Toggle SGML Header (+)


Section 1: 8-K (8-K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 4, 2018 (June 1, 2018)

 


 

GMS INC.

(Exact name of registrant as specified in charter)

 


 

Delaware

 

001-37784

 

46-2931287

(State or Other Jurisdiction
of Incorporation)

 

(Commission
File Number)

 

(I.R.S. Employer
Identification No.)

 

100 Crescent Centre Parkway, Suite 800
Tucker, Georgia

 

30084

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code: (800) 392-4619

 


 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

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

 

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

 

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

 

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

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  o

 

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  o

 

 

 



 

Item 1.01. Entry into a Material Definitive Agreement.

 

On June 1, 2018 (the “Third Amendment Effective Date”), an indirect wholly-owned subsidiary of GMS Inc. (the “Company”), GYP Holdings III Corp. (“GYP III”), entered into a Third Amendment to First Lien Credit Agreement (the “Third Amendment”), among GYP III, GYP Holdings II Corp. (“Holdings”), the other guarantors party thereto, Credit Suisse AG, as administrative agent, and Barclays Bank PLC, as 2018 Incremental First Lien Lender (as defined in the Third Amendment), which amended the First Lien Credit Agreement, dated as of April 1, 2014 (as amended by that certain Incremental First Lien Term Commitments Amendment, dated as of September 27, 2016, and that certain Second Amendment to First Lien Credit Agreement, dated as of June 7, 2017, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the Third Amendment Effective Date, the “Credit Agreement”), among GYP III, Holdings, each lender from time to time party thereto, and Credit Suisse AG, as administrative agent and as collateral agent. The Third Amendment provides for a new first lien term loan facility under the Credit Agreement in the aggregate principal amount of approximately $997 million due in June 2025 that bears interest at a floating rate based on LIBOR, with a 0% floor, plus 2.75%, representing a 25 basis point improvement compared to the interest rate of the existing first lien term loan facility under the Credit Agreement immediately prior to giving effect to the Third Amendment. Net proceeds from the new first lien term loan facility were used to repay GYP III’s existing first lien term loan facility of approximately $572 million and to finance the Transactions (as defined in the Third Amendment), including the payment, in part, of the purchase price for the Acquisition (as defined below) to be consummated pursuant to the terms of the Securities Purchase Agreement, dated as of April 4, 2018 (the “Purchase Agreement”), among the Company, the Sellers (as defined in the Purchase Agreement), the Sellers’ Agents (as defined in the Purchase Agreement) and the Acquired Entities (as defined in the Purchase Agreement). Except as described above, all other terms of the Credit Agreement remain substantially the same.

 

The foregoing description of the Third Amendment does not propose to be complete and is qualified in its entirety by reference to the full text of the Third Amendment, a copy of which is attached hereto as Exhibit 10.1, and the terms of which are incorporated herein by reference.

 

Barclays Capital Inc., an affiliate of Barclays Bank PLC, and Credit Suisse Securities (USA) LLC, an affiliate of Credit Suisse AG, have also acted as underwriters for the initial public offering and secondary offerings of the Company’s common stock for which they have received customary compensation.

 

Item 2.01. Completion of Acquisition or Disposition of Assets.

 

On June 1, 2018 (the “Closing Date”), the Company, through its indirect Canadian subsidiary Canada Gypsum Management and Supply, Inc. (“Buyer”), a British Columbia corporation, completed its previously announced acquisition (the “Acquisition”) of WSB Titan (“Titan”). Headquartered in Toronto, Titan is Canada’s largest gypsum specialty dealer serving the residential, commercial, and institutional markets with key products including wallboard, insulation, lumber, roofing, steel framing, and other complementary building products.

 

In accordance with the Purchase Agreement, on the Closing Date, Buyer purchased all of the outstanding equity interests of the Acquired Entities for a purchase price of approximately $627 million, which included certain members of Titan’s existing management rolling over $35 million of their ownership position into equity that is exchangeable for the Company’s stock.

 

The Company financed the Acquisition, together with related fees and expenses, using a combination of cash on hand, proceeds from GYP III’s existing asset based lending credit facility and net proceeds from the new first lien term loan facility described in Item 1.01 above.

 

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, which was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 5, 2018.

 

2



 

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

 

The disclosures of the material terms and conditions of the Third Amendment contained in Item 1.01 above are hereby incorporated by reference into this Item 2.03.

 

Item 7.01. Regulation FD Disclosure.

 

On June 4, 2018, the Company issued a press release announcing the completion of the Acquisition and GYP III’s entry into the Third Amendment. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Business Acquired.

 

The Company intends to file the financial statements of the Acquired Entities required by Item 9.01(a) as part of an amendment to this Current Report on Form 8-K no later than 71 calendar days after the required filing date for this Current Report on Form 8-K.

 

(b) Pro Forma Financial Information.

 

The Company intends to file the pro forma financial information required by Item 9.01(b) as an amendment to this Current Report on Form 8-K no later than 71 days after the required filing date for this Current Report on Form 8-K.

 

(d) Exhibits.

 

Exhibit

 

Description

10.1

 

Third Amendment to First Lien Credit Agreement, dated as of June 1, 2018, among GYP Holdings III Corp., GYP Holdings II Corp., the other guarantors party thereto, Credit Suisse AG, as administrative agent, and Barclays Bank PLC, as 2018 Incremental First Lien Lender (as defined therein).

99.1

 

Press release, dated June 4, 2018.

 

3



 

SIGNATURES

 

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

 

 

GMS INC.

 

 

Date: June 4, 2018

By:

/s/ H. Douglas Goforth

 

 

Name:

H. Douglas Goforth

 

 

Title:

Chief Financial Officer

 

4


(Back To Top)

Section 2: EX-10.1 (EX-10.1)

Exhibit 10.1

 

EXECUTION VERSION

 

THIRD AMENDMENT TO FIRST LIEN CREDIT AGREEMENT

 

This THIRD AMENDMENT TO FIRST LIEN CREDIT AGREEMENT is dated as of June 1, 2018 (this “Amendment”) and is entered into by and among GYP HOLDINGS III CORP., a Delaware corporation (the “Borrower”), GYP HOLDINGS II CORP., a Delaware corporation (“Holdings”), CREDIT SUISSE AG, as administrative agent (in such capacity, the “Administrative Agent”), BARCLAYS BANK PLC (“Barclays”), as 2018 Incremental First Lien Lender (as defined below), and, for purposes of Section 12 hereof, each other Loan Party party hereto.

 

PRELIMINARY STATEMENTS

 

The Borrower, Holdings, the lenders party thereto from time to time (the “Lenders”), the Administrative Agent and the other parties thereto have entered into that certain First Lien Credit Agreement, dated as of April 1, 2014 (as amended by that certain Incremental First Lien Term Commitments Amendment dated as of September 27, 2016 and that certain Second Amendment to First Lien Credit Agreement dated as of June 7, 2017, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Credit Agreement;” the Credit Agreement, as amended by this Amendment and as may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time after the date hereof, is herein referred to as the “Amended Credit Agreement”; capitalized terms used (including in the preamble and preliminary statements hereto) but not defined herein shall have the meanings assigned to such terms in the Credit Agreement).

 

Pursuant to and in accordance with Section 2.12 of the Credit Agreement, the Borrower may request from time to time Incremental First Lien Term Commitments.  The Borrower has notified the Administrative Agent of its request for an Incremental First Lien Term Commitment in an aggregate principal amount equal to $996,839,654.38 on the terms set forth in this Amendment.  The Administrative Agent and the Borrower have determined that the Incremental First Lien Term Commitments Effective Date with respect to such Incremental First Lien Term Commitment shall be the Third Amendment Effective Date (as defined below).

 

Pursuant to Section 2.12(d) of the Credit Agreement, an Incremental First Lien Term Commitments Amendment may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of Section 2.12 of the Credit Agreement.

 

Barclays and Credit Suisse Loan Funding LLC (acting through such of its affiliates or branches as it deems appropriate, “CS”), are acting as joint lead arrangers and joint bookrunners for this Amendment (in such capacities, collectively, the “Arrangers”).

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

SECTION 1.         Defined Terms.  As used in this Amendment, the following terms have the meanings set forth below:

 



 

Acquisition” means the acquisition by GYP Canada Holdings III Corp., a British Columbia corporation (“Canadian Newco”), a direct parent of the Purchaser Assignee (as defined in the Acquisition Agreement, the “Purchaser Assignee”) of all outstanding Equity Interests of the Acquired Entities (as defined in the Acquisition Agreement) pursuant to the Securities Purchase Agreement dated as of April 4, 2018 (including the exhibits and schedules thereto, the “Acquisition Agreement”) among the Acquired Entities (collectively, the “Target”), the Sellers (as defined in the Acquisition Agreement), the Sellers’ Agents (as defined in the Acquisition Agreement) and GMS Inc., a Delaware corporation (the “Purchaser”), whereby the Purchaser shall have assigned its rights thereunder to the Purchaser Assignee prior to the date hereof.

 

Contribution” means the contribution by the Borrower to the Purchaser of a combination of cash on the balance sheet of the Borrower and its Subsidiaries, the proceeds of approximately $143 million borrowed under the ABL Facility and the proceeds of the 2018 Incremental First Lien Term Loan.

 

Refinancing” means the refinancing, termination or discharge and satisfaction of substantially all existing indebtedness for borrowed money of the Target and its subsidiaries, other than intercompany indebtedness and existing capital leases, the revolving commitments under the Canadian ABL Facility (as defined in the Amended Credit Agreement), other indebtedness permitted to exist beyond the Third Amendment Effective Date under the Acquisition Agreement and certain limited indebtedness that the Arrangers and the Borrower reasonably agree may remain outstanding after the Third Amendment Effective Date, and the release of all liens securing any such indebtedness.

 

Specified Acquisition Agreement Representations” means such of the representations made by or with respect to the Target, its subsidiaries and their respective businesses in the Acquisition Agreement as are material to the interests of the 2018 Incremental First Lien Lender, but only to the extent that the Borrower has, or an affiliate of the Borrower has, the right (taking into account any applicable cure provisions) to terminate the Borrower’s or its obligations under the Acquisition Agreement or to decline to consummate the Acquisition as a result of a breach of such representations in the Acquisition Agreement.

 

Third Amendment Effective Date Representations” means (x) the Specified Representations (it being understood and agreed that, for purposes of this Amendment, the reference to the certificate delivered pursuant to Section 4.01(a)(xii) of the Credit Agreement on the Closing Date in the definition of “Specified Representations” with respect to Section 5.17 of the Credit Agreement shall refer instead to the certificate described in Section 4(a)(vii) below) and (y) the Specified Acquisition Agreement Representations.

 

Transactions” means, collectively, (i) the Acquisition, (ii) the Contribution, (iii) the Refinancing and (iv) the funding of the 2018 Incremental First Lien Term Loan hereunder.

 

SECTION 2.         2018 Incremental First Lien Lender, 2018 Incremental First Lien Term Commitment and 2018 Incremental First Lien Term Loan.  Pursuant to and in accordance with Section 2.12 of the Credit Agreement and subject to the satisfaction of the conditions precedent set forth in Section 4:

 

2



 

(a)           Barclays, as Incremental First Lien Lender (in such capacity, the “2018 Incremental First Lien Lender”), hereby agrees to provide an Incremental First Lien Term Commitment to the Borrower in an aggregate principal amount equal to $996,839,654.38 (the “2018 Incremental First Lien Term Commitment”) and to make a single term loan in respect thereof (the “2018 Incremental First Lien Term Loan”) to the Borrower on the Third Amendment Effective Date in an aggregate principal amount not to exceed the 2018 Incremental First Lien Term Commitment.

 

(b)           The Borrower is incurring the 2018 Incremental First Lien Term Commitment pursuant to clause (y) of the second proviso of Section 2.12(a) of the Credit Agreement.

 

(c)           The 2018 Incremental First Lien Term Commitment and the 2018 Incremental First Lien Term Loan shall constitute an Incremental First Lien Term Loan Tranche and shall have the terms set forth in Section 2(d) and in the Amended Credit Agreement.

 

(d)           The 2018 Incremental First Lien Term Commitment and the 2018 Incremental First Lien Term Loan shall have the following terms:

 

(i)            Subject to the terms and conditions set forth herein, the 2018 Incremental First Lien Lender agrees to make a 2018 Incremental First Lien Term Loan to the Borrower on the Third Amendment Effective Date in an amount not to exceed the 2018 Incremental First Lien Term Commitment.  Amounts borrowed under this Section 2(d)(i) and subsequently repaid or prepaid may not be reborrowed.  The 2018 Incremental First Lien Term Loan may be a Base Rate Loan or a Eurodollar Rate Loan as provided in the Amended Credit Agreement.  The 2018 Incremental First Lien Term Commitment shall be automatically and permanently reduced to zero after the making of the Borrowing of the 2018 Incremental First Lien Term Loan on the Third Amendment Effective Date.

 

(ii)           The 2018 Incremental First Lien Term Loan shall (A) mature on the Maturity Date set forth in the Amended Credit Agreement, (B) be repaid as set forth in Section 2.05(a) of the Amended Credit Agreement, (C) share in any prepayments and be subject to a premium in connection with a Repricing Transaction, in each case, as set forth in Section 2.03 of the Amended Credit Agreement, (D) be borrowed as (x) a Eurodollar Rate Loan with an Interest Period ending on June 29, 2018 and (y) a Eurodollar Rate Loan with an Interest Period ending on July 31, 2018 (in accordance with the last sentence of the definition of Interest Period) and (E) accrue interest at the rate set forth in Section 2.06 of the Amended Credit Agreement.

 

(iii)          Except as set forth in Section 2(d)(ii) above and in the Amended Credit Agreement, the 2018 Incremental First Lien Term Loan shall have terms substantially the same as those of the existing Term Loans outstanding on the Third Amendment Effective Date immediately prior to giving effect to this Amendment (the “Existing Term Loans”), as set forth in the Amended Credit Agreement, and shall be subject to the provisions of the Amended Credit Agreement and the other Loan Documents.

 

3



 

(e)           The proceeds of the 2018 Incremental First Lien Term Loan will be used to (i) prepay in full, pursuant to and in accordance with the Credit Agreement, the aggregate principal amount of all Existing Term Loans on the Third Amendment Effective Date immediately upon receipt of such proceeds by the Borrower, (ii) finance the Transactions and (iii) pay fees, premiums and expenses in connection therewith (including upfront fees and original issue discount).

 

(f)            The Administrative Agent will record the 2018 Incremental First Lien Term Commitment and the 2018 Incremental First Lien Term Loan in the Register in accordance with the Amended Credit Agreement.

 

SECTION 3.         Amendments to Credit Agreement.

 

(a)           The Credit Agreement is, as of the Third Amendment Effective Date and subject to satisfaction of the conditions precedent set forth in Section 4 of this Amendment, hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Credit Agreement attached as Annex I hereto.

 

(b)           The schedules to the Credit Agreement (other than Schedules 4.01(a)(viii) and 6.14) are each, as of the Third Amendment Effective Date and subject to satisfaction of the conditions precedent set forth in Section 4 of this Amendment, hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages thereof attached as Annex II hereto.

 

(c)           All exhibits to the Credit Agreement, in the forms thereof in effect immediately prior to the Third Amendment Effective Date, will be continued as the exhibits to the Amended Credit Agreement.

 

SECTION 4.         Conditions Precedent to Effectiveness.  This Amendment (including the agreements in Section 2 and the amendments to the Credit Agreement contained in Section 3) shall become effective on the date on which the following conditions precedent shall be satisfied (such date, the “Third Amendment Effective Date”):

 

(a)           the Administrative Agent shall have received each of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party and, in the case of clause (i) below, by the 2018 Incremental First Lien Lender, each dated as of the Third Amendment Effective Date (or, in the case of certificates of governmental officials, a recent date before the Third Amendment Effective Date) and each in form and substance reasonably satisfactory to the Administrative Agent (and, in the case of clause (vi) below, the Collateral Agent):

 

(i)            executed counterparts of this Amendment;

 

4



 

(ii)           resolutions or authorizations of each Loan Party authorizing the execution, delivery and performance of this Amendment and, in the case of the Borrower, the borrowings hereunder, and a certification of a Responsible Officer of each Loan Party that such resolutions have not been modified, rescinded or amended and are in full force and effect;

 

(iii)          either the Organization Documents of each Loan Party or a certification by a Responsible Officer of each Loan Party that there have been no changes to the Organization Documents of such Loan Party since the Closing Date, the New Incremental First Lien Term Commitments Effective Date and/or the Second Amendment Effective Date (as applicable);

 

(iv)          either incumbency certificates of each Loan Party or a certification by a Responsible Officer of each Loan Party that there have been no changes to the Responsible Officers set forth on the incumbency certificates of such Loan Party delivered on the Second Amendment Effective Date;

 

(v)           good standing certificates evidencing that each Loan Party is duly organized or formed and that each Loan Party is validly existing and in good standing;

 

(vi)          a favorable opinion of (x) Fried, Frank, Harris, Shriver & Jacobson LLP, counsel to the Loan Parties and (y) Eversheds Sutherland (US) LLP, special Georgia counsel to the Loan Parties, in each case dated the Third Amendment Effective Date, addressed to the Administrative Agent, the Collateral Agent, the 2018 Incremental First Lien Lender and the Lenders, in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent;

 

(vii)         a customary certificate, substantially in the form of Exhibit J to the Credit Agreement from the chief financial officer of Holdings, certifying that Holdings and its Subsidiaries, on a consolidated basis after giving effect to the Transactions, are Solvent; and

 

(viii)        a certificate, dated as of the Third Amendment Effective Date, duly executed by a Responsible Officer of Holdings (A) certifying that the conditions precedent set forth in Sections 4(c), 4(g) and 4(j) have been satisfied as of the Third Amendment Effective Date and (B) setting forth calculations in reasonable detail demonstrating compliance with the First Lien Leverage Ratio set forth in Section 2.12(a) of the Credit Agreement, after giving effect on a Pro Forma Basis to the incurrence of the 2018 Incremental First Lien Term Commitment;

 

(ix)          a notice of prepayment in full of the Existing Term Loans pursuant to and in accordance with Section 2.03(a)(i) of the Credit Agreement; and

 

(x)           a Committed Loan Notice with respect to the 2018 Incremental First Lien Term Loan, not later than 10:00 a.m. (New York City time) one (1) Business Day prior to the Third Amendment Effective Date;

 

5



 

(b)           the Borrower shall have delivered any pledged stock (or equivalent) certificates evidencing 65% of the voting Equity Interests, and 100% of non-voting Equity Interests, of GYP Holdings IV Corp., a Delaware corporation;

 

(c)           the Third Amendment Effective Date Representations shall be true and correct as of the Third Amendment Effective Date (except in the case of any Third Amendment Effective Date Representation which expressly relates to a given date or period, such representation and warranty shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be); provided, that any Third Amendment Effective Date Representation qualified by or subject to a “material adverse effect”, “material adverse change” or similar term or qualification shall be true and correct in all respects (after giving effect to any such qualification of materiality);

 

(d)           the Borrower shall have applied, concurrently with the making of the 2018 Incremental First Lien Term Loan, the proceeds of the 2018 Incremental First Lien Term Loan to prepay in full the aggregate principal amount of all Existing Term Loans outstanding on the Third Amendment Effective Date;

 

(e)           the Administrative Agent shall have received:

 

(i)            at least three Business Days prior to the Third Amendment Effective Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act, as is reasonably requested in writing by the Administrative Agent at least ten (10) business days prior to the Third Amendment Effective Date; and

 

(ii)           for the account of each Lender (as defined in the Credit Agreement) with an Existing Term Loan all interest accrued but unpaid on the Existing Term Loans through the Third Amendment Effective Date (without payment for any loss, cost or expense which may be due to such Lender under Section 3.05 of the Credit Agreement, which are hereby waived).

