Grantor is the record and beneficial owner of, and has good title to, the Pledged Securities pledged by it hereunder, free of any and all Liens securing Indebtedness owing to any other Person, except the security interest created by this Agreement and Liens permitted by the Credit Agreement (including, without limitation, those permitted to exist pursuant to Section 8.6 of the Credit Agreement).
4.3.4Upon the delivery to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, of the certificates evidencing the Pledged Securities held by such Grantor together with executed undated stock powers or other instruments of transfer, the security interest created in such Pledged Securities constituting certificated securities by this Agreement, assuming the continuing possession of such Pledged Securities by the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, will constitute a valid, perfected first priority (subject, in terms of priority only, to the priority of the Liens of the ABL Agent, the applicable Collateral Representative and any Additional Agent) security interest in such Pledged Securities to the extent provided in and governed by the Code, enforceable in accordance with its terms against all creditors of such Grantor and any Persons purporting to purchase such Pledged Securities from such Grantor to the extent provided in and governed by the Code, in each case subject to Liens permitted pursuant to the Credit Agreement, including Permitted Liens (and any applicable Intercreditor Agreement), and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
4.3.5Upon the earlier of (x) (to the extent a security interest in uncertificated securities may be perfected by the filing of a financing statement) the filing of the financing statements listed on Schedule 3 hereto and (y) the obtaining and maintenance of “control” (as described in the Code) by the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent
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(or their respective agents appointed for purposes of perfection), as applicable, in accordance with any applicable Intercreditor Agreement, of all Pledged Securities that constitute uncertificated securities, the security interest created by this Agreement in such Pledged Securities that constitute uncertificated securities, will constitute a valid, perfected first priority (subject, in terms of priority only, to the priority of the Liens of the ABL Agent, the applicable Collateral Representative and any Additional Agent) security interest in such Pledged Securities constituting uncertificated securities to the extent provided in and governed by the Code, enforceable in accordance with its terms against all creditors of such Grantor and any persons purporting to purchase such Pledged Securities from such Grantor, to the extent provided in and governed by the Code, in each case subject to Liens permitted pursuant to the Credit Agreement, including Permitted Liens (and any applicable Intercreditor Agreement), and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
Section 5.  COVENANTS
5.1Covenants of Each Guarantor. Each Guarantor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of (i) the date upon which the Loans, and all other Obligations then due and owing, shall have been paid in full in cash, and the Commitments shall have terminated, (ii) the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, if such Guarantor is a Subsidiary Guarantor, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of Parent, in each case that is permitted under the Credit Agreement or (iii) such Guarantor becoming an Excluded Subsidiary, such Guarantor 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 Guarantor or any of its Restricted Subsidiaries.
5.2Covenants of Each Grantor. Each Grantor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of (i) the date upon which the Loans, and all other Obligations then due and owing shall have been paid in full in cash, and the Commitments shall have terminated, (ii) the sale or other disposition of all of the Capital Stock of such Grantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, if such Grantor is a Subsidiary of Parent, any other transaction or occurrence as a result of which such Grantor ceases to be a Restricted Subsidiary of Parent, in each case that is permitted under the Credit Agreement or (iii) such Grantor becoming an Excluded Subsidiary:
5.2.1Delivery of Instruments and Chattel Paper. If any amount payable under or in connection with any of such Grantor’s Collateral shall be or become evidenced by any Instrument or Chattel Paper, such Grantor shall (except as provided in the following sentence) be entitled to retain possession of all Collateral of such Grantor evidenced by any Instrument or Chattel Paper, and shall hold all such Collateral in trust for the Collateral Agent, for the benefit of the Secured Parties. In the event that an Event of Default shall have occurred and be continuing, upon the request of the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, such Instrument or Chattel Paper shall be promptly delivered to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, duly indorsed in a manner reasonably satisfactory to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable
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Intercreditor Agreement, to be held as Collateral pursuant to this Agreement. Such Grantor shall not permit any other Person to possess any such Collateral at any time other than in connection with any sale or other disposition of such Collateral in a transaction permitted by the Credit Agreement or as contemplated by any applicable Intercreditor Agreement.
5.2.2[Reserved].
5.2.3Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon such Grantor’s Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, material claims for labor, materials and supplies) against or with respect to such Grantor’s Collateral, except that no such tax, assessment, charge, levy or claim need be paid or satisfied if the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor and except to the extent that the failure to do so, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
5.2.4Maintenance of Perfected Security Interest; Further Documentation. Such Grantor shall use commercially reasonable efforts to maintain the security interest created by this Agreement in such Grantor’s Collateral as a perfected security interest as described in Subsection 4.2.2 and to defend the security interest created by this Agreement in such Grantor’s Collateral against the claims and demands of all Persons whomsoever (subject to the other provisions hereof).
(b)Such Grantor will furnish to the Collateral Agent from time to time statements and schedules further identifying and describing such Grantor’s Term Loan Priority Collateral and such other reports in connection with such Grantor’s Term Loan Priority Collateral as the Collateral Agent may reasonably request in writing, all in reasonable detail.
(c)At any time and from time to time, upon the written request of the Collateral Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such Grantor, including, without limitation, the filing of any financing or continuation statements under the Uniform Commercial Code (or other similar laws) in effect in any United States jurisdiction with respect to the security interests created hereby provided further that the Borrower or such Grantor will not be required to (w) take any action in any jurisdiction other than the United States of America, or required by the laws of any such jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of the United States of America or to perfect any security interests (or other Liens) in any Collateral (other than with respect to a Foreign Subsidiary which is a Subsidiary Guarantor as of the date hereof or becomes a Subsidiary Guarantor pursuant to the Credit Agreement), (x) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except (A) so long as the ABL Credit Agreement is in effect, as required by Subsection 4.16 of the ABL Credit Agreement and (B) in the case of Collateral that constitutes Capital Stock or Pledged Notes in certificated form, delivering such Capital Stock or Pledged Notes to the Collateral Agent (or another Person as required under any applicable Intercreditor Agreement), (y) deliver landlord lien waivers, estoppels or collateral access letters or (z) file any fixture filing with respect to any security interest in Fixtures affixed to or attached to any real property constituting Excluded Assets.
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(d)The Collateral Agent may grant extensions of time for the creation and perfection of security interests in, or the obtaining a delivery of documents or other deliverables with respect to, particular assets of any Grantor where it determines that such action cannot be accomplished without undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or any other Security Documents.
5.2.5Changes in Name, Jurisdiction of Organization, etc. Such Grantor will give prompt written notice to the Collateral Agent of any change in its name or jurisdiction of organization (whether by merger of otherwise) (and in any event within 30 days of such change); provided that, promptly thereafter such Grantor shall deliver to the Collateral Agent copies (or other evidence of filing) of all additional filed financing statements and other documents reasonably necessary to maintain the validity, perfection and priority of the security interests created hereunder and other documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests as and to the extent provided for herein.
5.2.6[Reserved].
5.2.7Pledged Stock. In the case of each Grantor that is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Stock issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Collateral Agent promptly in writing of the occurrence of any of the events described in Subsection 5.3.1 with respect to the Pledged Stock issued by it and (iii) the terms of Subsections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Subsection 6.3(c) or 6.7 with respect to the Pledged Stock issued by it.
5.2.8[Reserved].
5.2.9Maintenance of Records. Such Grantor will keep and maintain at its own cost and expense reasonably satisfactory and complete records of its Collateral, including, without limitation, a record of all payments received and all credits granted with respect to such Collateral; provided that with respect to the ABL Priority Collateral, the satisfactory maintenance of such records shall be determined in good faith by such Grantor or the Borrower.
5.2.10Acquisition of Intellectual Property. Concurrently with the delivery of the annual Compliance Certificate pursuant to Subsection 7.2(a) of the Credit Agreement, such Grantor will notify the Collateral Agent of any acquisition (including those applied for by and registered or issued to the Grantors) by such Grantor of (i) any registration of any material United States Copyright, Patent or Trademark or (ii) any exclusive rights under a material United States Copyright License, Patent License or Trademark License constituting Collateral, and shall take such actions as may be reasonably necessary (but only to the extent such actions are within such Grantor’s control) to perfect the security interest granted to the Collateral Agent and the other Secured Parties therein, to the extent provided herein in respect of any United States Copyright, Patent or Trademark constituting Collateral on the date hereof, by (x) the execution and delivery of an amendment or supplement to this Agreement (or amendments to any such agreement previously executed or delivered by such Grantor) and/or (y) the making of appropriate filings (I) of financing statements under the Uniform Commercial Code of any applicable jurisdiction and/or (II) in the United States Patent and Trademark Office, or with respect to Copyrights and Copyright Licenses, the United States Copyright Office).
5.2.11[RESERVED].
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5.2.12Commercial Tort Actions. All Commercial Tort Actions of each Grantor in existence on the date of this Agreement in an amount of $7,500,000 or greater, known to such Grantor on the date hereof, are described in Schedule 7 hereto. If any Grantor shall at any time after the date of this Agreement acquire a Commercial Tort Action in an amount of $7,500,000, such Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.
5.2.13[RESERVED].
5.2.14Protection of Trademarks. Such Grantor shall, with respect to any Trademarks, use commercially reasonable efforts not to cease the use of any of such Trademarks or fail to maintain the level of the quality of products sold and services rendered under any of such Trademarks at a level at least substantially consistent with the quality of such products and services as of the date hereof, and shall use commercially reasonable efforts to take all steps reasonably necessary to ensure that licensees of such Trademarks use such consistent standards of quality, except, in each case, as would not reasonably be expected to have a Material Adverse Effect.
5.2.15Protection of Intellectual Property. Subject to and except as permitted by the Credit Agreement, such Grantor shall use commercially reasonable efforts not to do any act or omit to do any act whereby any of the Intellectual Property of the Grantor may lapse, expire, or become abandoned, or unenforceable, except as would not reasonably be expected to have a Material Adverse Effect.
5.2.16Assignment of Letter of Credit Rights. In the case of any Letter-of-Credit Rights of any Grantor in any letter of credit exceeding $7,500,000 in value acquired following the Closing Date, such Grantor shall use its commercially reasonable efforts to promptly obtain the consent of the issuer thereof and any nominated person thereon to the assignment of the proceeds of the related letter of credit in accordance with Section 5-114(c) of the UCC.
5.3Covenants of Each Grantor. Each Grantor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earlier to occur of (i) the Loans, and all other Obligations then due and owing shall have been paid in full in cash and the Commitments shall have terminated, (ii) the sale or other disposition of all of the Capital Stock of such Grantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, if such Grantor is a Subsidiary of Parent, any other transaction or occurrence as a result of which such Grantor ceases to be a Restricted Subsidiary of the Borrower, in each case that is permitted under the Credit Agreement or (iii) such Grantor becoming an Excluded Subsidiary.
5.3.1Additional Shares. If such Grantor shall, as a result of its ownership of its Pledged Stock, become entitled to receive or shall receive any stock certificate (including, without limitation, any stock certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), stock option or similar rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Collateral Agent and the other Secured Parties, hold the same in trust for the Collateral Agent and the other Secured Parties and deliver the same forthwith to the Collateral Agent (who will hold the same on behalf of the Secured Parties), or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, in the exact form received, duly indorsed by such Grantor to the Collateral Agent, or the ABL Agent, any applicable Collateral
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Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor, to be held by the Collateral Agent, or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, subject to the terms hereof, as additional collateral security for the Obligations (subject to Subsection 3.3 and provided that in no event shall there be pledged, nor shall any Grantor be required to pledge, more than 65% of any series of the outstanding Capital Stock (including for these purposes any investment or indebtedness deemed to be Capital Stock for United States tax purposes) of any Foreign Subsidiary or any of the Capital Stock of a Subsidiary of a Foreign Subsidiary pursuant to this Agreement). If an Event of Default shall have occurred and be continuing, any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer (except any liquidation or dissolution of any Subsidiary of Parent in accordance with the Credit Agreement) shall be paid over to the Collateral Agent, or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement to be held by the Collateral Agent, or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement subject to the terms hereof as additional collateral security for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Collateral Agent, be delivered to the Collateral Agent, or the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, to be held by the Collateral Agent, or the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement subject to the terms hereof as additional collateral security for the Obligations, in each case except as otherwise provided by any applicable Intercreditor Agreement. If any sums of money or property so paid or distributed in respect of the Pledged Stock shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement hold such money or property in trust for the Secured Parties, segregated from other funds of such Grantor, as additional collateral security for the Obligations.
5.3.2[RESERVED].
5.3.3Pledged Notes. Such Grantor shall, on the date of this Agreement (or on such later date upon which it becomes a party hereto pursuant to Subsection 9.15), deliver to the Collateral Agent, or the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, all Pledged Notes then held by such Grantor (excluding any Pledged Note the principal amount of which does not exceed $7,500,000), endorsed in blank or, at the request of the Collateral Agent, endorsed to the Collateral Agent. Furthermore, within ten Business Days (or such longer period as may be agreed by the Collateral Agent in its sole discretion) after any Grantor obtains a Pledged Note with a principal amount in excess of $7,500,000, such Grantor shall cause such Pledged Note to be delivered to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, endorsed in blank or, at the request of the Collateral Agent, or the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, endorsed to the Collateral Agent, or the ABL Agent or the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement.
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5.3.4Maintenance of Security Interest. Such Grantor shall use commercially reasonable efforts to defend the security interest created by this Agreement in such Grantor’s Collateral against the claims and demands of all Persons whomsoever. At any time and from time to time, upon the written request of the Collateral Agent and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such Grantor provided, further that the Borrower or such Grantor will not be required to (x) take any action in any jurisdiction other than the United States of America, or required by the laws of any such jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of the United States of America or to perfect any security interests (or other Liens) in any Collateral (other than with respect to a Foreign Subsidiary which is a Subsidiary Guarantor as of the date hereof or becomes a Subsidiary Guarantor pursuant to the Credit Agreement), (y) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except (A) as required by Subsection 4.16 of the ABL Credit Agreement so long as the ABL Credit Agreement is in effect and (B) in the case of Collateral that constitutes Capital Stock or intercompany notes in certificated form, delivering such Capital Stock or intercompany notes (in the case of intercompany notes, limited to any such note with a principal amount in excess of $7.5 million) to the Collateral Agent (or another Person as required under any applicable Intercreditor Agreement) or (z) deliver landlord lien waivers, estoppels or collateral access letters.
Section 6.  REMEDIAL PROVISIONS
6.1Certain Matters Relating to Accounts. At any time and from time to time after the occurrence and during the continuance of an Event of Default, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement), the Collateral Agent shall have the right to make test verifications of the Accounts Receivable constituting Collateral in any reasonable manner and through any reasonable medium that it reasonably considers advisable, and the relevant Grantor shall furnish all such assistance and information as the Collateral Agent may reasonably require in connection with such test verifications. At any time and from time to time after the occurrence and during the continuance of an Event of Default, if the Discharge of ABL Obligations has occurred and subject to any applicable Intercreditor Agreement) upon the Collateral Agent’s reasonable request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others reasonably satisfactory to the Collateral Agent to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts Receivable constituting Collateral.
(b)[RESERVED]
(c)At any time and from time to time after the occurrence and during the continuance of an Event of Default specified in Subsection 9.1(a) of the Credit Agreement, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement), at the Collateral Agent’s request, each Grantor shall deliver to the Collateral Agent copies or, if required by the Collateral Agent for the enforcement thereof or foreclosure thereon, originals of all documents held by such Grantor evidencing, and relating to, the agreements and transactions that gave rise to such Grantor’s Accounts Receivable constituting Collateral, including, without limitation, all statements relating to such Grantor’s Accounts Receivable constituting Collateral and all orders, invoices and shipping receipts.
(d)So long as no Event of Default has occurred and is continuing, the Collateral Agent shall instruct the Collateral Account Bank to promptly remit any funds on deposit in each Grantor’s Collateral Proceeds Account to such Grantor’s General Fund Account or any other
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account designated by such Grantor. In the event that an Event of Default has occurred and is continuing (and subject to any applicable Intercreditor Agreement), the Collateral Agent at its option may require that each Collateral Proceeds Account of each Grantor be established at the Collateral Agent or another institution reasonably acceptable to the Collateral Agent. In the event that an Event of Default has occurred and is continuing, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement), the Collateral Agent and the Grantors agree that the Collateral Agent, at its option, may require that the General Fund Account of each Grantor be established at the Collateral Agent or another institution reasonably acceptable to the Collateral Agent. Each Grantor shall have the right, at any time and from time to time, to withdraw such of its own funds from its own General Fund Account, and to maintain such balances in its General Fund Account, as it shall deem to be necessary or desirable.
6.2Communications with Obligors; Grantors Remain Liable. The Collateral Agent in its own name or in the name of others, may at any time and from time to time after the occurrence and during the continuance of an Event of Default specified in Subsection 9.1(a) of the Credit Agreement, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement) communicate with obligors under the Accounts Receivable constituting Collateral and parties to the Contracts (in each case, to the extent constituting Collateral) to verify with them to the Collateral Agent’s satisfaction the existence, amount and terms of any Accounts Receivable or Contracts.
(b)Upon the request of the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default specified in Subsection 9.1(a) of the Credit Agreement, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement) each Grantor shall notify obligors on such Grantor’s Accounts Receivable and parties to such Grantor’s Contracts (in each case, to the extent constituting Collateral) that such Accounts Receivable and such Contracts have been assigned to the Collateral Agent, for the benefit of the Secured Parties, and that payments in respect thereof shall be made directly to the Collateral Agent.
(c)Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of such Grantor’s Accounts Receivable to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. None of the Collateral Agent, the Administrative Agent or any other Secured Party shall have any obligation or liability under any Account Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating thereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Account Receivable (or any agreement giving rise thereto) to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
6.3Pledged Stock. Unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given notice to the relevant Grantor of the Collateral Agent’s intent to exercise its corresponding rights pursuant to Subsection 6.3(b), each Grantor shall be permitted to receive all cash dividends and distributions paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes, and to exercise all voting and corporate rights with respect to the Pledged Stock.
(b)If an Event of Default shall occur and be continuing and the Collateral Agent shall give at least two Business Days’ prior written notice of its intent to exercise such rights to the
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relevant Grantor or Grantors (i) the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Obligations of the relevant Grantor as provided in the Credit Agreement consistent with Subsection 6.5, and (ii) any or all of the Pledged Stock shall be registered in the name of the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent or the respective nominee thereof, and the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable or acting through its respective nominee, if applicable, in accordance with the terms of any applicable Intercreditor Agreement, may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the relevant Grantor or the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, may reasonably determine), all without liability to the maximum extent permitted by applicable law (other than for its gross negligence or willful misconduct) except to account for property actually received by it, but the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, shall have no duty, to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing; provided that the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, shall not exercise any voting or other consensual rights pertaining to the Pledged Stock in any way that would constitute an exercise of the remedies described in Subsection 6.6 other than in accordance with Subsection 6.6.
(c)Each Grantor hereby authorizes and instructs each Issuer or maker of any Pledged Securities pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Collateral Agent in writing with respect to Capital Stock in such Issuer that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer or maker shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Securities directly to the Collateral Agent.
6.4Proceeds to be Turned Over to the Collateral Agent. In addition to the rights of the Collateral Agent specified in Subsection 6.1 with respect to payments of Accounts Receivable constituting Collateral, if an Event of Default shall occur and be continuing, and the Collateral Agent shall have instructed any Grantor to do so, all Proceeds of Collateral received by such Grantor consisting of cash, checks and other Cash Equivalent items shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties hereto, the ABL Agent and the other ABL Secured Parties (as defined in the ABL Intercreditor Agreement) or any Additional Agent and the other applicable Additional Secured Parties (as defined in the ABL Intercreditor Agreement), or the applicable Collateral Representative, as applicable, in accordance with the terms of any applicable Intercreditor Agreement,
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segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent, the Applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement (or their respective agents appointed for purposes of perfection), in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, if required). All Proceeds of Collateral received by the Collateral Agent hereunder shall be held by the Collateral Agent in the relevant Collateral Proceeds Account maintained under its sole dominion and control. All Proceeds of Collateral while held by the Collateral Agent in such Collateral Proceeds Account (or by the relevant Grantor in trust for the Collateral Agent and the other Secured Parties) shall continue to be held as collateral security for all the Obligations of such Grantor and shall not constitute payment thereof until applied as provided in Subsection 6.5.
6.5Application of Proceeds. It is agreed that if an Event of Default shall occur and be continuing, any and all Proceeds of the relevant Grantor’s Collateral (as defined in the Credit Agreement) received by the Collateral Agent (whether from the relevant Grantor or otherwise) shall be held by the Collateral Agent for the benefit of the Secured Parties as collateral security for the Obligations of the relevant Grantor (whether matured or unmatured), and/or then or at any time thereafter may, in the sole discretion of the Collateral Agent, subject to each applicable Intercreditor Agreement, shall be applied by the Collateral Agent against the Obligations of the relevant Grantor then due and owing in the order of priority set forth in the Credit Agreement.
6.6Code and Other Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations to the extent permitted by applicable law, all rights and remedies of a secured party under the Code and under any other applicable law and in equity. Without limiting the generality of the foregoing, to the extent permitted by applicable law, the Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances, forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith, subject to any existing reserved rights or licenses, sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Collateral Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. To the extent permitted by law, the Collateral Agent or any other Secured Party shall have the right, upon any such sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in such Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the Collateral Agent’s request (subject to each applicable Intercreditor Agreement), to assemble the Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. The Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Subsection 6.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and the other Secured Parties hereunder, including, without limitation, reasonable attorneys’ fees and disbursements, to the payment in whole or in part of the Obligations of the relevant Grantor then due and owing, in the order of priority specified in Subsection 6.5 above, and only after such application and after the payment by the Collateral Agent of any other amount required by any provision of law, including, without limitation, Section
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9-615(a)(3) of the Code, need the Collateral Agent account for the surplus, if any, to such Grantor. To the extent permitted by applicable law, (i) such Grantor waives all claims, damages and demands it may acquire against the Collateral Agent or any other Secured Party arising out of the repossession, retention or sale of the Collateral, other than any such claims, damages and demands that may arise from the gross negligence or willful misconduct of any of the Collateral Agent or such other Secured Party, and (ii) if any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
6.7Registration Rights. If the Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Subsection 6.6, and if in the reasonable opinion of the Collateral Agent it is necessary or reasonably advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will use its reasonable best efforts to cause the Issuer thereof to (i) execute and deliver, and use its reasonable best efforts to cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the reasonable opinion of the Collateral Agent, necessary or advisable to register such Pledged Stock, or that portion thereof to be sold, under the provisions of the Securities Act, (ii) use its reasonable best efforts to cause the registration statement relating thereto to become effective and to remain effective for a period of not more than one year from the date of the first public offering of such Pledged Stock, or that portion thereof to be sold, and (iii) make all amendments thereto and/or to the related prospectus which, in the reasonable opinion of the Collateral Agent, are necessary or advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the Securities and Exchange Commission applicable thereto. Such Grantor agrees to use its reasonable best efforts to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any and all states and the District of Columbia that the Collateral Agent shall reasonably designate and to make available to its security holders, as soon as practicable, an earnings statement (which need not be audited) that will satisfy the provisions of Section 11(a) of the Securities Act.
(b)Such Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all such Pledged Stock, by reason of certain prohibitions contained in the Securities Act and applicable state securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Such Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, to the extent permitted by applicable law, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall not be under any obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such Issuer would agree to do so.
(c)Such Grantor agrees to use its reasonable best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of such Pledged Stock pursuant to this Subsection 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Such Grantor further agrees that a breach of any of the covenants contained in this Subsection 6.7 will cause irreparable injury to the Collateral Agent and the Lenders, that the Collateral Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Subsection 6.7 shall be specifically enforceable against such Grantor, and to the extent permitted by applicable law, such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred or is continuing under the Credit Agreement.
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6.8Waiver; Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay in full, the Loans, Reimbursement Obligations constituting Obligations of such Grantor and, to the extent then due and owing, all other Obligations of such Grantor and the reasonable fees and disbursements of any attorneys employed by the Collateral Agent or any other Secured Party to collect such deficiency.
Section 7.  THE COLLATERAL AGENT
7.1Collateral Agent’s Appointment as Attorney-in-Fact, etc. Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any authorized officer or agent thereof, 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 Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be reasonably necessary or desirable to accomplish the purposes of this Agreement to the extent permitted by applicable law, provided that the Collateral Agent agrees not to exercise such power except upon the occurrence and during the continuance of any Event of Default, and in accordance with and subject to each applicable Intercreditor Agreement. Without limiting the generality of the foregoing, at any time when an Event of Default has occurred and is continuing (in each case to the extent permitted by applicable law and subject to each applicable Intercreditor Agreement), (x) each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice or assent by such Grantor, to execute, in connection with any sale provided for in Subsection 6.6(a) or 6.7, any indorsements, assessments or other instruments of conveyance or transfer with respect to such Grantor’s Collateral, and (y) each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:
(i)in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Account Receivable of such Grantor that constitutes Collateral or with respect to any other Collateral of such Grantor and file any claim or take any other action or institute any proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any and all such moneys due under any Account Receivable of such Grantor that constitutes Collateral or with respect to any other Collateral of such Grantor whenever payable;
(ii)in the case of any Copyright, Patent, Trademark, Copyright License, Patent License or Trademark License constituting Collateral of such Grantor, execute and deliver any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to such Grantor to evidence the Collateral Agent’s and the Lenders’ security interest in such Copyright, Patent, Trademark, Copyright License, Patent License or Trademark License and the goodwill and general intangibles of such Grantor relating thereto or represented thereby, and such Grantor hereby consents to the non-exclusive royalty free use by the Collateral Agent of any Copyright, Patent, Trademark, Copyright License, Patent License or Trademark License owned by, or subject to the terms of any applicable agreement licensed to, such Grantor included in the Collateral for the purposes of disposing of any Collateral or exercising its rights under this Agreement;
(iii)pay or discharge taxes and Liens, other than Liens permitted under this Agreement or the other Loan Documents, levied or placed on the Collateral of such Grantor, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof; and
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(iv)(A) direct any party liable for any payment under any of the Collateral of such Grantor to make payment of any and all moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; (B) ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral of such Grantor; (C) sign and indorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral of such Grantor; (D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral of such Grantor or any portion thereof and to enforce any other right in respect of any Collateral of such Grantor; (E) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral of such Grantor; (F) settle, compromise or adjust any such suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as the Collateral Agent may deem appropriate; (G) subject to any existing reserved rights or licenses, assign any Copyright, Patent or Trademark constituting Collateral of such Grantor (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (H) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral of such Grantor as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral of such Grantor and the Collateral Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
(b)The reasonable expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Subsection 7.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due ABR Loans under the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral Agent on demand.
(c)Each Grantor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable as to the relevant Grantor until this Agreement is terminated as to such Grantor, and the security interests in the Collateral of such Grantor created hereby are released.
7.2Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the Code or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. None of the Collateral Agent or any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or, except as otherwise provided herein, to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Collateral Agent and the other Secured Parties hereunder are solely to protect the Collateral Agent’s and the other Secured Parties’ interests in the Collateral and shall not impose any duty upon the Collateral Agent or any other Secured Party to exercise any such powers. The Collateral Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and to the maximum extent permitted by applicable
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law, neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except as otherwise provided herein or for their own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
7.3Financing Statements. Pursuant to any applicable law, each Grantor authorizes the Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to such Grantor’s Collateral without the signature of such Grantor in such form and in such filing offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent under this Agreement. Each Grantor authorizes the Collateral Agent to use any collateral description reasonably determined by the Collateral Agent, including, without limitation, the collateral description “all personal property” or “all assets” or words of similar meaning in any such financing statements. The Collateral Agent agrees to use its commercially reasonable efforts to notify the relevant Grantor of any financing or continuation statement filed by it, provided that any failure to give such notice shall not affect the validity or effectiveness of any such filing.
7.4Authority of Collateral Agent. Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement or any amendment, supplement or other modification of this Agreement shall, as between the Collateral Agent and the Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.
7.5Right of Inspection. Upon reasonable written advance notice to any Grantor, or at any time and from time to time after the occurrence and during the continuation of an Event of Default, the Collateral Agent shall have access at reasonable times during normal business hours to all the books, correspondence and records of such Grantor, and the Collateral Agent and its representatives may examine the same, and to the extent reasonable take extracts therefrom and make photocopies thereof, and such Grantor agrees to render to the Collateral Agent at such Grantor’s reasonable cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. The Collateral Agent and its representatives shall also have the right, upon reasonable advance written notice to such Grantor subject to any lease restrictions, to enter during normal business hours into and upon any premises owned, leased or operated by such Grantor where any of such Grantor’s Inventory or Equipment is located for the purpose of inspecting the same, observing its use or otherwise protecting its interests therein to the extent not inconsistent with the provisions of the Credit Agreement.
Section 8.  NON-LENDER SECURED PARTIES
1.1Rights to Collateral. The Non-Lender Secured Parties shall not have any right whatsoever to do any of the following: (i) exercise any rights or remedies with respect to the Collateral (such term, as used in this Section 8, having the meaning assigned to it in the Credit Agreement) or to direct the Collateral Agent to do the same, including, without limitation, the right to (A) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, (B) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election, notify account debtors or make collections with respect to all or any portion of the Collateral or (C) release any Grantor under this Agreement or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; (ii) demand, accept or obtain any Lien on any Collateral (except for
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Liens arising under, and subject to the terms of, this Agreement); (iii) vote in any Bankruptcy Case or similar proceeding in respect of Parent or any of its Subsidiaries (any such proceeding, for purposes of this clause (a), a “Bankruptcy”) with respect to, or take any other actions concerning the Collateral; (iv) receive any proceeds from any sale, transfer or other disposition of any of the Collateral (except in accordance with this Agreement); (v) oppose any sale, transfer or other disposition of the Collateral; (vi) object to any debtor-in-possession financing in any Bankruptcy which is provided by one or more Lenders among others (including on a priming basis under Section 364(d) of the Bankruptcy Code); (vii) object to the use of cash collateral in respect of the Collateral in any Bankruptcy; or (viii) seek, or object to the Lenders seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy.
(b)Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, agrees that in exercising rights and remedies with respect to the Collateral, the Collateral Agent and the Lenders, with the consent of the Collateral Agent, may enforce the provisions of the Security Documents and exercise remedies thereunder and under any other Loan Documents (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment. Such exercise and enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction. The Non-Lender Secured Parties by their acceptance of the benefits of this Agreement and the other Security Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral. Whether or not a Bankruptcy Case has been commenced, the Non-Lender Secured Parties shall be deemed to have consented to any sale or other disposition of any property, business or assets of Parent or any of its Subsidiaries and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith.
(c)Notwithstanding any provision of this Subsection 8.1, the Non-Lender Secured Parties shall be entitled subject to each applicable Intercreditor Agreement to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleadings (A) in order to prevent any Person from seeking to foreclose on the Collateral or supersede the Non-Lender Secured Parties’ claim thereto or (B) in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Non-Lender Secured Parties. Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees to be bound by and to comply with each applicable Intercreditor Agreement and authorizes the Collateral Agent to enter into the Intercreditor Agreements on its behalf.
(d)Each Non-Lender Secured Party, by its acceptance of the benefit of this Agreement, agrees that the Collateral Agent and the Lenders may deal with the Collateral, including any exchange, taking or release of Collateral, may change or increase the amount of the Primary Obligations and/or the Guarantor Obligations, and may release any Grantor from its Obligations hereunder, all without any liability or obligation (except as may be otherwise expressly provided herein) to the Non-Lender Secured Parties.
8.2Appointment of Agent. Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, shall be deemed irrevocably to make, constitute and appoint the Collateral Agent, as agent under the Credit Agreement (and all officers, employees or agents designated by the Collateral Agent) as such Person’s true and lawful agent and attorney-in-fact, and in such capacity, the Collateral Agent shall have the right, with power of substitution for the Non-Lender Secured Parties and in each such Person’s name or otherwise, to effectuate any sale,
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transfer or other disposition of the Collateral. It is understood and agreed that the appointment of the Collateral Agent as the agent and attorney-in-fact of the Non-Lender Secured Parties for the purposes set forth herein is coupled with an interest and is irrevocable. It is understood and agreed that the Collateral Agent has appointed the Administrative Agent as its agent for purposes of perfecting certain of the security interests created hereunder and for otherwise carrying out certain of its obligations hereunder.
8.3Waiver of Claims. To the maximum extent permitted by law, each NonLender Secured Party waives any claim it might have against the Collateral Agent or the Lenders with respect to, or arising out of, any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of the Collateral Agent or the Lenders or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Loan Documents or any transaction relating to the Collateral (including, without limitation, any such exercise described in Subsection 8.1(b) above), except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person. To the maximum extent permitted by applicable law, none of the Collateral Agent or any Lender or any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Parent, any Subsidiary of Parent, any Non-Lender Secured Party or any other Person or to take any other action or forbear from doing so whatsoever with regard to the Collateral or any part thereof, except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person.
8.4Bank Products Providers; Hedging Providers. The Company may from time to time designate a Person as a “Bank Products Provider” or a “Hedging Provider” hereunder by written notice to the Collateral Agent, provided that, at the time of the Borrower’s designation of such Bank Products Provider or Hedging Provider, the obligations of the relevant Grantor under the applicable Hedging Agreement or Bank Products Agreement (as the case may be) have not been designated as ABL Obligations (as defined in the ABL Intercreditor Agreement) or Additional Obligations.
Section 9.  MISCELLANEOUS
9.1Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by each affected Grantor and the Collateral Agent, provided that (a) any provision of this Agreement imposing obligations on any Grantor may be waived by the Collateral Agent in a written instrument executed by the Collateral Agent and (b) notwithstanding anything to the contrary in Subsection 11.1 of the Credit Agreement, no such waiver and no such amendment or modification shall amend, modify or waive the definition of “Secured Party” or Subsection 6.5 if such waiver, amendment, or modification would adversely affect a Secured Party without the written consent of each such affected Secured Party. For the avoidance of doubt, it is understood and agreed that any amendment, amendment and restatement, waiver, supplement or other modification of or to the ABL Intercreditor Agreement that would have the effect, directly or indirectly, through any reference herein to the ABL Intercreditor Agreement or otherwise, of waiving, amending, supplementing or otherwise modifying this Agreement, or any term or provision hereof, or any right or obligation of any Grantor hereunder or in respect hereof, shall not be given such effect except pursuant to a written instrument executed by each affected Grantor and the Collateral Agent in accordance with this Subsection 9.1.
9.2Notices. All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Subsection 11.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Grantor shall be addressed to such Grantor at its notice address set forth on Schedule 1, unless and until such Grantor shall change
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such address by notice to the Collateral Agent and the Administrative Agent given in accordance with Subsection 11.2 of the Credit Agreement.
9.3No Waiver by Course of Conduct; Cumulative Remedies. None of the Collateral Agent or any other Secured Party shall by any act (except by a written instrument pursuant to Subsection 9.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Collateral Agent or such other Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
1.4Enforcement Expenses; Indemnification. Each Grantor jointly and severally agrees to pay or reimburse each Secured Party and the Collateral Agent for all their respective reasonable costs and expenses incurred in collecting against such Grantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement against such Grantor and the other Loan Documents to which such Grantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Secured Parties, the Collateral Agent and the Administrative Agent.
(b)Each Grantor jointly and severally agrees to pay, and to save the Collateral Agent, the Administrative Agent and the other Secured Parties harmless from, (x) any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other similar taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement and (y) any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and administration of this Agreement (collectively, the “indemnified liabilities”), in each case to the extent the Borrower would be required to do so pursuant to Subsection 11.5 of the Credit Agreement, and in any event excluding any Taxes or other indemnified liabilities arising from gross negligence, bad faith or willful misconduct of the Collateral Agent or any other Secured Party as determined by a court of competent jurisdiction in a final and nonappealable decision.
(c)The agreements in this Subsection 9.4 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents.
9.5Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Grantors, the Collateral Agent and the Secured Parties and their respective successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent, except as permitted by the Credit Agreement.
9.6Set-Off. Each Grantor hereby irrevocably authorizes each of the Administrative Agent and the Collateral Agent and each other Secured Party at any time and from time to time without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to the extent permitted by applicable law, upon the occurrence and during the continuance of an Event of Default under Subsection 9.1(a) of the Credit Agreement so long as any amount remains unpaid after it becomes due and payable by such Grantor hereunder, to set-off and appropriate and apply against any
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such amount any and all deposits (general or special, time or demand, provisional or final) (other than the Collateral Proceeds Account), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Collateral Agent, the Administrative Agent or such other Secured Party to or for the credit or the account of such Grantor, or any part thereof in such amounts as the Collateral Agent, the Administrative Agent or such other Secured Party may elect. The Collateral Agent, the Administrative Agent and each other Secured Party shall notify such Grantor promptly of any such set-off and the application made by the Collateral Agent, the Administrative Agent or such other Secured Party of the proceeds thereof; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Collateral Agent, the Administrative Agent and each other Secured Party under this Subsection 9.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent, the Administrative Agent or such other Secured Party may have.
9.7Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
9.8Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided that, with respect to any Pledged Stock issued by a Foreign Subsidiary, all rights, powers and remedies provided in this Agreement may be exercised only to the extent that they do not violate any provision of any law, rule or regulation of any Governmental Authority applicable to any such Pledged Stock or affecting the legality, validity or enforceability of any of the provisions of this Agreement against the Grantor (such laws, rules or regulations, “Applicable Law”) and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any Applicable Law.
9.9Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
9.10Integration. This Agreement and the other Loan Documents represent the entire agreement of the Grantors, the Collateral Agent and the other Secured Parties with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Grantors, the Collateral Agent or any other Secured Party relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.
9.11GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES ARE NOT MANDATORILY APPLICABLE BY STATUTE AND WOULD REQUIRE OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
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9.12Submission to Jurisdiction; Waivers. Each party hereto hereby irrevocably and unconditionally:
(a)submits for itself and its property in any legal action or proceeding relating to this Agreement and the other Loan Documents to which it is a party, or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the United States District Court for the Southern District of New York (or if such court lacks subject matter jurisdiction, the Supreme Court of the State of New York for the County of New York) and appellate courts therefrom; provided that nothing contained herein or in any other Loan Document will prevent any party hereto from bringing any action to enforce any award or judgment or exercise any right under this Agreement, the Security Documents or against any Collateral or any other property of any Loan Party in any other forum in which jurisdiction can be established;
(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 forum 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 party at its address referred to in Subsection 9.2 or at such other address of which the Collateral Agent and the Administrative Agent (in the case of any other party hereto) or the Borrower (in the case of the Collateral Agent and the Administrative Agent) shall have been notified pursuant thereto;
(d)agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or (subject to clause (a) above) shall limit the right to sue 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 any indirect, special, consequential or punitive damages.
9.13Acknowledgments. Each Grantor hereby acknowledges that:
(a)it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;
(b)none of the Collateral Agent, the Administrative Agent or any other Secured Party has any fiduciary, advisory or agency relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Collateral Agent, the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and
(c)no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Grantors and the Secured Parties.
9.14WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
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ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.15Additional Grantors. Each new Subsidiary of Parent that is required to become a party to this Agreement pursuant to Subsection 7.9(b) 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 substantially in the form of Annex 2 hereto. Each existing Grantor that is required to become a Grantor with respect to Capital Stock of any new Subsidiary of Parent pursuant to Subsection 7.9(b) of the Credit Agreement shall become a Grantor with respect thereto upon execution and delivery by such Grantor of a Supplemental Agreement substantially in the form of Annex 3 hereto.
9.16Releases. At such time as the Loans and the other Obligations (other than any Obligations owing to a Non-Lender Secured Party in respect of the provision of cash management services) then due and owing shall have been paid in full, the Commitments have been terminated, all Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral held by the Collateral Agent hereunder, and execute, acknowledge and deliver to such Grantor such releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as any Grantor shall reasonably request to evidence such termination.
(b)Upon any sale or other disposition of Collateral permitted by the Credit Agreement (other than any sale or disposition to another Grantor), the Lien pursuant to this Agreement on such sold or disposed of Collateral shall be automatically released. In connection with the sale or other disposition of all of the Capital Stock of any Grantor (other than to Parent, Holdings, the Borrower or any Subsidiary Guarantor), or, in the case of any Grantor that is a Subsidiary of Parent, any other transaction or occurrence as a result of which such Grantor ceases to be a Restricted Subsidiary of the Borrower or the sale or other disposition of Collateral (other than a sale or disposition to another Grantor) permitted under the Credit Agreement, the Collateral Agent shall, upon receipt from the Borrower of a written request for the release of such Grantor from its Guarantee or the release of the Collateral subject to such sale, disposition or other transaction, identifying such Grantor or the relevant Collateral, together with a certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents, deliver to the Borrower or the relevant Grantor, at the sole cost and expense of such Grantor, any Collateral of such relevant Grantor held by the Collateral Agent, or the Collateral subject to such sale or disposition (as applicable), and, at the sole cost and expense of such Grantor, execute, acknowledge and deliver to the Borrower or such Grantor such releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as the Borrower or such Grantor shall reasonably request (x) to evidence or effect the release of such Grantor from its Guarantee (if any) and of the Liens created hereby (if any) on such Grantor’s Collateral or (y) to evidence the release of the Collateral subject to such sale or disposition.
(c)Upon any Grantor becoming an Excluded Subsidiary in accordance with the provisions of the Credit Agreement, the Lien pursuant to this Agreement on all Collateral of such Grantor (if any) shall be automatically released, and the Guarantee (if any) of such Grantor, and all obligations of such Grantor hereunder, shall, terminate, all without delivery of any instrument or performance of any act by any party, and the Collateral Agent shall, upon the request of the Borrower or such Grantor, deliver to the Borrower or such Grantor any Collateral of such Grantor held by the Collateral Agent hereunder and the Collateral Agent and the Administrative Agent shall execute, acknowledge and deliver to the Borrower or such Grantor (at the sole cost and expense of the Borrower or
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such Grantor) all releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, necessary or reasonably desirable for the release of such Grantor from its Guarantee (if any) or the Liens created hereby (if any) on such Grantor’s Collateral, as applicable, as the Borrower or such Grantor may reasonably request.
(d)Upon any Collateral being or becoming an Excluded Asset, the Lien pursuant to this Agreement on such Collateral shall be automatically released. At the request and sole expense of any Grantor, the Collateral Agent shall deliver such Collateral (if held by the Collateral Agent) to such Grantor and execute, acknowledge and deliver to such Grantor such releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as such Grantor shall reasonably request to evidence such release.
(e)Notwithstanding any other provision of this Agreement or any other Loan Document, Holdings shall have the right to transfer all of the Capital Stock of the Borrower held by it (including, for the avoidance of doubt, any such transfer in connection with any change in the Borrower’s legal structure to a corporation, limited liability company or other entity) to any Parent Entity (including Holdings) or any Subsidiary of any Parent Entity (a “Successor Holding Company”) that (i) is a Person organized and existing under the laws of the United States of America, any State thereof or the District of Columbia and (ii) assumes all of the obligations of Holdings under this Agreement and the other Loan Documents to which Holdings is a party by executing and delivering to the Administrative Agent and the Collateral Agent a joinder substantially in the form of Annex 4 hereto, or one or more other documents or instruments, together with a financing statement in appropriate form for filing under the Uniform Commercial Code of the relevant jurisdiction, in form and substance reasonably satisfactory to the Collateral Agent, upon which (x) such Successor Holding Company will succeed to, and be substituted for, and may exercise every right and power of Holdings under this Agreement and the other Loan Documents, and shall thereafter be deemed to be “Holdings” for purposes of this Agreement and the other Loan Documents, (y) Holdings, as predecessor to the Successor Holding Company (“Predecessor Holding Company”), shall be irrevocably and unconditionally released from its Guarantee and all other obligations hereunder and under the other Loan Documents, and (z) the Lien pursuant to this Agreement on all Collateral of Predecessor Holding Company, and any Lien pursuant to any other Loan Document on any other property or assets of Predecessor Holding Company, shall be automatically released (it being understood that such transfer of Capital Stock of the Borrower to and assumption of rights and obligations of Holdings by such Successor Holding Company shall not constitute a Change of Control). At the request and the sole expense of Predecessor Holding Company or the Borrower, the Collateral Agent shall deliver to Predecessor Holding Company any Collateral and other property or assets of Predecessor Holding Company held by the Collateral Agent that is not required to be pledged under this Agreement or any other Loan Document by Successor Holding Company (including the Capital Stock of the Borrower) and execute, acknowledge and deliver to Predecessor Holding Company (subject to Subsection 7.2, without recourse and without representation or warranty) such releases, instruments or other documents (including without limitation UCC termination statements), and do or cause to be done all other acts, as Predecessor Holding Company or the Borrower shall reasonably request to evidence or effect the release of Predecessor Holding Company from its Guarantee and other obligations hereunder and under the other Loan Documents, and the release of the Liens created hereby on Predecessor Holding Company’s Collateral (other than the Capital Stock of the Borrower) and by any other Loan Document on any other property or assets of Predecessor Holding Company.
(f)So long as no Event of Default has occurred and is continuing, the Collateral Agent and the Administrative Agent shall at the direction of any applicable Grantor return to such Grantor any proceeds or other property received by it during any Event of Default pursuant to either Subsection 5.3.1 or 6.4 and not otherwise applied in accordance with Subsection 6.5.
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(g)The Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in good faith believes to be in accordance with) this Subsection 9.16.
(h)[Reserved].
9.17Judgment. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Collateral Agent could purchase the first currency with such other currency on the Business Day preceding the day on which final judgment is given.
(b)The obligations of any Grantor in respect of this Agreement to the Collateral Agent, for the benefit of each holder of Secured Obligations, shall, notwithstanding any judgment in a currency (the “judgment currency”) other than the currency in which the sum originally due to such holder is denominated (the “original currency”), be discharged only to the extent that on the Business Day following receipt by the Collateral Agent of any sum adjudged to be so due in the judgment currency, the Collateral Agent may in accordance with normal banking procedures purchase the original currency with the judgment currency; if the amount of the original currency so purchased is less than the sum originally due to such holder in the original currency, such Grantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Collateral Agent for the benefit of such holder, against such loss, and if the amount of the original currency so purchased exceeds the sum originally due to the Collateral Agent, the Collateral Agent agrees to remit to the Borrower, such excess. This covenant shall survive the termination of this Agreement and payment of the Obligations and all other amounts payable hereunder.
9.18Transfer Tax Acknowledgement. Each party hereto acknowledges that the shares delivered hereunder are being transferred to and deposited with the Collateral Agent (or other Person in accordance with any applicable Intercreditor Agreement) as security for the Obligations and that this Section 9.18 is intended to be the certificate of exemption from New York stock transfer taxes for the purposes of complying with Section 270.5(b) of the Tax Law of the State of New York.
[Remainder of page left blank intentionally; Signature pages to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the date first written above.
BORROWER:
ATKORE INTERNATIONAL, INC.
By:    /s/ John Deitzer    
Name: John Deitzer
Title: Vice President, Treasurer and Assistant
Corporate Secretary
GUARANTORS:


ATKORE INC.
ATKORE INTERNATIONAL HOLDINGS INC.
AFC CABLE SYSTEMS, INC.
ALLIED TUBE & CONDUIT CORPORATION
ATKORE PLASTIC PIPE CORPORATION
ATKORE STEEL COMPONENTS, INC.
CALPIPE INDUSTRIES, LLC
US TRAY, INC.
WPFY, INC.
ATKORE RMCP, INC.
UNISTRUT INTERNATIONAL CORPORATION
GEORGIA PIPE COMPANY
TKN, INC.
ATKORE PLASTICS SOUTHEAST, LLC
ATKORE SOUTHWEST, LLC
By:    /s/ John Deitzer    
Name: John Deitzer
Title: Vice President

[Signature Pages to Guarantee and Collateral Agreement]



Acknowledged and Agreed to as of the date hereof by:
JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
By:    /s/ Stephanie Lis    
Name: Stephanie Lis
Title: Authorized Officer

[Signature Pages to Guarantee and Collateral Agreement]


CANADIAN GUARANTEE AND COLLATERAL AGREEMENT

made by

COLUMBIA-MBF INC.,

in favor of

JPMORGAN CHASE BANK, N.A.,
as Collateral Agent
Dated as of May 26, 2021
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SCHEDULES
1    Notice Addresses of Grantors
2    Pledged Securities
3    Perfection Matters
4    Location of Jurisdiction of Organization, Etc.
5    Intellectual Property
6    [Reserved]
7    Commercial Tort Actions
ANNEX
1    Acknowledgement and Consent of Issuers who are not Grantors
2    Assumption Agreement
3    Supplemental Agreement