 

(f)            there shall have been paid (i) to the Administrative Agent, for the account of the Administrative Agent and the Lenders (including the 2018 Incremental First Lien Lender), as applicable, all fees and, to the extent required by Section 10.04 of the Credit Agreement, expenses (including reasonable out-of-pocket fees, charges and disbursements of counsel) that are due and payable on or before the Third Amendment Effective Date and (ii) to the Arrangers, all other compensation separately agreed to be paid on the Third Amendment Effective Date;

 

(g)           since April 4, 2018, there shall have been no Material Adverse Effect (as defined in the Acquisition Agreement);

 

(h)           the Arrangers shall have received (a) an audited consolidated statement of financial position, consolidated statements of income and comprehensive income, consolidated statement of changes in partners’ equity and consolidated statement of cash flows of Master LP and the Subsidiaries (as such terms are defined in the Acquisition Agreement) for the fiscal year ended on December 31, 2017, (b) an unaudited consolidated

 

6



 

statement of financial position, consolidated statements of income and comprehensive income, consolidated statement of changes in partners’ equity and consolidated statement of cash flows of Master LP and the Subsidiaries (as such terms are defined in the Acquisition Agreement) for each fiscal quarter of Master LP and the Subsidiaries (as such terms are defined in the Acquisition Agreement) ended after December 31, 2017 and at least 45 days prior to the Third Amendment Effective Date, and (c) a pro forma consolidated balance sheet and related statement of income of the Borrower as of the date of the consolidated balance sheet and income statement delivered pursuant to clause (a) (or (b), if as of a later date) for the twelve-month period ending on such date, prepared after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements) (which shall not be required to be prepared in compliance with Regulation S-X of the Securities Act of 1933, as amended, or include adjustments for purchase accounting);

 

(i)            prior to, or substantially concurrently with the initial funding of the 2018 Incremental First Lien Term Loan, the Refinancing shall have been consummated and the Contribution shall have been made; and

 

(j)            the Acquisition shall be consummated pursuant to the Acquisition Agreement, substantially concurrently with the initial funding of the 2018 Incremental First Lien Term Loan, without giving effect to any amendments thereto, waivers thereof, supplements thereto or consents with respect thereto that are materially adverse to the Arrangers or the 2018 Incremental First Lien Lender in their capacities as such, without the consent of the 2018 Incremental First Lien Lender, such consent not to be unreasonably withheld or delayed; provided that (a) any change or modification to the definition of “Material Adverse Effect” (as such term is defined in the Acquisition Agreement) shall be deemed materially adverse to the Arrangers and the 2018 Incremental First Lien Lender and (b) neither the reduction of the Purchase Price (as defined in the Acquisition Agreement) nor the increase in the Purchase Price (to the extent funded with the proceeds of an Equity Offering (as defined in the Amended Credit Agreement) and/or the proceeds of amounts borrowed under the ABL Facility) shall be deemed materially adverse to the Arrangers and the 2018 Incremental First Lien Lender.

 

SECTION 5.         Representations and Warranties. To induce the other parties hereto to enter into this Amendment, each of Holdings and the Borrower represents and warrants to the Administrative Agent, the Collateral Agent, the 2018 Incremental First Lien Lender and the other Lenders that, as of the Third Amendment Effective Date and immediately after giving effect to the transactions and amendments to occur on the Third Amendment Effective Date:

 

(a)           each Loan Party and each of its Subsidiaries has all requisite power and authority to execute and deliver this Amendment and perform its obligations under this Amendment and the Amended Credit Agreement;

 

(b)           this Amendment has been duly executed and delivered by each Loan Party that is party hereto and constitutes a legal, valid and binding obligation of such Loan Party,

 

7



 

enforceable against each Loan Party that is party hereto in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other laws affecting creditors’ rights generally and by general principles of equity;

 

(c)           the execution and delivery by each Loan Party of this Amendment and the performance by each Loan Party of this Amendment and the Amended Credit Agreement, and the consummation of the transactions contemplated by this Amendment, are within such Loan Party’s corporate or other powers, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (i) contravene the terms of any of such Person’s Organization Documents, (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than any Lien to secure the Secured Obligations pursuant to the Collateral Documents), or require any payment (except for the prepayment of all Existing Term Loans and ABL Loans on the Third Amendment Effective Date) to be made under (A) the ABL Facility, (B) any other Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (C) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject or (iii) violate any Law; except with respect to any breach or contravention or payment referred to in clause (ii)(B) and (ii)(C), to the extent that such conflict, breach, contravention or payment could not reasonably be expected to have a Material Adverse Effect;

 

(d)           no approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (i) the execution or delivery by any Loan Party of this Amendment or the performance by any Loan Party of this Amendment or the Amended Credit Agreement, or enforcement against, any Loan Party of this Amendment or the Amended Credit Agreement or for the consummation of the transactions contemplated hereby or (ii) the exercise by an Agent or any Lender (including the 2018 Incremental First Lien Lender) of its rights under this Amendment or the Amended Credit Agreement, except for the approvals, consents, exemptions, authorizations, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect and those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make could not reasonably be expected to have a Material Adverse Effect;

 

(e)           neither Holdings nor any Restricted Subsidiary of Holdings is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and

 

(f)            the representations and warranties of each Loan Party set forth in any Loan Document to which it is a party are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) on and as of the Third Amendment Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct

 

8



 

in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date.

 

SECTION 6.         Post-Effectiveness Covenants.  Each Loan Party warrants, covenants and agrees with the Administrative Agent and the Lenders that each Loan Party will execute and deliver the documents and complete the tasks set forth on Schedule A hereto, in each case within the time limits specified on such Schedule (or such longer period as the Administrative Agent may agree in its sole discretion).

 

SECTION 7.         Effect on Loan Documents.  Except as specifically amended hereby, all Loan Documents shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  Without limiting the generality of the foregoing:

 

(a)           the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent, the Collateral Agent or any Lender under any Loan Document, nor constitute a waiver of any provision of any Loan Document or in any way limit, impair or otherwise affect the rights and remedies of the Administrative Agent, the Collateral Agent and the Lenders under any Loan Document;

 

(b)           on and after the Third Amendment Effective Date, each reference in the Amended Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of like import referring to the Credit Agreement and each reference in any other Loan Document to “the Credit Agreement,” “thereunder,” “thereof,” “therein” or words of like import referring to the Credit Agreement shall mean and be a reference to the Amended Credit Agreement, and this Amendment and the Amended Credit Agreement shall be read together and construed as a single instrument;

 

(c)           nothing herein shall be deemed to entitle any Loan Party to a further amendment to, or a consent, waiver, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Amended Credit Agreement or any other Loan Document in similar or different circumstances;

 

(d)           on the Third Amendment Effective Date, each of the 2018 Incremental First Lien Lender shall (i) become a “Lender” and a “Term Lender” for all purposes of the Amended Credit Agreement and the other Loan Documents, (ii) have the 2018 Incremental First Lien Term Commitment which shall become a “Commitment” under the Amended Credit Agreement and (iii) make the 2018 Incremental First Lien Term Loan to the Borrower in a principal amount up to the 2018 Incremental First Lien Term Commitment, and the 2018 Incremental First Lien Term Loan shall be a “Term Loan” for all purposes of the Amended Credit Agreement and the other Loan Documents; and

 

(e)           each of the parties hereto hereby acknowledges and agrees that (i) this Amendment shall constitute a Loan Document for all purposes of the Amended Credit Agreement and the other Loan Documents and (ii) the terms of this Amendment do not constitute a novation but, rather, an amendment of the terms of certain pre-existing Indebtedness and the Credit Agreement, as evidenced by the Amended Credit Agreement.

 

9



 

For the avoidance of doubt, each representation and warranty in the Credit Agreement with regard to the Loan Documents shall be deemed a representation and warranty with regard to this Amendment.

 

SECTION 8.         Expenses.  The Borrower agrees to pay all reasonable out-of-pocket costs and expenses incurred by the Administrative Agent, the Collateral Agent and the Arrangers in connection with this Amendment and any other documents prepared in connection herewith and the consummation and administration of the transactions contemplated hereby.  The Borrower hereby confirms that the indemnification provisions set forth in Section 10.05 of the Amended Credit Agreement shall apply to this Amendment and any other documents prepared in connection herewith and the consummation and administration of the transactions contemplated hereby, and such liabilities, obligations, losses, damages, penalties, claims, demands, actions, judgments, suits, costs (including settlement costs) expenses and disbursements (including fees, disbursements and charges of counsel) (as more fully set forth therein as applicable) which may arise herefrom or in connection herewith.

 

SECTION 9.         Consent to Assignments.  For purposes of Section 10.07(b) of the Amended Credit Agreement, the Borrower hereby consents to any assignment by the 2018 Incremental First Lien Lender or any of its Affiliates of all or any portion of the 2018 Incremental First Lien Term Loan in connection with the initial syndication of the 2018 Incremental First Lien Term Loan to any assignee disclosed by the 2018 Incremental First Lien Lender to, and approved by, the Borrower prior to the Third Amendment Effective Date.

 

SECTION 10.       Governing Law.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

SECTION 11.       Amendments; Execution in Counterparts; Severability; Interpretative Provisions.

 

(a)           No amendment or waiver of any provision of this Amendment, and no consent to any departure by the Borrower or any other Loan Party herefrom, shall be effective unless in writing signed by the Administrative Agent, the 2018 Incremental First Lien Lender and Holdings and the Borrower or the applicable Loan Party, as the case may be, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

(b)           This Amendment may be executed in one or more counterparts (and by different parties hereto in different counterparts), each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery by telecopier or other electronic transmission of an executed counterpart of a signature page to this Amendment shall be effective as delivery of an original executed counterpart of this Amendment.

 

(c)           If any provision of this Amendment is held to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Amendment shall not be affected or impaired thereby.  The invalidity of a provision in a

 

10



 

particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

(d)                                 The rules of construction specified in Sections 1.02 through and including 1.11 of the Credit Agreement also apply to this Amendment.

 

SECTION 12.                     Acknowledgment and Reaffirmation.  Each Loan Party hereby:

 

(a)                                 (i) acknowledges that it has reviewed the terms and provisions of this Amendment (including, without limitation, Section 7), (ii) consents to the amendment of the Credit Agreement effected pursuant to this Amendment, (iii) reaffirms and confirms that each Loan Document to which it is a party or is otherwise bound, each Lien granted by it to the Collateral Agent for the benefit of the Secured Parties (including the 2018 Incremental First Lien Lender) pursuant to any such Loan Document and all Collateral encumbered thereby continues to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Loan Documents the payment and performance of all “Obligations”, “Guaranteed Obligations” or “Secured Obligations”, as applicable, under each Loan Document to which is a party (in each case as such terms are defined in the applicable Loan Document), and hereby ratifies the security interests in the Collateral (as defined in the Credit Agreement) granted by it pursuant to the Collateral Documents and, without limiting the foregoing, does hereby grant a security interest in such Collateral as security for the Secured Obligations (including, for the avoidance of doubt, the obligations in respect of the 2018 Incremental First Lien Term Loan), and (iv) acknowledges and affirms that the 2018 Incremental First Lien Term Commitment and any 2018 Incremental First Lien Term Loan made or deemed made pursuant to this Amendment or the 2018 Incremental First Lien Term Commitment constitute “Obligations”, “Secured Obligations” or “Guaranteed Obligations” and similar defined terms used in the Loan Documents, as applicable;

 

(b)                                 acknowledges and agrees that (i) each Loan Document to which it is a party or otherwise bound shall continue and remain in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this Amendment, (ii) notwithstanding the conditions to effectiveness set forth in this Amendment, no consent by any Loan Party (other than Holdings and the Borrower) is required by the terms of the Credit Agreement or any other Loan Document to the amendments to the Credit Agreement effected pursuant to this Amendment and (iii) nothing in the Amended Credit Agreement, this Amendment or any other Loan Document shall be deemed to require its consent to any future amendments to the Credit Agreement, except to the extent expressly set forth in Section 10.01 of the Amended Credit Agreement;

 

(c)                                  agrees that the First Lien Obligations or Secured Obligations, as applicable, include, among other things and without limitation, the prompt and complete payment and performance by the Borrower when due and payable (whether at the stated maturity, by acceleration or otherwise) of principal and interest on, and premium (if any) on, the 2018 Incremental First Lien Term Loan under the Amended Credit Agreement; and

 

11



 

(d)                                 acknowledges and agrees that nothing in this Amendment shall be deemed to be a novation of any obligations under the Credit Agreement or any other Loan Document.

 

SECTION 13.                     Treatment of Amendment Under FATCA. For purposes of determining withholding Taxes imposed under FATCA, from and after the Third Amendment Effective Date, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Amended Credit Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 

12



 

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

 

 

GYP HOLDINGS II CORP., as Holdings

 

 

 

 

 

 

By:

 

 

 

 

/s/ H. Douglas Goforth

 

 

 

Name: H. Douglas Goforth

 

 

 

Title: Vice President, Chief Financial

 

 

 

 

Officer & Treasurer

 

 

 

 

 

 

GYP HOLDINGS III CORP., as Borrower

 

 

 

 

 

 

By:

 

 

 

 

/s/ H. Douglas Goforth

 

 

 

Name: H. Douglas Goforth

 

 

 

Title: Vice President, Chief Financial

 

 

 

 

Officer & Treasurer

 

 

 

 

 

 

GYPSUM MANAGEMENT AND SUPPLY, INC., as Co-Obligor and a Guarantor

 

 

 

 

 

 

By:

 

 

 

 

/s/ H. Douglas Goforth

 

 

 

Name: H. Douglas Goforth

 

 

 

Title: Vice President, Chief Financial

 

 

 

 

Officer & Treasurer

 

[Signature Page to GMS Third Amendment (2018)]

 



 

SUBSIDIARY GUARANTORS:

 

 

PIONEER MATERIALS WEST, INC.

 

STATE LINE BUILDING SUPPLY, INC.

 

GATOR GYPSUM, INC.

 

CAPITOL INTERIOR PRODUCTS, INC.

 

CAPITOL MATERIALS COASTAL, INC.

 

CAPITOL MATERIALS, INCORPORATED

 

GMS STRATEGIC SOLUTIONS, INC.

 

ROCKET INSTALLATION, INC.

 

SUN VALLEY INTERIOR SUPPLY, INC.

 

TOOL SOURCE WAREHOUSE, INC.

 

TUCKER ACOUSTICAL PRODUCTS, INC.

 

TUCKER MATERIALS, INC.

 

CHICAGO GYPSUM SUPPLY, INC.

 

NEW ENGLAND GYPSUM SUPPLY, INC.

 

OHIO VALLEY SUPPLY, INC.

 

PACIFIC GYPSUM SUPPLY, INC.

 

GYPSUM SUPPLY COMPANY

 

PIONEER MATERIALS, INC.

 

TAMARACK MATERIALS, INC.

 

MISSOURI DRYWALL SUPPLY, INC.

 

WILDCAT MATERIALS, INC.

 

COLONIAL MATERIALS, INC.

 

CHAPARRAL MATERIALS, INC.

 

CHEROKEE BUILDING MATERIALS OF OKC, INC.

 

CHEROKEE BUILDING MATERIALS, INC.

 

CARTER HARDWARE COMPANY

 

ROCKY TOP MATERIALS, INC.

 

COWTOWN MATERIALS, INC.

 

EASTEX MATERIALS, INC.

 

LONE STAR MATERIALS, INC.

 

RIO GRANDE BUILDING MATERIALS, INC.

 

TEJAS MATERIALS, INC.

 

CAPITOL BUILDING SUPPLY, INC.

 

COMMONWEALTH BUILDING MATERIALS, INC.

 

GTS DRYWALL SUPPLY COMPANY

 

PENNSYLVANIA GYPSUM, INC.

 

 

By:

 

 

 

/s/ H. Douglas Goforth

 

 

Name: H. Douglas Goforth

 

 

Title: Assistant Treasurer

 

[Signature Page to GMS Third Amendment (2018)]

 



 

 

GYPSUM SUPPLY INSTALLED INSULATION, LLC

 

By: GYPSUM SUPPLY COMPANY, its Manager

 

 

 

 

 

 

By:

 

 

 

 

/s/ H. Douglas Goforth

 

 

 

Name: H. Douglas Goforth

 

 

 

Title: Assistant Treasurer

 

[Signature Page to GMS Third Amendment (2018)]

 



 

 

BARCLAYS BANK PLC, as 2018 Incremental First Lien Lender

 

 

 

 

 

 

By:

 

 

 

 

/s/ Craig Malloy

 

 

 

Name: Craig Malloy

 

 

 

Title: Director

 

[Signature Page to GMS Third Amendment (2018)]

 



 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Administrative Agent

 

 

 

 

 

 

By:

 

 

 

 

/s/ Judith Smith

 

 

 

Name: Judith Smith

 

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

/s/ D. Andrew Maletta

 

 

 

Name: D. Andrew Maletta

 

 

 

Title: Authorized Signatory

 

[Signature Page to GMS Third Amendment (2018)]

 



 

Schedule A

to Third Amendment to First Lien Credit Agreement

 

POST-EFFECTIVENESS MATTERS

 

1.              REAL ESTATE DELIVERABLES

 

The Loan Parties shall deliver, or cause to be delivered, to the Administrative Agent no later than the date occurring sixty (60) days after the Third Amendment Effective Date (or such later date as may be acceptable to the Administrative Agent in its reasonable discretion), to the extent determined by the Administrative Agent to be reasonably necessary or desirable, each of the following items:

 

(i)                                     to the extent reasonably necessary, fully executed and notarized mortgage modifications (each, a “Mortgage Modification”), in proper form for recording in all appropriate places in all applicable jurisdictions, encumbering each applicable Mortgaged Property;

 

(ii)                                  an opinion of counsel (which counsel shall be reasonably satisfactory to the Administrative Agent) in each state in which a Mortgaged Property for which a Mortgage Modification is required, is located with respect to the enforceability of such Mortgage as modified by the applicable Mortgage Modification, and such other customary matters with regards to each such Mortgage Modification as the Administrative Agent may reasonably request, in each case in form and substance reasonably satisfactory to the Administrative Agent;

 

(iii)                               with respect to the lender’s title insurance policy insuring each Mortgaged Property for which a Mortgage Modification is required, a mortgage modification endorsement with respect to such Mortgaged Property, issued by a title company reasonably satisfactory to the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, insuring, to the extent that such coverage is available by endorsement in the applicable jurisdiction, that the validity, enforceability and priority of the applicable Mortgage, and the effectiveness of such title policy, shall remain unchanged following recordation of the related Mortgage Modification; and

 

(iv)                              (a) an updated Flood Determination Form with respect to each Mortgaged Property; (b) if it is a Flood Hazard Property, a Borrower Notice; (c) the Borrower’s written acknowledgment of receipt of the Borrower Notice from the Administrative Agent as to the fact that such Mortgaged Property is a Flood Hazard Property and as to whether the community in which each such Flood Hazard Property is located is participating in the NFIP; and (d) if the Borrower Notice is required to be given and flood insurance is available in the community in which the applicable Mortgaged Property is located, Evidence of Flood Insurance.

 



 

UNOFFICIAL EXECUTION COPYVERSION

ANNEX I

 

Adjusted marked version reflecting changes made pursuant to the Third Amendment.

 

Added text shown underscored; deleted text shown strikethrough.

(conformed to

 

Incremental First Lien Term Commitments Amendment dated as of September 27, 2016 and

Second Amendment to First Lien Credit Agreement dated as of June 7, 2017)

 

FOR REFERENCE PURPOSES ONLY

 

 

FIRST LIEN CREDIT AGREEMENT

 

Dated as of April 1, 2014

 

among

 

GYP HOLDINGS III CORP.

 

as the Borrower,

 

GYP HOLDINGS II CORP.

 

as Holdings,

 

CREDIT SUISSE AG

 

as Administrative Agent and Collateral Agent

 

The Other Lenders Party Hereto,

 

BARCLAYS BANK PLC

 

CREDIT SUISSE SECURITIES (USA)LOAN FUNDING LLC

 

RBC CAPITAL MARKETS(1)

 

UBS SECURITIES LLC

 

as Joint Lead Arrangers and Joint Bookrunners

 


(1) RBC Capital Markets is a brand name for the capital markets businesses of Royal Bank of Canada and its affiliates.

 

 



 

TABLE OF CONTENTS

 

Section

 

 

Page

 

 

 

 

ARTICLE I

 

 

DEFINITIONS AND ACCOUNTING TERMS

 

 

 

 

1.01

Defined Terms

1

1.02

Other Interpretive Provisions

5556

1.03

Accounting Terms

5557

1.04

Rounding

5658

1.05

References to Agreements and Laws

5658

1.06

Times of Day

5658

1.07

Timing of Payment or Performance

5658

1.08

Currency Equivalents Generally

5658

1.09

Pro Forma Calculations

5658

1.10

Basket Calculations

5759

1.11

Classification of Term Loans and Term Borrowings

5759

 

 

 

 

ARTICLE II

 

 

THE COMMITMENTS AND CREDIT EXTENSIONS

 

 

 

 

2.01

The Term Loans

5759

2.02

Term Borrowings, Conversions and Continuations of Term Loans

5759

2.03

Prepayments

5961

2.04

Termination or Reduction of Term Commitments

6869

2.05

Repayment of Term Loans

6870

2.06

Interest

7072

2.07

Fees

7072

2.08

Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate

7072

2.09

Evidence of Indebtedness

7173

2.10

Payments Generally; Administrative Agent’s Clawback

7173

2.11

Sharing of Payments

7375

2.12

Incremental First Lien Term Facilities

7476

2.13

Defaulting Lenders

7981

 

 

 

 

ARTICLE III

 

 

TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

 

 

 

 

3.01

Taxes

8082

3.02

Illegality

8485

3.03

Inability to Determine Rates

8486

3.04

Increased Cost and Reduced Return; Capital Adequacy

8586

3.05

Funding Losses

8687

3.06

Matters Applicable to All Requests for Compensation

8688

3.07

Replacement of Lenders under Certain Circumstances

8789

3.08

Eurodollar Rate Amendment

90

 



 

3.083.09

Survival

8891

 

 

 

 

ARTICLE IV

 

 

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

 

 

 

4.01

Conditions to Initial Credit Extension

8991

4.02

Conditions to All Credit Extensions

9396

 

 

 

 

ARTICLE V

 

 

REPRESENTATIONS AND WARRANTIES

 

 

 

 

5.01

Existence, Qualification and Power; Compliance with Laws

9497

5.02

Authorization; No Contravention

9497

5.03

Governmental Authorization; Other Consents

9597

5.04

Binding Effect

9598

5.05

Financial Statements; No Material Adverse Effect

9598

5.06

Litigation

9699

5.07

No Default

9699

5.08

Ownership of Property; Liens

9699

5.09

Environmental Matters

9799

5.10

Taxes

97100

5.11

ERISA Compliance

98100

5.12

Subsidiaries; Equity Interests

98101

5.13

Margin Regulations; Investment Company Act

99101

5.14

Disclosure

99101

5.15

Compliance with Laws

99102

5.16

Intellectual Property

100102

5.17

Solvency

100102

5.18

Labor Matters

100103

5.19

Perfection, Etc.

100103

5.20

OFAC and PATRIOT Act Compliance

101103

5.21

Anti-Corruption Compliance

101103

5.22

OFAC

101104

5.23

Designation as Senior Debt

101104

5.24

Tax Reporting Compliance

101104

 

 

 

 

ARTICLE VI

 

 

AFFIRMATIVE COVENANTS

 

 

 

 

6.01

Financial Statements

102104

6.02

Certificates; Other Information

103105

6.03

Notices

105108

6.04

Payment of Obligations

106108

6.05

Preservation of Existence, Etc.

106108

6.06

Maintenance of Properties

106109

6.07

Maintenance of Insurance

106109

 

ii



 

6.08

Compliance with Laws

107109

6.09

Books and Records

107109

6.10

Inspection Rights

107109

6.11

Use of Proceeds

107110

6.12

Covenant to Guarantee Obligations and Give Security

107110

6.13

Compliance with Environmental Laws

110113

6.14

Further Assurances, Post Closing Obligations

110113

6.15

Maintenance of Ratings

113115

6.16

Conference Calls

113115

6.17

ERISA

113116

 

 

 

 

ARTICLE VII

 

 

NEGATIVE COVENANTS

 

 

 

 

7.01

Liens

113116

7.02

Investments

117120

7.03

Indebtedness

121123

7.04

Fundamental Changes

124127

7.05

Dispositions

125128

7.06

Restricted Payments

127130

7.07

Change in Nature of Business

131133

7.08

Transactions with Affiliates

131133

7.09

Burdensome Agreements

132134

7.10

Use of Proceeds

133136

7.11

Amendments of Organization Documents

133136

7.12

Accounting Changes

133136

7.13

Prepayments, Etc. of Indebtedness and Modifications of Certain Debt Instruments

133136

7.14

Holding Companies

134137

 

 

 

 

ARTICLE VIII

 

 

EVENTS OF DEFAULT AND REMEDIES

 

 

 

 

8.01

Events of Default

135138

8.02

Remedies Upon Event of Default

138140

8.03

Application of Funds

138141

 

 

 

 

ARTICLE IX

 

 

ADMINISTRATIVE AGENT AND OTHER AGENTS

 

 

 

 

9.01

Appointment and Authorization of Agents

139142

9.02

Delegation of Duties

140143

9.03

Liability of Agents

140143

9.04

Reliance by Agents

141143

9.05

Notice of Default

141144

9.06

Credit Decision; Disclosure of Information by Agents

141144

9.07

Indemnification of Agents

142145

 

iii



 

9.08

Agents in their Individual Capacities

142145

9.09

Successor Agents

143146

9.10

Administrative Agent May File Proofs of Claim

144147

9.11

Collateral and Guaranty Matters

145148

9.12

Secured Hedge Agreements

146148

9.13

Other Agents; Arranger and Managers

146149

9.14

Appointment of Supplemental Administrative Agents

146149

9.15

Withholding

147150

9.16

Certain ERISA Matters

150

 

 

 

 

ARTICLE X

 

 

MISCELLANEOUS

 

 

 

 

10.01

Amendments, Etc.

147152

10.02

Notices; Effectiveness; Electronic Communications

151156

10.03

No Waiver; Cumulative Remedies; Enforcement

153158

10.04

Expenses and Taxes

154158

10.05

Indemnification by the Borrower

154159

10.06

Payments Set Aside

156160

10.07

Successors and Assigns

156161

10.08

Confidentiality

162167

10.09

Setoff

163168

10.10

Interest Rate Limitation

164168

10.11

Counterparts

164169

10.12

Integration; Effectiveness

164169

10.13

Survival of Representations and Warranties

165169

10.14

Severability

165169

10.15

Governing Law; Jurisdiction; Etc.

165170

10.16

WAIVER OF RIGHT TO TRIAL BY JURY

166171

10.17

Binding Effect

166171

10.18

No Advisory or Fiduciary Responsibility

167171

10.19

Affiliate Activities

167172

10.20

Electronic Execution of Assignments and Certain Other Documents

168172

10.21

USA PATRIOT ACT; “Know Your Customer” Checks

168172

10.22

Keepwell

169173

10.23

Intercreditor Agreements

169173

10.24

Acknowledgement and Consent to Bail-In of EEA Financial Institutions

174

10.25

Co-Obligor

174

 

iv



 

SCHEDULES

 

 

 

 

 

I

 

Guarantors

II

 

Immaterial Subsidiaries

2.01

 

Term Commitments and Pro Rata Shares

4.01(a)(viii)

 

Local Counsel

5.08(b)

 

Material Real Property

5.09

 

Environmental Matters

5.11(d)

 

Pension Plans

5.12

 

Subsidiaries and Other Equity Investments

5.16

 

Intellectual Property

5.18

 

Labor Matters

6.14

 

Initial Mortgaged Properties

7.01

 

Existing Liens

7.02

 

Existing Investments

7.03

 

Existing Indebtedness

7.08

 

Existing Affiliate Transactions

10.02

 

Administrative Agent’s Office, Certain Addresses for Notices

 

 

 

EXHIBITS

 

 

 

 

 

Form of

 

 

 

A

 

Committed Loan Notice

B

 

[Reserved]

C

 

Note

D

 

Compliance Certificate

E-1

 

Assignment and Assumption

E-2

 

Affiliated Lender Assignment and Assumption

E-3

 

Administrative Questionnaire

F-1

 

Holdings Guaranty

F-2

 

Subsidiary Guaranty

G

 

Security Agreement

H

 

Intellectual Property Security Agreement

I

 

Opinion Matters — Counsel to the Loan Parties

J

 

Solvency Certificate

K

 

Discounted Prepayment Option Notice

L

 

Lender Participation Notice

M

 

Discounted Voluntary Prepayment Notice

N

 

U.S. Tax Compliance Certificate

O

 

Secured Hedge Notice

P

 

Intercompany Note

Q

 

Term Intercreditor Agreement

R

 

ABL/Term Intercreditor Agreement

 

v



 

FIRST LIEN CREDIT AGREEMENT

 

This FIRST LIEN CREDIT AGREEMENT (this “Agreement”) is entered into as of April 1, 2014, among GYP HOLDINGS III CORP., a Delaware corporation (the “Borrower”), GYP HOLDINGS II CORP., a Delaware corporation (“Holdings”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), CREDIT SUISSE AG, as Administrative Agent and as Collateral Agent.

 

PRELIMINARY STATEMENTS

 

Pursuant to the terms and conditions set forth in the Acquisition Agreement (as hereinafter defined), the Borrower will acquire (the “Acquisition”) 100% of the Shares other than Rollover Shares (each as defined in the Acquisition Agreement) of Gypsum Management and Supply, Inc., a Georgia corporation (“GMS”), from each of the persons set forth on Schedule A to the Acquisition Agreement (collectively, the “Seller”).

 

The Borrower has requested that, immediately upon the satisfaction in full of the conditions precedent set forth in Article IV below, the Lenders lend to the Borrower $390,000,000 in the form of a term loan facility.

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

 

1.01                        Defined Terms.  As used in this Agreement (including the preliminary statements above), the following terms shall have the meanings set forth below:

 

ABL Administrative Agent” means the administrative agent under the ABL Facility.

 

ABL Cap” means the greater of (i) $345,000,000 and (ii) an amount equal to the sum of 90% of the book value of all inventory and 90% of the book value of all accounts receivable, in each case, owned by the Borrower and its Restricted Subsidiaries as of the end of the most recent fiscal quarter for which financial statements have been delivered to the Administrative Agent in accordance with Section 6.01(a) or (b) and calculated in accordance with GAAP.

 

ABL Collateral Agent” means the collateral agent under the ABL Facility.

 

ABL Facility” means the ABL Revolving Credit Agreement dated as of the date hereof (as amended, supplemented or otherwise modified from time to time in accordance with the terms of the ABL/Term Intercreditor Agreement), among the Borrower, Holdings, Wells Fargo Bank, N.A., as administrative agent thereunder, the other agents party thereto and the ABL Lenders, including any replacement thereof entered into in connection with one or more refinancings thereof permitted under the ABL/Term Intercreditor Agreement (so long as the

 



 

documents governing such replacement constitute “ABL Debt Documents” for purposes of the ABL/Term Intercreditor Agreement).

 

ABL Lender” means a lender under the ABL Facility.

 

ABL Loan” means a “Loan” as defined in the ABL Facility.

 

ABL Loan Documents” means the “Loan Documents” as defined in the ABL Facility.

 

ABL Obligations” means the “ABL Obligations” as defined in the ABL Facility.

 

ABL Priority Collateral” has the meaning specified in the ABL/Term Intercreditor Agreement.

 

ABL/Term Intercreditor Agreement” means the ABL/Term Intercreditor Agreement substantially in the form of Exhibit R, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof), among the Loan Parties, the Collateral Agent, the ABL Collateral Agent and the Second Lien Collateral Agent.

 

Acquisitionhas the meaning specified in the “Preliminary Statements.”

 

Acquisition Agreement” means the Stock Purchase Agreement (including the schedules and exhibits thereto), dated as of February 11, 2014, among the Borrower, as Buyer, GMS, as Company and the Seller.

 

Acceptable Discount” has the meaning specified in Section 2.03(a)(iii)(C).

 

Acceptance Date” has the meaning specified in Section 2.03(a)(iii)(B).

 

Accepting Lenders” has the meaning specified in Section 2.03(c).

 

Acquired Business” has the meaning specified in Section 7.02(i).

 

Administrative Agent” means Credit Suisse AG, in its capacity as administrative agent under the Term Facility, and any successor administrative agent.

 

Administrative Agent’s Office” means the Administrative Agent’s address as set forth on Schedule 10.02, or such other address as the Administrative Agent may from time to time notify the Borrower and the Lenders.

 

Administrative Questionnaire” means an Administrative Questionnaire in substantially the form of Exhibit E-3 or any other form approved by the Administrative Agent.

 

AEA” means AEA Investors LP and its Affiliates, other than any portfolio company of any of the foregoing.

 

Affected Facility” has the meaning specified in Section 10.01(B).

 

2



 

Affiliate” means, with respect to any Person, another Person that directly or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.  “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

 

Affiliated Lenders” means, collectively, the Borrower and its Subsidiaries, Non-Debt Fund Affiliates and Debt Fund Affiliates.

 

Affiliated Lender Assignment and Assumption” means an Affiliated Lender Assignment and Assumption substantially in the form of Exhibit E-2.

 

Agent-Related Persons” means each Agent, together with its Affiliates, and the officers, directors, employees, partners, members, representatives, agents, attorneys-in-fact, trustees and advisors of such Persons and Affiliates and their respective successors and assigns.

 

Agents” means, collectively, the Administrative Agent, the Collateral Agent and the Supplemental Administrative Agents (if any).

 

Aggregate Commitments” means the Term Commitments of all the Lenders.

 

Agreement” means this First Lien Credit Agreement, as amended, supplemented or modified from time to time in accordance with its terms.

 

Applicable Discount” has the meaning specified in Section 2.03(a)(iii)(C).

 

Applicable Rate” means a percentage per annum equal to 3.002.75% per annum for Eurodollar Rate Loans, and 2.001.75% per annum for Base Rate Loans.

 

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

 

Arrangers” means (i) in respect of periods prior to the Third Amendment Effective Date, each of CS Securities, RBC Capital Markets, and UBS Securities LLC, in their capacities as exclusive joint lead arrangers and joint bookrunners, and (ii) on and after the Third Amendment Effective Date, Barclays Bank PLC and Credit Suisse Loan Funding LLC, in their capacities as exclusive joint lead arrangers and joint bookrunners.

 

Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

 

Assignment and Assumption” means an Assignment and Assumption substantially in the form of Exhibit E-1.

 

3



 

Attributable Indebtedness” means, on any date, in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP (subject to Section 1.03(c)).

 

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

 

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

 

Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the Prime Rate and (c) the one-month Eurodollar Rate (after giving effect to any applicable “floor”) plus 1%; provided that, for the avoidance of doubt, the Eurodollar Rate for any day shall be based on the rate determined on such day at approximately 11:00 a.m. (London Time) by reference to the Intercontinental Exchange Benchmark Administration Ltd. (or any successor thereto) Interest Settlement Rates for deposits in Dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the Intercontinental Exchange Benchmark Administration Ltd. (or any successor thereto) as an authorized vendor for the purpose of displaying such rates).  Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Rate or the Eurodollar Rate shall be effective on the effective date of such change in the Prime Rate, the Federal Funds Rate or the Eurodollar Rate, as the case may be.

 

Base Rate Loan” means a Term Loan that bears interest based on the Base Rate.