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CANADIAN GUARANTEE AND COLLATERAL AGREEMENT
CANADIAN GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 26, 2021, made by COLUMBIA-MBF INC., a corporation formed by amalgamation under the laws of Canada (the “Initial Grantor”), and certain Subsidiaries of ATKORE INC., a Delaware corporation (the “Parent”) from time to time party hereto, in favor of JPMORGAN CHASE BANK, N.A., as collateral agent (in such capacity, the “Collateral Agent”) and administrative agent (in such capacity, the “Administrative Agent”) for the banks and other financial institutions (collectively, the “Lenders”; individually, a “Lender”) from time to time parties to the Credit Agreement described below.
W I T N E S E T H:
WHEREAS, pursuant to that certain Term Loan Credit Agreement, dated as of May 26, 2021 (as amended, amended and restated, waived, supplemented or otherwise modified from time to time, together with any agreement extending the maturity of, or restructuring, refunding, refinancing or increasing the Indebtedness under such agreement or successor agreements, the “Credit Agreement”), among ATKORE INTERNATIONAL, INC. (the “Borrower”), Parent, the Collateral Agent, the Administrative Agent, and the other parties party thereto, 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 Initial Grantor and the Borrower are members of an affiliated group of companies that includes the other Grantors from time to time party hereto (as defined below);
WHEREAS, the proceeds of the extensions of credit under the Credit Agreement have and will continue to be used in part to enable the Borrower to make valuable transfers to one or more of the other Grantors in connection with the operation of their respective businesses;
WHEREAS, the Borrower, the Initial Grantor and the other Grantors are engaged in related businesses, and each such Grantor will derive substantial direct and indirect benefit from the making of the extensions of credit under the Credit Agreement;
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement, dated as of August 28, 2020 (as amended, amended and restated, waived supplemented or otherwise modified from time to time, together with any agreement extending the maturity of, or restructuring, refunding, refinancing or increasing the Indebtedness under such agreement or successor agreement, the “ABL Credit Agreement”), among the Borrower, the Subsidiary Borrowers (as defined therein) party thereto (collectively with the Borrower, the “ABL Borrowers”), the banks and other financial institutions lenders thereunder (collectively, the “ABL Lenders”), Wells Fargo Bank, National Association, as administrative agent and collateral agent (in such capacity, the “ABL Agent”) and the other parties party thereto, the ABL Lenders have severally agreed to make extensions of credit to the ABL Borrowers upon the terms and subject to the conditions set forth therein;
WHEREAS, pursuant to that certain Canadian Guarantee and Collateral Agreement, dated as of August 28, 2020 (as amended, amended and restated, waived, supplemented or otherwise modified from time to time, the “ABL Guarantee and Collateral Agreement”), among the Initial Grantor and certain other Subsidiaries of the Borrower and the ABL Agent, the Initial Grantor and such Subsidiaries have granted a first priority Lien to the ABL Agent for the benefit of the holders of ABL Obligations (as defined herein) on the ABL Priority Collateral (as defined herein) and a second priority Lien for the benefit of the holders of the ABL Obligations on the Term Loan Priority Collateral (as defined herein) (subject in each case to Permitted Liens (as defined in the ABL Credit Agreement)); and
WHEREAS, the ABL Agent and the Collateral Agent are party to that certain Intercreditor Agreement, acknowledged by ATKORE INTERNATIONAL HOLDINGS INC., a Delaware corporation (“Holdings”), Parent, the Borrower and certain of their subsidiaries, dated as of May 26, 2021 (as amended, amended and restated, waived, supplemented or otherwise modified from time to time (subject to Section 9.1 hereof), the “ABL Intercreditor Agreement”).
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NOW, THEREFORE, in consideration of the premises and to induce the Administrative 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 Administrative Agent and the Collateral Agent, for the benefit of the Secured Parties (as defined below), as follows:
SECTION 1.DEFINED TERMS
1.1Definitions.
(a)Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement, and the following terms that are defined in the PPSA (as in effect on the date hereof) are used herein as so defined: Certificated Security, Consumer Goods, Chattel Paper, Document of Title, Equipment, Financial Assets, Goods, Intangibles, Investment Property, Money, Proceeds, Securities Accounts and Security Entitlements.
(b)The following terms shall have the following meanings:
ABL Agent”: as defined in the recitals hereto.
ABL Borrowers”: as defined in the recitals hereto.
ABL Credit Agreement”: as defined in the recitals hereto.
ABL Guarantee and Collateral Agreement”: as defined in the recitals hereto.
ABL Lenders”: as defined in the recitals hereto.
ABL Priority Collateral”: as defined in the ABL Intercreditor Agreement.
ABL Intercreditor Agreement”: as defined in the recitals hereto.
Accounts”: all accounts (as defined in the PPSA) of each Grantor, including, without limitation, all Accounts (as defined in the Credit Agreement) and Accounts Receivable of such Grantor.
Accounts Receivable”: any right to payment for goods sold or leased or for services rendered.
Additional Agent”: as defined in the ABL Intercreditor Agreement.
Additional Collateral Documents”: as defined in the ABL Intercreditor Agreement.
Additional Credit Facilities”: as defined in the ABL Intercreditor Agreement.
Additional Obligations”: as defined in the ABL Intercreditor Agreement.
Adjusted Net Worth”: of any Guarantor at any time, shall mean the greater of (x) $0 and (y) the amount by which the fair saleable value of such Guarantor’s assets on the date of the respective payment hereunder exceeds its debts and other liabilities (including contingent liabilities, but without giving effect to any of its obligations under this Agreement or any other Loan Document, or pursuant to its guarantee with respect to any Indebtedness then outstanding under the ABL Credit Agreement or any Assumed Indebtedness) on such date.
Administrative Agent”: as defined in the preamble hereto.
Agreement”: this Canadian Guarantee and Collateral Agreement, as the same may be amended, restated, supplemented, waived or otherwise modified from time to time.
Applicable Law”: as defined in Section 9.8 hereto.
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Asset Sales Proceeds Account”: one or more Deposit Accounts or Securities Accounts holding only the proceeds of any sale or disposition of any Term Loan Priority Collateral and the proceeds or investment thereof.
Bank Products Provider”: shall mean any Person that has entered into a Bank Products Agreement with a Grantor with the obligations of such Grantor thereunder being secured by one or more Loan Documents, as designated by the Borrower in accordance with Section 8.4 hereof (provided that no Person shall, with respect to any Bank Products Agreement, be at any time a Bank Products Provider with respect to more than one Credit Facility).
Bankruptcy Case”: (i) Parent or any of its Subsidiaries commencing any case, proceeding or other action (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets, or Parent or any of its Subsidiaries making a general assignment for the benefit of its creditors; or (ii) there being commenced against Parent or any of its Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged or unbonded for a period of 60 days.
Borrower”: as defined in the preamble hereto.
CIPO”: the Canadian Intellectual Property Office.
Closing Date”: means the effective date of this Agreement.
Collateral”: as defined in Section 3; provided that, for purposes of Subsection 6.5, Section 8 and Subsection 9.16(b), “Collateral” shall have the meaning assigned to such term in the Credit Agreement.
Collateral Account Bank”: a bank which at all times is a Collateral Agent or a Lender or an affiliate thereof as selected by the relevant Grantor and consented to in writing by the Collateral Agent (such consent not to be unreasonably withheld or delayed).
Collateral Agent”: as defined in the preamble hereto.
Collateral Proceeds Account”: a non-interest bearing cash collateral account established and maintained by the relevant Grantor at an office of the Collateral Account Bank in the name, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Parties.
Commercial Tort Action”: any action, other than an action primarily seeking declaratory or injunctive relief with respect to claims asserted or expected to be asserted by Persons other than the Grantors, that is commenced by a Grantor in the courts of the United States of America, any state or territory thereof or any political subdivision of any such state or territory, in which any Grantor seeks damages arising out of torts committed against it that would reasonably be expected to result in a damage award to it exceeding $7,500,000.
Commodity Exchange Act”: the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute thereto.
Contracts”: with respect to any Grantor, all contracts, agreements, instruments and indentures in any form and portions thereof, to which such Grantor is a party or under which such Grantor or any property of such Grantor is subject, as the same may from time to time be amended, supplemented, waived or otherwise modified, including, without limitation, (i) all rights of such Grantor to receive moneys due and to become due to it thereunder or in connection therewith, (ii) all rights of such Grantor
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to damages arising thereunder and (iii) all rights of such Grantor to perform and to exercise all remedies thereunder.
Contractual Obligation”: as to any Person, any provision of any material security issued by such Person or of any material agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.
Copyright Licenses”: with respect to any Grantor, all Canadian written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any Canadian copyright of such Grantor, other than agreements with any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor, including, without limitation, any material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Copyrights”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Canadian copyrights, whether or not the underlying works of authorship have been published or registered, all Canadian copyright registrations and copyright applications, including, without limitation, any copyright registrations and copyright applications listed on Schedule 5 hereto, and (i) all renewals thereof, (ii) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof and (iii) the right to sue or otherwise recover for past, present and future infringements and misappropriations thereof.
Credit Agreement”: has the meaning provided in the recitals hereto.
Credit Facility”: the Credit Agreement, the ABL Credit Agreement (as defined in the ABL Intercreditor Agreement) or any Additional Credit Facility, as applicable.
CSRA Registrations”: as defined in Section 4.2.1.
DDAs”: as defined in the ABL Credit Agreement.
Deposit Account”: with respect to any Grantor, (i) all deposit, demand, time, savings, passbook or other Accounts with a bank, credit union, trust company or similar financial institution and all Accounts and sub-Accounts relating to any of the foregoing Accounts now or hereafter held in the name of any Grantor and (ii) all cash, funds, money, checks, notes and Instruments from time to time on deposit in any of the Accounts or sub-Accounts described in clause (i) of this definition.
Designs”: with respect to any Grantor, designs and design applications, including (i) the design and design applications listed on Schedule 5, (ii) all continuations, divisionals, continuations-in-part, re-examinations, reissues, and renewals thereof and improvements thereon, (iii) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (iv) the right to sue for past, present, and future infringements thereof, and (v) all of each Grantor’s rights corresponding thereto throughout the world.
Discharge of ABL Obligations”: as defined in the ABL Intercreditor Agreement.
Excluded Assets”: as defined in Section 3.3.
Excluded Swap Obligation”: with respect to any Guarantor, any obligation (a “Swap Obligation”) to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act, if, and to the extent that, all or a portion of the guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof).
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Fixtures”: any trade fixtures, other fixtures and storage facilities (wherever located), and all additions and accessories thereto and replacements therefor.
Foreign Intellectual Property”: any right, title or interest in or to any copyrights, copyright licenses, patents, patent applications, patent licenses, designs, trade secrets, trade secret licenses, trademarks, trademark applications, trade names, trademark licenses, technology, know-how and processes or any other intellectual property governed by or arising or existing under, pursuant to or by virtue of the laws of any jurisdiction other than Canada or any province or territory thereof.
General Fund Account”: the general fund account of the relevant Grantor established at the same office of the Collateral Account Bank as the Collateral Proceeds Account.
Grantors”: the Initial Grantor and any other Subsidiary of Parent that becomes a party hereto from time to time after the date hereof.
Guarantor Obligations”: with respect to any Guarantor, all obligations and liabilities of such Guarantor which may arise under or in connection with Section 2 of this Agreement, in each case whether on account of guarantee obligations, reimbursement obligations, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees and disbursements of counsel to the Administrative Agent, to the Other Representatives or to the Lenders that are required to be paid by such Guarantor pursuant to the terms of this Agreement and interest and fees accruing after (or would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Guarantor, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding).
Guarantors”: the collective reference to each Grantor, provided that each such Grantor shall be considered a Guarantor only with respect to the Primary Obligations of any other Grantor.
Hedging Provider”: any Person that has entered into a Hedge Agreement with a Grantor with the obligations of such Grantor thereunder being secured by one or more Loan Documents, as designated by the Borrower in accordance with Section 8.4 hereof (provided that no Person shall, with respect to any Hedge Agreement, be at any time a Hedging Provider with respect to more than one Credit Facility).
Holdings”: as defined in the recitals hereto.
Initial Grantor”: as defined in the preamble hereto.
Instruments”: has the meaning specified in the PPSA, but excluding the Pledged Securities.
Intellectual Property”: with respect to any Grantor, the collective reference to such Grantor’s Copyrights, Copyright Licenses, Designs, Patents, Patent Licenses, Trade Secrets, Trade Secret Licenses, Trademarks and Trademark Licenses.
Intercompany Note”: with respect to any Grantor, any promissory note in a principal amount in excess of $7,500,000 evidencing loans made by such Grantor to Parent, Holdings, the Borrower or any of its Restricted Subsidiaries.
Intercreditor Agreements”: the ABL Intercreditor Agreement and any Other Intercreditor Agreement that may be entered into in the future by the Collateral Agent and one or more Additional Agents and acknowledged by the Borrower and the other Grantors (each as amended, amended and restated, waived, supplemented or otherwise modified from time to time (subject to Subsection 9.1)) (upon and during the effectiveness thereof).
Inventory”: with respect to any Grantor, all inventory (as defined in the PPSA) of such Grantor, including, without limitation, all Inventory (as defined in the Credit Agreement) of such Grantor.
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Investment Property”: the collective reference to (i) all “investment property” as such term is defined in the PPSA (other than any Capital Stock of any Foreign Subsidiary in excess of 65% of any series of such stock and other than any Capital Stock excluded from the definition of “Pledged Stock”) and (ii) whether or not constituting “investment property” as so defined, all Pledged Securities.
Issuers”: the collective reference to the Persons identified on Schedule 2 as the issuers of Pledged Stock, together with any successors to such companies (including, without limitation, any successors contemplated by Subsection 8.2 of the Credit Agreement).
Lender”: as defined in the preamble hereto.
Letter of Credit Rights”: a right to payment or performance under a letter of credit, whether or not the beneficiary has demanded or is at the time entitled to demand payment or performance but shall not include the right of a beneficiary to demand payment or performance under a letter of credit.
Non-Lender Secured Parties”: the collective reference to all Bank Products Providers and Hedging Providers and their respective successors, assigns and transferees.
Obligations”: with respect to any Loan Party, the collective reference to its Primary Obligations and Guarantor Obligations.
Parent”: as defined in the preamble hereto.
Patent Licenses”: with respect to any Grantor, all Canadian written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any Canadian patent, patent application, or patentable invention other than agreements with any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor, including, without limitation, the material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Patents”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Canadian patents, patent applications and patentable inventions and all reissues and extensions thereof, including, without limitation, all patents and patent applications identified in Schedule 5 hereto, and including, without limitation, (i) all inventions and improvements described and claimed therein, (ii) the right to sue or otherwise recover for any and all past, present and future infringements and misappropriations thereof, (iii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past, present or future infringements thereof), and (iv) all other rights corresponding thereto in Canada and all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, and extensions thereof, all improvements thereon, and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto.
Pledged Notes”: with respect to any Grantor, all Intercompany Notes at any time issued to, or held or owned by, such Grantor.
Pledged Securities”: the collective reference to the Pledged Notes and the Pledged Stock.
Pledged Stock”: with respect to any Grantor, the shares of Capital Stock listed on Schedule 2 as held by such Grantor, together with any other shares of Capital Stock required to be pledged by such Grantor pursuant to Subsection 7.9 of the Credit Agreement, as well as any other shares, stock certificates, options or rights of any nature whatsoever in respect of the Capital Stock of any Issuer that may be issued or granted to, or held by, such Grantor while this Agreement is in effect, in each case unless and until such time as the respective pledge of such Capital Stock under this Agreement is released in accordance with the terms hereof and of the Credit Agreement (provided that in no event shall there be pledged, nor shall any Grantor be required to pledge, directly or indirectly, (i) more than 65% of any series of the outstanding Capital Stock (including for these purposes any investment or indebtedness deemed to be Capital Stock for U.S. tax purposes) of any Foreign Subsidiary, (ii) any of the Capital Stock
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of a Subsidiary of a Foreign Subsidiary, (iii) de minimis shares of a Foreign Subsidiary held by any Grantor as a nominee or in a similar capacity, (iv) any Capital Stock of any Excluded Subsidiary (other than, but without limiting clause (i) above, a Subsidiary described in clause (d) of the definition thereof) and (v) without duplication, any Excluded Assets).
PPSA”: the Personal Property Security Act (Ontario), including the regulations thereto; provided, that, if perfection or the effect of perfection or non-perfection or the priority of any Lien created hereunder or under any other Loan Document on the Collateral is governed by the personal property security legislation or other applicable legislation with respect to personal property security in effect in a jurisdiction in Canada other than the Province of Ontario, “PPSA” means the Personal Property Security Act or such other applicable legislation (including the Civil Code of Quebec) in effect from time to time in such other jurisdiction in Canada for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.
Primary Obligations”: the collective reference to (a) all obligations and liabilities of the Borrower in respect of the unpaid principal of and interest on (including, without limitation, interest and fees accruing after the maturity of the Loans and interest and fees accruing after (or that would accrue but for) the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest or fees is allowed in such proceeding) the Loans, and all other obligations and liabilities of the Borrower to the Secured Parties, 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, the Loans, the other Loan Documents, any Hedge Agreement entered into with any Hedging Provider or any Bank Products Agreement entered into with any Bank Products Provider (provided, however, that the definition of “Primary Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Grantor to support, as applicable) any Excluded Swap Obligations of the Borrower or any other Loan Party for purposes of determining any obligations of any Guarantor or other Grantor), in each case whether on account of principal, interest, reimbursement obligations, amounts payable in connection with any such Bank Products Agreement or a termination of any transaction entered into pursuant to any such Hedge Agreement, fees, indemnities, costs, expenses or otherwise (including, without limitation, all reasonable fees, expenses and disbursements of counsel to the Administrative Agent or any other Secured Party that are required to be paid by the Borrower pursuant to the terms of the Credit Agreement or any other Loan Document) and (b) all obligations and liabilities of any Grantor to the Secured Parties, 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, any Hedge Agreement entered into with any Hedging Provider or any Bank Products Agreement entered into with any Bank Products Provider (provided, however, that the definition of “Primary Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Grantor to support, as applicable) any Excluded Swap Obligations of the Borrower or any other Loan Party for purposes of determining any obligations of any Guarantor or other Grantor), in each case whether on account of principal, interest, reimbursement obligations, amounts payable in connection with any such Bank Products Agreement or a termination of any transaction entered into pursuant to any such Hedge Agreement, fees, indemnities, costs, expenses or otherwise.
Proceeds”: all “proceeds” as such term is defined in the PPSA on the date hereof and, in any event, Proceeds of Pledged Securities shall include, without limitation, all dividends or other income from the Pledged Securities, collections thereon or distributions or payments with respect thereto.
Restrictive Agreements”: as defined in Subsection 3.3(a).
Secured Parties”: the collective reference to (i) the Administrative Agent, the Collateral Agent and each Other Representative, (ii) the Lenders, (iii) the Non-Lender Secured Parties and (iv) their respective successors and assigns and their permitted transferees and endorsees.
Specified Asset”: as defined in Subsection 4.2.2 hereof.
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STA”: means collectively, the Securities Transfer Act (Ontario) and comparable securities transfer legislation in effect in any other jurisdiction, as such legislation may be amended, consolidated or replaced from time to time.
Supporting Obligations”: means supporting obligations, and includes letters of credit and guaranties issued in support of Accounts, Chattel Paper, Documents of Title, Intangibles, Instruments or Investment Property.
Term Loan Priority Collateral”: the “Term Loan Priority Collateral” as defined in the ABL Intercreditor Agreement.
Trade Secret Licenses”: with respect to any Grantor, all Canadian written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any Canadian trade secrets, including, without limitation, know how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, other than agreements with any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Trade Secrets”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Canadian trade secrets, including, without limitation, know-how, processes, formulae, compositions, designs, and confidential business and technical information, and all rights of any kind whatsoever accruing thereunder or pertaining thereto, including, without limitation, (i) all income, royalties, damages and payments now and hereafter due and/or payable with respect thereto, including, without limitation, payments under all licenses, non-disclosure agreements and memoranda of understanding entered into in connection therewith, and damages and payments for past or future misappropriations thereof, and (ii) the right to sue or otherwise recover for past, present or future misappropriations thereof.
Trademark Licenses”: with respect to any Grantor, all Canadian written license agreements of such Grantor providing for the grant by or to such Grantor of any right under any Canadian trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, other than agreements with any Person who is an Affiliate or a Subsidiary of the Borrower or such Grantor, including, without limitation, the material license agreements listed on Schedule 5 hereto, subject, in each case, to the terms of such license agreements, and the right to prepare for sale, sell and advertise for sale, all Inventory now or hereafter covered by such licenses.
Trademarks”: with respect to any Grantor, all of such Grantor’s right, title and interest in and to all Canadian trademarks, service marks, trade names, trade dress or other indicia of trade origin or business identifiers, trademark and service mark registrations, and applications for trademark or service mark registrations, and any renewals thereof, including, without limitation, each registration and application identified in Schedule 5 hereto, and including, without limitation, (i) the right to sue or otherwise recover for any and all past, present and future infringements or dilutions thereof, (ii) all income, royalties, damages and other payments now and hereafter due and/or payable with respect thereto (including, without limitation, payments under all licenses entered into in connection therewith, and damages and payments for past or future infringements thereof), and (iii) all other rights corresponding thereto and all other rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto in Canada, together in each case with the goodwill of the business connected with the use of, and symbolized by, each such trademark, service mark, trade name, trade dress or other indicia of trade origin or business identifiers.
ULC” shall mean an unlimited company, unlimited liability corporation or unlimited liability company.
ULC Laws” shall mean the Companies Act (Nova Scotia), the Business Corporations Act (Alberta), the Business Corporations Act (British Columbia) and any other present or future laws governing ULCs.
ULC Shares” shall mean shares or other equity interests in the capital stock of a ULC.
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Vehicles”: all cars, trucks, trailers, construction and earth moving equipment and other vehicles with a vehicle identification number or otherwise constituting “serial number goods” or “serial numbered goods” for the purposes of the applicable PPSA and all tires and other appurtenances to any of the foregoing.
$”: means the lawful money of the United States of America.
1.2Other Definitional Provisions.
(a)The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Schedule and Annex references are to this Agreement unless otherwise specified. The words “include,” “includes,” and “including” shall be deemed to be followed by the phrase “without limitation.”
(b)The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
(c)Where the context requires, terms relating to the Collateral, or any part thereof, when used in relation to a Grantor shall refer to such Grantor’s Collateral or the relevant part thereof.
(d)All references in this Agreement to any of the property described in the definition of the term “Collateral” or to any Proceeds thereof, shall be deemed to be references thereto only to the extent the same constitute Collateral.
(e)Notwithstanding anything to the contrary herein or in any Loan Document, no Subsidiary that is a party to the ABL Guarantee and Collateral Agreement (or otherwise is a borrower or guarantor under the ABL Credit Agreement) shall be an Excluded Subsidiary under and as defined in the Credit Agreement. For the avoidance of doubt, the Initial Grantor and each Guarantor that becomes a party to this Agreement shall be a Subsidiary Guarantor under and as defined in the Credit Agreement unless and until such time as such Guarantor is released from Guarantee in accordance with the Credit Agreement; provided, however, that no such Guarantor may be released on the basis that it is an Excluded Subsidiary, if such Guarantor is a party to the ABL Guarantee and Collateral Agreement (or otherwise is a borrower or guarantor under the ABL Credit Agreement).
(f)Notwithstanding the limitations or exceptions set forth in the Credit Agreement with respect to the granting or perfection of security interests and delivery of security documents, each Grantor agrees to grant the security and take the actions contemplated by this Agreement. To the extent that any Grantor takes any action to grant or perfect a security interest in favor of the ABL Agent, such Grantor shall concurrently therewith takes such action in favor of the Collateral Agent.
SECTION 2.GUARANTEE
2.1Guarantee.
(a)Each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees to the Administrative Agent, for the benefit of the Secured Parties, the prompt and complete payment and performance by the Loan Parties when due and payable (whether at the stated maturity, by acceleration or otherwise) of the Primary Obligations of the Loan Parties; provided, however, that nothing herein or in the definition of “Primary Obligations” shall create any guarantee by any Guarantor of (or grant of security interest by any Grantor to support, as applicable) any Excluded Swap Obligations of a Loan Party for purposes of determining any obligations of such Guarantor (or Grantor) hereunder owed to the applicable Secured Parties.
(b)Anything herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor (other than the Borrower) hereunder and under the other Loan
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Documents shall in no event exceed the amount that can be guaranteed by such Guarantor under applicable law, including applicable laws relating to the insolvency of debtors.
(c)Each Guarantor agrees that the Primary Obligations guaranteed by it hereunder 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 Section 2 or affecting the rights and remedies of the Administrative Agent or any other Secured Party hereunder.
(d)The guarantee contained in this Section 2 shall remain in full force and effect until the earlier to occur of (i) the first date on which all the Loans and all other Primary Obligations then due and owing, and the obligations of each Guarantor under the guarantee contained in this Section 2 then due and owing shall have been satisfied by payment in full in cash 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, (ii) as to any Guarantor, the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, in the case of any Subsidiary Guarantor, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of the Borrower, in each case that is permitted under the Credit Agreement and (iii) as to any Guarantor, such Guarantor becoming an Excluded Subsidiary.
(e)No payment made by the Borrower, any other Loan Party with Primary Obligations, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any other Secured Party from the Borrower, any other Loan Party with Primary Obligations, 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 any 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 or any payment received or collected from such Guarantor in respect of any of the Primary Obligations), remain liable for the Primary Obligations of the Borrower guaranteed by it hereunder up to the maximum liability of such Guarantor hereunder until the earlier to occur of (i) the first date on which all the Loans, and all other Primary Obligations of the Borrower then due and owing, are paid in full in cash and the Commitments are terminated, (ii) the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, if such Guarantor is a Subsidiary Guarantor, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of the Borrower, in each case that is permitted under the Credit Agreement and (iii) as to any such Guarantor, such Guarantor becoming an Excluded Subsidiary.
2.2Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share (based, to the maximum extent permitted by law, on the respective Adjusted Net Worths of the Guarantors on the date the respective payment is made) of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder that has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Subsection 2.3. The provisions of this Subsection 2.2 shall in no respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the other Secured Parties, and each Guarantor shall remain liable to the Administrative Agent and the other Secured Parties for the full amount guaranteed by such Guarantor hereunder.
2.3No Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off or application of funds of any Guarantor by the Administrative Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of the rights of the Administrative Agent or any other Secured Party against the Borrower, any other Loan Party with Primary Obligations or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative Agent or any other Secured Party for the payment of the Primary Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrower, any other Loan Party with Primary Obligations or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and the other Secured Parties by the Loan Parties on account
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of the Primary Obligations 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 shall not have been paid in full in cash or any of the Commitments shall remain in effect, such amount shall be held by such Guarantor in trust for the Administrative 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 Administrative Agent in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if required), to be held as collateral security for all of the Primary Obligations (whether matured or unmatured) guaranteed by such Guarantor and/or then or at any time thereafter may be applied against any Primary Obligations, whether matured or unmatured, in such order as the Administrative Agent may determine.
2.4Amendments, etc. with respect to the Obligations. To the maximum extent permitted by law, 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 made by the Collateral Agent, the Administrative Agent or any other Secured Party may be rescinded by the Collateral Agent, the Administrative Agent or such other Secured Party and any of the Primary Obligations continued, and the Primary Obligations, 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, waived, modified, accelerated, compromised, subordinated, waived, surrendered or released by the Collateral Agent, the Administrative 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, waived, modified, supplemented or terminated, in whole or in part, as the Collateral Agent or the Administrative Agent (or the Required Lenders or the applicable Lenders(s), 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, the Administrative Agent or any other Secured Party for the payment of any of the Primary Obligations may be sold, exchanged, waived, surrendered or released. None of the Collateral Agent, the Administrative Agent and each other Secured Party shall have any obligation to protect, secure, perfect or insure any Lien at any time held by it as security for any of the Primary Obligations or for the guarantee contained in this Section 2 or any property subject thereto, except to the extent required by applicable law.
2.5Guarantee Absolute and Unconditional. Each Guarantor waives, to the maximum extent permitted by applicable law, any and all notice of the creation, renewal, extension or accrual of any of the Primary Obligations and notice of or proof of reliance by the Collateral Agent, the Administrative Agent or any other Secured Party upon the guarantee contained in this Section 2 or acceptance of the guarantee contained in this Section 2; each of the Primary Obligations, and any obligation contained therein, 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 Section 2; and all dealings between the Loan Parties, on the one hand, and the Collateral Agent, the Administrative 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 Section 2. Each Guarantor waives, to the maximum extent permitted by applicable law, diligence, presentment, protest, demand for payment and notice of default or nonpayment to or upon the Borrower, any other Loan Party with Primary Obligations or any of the other Guarantors with respect to any of the Primary Obligations. Each Guarantor understands and agrees, to the extent permitted by law, that the guarantee contained in this Section 2 shall be construed as a continuing, absolute and unconditional guarantee of payment and not of collection. Each Guarantor hereby waives, to the maximum extent permitted by applicable law, any and all defenses (other than any claim against a Secured Party alleging breach of a contractual provision of any of the Loan Documents) that it may have arising out of or in connection with any and all of the following: (a) the validity or enforceability of the Credit Agreement or any other Loan Document, any of the Primary Obligations 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, the Administrative Agent or any other Secured Party, (b) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by the Borrower or any other Loan Party against the Collateral Agent, the Administrative Agent or any other Secured Party, (c) any change in the time, place, manner or place of payment, amendment, or waiver or increase in any of the Obligations, (d) any exchange, taking, or release of Collateral, (e) any change in the structure or existence of the Borrower, (f) any application of Collateral to any of the
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Obligations, (g) any law, regulation or order of any jurisdiction, or any other event, affecting any term of any Obligation or the rights of the Collateral Agent, the Administrative Agent or any other Secured Party with respect thereto, including, without limitation: (i) the application of any such law, regulation, decree or order, including any prior approval, which would prevent the exchange of any currency (other than Dollars) for Dollars or the remittance of funds outside of such jurisdiction or the unavailability of Dollars in any legal exchange market in such jurisdiction in accordance with normal commercial practice, (ii) a declaration of banking moratorium or any suspension of payments by banks in such jurisdiction or the imposition by such jurisdiction or any Governmental Authority thereof of any moratorium on, the required rescheduling or restructuring of, or required approval of payments on, any indebtedness in such jurisdiction, (iii) any expropriation, confiscation, nationalization or requisition by such country or any Governmental Authority that directly or indirectly deprives the Borrower of any assets or their use, or of the ability to operate its business or a material part thereof, or (iv) any war (whether or not declared), insurrection, revolution, hostile act, civil strife or similar events occurring in such jurisdiction which has the same effect as the events described in clause (i), (ii) or (iii) above (in each of the cases contemplated in clauses (i) through (iv) above, to the extent occurring or existing on or at any time after the date of this Agreement), or (h) any other circumstance whatsoever (other than payment in full in cash of the Primary Obligations guaranteed by it hereunder) (with or without notice to or knowledge of the Borrower, any other Loan Party with Primary Obligations or any Guarantor) that constitutes, or might be construed to constitute, an equitable or legal discharge of the Loan Parties from the Primary Obligations, or of such Guarantor under the guarantee contained in this Section 2, 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, the Administrative Agent and 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 with Primary Obligations, any other Guarantor or any other Person or against any collateral security or guarantee for the Primary Obligations guaranteed by such Guarantor hereunder or any right of offset with respect thereto, and any failure by the Collateral Agent, the Administrative 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 with Primary Obligations, 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, the Administrative Agent or any other Secured Party against any Guarantor. For the purposes hereof “demand” shall include the commencement and continuance of any legal proceedings.
2.6Reinstatement. The guarantee of any Guarantor contained in this Section 2 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 guaranteed by such Guarantor hereunder is rescinded or must otherwise be restored or returned by the Collateral Agent, the Administrative Agent or any other Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Borrower, any other Loan Party with Primary Obligations 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 with Primary Obligations or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made.
2.7Payments. Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent without set-off or counterclaim, in Dollars (or in the case of any amount required to be paid in any other currency pursuant to the requirements of the Credit Agreement or other agreement relating to the respective Obligations, such other currency), at the Administrative Agent’s office specified in Subsection 11.2 of the Credit Agreement or such other address as may be designated in writing by the Administrative Agent to such Guarantor from time to time in accordance with Subsection 11.2 of the Credit Agreement.
SECTION 3.GRANT OF SECURITY INTEREST
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3.1Grant. Each Grantor hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a security interest in all of the Collateral of such Grantor, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of its Obligations (provided, however, that nothing herein or in the definition of “Obligations” shall grant any security interest to secure any obligations or liabilities of a Loan Party under or in connection with any Excluded Swap Obligations for purposes of determining any obligations of a Grantor hereunder) of such Grantor. The term “Collateral,” as to any Grantor, means all of the Grantor’s property and undertaking, including, without limitation, the following property (wherever located) now owned or at any time hereafter acquired by such Grantor or in which such Grantor now has or at any time in the future may acquire any right, title or interest, except as provided in Subsection 3.3:
(a)all Accounts;
(b)all Money (including all cash);
(c)all cash or Cash Equivalents;
(d)all Chattel Paper;
(e)all Contracts;
(f)all Deposit Accounts (including DDAs), all of such Grantor’s Financial Assets credited to such Deposit Accounts and all Security Entitlements in respect thereof;
(g)all Documents of Title;
(h)all Equipment;
(i)all Intangibles;
(j)all Goods;
(k)all Instruments;
(l)all Intellectual Property;
(m)all Inventory;
(n)all Investment Property;
(o)all letters of credit or Letter of Credit Rights;
(p)all Fixtures;
(q)all commercial tort claims constituting Commercial Tort Actions described in Schedule 7 (together with any Commercial Tort Actions subject to a further writing provided in accordance with Subsection 5.2.12);
(r)all accessions to, substitutions for and replacements, proceeds, 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 Intangibles at any time evidencing or relating to any of the foregoing;
(s)all Pledged Securities;
(t)all books and records pertaining to any of the foregoing;
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(u)the Collateral Proceeds Account; and
(v)to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all Supporting Obligations and all collateral security and guarantees given by any Person with respect to any of the foregoing.
3.2[Reserved].
3.3Certain Limited Exceptions. No security interest is or will be granted pursuant to this Agreement or any other Security Document, other than the security interest granted in the Guarantee and Collateral Agreement, in any right, title or interest of any Grantor under or in, and “Collateral” shall not include, the following (subject to the last sentence of this Section 3.3, collectively, the “Excluded Assets”):
(a)any Instruments, Contracts, Chattel Paper, Intangibles, Copyright Licenses, Patent Licenses, Trademark Licenses, Trade Secret Licenses or other contracts or agreements with or issued by Persons other than Parent, a Subsidiary of Parent or an Affiliate thereof, (collectively, “Restrictive Agreements”) that would otherwise be included in the Collateral (and such Restrictive Agreements shall not be deemed to constitute a part of the Collateral) for so long as, and to the extent that, the granting of such a security interest pursuant hereto would result in a breach, default or termination of such Restrictive Agreements (in each case, except to the extent that, pursuant to the PPSA or other applicable law, the granting of security interests therein can be made without resulting in a breach, default or termination of such Restrictive Agreements);
(b)any Equipment or other property that would otherwise be included in the Collateral (and such Equipment or other property shall not be deemed to constitute a part of the Collateral) if such Equipment or other property (x) is subject to a Lien described in clause (h) (with respect to Purchase Money Obligations or Capitalized Lease Obligations) or (o) (with respect to such Liens described in such clause (h)) of the definition of “Permitted Liens” in the Credit Agreement (but in each case only for so long as such Liens are in place) or (y) is subject to any Lien in respect of Hedging Obligations permitted by Subsection 8.6 of the Credit Agreement as a “Permitted Lien” pursuant to clause (h) of the definition thereof in the Credit Agreement (but in each case only for so long as such Liens are in place), and, in the case of such other property, such other property consists solely of (i) cash, Cash Equivalents, Temporary Cash Investments or Investment Grade Securities, together with proceeds, dividends and distributions in respect thereof, (ii) any assets relating to such assets, proceeds, dividends or distributions, or to such Hedging Obligations, and/or (iii) any other assets consisting of, relating to or arising under or in connection with (1) any Hedging Obligations or (2) any other agreements, instruments or documents related to any such Hedging Obligations or to any of the assets referred to in any of subclauses (i) through (iii) of this subclause (y);
(c)any property that would otherwise be included in the Collateral (and such property shall not be deemed to constitute a part of the Collateral) if such property (x) has been sold or otherwise transferred in connection with a Special Purpose Financing (as defined in the Credit Agreement), or (y) constitutes the proceeds or products of any property that has been sold or otherwise transferred pursuant to such Special Purpose Financing (other than any payments received by any Grantor in payment for the sale and transfer of such property in such Special Purpose Financing) or (z) is subject to any Liens securing Indebtedness incurred in compliance with Section 8.1(b)(ix) of the Credit Agreement or permitted by Section 8.6 of the Credit Agreement as “Permitted Liens” permitted pursuant to clause (r) of the definition of such term;
(d)any property (and/or related rights and/or assets) that would otherwise be included in the Collateral (and such property (and/or related rights and/or assets) shall not be deemed to constitute a part of the Collateral) if such property (A) has been sold or otherwise transferred in connection with a Sale and Leaseback Transaction (as defined in the definition of “Exempt Sale and Leaseback Transaction” in the Credit Agreement) permitted under clause (x) or (xviii) of the definition of “Asset Disposition” in the Credit Agreement or under Section 8.4 of the Credit Agreement, or (B) is subject to any Liens permitted under Subsection 8.6 of the Credit Agreement which relate to property subject to any such Sale and Leaseback Transaction (as defined in the definition of “Exempt Sale and Leaseback Transaction” in the Credit Agreement) or intangibles related thereto (but only for so long as
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such Liens are in place); provided that, notwithstanding the foregoing, a security interest of the Collateral Agent shall attach to any money, securities or other consideration received by any Grantor as consideration for the sale or other disposition of such property as and to the extent such consideration would otherwise constitute Collateral;
(e)Capital Stock (including for these purposes any investment or indebtedness deemed to be Capital Stock for U.S. tax purposes) that is described in the proviso to the definition of “Pledged Stock”;
(f)any Money, cash, checks, other negotiable instruments, funds and other evidence of payment held in any Deposit Account of Parent in the nature of a security deposit with respect to obligations for the benefit of Parent, which must be held for or returned to the applicable counterparty under applicable law or pursuant to Contractual Obligations;
(g)[reserved];
(h)any interest in leased real property (including Fixtures related thereto) (and there shall be no requirement to deliver landlord lien waivers, estoppels or collateral access letters);
(i)any fee interest in owned real property (including Fixtures related thereto) if the fair market value of such fee interest is less than $12,500,000;
(j)any Vehicles and any assets subject to certificate of title;
(k)Letter of Credit Rights and commercial tort claims individually with a value of less than $7,500,000;
(l)assets to the extent the granting or perfecting of a security interest in such assets would result in costs or other consequences to Parent or any of its Subsidiaries as reasonably determined in writing by the Borrower and the Administrative Agent, that are excessive in view of the benefits that would be obtained by the Secured Parties;
(m)those assets over which the granting of security interests in such assets would be prohibited by contract permitted under the Credit Agreement, applicable law or regulation or the organizational or joint venture documents of any non-wholly owned Subsidiary (including permitted liens, leases and licenses) (in each case, after giving effect to the applicable anti-assignment provisions of the PPSA, other than proceeds and receivables thereof to the extent that their assignment is expressly deemed effective or enforceable under the PPSA notwithstanding such prohibitions), or to the extent that such security interests would result in adverse tax consequences to Parent, Holdings, Borrower or any one or more of its Subsidiaries as reasonably determined in writing by the Borrower and notified in writing to the Collateral Agent (it being understood that the Lenders shall not require Parent or any of its subsidiaries to enter into any security agreements or pledge agreements governed by foreign law (other than the laws of the United States of America and any of its states));
(n)any assets specifically requiring perfection through control (including cash, cash equivalents, deposit accounts or other bank or securities accounts), to the extent the security interest in such asset is not automatically perfected by filings under the PPSA or, in the case of Pledged Stock, by being held by the Collateral Agent or an Additional Agent as agent for the Collateral Agent, other than (i) prior to the Discharge of ABL Obligations, DDAs and Blocked Accounts (as defined in the ABL Credit Agreement) (in each case only to the extent required pursuant to Subsection 4.16 of the ABL Credit Agreement), and (ii) the Collateral Proceeds Account (to the extent required pursuant to this Agreement), and, prior to the Discharge of ABL Obligations, any Collateral Proceeds Account under and as defined in the ABL Guarantee and Collateral Agreement (to the extent required pursuant to the ABL Collateral Agreement);
(o)Foreign Intellectual Property;
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(p)any aircrafts, airframes, aircraft engines, helicopters, vessels or rolling stock or any equipment or other asset constituting a part thereof;
(q)any property that would otherwise constitute ABL Priority Collateral but is an Excluded Asset (as such term is defined in the ABL Guarantee and Collateral Agreement);
(r)any Capital Stock and other securities of a Subsidiary to the extent that the pledge of or grant of any other Lien on such Capital Stock or other securities for the benefit of any holders of securities results in Parent or any of its Subsidiaries being required to file separate financial statements for such Subsidiary with the Securities and Exchange Commission (or any other governmental authority) pursuant to either Rule 3-10 or 3-16 of Regulation S-X under the Securities Act, or any other law, rule or regulation as in effect from time to time, but only to the extent necessary to not be subject to such requirement;
(s)with respect to any Grantor’s grant of security in Trademarks, such grant of security shall be limited to a grant by such Grantor of a security interest in (and not constitute an assignment of) all of the Grantor’s right, title and interest in such Trademarks;
(t)Consumer Goods; and
(u)the last day of the term of any lease or agreement for lease of rental property.
Notwithstanding the foregoing clauses (a) through (u), no “Collateral” as defined in the ABL Guarantee and Collateral Agreement shall constitute Excluded Assets.
For greater clarity, each Grantor’s grant of security in the Trademarks under this Agreement shall constitute a grant by such Grantor of a security interest, and a charge, hypothecation and pledge of, all of such Grantor’s right, title and interest in such Trademarks in favour of the Collateral Agent and not constitute an assignment thereof.
3.4Intercreditor Relations. Notwithstanding anything herein to the contrary, it is the understanding of the parties that the Liens granted pursuant to Subsection 3.1 and 3.2 herein shall (w) with respect to all Collateral other than Collateral constituting Term Loan Priority Collateral, prior to the Discharge of the ABL Obligations, be subject and subordinate to the Liens granted to the ABL Agent for the benefit of the holders of the ABL Obligations to secure the ABL Obligations pursuant to the ABL Guarantee and Collateral Agreement, and (x) with respect to Term Loan Priority Collateral, prior to the Discharge of the ABL Obligations, be senior in priority to the Liens granted to the ABL Agent for the benefit of the holders of the ABL Obligations to secure the ABL Obligations pursuant to the ABL Guarantee and Collateral Agreement. The Collateral Agent acknowledges and agrees that the relative priority of the Liens granted to the Collateral Agent and the ABL Agent may be determined solely pursuant to the applicable Intercreditor Agreements, and not by priority as a matter of law or otherwise. Notwithstanding anything herein to the contrary, the Liens and security interest granted to the Collateral Agent pursuant to this Agreement and the exercise of any right or remedy by the Collateral Agent hereunder are subject to the provisions of the ABL Intercreditor Agreement. In the event of any conflict between the terms of the ABL Intercreditor Agreement and this Agreement, the terms of the ABL Intercreditor Agreement shall govern and control as among the Collateral Agent and the ABL Agent. In the event of any such conflict, each Grantor may act (or omit to act) in accordance with such Intercreditor Agreement, and shall not be in breach, violation or default of its obligations hereunder by reason of doing so. Notwithstanding any other provision hereof, for so long as any ABL Obligations remain outstanding, any obligation hereunder to deliver to the Collateral Agent any Collateral constituting ABL Priority Collateral shall be satisfied by causing such Collateral to be delivered to the ABL Agent to be held in accordance with the ABL Intercreditor Agreement.
3.5Attachment of Liens. Each Grantor agrees that the Collateral Agent, each Lender and each of the other Secured Parties have given value and that the pledges and security interests created by this Agreement are intended to attach (a) with respect to Collateral that is now in existence, upon execution of this Agreement, and (b) with respect to Collateral that comes into existence in the future, upon such Grantor acquiring rights in the Collateral or the power to transfer rights in the Collateral to the
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Collateral Agent. In each case, the parties do not intend to postpone the attachment of any security interests created by this Agreement.
SECTION 4.REPRESENTATIONS AND WARRANTIES
4.1Representations and Warranties of Each Guarantor. 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 Guarantor hereby represents and warrants to the Collateral Agent and each other Secured Party that the representations and warranties set forth in Section 5 of the Credit Agreement as they relate to such Guarantor or to the Loan Documents to which such Guarantor is a party, each of which representations and warranties is hereby incorporated herein by reference, are true and correct in all material respects, and the Collateral Agent and each other Secured Party shall be entitled to rely on each of such representations and warranties as if fully set forth herein; provided that each reference in each such representation and warranty to the Borrower’s knowledge shall, for the purposes of this Subsection 4.1, be deemed to be a reference to such Guarantor’s knowledge.
4.2Representations and Warranties of Each Grantor. 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 other Secured Party that, in each case after giving effect to the Transactions:
4.2.1Title; No Other Liens. Except for the security interests granted to the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement and the other Liens permitted to exist on such Grantor’s Collateral by the Credit Agreement, such Grantor owns each item of such Grantor’s Collateral free and clear of any and all Liens securing Indebtedness. Except as set forth on Schedule 3, to the knowledge of such Grantor, no currently effective financing statement or other similar public notice with respect to any Lien securing Indebtedness on all or any part of such Grantor’s Collateral is on file or of record in any public office in Canada or any province or territory thereof, except, in each case, such as have been filed in favor of the Collateral Agent for the benefit of the Secured Parties pursuant to this Agreement or as are permitted by the Credit Agreement or any other Loan Document or for which termination statements will be delivered on the Closing Date. For greater certainty, the following registrations filed against Unistrut Canada Limited (which is a predecessor corporation of the Initial Grantor) under the Corporate Security Registration Act (“CSRA”) relate to historical debt that has been repaid in full prior to the Closing Date and evidence Liens that have been fully and finally released in their entirety by the holders of such Liens namely, Bank of Boston Canada, The First National Bank of Boston Canada and Boston Australia Limited prior to the Closing Date: (i) CSRA Number 078748, Reference File Number 900787482, filed on January 31, 1986 in favour of Bank of Boston Canada; (ii) CSRA Number 078749, Reference File Number 900787491, filed on January 31, 1986 in favour of The First National Bank of Boston; and (iii) CSRA Number 078750, Reference File Number 900787509, filed on January 31, 1986 in favour of Boston Australia Limited (collectively, the “CSRA Registrations”).
4.2.2Perfected First Priority Liens.
(a)This Agreement is effective to create, as collateral security for the Obligations of such Grantor, valid and enforceable Liens on such Grantor’s Collateral in favor of the Collateral Agent for the benefit of the Secured Parties, except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance or preference, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
(b)Except with regard to (i) Liens (if any) on Specified Assets and (ii) any rights in favor of the Canadian government as required by law (if any), upon the completion of the Filings and, with respect to Instruments, Chattel Paper and Documents of Title upon the earlier of such Filing or the delivery to and continuing possession by the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with the applicable Intercreditor Agreement, of all Instruments, Chattel Paper and Documents a security interest in which is perfected by
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possession, and the obtaining and maintenance of “control” (as described in the PPSA or STA, as applicable) by the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable (or their respective agents appointed for purposes of perfection), in accordance with the applicable Intercreditor Agreement of all Deposit Accounts, Blocked Accounts, the Collateral Proceeds Account, electronic Chattel Paper and Letter of Credit Rights, a security interest in which is perfected by “control” and in the case of Commercial Tort Actions (other than such Commercial Tort Actions listed on Schedule 7 on the date of this Agreement), the taking of the actions required by Subsection 5.2.12 herein, the Liens created pursuant to this Agreement will constitute valid Liens on and (to the extent provided herein) perfected security interests in such Grantor’s Collateral in favor of the Collateral Agent for the benefit of the Secured Parties, and will be prior to all other Liens of all other Persons securing Indebtedness, in each case other than Permitted Liens (and subject to any applicable Intercreditor Agreement), and enforceable as such as against all other Persons other than Ordinary Course Transferees, except to the extent that the recording of an assignment or other transfer of title to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent (in accordance with the applicable Intercreditor Agreement) or the recording of other applicable documents in CIPO may be necessary for perfection or enforceability, and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance or preference, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing. As used in this Subsection 4.2.2(b), the following terms shall have the following meanings:
Filings”: the filing or recording of (i) the Financing Statements as set forth in Schedule 3, (ii) this Agreement or a notice thereof with respect to the Intellectual Property as set forth in Schedule 3, and (iii) any filings after the Closing Date in any other jurisdiction as may be necessary under any Requirement of Law.
Financing Statements”: the financing statements delivered to the Collateral Agent by such Grantor on or before the Closing Date for filing in the jurisdictions listed in Schedule 4.
Ordinary Course Transferees”: (i) with respect to goods only, buyers in the ordinary course of business and lessees in the ordinary course of business to the extent provided in Section 28 (or equivalent provisions) of the PPSA as in effect from time to time in the relevant jurisdiction, (ii) with respect to intangibles only, licensees in the ordinary course of business to the extent provided in Section 28 (or equivalent provisions) of the PPSA as in effect from time to time in the relevant jurisdiction and (iii) any other Person who is entitled to take free of the Lien pursuant to the applicable PPSA as in effect from time to time in the relevant jurisdiction.
Permitted Liens”: Liens permitted pursuant to the Credit Agreement, including, without limitation, those permitted to exist pursuant to Section 8.6 of the Credit Agreement.
Specified Assets”: the following property and assets of such Grantor:
(1)Patents, Patent Licenses, Designs, Trademarks and Trademark Licenses to the extent that (a) Liens thereon cannot be perfected by the filing of financing statements under the PPSA or by the filing and acceptance thereof in CIPO or (b) such Patents, Patent Licenses, Designs, Trademarks and Trademark Licenses are not, individually or in the aggregate, material to the business of the Borrower and its Subsidiaries taken as a whole;
(2)Copyrights and Copyright Licenses with respect thereto and Accounts or receivables arising therefrom to the extent that the PPSA as in effect from time to time in the relevant jurisdiction is not applicable to the creation or perfection of Liens thereon;
(3)Collateral for which the perfection of Liens thereon requires filings in or other actions under the laws of jurisdictions outside Canada or any province or territory thereof;
(4)[reserved];
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(5)Fixtures, Vehicles, any other assets subject to certificates of title and Money; and Cash Equivalents (other than Cash Equivalents constituting Investment Property to the extent a security interest is perfected by the filing of a financing statement);
(6)Proceeds of Accounts or Inventory which do not themselves constitute Collateral or which do not constitute identifiable cash proceeds or which have not yet been transferred to or deposited in the Collateral Proceeds Account (if any); and,
(7)Uncertificated securities (to the extent a security interest is not perfected by the filing of a financing statement).
4.2.3Jurisdiction of Organization and Registered Office. On the date hereof, such Grantor’s jurisdiction of organization and registered office is specified on Schedule 4.
4.2.4[Reserved].
4.2.5[Reserved].
4.2.6Patents, Designs, Copyrights and Trademarks. Schedule 5 lists all material Trademarks, material Copyrights, material Patents and material Designs, in each case, registered in CIPO and owned by such Grantor in its own name as of the date hereof, and all material Trademark Licenses, all material Copyright Licenses and all material Patent Licenses (including, without limitation, material Trademark Licenses for registered Trademarks, material Copyright Licenses for registered Copyrights and material Patent Licenses for registered Patents) owned by such Grantor in its own name as of the date hereof, in each case, that is solely Canadian Intellectual Property.
4.3Representations and Warranties of Each Grantor. To induce the Collateral Agent, the Administrative 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 other Secured Party that:
4.3.1Except as provided in Subsection 3.3, the shares of Pledged Stock pledged by such Grantor hereunder constitute (i) in the case of shares of a Subsidiary formed under the laws of Canada or a province or territory thereof (a “Canadian Subsidiary”), all the issued and outstanding shares of all classes of the Capital Stock of such Canadian Subsidiary owned by such Grantor and (ii) in the case of any Pledged Stock constituting Capital Stock of any Foreign Subsidiary, as of the Closing Date such percentage (not more than 65%) as is specified on Schedule 2 of all the issued and outstanding shares of all classes of the Capital Stock of each such Foreign Subsidiary owned by such Grantor.
4.3.2[Reserved].
4.3.3Such Grantor is the record and beneficial owner of, and has good title to, the Pledged Securities pledged by it hereunder, free of any and all Liens securing Indebtedness owing to any other Person, except the security interest created by this Agreement and Liens permitted by the Credit Agreement (including, without limitation, those permitted to exist pursuant to Section 8.6 of the Credit Agreement).
4.3.4Upon the delivery to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, of the certificates evidencing the Pledged Securities held by such Grantor together with executed undated stock powers or other instruments of transfer, the security interest created in such Pledged Securities constituting certificated securities by this Agreement, assuming the continuing possession of such Pledged Securities by the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, will constitute a valid, perfected first priority (subject, in terms of priority only, to the priority of the Liens of the ABL Agent, the applicable Collateral Representative and any Additional Agent) security interest in such Pledged Securities to the extent provided in and governed by the PPSA, enforceable in accordance with its terms against all creditors of such Grantor and any Persons purporting
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to purchase such Pledged Securities from such Grantor to the extent provided in and governed by the PPSA, in each case subject to Liens permitted pursuant to the Credit Agreement, including Permitted Liens (and any applicable Intercreditor Agreement), and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance or preference, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
4.3.5Upon the earlier of (x) (to the extent a security interest in uncertificated securities may be perfected by the filing of a financing statement) the filing of the financing statements listed on Schedule 3 hereto and (y) the obtaining and maintenance of “control” (as described in the PPSA) by the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent (or their respective agents appointed for purposes of perfection), as applicable, in accordance with any applicable Intercreditor Agreement, of all Pledged Securities that constitute uncertificated securities, the security interest created by this Agreement in such Pledged Securities that constitute uncertificated securities, will constitute a valid, perfected first priority (subject, in terms of priority only, to the priority of the Liens of the ABL Agent, the applicable Collateral Representative and any Additional Agent) security interest in such Pledged Securities constituting uncertificated securities to the extent provided in and governed by the PPSA, enforceable in accordance with its terms against all creditors of such Grantor and any persons purporting to purchase such Pledged Securities from such Grantor, to the extent provided in and governed by the PPSA, in each case subject to Liens permitted pursuant to the Credit Agreement, including Permitted Liens (and any applicable Intercreditor Agreement), and except as to enforcement, as may be limited by applicable domestic or foreign bankruptcy, insolvency, fraudulent conveyance or preference, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights’ generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.
SECTION 5.COVENANTS
5.1Covenants of Each Guarantor. Each Guarantor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of (i) the date upon which the Loans, and all other Obligations then due and owing, shall have been paid in full in cash, and the Commitments shall have terminated, (ii) the sale or other disposition of all of the Capital Stock of such Guarantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, if such Guarantor is a Subsidiary Guarantor, any other transaction or occurrence as a result of which such Guarantor ceases to be a Restricted Subsidiary of Parent, in each case that is permitted under the Credit Agreement or (iii) such Guarantor becoming an Excluded Subsidiary, such Guarantor 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 Guarantor or any of its Restricted Subsidiaries.
5.2Covenants of Each Grantor. Each Grantor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earliest to occur of (i) the date upon which the Loans, and all other Obligations then due and owing shall have been paid in full in cash, and the Commitments shall have terminated, (ii) the sale or other disposition of all of the Capital Stock of such Grantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, if such Grantor is a Subsidiary of Parent, any other transaction or occurrence as a result of which such Grantor ceases to be a Restricted Subsidiary of Parent, in each case that is permitted under the Credit Agreement or (iii) such Grantor becoming an Excluded Subsidiary:
5.2.1Delivery of Instruments and Chattel Paper. If any amount payable under or in connection with any of such Grantor’s Collateral shall be or become evidenced by any Instrument or Chattel Paper, such Grantor shall (except as provided in the following sentence) be entitled to retain possession of all Collateral of such Grantor evidenced by any Instrument or Chattel Paper, and shall hold all such Collateral in trust for the Collateral Agent, for the benefit of the Secured Parties. In the event that an Event of Default shall have occurred and be continuing, upon the request of the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, such Instrument or Chattel Paper shall be
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promptly delivered to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, duly indorsed in a manner reasonably satisfactory to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, to be held as Collateral pursuant to this Agreement. Such Grantor shall not permit any other Person to possess any such Collateral at any time other than in connection with any sale or other disposition of such Collateral in a transaction permitted by the Credit Agreement or as contemplated by any applicable Intercreditor Agreement.
5.2.2[Reserved].
5.2.3Payment of Obligations. Such Grantor will pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all material taxes, assessments and governmental charges or levies imposed upon such Grantor’s Collateral or in respect of income or profits therefrom, as well as all material claims of any kind (including, without limitation, material claims for labor, materials and supplies) against or with respect to such Grantor’s Collateral, except that no such tax, assessment, charge, levy or claim need be paid or satisfied if the amount or validity thereof is currently being contested in good faith by appropriate proceedings and reserves in conformity with GAAP with respect thereto have been provided on the books of such Grantor and except to the extent that the failure to do so, in the aggregate, would not reasonably be expected to have a Material Adverse Effect.
5.2.4Maintenance of Perfected Security Interest; Further Documentation.