 

Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Securities and Exchange Act of 1934, as amended, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Securities and Exchange Act of 1934, as amended), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns,” “Beneficially Owned” and “Beneficial Ownership” have a corresponding meaning.

 

Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

Board of Directors” means: (a) with respect to Holdings, the Borrower or any other corporation, the board of directors (or analogous governing body) of the corporation or any committee thereof duly authorized to act on behalf of such board; (b) with respect to a partnership,

 

4



 

the board of directors of the general partner of the partnership; (c) with respect to a limited liability company, the managing member or members (or analogous governing body) or any controlling committee of managing members thereof; and (d) with respect to any other Person, the board or committee of such Person serving a similar function.

 

Borrower” has the meaning specified in the introductory paragraph to this Agreement.

 

Borrower Materials” has the meaning specified in Section 6.02.

 

Borrower Notice” has the meaning specified in Section 6.12(d).

 

Borrower Purchasing Party” means the Borrower and any of its Restricted Subsidiaries.

 

Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the jurisdiction where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, is a day that is also a London Banking Day.

 

Canadian ABL Facility” means the Amended and Restated Credit Agreement dated as of June 28, 2017 (as amended on the date hereof to, among other things, permanently repay all outstanding term loans thereunder and as further amended, supplemented or otherwise modified in accordance with its terms), among Master Titan Holdings Limited Partnership, Watson Limited Partnership, Slegg Limited Partnership, BC Ceilings Limited Partnership, Core Acoustic Titan Limited Partnership and Shoemaker Limited Partnership, as the borrowers, Canadian Imperial Bank of Commerce, as administrative agent, co-lead arranger and sole bookrunner, and the other financial institutions from time to time party thereto.

 

Canadian ULCs” means GYP Canada Holdings I ULC, a British Columbia corporation, and GYP Canada Holdings II ULC, a British Columbia corporation.

 

Capital Expenditures” means, as of any date for the applicable period then ended, all capital expenditures of the Borrower and its Restricted Subsidiaries on a consolidated basis for such period, as determined in accordance with GAAP.

 

Capitalized Leasemeans any lease that has been or should be, in accordance with GAAP (subject to Section 1.03(c)), recorded as a capitalized lease.

 

Cash Collateral Account” means a blocked, non-interest bearing deposit account at Credit Suisse or a financial institution selected by the Administrative Agent, in the name of the Borrower and under the sole dominion and control of the Administrative Agent, and otherwise established in a manner satisfactory to the Administrative Agent.

 

Cash Equivalents” means any of the following types of Investments, to the extent owned by the Borrower or any of its Restricted Subsidiaries:

 

5



 

(a)                           direct obligations (or certificates representing an interest in such obligations) issued by, or unconditionally guaranteed by, the government of the United States (including, in each case, any agency or instrumentality thereof), as the case may be, the payment of which is backed by the full faith and credit of the United States, and which are not callable or redeemable at the issuer’s option;

 

(b)                           overnight bank deposits, time deposit accounts, certificates of deposit, banker’s acceptances and money market deposits with maturities (and similar instruments) of 12 months or less from the date of acquisition issued by a bank or trust company which is organized under, or authorized to operate as a bank or trust company under, the laws of the United States; provided that such bank or trust company has capital, surplus and undivided profits aggregating in excess of $250,000,000  and whose long-term debt is rated “A-1” or higher by Moody’s or A+ or higher by S&P or the equivalent rating category of another internationally recognized rating agency;

 

(c)                            commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and, in each case, maturing within one year after the date of acquisition;

 

(d)                           marketable short-term money market and similar funds (including such funds investing a portion of their assets in municipal securities) having a rating of at least P-1 or A-1 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another nationally recognized statistical rating agency selected by the Borrower);

 

(e)                            repurchase obligations with a term of not more than 30 days for underlying Investments of the types described in clauses (a) and (b) above entered into with any financial institution meeting the qualifications specified in clause (b) above;

 

(f)                             Investments, classified in accordance with GAAP as Current Assets of the Borrower or any of its Restricted Subsidiaries, in money market investment programs, which are administered by financial institutions having capital of at least $250,000,000, and the portfolios of which are limited such that at least 95% of such investments are of the character, quality and maturity described in clauses (a), through (e) of this definition;

 

(g)                            investment funds investing at least 95% of their assets in securities of the types (including as to credit quality and maturity) described in clauses (a) through (f) above; and

 

(h)                           (x) such local currencies in those countries in which the Borrower or any of its Restricted Subsidiaries transacts business from time to time in the ordinary course of business and (y) investments of comparable tenor and credit quality to those described in the foregoing clauses (a) through (g) customarily utilized in countries in which Borrower or any of its Restricted Subsidiaries transacts business from time to time in the ordinary course of business.

 

Casualty Event” means any event that gives rise to the receipt by the Borrower or any of its Restricted Subsidiaries of any casualty insurance proceeds or condemnation awards in respect of any equipment, fixed assets or real property (including any improvements thereon).

 

6



 

CFC Holdco” means a Subsidiary (a) a Subsidiary that (i) has no material assets other than the equity of one or more Foreign Subsidiaries or (bii) that is treated as a disregarded entity for U.S. federal income tax purposes that holds equity of one or more Foreign Subsidiaries or (b) GYP IV.

 

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

 

Change of Control” means the occurrence of any of the following:

 

(i)            the direct or indirect sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of Holdings and its Subsidiaries taken as a whole or the Borrower and its Subsidiaries taken as a whole to any Person (including any “person” (as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended)) other than one or more Permitted Holders; or

 

(ii)           the adoption of a plan relating to the liquidation or dissolution of Holdings or the Borrower; or

 

(iii)          the consummation of any transaction (including, without limitation, any merger or consolidation), the result of which is that any Person (including any “person” as defined in clause (i) above) other than one or more Permitted Holders becomes the Beneficial Owner, directly or indirectly, of more than 50% of the issued and outstanding Voting Stock of Holdings or the Borrower measured by voting power rather than number of shares; or

 

(iv)          the first day on which a majority of the members of the Board of Directors of Holdings or the Borrower are not Continuing Directors; or

 

(v)           Holdings ceases to own, directly or indirectly, 100% of the Equity Interests of the Borrower; or

 

(vi)          a “Change of Control” (as defined in the ABL Facility or the Second Lien Credit Agreement) shall occur.

 

Class” means (a) with respect to Lenders, each of the following classes of Lenders: (i) Lenders holding Term Loans and (ii) Lenders holding an Incremental First Lien Term

 

7



 

Loan Tranche, and (b) with respect to Term Loans, each of the following classes of Term Loans: (i) Term Loans and (ii) Incremental First Lien Term Loans of any Incremental First Lien Term Loan Tranche.  For the avoidance of doubt, any Term Loans or Term Commitments created pursuant to a Permitted Amendment shall constitute a separate Class.

 

Closing Date” means the first date on which all of the conditions precedent in Article IV are satisfied or waived in accordance with Article IV.

 

Closing Material Adverse Effect” means any material adverse change, effect, event, occurrence, fact or condition in or on the business, results of operation, condition (financial or otherwise) or assets of the Target, taken as a whole, provided, however, that in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, a Closing Material Adverse Effect: any material adverse facts, circumstances, events, changes, effects or occurrences (a) resulting from or relating to the identity of Buyer or any of its Affiliates as the Buyer of the Target or the announcement of or execution of the Acquisition Agreement or the pendency of the transactions contemplated by the Acquisition Agreement, including losses or threatened losses of employees, customers, suppliers or others having relationships with the Target; (b) resulting from or relating to political conditions or any acts of terrorism or war; (c) relating to generally applicable economic conditions (including the state of the financial, debt, credit or securities markets, in the United States or elsewhere) or the industries in which the Target operates in general; (d) resulting from or relating to any change in Laws or GAAP or authoritative interpretations thereof; (e) resulting from or relating to the failure of the Business to meet projections, forecasts or estimates delivered to any Person (provided that the underlying causes of such failures may be considered in determining whether there is a Closing Material Adverse Effect unless otherwise provided in this definition);  (f) resulting from or relating to any natural or man-made disaster or acts of God, or (g) resulting from or relating to actions of the Target or any of its Affiliates which Buyer has expressly requested or to which Buyer has expressly consented; except, in the case of clauses (b), (c), (d) or (f), where such change, effect, event, occurrence, fact or condition disproportionately affects the Target, taken as a whole, relative to other participants in the industries in which the Target operates.  Capitalized terms used above in the definition of “Closing Material Adverse Effect” without definition shall have the meanings assigned to them in the Acquisition Agreement.

 

Code” means the U.S. Internal Revenue Code of 1986, as amended (unless otherwise provided herein).

 

Collateral” means all of the “Collateral” referred to in the Collateral Documents and all of the other property and assets that are or are required under the terms of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Secured Parties.

 

Collateral Agent” means Credit Suisse AG, in its capacity as collateral agent under the Loan Documents, and any successor collateral agent.

 

Collateral Documents” means, collectively, the Security Agreement, the Intercreditor Agreements, the Intellectual Property Security Agreement, the Mortgages, each of the mortgages, collateral assignments, Security Agreement Supplements, Intellectual Property

 

8



 

Security Agreement Supplements, security agreements, pledge agreements or other similar agreements delivered to the Administrative Agent, the Collateral Agent and the Lenders pursuant to Section 6.12 or 6.14, and each of the other agreements, instruments or documents entered into by a Loan Party that creates or purports to create a Lien over all or any part of its assets in respect of the First Lien Obligations in favor of the Collateral Agent for the benefit of the Secured Parties.

 

Commitment Letter” means the Commitment Letter, dated as of February 11, 2014 (as amended, supplemented or otherwise modified by the Joinder to Commitment Letter, dated as of February 25, 2014), among Holdings, Wells Fargo Bank, N.A., SunTrust Robinson Humphrey, Inc., SunTrust Bank, Credit Suisse Securities (USA) LLC, Credit Suisse AG, Royal Bank of Canada, UBS AG, Stamford Branch, and UBS Securities LLC.

 

Committed Loan Notice” means a notice of (a) a Term Borrowing, (b) a conversion of Term Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

 

Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

Company Plan” means a Plan other than a Multiemployer Plan.

 

Compliance Certificate” means a certificate substantially in the form of Exhibit D.

 

Connection Income Taxes” means (a) Taxes that are imposed on or measured by net income (however denominated) or (b) that are franchise Taxes, in each case that are imposed as a result of a present or former connection between Agent, Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any other Loan Party hereunder and the jurisdiction imposing such Tax (other than connections arising solely from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Term Loan or Loan Document).

 

Consolidated Cash Taxes” means, as of any date for the applicable period ending on such date with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis, the aggregate of all income, franchise and similar taxes, as determined in accordance with GAAP, to the extent the same are payable in cash with respect to such period.

 

Consolidated Current Assets” means, with respect to any Person and its Restricted Subsidiaries on a consolidated basis, all assets that, in accordance with GAAP, would be classified as current assets on the consolidated balance sheet of such Person, after deducting appropriate and adequate reserves therefrom in each case in which a reserve is proper in accordance with GAAP, but excluding any payment of contract-related costs (customarily referred to as costs in excess of billing), cash, Cash Equivalents and Swap Contracts to the extent that the mark-to-market Swap Termination Value would be reflected as an asset on the consolidated balance sheet of such Person.

 

9



 

Consolidated Current Liabilities” means, with respect to any Person and its Restricted Subsidiaries on a consolidated basis, all liabilities in accordance with GAAP that would be classified as current liabilities on the consolidated balance sheet of such Person, but excluding any advanced payments received for contracts (customarily referred to as billings in excess of costs), the current portion of Indebtedness (including the Swap Termination Value of any Swap Contracts) to the extent reflected as a liability on the consolidated balance sheet of such Person.

 

Consolidated EBITDA” means, as of any date for the applicable period ending on such date with respect to any Person and its Restricted Subsidiaries on a consolidated basis, the sum of (a) Consolidated Net Income, plus (b) an amount which, in the determination of Consolidated Net Income for such period, has been deducted for (other than clause (xix)), without duplication,

 

(i)            total interest expense determined in accordance with GAAP (including, to the extent deducted and not added back in computing Consolidated Net Income, (a) amortization of original issue discount resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers’ acceptances, (c) non-cash interest payments, (d) the interest component of Capitalized Leases, (e) net payments, if any, made (less net payments, if any, received) pursuant to interest rate Swap Contracts with respect to Indebtedness, (f) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, and (g) any expensing of bridge, commitment and other financing fees) and, to the extent not reflected in such total interest expense, any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate or currency risk, net of interest income and gains on such hedging obligations,

 

(ii)           provision for taxes based on income, profits or capital of the Borrower and its Restricted Subsidiaries, including, without limitation, federal, state, franchise and similar taxes and foreign withholding taxes paid or accrued during such period including penalties and interest related to such taxes or arising from any tax examinations,

 

(iii)          depreciation and amortization expense (including amortization of intangible assets),

 

(iv)          non-cash expenses resulting from any employee benefit or management compensation plan or the grant of stock appreciation or similar rights, stock options, restricted stock or other rights or equity incentive programs to employees of Holdings, the Borrower or any Restricted Subsidiary pursuant to a written plan or agreement or the treatment of such options under variable plan accounting,

 

(v)           any costs or expenses incurred pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or

 

10



 

agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of Holdings or net cash proceeds of an issuance of Equity Interests of Holdings (other than Disqualified Equity Interests),

 

(vi)          all extraordinary, non-recurring or unusual losses and charges,

 

(vii)         costs and expenses in connection with branch startups, provided that the aggregate amount of add backs made pursuant to this clause (vii), when added to the aggregate amount of add backs pursuant to clauses (ix) and (xix) below, shall not exceed an amount equal to 20% of Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended prior to the determination date (without giving effect to any adjustments pursuant to this clause (vii) or clauses (ix) or (xix) below),

 

(viii)        cash fees and expenses (including Sponsor deal fees) and employee bonuses incurred in connection with, or in anticipation of, the Transactions,

 

(ix)          cash restructuring charges or reserves and business optimization expense, including any restructuring costs and integration costs incurred in connection with Permitted Acquisitions after the Closing Date, project start-up costs, costs related to the closure and/or consolidation of facilities, retention charges, contract termination costs, recruiting, retention, relocation, severance and signing bonuses and expenses, systems establishment costs, conversion costs and excess pension charges, consulting fees and any one-time expense relating to enhanced accounting function, or costs associated with becoming a public company or any other costs (including legal services costs) incurred in connection with any of the foregoing; provided that the aggregate amount of add backs made pursuant to this clause (ix), when added to the aggregate amount of add backs pursuant  to clause (vii) above and clause (xix) below, shall not exceed an amount equal to 20% of Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended prior to the determination date (without giving effect to any adjustments pursuant to this clause (ix), clause (vii) above or clause (xix) below),

 

(x)           transaction fees and expenses (including those in connection with, to the extent permitted hereunder, any Investment, any Debt Issuance, any Equity Issuance, any Disposition, or any Casualty Event and any amendments or waivers of the Loan Documents, the ABL Loan Documents or the Second Lien Loan Documents, in each case, whether or not consummated),

 

(xi)          any losses (or minus any gains) realized upon the disposition of property outside of the ordinary course of business,

 

(xii)         any (x) expenses, charges or losses that are covered by indemnification or other reimbursement provisions in connection with any permitted

 

11



 

Investment, Permitted Acquisitions or any permitted sale, conveyance, transfer or other disposition of assets or (y) expenses, charges or losses with respect to liability or casualty events or business interruption covered by insurance, in each case to the extent actually reimbursed, or, so long as the Borrower has made a determination that reasonable evidence exists that such indemnification or reimbursement will be made, and only to the extent that such amount is (A) not denied by the applicable indemnifying party, obligor or insurer in writing and (B) in fact indemnified or reimbursed within 365 days after such determination (with a deduction in the applicable future period for any amount so added back to the extent not so indemnified or reimbursed within such 365 day period),

 

(xiii)        management fees (or special dividends in lieu thereof) permitted under Section 7.08(d),

 

(xiv)        any non-cash purchase accounting adjustment and any step-ups with respect to re-valuing assets and liabilities in connection with the Transactions or any Investment permitted under Section 7.02,

 

(xv)         non-cash losses from Joint Ventures and non-cash minority interest reductions,

 

(xvi)        fees and expenses in connection with debt exchanges or refinancings permitted under Section 7.13,

 

(xvii)       other expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income which do not represent a cash item in such period or any future period,

 

(xviii)      losses recognized and expenses incurred in connection with the effect of currency and exchange rate fluctuations on intercompany balances and other balance sheet items, and

 

(xix)        the amount of net cost savings, operating expense reductions, other operating improvements and acquisition synergies projected by the Borrower in good faith to be realized during such period (calculated on a Pro Forma Basis as though such items had been realized on the first day of such period) as a result of actions taken or to be taken in connection with the Transactions or any acquisition or disposition by the Borrower or any Restricted Subsidiary, any operational changes (including, without limitation, operational changes arising out of the modification of contractual arrangements (including, without limitation, renegotiation of lease agreements, utilities and logistics contracts and insurance policies, as well as purchases of leased real properties)) or headcount reductions, net of the amount of actual benefits realized during such period that are otherwise included in the calculation of Consolidated EBITDA from such actions, provided that (A) a duly completed certificate signed by a Responsible

 

12



 

Officer of the Borrower shall be delivered to the Administrative Agent together with the Compliance Certificate required to be delivered pursuant to Section 6.02, certifying that (x) such cost savings, operating expense reductions and synergies are reasonably expected and factually supportable as determined in good faith by the Borrower, and (y) such actions are to be taken and the results with respect thereto are to be achieved within (I) in the case of any such cost savings, operating expense reductions and synergies in connection with the Transactions, 18 months after the Closing Date and (II) in all other cases, within 18 months after the consummation of the acquisition, disposition or any operational change, which is expected to result in such cost savings, expense reductions or synergies, (B) no cost savings, operating expense reductions and synergies shall be added pursuant to this clause (xix) to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such period, (C) to the extent that any cost savings, operating expense reductions and synergies are not associated with the Transactions, all steps shall have been taken for realizing such savings, (D) projected amounts (and not yet realized) may no longer be added in calculating Consolidated EBITDA pursuant to this clause (xix) to the extent occurring more than four full fiscal quarters after the specified action taken in order to realize such projected cost savings, operating expense reductions and synergies and (E) the aggregate amount of add backs made pursuant to this clause (xix), when added to the aggregate amount of add backs pursuant to clauses (vii) and (ix) above, shall not exceed an amount equal to 20% of Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended prior to the determination date (without giving effect to any adjustments pursuant to clauses (vii) and (ix) above or this clause (xix)), minus

 

(c)                      an amount which, in the determination of Consolidated Net Income, has been included for:

 

(i)            federal, state, local and foreign income tax credits and refunds (to the extent not netted from tax expense),

 

(ii)           non-recurring income or gains from discontinued operations,

 

(iii)          all extraordinary, non-recurring or unusual gains and non-cash income during such period,

 

(iv)          any gains realized upon the disposition of property outside of the ordinary course of business, and

 

(v)           the amount of Restricted Payments permitted under Sections 7.06(e)(i), 7.06(e)(ii), 7.06(e)(iii), 7.06(e)(viii) and 7.06(i) (except to the extent that (x) the amount paid with such Restricted Payments would not, if the respective expense or other item had been incurred directly by the Borrower, have reduced Consolidated EBITDA determined

 

13



 

in accordance with this definition or (y) such Restricted Payment is paid by the Borrower in respect of an expense or other item that has resulted in, or will result in, a reduction of Consolidated EBITDA, as calculated pursuant to this definition), plus or minus

 

(d)                     unrealized losses/gains in respect of Swap Contracts, all as determined in accordance with GAAP.

 

Notwithstanding anything to the contrary, Consolidated EBITDA shall be deemed to be $21,900,000 for the fiscal quarter ended on April 30, 2013, $22,900,000 for the fiscal quarter ended on July 31, 2013, $27,400,000 for the fiscal quarter ended on October 31, 2013 and $21,000,000 for the fiscal quarter ended on January 31, 2014.

 

Consolidated Funded First Lien Indebtedness” means (A) all Consolidated Funded Indebtedness constituting ABL Obligations and (B) all other Consolidated Funded Indebtedness that is secured by a Lien on any Collateral (other than Liens permitted under Section 7.01(i)) that is not subordinated to the Lien on such Collateral securing the First Lien Obligations; provided that (x) such Consolidated First Lien Indebtedness is not subordinated in right of payment to the First Lien Obligations and (y) for purposes of the definition of “Permitted Other First Lien Indebtedness”, the definition of “Permitted Other Second Lien Indebtedness” and clause (y) of the second proviso in Section 2.12(a) only, all Incremental First Lien Term Facilities and all Permitted Other First Lien Indebtedness (and any Permitted Refinancing thereof) shall be deemed to be (a) secured by a Lien on the Collateral that is not subordinated to the Lien on such Collateral securing the First Lien Obligations, whether or not so secured and (b) not subordinated in right of payment to the First Lien Obligations, whether or not so subordinated.

 

Consolidated Funded Indebtedness” means all Indebtedness of a Person and its Restricted Subsidiaries on a consolidated basis, in an amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP (but (x) excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions or any Permitted Acquisition and (y) any Indebtedness that is issued at a discount to its initial principal amount shall be calculated based on the entire principal amount thereof), excluding (i) net obligations under any Swap Contract, (ii) any earn-out obligation until such obligation becomes a liability on the balance sheet of the applicable Person, (iii) any deferred compensation arrangements, (iv) any non-compete or consulting obligations incurred in connection with Permitted Acquisitions, or (v) obligations in respect of letters of credit, bankers’ acceptances, bank Guarantees, surety bonds, performance bonds, advance payment guarantees or bonds, warranties, bid guarantees or bonds and similar instruments except to the extent of unreimbursed amounts thereunder; provided that any unreimbursed amount under commercial letters of credit shall not be counted as Consolidated Funded Indebtedness until one (1) Business Day after such amount is drawn.  The amount of Consolidated Funded Indebtedness for which recourse is limited either to a specified amount or to an identified asset of such Person shall be deemed to be equal to such specified amount or, if less, the fair market value of such identified asset.

 

Consolidated Funded Secured Indebtedness” means Consolidated Funded Indebtedness that is secured by a Lien on assets of the Borrower or any of its Restricted Subsidiaries, provided that (x) such Consolidated Funded Indebtedness is not subordinated in right

 

14



 

of payment to the First Lien Obligations and (y) for purposes of the definition of “Permitted Other First Lien Indebtedness”, the definition of “Permitted Other Second Lien Indebtedness”, the definition of “Secured Leverage Ratio” as used in the definition of “Second Lien Cap” and clause (y) of the second proviso in Section 2.12(a) only, all Incremental First Lien Term Facilities and all Permitted Other Indebtedness (and any Permitted Refinancing thereof) shall be deemed to be (a) secured by a Lien on the assets of the Borrower and its Restricted Subsidiaries, whether or not so secured and (b) not subordinated in right of payment to the First Lien Obligations, whether or not so subordinated.

 

Consolidated Net Income” means, as of any date for the applicable period ending on such date with respect to any Person and its Restricted Subsidiaries on a consolidated basis, net income (excluding, without duplication, (i) extraordinary items, (ii) any amounts attributable to Investments in any Unrestricted Subsidiary or Joint Venture to the extent that either (x) such amounts have not been distributed in cash to such Person and its Restricted Subsidiaries during the applicable period, (y) such amounts were not earned by such Unrestricted Subsidiary or Joint Venture during the applicable period or (z) there exists in respect of any future period any encumbrance or restriction on the ability of such Unrestricted Subsidiary or Joint Venture to pay dividends or make any other distributions in cash on the Equity Interests of such Unrestricted Subsidiary or Joint Venture held by such Person and its Restricted Subsidiaries, (iii) the cumulative effect of foreign currency translations during such period to the extent included in Consolidated Net Income, (iv) the income (or loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary of the Borrower or is merged into or consolidated with the Borrower or any of its Restricted Subsidiaries (except to the extent required for any calculation of Consolidated EBITDA on a Pro Forma Basis), (v) net income of any Restricted Subsidiary (other than a Loan Party) for any period to the extent that, during such period (or, for purposes of calculating Cumulative Credit, either during such period or in respect of any future period) there exists any encumbrance or restriction on the ability of such Restricted Subsidiary to pay dividends or make any other distributions in cash on the Equity Interests of such Restricted Subsidiary held by such Person and its Restricted Subsidiaries, except to the extent such encumbrance or restriction is contained in the Canadian ABL Facility or to the extent that such net income is distributed in cash during such period to such Person or to a Restricted Subsidiary of such Person that is not itself subject to any such encumbrance or restriction, (vi) cancellation of Indebtedness income arising out of prepayments made in accordance with Section 2.03(a)(iii) and (vii) any income (loss) for such period attributable to the early extinguishment of (a) Indebtedness, (b) obligations under any Swap Contracts or (c) other derivative instruments), as determined in accordance with GAAP.

 

Consolidated Scheduled Funded Debt Payments” means, as of any date for the applicable period ending on such date with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis, the sum of all scheduled payments of principal during such period on Consolidated Funded Indebtedness that constitutes Funded Debt (including the implied principal component of payments due on Capitalized Leases during such period), less the reduction in such scheduled payments resulting from voluntary prepayments or mandatory prepayments of such Funded Debt (including as required pursuant to Section 2.03) as determined in accordance with GAAP.

 

15



 

“Consolidated Total Assets” means, as of any date, the total assets of the Borrower and its Restricted Subsidiaries, determined in accordance with GAAP, as set forth on the consolidated balance sheet of the Borrower as of such date.

 

Continuing Directors” means the directors of each of Holdings and the Borrower on the Closing Date, and each other director, if, in each case, such other director’s nomination for election to the Board of Directors of Holdings or the Borrower is recommended by a majority of the then Continuing Directors or such other director receives the vote of the Sponsor in his or her election by the stockholders of Holdings or of the Borrower.

 

Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

Control” has the meaning specified in the definition of “Affiliate.”

 

Credit Extension” means a Term Borrowing.

 

Credit Suisse” means Credit Suisse AG, acting through such of its affiliates or branches as it deems appropriate, and its successors.

 

CS Securities” means Credit Suisse Securities (USA) LLC and its successors.

 

Cumulative Credit” means, at any date, an amount, not less than zero in the aggregate (except to the extent resulting from the operation of clause (e)), determined on a cumulative basis equal to:

 

(a)                                 the sum of a percentage of Excess Cash Flow for each full fiscal quarter ended after the Closing Date and prior to such date of determination, equal to, for each such fiscal quarter:

 

(i) 50% if, as of the last day of such fiscal quarter, the Total Leverage Ratio was greater than or equal to 5.50:1.00,

 

(ii) 75% if, as of the last day of such fiscal quarter, the Total Leverage Ratio was less than 5.50:1.00 but greater than or equal to 5.00:1.00 or

 

(iii) 100% if, as of the last day of such fiscal quarter, the Total Leverage Ratio was less than 5.00:1.00, plus

 

(b)                                 the sum of any Declined Amounts, plus

 

(c)                                  in the event that Cumulative Credit has been reduced as a result of an Investment made pursuant to Section 7.02(t) (any such Investment for purposes of this clause (c) being an “Original Investment” and the amount of any such reduction for purposes of this clause (c) being the “Reduction Amount” in respect of such Investment) in connection with the designation of a Restricted Subsidiary as an Unrestricted Subsidiary, the acquisition of Equity Interests of an Unrestricted Subsidiary or the acquisition of any Investments, an amount equal to

 

16



 

the lesser of (A) the aggregate amount received by the Borrower or any Restricted Subsidiary in cash and Cash Equivalents from:  (i) the sale (other than to the Borrower or any such Restricted Subsidiary) of any such Equity Interests of an Unrestricted Subsidiary or any such Investments, or (ii) any dividend or other distribution by any such Unrestricted Subsidiary received in respect of any such Investments, or (iii) interest, returns of principal, repayments and similar payments by any such Unrestricted Subsidiary or received in respect of any such Investments, and (B) the Reduction Amount in respect of such Original Investment; plus

 

(d)                                 in the event that Cumulative Credit has been reduced as a result of an Investment made pursuant to Section 7.02(t) in connection with the designation of a Restricted Subsidiary as an Unrestricted Subsidiary (any such designation being the “Original Designation” and the amount of any such reduction for purposes of this clause (d) being the “Reduction Amount” in respect of such designation), in the event any such Unrestricted Subsidiary has been re-designated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Borrower or a Restricted Subsidiary, an amount equal to the lesser of (A) the fair market value of the Investments of the Borrower and the Restricted Subsidiaries in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable) and (B) the Reduction Amount in respect of such Original Designation, minus

 

(e)                                  the aggregate excess (or plus any shortfall) in respect of each fiscal year of the Borrower (commencing with the first full fiscal year ending after the Closing Date) completed prior to such date of (i) the cumulative amount of Cumulative Credit attributable to and determined in accordance with clause (a) of this definition for all four fiscal quarters of each such fiscal year over (ii) such cumulative amount for each such fiscal year attributable to clause (a) of this definition but determined on an annual (and not quarterly) basis for each such fiscal year (for the avoidance of doubt, based on the Total Leverage Ratio as of the last day of each such fiscal year), as such amount may be reduced from time to time to the extent that all or a portion of Cumulative Credit is applied to make Investments, Restricted Payments or prepayments of Junior Financing pursuant to Section 7.02(t), 7.06(f)(2) or 7.13(a)(i), respectively.

 

Cure Amount” has the meaning specified in the ABL Facility.

 

Current Assets” means, with respect to any Person, all assets of such Person that, in accordance with GAAP, would be classified as current assets on the balance sheet of a company conducting a business the same as or similar to that of such Person, after deducting appropriate and adequate reserves therefrom in each case in which a reserve is proper in accordance with GAAP.

 

Declined Amounts” has the meaning specified in Section 2.03(c).

 

Declining Lender” has the meaning specified in Section 2.03(c).

 

Debt Fund Affiliate” means any Affiliate of the Sponsor that is a bona fide diversified debt fund primarily engaged in, or advising funds or other investment vehicles that are engaged in making, purchasing or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of business whose managers have fiduciary duties to

 

17



 

the third-party investors in such fund or investment vehicle that are independent of their duties to the equity holders of Holdings.

 

Debt Issuance” means the issuance by any Person and its Restricted Subsidiaries of any Indebtedness for borrowed money.

 

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

 

Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

Default Rate” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate applicable to Base Rate Loans plus (c) 2.0% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the Eurodollar Rate plus the Applicable Rate applicable to such Eurodollar Rate Loan plus 2.0% per annum, in each case, to the fullest extent permitted by applicable Laws.

 

Defaulting Lender” means, subject to Section 2.13(b), any Lender that (a) has failed to (i) fund all or any portion of its Term Loans within two (2) Business Days of the date such Term Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (which conditions precedent, together with the applicable default, if any, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower or the  Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lenders’ obligation to fund a Term Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with the applicable default, if any, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent or the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent or the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law or a Bail-In Action, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest

 

18



 

does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender; provided, further, that the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator with respect to a Lender of a Lender’s direct or indirect parent company under the Dutch Financial Supervision Act 2007 (as amended from time to time and including any successor legislation) shall not result in a Lender being deemed a Defaulting Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.13(b)) upon delivery of written notice of such determination to the Borrower and each Lender.

 

Discounted Prepayment Option Notice” has the meaning specified in Section 2.03(a)(iii)(B).

 

Discount Range” has the meaning specified in Section 2.03(a)(iii)(B).

 

Discounted Voluntary Prepayment” has the meaning specified in Section 2.03(a)(iii)(A).

 

Discounted Voluntary Prepayment Notice” has the meaning specified in Section 2.03(a)(iii)(E).

 

Disposition” or “Dispose” means the sale, assignment, transfer, license, lease or other disposition of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Restricted Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

Disqualified Equity Interests” means any Equity Interest which, by its terms (or by the terms of any security or other Equity Interests into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligations or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Term Loans and all other First Lien Obligations that are accrued and payable), (b) is redeemable at the option of the holder thereof, in whole or in part, (c) provides for the scheduled payments of dividends in cash, or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is ninety one (91) days after the Latest Maturity Date of all Term Loans then in effect; provided that if such Equity Interests are issued pursuant to a plan for the benefit of employees of Holdings (or any direct or indirect parent thereof) or the Restricted Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because it may be required to be repurchased by Holdings, the Borrower or its Restricted Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

19



 

Dollar” and “$” mean lawful money of the United States.

 

Domestic Subsidiary” means any Subsidiary of Holdings (other than any CFC Holdco) that is organized under the laws of the United States, any state thereof or the District of Columbia.

 

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

 

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

 

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

 

Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.07(b)(iii) and (v) (subject to such consents, if any, as may be required under Section 10.07(b)(iii).

 

Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws (including common law), regulations, ordinances, rules, judgments, orders, decrees or binding judicial or administrative decisions relating to pollution and the protection of the environment (including air, water vapor, surface water, ground water, drinking water, drinking water supply, surface or subsurface land, plant and animal life or any other natural resource), and public and worker health and safety as it relates to Hazardous Materials, including those related to the generation, use, handling, storage, transportation, treatment, recycling, labeling or Environmental Release of, or exposure to, any Hazardous Materials.

 

Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, natural resource damages, costs of environmental remediation, investigation or monitoring, consulting costs and attorney fees, and fines or penalties) resulting from or based upon (a) any Environmental Law, including any noncompliance therewith, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) an Environmental Release or threatened Environmental Release of any Hazardous Materials or (e) any contract, agreement or other binding consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

 

20



 

Environmental Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, migrating, leaching, dispersal, dumping or disposing into or through the indoor or outdoor environment.

 

Equity Contribution” has the meaning specified in the definition of the “Transactions.”

 

Equity Interests” means, with respect to any Person, all of the shares, interests, rights, participations or other equivalents (however designated) of capital stock of (or other ownership or profit interests or units in) such Person and all of the warrants, options or other rights for the purchase, acquisition or exchange from such Person of any of the foregoing (including through convertible securities).

 

Equity Issuance” means any issuance for cash by any Person to any other Person of (a) its Equity Interests, (b) any of its Equity Interests pursuant to the exercise of options or warrants, (c) any of its Equity Interests pursuant to the conversion of any debt securities to equity or (d) any options or warrants relating to its Equity Interests.

 

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

 

ERISA Affiliate” means any trade or business (whether or not incorporated), that together with any Loan Party, is treated as a single employer within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 302 of ERISA or Section 412 of the Code).

 

ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of any Loan Party or any ERISA Affiliate from a Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) the withdrawal of any of the Loan Parties or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by any of the Loan Parties or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (d) the filing of a notice of intent to terminate or the treatment of a Pension Plan amendment as a termination under Section 4041 of ERISA, (e) the institution by the PBGC of proceedings to terminate a Pension Plan or Multiemployer Plan; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the determination that any Pension Plan is in at-risk status, as defined in Section 430 of the Code or Section 303 of ERISA, or the determination that any Multiemployer Plan is in endangered or critical status within the meaning of Section 432 of the Code or Section 305 of ERISA; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or any ERISA Affiliate; (i) the imposition of a lien under Section 430(k) of the Code or Section 303(k) of  ERISA with respect to any Pension Plan;

 

21



 

or (j) the failure to meet the minimum funding standard of Section 412 or 430 of the Code or Section 302 or 303 of ERISA with respect to any Pension Plan (whether or not waived) or the failure to make by its due date a required installment under Section 430(j) of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan.

 

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

 

Eurodollar Rate” means, for any Interest Period with respect to a Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent pursuant to the following formula:

 

Eurodollar Rate =

Eurodollar Base Rate

1.00 – Eurodollar Reserve Percentage

 

where,

 

Eurodollar Base Rate” means, for such Interest Period, the rate per annum equal to (i) the rate determined by the Administrative Agent to be the applicable Screen Rate at approximately 11:00 a.m. (London Time), two (2) Business Days prior to the commencement of such Interest Period, for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, or (ii) to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the “Eurodollar Base Rate” shall be the Interpolated Rate.

 

Eurodollar Rate Loan” means a Term Loan that bears interest at the Eurodollar Rate.

 

Eurodollar Reserve Percentage” means, for any day during any Interest Period, the reserve percentage (expressed as a decimal, carried out to five decimal places) in effect on such day, whether or not applicable to any Lender, under regulations issued from time to time by the FRB for determining the maximum reserve requirement (including any emergency, supplemental, marginal or other reserve requirement) with respect to Eurodollar funding (currently referred to as “Eurodollar liabilities”).  The Eurodollar Rate for each outstanding Term Loan the interest on which is determined by reference to the Eurodollar Rate shall be adjusted automatically as of the effective date of any change in the Eurodollar Reserve Percentage.

 

Eurodollar Screen Rate” means the Eurodollar Rate quote on the applicable screen page the Administrative Agent designates to determine the Eurodollar Rate (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time).

 

Eurodollar Successor Rate” has the meaning specified in Section 3.08.