(a)Such Grantor shall use commercially reasonable efforts to maintain the security interest created by this Agreement in such Grantor’s Collateral as a perfected security interest as described in Subsection 4.2.2 and to defend the security interest created by this Agreement in such Grantor’s Collateral against the claims and demands of all Persons whomsoever (subject to the other provisions hereof).
(b)Such Grantor will furnish to the Collateral Agent from time to time statements and schedules further identifying and describing such Grantor’s Term Loan Priority Collateral and such other reports in connection with such Grantor’s Term Loan Priority Collateral as the Collateral Agent may reasonably request in writing, all in reasonable detail.
(c)At any time and from time to time, upon the written request of the Collateral Agent, and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such Grantor, including, without limitation, the filing of any financing or continuation statements under the PPSA (or other similar laws) in effect in any Canadian jurisdiction with respect to the security interests created hereby provided further that the Borrower or such Grantor will not be required to (w) take any action in any jurisdiction other than Canada, or required by the laws of any such jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of Canada or to perfect any security interests (or other Liens) in any Collateral (other than with respect to a Foreign Subsidiary which is a Subsidiary Guarantor as of the date hereof or becomes a Subsidiary Guarantor pursuant to the Credit Agreement), (x) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except (A) so long as the ABL Credit Agreement is in effect, as required by Subsection 4.16 of the ABL Credit Agreement and (B) in the case of Collateral that constitutes Capital Stock or Pledged Notes in certificated form, delivering such Capital Stock or Pledged Notes to the Collateral Agent (or another Person as required under any applicable Intercreditor Agreement), (y) deliver landlord lien waivers, estoppels or collateral access letters or (z) file any fixture filing with respect to any security interest in Fixtures affixed to or attached to any real property constituting Excluded Assets.
(d)The Collateral Agent may grant extensions of time for the creation and perfection of security interests in, or the obtaining a delivery of documents or other deliverables with respect to, particular assets of any Grantor where it determines that such action cannot be accomplished without
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undue effort or expense by the time or times at which it would otherwise be required to be accomplished by this Agreement or any other Security Documents.
(e)[reserved].
5.2.5Changes in Name, Jurisdiction of Organization, Registered Office, etc. Such Grantor will give prompt written notice to the Collateral Agent, of any change in its name, jurisdiction of organization, registered office, chief executive office or its location of collateral (other than with respect to inventory in transit) to a location outside of Ontario, the United States of America, or any other jurisdiction in which the Collateral Agent has a perfected security interest against the Grantor (whether by amalgamation or otherwise) (and in any event within 30 days of such change); provided that, in each case, promptly thereafter, such Grantor shall deliver to the Collateral Agent copies (or other evidence of filing) of all additional filed financing statements and other documents reasonably necessary to maintain the validity, perfection and priority of the security interests created hereunder and other documents reasonably requested by the Collateral Agent to maintain the validity, perfection and priority of the security interests as and to the extent provided for herein.
5.2.6[Reserved].
5.2.7Pledged Stock. In the case of each Grantor that is an Issuer, such Issuer agrees that (i) it will be bound by the terms of this Agreement relating to the Pledged Stock issued by it and will comply with such terms insofar as such terms are applicable to it, (ii) it will notify the Collateral Agent promptly in writing of the occurrence of any of the events described in Subsection 5.3.1 with respect to the Pledged Stock issued by it and (iii) the terms of Subsections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with respect to all actions that may be required of it pursuant to Subsection 6.3(c) or 6.7 with respect to the Pledged Stock issued by it.
5.2.8[Reserved].
5.2.9Maintenance of Records. Such Grantor will keep and maintain at its own cost and expense reasonably satisfactory and complete records of its Collateral, including, without limitation, a record of all payments received and all credits granted with respect to such Collateral; provided that with respect to the ABL Priority Collateral, the satisfactory maintenance of such records shall be determined in good faith by such Grantor or the Borrower.
5.2.10Acquisition of Intellectual Property. Concurrently with the delivery of the annual Compliance Certificate pursuant to Subsection 7.2(a) of the Credit Agreement, such Grantor will notify the Collateral Agent of any acquisition (including those applied for by and registered or issued to the Grantors) by such Grantor of (i) any registration of any material Canadian Copyright, Design, Patent or Trademark or (ii) any exclusive rights under a material Canadian Copyright License, Patent License or Trademark License constituting Collateral, and shall take such actions as may be reasonably necessary (but only to the extent such actions are within such Grantor’s control) to perfect the security interest granted to the Collateral Agent and the other Secured Parties therein, to the extent provided herein in respect of any Canadian Copyright, Patent or Trademark constituting Collateral on the date hereof, by (x) the execution and delivery of an amendment or supplement to this Agreement (or amendments to any such agreement previously executed or delivered by such Grantor) and/or (y) the making of appropriate filings (I) of financing statements under the PPSA of any applicable jurisdiction and/or (II) in CIPO.
5.2.11[Reserved].
5.2.12Commercial Tort Actions. All Commercial Tort Actions of each Grantor in existence on the date of this Agreement in an amount of $7,500,000 or greater, known to such Grantor on the date hereof, are described in Schedule 7 hereto. If any Grantor shall at any time after the date of this Agreement acquire a Commercial Tort Action in an amount of $7,500,000, such Grantor shall promptly notify the Collateral Agent thereof in a writing signed by such Grantor and describing the details thereof and shall grant to the Collateral Agent in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement.
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5.2.13[Reserved].
5.2.14Protection of Trademarks. Such Grantor shall, with respect to any Trademarks, use commercially reasonable efforts not to cease the use of any of such Trademarks or fail to maintain the level of the quality of products sold and services rendered under any of such Trademarks at a level at least substantially consistent with the quality of such products and services as of the date hereof, and shall use commercially reasonable efforts to take all steps reasonably necessary to ensure that licensees of such Trademarks use such consistent standards of quality, except, in each case, as would not reasonably be expected to have a Material Adverse Effect.
5.2.15Protection of Intellectual Property. Subject to and except as permitted by the Credit Agreement, such Grantor shall use commercially reasonable efforts not to do any act or omit to do any act whereby any of the Intellectual Property of the Grantor may lapse, expire, or become abandoned, or unenforceable, except as would not reasonably be expected to have a Material Adverse Effect.
5.2.16Assignment of Letter of Credit Rights. In the case of any Letter of Credit Rights of any Grantor in any letter of credit exceeding $7,500,000 in value acquired following the Closing Date, such Grantor shall use its commercially reasonable efforts to promptly obtain the consent of the issuer thereof and any nominated person thereon to the assignment of the proceeds of the related letter of credit in accordance with applicable law.
5.3Covenants of Each Grantor. Each Grantor covenants and agrees with the Collateral Agent and the other Secured Parties that, from and after the date of this Agreement until the earlier to occur of (i) the Loans, and all other Obligations then due and owing shall have been paid in full in cash and the Commitments shall have terminated, (ii) the sale or other disposition of all of the Capital Stock of such Grantor (other than to Parent, Holdings, the Borrower or a Subsidiary Guarantor), or, if such Grantor is a Subsidiary of Parent, any other transaction or occurrence as a result of which such Grantor ceases to be a Restricted Subsidiary of the Borrower, in each case that is permitted under the Credit Agreement or (iii) such Grantor becoming an Excluded Subsidiary.
5.3.1Additional Shares. If such Grantor shall, as a result of its ownership of its Pledged Stock, become entitled to receive or shall receive any stock certificate (including, without limitation, any stock certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any reorganization), stock option or similar rights in respect of the Capital Stock of any Issuer, whether in addition to, in substitution of, as a conversion of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the same as the agent of the Collateral Agent and the other Secured Parties, hold the same in trust for the Collateral Agent and the other Secured Parties and deliver the same forthwith to the Collateral Agent (who will hold the same on behalf of the Secured Parties), or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, in the exact form received, duly indorsed by such Grantor to the Collateral Agent, or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, if required, together with an undated stock power covering such certificate duly executed in blank by such Grantor, to be held by the Collateral Agent, or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, subject to the terms hereof, as additional collateral security for the Obligations (subject to Subsection 3.3 and provided that in no event shall there be pledged, nor shall any Grantor be required to pledge, more than 65% of any series of the outstanding Capital Stock (including for these purposes any investment or indebtedness deemed to be Capital Stock for U.S. tax purposes) of any Foreign Subsidiary or any of the Capital Stock of a Subsidiary of a Foreign Subsidiary pursuant to this Agreement). If an Event of Default shall have occurred and be continuing, any sums paid upon or in respect of the Pledged Stock upon the liquidation or dissolution of any Issuer (except any liquidation or dissolution of any Subsidiary of Parent in accordance with the Credit Agreement) shall be paid over to the Collateral Agent, or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement to be held by the Collateral Agent, or the ABL Agent, any applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement subject to the terms hereof as additional collateral security
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for the Obligations, and in case any distribution of capital shall be made on or in respect of the Pledged Stock or any property shall be distributed upon or with respect to the Pledged Stock pursuant to the recapitalization or reclassification of the capital of any Issuer or pursuant to the reorganization thereof, the property so distributed shall, unless otherwise subject to a perfected security interest in favor of the Collateral Agent, be delivered to the Collateral Agent, or the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, to be held by the Collateral Agent, or the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement subject to the terms hereof as additional collateral security for the Obligations, in each case except as otherwise provided by any applicable Intercreditor Agreement. If any sums of money or property so paid or distributed in respect of the Pledged Stock shall be received by such Grantor, such Grantor shall, until such money or property is paid or delivered to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement hold such money or property in trust for the Secured Parties, segregated from other funds of such Grantor, as additional collateral security for the Obligations.
5.3.2[Reserved].
5.3.3Pledged Notes. Such Grantor shall, on the date of this Agreement (or on such later date upon which it becomes a party hereto pursuant to Subsection 9.15), deliver to the Collateral Agent, or the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, all Pledged Notes then held by such Grantor (excluding any Pledged Note the principal amount of which does not exceed $7,500,000), endorsed in blank or, at the request of the Collateral Agent, endorsed to the Collateral Agent. Furthermore, within ten Business Days (or such longer period as may be agreed by the Collateral Agent in its sole discretion) after any Grantor obtains a Pledged Note with a principal amount in excess of $7,500,000, such Grantor shall cause such Pledged Note to be delivered to the Collateral Agent, the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, endorsed in blank or, at the request of the Collateral Agent, or the ABL Agent, the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement, endorsed to the Collateral Agent, or the ABL Agent or the applicable Collateral Representative or any Additional Agent, as applicable, in accordance with any applicable Intercreditor Agreement.
5.3.4Maintenance of Security Interest. Such Grantor shall use commercially reasonable efforts to defend the security interest created by this Agreement in such Grantor’s Collateral against the claims and demands of all Persons whomsoever. At any time and from time to time, upon the written request of the Collateral Agent and at the sole expense of such Grantor, such Grantor will promptly and duly execute and deliver such further instruments and documents and take such further actions as the Collateral Agent may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the rights and powers herein granted by such Grantor provided further that the Borrower or such Grantor will not be required to (x) take any action in any jurisdiction other than Canada, or required by the laws of any such jurisdiction, in order to create any security interests (or other Liens) in assets located or titled outside of Canada or to perfect any security interests (or other Liens) in any Collateral (other than with respect to a Foreign Subsidiary which is a Subsidiary Guarantor as of the date hereof or becomes a Subsidiary Guarantor pursuant to the Credit Agreement), (y) deliver control agreements with respect to, or confer perfection by “control” over, any deposit accounts, bank or securities account or other Collateral, except (A) as required by Subsection 4.16 of the ABL Credit Agreement so long as the ABL Credit Agreement is in effect and (B) in the case of Collateral that constitutes Capital Stock or intercompany notes in certificated form, delivering such Capital Stock or intercompany notes (in the case of intercompany notes, limited to any such note with a principal amount in excess of $7.5 million) to the Collateral Agent (or another Person as required under any applicable Intercreditor Agreement) or (z) deliver landlord lien waivers, estoppels or collateral access letters.
5.3.5ULC Shares. Such Grantor acknowledges that certain of the Collateral of such Grantor may now or in the future consist of ULC Shares, and that it is the intention of the Collateral Agent and each Grantor that neither the Collateral Agent nor any other Secured Party should under any circumstances prior to realization thereon be held to be a “member” or a “shareholder”, as applicable, of a
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ULC for the purposes of any ULC Laws. Therefore, notwithstanding any provisions to the contrary contained in this Agreement, the Credit Agreement, the Intercreditor Agreements or any other Loan Document, where a Grantor is the registered owner of ULC Shares which are Collateral of such Grantor, such Grantor shall remain the sole registered owner of such ULC Shares until such time as such ULC Shares are effectively transferred into the name of the Collateral Agent, any other Secured Party, or any other Person on the books and records of the applicable ULC. Accordingly, each Grantor shall be entitled to receive and retain for its own account any dividend on or other distribution, if any, with respect to such ULC Shares (except for any dividend or distribution comprised of certificated securities which are Collateral of such Grantor, which shall be delivered to the Collateral Agent to hold hereunder) and shall have the right to vote such ULC Shares and to control the direction, management and policies of the applicable ULC to the same extent as such Grantor would if such ULC Shares were not pledged to the Collateral Agent pursuant hereto. Nothing in this Agreement, the Credit Agreement, the Intercreditor Agreements or any other Loan Document is intended to, and nothing in this Agreement, the Credit Agreement or any other Loan Document shall, constitute the Collateral Agent, any other Secured Party, or any other Person other than the applicable Grantor, a member or shareholder of a ULC for the purposes of any ULC Laws (whether listed or unlisted, registered or beneficial), until such time as notice is given to such Grantor and further steps are taken pursuant hereto or thereto so as to register the Collateral Agent, any other Secured Party, or such other Person, as specified in such notice, as the holder of the ULC Shares. To the extent any provision hereof would have the effect of constituting the Collateral Agent or any other Secured Party as a member or a shareholder, as applicable, of any ULC prior to such time, such provision shall be severed herefrom and shall be ineffective with respect to ULC Shares which are Collateral of any Grantor without otherwise invalidating or rendering unenforceable this Agreement or invalidating or rendering unenforceable such provision insofar as it relates to Collateral of any Grantor which is not ULC Shares. Except upon the exercise of rights of the Collateral Agent to sell, transfer or otherwise dispose of ULC Shares in accordance with this Agreement, each Grantor shall not cause or permit, or enable an issuer of Pledged Securities that is a ULC to cause or permit, the Collateral Agent or any other Secured Party to: (a) be registered as a shareholder or member of such issuer; (b) have any notation entered in their favour in the share register of such issuer; (c) be held out as shareholders or members of such issuer; (d) receive, directly or indirectly, any dividends, property or other distributions from such issuer by reason of the Collateral Agent holding security interests over the ULC Shares; or (e) act as a shareholder of such issuer, or exercise any rights of a shareholder including the right to attend a meeting of shareholders of such Issuer or to vote its ULC Shares.
SECTION 6.REMEDIAL PROVISIONS
6.1Certain Matters Relating to Accounts.
(a)At any time and from time to time after the occurrence and during the continuance of an Event of Default, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement), the Collateral Agent shall have the right to make test verifications of the Accounts Receivable constituting Collateral in any reasonable manner and through any reasonable medium that it reasonably considers advisable, and the relevant Grantor shall furnish all such assistance and information as the Collateral Agent may reasonably require in connection with such test verifications. At any time and from time to time after the occurrence and during the continuance of an Event of Default, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement) upon the Collateral Agent’s reasonable request and at the expense of the relevant Grantor, such Grantor shall cause independent public accountants or others reasonably satisfactory to the Collateral Agent to furnish to the Collateral Agent reports showing reconciliations, aging and test verifications of, and trial balances for, the Accounts Receivable constituting Collateral.
(b)[reserved].
(c)At any time and from time to time after the occurrence and during the continuance of an Event of Default specified in Subsection 9.1(a) of the Credit Agreement, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement), at the Collateral Agent’s request, each Grantor shall deliver to the Collateral Agent copies or, if required by the Collateral Agent for the enforcement thereof or foreclosure thereon, originals of all documents held by such Grantor evidencing, and relating to, the agreements and transactions that gave rise to such Grantor’s
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Accounts Receivable constituting Collateral, including, without limitation, all statements relating to such Grantor’s Accounts Receivable constituting Collateral and all orders, invoices and shipping receipts.
(d)So long as no Event of Default has occurred and is continuing, the Collateral Agent shall instruct the Collateral Account Bank to promptly remit any funds on deposit in each Grantor’s Collateral Proceeds Account to such Grantor’s General Fund Account or any other account designated by such Grantor. In the event that an Event of Default has occurred and is continuing (and subject to any applicable Intercreditor Agreement), the Collateral Agent at its option may require that each Collateral Proceeds Account of each Grantor be established at the Collateral Agent or another institution reasonably acceptable to the Collateral Agent. In the event that an Event of Default has occurred and is continuing, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement), the Collateral Agent and the Grantors agree that the Collateral Agent, at its option, may require that the General Fund Account of each Grantor be established at the Collateral Agent or another institution reasonably acceptable to the Collateral Agent. Each Grantor shall have the right, at any time and from time to time, to withdraw such of its own funds from its own General Fund Account, and to maintain such balances in its General Fund Account, as it shall deem to be necessary or desirable.
6.2Communications with Obligors; Grantors Remain Liable.
(a)The Collateral Agent in its own name or in the name of others, may at any time and from time to time after the occurrence and during the continuance of an Event of Default specified in Subsection 9.1(a) of the Credit Agreement, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement) communicate with obligors under the Accounts Receivable constituting Collateral and parties to the Contracts (in each case, to the extent constituting Collateral) to verify with them to the Collateral Agent’s satisfaction the existence, amount and terms of any Accounts Receivable or Contracts.
(b)Upon the request of the Collateral Agent at any time after the occurrence and during the continuance of an Event of Default specified in Subsection 9.1(a) of the Credit Agreement, if the Discharge of ABL Obligations has occurred (and subject to any applicable Intercreditor Agreement) each Grantor shall notify obligors on such Grantor’s Accounts Receivable and parties to such Grantor’s Contracts (in each case, to the extent constituting Collateral) that such Accounts Receivable and such Contracts have been assigned to the Collateral Agent, for the benefit of the Secured Parties, and that payments in respect thereof shall be made directly to the Collateral Agent.
(c)Anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of such Grantor’s Accounts Receivable to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise thereto. None of the Collateral Agent, the Administrative Agent or any other Secured Party shall have any obligation or liability under any Account Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Party of any payment relating thereto, nor shall the Collateral Agent or any other Secured Party be obligated in any manner to perform any of the obligations of any Grantor under or pursuant to any Account Receivable (or any agreement giving rise thereto) to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party thereunder, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts that may have been assigned to it or to which it may be entitled at any time or times.
6.3Pledged Stock.
(a)Unless an Event of Default shall have occurred and be continuing and the Collateral Agent shall have given notice to the relevant Grantor of the Collateral Agent’s intent to exercise its corresponding rights pursuant to Subsection 6.3(b), each Grantor shall be permitted to receive all cash dividends and distributions paid in respect of the Pledged Stock and all payments made in respect of the Pledged Notes, and to exercise all voting and corporate rights with respect to the Pledged Stock.
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(b)If an Event of Default shall occur and be continuing and the Collateral Agent shall give at least two Business Days’ prior written notice of its intent to exercise such rights to the relevant Grantor or Grantors (i) the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, shall have the right to receive any and all cash dividends, payments or other Proceeds paid in respect of the Pledged Stock and make application thereof to the Obligations of the relevant Grantor as provided in the Credit Agreement consistent with Subsection 6.5, and (ii) any or all of the Pledged Stock shall be registered in the name of the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent or the respective nominee thereof, and the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable or acting through its respective nominee, if applicable, in accordance with the terms of any applicable Intercreditor Agreement, may thereafter exercise (x) all voting, corporate and other rights pertaining to such Pledged Stock at any meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and all rights of conversion, exchange, subscription and any other rights, privileges or options pertaining to such Pledged Stock as if it were the absolute owner thereof (including, without limitation, the right to exchange at its discretion any and all of the Pledged Stock upon the merger, consolidation, amalgamation, reorganization, recapitalization or other fundamental change in the corporate structure of any Issuer, or upon the exercise by the relevant Grantor or the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, of any right, privilege or option pertaining to such Pledged Stock, and in connection therewith, the right to deposit and deliver any and all of the Pledged Stock with any committee, depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, may reasonably determine), all without liability to the maximum extent permitted by applicable law (other than for its gross negligence or willful misconduct) except to account for property actually received by it, but the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, shall have no duty, to any Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing, provided that the Collateral Agent, the applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, shall not exercise any voting or other consensual rights pertaining to the Pledged Stock in any way that would constitute an exercise of the remedies described in Subsection 6.6 other than in accordance with Subsection 6.6.
(c)Each Grantor hereby authorizes and instructs each Issuer or maker of any Pledged Securities pledged by such Grantor hereunder to (i) comply with any instruction received by it from the Collateral Agent in writing with respect to Capital Stock in such Issuer that (x) states that an Event of Default has occurred and is continuing and (y) is otherwise in accordance with the terms of this Agreement, without any other or further instructions from such Grantor, and each Grantor agrees that each Issuer or maker shall be fully protected in so complying, and (ii) unless otherwise expressly permitted hereby, pay any dividends or other payments with respect to the Pledged Securities directly to the Collateral Agent.
6.4Proceeds to be Turned Over to the Collateral Agent. In addition to the rights of the Collateral Agent specified in Subsection 6.1 with respect to payments of Accounts Receivable constituting Collateral, if an Event of Default shall occur and be continuing, and the Collateral Agent shall have instructed any Grantor to do so, all Proceeds of Collateral received by such Grantor consisting of cash, checks and other Cash Equivalent items shall be held by such Grantor in trust for the Collateral Agent and the other Secured Parties hereto, the ABL Agent and the other ABL Secured Parties (as defined in the ABL Intercreditor Agreement) or any Additional Agent and the other applicable Additional Secured Parties (as defined in the ABL Intercreditor Agreement), or the applicable Collateral Representative, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, segregated from other funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to the Collateral Agent, the Applicable Collateral Representative, the ABL Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement (or their respective agents appointed for purposes of perfection), in the exact form received by such Grantor (duly indorsed by such Grantor to the Collateral Agent, the applicable Collateral Representative, the ABL
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Agent or any Additional Agent, as applicable, in accordance with the terms of any applicable Intercreditor Agreement, if required). All Proceeds of Collateral received by the Collateral Agent hereunder shall be held by the Collateral Agent in the relevant Collateral Proceeds Account maintained under its sole dominion and control. All Proceeds of Collateral while held by the Collateral Agent in such Collateral Proceeds Account (or by the relevant Grantor in trust for the Collateral Agent and the other Secured Parties) shall continue to be held as collateral security for all the Obligations of such Grantor and shall not constitute payment thereof until applied as provided in Subsection 6.5.
6.5Application of Proceeds. It is agreed that if an Event of Default shall occur and be continuing, any and all Proceeds of the relevant Grantor’s Collateral (as defined in the Credit Agreement) received by the Collateral Agent (whether from the relevant Grantor or otherwise) shall be held by the Collateral Agent for the benefit of the Secured Parties as collateral security for the Obligations of the relevant Grantor (whether matured or unmatured), and/or then or at any time thereafter may, in the sole discretion of the Collateral Agent, subject to each applicable Intercreditor Agreement, shall be applied by the Collateral Agent against the Obligations of the relevant Grantor then due and owing in the order of priority set forth in the Credit Agreement.
6.6PPSA and Other Remedies. If an Event of Default shall occur and be continuing, the Collateral Agent, on behalf of the Secured Parties, may exercise, in addition to all other rights and remedies granted to them in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Obligations to the extent permitted by applicable law, all rights and remedies of a secured party under the PPSA and under any other applicable law and in equity including the appointment of a receiver or a receiver and manager for the Grantors. Without limiting the generality of the foregoing, to the extent permitted by applicable law, the Collateral Agent, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except any notice required by law referred to below) to or upon any Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances, forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith, subject to any existing reserved rights or licenses, sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker’s board or office of the Collateral Agent or any other Secured Party or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risk. To the extent permitted by law, the Collateral Agent or any other Secured Party shall have the right, upon any such sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in such Grantor, which right or equity is hereby waived and released. Each Grantor further agrees, at the Collateral Agent’s request (subject to each applicable Intercreditor Agreement), to assemble the Collateral and make it available to the Collateral Agent at places which the Collateral Agent shall reasonably select, whether at such Grantor’s premises or elsewhere. The Collateral Agent shall apply the net proceeds of any action taken by it pursuant to this Subsection 6.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of the Collateral Agent and the other Secured Parties hereunder, including, without limitation, reasonable legal fees and disbursements, to the payment in whole or in part of the Obligations of the relevant Grantor then due and owing, in the order of priority specified in Subsection 6.5 above, and only after such application and after the payment by the Collateral Agent of any other amount required by any provision of law, need the Collateral Agent account for the surplus, if any, to such Grantor. To the extent permitted by applicable law, (i) such Grantor waives all claims, damages and demands it may acquire against the Collateral Agent or any other Secured Party arising out of the repossession, retention or sale of the Collateral, other than any such claims, damages and demands that may arise from the gross negligence or willful misconduct of any of the Collateral Agent or such other Secured Party, and (ii) if any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition.
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6.7Registration/Qualification Rights.
(a)If the Collateral Agent shall determine to exercise its right to sell any or all of the Pledged Stock pursuant to Subsection 6.6, and if in the reasonable opinion of the Collateral Agent it is necessary or reasonably advisable to have the Pledged Stock, or that portion thereof to be sold, registered under the provisions of the Securities Act, the relevant Grantor will use its reasonable best efforts to cause the Issuer thereof to (i) execute and deliver, and use its reasonable best efforts to cause the directors and officers of such Issuer to execute and deliver, all such instruments and documents, and do or cause to be done all such other acts as may be, in the reasonable opinion of the Collateral Agent, necessary or advisable to register such Pledged Stock, or that portion thereof to be sold, under the provisions of any applicable securities legislation, (ii) use its reasonable best efforts to cause the qualification of the stock for sale in accordance with any applicable securities legislation, and (iii) make all amendments thereto and/or to any related prospectus or other offering or disclosure documentation which, in the reasonable opinion of the Collateral Agent, are necessary or advisable, all in conformity with the requirements of the applicable securities legislation. Such Grantor agrees to use its reasonable best efforts to cause such Issuer to comply with the provisions of the securities or “Blue Sky” laws of any applicable jurisdiction that the Collateral Agent shall reasonably designate and to make available to its security holders, as soon as practicable, any financial information required to satisfy the provisions of the applicable securities legislation.
(b)Such Grantor recognizes that the Collateral Agent may be unable to effect a public sale of any or all such Pledged Stock, by reason of certain prohibitions contained in applicable securities laws or otherwise, and may be compelled to resort to one or more private sales thereof to a restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale thereof. Such Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances, to the extent permitted by applicable law, agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. The Collateral Agent shall not be under any obligation to delay a sale of any of the Pledged Stock for the period of time necessary to permit the Issuer thereof to register such securities for public sale under applicable securities laws, even if such Issuer would agree to do so.
(c)Such Grantor agrees to use its reasonable best efforts to do or cause to be done all such other acts as may be necessary to make such sale or sales of all or any portion of such Pledged Stock pursuant to this Subsection 6.7 valid and binding and in compliance with any and all other applicable Requirements of Law. Such Grantor further agrees that a breach of any of the covenants contained in this Subsection 6.7 will cause irreparable injury to the Collateral Agent and the Lenders, that the Collateral Agent and the Lenders have no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Subsection 6.7 shall be specifically enforceable against such Grantor, and to the extent permitted by applicable law, such Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred or is continuing under the Credit Agreement.
6.8Waiver; Deficiency. Each Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to pay in full, the Loans, Reimbursement Obligations constituting Obligations of such Grantor and, to the extent then due and owing, all other Obligations of such Grantor and the reasonable fees and disbursements of any attorneys or legal counsel employed by the Collateral Agent or any other Secured Party to collect such deficiency.
6.9License. Each Grantor hereby grants to the Collateral Agent a royalty-free license and right to use the Intellectual Property, including but not limited to, any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, and advertising matter, whether owned by such Grantor or with respect to which such Grantor has rights under license, sublicense, or other agreements (including any Intellectual Property license), but only to the extent (i) such license, sublicense or agreement does not prohibit such license to or use by the Collateral Agent, and (ii) such Grantor will not be in default under such license, sublicense, or other agreement as a result of such license to or use by the Collateral Agent, solely for the purposes of preparing for sale, advertising for sale and selling or otherwise disposing of any Collateral after the occurrence of an Event of Default that is continuing, and
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each Grantor’s rights under all licenses and all franchise agreements shall inure to the benefit of Collateral Agent.
SECTION 7.THE COLLATERAL AGENT
7.1Collateral Agent’s Appointment as Attorney-in-Fact, etc.
(a)Each Grantor hereby irrevocably constitutes and appoints the Collateral Agent and any authorized officer or agent thereof, 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 Grantor and in the name of such Grantor or in its own name, for the purpose of carrying out the terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments that may be reasonably necessary or desirable to accomplish the purposes of this Agreement to the extent permitted by applicable law, provided that the Collateral Agent agrees not to exercise such power except upon the occurrence and during the continuance of any Event of Default, and in accordance with and subject to each applicable Intercreditor Agreement. Without limiting the generality of the foregoing, at any time when an Event of Default has occurred and is continuing (in each case to the extent permitted by applicable law and subject to each applicable Intercreditor Agreement), (x) each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice or assent by such Grantor, to execute, in connection with any sale provided for in Subsection 6.6(a) or 6.7, any indorsements, assessments or other instruments of conveyance or transfer with respect to such Grantor’s Collateral, and (y) each Grantor hereby gives the Collateral Agent the power and right, on behalf of such Grantor, without notice to or assent by such Grantor, to do any or all of the following:
(i)in the name of such Grantor or its own name, or otherwise, take possession of and indorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Account Receivable of such Grantor that constitutes Collateral or with respect to any other Collateral of such Grantor and file any claim or take any other action or institute any proceeding in any court of law or equity or otherwise deemed appropriate by the Collateral Agent for the purpose of collecting any and all such moneys due under any Account Receivable of such Grantor that constitutes Collateral or with respect to any other Collateral of such Grantor whenever payable;
(ii)in the case of any Copyright, Patent, Trademark, Copyright License, Patent License or Trademark License constituting Collateral of such Grantor, execute and deliver any and all agreements, instruments, documents and papers as the Collateral Agent may reasonably request to such Grantor to evidence the Collateral Agent’s and the Lenders’ security interest in such Copyright, Patent, Trademark, Copyright License, Patent License or Trademark License and the goodwill and intangibles of such Grantor relating thereto or represented thereby, and such Grantor hereby consents to the non-exclusive royalty free use by the Collateral Agent of any Copyright, Patent, Trademark, Copyright License, Patent License or Trademark License owned by, or subject to the terms of any applicable agreement licensed to, such Grantor included in the Collateral for the purposes of disposing of any Collateral or exercising its rights under this Agreement;
(iii)pay or discharge taxes and Liens, other than Liens permitted under this Agreement or the other Loan Documents, levied or placed on the Collateral of such Grantor, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any part of the premiums therefor and the costs thereof; and
(iv)(A) direct any party liable for any payment under any of the Collateral of such Grantor to make payment of any and all moneys due or to become due thereunder directly to the Collateral Agent or as the Collateral Agent shall direct; (B) ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral of such Grantor; (C) sign and indorse any
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invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral of such Grantor; (D) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral of such Grantor or any portion thereof and to enforce any other right in respect of any Collateral of such Grantor; (E) defend any suit, action or proceeding brought against such Grantor with respect to any Collateral of such Grantor; (F) settle, compromise or adjust any such suit, action or proceeding described in clause (E) above and, in connection therewith, to give such discharges or releases as the Collateral Agent may deem appropriate; (G) subject to any existing reserved rights or licenses, assign any Copyright, Patent or Trademark constituting Collateral of such Grantor (along with the goodwill of the business to which any such Copyright, Patent or Trademark pertains), for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine; and (H) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral of such Grantor as fully and completely as though the Collateral Agent were the absolute owner thereof for all purposes, and do, at the Collateral Agent’s option and such Grantor’s expense, at any time, or from time to time, all acts and things which the Collateral Agent deems necessary to protect, preserve or realize upon the Collateral of such Grantor and the Collateral Agent’s and the other Secured Parties’ security interests therein and to effect the intent of this Agreement, all as fully and effectively as such Grantor might do.
(b)The reasonable expenses of the Collateral Agent incurred in connection with actions undertaken as provided in this Subsection 7.1, together with interest thereon at a rate per annum equal to the rate per annum at which interest would then be payable on past due ABR Loans under the Credit Agreement, from the date of payment by the Collateral Agent to the date reimbursed by the relevant Grantor, shall be payable by such Grantor to the Collateral Agent on demand.
(c)Each Grantor hereby ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this Agreement are coupled with an interest and are irrevocable as to the relevant Grantor until this Agreement is terminated as to such Grantor, and the security interests in the Collateral of such Grantor created hereby are released.
7.2Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under the PPSA or otherwise, shall be to deal with it in the same manner as the Collateral Agent deals with similar property for its own account. None of the Collateral Agent or any other Secured Party nor any of their respective officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of any Grantor or any other Person or, except as otherwise provided herein, to take any other action whatsoever with regard to the Collateral or any part thereof. The powers conferred on the Collateral Agent and the other Secured Parties hereunder are solely to protect the Collateral Agent’s and the other Secured Parties’ interests in the Collateral and shall not impose any duty upon the Collateral Agent or any other Secured Party to exercise any such powers. The Collateral Agent and the other Secured Parties shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and to the maximum extent permitted by applicable law, neither they nor any of their officers, directors, employees or agents shall be responsible to any Grantor for any act or failure to act hereunder, except as otherwise provided herein or for their own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).
7.3Financing Statements. Pursuant to any applicable law, each Grantor authorizes the Collateral Agent to file or record financing statements and other filing or recording documents or instruments with respect to such Grantor’s Collateral without the signature of such Grantor in such form and in such filing offices as the Collateral Agent reasonably determines appropriate to perfect the security interests of the Collateral Agent under this Agreement. Each Grantor authorizes the Collateral Agent to use any collateral description reasonably determined by the Collateral Agent, including, without limitation, the collateral description “all personal property”, “all assets” or “all present and after-acquired
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property” or words of similar meaning in any such financing statements. The Collateral Agent agrees to use its commercially reasonable efforts to notify the relevant Grantor of any financing or continuation statement filed by it, provided that any failure to give such notice shall not affect the validity or effectiveness of any such filing.
7.4Authority of Collateral Agent. Each Grantor acknowledges that the rights and responsibilities of the Collateral Agent under this Agreement with respect to any action taken by the Collateral Agent or the exercise or non-exercise by the Collateral Agent of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Agreement or any amendment, supplement or other modification of this Agreement shall, as between the Collateral Agent and the Secured Parties, be governed by the Credit Agreement and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Collateral Agent and the Grantors, the Collateral Agent shall be conclusively presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Grantor shall be under any obligation, or entitlement, to make any inquiry respecting such authority.
7.5Right of Inspection. Upon reasonable written advance notice to any Grantor, or at any time and from time to time after the occurrence and during the continuation of an Event of Default, the Collateral Agent shall have access at reasonable times during normal business hours to all the books, correspondence and records of such Grantor, and the Collateral Agent and its representatives may examine the same, and to the extent reasonable take extracts therefrom and make photocopies thereof, and such Grantor agrees to render to the Collateral Agent at such Grantor’s reasonable cost and expense, such clerical and other assistance as may be reasonably requested with regard thereto. The Collateral Agent and its representatives shall also have the right, upon reasonable advance written notice to such Grantor subject to any lease restrictions, to enter during normal business hours into and upon any premises owned, leased or operated by such Grantor where any of such Grantor’s Inventory or Equipment is located for the purpose of inspecting the same, observing its use or otherwise protecting its interests therein to the extent not inconsistent with the provisions of the Credit Agreement.
SECTION 8.NON-LENDER SECURED PARTIES
8.1Rights to Collateral.
(a)The Non-Lender Secured Parties shall not have any right whatsoever to do any of the following: (i) exercise any rights or remedies with respect to the Collateral (such term, as used in this Section 8, having the meaning assigned to it in the Credit Agreement) or to direct the Collateral Agent to do the same, including, without limitation, the right to (A) enforce any Liens or sell or otherwise foreclose on any portion of the Collateral, (B) request any action, institute any proceedings, exercise any voting rights, give any instructions, make any election, notify account debtors or make collections with respect to all or any portion of the Collateral or (C) release any Grantor under this Agreement or release any Collateral from the Liens of any Security Document or consent to or otherwise approve any such release; (ii) demand, accept or obtain any Lien on any Collateral (except for Liens arising under, and subject to the terms of, this Agreement); (iii) vote in any Bankruptcy Case or similar proceeding in respect of Parent or any of its Subsidiaries (any such proceeding, for purposes of this clause (a), a “Bankruptcy”) with respect to, or take any other actions concerning the Collateral; (iv) receive any proceeds from any sale, transfer or other disposition of any of the Collateral (except in accordance with this Agreement); (v) oppose any sale, transfer or other disposition of the Collateral; (vi) object to any debtor-in-possession financing in any Bankruptcy which is provided by one or more Lenders among others (including on a priming basis under Section 364(d) of the Bankruptcy Code); (vii) object to the use of cash collateral in respect of the Collateral in any Bankruptcy; or (viii) seek, or object to the Lenders seeking on an equal and ratable basis, any adequate protection or relief from the automatic stay with respect to the Collateral in any Bankruptcy.
(b)Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, agrees that in exercising rights and remedies with respect to the Collateral, the Collateral Agent and the Lenders, with the consent of the Collateral Agent, may enforce the provisions of the Security Documents and exercise remedies thereunder and under any other Loan Documents (or refrain from enforcing rights and exercising remedies), all in such order and in such manner as they may determine in the exercise of their sole business judgment. Such exercise and
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enforcement shall include, without limitation, the rights to collect, sell, dispose of or otherwise realize upon all or any part of the Collateral, to incur expenses in connection with such collection, sale, disposition or other realization and to exercise all the rights and remedies of a secured lender under the PPSA of any applicable jurisdiction. The Non-Lender Secured Parties by their acceptance of the benefits of this Agreement and the other Security Documents hereby agree not to contest or otherwise challenge any such collection, sale, disposition or other realization of or upon all or any of the Collateral. Whether or not a Bankruptcy Case has been commenced, the Non-Lender Secured Parties shall be deemed to have consented to any sale or other disposition of any property, business or assets of Parent or any of its Subsidiaries and the release of any or all of the Collateral from the Liens of any Security Document in connection therewith.
(c)Notwithstanding any provision of this Subsection 8.1, the Non-Lender Secured Parties shall be entitled subject to each applicable Intercreditor Agreement to file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleadings (A) in order to prevent any Person from seeking to foreclose on the Collateral or supersede the Non-Lender Secured Parties’ claim thereto or (B) in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims of the Non-Lender Secured Parties. Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement, agrees to be bound by and to comply with each applicable Intercreditor Agreement and authorizes the Collateral Agent to enter into the Intercreditor Agreements on its behalf.
(d)Each Non-Lender Secured Party, by its acceptance of the benefit of this Agreement, agrees that the Collateral Agent and the Lenders may deal with the Collateral, including any exchange, taking or release of Collateral, may change or increase the amount of the Primary Obligations and/or the Guarantor Obligations, and may release any Grantor from its Obligations hereunder, all without any liability or obligation (except as may be otherwise expressly provided herein) to the Non-Lender Secured Parties.
8.2Appointment of Agent. Each Non-Lender Secured Party, by its acceptance of the benefits of this Agreement and the other Security Documents, shall be deemed irrevocably to make, constitute and appoint the Collateral Agent, as agent under the Credit Agreement (and all officers, employees or agents designated by the Collateral Agent) as such Person’s true and lawful agent and attorney-in-fact, and in such capacity, the Collateral Agent shall have the right, with power of substitution for the Non-Lender Secured Parties and in each such Person’s name or otherwise, to effectuate any sale, transfer or other disposition of the Collateral. It is understood and agreed that the appointment of the Collateral Agent as the agent and attorney-in-fact of the Non-Lender Secured Parties for the purposes set forth herein is coupled with an interest and is irrevocable. It is understood and agreed that the Collateral Agent has appointed the Administrative Agent as its agent for purposes of perfecting certain of the security interests created hereunder and for otherwise carrying out certain of its obligations hereunder.
8.3Waiver of Claims. To the maximum extent permitted by law, each Non-Lender Secured Party waives any claim it might have against the Collateral Agent or the Lenders with respect to, or arising out of, any action or failure to act or any error of judgment, negligence, or mistake or oversight whatsoever on the part of the Collateral Agent or the Lenders or their respective directors, officers, employees or agents with respect to any exercise of rights or remedies under the Loan Documents or any transaction relating to the Collateral (including, without limitation, any such exercise described in Subsection 8.1(b) above), except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person. To the maximum extent permitted by applicable law, none of the Collateral Agent or any Lender or any of their respective directors, officers, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Parent, any Subsidiary of Parent, any Non-Lender Secured Party or any other Person or to take any other action or forbear from doing so whatsoever with regard to the Collateral or any part thereof, except for any such action or failure to act that constitutes willful misconduct or gross negligence of such Person.
8.4Bank Products Providers; Hedging Providers. The Company may from time to time designate a Person as a “Bank Products Provider” or a “Hedging Provider” hereunder by written notice to the Collateral Agent, provided that, at the time of the Borrower’s designation of such Bank Products
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Provider or Hedging Provider, the obligations of the relevant Grantor under the applicable Hedge Agreement or Bank Products Agreement (as the case may be) have not been designated as ABL Obligations (as defined in the ABL Intercreditor Agreement) or Additional Obligations.
SECTION 9.MISCELLANEOUS
9.1Amendments in Writing. None of the terms or provisions of this Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by each affected Grantor and the Collateral Agent, provided that (a) any provision of this Agreement imposing obligations on any Grantor may be waived by the Collateral Agent in a written instrument executed by the Collateral Agent and (b) notwithstanding anything to the contrary in Subsection 11.1 of the Credit Agreement, no such waiver and no such amendment or modification shall amend, modify or waive the definition of “Secured Party” or Subsection 6.5 if such waiver, amendment, or modification would adversely affect a Secured Party without the written consent of each such affected Secured Party. For the avoidance of doubt, it is understood and agreed that any amendment, amendment and restatement, waiver, supplement or other modification of or to the Intercreditor Agreement that would have the effect, directly or indirectly, through any reference herein to the Intercreditor Agreement or otherwise, of waiving, amending, supplementing or otherwise modifying this Agreement, or any term or provision hereof, or any right or obligation of any Grantor hereunder or in respect hereof, shall not be given such effect except pursuant to a written instrument executed by each affected Grantor and the Collateral Agent in accordance with this Subsection 9.1.
9.2Notices. All notices, requests and demands to or upon the Collateral Agent or any Grantor hereunder shall be effected in the manner provided for in Subsection 11.2 of the Credit Agreement; provided that any such notice, request or demand to or upon any Grantor shall be addressed to such Grantor at its notice address set forth on Schedule 1, unless and until such Grantor shall change such address by notice to the Collateral Agent and the Administrative Agent given in accordance with Subsection 11.2 of the Credit Agreement.
9.3No Waiver by Course of Conduct; Cumulative Remedies. None of the Collateral Agent or any other Secured Party shall by any act (except by a written instrument pursuant to Subsection 9.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default. No failure to exercise, nor any delay in exercising, on the part of the Collateral Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by the Collateral Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Collateral Agent or such other Secured Party would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law.
9.4Enforcement Expenses; Indemnification.
(a)Each Grantor jointly and severally agrees to pay or reimburse each Secured Party and the Collateral Agent for all their respective reasonable costs and expenses incurred in collecting against such Grantor under the guarantee contained in Section 2 or otherwise enforcing or preserving any rights under this Agreement against such Grantor and the other Loan Documents to which such Grantor is a party, including, without limitation, the reasonable fees and disbursements of counsel to the Secured Parties, the Collateral Agent and the Administrative Agent.
(b)Each Grantor jointly and severally agrees to pay, and to save the Collateral Agent, the Administrative Agent and the other Secured Parties harmless from, (x) any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise, sales or other similar taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement and (y) any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever with respect to the execution, delivery, enforcement, performance and
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administration of this Agreement (collectively, the “indemnified liabilities”), in each case to the extent the Borrower would be required to do so pursuant to Subsection 11.5 of the Credit Agreement, and in any event excluding any Taxes or other indemnified liabilities arising from gross negligence, bad faith or willful misconduct of the Collateral Agent or any other Secured Party as determined by a court of competent jurisdiction in a final and nonappealable decision.
(c)The agreements in this Subsection 9.4 shall survive repayment of the Obligations and all other amounts payable under the Credit Agreement and the other Loan Documents.
9.5Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Grantors, the Collateral Agent and the Secured Parties and their respective successors and assigns; provided that no Grantor may assign, transfer or delegate any of its rights or obligations under this Agreement without the prior written consent of the Collateral Agent, except as permitted by the Credit Agreement.
9.6Set-Off. Each Grantor hereby irrevocably authorizes each of the Administrative Agent and the Collateral Agent and each other Secured Party at any time and from time to time without notice to such Grantor or any other Grantor, any such notice being expressly waived by each Grantor, to the extent permitted by applicable law, upon the occurrence and during the continuance of an Event of Default under Subsection 9.1(a) of the Credit Agreement so long as any amount remains unpaid after it becomes due and payable by such Grantor hereunder, to set-off and appropriate and apply against any such amount any and all deposits (general or special, time or demand, provisional or final) (other than the Collateral Proceeds Account), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by the Collateral Agent, the Administrative Agent or such other Secured Party to or for the credit or the account of such Grantor, or any part thereof in such amounts as the Collateral Agent, the Administrative Agent or such other Secured Party may elect. The Collateral Agent, the Administrative Agent and each other Secured Party shall notify such Grantor promptly of any such set-off and the application made by the Collateral Agent, the Administrative Agent or such other Secured Party of the proceeds thereof; provided that the failure to give such notice shall not affect the validity of such set-off and application. The rights of the Collateral Agent, the Administrative Agent and each other Secured Party under this Subsection 9.6 are in addition to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent, the Administrative Agent or such other Secured Party may have.
9.7Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.
9.8Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided that, with respect to any Pledged Stock issued by a Foreign Subsidiary, all rights, powers and remedies provided in this Agreement may be exercised only to the extent that they do not violate any provision of any law, rule or regulation of any Governmental Authority applicable to any such Pledged Stock or affecting the legality, validity or enforceability of any of the provisions of this Agreement against the Grantor (such laws, rules or regulations, “Applicable Law”) and are intended to be limited to the extent necessary so that they will not render this Agreement invalid, unenforceable or not entitled to be recorded, registered or filed under the provisions of any Applicable Law.
9.9Section Headings. The Section headings used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
9.10Integration. This Agreement and the other Loan Documents represent the entire agreement of the Grantors, the Collateral Agent and the other Secured Parties with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by the Grantors, the
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Collateral Agent or any other Secured Party relative to subject matter hereof not expressly set forth or referred to herein or in the other Loan Documents.
9.11GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND ANY CLAIM OR CONTROVERSY RELATING HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.
9.12Submission to Jurisdiction; Waivers. Each party hereto hereby 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 judgement in respect thereof, to the non-exclusive general jurisdiction of the courts of the Province of Ontario (the “Ontario Courts”); provided that nothing contained herein or in any other Loan Document will prevent any party hereto from bringing any action to enforce any award or judgement or exercise any right under this Agreement, the Security Documents or against any Collateral or any other property of any Loan Party in any other forum in which jurisdiction can be established;
(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 forum 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 party at its address referred to in Subsection 9.2 or at such other address of which the Collateral Agent and the Administrative Agent (in the case of any other party hereto) or the Borrower (in the case of the Collateral Agent and the Administrative Agent) shall have been notified pursuant thereto;
(d)agrees that nothing herein shall affect the right to effect service of process in any other manner permitted by law or (subject to clause (a) above) shall limit the right to sue 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 any special, indirect or consequential, or punitive damages.
9.13Acknowledgments. Each Grantor hereby acknowledges that:
(a)it has been advised by counsel in the negotiation, execution and delivery of this Agreement and the other Loan Documents to which it is a party;
(b)none of the Collateral Agent, the Administrative Agent or any other Secured Party has any fiduciary, advisory or agency relationship with or duty to any Grantor arising out of or in connection with this Agreement or any of the other Loan Documents, and the relationship between the Grantors, on the one hand, and the Collateral Agent, the Administrative Agent and the other Secured Parties, on the other hand, in connection herewith or therewith is solely that of debtor and creditor; and
(c)no joint venture is created hereby or by the other Loan Documents or otherwise exists by virtue of the transactions contemplated hereby among the Secured Parties or among the Grantors and the Secured Parties.
9.14WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
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PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.15Additional Grantors. Each new Subsidiary of Parent that is required to become a party to this Agreement pursuant to Subsection 7.9(b) 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 substantially in the form of Annex 2 hereto. Each existing Grantor that is required to become a Grantor with respect to Capital Stock of any new Subsidiary of Parent pursuant to Subsection 7.9(b) of the Credit Agreement shall become a Grantor with respect thereto upon execution and delivery by such Grantor of a Supplemental Agreement substantially in the form of Annex 3 hereto.
9.16Releases.
(a)At such time as the Loans and the other Obligations (other than any Obligations owing to a Non-Lender Secured Party in respect of the provision of cash management services) then due and owing shall have been paid in full, the Commitments have been terminated, all Collateral shall be released from the Liens created hereby, and this Agreement and all obligations (other than those expressly stated to survive such termination) of the Collateral Agent and each Grantor hereunder shall terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert to the Grantors. At the request and sole expense of any Grantor following any such termination, the Collateral Agent shall deliver to such Grantor any Collateral held by the Collateral Agent hereunder, and execute, acknowledge and deliver to such Grantor such releases, instruments or other documents (including without limitation PPSA termination statements), and do or cause to be done all other acts, as any Grantor shall reasonably request to evidence such termination.
(b)Upon any sale or other disposition of Collateral permitted by the Credit Agreement (other than any sale or disposition to another Grantor), the Lien pursuant to this Agreement on such sold or disposed of Collateral shall be automatically released. In connection with the sale or other disposition of all of the Capital Stock of any Grantor (other than to Parent, Holdings, the Borrower or any Subsidiary Guarantor), or, in the case of any Grantor that is a Subsidiary of Parent, any other transaction or occurrence as a result of which such Grantor ceases to be a Restricted Subsidiary of the Borrower or the sale or other disposition of Collateral (other than a sale or disposition to another Grantor) permitted under the Credit Agreement, the Collateral Agent shall, upon receipt from the Borrower of a written request for the release of such Grantor from its Guarantee or the release of the Collateral subject to such sale, disposition or other transaction, identifying such Grantor or the relevant Collateral, together with a certification by the Borrower stating that such transaction is in compliance with the Credit Agreement and the other Loan Documents, deliver to the Borrower or the relevant Grantor, at the sole cost and expense of such Grantor, any Collateral of such relevant Grantor held by the Collateral Agent, or the Collateral subject to such sale or disposition (as applicable), and, at the sole cost and expense of such Grantor, execute, acknowledge and deliver to the Borrower or such Grantor such releases, instruments or other documents (including without limitation PPSA termination statements), and do or cause to be done all other acts, as the Borrower or such Grantor shall reasonably request (x) to evidence or effect the release of such Grantor from its Guarantee (if any) and of the Liens created hereby (if any) on such Grantor’s Collateral or (y) to evidence the release of the Collateral subject to such sale or disposition.
(c)Upon any Grantor becoming an Excluded Subsidiary in accordance with the provisions of the Credit Agreement, the Lien pursuant to this Agreement on all Collateral of such Grantor (if any) shall be automatically released, and the Guarantee (if any) of such Grantor, and all obligations of such Grantor hereunder, shall, terminate, all without delivery of any instrument or performance of any act by any party, and the Collateral Agent shall, upon the request of the Borrower or such Grantor, deliver to the Borrower or such Grantor any Collateral of such Grantor held by the Collateral Agent hereunder and the Collateral Agent and the Administrative Agent shall execute, acknowledge and deliver to the Borrower or such Grantor (at the sole cost and expense of the Borrower or such Grantor) all releases, instruments or other documents (including without limitation PPSA termination statements), and do or cause to be done all other acts, necessary or reasonably desirable for the release of such Grantor from its Guarantee (if any) or the Liens created hereby (if any) on such Grantor’s Collateral, as applicable, as the Borrower or such Grantor may reasonably request.
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(d)Upon any Collateral being or becoming an Excluded Asset, the Lien pursuant to this Agreement on such Collateral shall be automatically released. At the request and sole expense of any Grantor, the Collateral Agent shall deliver such Collateral (if held by the Collateral Agent) to such Grantor and execute, acknowledge and deliver to such Grantor such releases, instruments or other documents (including without limitation PPSA termination statements), and do or cause to be done all other acts, as such Grantor shall reasonably request to evidence such release.
(e)[reserved].
(f)So long as no Event of Default has occurred and is continuing, the Collateral Agent and the Administrative Agent shall at the direction of any applicable Grantor return to such Grantor any proceeds or other property received by it during any Event of Default pursuant to either Subsection 5.3.1 or 6.4 and not otherwise applied in accordance with Subsection 6.5.
(g)The Collateral Agent shall have no liability whatsoever to any other Secured Party as the result of any release of Collateral by it in accordance with (or which the Collateral Agent in good faith believes to be in accordance with) this Subsection 9.16.
9.17Judgment.
(a)If for the purpose of obtaining judgment in any court it is necessary to convert a sum due hereunder in one currency into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Collateral Agent could purchase the first currency with such other currency on the Business Day preceding the day on which final judgment is given.
(b)The obligations of any Grantor in respect of this Agreement to the Collateral Agent, for the benefit of each holder of the Obligations, shall, notwithstanding any judgment in a currency (the “judgment currency”) other than the currency in which the sum originally due to such holder is denominated (the “original currency”), be discharged only to the extent that on the Business Day following receipt by the Collateral Agent of any sum adjudged to be so due in the judgment currency, the Collateral Agent may in accordance with normal banking procedures purchase the original currency with the judgment currency; if the amount of the original currency so purchased is less than the sum originally due to such holder in the original currency, such Grantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Collateral Agent for the benefit of such holder, against such loss, and if the amount of the original currency so purchased exceeds the sum originally due to the Collateral Agent, the Collateral Agent agrees to remit to the Borrower, such excess. This covenant shall survive the termination of this Agreement and payment of the Obligations and all other amounts payable hereunder.
9.18Copy of Agreement. Each Grantor acknowledges receipt of a fully executed copy of this Agreement. Each Grantor hereby waives its right to receive a copy of any financing statement, financing change statement or verification statement which may be filed by or issued to the Administrative Agent in respect of this Agreement.
9.19Amalgamation. Each Grantor acknowledges and agrees that, in the event it amalgamates with any other company or companies, it is the intention of the parties hereto that the term “Grantor”, when used herein, shall apply to each of the amalgamating companies and to the amalgamated company, such that the security interest granted hereby:
(a)shall extend to “Collateral” (as that term is herein defined) owned by each of the amalgamating companies and the amalgamated company at the time of amalgamation and to any “Collateral” thereafter owned or acquired by the amalgamated company; and
(b)shall secure all “Obligations” (as that term is herein defined) of each of the amalgamating companies and the amalgamated company to the Administrative Agent and the other Secured Parties or any of them at the time of amalgamation and all “Obligations” of the
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amalgamated company to the Administrative Agent, Collateral Agent and the other Secured Parties or any of them thereafter arising. The Security Interest shall attach to all “Collateral” owned by each company amalgamating with the Grantor, and by the amalgamated company, at the time of
the amalgamation, and shall attach to all “Collateral” thereafter owned or acquired by the amalgamated company when such becomes owned or is acquired.
[Remainder of page left blank intentionally; Signature pages to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed, all as of the date first written above.
COLUMBIA-MBF INC.
By:    /s/ John Curran    
    Name:    John Curran
    Title:    Vice President and Controller