 

Eurodollar Successor Rate Conforming Changes” means, with respect to any proposed Eurodollar Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Administrative Agent,

 

22



 

to reflect the adoption of such Eurodollar Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such Eurodollar Successor Rate exists, in such other manner of administration as the Administrative Agent determines in consultation with the Borrower).

 

Event of Default” has the meaning specified in Section 8.01.

 

Evidence of Flood Insurance” has the meaning specified in Section 6.12(d).

 

Excess Cash Flow” means, with respect to any Excess Cash Flow Period, an amount equal to (a) Consolidated Net Income of the Borrower and its Restricted Subsidiaries minus (b) without duplication (in each case, for the Borrower and its Restricted Subsidiaries on a consolidated basis),

 

(i)            Capital Expenditures, except to the extent made using proceeds, payments or any other amounts available from events or circumstances that were not included in determining Consolidated Net Income during such period,

 

(ii)           Consolidated Scheduled Funded Debt Payments and, to the extent not otherwise deducted from Consolidated Net Income, Consolidated Cash Taxes,

 

(iii)          Restricted Payments made by the Borrower and its Restricted Subsidiaries to the extent that such Restricted Payments are permitted to be made under Section 7.06(e) or 7.06(i), solely to the extent made, directly or indirectly, with the proceeds from events or circumstances that were included in the calculation of Consolidated Net Income,

 

(iv)          the aggregate amount of voluntary or mandatory permanent principal payments or repurchases of Indebtedness of the Borrower and its Restricted Subsidiaries (excluding the First Lien Obligations, the ABL Loans and the Second Lien Obligations); provided that (A) such prepayments or repurchases are otherwise permitted hereunder, (B) if such Indebtedness consists of a revolving line of credit, the commitments under such line of credit are permanently reduced by the amount of such prepayment or repurchase and (C) such prepayments or repurchases are not made, directly or indirectly, using (1) proceeds, payments or any other amounts available from events or circumstances that were not included in determining Consolidated Net Income during such period or (2) the Cumulative Credit,

 

(v)           cash payments made in satisfaction of non-current liabilities (excluding payments of Indebtedness for borrowed money) or non-cash charges in a prior period, in each case, not made directly or indirectly using (1) proceeds, payments or any other amounts available from events or circumstances that were not included in determining Consolidated Net Income during such period or (2) the Cumulative Credit,

 

23



 

(vi)          to the extent not deducted in arriving at Consolidated Net Income, cash expenses incurred in connection with the Transactions or, to the extent permitted hereunder, any Investment permitted under Section 7.02, Equity Issuance or Debt Issuance,

 

(vii)         cash from operations used or to be used to consummate a Permitted Acquisition (if such Permitted Acquisition has been consummated, or committed to be consummated, prior to the date on which a prepayment of Term Loans would be required pursuant to Section 2.03(b)(i) with respect to such fiscal year period); provided, however, that if any amount is deducted from Excess Cash Flow pursuant to this clause (vii) with respect to a fiscal year as a result of a Permitted Acquisition that has been committed to be consummated but not yet actually consummated at the time of such deduction (the amount of such cash being the “Relevant Deduction Amount”) then (A) for the avoidance of doubt, no amount shall be deducted from Excess Cash Flow pursuant to this clause (vii) as a result of such Permitted Acquisition being actually consummated for the Relevant Deduction Amount, and (B) if such Permitted Acquisition is not actually consummated for the Relevant Deduction Amount prior to the date on which a prepayment of Term Loans would be required pursuant to Section 2.03(b)(i) with respect to the immediately following fiscal year period, an amount equal to such Relevant Deduction Amount shall be added to Excess Cash Flow for such immediately following fiscal year period,

 

(viii)        to the extent not deducted in arriving at Consolidated Net Income, cash contributions to pension and other employee benefits plans,

 

(ix)          to the extent not deducted in arriving at Consolidated Net Income, any cash losses from extraordinary, unusual or non-recurring items,

 

(x)           to the extent not deducted in arriving at Consolidated Net Income, cash payments in respect of any hedging obligations,

 

(xi)          net non-cash gains and credits to the extent included in arriving at Consolidated Net Income, plus

 

(c) net non-cash charges and losses to the extent deducted in arriving at Consolidated Net Income; plus

 

(d) decreases in Net Working Capital for such period (other than any such decreases arising from acquisitions or dispositions by the Borrower and its Restricted Subsidiaries completed during such period or the application of purchase accounting), minus

 

(e) increases in Net Working Capital for such period (other than any such increases arising from acquisitions or dispositions by the Borrower and its Restricted Subsidiaries completed during such period or the application of purchase accounting).

 

24



 

Excess Cash Flow Period” means any fiscal year of the Borrower, commencing with the first full fiscal year ended after the Closing Date.

 

Excluded Subsidiary” means any Subsidiary of the Borrower that is (i) a Foreign Subsidiary or a Foreign Subsidiary of a Domestic Subsidiary or a CFC Holdco, (ii) an Immaterial Subsidiary, (iii) prohibited by applicable law, regulation or by any Contractual Obligation existing on the Closing Date or on the date such Person becomes a Subsidiary (as long as such Contractual Obligation was not entered into in contemplation of such Person becoming a Subsidiary) from providing a Subsidiary Guaranty or that would require a governmental (including regulatory) or third party consent, approval, license or authorization in order to grant such Subsidiary Guaranty (to the extent that the Borrower has used commercially reasonable efforts (not involving spending money in excess of de minimis amounts) to obtain such consent, approval, license or authorization), (iv) any Domestic Subsidiary that is a direct or indirect Subsidiary of a Foreign Subsidiary, (v) captive insurance companies, (vi) a not-for-profit Subsidiary, (vii) a Subsidiary not wholly-owned (other than any such Subsidiary described in the parenthetical in clause (ii) of the definition of Guarantor) by the Borrower and/or one or more of its wholly owned Restricted Subsidiaries, (viii) any Unrestricted Subsidiary and, (ix) a Subsidiary to the extent that the burden or cost of obtaining a Subsidiary Guaranty therefrom is excessive in relation to the benefit afforded thereby (as reasonably determined by the Administrative Agent and the Borrower) and (x) GYP V.

 

Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Loan Party of, or the grant by such Loan Party 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) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder (determined after giving effect to Section 14 of the Subsidiary Guaranty and any other “keepwell, support or other agreement” for the benefit of such Loan Party and any and all guarantees of such Loan Party’s Swap Obligations by other Loan Parties) at the time the Guaranty of such Loan Party, or a grant by such Loan Party of a security interest, becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a Master Agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes excluded in accordance with the first sentence of this definition.

 

Excluded Taxes” means, with respect to any Agent, Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower or any other Loan Party hereunder, (a) Taxes (i) imposed on (or measured by) its overall net income or overall gross income (however denominated) by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located, or (ii) that are imposed as a result of a present or former connection between such recipient and the jurisdiction imposing such Tax (other than connections arising solely from such recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned

 

25



 

an interest in any Term Loan or Loan Document), (b) any branch profits Taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction described in clause (a) above, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 3.07), any United States federal withholding Tax that is imposed on amounts payable to such Foreign Lender pursuant to a law in effect at the time such Foreign Lender becomes a party to this Agreement (or designates a new Lending Office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts with respect to such withholding Tax pursuant to Section 3.01(a), (d) Taxes attributable to such recipient’s failure to comply with Section 3.01(g) or Section 3.01(h) and (e) any United States federal withholding Taxes imposed under FATCA.

 

FATCA” means Sections 1471 through 1474 of the Code, as of the Closing Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.

 

FCPA” has the meaning specified in Section 5.21.

 

Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day.

 

Fee Letter” means the Fee Letter, dated as of February 11, 2014 (as amended, supplemented or otherwise modified by the Joinder to Fee Letter, dated as of February 25, 2014), among Holdings, Wells Fargo Bank, N.A., SunTrust Robinson Humphrey, Inc., SunTrust Bank, Credit Suisse Securities (USA) LLC, Credit Suisse AG, Royal Bank of Canada, UBS AG, Stamford Branch, and UBS Securities LLC.

 

First Lien Leverage Ratio” means, with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis, as of any date, the ratio of (x) Consolidated Funded First Lien Indebtedness (net of (i) cash and Cash Equivalents on hand that are not Restricted, (ii) cash and Cash Equivalents restricted in favor of, without duplication, the Administrative Agent, the Collateral Agent, the ABL Administrative Agent, the ABL Collateral Agent, the Second Lien Administrative Agent, the Second Lien Collateral Agent, any Lender, any ABL Lender or any Second Lien Lender, and (iii) Seasonal ABL Indebtedness in an amount not to exceed $20,000,000) of the Borrower and its Restricted Subsidiaries on the last day of the most recently ended fiscal quarter for which financial statements have been delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) to (y) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for the most recently ended four (4) consecutive fiscal quarter period ending on or prior to such date for which financial statements have been delivered to the Administrative Agent and the Lenders pursuant to Sections 6.01(a) and (b).

 

26



 

First Lien Obligations” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Term Loan or Secured Hedge Agreement (other than Excluded Swap Obligations), in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest, fees and costs that accrue after the commencement by or against any Loan Party of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding (or that would accrue but for the commencement of such proceeding), regardless of whether such interest and fees are allowed claims in such proceeding. Without limiting the generality of the foregoing, the First Lien Obligations of the Loan Parties under the Loan Documents include (a) the obligation to pay principal, interest, charges, expenses, fees, indemnities and other amounts payable by any Loan Party under any Loan Document and (b) the obligation of any Loan Party to reimburse any amount in respect of any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf of such Loan Party; provided that the First Lien Obligations shall not include Excluded Swap Obligations.

 

“Flood Determination Form” has the meaning specified in Section 6.12(d).

 

“Flood Hazard Property” has the meaning specified in Section 6.12(d).

 

Flood Laws” means the National Flood Insurance Reform Act of 1994 and related legislation (including the regulations of the Board of Governors of the Federal Reserve System).

 

Foreign Disposition” has the meaning specified in Section 2.03(b)(vi).

 

Foreign Lender” means any Lender that is not a United States person, as such term is defined in Section 7701(a)(30) of the Code.

 

Foreign Subsidiary” means any Subsidiary of the Borrower which is not a Domestic Subsidiary.

 

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

 

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

 

Funded Debt” of any Person means Indebtedness of such Person that by its terms matures more than one (1) year after the date of its creation or matures within one (1) year from any date of determination but is renewable or extendible, at the option of such Person, to a date more than one (1) year after such date or arises under a revolving credit or similar agreement that obligates the lender or lenders to extend credit during a period of more than one (1) year after such date.

 

GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial

 

27



 

Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

GMShas the meaning specified in the “Preliminary Statements.”

 

Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

 

Granting Lender” has the meaning specified in Section 10.07(g).

 

Guarantee” means, as to any Person, without duplication, any (a) obligation, contingent or otherwise, of such Person Guaranteeing or having the economic effect of Guaranteeing any Indebtedness or other monetary obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other monetary obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance of such Indebtedness or other monetary obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other monetary obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other monetary obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) Lien on any assets of such Person securing any Indebtedness or other monetary obligation of any other Person, whether or not such Indebtedness or other monetary obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien); provided that the term “Guarantee” shall not include endorsements for collection or deposit, in either case in the ordinary course of business, or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or Disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the Guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

 

Guarantors” means, collectively, (i) Holdings, (ii) each wholly-owned  Domestic Subsidiary (which term, for purposes of this definition, shall include non-wholly-owned domestic Restricted Subsidiaries in which (x) the minority interests are held solely by management and employees of such Restricted Subsidiary and (y) the Borrower directly or indirectly owns at least 80% of the Equity Interests of such Restricted Subsidiary) of the Borrower that is a Restricted Subsidiary and is listed on Schedule I, and (iii) each other wholly-owned Domestic Subsidiary of the Borrower that is a Restricted Subsidiary that shall be required to execute and deliver a Guaranty or Guaranty supplement pursuant to Section 6.12.

 

28



 

Guaranty” means, collectively, the Holdings Guaranty and the Subsidiary Guaranty.

 

GYP IV” means GYP Holdings IV Corp., a Delaware corporation.

 

GYP V” means GYP Holdings V Corp., a Delaware corporation.

 

Hazardous Materials” means all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, flammable, explosive or radioactive substances, and all other substances or wastes of any nature regulated as “hazardous” or “toxic,” or as a “pollutant” or a “contaminant,” pursuant to any Environmental Law.

 

Hedge Bank” means (i) any Person that at the time it enters into a Secured Hedge Agreement, is an Agent, an ABL Agent, an Arranger, a Lender, an ABL Lender or an Affiliate of an Agent, an ABL Agent, an Arranger, a Lender or an ABL Lender or (ii) any Person that is, as of the Closing Date, an Agent, an ABL Agent, an Arranger, a Lender, an ABL Lender or an Affiliate of an Agent, an ABL Agent, an Arranger, a Lender or an ABL Lender and a party to a Secured Hedge Agreement, in each case, in its capacity as a party to such Secured Hedge Agreement.  For the avoidance of doubt, such Person shall continue to be a Hedge Bank with respect to the applicable Secured Hedge Agreement even if it ceases to be an Agent, an ABL Agent, an Arranger, a Lender or an ABL Lender or an Affiliate of an Agent, an ABL Agent, an Arranger, a Lender or an ABL Lender after the date on which it entered into such Secured Hedge Agreement.

 

Holdings” has the meaning specified in the introductory paragraph to this Agreement.

 

Holdings Guaranty” means the Holdings Guaranty made by Holdings in favor of the Collateral Agent on behalf of the Secured Parties, substantially in the form of Exhibit F-1.

 

Immaterial Subsidiary” means each Restricted Subsidiary designated as such by the Borrower to the Administrative Agent and the Collateral Agent in writing that meets all of the following criteria calculated on the Pro Forma Basis by reference to the most recently delivered set of the financial statements delivered pursuant to Section 6.01(a):  (a) the aggregate gross assets (excluding goodwill) of any Restricted Subsidiary designated as an Immaterial Subsidiary and its Restricted Subsidiaries (on a consolidated basis) as of the date of such statements do not exceed an amount equal to 5% of the Consolidated Total Assets of the Restricted Group as of such date; (b) the aggregate of the earnings before interest, tax, depreciation and amortization (calculated on the same basis as Consolidated EBITDA) of any Restricted Subsidiary designated as an Immaterial Subsidiary and its Restricted Subsidiaries (on a consolidated basis) for the four fiscal quarter period ending on such date do not exceed an amount equal to 5% of the Consolidated EBITDA of the Restricted Group for such period; (c) the aggregate gross assets (excluding goodwill) of all Restricted Subsidiaries designated as Immaterial Subsidiaries and their respective Restricted Subsidiaries (on a consolidated basis) as of the date of such statements do not exceed an amount equal to 10% of the Consolidated Total Assets of the Restricted Group as of such date; and (d) the aggregate of the earnings before interest, tax, depreciation and amortization (calculated on the same basis as Consolidated EBITDA) of all Restricted Subsidiaries designated as Immaterial

 

29



 

Subsidiaries and their respective Restricted Subsidiaries (on a consolidated basis) for the four fiscal quarter period ending on such date do not exceed an amount equal to 10% of the Consolidated EBITDA of the Restricted Group for such period; provided that if, at any time after the delivery of such financial statements, (i) with respect to any Restricted Subsidiary designated as an Immaterial Subsidiary at such time, the aggregate gross assets (excluding goodwill) of such Restricted Subsidiary and its Restricted Subsidiaries (on a consolidated basis) shall exceed the threshold set forth in clause (a) or the aggregate of the earnings before interest, tax, depreciation and amortization of such Restricted Subsidiary and its Restricted Subsidiaries (on a consolidated basis) exceed the threshold set forth in clause (b) or (ii) with respect to all Restricted Subsidiaries designated as Immaterial Subsidiaries at such time, the aggregate gross assets (excluding goodwill) of such Restricted Subsidiaries and their respective Restricted Subsidiaries (on a consolidated basis) shall exceed the threshold set forth in clause (c) or the aggregate of the earnings before interest, tax, depreciation and amortization of such Subsidiaries and their respective Restricted Subsidiaries (on a consolidated basis) exceed the threshold set forth in clause (d), then the Borrower shall, not later than thirty (30) days after the date by which financial statements for the fiscal quarter or the fiscal year, as applicable, in which such excess occurs must be delivered (or such longer period as the Administrative Agent may agree in its reasonable discretion), (A) notify the Administrative Agent and the Collateral Agent in writing that one or more of such Restricted Subsidiaries no longer constitutes an Immaterial Subsidiary and (B) comply with the provisions of Section 6.12 applicable to such Subsidiary.  All Immaterial Subsidiaries as of the ClosingThird Amendment Effective Date are set forth on Schedule II.

 

Incremental First Lien Lender” has the meaning specified in Section 2.12(c).

 

Incremental First Lien Term Commitment” has the meaning specified in Section 2.12(a).

 

Incremental First Lien Term Commitments Amendment” has the meaning specified in Section 2.12(d).

 

Incremental First Lien Term Commitments Effective Date” has the meaning specified in Section 2.12(e).

 

Incremental First Lien Term Facilities” has the meaning specified in Section 2.12(a).

 

Incremental First Lien Term Loan Tranche” has the meaning specified in Section 2.12(a).

 

Incremental First Lien Term Loans” has the meaning specified in Section 2.12(a).

 

Incremental Second Lien Term Loans” has the meaning specified in the Second Lien Credit Agreement.

 

Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

30



 

(a)                           all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b)                           the maximum amount of all letters of credit (including standby and commercial), bankers’ acceptances, bank Guarantees, surety bonds, performance bonds, advance payment guarantees or bonds, warranties, bid guarantees or bonds and similar instruments issued or created by or for the account of such Person;

 

(c)                            net obligations of such Person under any Swap Contract;

 

(d)                           all obligations of such Person to pay the deferred purchase price of property or services (other than (x) trade accounts payable in the ordinary course of business, (y) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and (z) expenses accrued in the ordinary course of business);

 

(e)                            indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development bond and similar financings), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f)                             all Attributable Indebtedness;

 

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

 

(h)                           all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.  For purposes of clause (e), the amount of Indebtedness of any Person that is non-recourse to such Person shall be deemed to be equal to the lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the fair market value of the property encumbered thereby as determined by such Person in good faith.

 

Indemnified Liabilities” has the meaning set forth in Section 10.05.

 

Indemnified Taxes” means Taxes other than Excluded Taxes and Other Taxes.

 

Indemnitees” has the meaning set forth in Section 10.05.