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Acknowledged and Agreed to as of the date hereof by:
JPMORGAN CHASE BANK, N.A., as Collateral Agent
By:    /s/ Stephanie Lis    
    Name: Stephanie Lis    
    Title: Authorized Officer    

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ATKORE INTERNATIONAL GROUP INC.
Non-Employee Director Compensation Program
of Atkore Inc. (the “Company”)
Effective January 28, 2021
Each non-employee director who is not affiliated with the Company shall receive, in respect of his or her services as a non-employee director of the Company, the following:
 
  1.
Annual Cash Retainer. An annual cash retainer of $90,000, payable quarterly in arrears.
 
  2.
Audit Committee Chair Service. An additional annual cash retainer of $20,000.
 
  3.
Compensation Committee Chair Service. An additional annual cash retainer of $15,000.
 
  4.
Nominating and Governance Committee Chair. An additional annual cash retainer of $10,000.
 
  5.
Annual Award Restricted Stock Units. On the day of the Company’s annual meeting of stockholders each year following the initial public offering, a grant to each non-employee director of restricted stock units with a Fair Market Value equal to $120,000 on the date of grant. Restricted stock units will vest on the first to occur of (i) the day prior to the next following annual meeting (or, if earlier, the day prior to the first anniversary of the grant date), (ii) the director’s termination of services on the Board (other than a voluntary resignation or a termination for Cause) and (iii) a Change in Control. On any other termination of Board services, any unvested restricted stock units will be forfeited. These grants will be made under the Atkore International Group Inc. 2020 Omnibus Incentive Plan (the “Omnibus Plan”), or a successor plan. Settlement of the vested restricted stock units into Shares of Company Common Stock will occur promptly following the applicable vesting date.
 
  6.
Deferral of Cash Fees and Restricted Stock Units. If the Company implements a plan pursuant to which non-employee directors may defer the receipt of cash fees and/or vested restricted stock units, then the timing of payment of the fees and settlement of vested restricted stock units will be determined by reference to such deferral plan.
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  7.
No Meeting Fees. Directors shall not receive additional fees for attending any Board or Committee meetings.
 
  8.
Expense Reimbursement. Each director shall be reimbursed for reasonable expenses incurred in connection with attending Board meetings and committee meetings.
 
  9.
Transition Matters. This program will be subject to such other reasonable transition rules (e.g., with respect to commencement or termination of services other than on the date of the Company’s meeting) in order to give full effect to this program. In general, the cash fees and restricted stock unit grants will be pro-rated for the year of initial election to the Board other than at the annual meeting of stockholders (and, with respect to the restricted stock units, vesting would occur as described in paragraph 5).
 
  10.
Amendment of this Policy; Capitalized Terms. This policy may be amended from time to time by the Board. Capitalized terms used in this policy but not defined in this policy will have the meanings set forth in the Omnibus Plan.
 
  11.
Stock Ownership Guidelines. It is expected that non-employee directors will, during their tenure of Board service, own stock or vested stock units having a value equal to five times the annual cash retainer for Board service. Directors are expected to retain equity awards granted to them (net of applicable taxes) under this policy in order to attain such ownership multiple.



[Final]

ATKORE INTERNATIONAL GROUP INC.
2016 OMNIBUS INCENTIVE PLAN

ARTICLE I

PURPOSES

This Atkore International Group Inc. 2016 Omnibus Incentive Plan, as may be amended from time to time (the “Plan”), has the following purposes:

(1)To further the growth, development and financial success of Atkore International Group Inc. (the “Company”) and its Subsidiaries (as defined herein), by providing additional incentives to employees, consultants and directors of the Company and its Subsidiaries by assisting them to become owners of Company Common Stock, thereby benefiting directly from the growth, development and financial success of the Company and its Subsidiaries.

(2)To enable the Company (and its Subsidiaries) to obtain and retain the services of the type of professional and managerial employees, consultants and directors considered essential to the long-range success of the Company (and its Subsidiaries) by providing and offering them an opportunity to become owners of Company Common Stock pursuant to the Awards granted hereunder.

As of the Effective Date, the Plan replaces and succeeds the Atkore International Group Inc. Stock Incentive Plan (the “Stock Incentive Plan”), and, from and after the Effective Date, no further awards shall be made under the Stock Incentive Plan (but, for the avoidance of doubt, the adoption of this Plan will have no effect on the terms and conditions of outstanding awards under the Stock Incentive Plan).

ARTICLE II DEFINITIONS
Whenever the following terms are used in this Plan, they shall have the meanings
specified below unless the context clearly indicates to the contrary. The singular pronoun shall include the plural where the context so indicates.

Section 2.1    “Administrator” shall mean the Board or any committee of the Board designated by the Board to administer the Plan. To the extent Section 162(m) of the Code is applicable to the Company and the Plan, and for those Awards intended to qualify as performance- based compensation under Section 162(m) of the Code, the Administrator shall mean the Compensation Committee of the Board or such other committee or subcommittee of the Board or the Compensation Committee as the Board or the Compensation Committee shall designate, consisting of two or more members and an “outside director” within the meaning of Section 162(m) of the Code. In addition, the Administrator with respect to Awards intended to be exempted from Section 16 of the Exchange Act shall be the Compensation Committee of the Board or such other committee or subcommittee of the Board or the Compensation Committee as
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the Board or the Compensation Committee shall designate, each of whom is a “non-employee director” within the meaning of Rule 16b-3, as promulgated under the Exchange Act (or, alternatively, the full Board may act as in the Administrator in such case).

Section 2.2    “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with, such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act.
Section 2.3    “Alternative Award” shall have the meaning set forth in Section 14.1. Section 2.4    “Alternative Performance Awards” shall have the meaning set forth in
Section 14.2.

Section 2.5    “Applicable Laws” shall mean the requirements relating to the administration of stock option, restricted stock, restricted stock unit and other equity-based compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Company Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted under the Plan.

Section 2.6    “Award” shall mean any Option, Stock Purchase Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, SAR, Dividend Equivalent, Deferred Share Unit or other Stock-Based Award granted to a Participant pursuant to the Plan, including an Award combining two or more types of Awards into a single grant.

Section 2.7    “Award Agreement” shall mean any written agreement, contract or other instrument or document evidencing an Award, including through an electronic medium. The Administrator may provide for the use of electronic, internet or other non-paper Award Agreements, and the use of electronic, internet or other non-paper means for the Participant’s acceptance of, or actions under, an Award Agreement unless otherwise expressly specified herein. In the event of any inconsistency or conflict between the express terms of the Plan and the express terms of an Award Agreement, the express terms of the Plan shall govern.

Section 2.8    “Base Price” shall have the meaning set forth in Section 2.53. Section 2.9    “Board” shall mean the Board of Directors of the Company.
Section 2.10    “Cause” shall mean, unless otherwise provided in the Award Agreement, any of the following: (a) the Participant’s commission of a crime involving fraud, theft, false statements or other similar acts or commission of any crime that is a felony (or comparable classification in a jurisdiction that does not use these terms); (b) the Participant’s engaging in any conduct that constitutes an employment disqualification under applicable law with respect to a material portion of the Participant’s work duties; (c) the Participant’s willful or grossly negligent failure to perform his or her material employment-related duties for the Company and its Subsidiaries, or willful misconduct in the performance of such duties; (d) the Participant’s material violation of any Company or Subsidiary policy as in effect from time to time; (e) the Participant’s engaging in any act or making any public statement that materially impairs, impugns, denigrates, disparages or negatively reflects upon the name, reputation or business interests of the Company or
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IMAGE_01.JPG its Subsidiaries; or (f) the Participant’s material breach of any Award Agreement, employment agreement, or noncompetition, nondisclosure or nonsolicitation agreement to which the Participant is a party or by which the Participant is bound; provided that in the case of any Participant who, as of the date of determination, is a party to an effective services, severance, consulting or employment agreement with the Company or any Subsidiary of the Company that employs such individual, “Cause” shall have the meaning, if any, specified in such agreement. A termination for Cause shall be deemed to include a determination by the Administrator following a Participant’s termination of employment that circumstances existing prior to such termination would have entitled the Company or one of its Subsidiaries to have terminated such Participant’s employment for Cause. All rights a Participant has or may have under the Plan shall be suspended automatically during the pendency of any investigation by the Administrator or its designee, or during any negotiations between the Administrator or its designee and the Participant, regarding any actual or alleged act or omission by the Participant of the type described in the applicable definition of Cause.

Section 2.11    “Change in Control” shall mean the first to occur of any of the following events after the Effective Date:

(a)the acquisition, directly or indirectly, by any Person (which, for purposes of this definition, shall include a “group” (as defined in Section 13(d) of the Exchange Act)) of beneficial ownership of more than 30% of the combined voting power of the Company’s then outstanding voting securities, other than any such acquisition by the Company, any of its Subsidiaries, any employee benefit plan of the Company or any of its Subsidiaries, or by the Investors, or any Affiliates of the foregoing;

(b)the merger, consolidation or other similar transaction involving the Company, as a result of which (x) Persons who were holders of voting securities of the Company immediately prior to such merger, consolidation, or other similar transaction do not immediately thereafter beneficially own, directly or indirectly, in substantially the same relative proportions as immediately prior to such transaction, more than 50% of the combined voting power entitled to vote generally in the election of directors of the merged or consolidated company and (y) the Investors immediately thereafter do not beneficially own, directly or indirectly, more than 50% of the combined voting power entitled to vote generally in the election of directors of the merged or consolidated company;

(c)within any 24-month period, the individuals who were members of the Board at the beginning of such period (the “Incumbent Directors”) shall cease to constitute at least a majority of the Board, provided that any director elected or nominated for election to the Board by any Investor or a majority of the Incumbent Directors still in office shall be deemed to be an Incumbent Director for purpose of this clause (c); provided, that any member of the Board whose initial assumption of office occurs as a result of (including by reason of the settlement of) an actual or threatened proxy contest, election contest or other contested election of directors shall in no event be considered an Incumbent Director;
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(d)the approval by the Company’s shareholders of the liquidation or dissolution of the Company (other than a liquidation that effects in substance a transfer of all or substantially all of the assets of the Company satisfying clause (e) of this definition); or

(e)the sale, transfer or other disposition of all or substantially all of the assets of the Company to one or more Persons that are not any of the Investors and are not, immediately prior to such sale, transfer or other disposition, Affiliates of the Company;

IMAGE_1.JPG in each case, provided that, as to Awards subject to Section 409A of the Code the payment or settlement of which will occur by reason of the Change in Control, such event also constitutes a “change in control” within the meaning of Section 409A of the Code. In addition, notwithstanding the foregoing, (i) a “Change in Control” shall not be deemed to occur if the Company files for bankruptcy, liquidation or reorganization under the United States Bankruptcy Code or as a result of any restructuring that occurs as a result of any such proceeding and (ii) a Public Offering shall not constitute a Change in Control.

Section 2.12    “Change in Control Price” shall mean the price per share of Company Common Stock paid in conjunction with any transaction resulting in a Change in Control. If any part of the offered price is payable other than in cash, the value of the non-cash portion of the Change in Control Price shall be determined in good faith by the Administrator as constituted immediately prior to the Change in Control.

Section 2.13    “Code” shall mean the Internal Revenue Code of 1986, as amended.

Section 2.14    “Company” shall mean Atkore International Group Inc., a Delaware corporation, and any successor thereto.

Section 2.15    “Company Common Stock” shall mean the common stock, par value
$0.01 per share, of the Company and such other stock or securities into which such common stock is hereafter converted or for which such common stock is exchanged.

Section 2.16    “Competitive Activity” shall mean a Participant’s material breach of restrictive covenants relating to noncompetition, nonsolicitation (of customers or employees) or preservation of confidential information, or other covenants having the same or similar scope, included in an Award Agreement or other agreement to which the Participant and the Company or any of its Subsidiaries is a party.

Section 2.17    “Consultant” shall mean any natural person who is engaged by the Company or any of its Subsidiaries to render consulting or advisory services to such entity.

Section 2.18    “Corporate Event” shall mean, as determined by the Administrator in its sole discretion, any transaction or event described in Section 4.3(a) or any unusual or nonrecurring transaction or event affecting the Company, any Subsidiary of the Company, or the financial statements of the Company or any of its Subsidiaries, or changes in applicable laws, regulations or accounting principles (including, without limitation, a recapitalization of the Company).
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Section 2.19    “Deferred Share Unit” shall mean a unit credited to a Participant’s account in the books of the Company under Article X which represents the right to receive one Share of Company Common Stock or cash equal to the Fair Market Value thereof on settlement of the account.

Section 2.20    “Director” shall mean a member of the Board or a member of the board of directors of any Subsidiary of the Company.

Section 2.21    “Disability” shall mean (x) for Awards that are not subject to Section 409A of the Code, “disability” as such term is defined in in the long-term disability insurance plan or program of the Company or any Subsidiary then covering the Participant and (y) for Awards that are subject to Section 409A of the Code, “disability” shall have the meaning set forth in Section 409A(a)(2)(c) of the Code; provided that with respect to Awards that are not subject to Section 409A, in the case of any Participant who, as of the date of determination, is a party to an effective services, severance, consulting or employment agreement with the Company or any Subsidiary of the Company that employs such individual, “Disability” shall have the meaning, if any, specified in such agreement.

Section 2.22    “Dividend Equivalent” shall mean the right to receive payments, in cash or in Shares, based on dividends paid with respect to Shares.

Section 2.23    “Effective Date” shall have the meaning set forth in Section 15.7.

Section 2.24    “Eligible Representative” for a Participant shall mean such Participant’s personal representative or such other person as is empowered under the deceased Participant’s will or the then applicable laws of descent and distribution to represent the Participant hereunder.

Section 2.25    “Employee” shall mean any individual classified as an employee by the Company or one of its Subsidiaries, whether such employee is so employed at the time this Plan is adopted or becomes so employed subsequent to the adoption of this Plan, including any person to whom an offer of employment has been extended (except that any Award granted to such person shall be conditioned on his or her commencement of service). A person shall not cease to be an Employee in the case of (a) any leave of absence approved by the Company or (b) transfers between locations of the Company or between the Company, any of its Subsidiaries, or any successor to the foregoing. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, the employment relationship shall be deemed to have terminated on the first day immediately following such three (3)-month period, and such Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Qualified Stock Option on the first day immediately following a three
(3)-month period from the date the employment relationship is deemed terminated.

Section 2.26    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
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Section 2.27    “Executive Officer” shall mean each person who is an officer of the Company or any Subsidiary and who is subject to the reporting requirements under Section 16(a) of the Exchange Act.

Section 2.28    “Fair Market Value” of a Share as of any date of determination shall be:

(a)If the Company Common Stock is listed on any established stock exchange or a national market system, then the closing price on such date per Share as reported as quoted on such stock exchange or system shall be the Fair Market Value for the date of determination; provided, however, as to any Awards granted on or with a date of determination that is the date of the pricing of the Company’s Public Offering, “Fair Market Value” shall be equal to the per share price the Company Common Stock is offered to the public in connection with such Public Offering.

(b)If there are no transactions in the Company Common Stock that are available to the Company on any date of determination pursuant to clause (a) but transactions are available to the Company as of the immediately preceding trading date, then the Fair Market Value determined as of the immediately preceding trading date shall be the Fair Market Value for the date of determination; or

(c)If neither clause (a) nor clause (b) shall apply on any date of determination, then the Fair Market Value shall be determined in good faith by the Administrator with reference to (x) the most recent valuation of the Company Common Stock performed by an independent valuation consultant or appraiser of nationally recognized standing selected by the Administrator, if any, (y) sales prices of securities issued to investors in any recent arm’s length transactions, and (z) any other factors determined to be relevant by the Administrator.

Section 2.29    “Incentive Stock Option” shall mean an Option which qualifies under Section 422 of the Code and is expressly designated as an Incentive Stock Option in the Award Agreement.

IMAGE_14.JPG Section 2.30    “Investors” means, collectively, (i) CD&R Allied Holdings, L.P., (ii) any Affiliate thereof and (iii) any successor in interest to any thereof.

Section 2.31    “normal retirement age” shall have the meaning set forth in the applicable Award Agreement or, if not defined in the Award Agreement, pursuant to the customary policies of the Company.

Section 2.32    “Non-Qualified Stock Option” shall mean an Option which is not an Incentive Stock Option.

Section 2.33    “Non-U.S. Awards” shall have the meaning set forth in Section 3.5.

Section 2.34    “Option” shall mean an option to purchase Company Common Stock granted under the Plan. The term “Option” includes both an Incentive Stock Option and a Non- Qualified Stock Option.
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Section 2.35    “Option Price” shall have the meaning set forth in Section 6.3.

Section 2.36    “Optionee” shall mean a Participant to whom an Option or SAR is granted under the Plan.

Section 2.37    “Participant” shall mean any Service Provider who has been granted an Award pursuant to the Plan.

Section 2.38 “Performance Award” shall mean Performance Shares, Performance Units and all other Awards that vest (in whole or in part) upon the achievement of specified Performance Goals.

Section 2.39    “Performance Award Conversion” shall have the meaning set forth in Section 14.3.

Section 2.40    “Performance Cycle” shall mean the period of time selected by the Administrator during which performance is measured for the purpose of determining the extent to which a Performance Award has been earned or vested.

Section 2.41    “Performance Goals” means the objectives established by the Administrator for a Performance Cycle pursuant to Section 9.5 for the purpose of determining the extent to which a Performance Award has been earned or vested.

Section 2.42 “Performance Share” means an Award granted pursuant to Article IX of the Plan of a Share or a contractual right to receive a Share (or the cash equivalent thereof) upon the achievement, in whole or in part, of the applicable Performance Goals.

Section 2.43    “Performance Unit” means a U.S. Dollar-denominated unit (or a unit denominated in the Participant’s local currency) granted pursuant to Article IX of the Plan, payable upon the achievement, in whole or in part, of the applicable Performance Goals.

Section 2.44    “Person” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or any other entity of whatever nature.

Section 2.45    “Plan” shall have the meaning set forth in Article I.

IMAGE_1.JPG Section 2.46    “Public Offering” shall mean the first day as of which (i) sales of Company Common Stock are made to the public in the United States pursuant to an underwritten public offering of the Company Common Stock led by one or more underwriters at least one of which is an underwriter of nationally recognized standing or (ii) the Administrator has determined that the Company Common Stock otherwise has become publicly traded for this purpose.

Section 2.47 “Replacement Awards” shall mean Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form or combination by the Company or any of its Subsidiaries.

Section 2.48    “Restricted Stock” shall mean an Award granted pursuant to Section 8.1.
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Section 2.49    “Restricted Stock Unit” shall mean an Award granted pursuant to Section
8.2.

Section 2.50    “Securities Act” shall mean the Securities Act of 1933, as amended. Section 2.51    “Service Provider” shall mean an Employee, Consultant, or Director. Section 2.52    “Share” shall mean a share of Company Common Stock.
Section 2.53    “Stock Appreciation Right” or “SAR” shall mean the right to receive a
IMAGE_1.JPG payment from the Company in cash and/or Shares equal to the product of (i) the excess, if any, of the Fair Market Value of one Share on the exercise date over a specified price (the “Base Price”) fixed by the Administrator on the grant date (which specified price shall not be less than the Fair Market Value of one Share on the grant date), multiplied by (ii) a stated number of Shares.
Section 2.54    “Stock-Based Award” shall have the meaning set forth in Section 11.1. Section 2.55    “Stock Purchase Right” shall mean an Award granted pursuant to Section
5.4.

Section 2.56    “Subplans” shall have the meaning set forth in Section 3.5.

Section 2.57    “Subsidiary” shall mean any entity that is directly or indirectly controlled
by the Company or any entity in which the Company directly or indirectly has at least a 50% equity interest, provided that, to the extent required under Section 422 of the Code when granting an Incentive Stock Option, Subsidiary shall mean any corporation in an unbroken chain of corporations beginning with such entity if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

Section 2.58    “Termination of employment,” “termination of service” and any similar term or terms shall mean, with respect to a Director who is not an Employee of the Company or any of its Subsidiaries, the date upon which such Director ceases to be a member of the Board, with respect to a Consultant who is not an Employee of the Company or any of its Subsidiaries, the date upon which such Consultant ceases to provide consulting or advisory services to the Company or any of its Subsidiaries, and, with respect to an Employee, the date the Participant ceases to be an Employee; provided that with respect to any Award subject to Section 409A of the Code, such terms shall mean “separation from service,” as defined in Section 409A of the Code and the rules, regulations and guidance promulgated thereunder. A “termination of employment” or “termination of service” shall not occur if a Director, immediately upon ceasing to be a member of the Board, becomes an Employee of the Company or any of its Subsidiaries or if an Employee, immediately upon termination of employment with the Company or any of its Subsidiaries, becomes or continues to serve as a member of the Board.

Section 2.59    “Withholding Taxes” shall mean the federal, state, local or foreign income taxes, withholding taxes or employment taxes required to be withheld under Applicable Law, which shall be at a rate determined by the Company that is permitted under applicable IRS withholding rules and that does not to cause adverse accounting consequences.
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ARTICLE III ADMINISTRATION
Section 3.1    Administrator. The Plan shall be administered by the Board or an
Administrator appointed by the Board, which Administrator, unless otherwise determined by the Board, shall be constituted to comply with Applicable Laws, including, without limitation, Section 16 of the Exchange Act and Section 162(m) of the Code, and the listing requirements of the New York Stock Exchange or any other exchange on which the Shares are listed.

Section 3.2    Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a committee, the specific duties delegated by the Board to such Administrator, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion to:

(a)determine the Fair Market Value;

(b)determine the type or types of Awards to be granted to each Participant;

(c)select the Service Providers to whom Awards may from time to time be granted hereunder;

(d)determine all matters and questions related to the termination of service of a Service Provider with respect to any Award granted to him or her hereunder, including, but not by way of limitation of, all questions of whether a particular Service Provider has taken a leave of absence, all questions of whether a leave of absence taken by a particular Service Provider constitutes a termination of service, all questions of whether a termination of service of a particular Service Provider resulted from discharge for Cause, and policies regarding the determination of normal retirement age;

(e)determine the number of Awards to be granted and the number of Shares to which an Award will relate;

(f)approve forms of agreement for use under the Plan, which need not be identical for each Service Provider;

(g)determine the terms and conditions of any Awards granted hereunder (including, without limitation, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions and any restriction or limitation regarding any Awards or the Company Common Stock relating thereto) based in each case on such factors as the Administrator, in its sole discretion, shall determine;

(h)prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to Subplans established for the purpose of satisfying applicable foreign laws;
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(i)determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise or purchase price of an Award may be paid in, cash, Company Common Stock, other Awards, or other property, or an Award may be canceled, forfeited or surrendered;

(j)suspend or accelerate the vesting of any Award granted under the Plan;

(k)construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; and

(l)make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan.

IMAGE_1.JPG Section 3.3    Delegation by the Administrator. The Administrator may delegate, subject to such terms or conditions or guidelines as it shall determine, to any officer or group of officers, or Director or group of Directors of the Company or its Affiliates any portion of its authority and powers under the Plan with respect to Participants who are not Executive Officers or non-employee directors of the Board; provided that any delegation to one or more officers of the Company shall be subject to and comply with Section 157(c) of the Delaware General Corporation Law (or successor provision). In addition, (i) with respect to any Award intended to qualify as “performance-based” compensation under Section 162(m) of the Code, the Administrator shall mean the Compensation Committee of the Board or such other committee or subcommittee of the Board or the Compensation Committee as the Board or the Compensation Committee of the Board shall designate, consisting solely of two or more members, each of whom is an “outside director” within the meaning of Section 162(m) of the Code and (ii) with respect to any Award intended to qualify for the exemption contained in Rule 16b-3 promulgated under the Exchange Act, the Administrator shall consist of solely two or more “non-employee directors” within the meaning of such rule, or, in the alternative, the entire Board.

Section 3.4    Compensation, Professional Assistance, Good Faith Actions. The Administrator may receive such compensation for its services hereunder as may be determined by the Board. All expenses and liabilities incurred by the Administrator in connection with the administration of the Plan shall be borne by the Company. The Administrator may, in its discretion, elect to engage the services of attorneys, consultants, accountants, appraisers, brokers or other persons. The Administrator, the Company and its officers and Directors shall be entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken and all interpretations, decisions and determinations made by the Administrator, in good faith shall be final and binding upon all Participants, the Company and all other interested persons. The Administrator’s determinations under the Plan need not be uniform and may be made by the Administrator selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated. The Administrator (and its members) shall not be personally liable for any action, determination or interpretation made with respect to the Plan or the Awards, and the Administrator (and its members) shall be fully protected by the Company with respect to any such action, determination or interpretation.

Section 3.5    Participants Based Outside the United States. To conform with the provisions of local laws and regulations, or with local compensation practices and policies, in
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IMAGE_1.JPG foreign countries in which the Company or any of its Subsidiaries or Affiliates operate, but subject to the limitations set forth herein regarding the maximum number of shares issuable hereunder and the maximum award to any single Participant, the Administrator may (i) modify the terms and conditions of Awards granted to Participants employed outside the United States (“Non-U.S. Awards”), (ii) establish subplans with such modifications as may be necessary or advisable under the circumstances (“Subplans”) and (iii) take any action which it deems advisable to obtain, comply with or otherwise reflect any necessary governmental regulatory procedures, exemptions or approvals with respect to the Plan. The Administrator’s decision to grant Non-U.S. Awards or to establish Subplans is entirely voluntary, and at the complete discretion of the Administrator.
The Administrator may amend, modify or terminate any Subplans at any time, and such amendment, modification or termination may be made without prior notice to the Participants. The Company, Subsidiaries, Affiliates and members of the Administrator shall not incur any liability of any kind to any Participant as a result of any change, amendment or termination of any Subplan at any time. The benefits and rights provided under any Subplan or by any Non-U.S.
Award (x) are wholly discretionary and, although provided by either the Company, a Subsidiary or Affiliate, do not constitute regular or periodic payments and (y) except as otherwise required under Applicable Laws, are not to be considered part of the Participant’s salary or compensation under the Participant’s employment with the Participant’s local employer for purposes of calculating any severance, resignation, redundancy or other end of service payments, vacation, bonuses, long-term service awards, indemnification, pension or retirement benefits, or any other payments, benefits or rights of any kind. If a Subplan is terminated, the Administrator may direct the payment of Non-
U.S. Awards (or direct the deferral of payments whose amount shall be determined) prior to the dates on which payments would otherwise have been made, and, in the Administrator’s discretion, such payments may be made in a lump sum or in installments.

ARTICLE IV SHARES SUBJECT TO PLAN
Section 4.1    Shares Subject to Plan.

(a)Subject to Section 4.3, the aggregate number of Shares which may be issued under this Plan is 3,767,500, all of which may be issued in the form of Incentive Stock Options under the Plan. The Shares issued under the Plan may be authorized but unissued, or reacquired Company Common Stock. No provision of this Plan shall be construed to require the Company to maintain the Shares in certificated form. Unless the Administrator shall determine otherwise,
(x)Awards may not consist of fractional shares and shall be rounded down to the nearest whole Share, and (y) fractional Shares shall not be issued under the Plan (and shall instead also be rounded as aforesaid).