 

Ineligible Assignee” has the meaning specified in Section 10.07(b).

 

31



 

Information” has the meaning specified in Section 10.08.

 

Initial Lenders” means Credit Suisse, Royal Bank of Canada, and UBS.

 

Initial Mortgaged Properties” means the properties listed on Schedule 6.14.

 

Intellectual Property Security Agreement” means, collectively, the intellectual property security agreement, substantially in the form of Exhibit H hereto together with each intellectual property security agreement supplement, including any such supplement executed and delivered pursuant to Section 6.12.

 

Intellectual Property Security Agreement Supplement” has the meaning specified in the Security Agreement.

 

Intercompany Note” means a promissory note substantially in the form of Exhibit P evidencing Indebtedness owed among the Loan Parties and their respective Subsidiaries.

 

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

 

Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Term Loan and the Maturity Date of the applicable Class of Term Loans under the Term Facility; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each January, April, July and October and the Maturity Date of the applicable Class of Term Loans under the Term Facility.

 

Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, or to the extent consented to by all Lenders, twelve months thereafter, as selected by the Borrower in its Committed Loan Notice; provided that:

 

(a)                           any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

(b)                           any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

 

(c)                            no Interest Period shall extend beyond the Maturity Date of the applicable Class of Term Loans under the Term Facility.

 

32



 

Notwithstanding the foregoing, to the extent the Borrower has elected to borrow the New Incremental First Lien Term Loan (as defined in the New Incremental First Lien Term Commitments Amendment) on the New Incremental First Lien Term Commitments Effective Date or Incremental First Lien Term Loans on an Incremental First Lien Commitments Effective Date, as the case may be, as Eurodollar Rate Loans, the Interest Period (x) applicable to such New Incremental First Lien Term Loan shall end on October 31, 2016 and (y) applicable to such Incremental First Lien Term Loans may, at the election of the Borrower, end on the next succeeding quarterly amortization date with respect to such Incremental First Lien Term Loans.

 

Interpolated Rate” means, in relation to any Eurodollar Rate Loan, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the applicable Eurodollar Rate for the longest period (for which the applicable Eurodollar Rate is available for deposits in Dollars) that is shorter than the Interest Period of that Eurodollar Rate Loan and (b) the applicable Eurodollar Rate for the shortest period (for which such Eurodollar Rate is available for deposits in Dollars) that exceeds the Interest Period of that Eurodollar Rate Loan, in each case, as of 11:00 a.m. (London time) two (2) Business Days prior to the first day of such Interest Period.

 

Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests or debt or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor incurs debt of the type referred to in clause (h) of the definition of “Indebtedness” set forth in this Section 1.01 in respect of such Person, (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person, or (d) the Disposition of any property for less than the fair market value thereof (other than Dispositions under Sections 7.05(e), (i) and (k)).  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, less all returns representing a return of capital with respect to such Investment received by the Borrower or a Restricted Subsidiary.

 

Investors” has the meaning specified in the definition of the “Transactions.”

 

IP Rights” has the meaning set forth in Section 5.16.

 

IRS” means the United States Internal Revenue Service.

 

Joint Venture” means (a) any Person which would constitute an “equity method investee” of the Borrower or any of its Subsidiaries, and (b) any Person in whom the Borrower or any of its Subsidiaries beneficially owns any Equity Interest that is not a Subsidiary.

 

Junior Financing” has the meaning specified in Section 7.13.

 

33



 

Junior Financing Documentation” means the Second Lien Loan Documents and any documentation governing any other Junior Financing.

 

Latest Maturity Date” means, at any date of determination, the latest maturity date applicable to any Class of Term Loans or Term Commitments at such time, including, for the avoidance of doubt, the latest maturity date of any Class of Term Loans or Incremental First Lien Term Loans established pursuant to any Incremental First Lien Term Commitments Amendment, in each case as extended from time to time in accordance with this Agreement (including pursuant to any Permitted Amendment in accordance with Section 10.01).

 

Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

Lender” has the meaning specified in the introductory paragraph to this Agreement.

 

Lender Participation Notice” has the meaning specified in Section 2.03(a)(iii)(C).

 

Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

 

Lien” means any mortgage, lease, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any Capitalized Lease having substantially the same economic effect as any of the foregoing).

 

Loan Documents” means, collectively, (a) for purposes of this Agreement and the Notes and any amendment, supplement or other modification hereof or thereof and for all other purposes other than for purposes of the Guaranty and the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the Guaranty, (iv) the Collateral Documents, (v) the Fee Letter, (vi) any Incremental First Lien Term Commitments Amendment and (vii) any Loan Modification Agreement and (b) for purposes of the Guaranty and the Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the Guaranty, (iv) the Collateral Documents, (v) the Fee Letter, (vi) any Incremental First Lien Term Commitments Amendment, (vii) any Loan Modification Agreement, and (viii) each Secured Hedge Agreement.

 

Loan Modification Accepting Lender” has the meaning specified in Section 10.01(B).

 

Loan Modification Agreement” has the meaning specified in Section 10.01(B).

 

34



 

Loan Modification Offer” has the meaning specified in Section 10.01(B).

 

Loan Parties” means, collectively, the Borrower and each Guarantor.

 

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

 

London Time” means Greenwich Mean Time or British Summer Time, as applicable.

 

Master Agreement” has the meaning specified in the definition of “Swap Contract”.

 

Material Adverse Effect” means (a) a material adverse effect on the business, operations, assets, liabilities (actual or contingent) or financial condition of Holdings and its Restricted Subsidiaries, taken as a whole, (b) a material adverse effect on the ability of the Loan Parties (taken as a whole) to perform their respective payment obligations under any Loan Document to which the Borrower or any of the Loan Parties is a party or (c) a material adverse effect on the rights and remedies of the Agents or the Lenders under any Loan Document.

 

Material Real Property” means any parcel of real property (other than a parcel with a fair market value of less than $2,500,000) owned in fee by the Borrower or a Guarantor.

 

Maturity Date” means: the earliest of (i) April June 1, 20232025 and (ii) the date that the Term Loans are declared due and payable pursuant to Section 8.02.

 

Maximum Rate” has the meaning specified in Section 10.10.

 

Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

Mortgage” means, collectively, the deeds of trust, trust deeds and mortgages made by the Loan Parties in favor or for the benefit of the Collateral Agent on behalf of the Secured Parties in form and substance satisfactory to the Collateral Agent.

 

Mortgage Policies” has the meaning specified in Section 6.14(b)(ii).

 

Mortgaged Properties” means (i) the Initial Mortgaged Properties listed on Schedule 6.14 and (ii) each other parcel of Material Real Property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 6.12(a)(iii).

 

Multiemployer Plan” means any Plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

35



 

Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including a Loan Party or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

 

Narrative Report” means, with respect to the financial statements for which such narrative report is required, a narrative report describing the operations of the Borrower and its Subsidiaries in the form prepared for presentation to senior management of the Borrower for the fiscal quarter or fiscal year and for the period from the beginning of the then current fiscal year to the end of such period to which such financial statements relate.

 

Net Cash Proceeds” means:

 

(a)                           with respect to the Disposition of any asset by the Borrower or any Restricted Subsidiary or any Casualty Event, the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such Disposition or Casualty Event (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received and, with respect to any Casualty Event, any insurance proceeds or condemnation awards in respect of such Casualty Event received by or paid to or for the account of the Borrower or any Restricted Subsidiary) over (ii) the sum of (A) the principal amount of any Indebtedness that is secured by the asset subject to such Disposition or Casualty Event and that is repaid in connection with such Disposition or Casualty Event (other than Indebtedness under the Loan Documents), (B) the out-of-pocket expenses incurred by the Borrower or such Restricted Subsidiary in connection with such Disposition or Casualty Event (including attorneys’ fees, accountants’ fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary fees actually incurred in connection therewith), (C) income taxes reasonably estimated to be actually payable as a result of any gain recognized in connection therewith, and (D) any reserve for adjustment in respect of (x) the sale price of such asset or assets established in accordance with GAAP and (y) any liabilities associated with such asset or assets and retained by the Borrower or any Restricted Subsidiary after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction.  It being understood that “Net Cash Proceeds” shall include, without limitation, any cash or Cash Equivalents (i) received upon the Disposition of any non-cash consideration received by the Borrower or any Restricted Subsidiary in any such Disposition and (ii) upon the reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described in clause (D) of the preceding sentence or, if such liabilities have not been satisfied in cash and such reserve not reversed within three hundred and sixty-five (365) days after such Disposition or Casualty Event, the amount of such reserve;

 

(b)                           with respect to the issuance of any Equity Interest by the Borrower or any Restricted Subsidiary, the excess of (i) the sum of the cash and Cash Equivalents received in connection with such issuance over (i) the investment banking fees, underwriting

 

36



 

discounts and commissions, and other out-of-pocket expenses, incurred by the Borrower or such Restricted Subsidiary in connection with such issuance; and

 

(c)                            with respect to the incurrence or issuance of any Indebtedness by the Borrower or any Restricted Subsidiary, the excess, if any, of (i) the sum of the cash received in connection with such incurrence or issuance over (ii) the investment banking fees, underwriting discounts and commissions, taxes reasonably estimated to be actually payable and other out-of-pocket expenses, incurred by the Borrower or such Restricted Subsidiary in connection with such incurrence or issuance.

 

Net Working Capital” means, with respect to any Person and its Restricted Subsidiaries on a consolidated basis, Consolidated Current Assets minus Consolidated Current Liabilities.

 

New Incremental First Lien Term Commitments Amendment” means the Incremental First Lien Term Commitments Amendment, dated as of September 27, 2016, among Holdings, the Borrower, the New Incremental First Lien Lender (as defined therein), the Administrative Agent and the other parties thereto.

 

New Incremental First Lien Term Commitments Effective Date” means September 27, 2016.

 

New York Time” means Eastern Standard Time or Eastern Daylight Time, as applicable.

 

NFIP” has the meaning specified in Section 6.12(d).

 

No Undisclosed Information Representation” by a Person means a representation that such Person is not in possession of any material non-public information with respect to Holdings, the Borrower, their respective Subsidiaries or their respective securities.

 

Non-Consenting Lender” has the meaning specified in Section 3.07(d).

 

Non-Debt Fund Affiliate” means any Affiliate of the Sponsor other than (i) Holdings, (ii) any Subsidiary of Holdings, (iii) any Debt Fund Affiliate and (iv) any natural person.

 

Note” means a promissory note of the Borrower payable to any Term Lender or its registered assigns, in substantially the form of Exhibit C hereto, evidencing the indebtedness of the Borrower to such Term Lender resulting from the Term Loans made or held by such Term Lender.

 

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

 

Offered Loans” has the meaning specified in Section 2.03(a)(iii)(C).

 

OID” has the meaning specified in Section 2.12(b).

 

37



 

Organization Documents” means: (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

Original Designation” has the meaning specified in the definition of “Cumulative Credit.”

 

Original Investment” has the meaning specified in the definition of “Cumulative Credit.”

 

Other Equity” has the meaning specified in the definition of the “Transactions.”

 

Other Taxes” means any and all present or future stamp, court or documentary, intangible, recording or filing Taxes or any other similar Taxes, charges or levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

 

Outstanding Amount” means with respect to the Term Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Term Loans, as the case may be, occurring on such date.

 

Parent” means GMS Inc., a Delaware corporation and the indirect parent company of the Borrower.

 

Participant” has the meaning specified in Section 10.07(d).

 

Participant Register” has the meaning set forth in Section 10.07(k).

 

PATRIOT Act” has the meaning specified in Section 10.21.

 

PBGC” means the Pension Benefit Guaranty Corporation.

 

Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Protection Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Protection Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

Pension Plan” means any “employee pension benefit plan” (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by a Loan Party or

 

38



 

any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 or 430 of the Code or Section 302 or 303 of ERISA.

 

Permits” has the meaning specified in Section 5.01.

 

Permitted Acquisition” has the meaning specified in Section 7.02(i).

 

Permitted Amendments” has the meaning specified in Section 10.01(B).

 

Permitted Encumbrances” means any Liens or other encumbrances on any Mortgaged Property permitted under the applicable Mortgage Policy.

 

Permitted Equity” has the meaning specified in the definition of the “Transactions.”

 

Permitted Equity Issuance” means (a) any sale or issuance of any Equity Interests (excluding Disqualified Equity Interests) of Holdings the proceeds of which are contributed to the common equity of the Borrower, (b) any sale or issuance of any Equity Interests (excluding Disqualified Equity Interests) of the Borrower to Holdings or (c) any capital contribution to the Borrower.

 

Permitted Holders” means the Sponsor and the members of the management of Holdings and its Subsidiaries (the “Management Shareholders”); provided that in no event shall the Management Shareholders be treated as Permitted Holders with respect to more than 10% of the Voting Stock of Holdings.

 

Permitted Other First Lien Indebtedness” means Indebtedness, that is either unsecured or secured by Permitted Other Indebtedness Liens, and the aggregate principal amount of which, together with the aggregate principal amount of (i) all increases in the Term Facility incurred and outstanding in reliance on Section 2.12(a)(x), (ii) all increases in the Second Lien Loans incurred and outstanding in reliance on Section 2.12(a)(x) of the Second Lien Credit Agreement and (iii) all Permitted Other Second Lien Indebtedness incurred in reliance on clause (x) of the definition thereof, does not exceed the sum of (x) $100,000,000 plus (y) such additional amount that would not, after giving effect on a Pro Forma Basis to the incurrence thereof cause the First Lien Leverage Ratio (without netting the cash and Cash Equivalent constituting proceeds of the applicable Permitted Other First Lien Indebtedness) as at the end of the most recently ended fiscal quarter of the Borrower for which financial statements have been delivered to the Administrative Agent to exceed (I) 4.20:1.00 or (II) if such Permitted Other Indebtedness is incurred to finance a Permitted Acquisition, the First Lien Leverage Ratio immediately preceding the incurrence of such Incremental First Lien Term Facility and consummation of such Permitted Acquisition (it being understood and agreed that the Borrower may incur such Indebtedness under either clause (x) or (y) in such order as it may elect in its sole discretion); provided that: (A) the terms of such Indebtedness do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the Latest Maturity Date of all Classes of Term Loans then in effect (other than customary offers to repurchase or mandatory prepayments upon a change of control, asset sale or event of loss, customary acceleration rights after an event of default and, with respect to such Indebtedness incurred in the form of loans, customary amortization payments, subject to clause (B) below); (B) the maturity date of such Indebtedness shall not be shorter than

 

39



 

the Latest Maturity Date of all Term Loans then in effect and, with respect to such Indebtedness incurred in the form of loans, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than the Weighted Average Life to Maturity of the then outstanding Term Loans; (C) the covenants, events of default, Guarantees, collateral and other terms of such Indebtedness, when taken as a whole, are not more restrictive to the Borrower and its Restricted Subsidiaries than those set forth in this Agreement (provided that a certificate of the Chief Financial Officer of the Borrower delivered to the Administrative Agent in good faith at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirement set forth in this clause (C), shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent provides notice to the Borrower of its objection during such five (5) Business Day period); (D) immediately before and immediately after giving effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred and be continuing; and (E) the agent, trustee or other representative of the holders of such Indebtedness, acting on behalf of such holders, shall be party to the Intercreditor Agreements or other customary intercreditor agreements that are reasonably satisfactory to the Administrative Agent and the ABL Administrative Agent.

 

Permitted Other Indebtedness” means Permitted Other First Lien Indebtedness and Permitted Other Second Lien Indebtedness.

 

Permitted Other Indebtedness Liens” means Liens on the Collateral that secure Permitted Other Indebtedness and, in the case of any such Liens on the Term Priority Collateral, that are pari passu with or junior to the Liens on the Term Priority Collateral securing the First Lien Obligations, provided that (w) all such Liens on the Term Priority Collateral securing any Permitted Other Second Lien Indebtedness must be junior to the Liens securing the First Lien Obligations, (x) all such Liens on the Term Priority Collateral that are junior to the Liens on the Term Priority Collateral securing the First Lien Obligations will be pari passu with, or junior to, the Liens on the Term Priority Collateral securing the Second Lien Obligations, (y) such Liens are granted under security documents to a collateral agent for the benefit of the holders of the Permitted Other Indebtedness and subject to the Intercreditor Agreements or other customary intercreditor agreements that are reasonably satisfactory to the Administrative Agent, the ABL Administrative Agent, the Second Lien Administrative Agent, the Collateral Agent, the ABL Collateral Agent, and the Second Lien Collateral Agent, and that are entered into among the Collateral Agent, the ABL Collateral Agent and the Second Lien Collateral Agent, such other collateral agent and the Loan Parties and which provides for lien sharing and for the senior, junior or pari passu treatment of such Liens with the Liens securing, as applicable, the First Lien Obligations, the ABL Obligations or Second Lien Obligations and (z) all such Liens on the ABL Priority Collateral shall be (i) junior to the Liens on the ABL Priority Collateral securing the ABL Obligations, (ii) pari passu with, or junior to, the Liens on the ABL Priority Collateral securing the First Lien Obligations and (iii) pari passu with, or junior to, the Liens on the ABL Priority Collateral securing the Second Lien Obligations.

 

Permitted Other Second Lien Indebtedness” means Indebtedness, that is either unsecured or secured by Permitted Other Indebtedness Liens, and the aggregate principal amount of which, together with the aggregate principal amount of (i) all increases in the Second Lien Loans

 

40



 

incurred and outstanding in reliance on Section 2.12(a)(x) of the Second Lien Credit Agreement, (ii) all Incremental First Lien Term Commitments incurred and outstanding in reliance on Section 2.12(a)(x) of this Agreement (assuming the full funding thereof) and (iii) all Permitted Other First Lien Indebtedness (assuming the full funding thereof) incurred in reliance on clause (x) of the definition thereof, does not exceed the sum of (x) $100,000,000 plus (y) such additional amount that would not, after giving effect on a Pro Forma Basis to the incurrence thereof cause the Secured Leverage Ratio (without netting the cash and Cash Equivalents constituting proceeds of the applicable Permitted Other Second Lien Indebtedness) as at the end of the most recently ended fiscal quarter of the Borrower for which financial statements have been delivered to the Second Lien Administrative Agent to exceed (I) 6.00:1.00 or (II) if the Permitted Other Second Lien Indebtedness is incurred to finance a Permitted Acquisition, the Secured Leverage Ratio immediately preceding the incurrence of such Incremental First Lien Term Facility and consummation of such Permitted Acquisition (it being understood and agreed that the Borrower may incur such Indebtedness under either clause (x) or (y) in such order as it may elect in its sole discretion); provided that: (A) the terms of such Indebtedness do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the Latest Maturity Date (as defined in the Second Lien Credit Agreement) of all Second Lien Loans then in effect (other than customary offers to repurchase or mandatory prepayments upon a change of control, asset sale or event of loss and customary acceleration rights after an event of default); (B) the maturity date of such Indebtedness shall not be shorter than the Latest Maturity Date of all Second Lien Loans then in effect (and, if for any reason there are no Second Lien Loans outstanding, not shorter than the Latest Maturity Date of all First Lien Loans) and, with respect to such Indebtedness incurred in the form of loans, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than the Weighted Average Life to Maturity of the then outstanding Second Lien Loans; (C) the covenants, events of default, Guarantees, collateral and other terms of such Indebtedness, when taken as a whole, are not more restrictive to the Borrower and its Restricted Subsidiaries than those set forth in the Second Lien Credit Agreement (provided that a certificate of the Chief Financial Officer of the Borrower delivered to the Administrative Agent in good faith at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirement set forth in this clause (C), shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent provides notice to the Borrower of its objection during such five (5) Business Day period); (D) immediately before and immediately after giving effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred and be continuing; and (E) the agent, trustee or other representative of the holders of such Indebtedness, acting on behalf of such holders, shall be party to the Intercreditor Agreements or other customary intercreditor agreements that are reasonably satisfactory to the Administrative Agent, the ABL Administrative Agent and the Second Lien Administrative Agent.