(b)Upon the grant of an Award, the maximum number of Shares set forth in Section 4.1(a) shall be reduced by the maximum number of Shares that are issued or may be issued pursuant to such Award.    If any such Award or portion thereof under this Plan is for any reason forfeited, canceled, cash-settled, expired or otherwise terminated without the issuance of Shares, the Shares subject to such forfeited, canceled, cash-settled, expired or otherwise terminated Award or award, or portion thereof, shall again be available for grant under the Plan. If Shares are tendered or withheld from issuance with respect to an Award by the Company in satisfaction
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of any Option Price, Base Price or tax withholding or similar obligations, such tendered or withheld Shares shall again be available for grant under the Plan. Awards which the Administrator reasonably determines will be settled in cash, and Awards subject to Performance Goals that the Administrator reasonably determines are certain not to be met, shall not (or shall upon such determination cease to) reduce the Plan maximum set forth in Section 4.1(a).
Notwithstanding the foregoing, and except to the extent required by Applicable Law, Replacement Awards shall not be counted against Shares available for grant pursuant to this Plan.

Section 4.2    Individual Award Limitations. Subject to Section 4.1(a) and Section 4.3, the following individual Award limits shall apply to the extent Section 162(m) of the Code is applicable to the Company and the Plan, and for those Awards intended to qualify as performance- based compensation under Section 162(m) of the Code:

(a)No Participant may be granted more than 1,027,500 Options, SARs or any other Award based solely on the increase in value of the Shares from the date of grant under the Plan in any calendar year.

(b)No Participant may be granted more than 685,000 Performance Shares, shares of performance-based Restricted Stock, performance-based Restricted Stock Units or performance-based Dividend Equivalents under the Plan in any calendar year.

(c)No Participant may be granted Performance Units or any other performance-based Award settled in cash under the Plan in any calendar year with a value of more than US $5 million (or the equivalent of such amount denominated in the Participant’s local currency).

In addition, in any calendar year in respect of a non-employee Director’s service to the Company as a non-employee Director, the maximum Fair Market Value of Shares subject to Awards granted to such Director, and the maximum amount of cash paid to such Director shall not exceed US $500,000 in the aggregate (in each case excluding any additional compensation paid to a non-employee chairman of the Board for services in such capacity).

Section 4.3    Changes in Company Common Stock; Disposition of Assets and Corporate Events.

(a)If and to the extent necessary or appropriate to reflect any stock dividend, extraordinary dividend, stock split or share combination or any recapitalization, merger, consolidation, exchange of shares, spin-off, liquidation or dissolution of the Company or other similar transaction affecting the Company Common Stock (each, a “Corporate Event”), the Administrator shall adjust the number of shares of Company Common Stock available for issuance under the Plan, any other limit applicable under the Plan with respect to the number of Awards that may be granted hereunder, and the number, class and exercise price (if applicable) or Base Price (if applicable) of any outstanding Award, and/or make such substitution, revision or other provisions or take such other actions with respect to any outstanding Award or the holder or holders thereof, in each case as it determines to be equitable. Without limiting the generality of the foregoing sentence, in the event of any such Corporate Event, the Administrator
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IMAGE_1.JPG shall have the power to make such changes as it deems appropriate in (i) the number and type of shares or other securities covered by outstanding Awards, (ii) the prices specified therein (if applicable), (iii) the securities, cash or other property to be received upon the exercise, settlement or conversion of such outstanding Awards or otherwise to be received in connection with such outstanding Awards and (iv) any applicable Performance Goals. After any adjustment made by the Administrator pursuant to this Section 4.3, the number of shares subject to each outstanding Award shall be rounded down to the nearest whole number of whole or fractional shares (as determined by the Administrator), and (if applicable) the exercise price thereof shall be rounded up to the nearest cent.

(b)Any adjustment of an Award pursuant to this Section 4.3 shall be effected in compliance with Section 422 and 409A of the Code to the extent applicable.

Section 4.4    Award Agreement Provisions. The Administrator may include such further provisions and limitations in any Award Agreement as it may deem equitable and in the best interests of the Company and its Subsidiaries.

IMAGE_1.JPG Section 4.5    Prohibition Against Repricing. From and after a Public Offering, except to the extent (i) approved in advance by holders of a majority of the Shares entitled to vote generally in the election of directors or (ii) pursuant to Section 4.3 as a result of any Corporate Event or pursuant to Section 14 in connection with a Change in Control, the Administrator shall not have the power or authority to reduce, whether through amendment or otherwise, the exercise price of any outstanding Option or Base Price of any outstanding SAR or to grant any new Award, or make any cash payment, in substitution for or upon the cancellation of Options or SARs previously granted and as to which the exercise price or Base Price thereof is in excess of the then- current Fair Market Value of Share.

ARTICLE V

GRANTING OF OPTIONS AND SARS AND SALE OF COMPANY COMMON STOCK

Section 5.1    Eligibility. Non-Qualified Stock Options and SARs may be granted to Service Providers. Subject to Section 5.2, Incentive Stock Options may only be granted to Employees.

Section 5.2    Qualification of Incentive Stock Options. No Employee may be granted an Incentive Stock Option under the Plan if such Employee, at the time the Incentive Stock Option is granted, owns stock possessing more than ten (10) percent of the total combined voting power of all classes of stock of the Company or any then existing Subsidiary of the Company or “parent corporation” (within the meaning of Section 424(e) of the Code) unless such Incentive Stock Option conforms to the applicable provisions of Section 422 of the Code.

Section 5.3    Granting of Options and SARs to Service Providers.

(a)Options and SARs. The Administrator may from time to time:
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(i)Select from among the Service Providers (including those to whom Options or SARs have been previously granted under the Plan) such of them as in its opinion should be granted Options and/or SARs;

(ii)Determine the number of Shares to be subject to such Options and/or SARs granted to such Service Provider, and determine whether such Options are to be Incentive Stock Options or Non-Qualified Stock Options; and

(iii)Determine the terms and conditions of such Options and SARs, consistent with the Plan.

(b)SARs may be granted in tandem with Options or may be granted on a freestanding basis, not related to any Option. Unless otherwise determined by the Administrator at the grant date or determined thereafter in a manner more favorable to the Participant, SARs granted in tandem with Options shall have substantially similar terms and conditions to such Options to the extent applicable, or may be granted on a freestanding basis, not related to any Option.

(c)Upon the selection of a Service Provider to be granted an Option or SAR under this Section 5.3, the Administrator shall issue, or shall instruct an authorized officer to issue, such Option or SAR and may impose such conditions on the grant of such Option or SAR as it deems appropriate. Subject to Section 15.2 of the Plan, any Incentive Stock Option granted under the Plan may be modified by the Administrator, without the consent of the Optionee, even if such modification would result in the disqualification of such Option as an “incentive stock option” under Section 422 of the Code.

Section 5.4    Sale of Company Common Stock to Service Providers. The Administrator, acting in its sole discretion, may from time to time designate one or more Service Providers to whom an offer to sell Shares shall be made and the terms and conditions thereof, provided, however, that the price per Share shall not be less than the Fair Market Value of such Shares on the date any such offer is accepted. Each Share sold to a Service Provider under this Section 5.4 shall be evidenced by such agreements as shall be approved by the Administrator, which shall contain terms consistent with the terms hereof. Any Shares sold under this Section 5.4 shall be subject to the same limitations, restrictions and administration hereunder as would apply to any Shares issued pursuant to the exercise of an Option under this Plan including, without limitation, conditions and restrictions set forth in Section 7.6 below.

ARTICLE VI

TERMS OF OPTIONS AND SARS

Section 6.1    Award Agreement. Each Option and each SAR shall be evidenced by an Award Agreement, which shall be executed by the Optionee and an authorized officer and which shall contain such terms and conditions as the Administrator shall determine, consistent with the Plan. Award Agreements evidencing Incentive Stock Options shall contain such terms and conditions as may be necessary to qualify such Options as “incentive stock options” under Section 422 of the Code.
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Section 6.2    Exercisability and Vesting of Options and SARs.

(a)Each Option and SAR shall vest and become exercisable according to the terms of the applicable Award Agreement; provided, however, that by a resolution adopted after an Option or SAR is granted the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the time at which such Option or SAR or any portion thereof may be exercised.

(b)Except as otherwise provided by the Administrator or in the applicable Award Agreement, no portion of an Option or SAR which is unexercisable on the date that an Optionee incurs a termination of service as a Service Provider shall thereafter become exercisable.

(c)The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Stock Options are first exercisable by a Service Provider in any calendar year may not exceed $100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.

(d)SARs granted in tandem with an Option shall become vested and exercisable on the same date or dates as the Options with which such SARs are associated vest and become exercisable. SARs that are granted in tandem with an Option may only be exercised upon the surrender of the right to exercise such Option for an equivalent number of Shares, and may be exercised only with respect to the Shares for which the related Option is then exercisable.

Section 6.3    Option Price and Base Price. Excluding Replacement Awards, the per Share purchase price of the Shares subject to each Option (the “Option Price”) and the Base Price of each SAR shall be set by the Administrator and shall be not less than 100% of the Fair Market Value of such Shares on the date such Option or SAR is granted.

Section 6.4    Expiration of Options and SARs. No Option or SAR may be exercised after the first to occur of the following events:

(a)Unless a longer period is set forth in the Award Agreement, the expiration of ten (10) years from the date the Option or SAR was granted; or

(b)With respect to an Incentive Stock Option in the case of an Optionee owning (within the meaning of Section 424(d) of the Code), at the time the Incentive Stock Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company or any Subsidiary, the expiration of five (5) years from the date the Incentive Stock Option was granted.

ARTICLE VII EXERCISE OF OPTIONS AND SARS
Section 7.1    Person Eligible to Exercise. During the lifetime of the Optionee, only the
Optionee may exercise an Option or SAR (or any portion thereof) granted to him or her; provided,
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however, that the Optionee’s Eligible Representative may exercise his or her Option or SAR or portion thereof during the period of the Optionee’s Disability. After the death of the Optionee, any exercisable portion of an Option or SAR may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Award Agreement, be exercised by his or her Eligible Representative.

Section 7.2    Partial Exercise. At any time and from time to time prior to the date on which the Option or SAR becomes unexercisable under the Plan or the applicable Award Agreement, the exercisable portion of an Option or SAR may be exercised in whole or in part; provided, however, that the Company shall not be required to issue fractional Shares and the Administrator may, by the terms of the Option or SAR, require any partial exercise to exceed a specified minimum number of Shares.

Section 7.3    Manner of Exercise. Subject to any generally applicable conditions or procedures that may be imposed by the Administrator, an exercisable Option or SAR, or any exercisable portion thereof, may be exercised solely by delivery to the Administrator or its designee of all of the following prior to the time when such Option or SAR or such portion becomes unexercisable under the Plan or the applicable Award Agreement:

(a)Notice in writing signed by the Optionee or his or her Eligible Representative, stating that such Option or SAR or portion is being exercised, and specifically stating the number of Shares with respect to which the Option or SAR is being exercised (which form of notice shall be provided by the Administrator upon request and may be electronic);

(b)A copy of any agreements or other documentation in use by the Company at the time of exercise (which shall be provided by the Administrator upon request);

(c)(i)    With respect to the exercise of any Option, full payment (in cash (through wire transfer only) or by personal, certified, or bank cashier check) of the aggregate Option Price of the Shares with respect to which such Option (or portion thereof) is thereby exercised; or

(ii)    if at a time when the broker-assisted cashless exercise program referred to in clause (iii) is not available, and unless the Administrator shall determine otherwise,
(A)Shares owned by the Optionee duly endorsed for transfer to the Company or
(B)Shares issuable to the Optionee upon exercise of the Option, in each case with a Fair Market Value on the date of Option exercise equal to the aggregate Option Price of the Shares with respect to which such Option (or portion thereof) is thereby exercised; or

(iii)payment of the Option Price through a broker-assisted cashless exercise program established by the Company; or

(iv)With the consent of the Administrator, any form of payment of the Option Price permitted by Applicable Laws and any combination of the foregoing methods of payment.
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(d)Full payment to the Company (in cash or by personal, certified or bank cashier check or by any other means of payment approved by the Administrator) of all minimum amounts necessary to satisfy any and all Withholding Taxes arising in connection with the exercise of the Option or SAR (notice of the amount of which shall be provided by the Administrator as soon as practicable following receipt by the Administrator of the notice of exercise);

(e)Such representations and documents as the Administrator deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal or state securities laws or regulations. The Administrator shall provide the Optionee or Eligible Representative with all such representations and documents as soon as practicable following receipt by the Administrator of the notice of exercise. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer orders to transfer agents and registrars; and

(f)In the event that the Option or SAR or portion thereof shall be exercised as permitted under Section 7.1 by any person or persons other than the Optionee, appropriate proof of the right of such person or persons to exercise the Option or SAR or portion thereof.

Section 7.4    Optionee Representations. The Administrator, in its sole discretion, may require an Optionee to make certain representations or acknowledgements, on or prior to the purchase of any Shares pursuant to any Option or SAR granted under this Plan, in respect thereof including, without limitation, that the Optionee is acquiring the Shares for an investment purpose and not for resale, and, if the Optionee is an Affiliate, additional acknowledgements regarding when and to what extent any transfers of such Shares may occur.

Section 7.5    Settlement of SARs. Unless otherwise determined by the Administrator, upon exercise of a SAR, the Participant shall be entitled to receive payment in the form, determined by the Administrator, of Shares, or cash, or a combination of Shares and cash having an aggregate value equal to the amount determined by multiplying:

(a)any increase in the Fair Market Value of one Share on the exercise date over the Base Price of such SAR, by

(b)the number of Shares with respect to which such SAR is exercised;

provided, however, that on the grant date, the Administrator may establish, in its sole discretion, a maximum amount per Share that may be payable upon exercise of a SAR, and provided, further, that in no event shall the value of the Company Common Stock or cash delivered on exercise of a SAR exceed the excess of the Fair Market Value of the Shares with respect to which the SAR is exercised over the Base Price of such Shares on the grant date of such SAR.

Section 7.6    Conditions to Issuance of Shares. The Company shall evidence the issuance of Shares delivered upon exercise of an Option or SAR in the books and records of the Company or in a manner determined by the Company. Notwithstanding the above, the Company
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shall not be required to effect the issuance of any Shares purchased upon the exercise of any Option or SAR or portion thereof prior to fulfillment of all of the following conditions:

(a)The admission of such Shares to listing on any and all stock exchanges on which such class of Company Common Stock is then listed;

(b)The completion of any registration or other qualification of such Shares under any state or federal law or under the rulings or regulations of the U.S. Securities and Exchange Commission or any other local, state, federal or foreign governmental regulatory body, which the Administrator shall, in its sole discretion, deem necessary or advisable;

(c)The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its sole discretion, determine to be necessary or advisable and

(d)The payment to the Company (or its Subsidiary, as applicable) of all amounts which it is required to withhold under Applicable Law in connection with the exercise of the Option or SAR.

The Administrator shall not have any liability to any Optionee for any delay in the delivery of Shares to be issued upon an Optionee’s exercise of an Option or SAR.

Section 7.7    Rights as Stockholders. The holder of an Option or SAR shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Shares purchasable upon the exercise of any part of an Option or SAR unless and until the Shares attributable to the exercise of the Option or SAR have been issued by the Company to such holder.

Section 7.8    Transfer Restrictions. The Administrator, in its sole discretion, may set forth in an Award Agreement or in such other agreements to be entered into at the time of exercise, such further restrictions on the transferability of the Shares purchasable upon the exercise of an Option or SAR as it deems appropriate. Any such restriction may be referred to in the Share register maintained by the Company or otherwise in a manner reflecting its applicability to the Shares. The Administrator may require the Employee to give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Stock Option, within two (2) years from the date of granting such Option or one (1) year after the transfer of such Shares to such Employee. The Administrator may cause the Share register maintained by the Company to refer to such requirement.

ARTICLE VIII

RESTRICTED STOCK AWARDS AND RESTRICTED STOCK UNIT AWARDS

Section 8.1    Restricted Stock.

(a)Grant of Restricted Stock. The Administrator is authorized to make Awards of Restricted Stock to any Service Provider selected by the Administrator in such amounts and
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subject to such terms and conditions as determined by the Administrator. All Awards of Restricted Stock shall be evidenced by an Award Agreement.

(b)Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Administrator may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Administrator determines at the time of the grant of the Award or thereafter.

(c)Issuance of Restricted Stock. The issuance of Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Administrator shall determine.

Section 8.2    Restricted Stock Units. The Administrator is authorized to make Awards of Restricted Stock Units to any Service Provider selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. At the time of grant, the Administrator shall specify the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate. At the time of grant, the Administrator shall specify the settlement date applicable to each grant of Restricted Stock Units which shall be no earlier than the vesting date or dates of the Award and may permit the settlement date to be determined at the election of the grantee consistent with Section 409A of the Code. Unless otherwise provided in an award agreement, on the settlement date, the Company shall, subject to the terms of this Plan (including satisfaction of applicable withholding taxes), transfer to the Participant one Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited. The Administrator shall specify the purchase price, if any, to be paid by the grantee to the Company for such Shares.

Section 8.3    Rights as a Stockholder. A Participant shall not be, nor have any of the rights or privileges of, a stockholder in respect of Restricted Stock Units awarded pursuant to the Plan unless and until the Shares attributable to such Restricted Stock Units have been issued to such Participant.

ARTICLE IX

PERFORMANCE SHARES AND PERFORMANCE UNITS

Section 9.1    Grant of Performance Awards. The Administrator is authorized to make Awards of Performance Shares and Performance Units to any Participant selected by the Administrator in such amounts and subject to such terms and conditions as determined by the Administrator. All Performance Shares and Performance Units shall be evidenced by an Award Agreement.

Section 9.2    Issuance and Restrictions. The Administrator shall have the authority to determine the Participants who shall receive Performance Shares and Performance Units, the number of Performance Shares and the number and value of Performance Units each Participant receives for any Performance Cycle, and the Performance Goals applicable in respect of such Performance Shares and Performance Units for each Performance Cycle. The Administrator shall
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determine the duration of each Performance Cycle (the duration of Performance Cycles may differ from one another), and there may be more than one Performance Cycle in existence at any one time. An Award Agreement evidencing the grant of Performance Shares or Performance Units shall specify the number of Performance Shares and the number and value of Performance Units awarded to the Participant, the Performance Goals applicable thereto, and such other terms and conditions not inconsistent with the Plan as the Administrator shall determine. No Company Common Stock will be issued at the time an Award of Performance Shares is made, and the Company shall not be required to set aside a fund for the payment of Performance Shares or Performance Units.

Section 9.3    Earned Performance Shares and Performance Units. Performance Shares and Performance Units shall become earned, in whole or in part, based upon the attainment of specified Performance Goals or the occurrence of any event or events, as the Administrator shall determine, either in an Award Agreement or thereafter on terms more favorable to the Participant to the extent consistent with Section 162(m). In addition to the achievement of the specified Performance Goals, the Administrator may condition payment of Performance Shares and Performance Units on such other conditions as the Administrator shall specify in an Award Agreement. The Administrator may also provide in an Award Agreement for the completion of a minimum period of service (in addition to the achievement of any applicable Performance Goals) as a condition to the vesting of any Performance Share or Performance Unit Award.

Section 9.4    Rights as a Stockholder. A Participant shall not have any rights as a stockholder in respect of Performance Shares or Performance Units awarded pursuant to the Plan (including, without limitation, to the right to vote on any matter submitted to the Company’s stockholders) until such time as the Shares attributable to such Performance Shares or Performance Units have been issued to such Participant or his or her beneficiary. Performance Shares as to which Shares are issued prior to the end of the Performance Cycle shall, during such period, be subject to such restrictions on transferability and other restrictions as the Administrator may impose (including, without limitation, limitations on the right to vote such Shares or the right to receive dividends on such Shares).

Section 9.5    Performance Goals. The Administrator shall establish the Performance Goals that must be satisfied in order for a Participant to receive an Award for a Performance Cycle or for an Award of Performance Shares or Performance Units to be earned or vested. At the discretion of the Administrator, the Performance Goals may be based upon (alone or in combination): (a) net or operating income (before or after taxes); (b) any earnings measure, including without limitation earnings before taxes, interest, depreciation and/or amortization (“EBITDA”); (c) any measure based on net income or net loss; (d) basic or diluted earnings per share or improvement in basic or diluted earnings per share; (e) sales (including, but not limited to, total sales, net sales and revenue growth); (f) net operating profit; (g) financial return measures (including, but not limited to, return on assets, capital, invested capital, equity, sales and revenue);
IMAGE_1.JPG IMAGE_1.JPG IMAGE_1.JPG (h) cash flow measures (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment); (i) productivity ratios (including but not limited to measuring liquidity, profitability and leverage); (j) share price (including, but not limited to, growth measures and total shareholder return); (k) expense/cost management targets; (l) margins (including, but not limited to, operating margin, net income margin, cash margin, gross, net or operating profit margins or margins based on EBITDA whether or not adjusted); (m)
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IMAGE_01.JPG IMAGE_1.JPG operating efficiency; (n) market share or market penetration; (o) customer targets (including, but not limited to, customer growth and customer satisfaction); (p) working capital targets or improvements; (q) economic value added; (r) balance sheet metrics (including, but not limited to, inventory, inventory turns, receivables turnover, net asset turnover, debt reduction, retained earnings, year-end cash, cash conversion cycle and ratio of debt to equity or to earnings or EBITDA); (s) workforce targets (including, but not limited to, diversity goals, employee engagement or satisfaction, employee retention and workplace health and safety goals); (t) implementation, completion or attainment of measurable objectives with respect to research and development, key products or key projects, lines of business, acquisitions and divestitures and strategic plan development and/or implementation; (u) comparisons with various stock market indices, peer companies or industry groups or classifications with regard to one more of these criteria, or, for any period of time in which Section 162(m) is not applicable to the Company and the Plan, or at any time in the case of (A) persons who are not “covered employees” under Section 162(m) of the Code or (B) Awards (whether or not to “covered employees”) not intended to qualify as performance-based compensation under Section 162(m) of the Code, such other criteria as may be determined by the Administrator.

IMAGE_14.JPG Performance Goals may be established on a Company-wide basis or with respect to one or more business units, divisions, Subsidiaries, or products and may be expressed in absolute terms, or relative to (i) current internal targets or budgets, (ii) the past performance of the Company (including the performance of one or more Subsidiaries, divisions or operating units),
(iii)the performance of one or more similarly situated companies, (iv) the performance of an index covering a peer group of companies or (v) other external measures of the selected performance criteria. Any performance objective may measure performance on an individual basis, as appropriate. The Administrator may provide for a threshold level of performance below which no Shares or compensation will be granted or paid in respect of Performance Shares or Performance Units, and a maximum level of performance above which no additional Shares or compensation will be granted or paid in respect of Performance Shares or Performance Units, and it may provide for differing amounts of Shares or compensation to be granted or paid in respect of Performance Shares or Performance Units for different levels of performance.

IMAGE_14.JPG Performance Goals that are financial metrics may be determined in accordance with United States Generally Accepted Accounting Principles (“GAAP”) or financial metrics that are based on, or able to be derived from GAAP, and may be adjusted when established or at any time thereafter to include or exclude any items otherwise includable or excludable under GAAP. Without limiting the generality of the immediately preceding sentence, the determination of performance pursuant to such Performance Goals may include or exclude (i) items that are unusual in nature and items that are infrequently occurring, as determined by the Company’s independent public accountants in accordance with GAAP or (ii) changes in accounting, and (iii) other material extraordinary events such as restructurings; discontinued operations; asset write- downs; significant litigation or claims, judgments or settlements; acquisitions or divestitures; reorganizations or changes in the corporate structure or capital structure of the Company; foreign exchange gains and losses; change in the fiscal year of the Company; business interruption events; unbudgeted capital expenditures; unrealized investment gains and losses; and impairments; in the case of each of clauses (i)-(iii) so long as such determination is made in a manner (and at a time) permitted by Section 162(m) of the Code. Notwithstanding any other provision of this paragraph to the contrary, in no event may any action referred to herein be taken
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with respect to Awards intended to be performance-based compensation under Section 162(m) of the Code if the taking of such action would cause such Awards to no longer qualify (and, in such case, the Administrator shall be deemed not to have the discretion to take such action).

Except in the case of Awards to “covered employees” intended to be performance-based compensation under Section 162(m) of the Code, the Administrator may also adjust the Performance Goals for any Performance Cycle as it deems equitable in recognition of unusual or non-recurring events affecting the Company, changes in applicable tax laws or accounting principles, or such other factors as the Administrator may determine.

Section 9.6    Special Rule for Performance Goals. If, at the time of grant, the Administrator intends a Performance Share Award, Performance Unit or other Performance Award to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, the Administrator must establish Performance Goals for the applicable Performance Cycle prior to the 91st day of the Performance Cycle (or by such other date as may be required under Section 162(m) of the Code) but not later than the date on which 25% of the Performance Cycle has elapsed.

IMAGE_1.JPG Section 9.7    Negative Discretion. Notwithstanding anything in this Article IX to the contrary, the Administrator shall have the right, in its absolute discretion, (i) to reduce or eliminate the amount otherwise payable to any Participant under Section 9.9 based on individual performance or any other factors that the Administrator, in its discretion, shall deem appropriate and (ii) to establish rules or procedures that have the effect of limiting the amount payable to each Participant to an amount that is less than the maximum amount otherwise authorized under the Award or under the Plan.

Section 9.8    Affirmative Discretion. Notwithstanding any other provision in the Plan to the contrary, but subject to the maximum number of Shares available for issuance under Article IV of the Plan the Administrator shall have the right, in its discretion, to grant an Award in cash, Shares or other Awards, or in any combination thereof, to any Participant (except for Awards intended to qualify as performance-based compensation under Section 162(m) of the Code, to the extent Section 162(m) of the Code is applicable to the Company and the Plan) in a greater amount than would apply under the applicable Performance Goals, based on individual performance or any other criteria that the Administrator deems appropriate. Notwithstanding any provision of the Plan to the contrary, in no event shall the Administrator have, or exercise, discretion with respect to a Performance Award intended to qualify as performance-based compensation under Section 162(m) of the Code if such discretion or the exercise thereof would cause such qualification not to be available.

Section 9.9    Certification of Attainment of Performance Goals. As soon as practicable after the end of a Performance Cycle and prior to any payment or vesting in respect of such Performance Cycle, the Administrator shall certify in writing the number of Performance Shares or other Performance Awards and the number and value of Performance Units that have been earned or vested on the basis of performance in relation to the established Performance Goals.

Section 9.10    Payment of Awards. Payment or delivery of Company Common Stock with respect to earned Performance Shares and earned Performance Units shall be made to the
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IMAGE_1.JPG Participant or, if the Participant has died, to the Participant’s Eligible Representative, as soon as practicable after the expiration of the Performance Cycle and the Administrator’s certification under Section 9.9 above and (unless an applicable Award Agreement shall set forth one or more other dates) in any event no later than the earlier of (i) ninety (90) days after the end of the fiscal year in which the Performance Cycle has ended and (ii) ninety (90) days after the expiration of the Performance Cycle. The Administrator shall determine and set forth in the applicable Award Agreement whether earned Performance Shares and the value of earned Performance Units are to be distributed in the form of cash, Shares or in a combination thereof, with the value or number of Shares payable to be determined based on the Fair Market Value of the Company Common Stock on the date of the Administrator’s certification under Section 9.9 above or such other date specified in the Award Agreement. The Administrator may, in an Award Agreement with respect to the award or delivery of Shares, condition the vesting of such Shares on the performance of additional service.

Section 9.11    Newly Eligible Participants. Notwithstanding anything in this Article IX to the contrary, the Administrator shall be entitled to make such rules, determinations and adjustments as it deems appropriate with respect to any Participant who becomes eligible to receive Performance Shares, Performance Units or other Performance Awards after the commencement of a Performance Cycle.

ARTICLE X DEFERRED SHARE UNITS
Section 10.1    Grant. Subject to Article III, the Administrator is authorized to make
awards of Deferred Share Units to any Participant selected by the Administrator at such time or times as shall be determined by the Administrator without regard to any election by the Participant to defer receipt of any compensation or bonus amount payable to him. The grant date of any Deferred Share Unit under the Plan will be the date on which such Deferred Share Unit is awarded by the Administrator or on such other future date as the Administrator shall determine in its sole discretion. Upon the grant of Deferred Share Units pursuant to the Plan, the Company shall establish a notional account for the Participant and will record in such account the number of Deferred Share Units awarded to the Participant. No Shares will be issued to the Participant at the time an award of Deferred Share Units is granted. Subject to Article III, Deferred Share Units may become payable on a Corporate Event, termination of employment or on a specified date or dates set forth in the Award Agreement evidencing such Deferred Share Units.

Section 10.2    Rights as a Stockholder. A Participant shall not be, nor have any of the rights and privileges of, a stockholder of the Company in respect of Deferred Share Units awarded pursuant to the Plan unless and until such time as the Shares attributable to such Deferred Share Units have been issued to such Participant.

Section 10.3    Vesting. Unless the Administrator provides otherwise at the grant date or provides thereafter in a manner more favorable to the Participant, Deferred Share Units shall be fully vested and nonforfeitable when granted.
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Section 10.4    Further Deferral Elections. A Participant may elect to further defer receipt of Shares issuable in respect of Deferred Share Units (or an installment of an Award) for a specified period or until a specified event and in a manner consistent with Section 409A of the Code, subject in each case to the Administrator’s approval and to such terms as are determined by the Administrator, all in its sole discretion. Subject to any exceptions adopted by the Administrator, such election must generally be made at least twelve (12) months prior to the prior settlement date of such Deferred Share Units (or any such installment thereof) and must defer settlement for at least five (5) years after such prior settlement date. A further deferral opportunity does not have to be made available to all Participants, and different terms and conditions may apply with respect to the further deferral opportunities made available to different Participants.

IMAGE_1.JPG Section 10.5    Settlement. Subject to this Article X, upon the date specified in the Award Agreement evidencing the Deferred Share Units, for each such Deferred Share Unit the Participant shall receive, as specified in the Award Agreement (and subject to satisfaction of applicable withholding taxes), (i) a cash payment equal to the Fair Market Value of one (1) Share as of such payment date, (ii) one (1) Share or (iii) any combination of clauses (i) and (ii).

ARTICLE XI

OTHER STOCK-BASED AWARDS

Section 11.1    Grant of Stock-Based Awards. The Administrator is authorized to make Awards of other types of equity-based or equity-related awards (“Stock-Based Awards”) not otherwise described by the terms of the Plan in such amounts and subject to such terms and conditions as the Administrator shall determine. All Stock-Based Awards shall be evidenced by an Award Agreement. Such Stock-Based Awards may be granted as an inducement to enter the employ of the Company or any Subsidiary or in satisfaction of any obligation of the Company or any Subsidiary to an officer or other key employee, whether pursuant to this Plan or otherwise, that would otherwise have been payable in cash or in respect of any other obligation of the Company.
Such Stock-Based Awards may entail the transfer of actual Shares, or payment in cash or otherwise of amounts based on the value of Shares and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.

Section 11.2    Automatic Grants for Directors. The Board or the Administrator may institute, by resolution or other corporate policy, grants of automatic Awards to new and continuing Directors, with the number and type of such Awards, the frequency of grant and all related terms and conditions, including any applicable vesting conditions, as determined by the Administrator in its sole discretion.

ARTICLE XII DIVIDEND EQUIVALENTS
Section 12.1    Generally. Dividend Equivalents may be granted to Participants at such
time or times as shall be determined by the Administrator. Dividend Equivalents may be granted in tandem with other Awards, in addition to other Awards, or freestanding and unrelated to other
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Awards. The grant date of any Dividend Equivalents under the Plan will be the date on which the Dividend Equivalent is awarded by the Administrator, or such other date permitted by Applicable Laws as the Administrator shall determine in its sole discretion. Dividend Equivalents may, at the discretion of the Administrator, be fully vested and nonforfeitable when granted or subject to such vesting conditions as determined by the Administrator; provided, that, unless the Administrator shall determine otherwise in an Award Agreement or thereafter on terms more favorable to a Participant, Dividend Equivalents with respect to Awards shall not be fully vested until the Awards have been earned and shall be forfeited if the related Award is forfeited. Dividend Equivalents shall be evidenced in writing, whether as part of the Award Agreement governing the terms of the Award, if any, to which such Dividend Equivalent relates, or pursuant to a separate Award Agreement with respect to freestanding Dividend Equivalents, in each case, containing such provisions not inconsistent with the Plan as the Administrator shall determine, including customary representations, warranties and covenants with respect to securities law matters.

ARTICLE XIII TERMINATION AND FORFEITURE
Section 13.1    Termination for Cause; Post-Service Competitive Activity. Unless
IMAGE_1.JPG otherwise determined by the Administrator at the grant date and set forth in the Award Agreement covering the Award or otherwise in writing or determined thereafter in a manner more favorable to the Participant, if a Participant’s employment or service terminates for Cause or a Participant engages in Competitive Activity following the Participant’s termination of service, all Options and SARs, whether vested or unvested, and all other Awards that are unvested or unexercisable or otherwise unpaid (or were unvested or unexercisable or unpaid at the time of occurrence of Cause) shall be immediately forfeited and canceled, effective as of the date of the Participant’s termination of service. Notwithstanding the foregoing, unless otherwise determined by the Administrator at the grant date and set forth in the Award Agreement covering the Award or otherwise in writing or determined thereafter in a manner more favorable to the Participant, any Award that vested or was paid to the Participant or otherwise settled during the twelve months prior to or any time after the Participant engaged in (i) the conduct that gave rise to the termination for Cause or (ii) Competitive Activity following the Participant’s termination of service, shall upon demand by the Administrator be immediately forfeited and disgorged or paid to the Company together with all gains earned or accrued due to the exercise of such Awards or sale of Company Common Stock issued pursuant to such Awards.

Section 13.2    Termination for Any Other Reason. Unless otherwise determined by the Administrator at the grant date and set forth in the Award Agreement covering the Award or otherwise in writing or determined thereafter in a manner more favorable to the Participant, if a Participant’s employment or service terminates for any reason other than Cause:

(a)All Awards that are unvested or unexercisable shall be immediately forfeited and canceled, effective as of the date of the Participant’s termination of service;

(b)All Options and SARs that are vested shall remain outstanding until (w) in the case of termination for death or Disability, the first anniversary of the date of the Participant’s death or Disability, (x) in the case of termination by reason of retirement at
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or following normal retirement age, the third anniversary of the date of retirement, (y) the three-month anniversary of the effective date of the Participant’s termination for any reason other than death, Disability or retirement at normal retirement age or (z) the Award’s normal expiration date, whichever is earlier, after which any unexercised Options and SARs shall immediately terminate; and

(c)All Awards other than Options and SARs that are vested shall be treated as set forth in the applicable Award Agreement (or in any more favorable manner determined by the Administrator).

Section 13.3    Post-Termination Informational Requirements. Before the settlement of any Award following termination of employment or service, the Administrator may require the Participant (or the Participant’s Eligible Representative, if applicable) to make such representations and provide such documents as the Administrator deems necessary or advisable to effect compliance with Applicable Law and determine whether the provisions of Section 13.1 or Section 13.4 may apply to such Award.

Section 13.4    Forfeiture of Awards. Awards granted under this Plan (and gains earned or accrued in connection with Awards) shall be subject to such generally applicable policies as to forfeiture and recoupment (including, without limitation, upon the occurrence of material financial or accounting errors, financial or other misconduct or Competitive Activity) as may be adopted by the Administrator or the Board from time to time and communicated to Participants. Any such policies may (in the discretion of the Administrator or the Board) be applied to outstanding Awards at the time of adoption of such policies, or on a prospective basis only. The Participant shall also forfeit and disgorge to the Company any Awards granted or vested and any gains earned or accrued due to the exercise of Options or SARs or the sale of any Company Common Stock to the extent required by Applicable Law or regulations in effect on or after the Effective Date, including Section 304 of the Sarbanes-Oxley Act of 2002 and Section 10D of the Exchange Act.
For the avoidance of doubt, the Administrator shall have full authority to implement any policies and procedures necessary to comply with Section 10D of the Exchange Act and any rules promulgated thereunder. The implementation of policies and procedures pursuant to this Section
13.4 and any modification of the same shall not be subject to any restrictions on amendment or modification of Awards.

Section 13.5    Clawbacks. Awards shall be subject to any generally applicable clawback policy adopted by the Administrator, the Board or the Company that is communicated to the Participants or any such policy adopted to comply with Applicable Law.

ARTICLE XIV CHANGE IN CONTROL
Section 14.1    Alternative Award. Unless otherwise expressly provided in an Award
Agreement and other than with respect to the Performance Award Conversion, no cancellation, acceleration or other payment shall occur in connection with a Change in Control pursuant to Section 14.3 with respect to any Award or portion thereof as a result of the Change in Control if the Administrator reasonably determines in good faith, prior to the occurrence of the Change in
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IMAGE_1.JPG Control, that such Award shall be honored or assumed, or new rights substituted therefor following the Change in Control (such honored, assumed or substituted award, an “Alternative Award”), provided that any Alternative Award must (i) give the Participant who held the Award rights and entitlements substantially equivalent to or better than the rights and terms applicable under the Award immediately prior to the Change in Control, including an equal or better vesting schedule and that Alternative Awards that are stock options have identical or better methods of payment of the exercise price thereof, (ii) have terms such that if a Participant’s employment is involuntarily (i.e., by the Company or its successor other than for Cause) or constructively (i.e., by the Participant with “good reason”, which, for a Participant who is a party to an employment agreement that contains such term, shall be as defined in such employment agreement, and, for a Participant who is not a party to an employment agreement containing such term, shall be determined by the Board prior to the Change in Control so as to be reasonably protective of the Participant in light of the circumstances of the particular transaction) terminated within two years following a Change in Control at a time when any portion of the Alternative Award is unvested, the unvested portion of such Alternative Award shall immediately vest in full and such Participant shall receive (as determined by the Board prior to the Change in Control) either (1) a cash payment equal in value to the excess (if any) of the fair market value of the stock subject to the Alternative Award at the date of exercise or settlement over the price (if any) that such Participant would be required to pay to exercise such Alternative Award or (2) publicly-traded shares or equity interests equal in value (as determined by the Administrator) to the value in clause (1).

IMAGE_1.JPG Section 14.2    Performance Award Conversion. Unless otherwise expressly provided in an Award Agreement, upon a Change in Control, then-outstanding Performance Awards shall be modified to remove any Performance Goals applicable thereto and to substitute, in lieu of such Performance Goals, vesting solely based on the requirement of continued service through, as nearly as is practicable, the date(s) on which the satisfaction of the Performance Goals would have been measured if the Change in Control had not occurred (or, if applicable, the later period of required service following such measurement date) (such Awards, the “Alternative Performance Awards”), with such service-vesting of the Alternative Performance Awards to accelerate upon the termination of employment of the holder prior to such vesting date(s) thereof, if such termination of employment satisfies the requirements of clause (ii) of Section 14.1 hereof. The number of Alternative Performance Awards shall be equal to (i) if less than 50% of the Performance Cycle has elapsed, the target number of Performance Awards pro rated based on the elapsed period of time between the grant date and the date of the Change in Control, and (ii) if 50% or more of the Performance Cycle has elapsed, a number of Performance Awards based on actual performance through the date of the Change in Control pro rated based on the elapsed period of time between the grant date and the date of the Change in Control (with the Administrator as constituted prior to the Change in Control making any determinations necessary to determine the pro rata number of Alternative Performance Awards and the vesting date(s) thereof). The conversion of the Performance Awards into Alternative Performance Awards is referred to herein as the “Performance Award Conversion”. Following the Performance Award Conversion, the Alternative Performance Awards shall either remain outstanding as Alternative Awards consistent with this Section 14.2 or shall be treated as provided in Section 14.3.

Section 14.3    Accelerated Vesting and Payment. Except as otherwise provided in this Article XIV or in an Award Agreement or thereafter on terms more favorable to a Participant, upon a Change in Control:
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(a)each vested and unvested Option or SAR shall be canceled in exchange for a payment equal to the excess, if any, of the Change in Control Price over the applicable Option Price or Base Price;

(b)the vesting restrictions applicable to all other unvested Awards (other than
(x)freestanding Dividend Equivalents not granted in connection with another Award and
(y)Performance Awards) shall lapse, all such Awards shall vest and become non- forfeitable and be canceled in exchange for a payment equal to the Change in Control Price;

(c)the Alternative Performance Awards shall be canceled in exchange for a payment equal to the Change in Control Price;

(d)all other Awards (other than freestanding Dividend Equivalents not granted in connection with another Award) that were vested prior to the Change in Control but that have not been settled or converted into Shares prior to the Change in Control shall be canceled in exchange for a payment equal to the Change in Control Price; and

(e)all freestanding Dividend Equivalents not granted in connection with another Award shall be cancelled without payment therefor.

To the extent any portion of the Change in Control Price is payable other than in cash and/or other than at the time of the Change in Control, Award holders under the Plan shall receive the same value in respect of their Awards (less any applicable exercise price, Base Price or similar feature) as is received by the Company’s stockholders in respect of their Company Common Stock (as determined by the Administrator), and the Administrator shall determine the extent to which such value shall be paid in cash, in securities or other property, or in a combination of cash and securities or other property, consistent applicable law. To the extent any portion of the Change in Control Price is payable other than at the time of the Change in Control, the Administrator shall determine the time and form of payment to the holders of Award consistent with Section 409A of the Code and other applicable law. For avoidance of doubt, upon a Change in Control the Administrator may cancel Options and SARs for no consideration if the aggregate Fair Market Value of the Shares subject to Options and SARs is less than or equal to the Option Price of such Options or the Base Price of such SARs.

Section 14.4    Section 409A. Notwithstanding the discretion in Sections 14.1, 14.2 or 14.3, if any Award is subject to Section 409A of the Code and an Alternative Award would be deemed a non-compliant modification of such Award under Section 409A, then no Alternative Award shall be provided and such Award shall instead be treated as provided in Section 14.3 or in the Award Agreement (or in such other manner determined by the Administrator that is a compliant modification under Section 409A).
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ARTICLE XV OTHER PROVISIONS
Section 15.1    Awards Not Transferable. Unless otherwise agreed to in writing by the
Administrator, no Award or interest or right therein or part thereof shall be liable for the debts, contracts or engagements of the Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law, by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition thereof shall be null and void and of no effect; provided, however, that nothing in this Section 15.1 shall prevent transfers by will or by the applicable laws of descent and distribution or, with the prior approval of the Company, estate planning transfers.

Section 15.2    Amendment, Suspension or Termination of the Plan or Award Agreements.

(a) IMAGE_14.JPG The Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator; provided that without the approval by a majority of the shares entitled to vote at a duly constituted meeting of shareholders of the Company, no amendment or modification to the Plan may (i) except as otherwise expressly provided in Section 4.3, increase the number of Shares subject to the Plan or the individual Award limitations specified in Section 4.2; (ii) modify the class of persons eligible for participation in the Plan or (iii) materially modify the Plan in any other way that would require shareholder approval under Applicable Law.

(b)Except as otherwise expressly provided in the Plan, neither the amendment, suspension nor termination of the Plan shall, without the consent of the holder of the Award, adversely alter or impair any rights or obligations under any Award theretofore granted. Except as provided by Section 4.3, notwithstanding the foregoing, the Administrator at any time, and from time to time, may amend the terms of any one or more existing Award Agreements, provided, however, that the rights of a Participant under an Award Agreement shall not be adversely impaired without the Participant’s written consent. The Company shall provide a Participant with notice of any amendment made to such Participant’s existing Award Agreement in accordance with the terms of this Section 15.2(b).

(c)Notwithstanding any provision of the Plan to the contrary, in no event shall adjustments made by the Administrator pursuant to Section 4.3 or the application of Section 13.4, Section 14.1, Section 14.2, Section 14.3, Section 15.6 or Section 15.13 to any Participant constitute an amendment of the Plan or of any Award Agreement requiring the consent of any Participant.

(d)No Award may be granted during any period of suspension nor after termination of the Plan, and in no event may any Award be granted under this Plan after the expiration of ten
(10) years from the Effective Date.
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Section 15.3    Effect of Plan upon Other Award and Compensation Plans. The adoption of this Plan shall not affect any other compensation or incentive plans in effect for the Company or any of its Subsidiaries. Nothing in this Plan shall be construed to limit the right of the Company or any of its Subsidiaries (a) to establish any other forms of incentives or compensation for Service Providers or (b) to grant or assume options or restricted stock other than under this Plan in connection with any proper corporate purpose, including, but not by way of limitation, the grant or assumption of options or restricted stock in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, firm or association.

Section 15.4    At-Will Employment. Nothing in the Plan or any Award Agreement hereunder shall confer upon the Participant any right to continue as a Service Provider of the Company or any of its Subsidiaries or shall interfere with or restrict in any way the rights of the Company and any of its Subsidiaries, which are hereby expressly reserved, to discharge any Participant at any time for any reason whatsoever, with or without Cause.

Section 15.5    Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of the Plan.

Section 15.6    Conformity to Securities Laws. The Plan is intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated under any of the foregoing, to the extent the Company, any of its Subsidiaries or any Participant is subject to the provisions thereof. Notwithstanding anything herein to the contrary, the Plan shall be administered, and Awards shall be granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations. To the extent permitted by applicable law, the Plan and Awards granted hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

Section 15.7    Term of Plan. The Plan shall become effective upon its date of adoption by the Administrator (the “Effective Date”) and shall continue in effect, unless sooner terminated pursuant to Section 15.2, until the tenth (10th) anniversary of the Effective Date. The provisions of the Plan shall continue thereafter to govern all outstanding Awards. It is intended that this Plan and the Awards made hereunder shall qualify for the transition rule contained in Treas. Reg.
§1.162-27(f)(1) during the period set forth therein to the maximum extent.

Section 15.8    Governing Law. To the extent not preempted by federal law, the Plan shall be construed in accordance with and governed by the laws of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

Section 15.9    Severability. In the event any portion of the Plan or any action taken pursuant thereto shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provisions had not been included, and the illegal or invalid action shall be null and void.

Section 15.10    Governing Documents. In the event of any express contradiction between the Plan and any Award Agreement or any other written agreement between a Participant and the
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Company or any Subsidiary of the Company that has been approved by the Administrator, the express terms of the Plan shall govern, unless it is expressly specified in such Award Agreement or other written document that such express provision of the Plan shall not apply.

Section 15.11    Withholding Taxes. In addition to any rights or obligations with respect to Withholding Taxes under the Plan or any applicable Award Agreement, the Company or any Subsidiary employing a Service Provider shall have the right to withhold from the Service Provider, or otherwise require the Service Provider or an assignee to pay, any Withholding Taxes arising as a result of grant, exercise, vesting or settlement of any Award or any other taxable event occurring pursuant to the Plan or any Award Agreement, including, without limitation, to the extent permitted by law, the right to deduct any such Withholding Taxes from any payment of any kind otherwise due to the Service Provider or to take such other actions (including, without limitation, withholding any Shares or cash deliverable pursuant to the Plan or any Award) as may be necessary to satisfy such Withholding Taxes; provided, however, that in the event that the Company withholds Shares issued or issuable to the Participant to satisfy all or any portion of the Withholding Taxes, the Company shall withhold a number of whole Shares having a Fair Market Value, determined as of the date of withholding, equal to such Withholding Taxes and any remaining amount shall be remitted in cash or withheld from cash payable to the Participant; and provided, further, that with respect to any Award subject to Section 409A of the Code, in no event shall Shares be withheld pursuant to this Section 15.11 (other than upon or immediately prior to settlement in accordance with the Plan and the applicable Award Agreement) other than to pay taxes imposed under the U.S. Federal Insurance Contributions Act (FICA) and any associated U.S. federal withholding tax imposed under Section 3401 of the Code and in no event shall the value of such Shares (other than upon immediately prior to settlement) exceed the amount of the tax imposed under FICA and any associated U.S. federal withholding tax imposed under Section 3401 of the Code. The Participant shall be responsible for all Withholding Taxes and other tax consequences of any Award granted under this Plan.

Section 15.12    Limitation Period For Claims. Any person who believes he or she is being denied any benefit or right under the Plan shall make a claim in respect of such denial by filing a written notice with the Administrator stating in reasonable detail the nature of the claim and the requested relief therefor. Such notice must be delivered to the Administrator within forty-five (45) days of the later of the payment date of the award or the specific event giving rise to the claim, and untimely claims shall be barred and will not be considered. The Administrator will notify the Participant of its decision in writing as soon as administratively practicable. Timely claims not responded to by the Administrator in writing within ninety (90) days of the date the written claim is delivered to the Administrator shall be deemed denied. The Administrator’s decision on any claim is final, conclusive and binding on all persons. No lawsuit relating to the Plan may be filed before a written claim is filed with the Administrator and is denied or deemed denied, and any lawsuit must be filed within one year of such denial or deemed denial or be forever barred.

Section 15.13    Section 409A. To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance
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that may be issued after the adoption of the Plan. Notwithstanding any provision of the Plan to the contrary, in the event that following the adoption of the Plan, the Administrator determines that any Award may be subject to Section 409A of the Code and related regulations and Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the adoption of the Plan), the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award,
IMAGE_1.JPG (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance or (c) comply with any correction procedures available with respect to Section 409A of the Code. Notwithstanding anything else contained in this Plan or any Award Agreement to the contrary, if a Service Provider is a “specified employee” as determined pursuant to Section 409A under any Company Specified Employee policy in effect at the time of the Service Provider’s “separation from service” (as determined under Section 409A) or, if no such policy is in effect, as defined in Section 409A of the Code), then, to the extent necessary to comply with, and avoid imposition on such Service Provider of any tax penalty imposed under, Section 409A of the Code, any payment required to be made to a Service Provider hereunder upon or following his or her separation from service shall be delayed until the first to occur of (i) the six-month anniversary of the Service Provider’s separation from service and (ii) the Service Provider’s death. Should payments be delayed in accordance with the preceding sentence, the accumulated payment that would have been made but for the period of the delay shall be paid in a single lump sum during the ten-day period following the lapsing of the delay period. No provision of this Plan or an Award Agreement shall be construed to indemnify any Service Provider for any taxes incurred by reason of Section 409A (or timing of incurrence thereof), other than an express indemnification provision therefor.

IMAGE_1.JPG Section 15.14    Notices. Except as provided otherwise in an Award Agreement, all notices and other communications required or permitted to be given under this Plan or any Award Agreement shall be in writing and shall be deemed to have been given if delivered personally, sent by email or any other form of electronic transfer approved by the Administrator, sent by certified or express mail, return receipt requested, postage prepaid, or by any recognized international equivalent of such delivery, (i) in the case of notices and communications to the Company, to its current business address and to the attention of the Corporate Secretary of the Company or (ii) in the case of a Participant, to the last known address, or email address or, where the individual is an employee of the Company or one of its subsidiaries, to the individual’s workplace address or email address or by other means of electronic transfer acceptable to the Administrator. All such notices and communications shall be deemed to have been received on the date of delivery, if sent by email or any other form of electronic transfer, at the time of dispatch or on the third business day after the mailing thereof.

* * * * * * *
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SCHEDULE OF SIGNATORIES TO DIRECTOR
INDEMNIFICATION AGREEMENTS


1. Betty R. Johnson

2. William E. Waltz Jr.

3. A. Mark Zeffiro

4. Jeri L. Isbell

5. Wilbert W. James Jr

6. Michael V. Schrock

7. Justin A. Kershaw

8. Scott H. Muse

9. William R. VanArsdale










Rev. 11/2020

Atkore International Group Inc.
Employee Performance Share Agreement

This Employee Performance Share Agreement (this “Agreement”), dated as of the date appearing on Exhibit A hereof (the “Grant Date”), between Atkore International Group Inc., a Delaware corporation (the “Company”), and each employee who is employed by the Company or one of its Subsidiaries and to whom a grant has been authorized (the “Employee”), is being entered into pursuant to the Atkore International Group Inc. 2020 Omnibus Incentive Plan (the “Plan”). Capitalized terms that are used in this Agreement but not defined in this Agreement have the meanings given to such terms in the Plan.

The Company and the Employee hereby agree as follows:

Section 1.    Grant of Performance Shares; Restrictive Covenants. The Company hereby evidences and confirms its grant to the Employee of the number of Performance Shares as shall be determined pursuant to Exhibit A and Section 2, subject to adjustment pursuant to the Plan. The Performance Shares represent the contractual right of the Employee to receive shares of Company Common Stock in such number and at such times as determined pursuant to this Agreement. Any Performance Share that becomes earned and vested in accordance with the terms of this Agreement will entitle the Employee to receive from the Company one (1) share of Company Common Stock herein and any related dividend equivalents. This Agreement is entered into pursuant to, and the Performance Shares granted hereunder are subject to, the terms and conditions of the Plan, which are incorporated by reference herein. Acceptance of this Agreement shall be evidenced by such physical or electronic methods as are adopted by the Company. In consideration of the grant of the Performance Shares and the economic benefits that may derive therefrom, Employee agrees to be bound to the restrictive covenants set forth in Exhibit C hereof.

Section 2.    Vesting of Performance Shares; Effect of Termination of Employment.

(a)Vesting. Except as otherwise provided in this Section 2, Performance Shares that are earned pursuant to Exhibit A and not forfeited pursuant to his Agreement shall become vested in accordance with the terms and conditions of this Agreement and the Plan, subject to the Employee’s continued employment through the last day of the Performance Cycle. Performance Shares that are earned and vested shall be settled as provided in Section 4.
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(b)Effect of Termination of Employment.

(i)Death, Disability or Retirement. If the Employee’s employment
(x) is terminated by reason of the Employee’s death or Disability or (y) terminates by reason of the Employee’s retirement on or after the Employee reaching normal retirement age (as determined by the retirement policy of the Company applicable to the Employee), in either case before the last day of the Performance Cycle, (1) a pro rata number of the Performance Shares shall be earned and vested based on actual achievement of the Performance Goals during the entire Performance Cycle (as if the Employee’s employment had continued during the entire Performance Cycle), with such resulting number of Performance Shares then multiplied by a fraction representing the elapsed portion of the Performance Cycle through the
date of the Employee’s actual date of termination of employment, and (2) any Performance Shares that do not vest pursuant to this Section 2(b)(i) shall automatically be forfeited and cancelled; provided, that (x) at least six (6) months must elapse from the Grant Date to the date of termination of the Employee’s employment for any termination initiated by the Employee to be treated as a retirement, and (y) in the case of the Employee’s retirement, such pro rata vesting shall be conditioned on the Administrator’s determination that the Employee remains in material compliance with any restrictive covenants applicable to the Employee.

(ii)    Any Other Reason. Upon termination of the Employee’s employment before the last day of the Performance Cycle for any reason other than the Employee’s death, Disability or retirement, all Performance Shares shall be forfeited and cancelled as of the effective date of such termination.

(c)Effect of a Change in Control. In the event that a Change in Control occurs during the Performance Cycle and the Employee remains employed through the date of the Change in Control, the Performance Shares shall be adjusted as provided in Section 14.2 of the Plan; provided, that if more than one-half of the Performance Cycle has elapsed and the Administrator (as constituted prior to the Change in Control) is not reasonably able to determine actual performance through the date of the Change in Control, then the pro ration described in Section 14.2 of the Plan shall be applied to the Target Number rather than the number based on actual performance. In the event that a Change in Control occurs during the Performance Cycle and the Employee’s employment terminates prior to the Change in Control by reason of the Employee’s death, Disability or retirement, (1) this Section 2(c) shall initially be applied as if the Employee had remained employed through the date of the Change in Control, (2) the number of Performance Shares resulting from the adjustment described in the first sentence of this Section 2(c) shall then be pro-rated as described in Section 2(b)(i), except that the Performance Cycle shall be deemed to be the period from the beginning of the Performance Cycle through the date of the Change in Control, and (3) the resulting
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number of Performance Shares after application of clauses (1) and (2) shall be paid to the Employee at or as soon as practicable after the Change in Control.

(d)Discretionary Acceleration. Notwithstanding anything contained in this Agreement to the contrary, the Administrator, in its sole discretion, may accelerate the vesting with respect to any Performance Shares, at such times and upon such terms and conditions as the Administrator shall determine.

(e)No Other Accelerated Vesting. The vesting provisions set forth in this Section 2 shall be the exclusive vesting and exercisability provisions applicable to the Performance Shares and shall supersede any other provisions relating to vesting, unless such other such provision expressly refers to the Plan by name and this Agreement by name and date.

Section 3.    Treatment of Dividends. If the Company pays any cash dividend or similar cash distribution on the Company Common Stock, the Company shall credit to the Employee’s account an amount equal to the product of (x) the number of the
Employee’s Performance Shares (based on the Target Number) as of the record date for such distribution times (y) the per share amount of such dividend or similar cash distribution on Company Common Stock. If the Company makes any dividend or other distribution on the Company Common Stock in the form of Company Common Stock or other securities, the Company will credit the Employee’s account with that number of additional Shares or other securities that would have been distributed with respect to that number of Shares underlying the Employee’s Performance Shares (based on the Target Number) as of the record date thereof, or, in its discretion, the Administrator may elect to credit the value (as determined by the Administrator) of such additional Shares or other securities to the Employee’s account in cash. Any such additional Shares, other securities or cash shall be subject to the same adjustments and restrictions as apply to the Performance Shares and shall be paid to the Employee if and when the related Settlement Date occurs (and, for clarity, shall be increased if greater than the Target Number is earned and forfeited if the related Performance Shares are forfeited).

Section 4.    Settlement of Performance Shares. Subject to Section 6(a), any Performance Shares that become earned and vested shall be settled into an equal number of shares of Company Common Stock on a date selected by the Company that is within thirty (30) days following the Administrator’s certification of achievement of the Performance Goals, but no later than March 15th of the calendar year immediately following the Performance Cycle (the “Settlement Date”). On the Settlement Date, the Company shall issue to the Employee one (1) whole share of Company Common Stock for each Performance Share that became earned and vested as of the Settlement Date, and, upon such issuance, the Employee’s rights in respect of each such Performance Share shall be extinguished. No fractional shares of Company Common Stock shall be issued in respect of the Performance Shares, and in the event that any fractional
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Performance Shares become earned and vested hereunder, such fractional Performance Shares shall be settled in cash

Section 5.    Restriction on Transfer; Non-Transferability of Performance Shares. The Performance Shares are not assignable or transferable, in whole or in part, and they may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including, but not limited to, by gift, operation of law or otherwise), other than by will or by the laws of descent and distribution to the estate of the Employee upon the Employee’s death or, with the prior approval of the Company’s General Counsel or the Administrator, estate planning transfers. Any purported transfer in violation of this Section 5 shall be void ab initio.

Section 6.    Miscellaneous.

(a)Tax Matters.

(i)Withholding. The Company or one of its Subsidiaries may require the Employee to remit to the Company an amount in cash sufficient to satisfy any applicable U.S. federal, state and local and non-U.S. tax withholding obligations that may arise in connection with the grant, vesting and/or settlement of the Performance Shares. Notwithstanding the preceding sentence, unless previously satisfied on or prior to the vesting date, the Company shall retain a number of Shares subject to the Performance Shares then vesting that have an aggregate Fair Market Value as of the vesting date equal to the amount of such taxes required to be withheld (and the Employee shall thereupon be deemed to have satisfied his or her obligations under this Section 6(a)); provided that the number of Shares retained shall be effected at a rate determined by the Company that is permitted under applicable IRS withholding rules and that does not to cause adverse accounting consequences (it being understood that the value of any fractional share of Company Common Stock shall be paid in cash). The number of Shares registered in the name of the Employee shall thereupon be reduced by the number of Shares so retained. The method of withholding set forth in the immediately preceding sentence shall not be available if withholding in this manner would violate any financing instrument of the Company or any of its Subsidiaries or to the extent that a facility is available to the Employee by which the Employee may sell Shares in the public market to satisfy such obligations.

(ii)Section 409A of the Code. The Performance Shares are not intended to be subject to Section 409A of the Code and shall be administered and construed in a manner consistent therewith.

(b)Incorporation of Forfeiture Provisions. The Employee acknowledges and agrees that, pursuant to the Plan, he or she shall be subject to any generally applicable
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disgorgement or forfeiture provisions set forth in Article XIII of the Plan as of the date of this Agreement or as may be imposed by the Administrator (including as required by applicable law) after the date of this Agreement, including with respect to post- employment Competitive Activity. The Employee hereby appoints the Company as the Employee’s attorney-in-fact of the undersigned to take such actions as may be necessary or appropriate to affect a transfer of the record ownership of any such Shares to which such disgorgement or forfeiture provisions may apply.

(c)No Right to Continued Employment. Nothing in this Agreement shall be deemed to confer on the Employee any right to continue in the employ of the Company or any Subsidiary, or to interfere with or limit in any way the right of the Company or any Subsidiary to terminate such employment at any time.

(d)Non-Transferability of Performance Shares. Prior to the Settlement Date thereof, the Performance Shares are not assignable or transferable, in whole or in part, and they may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including, but not limited to, by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Employee upon the Employee’s death or with the Company’s consent.

(e)Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be provided as set forth in Section 15.13 of the Plan.

(f)Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors, assigns, beneficiaries, legal representatives or estate any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(g)Waiver; Amendment.

(i)Waiver. Any party hereto or beneficiary hereof may by written notice to the other parties (A) extend the time for the performance of any of the obligations or other actions of the other parties under this Agreement, (B) waive compliance with any of the conditions or covenants of the other parties contained in this Agreement and (C) waive or modify performance of any of the obligations of the other parties under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, but not limited to, any investigation by or on behalf of any party or beneficiary, shall be deemed to constitute a waiver by the party or beneficiary taking such action of compliance with any representations, warranties, covenants or agreements contained herein.
5
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The waiver by any party hereto or beneficiary hereof of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by a party or beneficiary to exercise any right or privilege hereunder shall be deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise the same at any subsequent time or times hereunder.

(ii)Amendment. This Agreement may not be amended, modified or supplemented orally, but only by a written instrument executed by the Employee and the Company.

(h)Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company or the Employee without the prior written consent of the other party.

(i)Applicable Law and Forum. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction. Subject to the dispute resolution provision contained herein, any judicial action to enforce, interpret or challenge this Agreement shall be brought in the federal or state courts located in the State of Illinois, which shall be the exclusive forum for resolving such disputes. Both parties irrevocably consent to the personal jurisdiction of such courts for purposes of any such action.

(j) IMAGE_02.JPG Waiver of Jury Trial. Each party hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding arising out of this Agreement or any transaction contemplated hereby. Each party (i) 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 (ii) acknowledges that it and the other parties have been induced to enter into the Agreement by, among other things, the mutual waivers and certifications in this Section 6(j).

(k)Lock-Up Periods. If the Company files a registration statement under the Securities Act with respect to an underwritten public offering of any shares of its capital stock, the Employee shall not affect any public sale (including a sale under Rule 144 under the Securities Act or other similar provision of applicable law) or distribution of any Company Common Stock, other than as part of such underwritten public offering, during the 20 days prior to and the 90 days after the effective date of such registration statement (or such other period, not to exceed 180 days, as may be generally applicable to or agreed by the Company with respect to its transactions in its own Shares). If the Company files a prospectus in connection with a takedown from a shelf registration statement, the Associate shall not affect any public sale (including a sale under Rule 144
6
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under the Securities Act or other similar provision of applicable law) or distribution of any Company Common Stock, other than as part of such offering, for 20 days prior to and 90 days after the date the prospectus supplement is filed with the Securities and Exchange Commission.

(l)Trading Policies. The Employee acknowledges and agrees that he or she shall be subject to, and shall comply with, any of the Company's trading policies, as in effect from time to time.

(m)Section and Other Headings, etc. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(a)    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
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Exhibit A to
Employee Performance Share Agreement

1.Grant Information

Employee:
As communicated separately to the Employee
Grant Date:
November 17, 2020
Target Number of Performance Shares granted hereby (the “Target Number”):
As communicated separately to the Employee
Performance Cycle:
The three (3)-year period commencing October 1, 2020 and ending September 30,
2023

2.Earned Number of Performance Shares

Relative Total Shareholder Return, or “Relative TSR” (50% of Target Number of Performance Shares): The extent to which fifty percent (50%) of the Target Number of Performance Shares is earned shall be determined by reference to the achievement of Relative Total Shareholder Return, as follows:

Relative TSR Achievement:**
Number of Performance Shares Earned (as a percentage of the Target Number):
Lower than the 25th percentile
0%
25th percentile
50%
50th percentile
100%
75th percentile or higher
150%

**Notwithstanding the foregoing table, if Relative TSR achievement would result in higher than 100% of the Target Number of Performance Shares being earned but the TSR of the Company Common Stock on an absolute basis is negative, then the number of Performance Shares earned shall be 100% of the Target Number.
8
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For this purpose, “Total Shareholder Return” or “TSR” means the change in the value of the Relevant Stock over the Performance Cycle, including both stock price appreciation during the Performance Cycle and the deemed reinvestment of dividends on the Relevant Stock during the Performance Cycle. The beginning and ending stock prices will be based on a twenty (20) trading day average stock price ending on the first and last day of the Performance Cycle. Any dividends (including extraordinary cash dividends) declared on the Relevant Stock during the Performance Cycle will be reinvested at the closing price on the first ex-dividend date. All share-based dividends (including spinoffs) shall be assumed to be sold on the issue date for cash and such cash reinvested in Relevant Stock on that same date.

IMAGE_110.JPG Relevant Stock” means the Company Common Stock and the common stock of each of the constituent companies attached as Exhibit B (the “constituent companies”).

IMAGE_25.JPG The TSR “percentile” shall be the percentile ranking (carried to two decimal points), from highest to lowest, on the basis of the Total Shareholder Return figures reported by the financial reporting service selected by the Administrator in determining Total Shareholder Return for the Company and the constituent companies. If any of the constituent companies are no longer publicly traded at the end of the Performance Cycle due to bankruptcy, they will continue to be included in the Relative Total Shareholder Return calculation by force ranking them at the bottom of the array of the TSR Percentile. If any of the constituent companies are no longer publicly traded at the end of the Performance Cycle due to acquisition, they will be excluded from the calculation for all purposes and the TSR percentile will be determined by reference to the remaining constituent companies.

“Relative Total Shareholder Return,” or “Relative TSR” shall be the ranking of the Company against the constituent companies determined by reference to TSR percentile.

Profitability/Capital Efficiency (50% of Target Number of Performance Shares): The extent to which fifty percent (50%) of the Target Number of Performance Shares is earned shall be determined by reference to the achievement of Profitability/Capital Efficiency, as follows:

Profitability/Capital Efficiency Achievement:
Number of Performance Shares Earned (as a percentage of the Target Number):
Less than 80%
0%
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80% 50%
100% 100%
125% or more
200%

For this purpose, “Profitability/Capital Efficiency” is determined by reference to increase in Adjusted Net Income during the Performance Cycle (expressed as a percentage). For this purpose, “Adjusted Net Income” means net income as net income (loss) before merger and acquisition transaction costs, and other items due to one-time non-recurring events.

With respect to both Performance Goals, achievement of a Performance Goal in excess of the 0% threshold or below the 200% threshold will be calculated by the Administrator by straight-line interpolation by reference to the two relevant thresholds.

3.Certification of Performance

(a)    Certification of Achievement Relative to Performance Goals: As soon as practicable after the end of the Performance Cycle but in any event within 60 days after end of the Performance Cycle, the Administrator shall certify in writing the extent to which the Performance Goals have been achieved. In making such certification, the Administrator shall be permitted to exercise any discretion permitted under the Plan.
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Exhibit B to
Employee Performance Share Agreement

1.Constituent Company for purpose of determining TSR percentile rank

Peer Ticker
Peer Name
GICS Code
Atkore Compensation Peers
AYI
Acuity Brands, Inc.
20104010
WMS
Advanced Drainage Systems, Inc.
20102010
APOG
Apogee Enterprises, Inc.
20102010
AWI
Armstrong World Industries, Inc.
20102010
AZZ
AZZ Inc.
20104020
BDC
Belden Inc.
45203015
ENS EnerSys 20104010
GNRC
Generac Holdings Inc.
20104010
ROCK
Gibraltar Industries, Inc.
20102010
HUBB
Hubbell Incorporated
20104010
LFUS
Littelfuse, Inc.
45203015
DOOR
Masonite International Corporation
20102010
NVT
nVent Electric plc
20104010
NX
Quanex Building Products Corporation
20102010
RBC
Regal Beloit Corporation
20104010
RXN
Rexnord Corporation
20106020
SSD
Simpson Manufacturing Co., Inc.
20102010
VMI
Valmont Industries, Inc.
20103010
Commodity Chemicals (15101010)
CBT
Cabot Corporation
15101010
HWKN
Hawkins, Inc.
15101010
KOP
Koppers Holdings Inc.
15101010
KRO
Kronos Worldwide, Inc.
15101010
OEC
Orion Engineered Carbons S.A.
15101010
TG
Tredegar Corporation
15101010
TROX
Tronox Holdings plc
15101010
TSE
Trinseo S.A.
15101010
VVV
Valvoline Inc.
15101010
Steel (15104050)
CRS
Carpenter Technology Corporation
15104050
CLF
Cleveland-Cliffs Inc.
15104050
11
1002287540v6




SCHN
Schnitzer Steel Industries, Inc.
15104050
HCC
Warrior Met Coal, Inc.
15104050
WOR
Worthington Industries, Inc.
15104050
Building Products (20102010)
AMWD
American Woodmark Corporation
20102010
GFF
Griffon Corporation
20102010
PATK
Patrick Industries, Inc.
20102010
PGTI
PGT Innovations, Inc.
20102010
Construction & Engineering (20103010)
AMRC
Ameresco, Inc.
20103010
APG
APi Group Corporation
20103010
ACA
Arcosa, Inc.
20103010
FIX
Comfort Systems USA, Inc.
20103010
ROAD
Construction Partners, Inc.
20103010
DY
Dycom Industries, Inc.
20103010
GVA
Granite Construction Incorporated
20103010
GLDD
Great Lakes Dredge & Dock Corporation
20103010
IESC
IES Holdings, Inc.
20103010
MYRG
MYR Group Inc.
20103010
NVEE
NV5 Global, Inc.
20103010
PRIM
Primoris Services Corporation
20103010
WSC
WillScot Mobile Mini Holdings Corporation
20103010
WIRE
Encore Wire Corporation
20104010
EAF
GrafTech International Ltd.
20104010
ST
Sensata Technologies Holding plc
20104010
RUN
Sunrun Inc.
20104010
Heavy Electrical Equipment (20104020)
BE
Bloom Energy Corporation
20104020
TPIC
TPI Composites, Inc.
20104020
Construction Machinery & Heavy Trucks (20106010)
ALG
Alamo Group Inc.
20106010
ALSN
Allison Transmission Holdings, Inc.
20106010
ASTE
Astec Industries, Inc.
20106010
PLOW
Douglas Dynamics, Inc.
20106010
FSS
Federal Signal Corporation
20106010
GBX
The Greenbrier Companies, Inc.
20106010
SHYF
The Shyft Group, Inc.
20106010
12
1002287540v6




TRN
Trinity Industries, Inc.
20106010
WNC
Wabash National Corporation
20106010
Industrial Machinery (20106020)
AIN
Albany International Corp.
20106020
AIMC
Altra Industrial Motion Corp.
20106020
B
Barnes Group Inc.
20106020
GTLS
Chart Industries, Inc.
20106020
CIR
CIRCOR International, Inc.
20106020
CFX
Colfax Corporation
20106020
CMCO
Columbus McKinnon Corporation
20106020
CR
Crane Co.
20106020
DCI
Donaldson Company, Inc.
20106020
EPAC
Enerpac Tool Group Corporation
20106020
NPO
EnPro Industries, Inc.
20106020
ESE
ESCO Technologies Inc.
20106020
AQUA
Evoqua Water Technologies Corp.
20106020
FLS
Flowserve Corporation
20106020
FELE
Franklin Electric Co., Inc.
20106020
GTES
Gates Industrial Corporation plc
20106020
HLIO
Helios Technologies, Inc.
20106020
HI
Hillenbrand, Inc.
20106020
HY
Hyster-Yale Materials Handling, Inc.
20106020
ITT
ITT Inc.
20106020
JBT
John Bean Technologies Corporation
20106020
KAI
Kadant Inc.
20106020
KMT
Kennametal Inc.
20106020
LECO
Lincoln Electric Holdings, Inc.
20106020
MIDD
The Middleby Corporation
20106020
MLI
Mueller Industries, Inc.
20106020
MWA
Mueller Water Products, Inc.
20106020
PNR
Pentair plc
20106020
ROLL
RBC Bearings Incorporated
20106020
SPXC
SPX Corporation
20106020
FLOW
SPX FLOW, Inc.
20106020
SXI
Standex International Corporation
20106020
TNC
Tennant Company
20106020
TKR
The Timken Company
20106020
TRS
TriMas Corporation
20106020
13
1002287540v6




WTS
Watts Water Technologies, Inc.
20106020
WBT
Welbilt, Inc.
20106020
WWD
Woodward, Inc.
20106020
14
1002287540v6




Exhibit C Restrictive Covenants
Section 1    Confidential Information.

1.1The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and thereafter, the Employee will not disclose confidential or proprietary information or trade secrets related to any business of the Company or its Subsidiaries, including without limitation, and whether or not such information is specifically designated as confidential or proprietary: all business plans and marketing strategies; information concerning existing and prospective markets, suppliers and customers; financial information; information concerning the development of new products and services; and technical and non-technical data related to software programs, design, specifications, compilations, inventions, improvements, patent applications, studies, research, methods, devices, prototypes, processes, procedures and techniques.

1.2The Employee's obligations under this Section 1 are indefinite in term. Section 2    Return of Company Property.
2.1    The Employee acknowledges that all tangible items containing any confidential or proprietary information or trade secrets, including without limitation: memoranda, photographs, records, reports, manuals, drawings, blueprints, prototypes, notes, documents, drawings, specifications, software, media and other materials, including any copies thereof (including electronically recorded copies), are the exclusive property of the Company, and its Subsidiaries, and the Employee shall deliver to the Company all such material in the Employee's possession or control upon the Company's request and in any event upon the termination of the Employee's employment with the Company or its Subsidiaries. The Employee shall also return any keys, equipment, identification or credit cards, or other property belonging to the Company or its Subsidiaries upon termination of the Employee's employment or the Company's request.

Section 3    Noncompetition and Nonsolicitation.

3.1The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and for the one (1) year period following the date on which the Employee's employment with the Company or its Subsidiaries terminates for any reason, the Employee will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, be employed by, or be connected in any manner with, any person or entity engaged in any business that is (i) located in a region with respect to which the Employee had substantial responsibilities while employed by the Company or its Subsidiaries, and (ii) competitive, with (A) the line of business or businesses of the Company or its Subsidiaries in which
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the Employee was employed with during the Employee's employment (including any prospective business to be developed or acquired that was proposed at the date of termination), or (B) any other business of the Company or its Subsidiaries with respect to which the Employee had substantial exposure during such employment. For avoidance of doubt, if the Employee is a senior officer of the Company, the restriction contained herein shall relate to the Company and all of its Subsidiaries.

3.2The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and for the two (2) year period thereafter, the Employee will not, directly or indirectly, on the Employee's own behalf or on behalf of another (i) solicit, recruit, aid or induce any employee of the Company or its Subsidiaries to leave his or her employment with the Company or its Subsidiaries in order to accept employment with or render services to another person or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee, or (ii) solicit, aid, or induce any customer of the Company or its Subsidiaries to purchase goods or services then sold by the Company or its Subsidiaries from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such customer, or (iii) otherwise interfere with the relationship of the Company or any of its Subsidiaries with any of its employees, customers, agents, representatives or suppliers.

Section 4    Remedies.

4.1The Company and the Employee agree that the provisions of this Exhibit C do not impose an undue hardship on the Employee and are not injurious to the public; that these provisions are necessary to protect the business of the Company and its Subsidiaries; that the nature of the Employee's responsibilities with the Company provide and/or will provide the Employee with access to confidential or proprietary information or trade secrets that are valuable and confidential to the Company and its Subsidiaries; that the Company would not grant stock options, performance share units or restricted stock units to the Employee if the Employee did not agree to the provisions of this Exhibit C; that the provisions of this Exhibit C are reasonable in terms of length of time and scope; and that adequate consideration supports the provisions of this Exhibit C. In the event that a court determines that any provision of this Exhibit C is unreasonably broad or extensive, the Employee agrees that such court should narrow such provision to the extent necessary to make it reasonable and enforce the provisions as narrowed. The Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages for any breach of the Employee's obligations under this Exhibit C.

4.2Without limiting the generality of the remedies available to the Company pursuant to Section 4.1, if the Employee, except with the prior written consent of the Company, materially breaches the restrictive covenants contained in this Exhibit C, the Employee shall forfeit any then-outstanding stock options, performance share units or
16
1002287540v6




restricted stock units (whether vested or unvested); shall forfeit any shares of Common Stock acquired on exercise of stock options or vesting of performance share units or restricted stock units and then owned by the Employee; and shall pay to the Company in cash any net after-tax gain the Employee realized in cash in connection with the exercise of stock options (and/or sale of Common Stock underlying stock options or any shares purchased by the Employee from the Company). These rights of forfeiture and recoupment are in addition to any other remedies the Company may have against the Employee for the Employee's breach of the restrictive covenants contained in this Exhibit
C. The Employee's obligations under this Exhibit C shall be cumulative (but not duplicative, nor operate to extend the length of any such obligations) of any similar obligations the Employee has under the Plan, the Agreement or any other agreement with the Company or any Affiliate.
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1002287540v6

Rev. 3/2020

Atkore International Group Inc.
Form of Employee Restricted Stock Unit Agreement

This Employee Restricted Stock Unit Agreement (this “Agreement”), dated as of the date of grant separately communicated (the “Grant Date”), between Atkore International Group Inc., a Delaware corporation (the “Company”), and each employee who is employed by the Company or one of its Subsidiaries and to whom a grant has been authorized (the “Employee”), is being entered into pursuant to the Atkore International Group Inc. 2020 Omnibus Incentive Plan (the “Plan”). Capitalized terms that are used in this Agreement but not defined in this Agreement have the meanings given to such terms in the Plan.

The Company and the Employee hereby agree as follows:

Section 1.    Grant of Restricted Stock Units. Subject to the terms of this Agreement, the Company hereby evidences and confirms, effective as of the Grant Date, its grant to the Employee of the number of Restricted Stock Units separately communicated to the Employee. This Agreement is entered into pursuant to, and the terms of the Restricted Stock Units are subject to, the terms of the Plan. If there is any inconsistency between an express provision of this Agreement and an express provision of the Plan, the provision of the Plan shall govern.
Acceptance of this Agreement shall be evidenced by such physical or electronic methods as are adopted by the Company. In consideration of the grant of the Restricted Stock Units and the economic benefits that may derive therefrom, Employee agrees to be bound to the restrictive covenants set forth in Exhibit A hereof.

Section 2.    Vesting of Restricted Stock Units.

(a)    Vesting Based on Continued Employment. Except as otherwise provided Section 2(b) of this Agreement, the Restricted Stock Units shall become vested in three equal annual installments on the first through third anniversaries of the Grant Date, subject to the continuous employment of the Employee with the Company until the applicable vesting date; provided that
(x)if the Employee’s employment with the Company is terminated in a Special Termination (i.e., by reason of the Employee’s death or Disability), any unvested Restricted Stock Units held by the Employee shall immediately vest as of the effective date of such Special Termination, and
(y)if the Employee’s employment with the Company terminates by reason of the Employee’s retirement on or after the Employee reaching normal retirement age (as determined by the retirement policy of the Company applicable to the Employee), any unvested Restricted Stock Units held by the Employee as of the effective date of such retirement shall remain outstanding and shall become vested on the scheduled vesting date(s) thereof subject to the Administrator’s determination that the Employee is in material compliance with any restrictive covenants to which the Employee is subject (it being understood that, in such event, such unvested Restricted Stock Units may be unvested under this Agreement but vested for Federal tax purposes); provided, that at least six (6) months must elapse from the Grant Date to the date of termination of the Employee’s employment for any termination initiated by the Employee to be treated as a retirement. Vested Restricted Stock Units shall be settled as provided in Section 3.
1002287442v3


(b)Discretionary Acceleration. The Administrator, in its sole discretion, may accelerate the vesting of all or a portion of the Restricted Stock Units at any time and from time to time; provided, that the acceleration of vesting of Restricted Stock Units that are subject to Section 409A of the Code shall not accelerate the Settlement Date thereof unless permitted by Section 409A of the Code.

(c)Effect of a Change in Control. In the event of a Change in Control, all or a portion of the Restricted Stock Units shall be converted into Alternative Awards meeting the requirements of the Plan; provided, that, if so determined by the Administrator prior to the Change in Control, all of or a portion of the Restricted Stock Units shall be cancelled as set forth in Article XIV of the Plan for the payment described therein.

Section 3.    Settlement of Restricted Stock Units. Subject to Section 6(a), promptly following the date on which a Restricted Stock Unit becomes vested under this Agreement, and in any event no later than March 15th of the calendar year following the calendar year in which such vesting occurs (the “Settlement Date”), the Employee shall receive, without payment, one whole Share in respect of each such Restricted Stock Unit (and such Restricted Stock Unit shall thereupon be cancelled). Fractions of a Restricted Stock Unit shall not vest but shall be eligible for vesting on the next vesting date.

Section 4.    Effect of a Termination of Employment. If the Employee’s employment with the Company terminates for any reason prior to the vesting thereof, any Restricted Stock Units that have not vested before the effective date of such termination of employment or that do not become vested on such date shall be immediately forfeited and cancelled upon such termination of employment.

Section 5. Treatment of Dividends. If the Company pays any cash dividend or similar cash distribution on the Company Common Stock, the Company shall credit to the Employee’s account an amount equal to the product of (x) the number of the Employee’s
Restricted Stock Units as of the record date for such distribution times (y) the per share amount of such dividend or similar cash distribution on Company Common Stock. If the Company makes any dividend or other distribution on the Company Common Stock in the form of Company Common Stock or other securities, the Company will credit the Employee’s account with that number of additional Shares or other securities that would have been distributed with respect to that number of Shares underlying the Employee’s Restricted Stock Units as of the record date thereof, or, in its discretion, the Administrator may elect to credit the value (as
determined by the Administrator) of such additional Shares or other securities to the Employee’s account in cash. Any such additional Shares, other securities or cash shall be subject to the same restrictions as apply to the Restricted Stock and shall be paid to the Employee if and when the related Settlement Date occurs (and shall be forfeited if the related Restricted Stock Units are forfeited).

Section 6.    Miscellaneous.

(a)Tax Matters.
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(i)Withholding. The Company or one of its Subsidiaries may require the Employee to remit to the Company an amount in cash sufficient to satisfy any applicable
U.S. federal, state and local and non-U.S. tax withholding obligations that may arise in connection with the grant, vesting and/or settlement of the Restricted Stock Units. Notwithstanding the preceding sentence, unless previously satisfied on or prior to the vesting date, the Company shall retain a number of Shares subject to the Restricted Stock Units then vesting that have an aggregate Fair Market Value as of the vesting date equal to the amount of such taxes required to be withheld (and the Employee shall thereupon be deemed to have satisfied his or her obligations under this Section 6(a)); provided that the number of Shares retained shall be effected at a rate determined by the Company that is permitted under applicable IRS withholding rules and that does not to cause adverse accounting consequences (it being understood that the value of any fractional share of Company Common Stock shall be paid in cash). The number of Shares registered in the name of the Employee shall thereupon be reduced by the number of Shares so retained. The method of withholding set forth in the immediately preceding sentence shall not be available if withholding in this manner would violate any financing instrument of the Company or any of its Subsidiaries or to the extent that a facility is available to the Employee by which the Employee may sell Shares in the public market to satisfy such obligations.

(ii)Section 409A of the Code. If the Employee is not eligible for retirement during the vesting period applicable to the Restricted Stock Units, the Restricted Stock Units are intended not to be subject to Section 409A of the Code. If the Employee is eligible for retirement during the vesting period applicable to the Restricted Stock Units such that some or all of the Restricted Stock Units are subject to Section 409A, this Agreement and the Restricted Stock Units shall be administered and construed in a manner consistent with Section 409A of the Code.

(b)Incorporation of Forfeiture Provisions. The Employee acknowledges and agrees that, pursuant to the Plan, he or she shall be subject to any generally applicable disgorgement or forfeiture provisions set forth in Article XIII of the Plan as of the date of this Agreement or as may be imposed by the Administrator (including as required by applicable law) after the date of this Agreement, including with respect to post-employment Competitive Activity. The
Employee hereby appoints the Company as the Employee’s attorney-in-fact of the undersigned to take such actions as may be necessary or appropriate to effect a transfer of the record ownership of any such Shares to which such disgorgement or forfeiture provisions may apply.

(c)No Right to Continued Employment. Nothing in this Agreement shall be deemed to confer on the Employee any right to continue in the employ of the Company or any Subsidiary, or to interfere with or limit in any way the right of the Company or any Subsidiary to terminate such employment at any time.

(d)Non-Transferability of Restricted Stock Units. Prior to the Settlement Date thereof, the Restricted Stock Units are not assignable or transferable, in whole or in part, and they may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including, but not limited to, by gift,
3
1002287442v3


operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Employee upon the Employee’s death or with the Company’s consent.

(e)Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be provided as set forth in Section 15.13 of the Plan.

(f)Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors, assigns, beneficiaries, legal representatives or estate any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(g)Waiver; Amendment.

(i)Waiver. Any party hereto or beneficiary hereof may by written notice to the other parties (A) extend the time for the performance of any of the obligations or other actions of the other parties under this Agreement, (B) waive compliance with any of the conditions or covenants of the other parties contained in this Agreement and
(C) waive or modify performance of any of the obligations of the other parties under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party or beneficiary, shall be deemed to constitute a waiver by the party or beneficiary taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by any party hereto or beneficiary hereof of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by a party or beneficiary to exercise any right or privilege hereunder shall be deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise the same at any subsequent time or times hereunder.

(ii)Amendment. This Agreement may not be amended, modified or supplemented orally, but only by a written instrument executed by the Employee and the Company.

(h)Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company or the Employee without the prior written consent of the other party.

(i)Applicable Law and Forum. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction. Subject to the dispute resolution provision contained herein, any judicial action to enforce, interpret or challenge this Agreement shall be brought in the federal or state courts located in the State of Illinois, which shall be the exclusive forum for resolving such disputes. Both parties irrevocably consent to the personal jurisdiction of such courts for purposes of any such action.
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(j) IMAGE_0A.JPG Waiver of Jury Trial. Each party hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding arising out of this Agreement or any transaction contemplated hereby. Each party (i) 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 (ii) acknowledges that it and the other parties have been induced to enter into the Agreement by, among other things, the mutual waivers and certifications in this
Section 6(j).

(k)Lock-Up Periods. If the Company files a registration statement under the Securities Act with respect to an underwritten public offering of any shares of its capital stock, the Employee shall not affect any public sale (including a sale under Rule 144 under the Securities Act or other similar provision of applicable law) or distribution of any Company Common Stock, other than as part of such underwritten public offering, during the 20 days prior to and the 90 days after the effective date of such registration statement (or such other period, not to exceed 180 days, as may be generally applicable to or agreed by the Company with respect to its transactions in its own Shares). If the Company files a prospectus in connection with a takedown from a shelf registration statement, the Associate shall not affect any public sale (including a sale under Rule 144 under the Securities Act or other similar provision of applicable law) or distribution of any Company Common Stock, other than as part of such offering, for 20 days prior to and 90 days after the date the prospectus supplement is filed with the Securities and Exchange Commission.

(l)Trading Policies. The Employee acknowledges and agrees that he or she shall be subject to, and shall comply with, any of the Company's trading policies, as in effect from time to time.

(m)Section and Other Headings, etc. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(n)Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
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Exhibit A Restrictive Covenants
Section 1    Confidential Information.

1.1The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and thereafter, the Employee will not disclose confidential or proprietary information or trade secrets related to any business of the Company or its Subsidiaries, including without limitation, and whether or not such information is specifically designated as confidential or proprietary: all business plans and marketing strategies; information concerning existing and prospective markets, suppliers and customers; financial information; information concerning the development of new products and services; and technical and non-technical data related to software programs, design, specifications, compilations, inventions, improvements, patent applications, studies, research, methods, devices, prototypes, processes, procedures and techniques.

1.2The Employee's obligations under this Section 1 are indefinite in term. Section 2    Return of Company Property.
2.1    The Employee acknowledges that all tangible items containing any confidential or proprietary information or trade secrets, including without limitation: memoranda, photographs, records, reports, manuals, drawings, blueprints, prototypes, notes, documents, drawings, specifications, software, media and other materials, including any copies thereof (including electronically recorded copies), are the exclusive property of the Company, and its Subsidiaries, and the Employee shall deliver to the Company all such material in the Employee's possession or control upon the Company's request and in any event upon the termination of the Employee's employment with the Company or its Subsidiaries. The Employee shall also return any keys, equipment, identification or credit cards, or other property belonging to the Company or its Subsidiaries upon termination of the Employee's employment or the Company's request.

Section 3    Noncompetition and Nonsolicitation.

3.1The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and for the one (1) year period following the date on which the Employee's employment with the Company or its Subsidiaries terminates for any reason, the Employee will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, be employed by, or be connected in any manner with, any person or entity engaged in any business that is (i) located in a region with respect to which the Employee had substantial responsibilities while employed by the Company or its Subsidiaries, and (ii) competitive, with (A) the line of business or businesses of the Company or its Subsidiaries in which the Employee was employed with during the Employee's employment (including any prospective business to be developed or acquired that was proposed at the date of termination), or (B) any other business of the Company or its Subsidiaries with respect to which the Employee had substantial exposure during such employment. For avoidance of doubt, if the
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Employee is a senior officer of the Company, the restriction contained herein shall relate to the Company and all of its Subsidiaries.

3.2The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and for the two (2) year period thereafter, the Employee will not, directly or indirectly, on the Employee's own behalf or on behalf of another (i) solicit, recruit, aid or induce any employee of the Company or its Subsidiaries to leave his or her employment with the Company or its Subsidiaries in order to accept employment with or render services to another person or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee, or
(ii) solicit, aid, or induce any customer of the Company or its Subsidiaries to purchase goods or services then sold by the Company or its Subsidiaries from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such customer, or (iii) otherwise interfere with the relationship of the Company or any of its Subsidiaries with any of its employees, customers, agents, representatives or suppliers.

Section 4    Remedies.

4.1The Company and the Employee agree that the provisions of this Exhibit A do not impose an undue hardship on the Employee and are not injurious to the public; that these provisions are necessary to protect the business of the Company and its Subsidiaries; that the nature of the Employee's responsibilities with the Company provide and/or will provide the Employee with access to confidential or proprietary information or trade secrets that are valuable and confidential to the Company and its Subsidiaries; that the Company would not grant stock options, performance share units or restricted stock units to the Employee if the Employee did not agree to the provisions of this Exhibit A; that the provisions of this Exhibit A are reasonable in terms of length of time and scope; and that adequate consideration supports the provisions of this Exhibit A. In the event that a court determines that any provision of this Exhibit A is unreasonably broad or extensive, the Employee agrees that such court should narrow such provision to the extent necessary to make it reasonable and enforce the provisions as narrowed. The Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages for any breach of the Employee's obligations under this Exhibit A.

4.2Without limiting the generality of the remedies available to the Company pursuant to Section 4.1, if the Employee, except with the prior written consent of the Company, materially breaches the restrictive covenants contained in this Exhibit A, the Employee shall forfeit any then-outstanding stock options, performance share units or restricted stock units (whether vested or unvested); shall forfeit any shares of Common Stock acquired on exercise of stock options or vesting of performance share units or restricted stock units and then owned by the Employee; and shall pay to the Company in cash any net after-tax gain the Employee realized in cash in connection with the exercise of stock options (and/or sale of Common Stock underlying stock options or any shares purchased by the Employee from the Company). These rights of forfeiture and recoupment are in addition to any other remedies the Company may have against the Employee for the Employee's breach of the restrictive covenants contained in this Exhibit A. The Employee's obligations under this Exhibit A shall be cumulative (but not duplicative, nor operate to extend the length of any such obligations) of any similar obligations
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the Employee has under the Plan, the Agreement or any other agreement with the Company or any Affiliate.
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Rev. 12/2017

Atkore International Group Inc.
Form of Employee Stock Option Agreement

This Employee Stock Option Agreement (this “Agreement”), dated as of the date of grant separately communicated (the “Grant Date”), between Atkore International Group Inc., a
Delaware corporation (the “Company”), and each employee who is employed by the Company or one of its Subsidiaries and to whom a grant has been authorized (the “Employee”), is being entered into pursuant to the Atkore International Group Inc. 2016 Omnibus Incentive Plan (the “Plan”). Capitalized terms that are used in this Agreement but not defined in this Agreement have the meanings given to such terms in the Plan.

The Company and the Employee hereby agree as follows:

Section 1.    Grant of Options.

(a)Confirmation of Grant. Subject to the terms of this Agreement, the Company hereby evidences and confirms, effective as of the Grant Date, its grant to the Employee of Options to purchase the number of shares of Company Common Stock separately communicated to the Employee. The Options are not intended to be Incentive Stock Options. This Agreement is entered into pursuant to, and the terms of the Options are subject to, the terms of the Plan. If there is any inconsistency between an express provision of this Agreement and an express provision of the Plan, the provision of the Plan shall govern. Acceptance of this Agreement shall be evidenced by such physical or electronic methods as are adopted by the Company.

(b)Option Price. Each share covered by an Option shall have the Option Price separately communicated with respect to the Option.

(c)Restrictive Covenants. In consideration of the grant of the Options and the economic benefits that may derive therefrom, Employee agrees to be bound to the restrictive covenants set forth in Exhibit A hereof.

Section 2.    Vesting and Exercisability.

(a)Vesting of Options. Except as otherwise provided Section 2(b) of this Agreement, the Options shall become vested in three equal annual installments on the first through third anniversaries of the Grant Date, subject to the continuous employment of the Employee with the Company until the applicable vesting date; provided that (x) if the
Employee’s employment with the Company is terminated in a Special Termination (i.e., by reason of the Employee’s death or Disability), any unvested Options held by the Employee shall immediately vest as of the effective date of such Special Termination, and (y) if the Employee’s employment with the Company terminates by reason of the Employee’s retirement on or after the Employee reaching normal retirement age (as determined by the retirement policy of the Company applicable to the Employee), any unvested Options held by the Employee as of the effective date of such retirement shall remain outstanding and shall become vested and
exercisable on the scheduled vesting date(s) thereof subject to the Administrator’s determination that the Employee is in material compliance with any restrictive covenants to which the
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Employee is subject; provided, that at least six (6) months must elapse from the Grant Date to the date of termination of the Employee’s employment for any termination initiated by the Employee to be treated as a retirement.

(b)Discretionary Acceleration. The Administrator, in its sole discretion, may accelerate the vesting or exercisability of all or a portion of the Options, at any time and from time to time.

(c)Effect of a Change in Control. In the event of a Change in Control, all or a portion of the Options shall be converted into Alternative Awards meeting the requirements of the Plan; provided, that if so determined by the Administrator prior to the Change in Control, all Options, whether vested or unvested, shall be cancelled as set forth in Article XIV of the Plan for the payment described therein.

(d)Exercise. Once vested in accordance with the provisions of this Agreement, the Options may be exercised at any time and from time to time prior to the date such Options terminate pursuant to Section 2 or Section 3, subject to such generally applicable restrictions on exercise as may be imposed by the Administrator (including customary blackout periods during which trading by employees may not occur). Options may only be exercised with respect to whole Shares and must be exercised in accordance with Section 4 of this Agreement.

Section 3.    Termination of Options.

(a)Normal Termination Date. Unless earlier terminated pursuant to Section 2, or Section 3(b), Section 3(c) or Section 3(d) of this Agreement, the Options shall terminate on the tenth anniversary of the Grant Date (the “Normal Termination Date”), if not exercised prior to such date.

(b)Early Termination for Cause; Effect of Competitive Activity. If the Employee’s employment is terminated for Cause, or if the Employee engages in Competitive Activity after a termination of employment whether or not such termination is for Cause, all Options (whether or not then vested or exercisable) shall automatically be forfeited without payment upon such event. The Company may suspend, for a period of up to 90 days, the right of the Employee to exercise the Options during any period in which the Company believes reasonably and in good faith that the Employee may have engaged in acts constituting Cause or Competitive Activity.

(c)Early Termination for Any Other Reason. Subject to Section 3(d), if the
IMAGE_26.JPG Employee’s employment with the Company terminates for any reason, any Options held by the Employee that have not vested before the effective date of such termination of employment shall terminate immediately upon such termination of employment. Subject to Section 2, all vested Options held by the Employee following the effective date of a termination of employment other than for Cause shall remain exercisable until the first to occur of (i) the ninety-day anniversary of the effective date of the Employee’s termination of employment by the Company without Cause,
(ii) the first anniversary of the date of the Employee’s termination by reason of death or Disability, (iii) the third anniversary of the date of the Employee’s retirement on or after the Employee reaching normal retirement age (as determined by the retirement policy of the Company applicable to the Employee), (iv) the thirty-day anniversary of the effective date of the
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Employee’s termination of employment if such termination is not a termination to which clauses (i), (ii) or (iii) applies, and (v) the Normal Termination Date. Any vested Options not exercised within such period shall automatically terminate upon the expiration of such period.

(d)Tolling Provision. The Normal Termination Date and the post-termination exercise periods set forth in Section 3(c) shall be tolled by one business day for each business day that the exercise of the Options is not permitted under the Company trading policies or applicable law (as determined by the Administrator), but not later than the first anniversary of the Normal Termination Date.

Section 4.    Manner of Exercise.

(a)General. Subject to such reasonable administrative regulations as the Administrator may adopt from time to time, the exercise of vested Options by the Employee shall be pursuant to procedures set forth in the Plan or established by the Administrator from time to time and shall include the Employee specifying the proposed date on which the
IMAGE_26.JPG Employee desires to exercise a vested Option (the “Exercise Date”), the number of whole Shares with respect to which the Options are being exercised (the “Exercise Shares”) and the aggregate Option Price for such Exercise Shares (the “Exercise Price”) or such other or different requirements as may be imposed by the Company. Unless otherwise determined by the Administrator, (i) on or before the Exercise Date the Employee shall arrange for delivery to the Company, in such manner as is permitted under the Plan (including, if available, pursuant to a broker-assisted cashless exercise program established by the Company), of full payment for the Exercise Shares plus any required withholding taxes or other similar taxes, charges or fees and
(ii) IMAGE_26.JPG on the Exercise Date, the Company shall register the issuance of the Exercise Shares on its records (or direct such issuance to be registered by the Company’s transfer agent). The Company may require the Employee to furnish or execute such other documents as the Administrator shall deem necessary (i) to evidence such exercise or (ii) to comply with or satisfy the requirements of the Securities Act, applicable state or non-U.S. securities laws or any other law.

(b) IMAGE_26.JPG Restrictions on Exercise. Notwithstanding any other provision of this Agreement, the Options may not be exercised in whole or in part, and no certificates representing Exercise Shares shall be delivered, (i) (A) unless all requisite approvals and consents of any governmental authority of any kind shall have been secured, (B) the purchase of the Exercise Shares shall be exempt from registration under applicable U.S. federal and state securities laws, and applicable non-U.S. securities laws, or the Exercise Shares shall have been registered under such laws, and
(C)all applicable U.S. federal, state and local and non-U.S. tax withholding requirements shall have been satisfied, or (ii) if such exercise would result in a violation of the terms or provisions of, or a default or an event of default under, any guarantee, financing or security agreement entered into by the Company or any Subsidiary from time to time.

Section 5.    Miscellaneous.

(a)Withholding. The Company or one of its Subsidiaries may require the Employee to remit to the Company an amount in cash sufficient to satisfy any applicable U.S. federal, state and local and non-U.S. tax withholding or other similar charges or fees that may arise in
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connection with the grant, vesting, exercise, settlement or purchase of the Options to the extent that such withholding requirement is not satisfied by other means; provided, that if Exercise Shares are retained to satisfy such obligation, the number of Exercise Shares retained shall be effected at a rate determined by the Company that is permitted under applicable IRS withholding rules and that does not to cause adverse accounting consequences.

(b)Incorporation of Forfeiture Provisions. The Employee acknowledges and agrees that, pursuant to the Plan, he or she shall be subject to any generally applicable disgorgement or forfeiture provisions set forth in Article XIII of the Plan as of the date of this Agreement or as may be imposed by the Administrator (including as required by applicable law) after the date of this Agreement, including with respect to post-employment Competitive Activity. The Employee hereby appoints the Company as the Employee’s attorney-in-fact of the undersigned to take such actions as may be necessary or appropriate to effect a transfer of the record ownership of any such Shares to which such disgorgement or forfeiture provisions may apply.

(c)No Rights as Stockholder; No Voting Rights. The Employee shall have no rights as a stockholder of the Company with respect to any Shares covered by the Options until the exercise of the Options and delivery of the Shares.

(d)No Right to Continued Employment. Nothing in this Agreement shall be deemed to confer on the Employee any right to continue in the employ of the Company or any Subsidiary, or to interfere with or limit in any way the right of the Company or any Subsidiary to terminate such employment at any time.

(e)Non-Transferability of Options. The Options may be exercised only by the
Employee, or, following the Employee’s death, by the Employee’s designated beneficiary or by
the Employee’s estate in the absence of a designated beneficiary. The Options are not assignable or transferable, in whole or in part, and they may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including, but not limited to, by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of the Employee upon the Employee’s death or with the Company’s consent.

(f)Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be provided as set forth in Section 15.13 of the Plan.

(g)Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors, assigns, beneficiaries, legal representatives or estate any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

(h)Waiver; Amendment.

(i)Waiver. Any party hereto or beneficiary hereof may by written notice to the other parties (A) extend the time for the performance of any of the obligations or
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other actions of the other parties under this Agreement, (B) waive compliance with any of the conditions or covenants of the other parties contained in this Agreement and
(C) waive or modify performance of any of the obligations of the other parties under this Agreement. Except as provided in the preceding sentence, no action taken pursuant to this Agreement, including, without limitation, any investigation by or on behalf of any party or beneficiary, shall be deemed to constitute a waiver by the party or beneficiary taking such action of compliance with any representations, warranties, covenants or agreements contained herein. The waiver by any party hereto or beneficiary hereof of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by a party or beneficiary to exercise any right or privilege hereunder shall be deemed a waiver of such party’s or beneficiary’s rights or privileges hereunder or shall be deemed a waiver of such party’s or beneficiary’s rights to exercise the same at any subsequent time or times hereunder.

(ii)    Amendment. This Agreement may not be amended, modified or supplemented orally, but only by a written instrument executed by the Employee and the Company.

(i)Assignability. Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by the Company or the Employee without the prior written consent of the other party.

(j)Applicable Law and Forum. This Agreement shall be governed by and construed in accordance with the law of the State of Delaware regardless of the application of rules of conflict of law that would apply the laws of any other jurisdiction.

(k) IMAGE_26.JPG Waiver of Jury Trial. Each party hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding arising out of this Agreement or any transaction contemplated hereby. Each party (i) 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 (ii) acknowledges that it and the other parties have been induced to enter into the Agreement by, among other things, the mutual waivers and certifications in this Section 5(k).

(l)Lock-Up Periods. If the Company files a registration statement under the Securities Act with respect to an underwritten public offering of any shares of its capital stock, the Employee shall not affect any public sale (including a sale under Rule 144 under the Securities Act or other similar provision of applicable law) or distribution of any Company Common Stock, other than as part of such underwritten public offering, during the 20 days prior to and the 90 days after the effective date of such registration statement (or such other period, not to exceed 180 days, as may be generally applicable to or agreed by the Company with respect to its transactions in its own Shares). If the Company files a prospectus in connection with a takedown from a shelf registration statement, the Associate shall not affect any public sale (including a sale under Rule 144 under the Securities Act or other similar provision of applicable law) or distribution of any Company Common Stock, other than as part of such offering, for 20
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days prior to and 90 days after the date the prospectus supplement is filed with the Securities and Exchange Commission.

(m)Trading Policies. The Employee acknowledges and agrees that he or she shall be subject to, and shall comply with, any of the Company's trading policies, as in effect from time to time.

(n)Section and Other Headings, etc. The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

(o)Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.
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Exhibit A Restrictive Covenants
Section 1    Confidential Information.

1.1The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and thereafter, the Employee will not disclose confidential or proprietary information or trade secrets related to any business of the Company or its Subsidiaries, including without limitation, and whether or not such information is specifically designated as confidential or proprietary: all business plans and marketing strategies; information concerning existing and prospective markets, suppliers and customers; financial information; information concerning the development of new products and services; and technical and non-technical data related to software programs, design, specifications, compilations, inventions, improvements, patent applications, studies, research, methods, devices, prototypes, processes, procedures and techniques.

1.2The Employee's obligations under this Section 1 are indefinite in term. Section 2    Return of Company Property.
2.1    The Employee acknowledges that all tangible items containing any confidential or proprietary information or trade secrets, including without limitation: memoranda, photographs, records, reports, manuals, drawings, blueprints, prototypes, notes, documents, drawings, specifications, software, media and other materials, including any copies thereof (including electronically recorded copies), are the exclusive property of the Company, and its Subsidiaries, and the Employee shall deliver to the Company all such material in the Employee's possession or control upon the Company's request and in any event upon the termination of the Employee's employment with the Company or its Subsidiaries. The Employee shall also return any keys, equipment, identification or credit cards, or other property belonging to the Company or its Subsidiaries upon termination of the Employee's employment or the Company's request.

Section 3    Noncompetition and Nonsolicitation.

3.1The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and for the one (1) year period following the date on which the Employee's employment with the Company or its Subsidiaries terminates for any reason, the Employee will not directly or indirectly, own, manage, operate, control (including indirectly through a debt or equity investment), provide services to, be employed by, or be connected in any manner with, any person or entity engaged in any business that is (i) located in a region with respect to which the Employee had substantial responsibilities while employed by the Company or its Subsidiaries, and (ii) competitive, with (A) the line of business or businesses of the Company or its Subsidiaries in which the Employee was employed with during the Employee's employment (including any prospective business to be developed or acquired that was proposed at the date of termination), or (B) any other business of the Company or its Subsidiaries with respect to which the Employee had substantial exposure during such employment. For avoidance of doubt, if the
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Employee is a senior officer of the Company, the restriction contained herein shall relate to the Company and all of its Subsidiaries.

3.2The Employee agrees that during the Employee's employment with the Company or its Subsidiaries, and for the two (2) year period thereafter, the Employee will not, directly or indirectly, on the Employee's own behalf or on behalf of another (i) solicit, recruit, aid or induce any employee of the Company or its Subsidiaries to leave his or her employment with the Company or its Subsidiaries in order to accept employment with or render services to another person or entity unaffiliated with the Company or its Subsidiaries, or hire or knowingly take any action to assist or aid any other person or entity in identifying or hiring any such employee, or
(ii)solicit, aid, or induce any customer of the Company or its Subsidiaries to purchase goods or services then sold by the Company or its Subsidiaries from another person or entity, or assist or aid any other persons or entity in identifying or soliciting any such customer, or (iii) otherwise interfere with the relationship of the Company or any of its Subsidiaries with any of its employees, customers, agents, representatives or suppliers.

Section 4    Remedies.

4.1The Company and the Employee agree that the provisions of this Exhibit A do not impose an undue hardship on the Employee and are not injurious to the public; that these provisions are necessary to protect the business of the Company and its Subsidiaries; that the nature of the Employee's responsibilities with the Company provide and/or will provide the Employee with access to confidential or proprietary information or trade secrets that are valuable and confidential to the Company and its Subsidiaries; that the Company would not grant stock options, performance share units or restricted stock units to the Employee if the Employee did not agree to the provisions of this Exhibit A; that the provisions of this Exhibit A are reasonable in terms of length of time and scope; and that adequate consideration supports the provisions of this Exhibit A. In the event that a court determines that any provision of this Exhibit A is unreasonably broad or extensive, the Employee agrees that such court should narrow such provision to the extent necessary to make it reasonable and enforce the provisions as narrowed. The Company reserves all rights to seek any and all remedies and damages permitted under law, including, but not limited to, injunctive relief, equitable relief and compensatory damages for any breach of the Employee's obligations under this Exhibit A.

4.2Without limiting the generality of the remedies available to the Company pursuant to Section 4.1, if the Employee, except with the prior written consent of the Company, materially breaches the restrictive covenants contained in this Exhibit A, the Employee shall forfeit any then-outstanding stock options, performance share units or restricted stock units (whether vested or unvested); shall forfeit any shares of Common Stock acquired on exercise of stock options or vesting of performance share units or restricted stock units and then owned by the Employee; and shall pay to the Company in cash any net after-tax gain the Employee realized in cash in connection with the exercise of stock options (and/or sale of Common Stock underlying stock options or any shares purchased by the Employee from the Company). These rights of forfeiture and recoupment are in addition to any other remedies the Company may have against the Employee for the Employee's breach of the restrictive covenants contained in this Exhibit A. The Employee's obligations under this Exhibit A shall be cumulative (but not duplicative, nor operate to extend the length of any such obligations) of any similar obligations
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the Employee has under the Plan, the Agreement or any other agreement with the Company or any Affiliate.
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Exhibit 21.1
ATKORE INC.
Significant Subsidiaries
As of September 30, 2021
Entity Name    Jurisdiction of Incorporation
Acroba S.A.S. France
AFC Cable Systems, Inc. Delaware
Allied Luxembourg S.a.r.l. Luxembourg
Allied Metal Products (Changshu) Co., Ltd. China
Allied Products UK Limited United Kingdom
Allied Switzerland GmbH Switzerland
Allied Tube & Conduit Corporation Delaware
American Pipe & Plastics Holdings Group, Inc. Delaware
American Pipe & Plastics, Inc. New York
Atkore Construction Technologies NZ Limited New Zealand
Atkore Foreign Holdings Inc. Delaware
Atkore Holding IX (Denmark) Aps Denmark
Atkore International Holdings Inc. Delaware
Atkore International, Inc. Delaware
Atkore Metal Products Pte Ltd. Singapore
Atkore Plastic Pipe Corporation Delaware
Atkore Plastics Southeast, LLC Delaware
Atkore RMCP, Inc. Delaware
Atkore Southwest, LLC Delaware
Atkore Steel Components, Inc. Delaware
Calpipe Industries, LLC California
Columbia-MBF Inc. Canada
FlexHead Industries, Inc. Massachusetts
Flexicon Australia PTY Limited Australia
Flexicon Limited United Kingdom
Flytec Systems Limited United Kingdon
Georgia Pipe Company Georgia
Kalanda Enterprises Pty Limited Australia
Marco Cable Management Limited United Kingdom
Marco Gearing Limited United Kingdom
Modern Associates Limited United Kingdon
SprinkFLEX, LLC Massachusetts
Standard Industries Co., Limited Hong Kong
Swan Metal Skirtings Pty Limited Australia
Tekflex Limited United Kingdom
TKN, Inc. Rhode Island
Unistrut (New Zealand) Holdings Pty Limited Australia
Unistrut Australia Pty Limited Australia
Unistrut International Corporation Nevada
Unistrut Limited United Kingdom
US Tray, Inc. Delaware
Vergo Coating BVBA Belgium
Vergo Galva NV Belgium
Vergokan International NV Belgium
Vergokan NV Belgium
Vergokan OOO Russia
Vergokan SAS France
WPFY, Inc. Delaware


EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


We consent to the incorporation by reference in Registration Statement No. 333-212045 on Form S-8 of our reports dated November 18, 2021, relating to the consolidated financial statements and financial statement schedules of Atkore Inc. and subsidiaries, and the effectiveness of Atkore Inc. and subsidiaries’ internal control over financial reporting, appearing in this Annual Report on Form 10-K for the year ended September 30, 2021.


/s/ Deloitte & Touche LLP

Chicago, Illinois
November 18, 2021





Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT, AS AMENDED,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, William E. Waltz, certify that:

1. I have reviewed this Annual Report on Form 10-K of Atkore Inc.;

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 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 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.


Dated: November 18, 2021 /s/ William E. Waltz
William E. Waltz
President and Chief Executive Officer, Director (Principal Executive Officer)
 






Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT, AS AMENDED,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, David P. Johnson, certify that:

1. I have reviewed this Annual Report on Form 10-K of Atkore Inc.;

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 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 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.

Dated: November 18, 2021 /s/ David P. Johnson
David P. Johnson
Vice President and Chief Financial Officer (Principal 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

I, William E. Waltz, the Chief Executive Officer of Atkore Inc., certify that (i) the Annual Report on Form 10-K for the fiscal year ended September 30, 2021, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Atkore Inc.

Dated: November 18, 2021 /s/ William E. Waltz
William E. Waltz
President and Chief Executive Officer, Director (Principal 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

I, David P. Johnson, the Chief Financial Officer of Atkore Inc., certify that (i) the Annual Report on Form 10-K for the fiscal year ended September 30, 2021, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in such Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Atkore Inc.

Dated: November 18, 2021 /s/ David P. Johnson
David P. Johnson
Vice President and Chief Financial Officer (Principal Financial Officer)