 

Permitted Ratio Debt” means unsecured Indebtedness in the form of notes or loans under credit agreements, indentures or other similar agreements or instruments; provided that: (A) the terms of such Indebtedness do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the date that is ninety one (91) days after the Latest Maturity Date of all Classes of Term Loans then in effect (other than customary offers to repurchase upon a change of control, asset sale or event of loss and customary acceleration rights

 

41



 

after an event of default); (B) the covenants, events of default, Guarantees and other terms of such Indebtedness are customary for similar Indebtedness in light of then-prevailing market conditions and in any event, when taken as a whole (other than interest rate and redemption premiums), are not more restrictive to the Borrower and the Restricted Subsidiaries than those set forth in this Agreement (provided that a certificate of the Chief Financial Officer of the Borrower delivered to the Administrative Agent in good faith at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirement set forth in this clause (B), shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent provides notice to the Borrower of its objection during such five (5) Business Day period); (C) if such Indebtedness is subordinated, the Term Facility has been designated as “Designated Senior Debt” or its equivalent in respect of such Indebtedness; (D) in the case of any such Indebtedness of the Borrower or any Restricted Subsidiary owed to the seller of any property acquired in a Permitted Acquisition, such Indebtedness is expressly subordinated to the prior payment in full in cash of the First Lien Obligations on terms and conditions that are reasonably acceptable to the Administrative Agent; (E) immediately before and immediately after giving Pro Forma Effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred and be continuing; and (F) immediately after giving effect to the incurrence of such Indebtedness, the Borrower and its Restricted Subsidiaries shall be in Pro Forma Compliance with a maximum Total Leverage Ratio of 7.00:1.00, such compliance to be determined on the basis of the financial information most recently delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) as though such Indebtedness had been incurred as of the first day of the fiscal period covered thereby and evidenced by a certificate from the Chief Financial Officer of the Borrower demonstrating such compliance calculation in reasonable detail.

 

Permitted Refinancing” means, with respect to any Indebtedness, any modification, refinancing, refunding, renewal, replacement or extension of such Indebtedness; provided that (i) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed, replaced or extended except by an amount equal to accrued and unpaid interest, unpaid reasonable premium thereon and reasonable fees and expenses incurred, in connection with such modification, refinancing, refunding, renewal, replacement or extension and by an amount equal to any existing commitments unutilized thereunder; (ii) such modification, refinancing, refunding, renewal, replacement or extension has a final maturity date equal to or later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended; (iii) if the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended  is subordinated in right of payment to the First Lien Obligations, such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the First Lien Obligations on terms as favorable in all material respects to the Lenders as those contained in the documentation governing the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended; (iv) the terms and conditions (including, if applicable, as to collateral) of any such modified, refinanced, refunded, renewed, replaced or extended Indebtedness are, (A) either (x) customary for similar debt in light of then-prevailing market conditions (it being understood that such Indebtedness shall not include any financial maintenance

 

42



 

covenants and that any negative covenants shall be incurrence-based) or (y) not materially less favorable to the Loan Parties or the Lenders than the terms and conditions of the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended, and (B) when taken as a whole (other than interest rate and redemption premiums), are not more restrictive to the Borrower and the Restricted Subsidiaries than those set forth in this Agreement (provided that a certificate of the Chief Financial Officer of the Borrower delivered to the Administrative Agent in good faith at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirement set forth in the foregoing clause (iv), shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent provides notice to the Borrower of its objection during such five (5) Business Day period); (v) such modification, refinancing, refunding, renewal or extension is incurred by the Person who is the obligor on the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended; and (vi) at the time thereof, no Default or Event of Default shall have occurred and be continuing.

 

Permitted Surviving Debt” has the meaning specified in the definition of the “Transactions.”

 

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

 

Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Borrower or any ERISA Affiliate or any such Plan to which the Borrower or any ERISA Affiliate is required to contribute on behalf of any of its employees.

 

Platform” has the meaning specified in Section 6.02.

 

Pledged Debt” has the meaning specified in the Security Agreement.

 

Pledged Interests” has the meaning specified in the Security Agreement.

 

Prepayment Amount” has the meaning specified in Section 2.03(c).

 

Prepayment Date” has the meaning specified in Section 2.03(c).

 

Prime Rate” means the rate of interest per annum determined from time to time by Credit Suisse (or any successor to Credit Suisse in its capacity as Administrative Agent) as its prime commercial lending rate in effect at its principal office in New York City and notified to the Borrower.  Each change in the Prime Rate shall be effective as of the opening of business on the date such change is announced as being effective.  The Prime Rate is a reference rate and does not necessarily represent the lowest or best rate actually available.

 

Private Lenders” has the meaning specified in Section 6.02.

 

43



 

Pro Forma Basis”, “Pro Forma Compliance” and “Pro Forma Effect” means, in respect of a Specified Transaction, that such Specified Transaction and the following transactions in connection therewith (to the extent applicable) shall be deemed to have occurred as of the first day of the applicable period of measurement in such covenant:  (a) income statement items (whether positive or negative) attributable to the property or Person, if any, subject to such Specified Transaction, (i) in the case of a Disposition of all or substantially all Equity Interests in any Restricted Subsidiary of the Borrower or any division, product line, or facility used for operations of the Borrower or any of its Restricted Subsidiaries, shall be excluded, and (ii) in the case of a purchase or other acquisition of all or substantially all of the property and assets or business of any Person, or of assets constituting a business unit, a line of business or division of such Person, or of all or substantially all of the Equity Interests in a Person, shall be included, (b) any retirement of Indebtedness, and (c) any Indebtedness incurred or assumed by the Borrower or any of its Restricted Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination.

 

Pro Rata Share” means, with respect to each Lender at any time, a fraction (expressed as a percentage, carried out to the ninth decimal place, and subject to adjustment as provided in Section 2.13), the numerator of which is the amount of the Term Commitments of such Lender at such time and the denominator of which is the amount of the Aggregate Commitments at such time; provided, that if the commitment of each Lender to make Term Loans has been terminated pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such termination and after giving effect to any subsequent assignments made pursuant to the terms hereof.  The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

Productive Asset” means any real estate, building and equipment that is to be used by the Borrower or a Restricted Subsidiary in connection with providing services to a third party pursuant to a written contract, the benefits of which the Borrower believes in good faith warrant the incurrence of the Attributable Indebtedness described in Section 7.03(e)(ii) incurred to finance all or any part of such Productive Asset.

 

Proposed Discounted Prepayment Amount” has the meaning specified in Section 2.03(a)(iii)(B).

 

PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

Public Lender” has the meaning specified in Section 6.02.

 

Qualified ECP Borrower” means, in respect of any Swap Obligations, each Loan Party that has total assets exceeding $10,000,000 at the time the grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract

 

44



 

participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

Qualifying IPO” means the issuance by Holdings, or any direct or indirect parent thereof, of its common Equity Interests in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective registration statement filed with the SEC in accordance with the Securities Act (whether alone or in connection with a secondary public offering).

 

Qualifying Lenders” has the meaning specified in Section 2.03(a)(iii)(D).

 

Qualifying Loans” has the meaning specified in Section 2.03(a)(iii)(D).

 

Reduction Amount” has the meaning set forth in the definition of “Cumulative Credit.”

 

Refinancing” has the meaning specified in the definition of the “Transactions.”

 

Register” has the meaning set forth in Section 10.07(c).

 

Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, attorneys-in-fact, trustees and advisors of such Person and of such Person’s Affiliates.

 

Relevant Transactionhas the meaning specified in Section 2.03(b)(ii).

 

Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty (30) day notice period has been waived.

 

Repricing Transaction” means any refinancing, replacement or repricing, in whole or in part, of any of the Term Loans under this Agreement, directly or indirectly, (x) from, or in anticipation of, the receipt of proceeds of any Indebtedness (including, without limitation, any Incremental First Lien Term Loans or any new or additional loans under this Agreement), or (y) pursuant to any amendment to this Agreement, in any case, having or resulting in a weighted average yield (to be determined by the Administrative Agent, after giving effect to margins, interest rate floors, upfront or similar fees or original issue discount shared with all lenders or holders thereof, but excluding the effect of any arrangement, structuring, syndication or other fees payable in connection therewith that are not shared with all lenders or holders thereof generally and in their capacity as lenders or holders) as of the date of such refinancing that is, or could be by the express terms of such Indebtedness (and not by virtue of any fluctuation in the Eurodollar Rate or Base Rate), less than the weighted average yield of (to be determined by the Administrative Agent, on the same basis as above) such Term Loans immediately prior to such refinancing, replacement or repricing, excluding in each case any refinancing, replacement or repricing of Term Loans in connection with any registered equity offering and/or private placement, as the case may be, of common stock of Parent, a Change of Control transaction or any Permitted Acquisition for an aggregate consideration in excess of $300,000,000.

 

45



 

Request for Credit Extension” means with respect to a Term Borrowing, conversion or continuation of Term Loans, a Committed Loan Notice.

 

Required Lenders” means, as of any date of determination, Lenders holding more than 50% of the sum of the (a) Total Outstandings and (b) aggregate unused Term Commitments; provided that the unused Term Commitments of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of a Loan Party and, as to any document delivered on the Closing Date, any vice president, secretary or assistant secretary.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

Restricted” means, when referring to cash or Cash Equivalents of the Borrower or any of its Restricted Subsidiaries, that such cash or Cash Equivalents (a) appear (or would be required to appear) as “restricted” on a consolidated balance sheet of the Borrower or such Restricted Subsidiary (unless such appearance is related to the Collateral Documents (or the Liens created thereunder)) or (b) are subject to any Lien (other than nonconsensual Liens permitted by Section 7.01 and Liens permitted by Sections 7.01(b), 7.01(i), 7.01(o), 7.01(p), 7.01(v) (but only to the extent the First Lien Obligations are secured by such cash and Cash Equivalents), 7.01(w) (but only to the extent the First Lien Obligations are secured by such cash and Cash Equivalents), 7.01(ee) (but only to the extent the First Lien Obligations are secured by such cash and Cash Equivalents) and 7.01(ff) (but only to the extent the First Lien Obligations are secured by such cash and Cash Equivalents)) in favor of any Person other than the Collateral Agent, any Lender, the ABL Collateral Agent, the Second Lien Collateral Agent, any Second Lien Lender, or any ABL Lender.

 

Restricted Group” means the Borrower and its Restricted Subsidiaries.

 

Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interest of any Person, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interest, or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent Persons thereof).

 

Restricted Proceedshas the meaning specified in Section 2.03(b)(vi).

 

Restricted Subsidiary” means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary.

 

Sanctioned Entity” means (a) a country or a government of a country, (b) an agency of the government of a country, (c) an organization directly or indirectly owned or controlled by a country, or (d) a Person resident in, or determined to be resident in, a country with

 

46



 

which dealings by U.S. Persons are prohibited pursuant to a country sanctions program identified on the list maintained and published by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/programs, or as otherwise published from time to time.

 

Sanctioned Person” means (a) a Person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time to time, or (b) a Person owned or controlled by a Person named on the list of Specially Designated Nationals or Blocked Persons.

 

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

 

Scheduled Unavailability Date” has the meaning specified in Section 3.08.

 

Screen Rate” means the Intercontinental Exchange Benchmark Administration Ltd. (or (x) any successor service or entity that has been authorized by the U.K. Financial Conduct Authority to administer the London Interbank Offered Rate or (y) any service selected by such Administrative Agent that has been nominated by such an entity as an authorized information vendor for the purpose of displaying such rates) Interest Settlement Rate for Dollars for the relevant Interest Period.  If the Intercontinental Exchange Benchmark Administration Ltd. (or any successor thereto) ceases to establish such rate, the agreed page is replaced or service ceases to be available, the Administrative Agent may specify another page or service displaying the appropriate rate.

 

Seasonal ABL Indebtedness” means, as of the last day of any fiscal quarter, Indebtedness outstanding under the ABL Facility used to finance seasonal working capital needs of the Borrower and its Restricted Subsidiaries (as reasonably determined by the Borrower in good faith) as of such day.

 

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

 

Second Amendment” means the Second Amendment to First Lien Credit Agreement, dated as of June 7, 2017, among Holdings, the Borrower, the 2017 Incremental First Lien Lender (as defined therein), the Administrative Agent and the other parties thereto.

 

Second Amendment Effective Date” means June 7, 2017.

 

Second Lien Administrative Agent” means the “Administrative Agent” as defined in the Second Lien Credit Agreement.

 

Second Lien Cap” means (a) the sum of (x) $260,000,000 plus (y) such additional amount that would not, after giving effect on a Pro Forma Basis to the incurrence thereof cause the Secured Leverage Ratio (without netting the cash and Cash Equivalents constituting proceeds of the applicable Second Lien Obligations) as at the end of the most recently ended fiscal quarter of the Borrower for which financial statements have been delivered to the Second Lien

 

47



 

Administrative Agent to exceed 6.00:1.00, minus (b) the sum of (i) all Permitted Other Second Lien Indebtedness incurred in reliance on clause (x) of the definition thereof, (ii) all Incremental First Lien Term Commitments incurred and outstanding in reliance on Section 2.12(a)(x) of this Agreement (assuming the full funding thereof) and (iii) all Permitted Other First Lien Indebtedness (assuming the full funding thereof) incurred in reliance on clause (x) of the definition thereof.

 

Second Lien Collateral Agent” means the “Collateral Agent” as defined in the Second Lien Credit Agreement.

 

Second Lien Credit Agreement” means the Second Lien Credit Agreement, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time in accordance with its terms and with the Intercreditor Agreements), among Holdings, the Borrower, the Second Lien Lenders, the Second Lien Administrative Agent and the Second Lien Collateral Agent, including any replacement thereof entered into in connection with one or more refinancings thereof permitted hereunder (whether or not such refinancing has previously been consummated) (so long as the documents governing such replacement constitute “Term Debt Documents” for purposes of the ABL/Term Intercreditor Agreement).

 

Second Lien Lender” means any “Lender” as defined in the Second Lien Credit Agreement.

 

Second Lien Loan Documents” means the Second Lien Credit Agreement and the other “Loan Documents” as defined in the Second Lien Credit Agreement.

 

Second Lien Loans” means the “Loans” as defined in the Second Lien Credit Agreement and shall, for the avoidance of doubt, include Incremental Second Lien Loans.

 

Second Lien Obligations” means the “Second Lien Obligations” as defined in the Second Lien Credit Agreement.

 

Secured Hedge Agreement” means any Swap Contract permitted under Article VII that is entered into by and between any Loan Party and any Hedge Bank and for which (a) written notice substantially in the form of Exhibit O has been delivered by the Loan Party or the Hedge Bank to the Administrative Agent and the Collateral Agent, which (i) specifies that such Swap Contract is intended to be secured on a pari passu basis with the other First Lien Obligations and is a Secured Hedge Agreement, and (ii)  acknowledges and accepts Hedge Bank’s appointment of the Administrative Agent and the Collateral Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto, and (b) the Loan Party and/or Hedge Bank provides to the Administrative Agent and the Collateral Agent such supporting documentation as the Administrative Agent or the Collateral Agent may reasonably request.

 

Secured Leverage Ratio” means, with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis, as of any date, the ratio of (x) Consolidated Funded Secured Indebtedness (net of (i) cash  and Cash Equivalents on hand that are not Restricted, (ii) cash  and Cash Equivalents restricted in favor of, without duplication, the Administrative Agent, the Collateral Agent, the ABL Administrative Agent, the ABL Collateral Agent, the Second Lien Administrative Agent, the Second Lien Collateral Agent, any Lender, any ABL Lender or any Second Lien Lender, and (iii) Seasonal ABL Indebtedness in an amount not to exceed

 

48



 

$20,000,000) of the Borrower and its Restricted Subsidiaries on the last day of the most recently ended fiscal quarter for which financial statements have been delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) to (y) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for the most recently ended four (4) consecutive fiscal quarter period ending on or prior to such date for which financial statements have been delivered.

 

Secured Obligations” has the meaning specified in the Security Agreement.

 

Secured Parties” means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, the Hedge Banks, any Supplemental Administrative Agent and each co-agent or sub-agent appointed by the Administrative Agent or the Collateral Agent from time to time pursuant to Section 9.01(b).

 

Security Agreement” means, collectively, the Security Agreement dated as of the Closing Date executed by the Loan Parties, substantially in the form of Exhibit G, together with each other security agreement supplement executed and delivered pursuant to Section 6.12.

 

Security Agreement Supplement” has the meaning specified in the Security Agreement.

 

Sellerhas the meaning specified in the “Preliminary Statements.”

 

Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of debts and liabilities, including, without limitation, contingent liabilities, subordinated or otherwise, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities, subordinated, contingent or otherwise, as they become absolute and mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

SPC” has the meaning specified in Section 10.07(g).

 

Specified Affiliate Indebtedness” has the meaning specified in Section 7.03(r).

 

Specified Refinancing Debt” means Indebtedness that is either unsecured or secured by Specified Refinancing Liens, provided that: (A) an amount equal to the principal amount of such Indebtedness is applied concurrently with the incurrence thereof to prepay the Term Loans pursuant to Section 2.03(b)(iii) or any previously incurred Specified Refinancing Debt; (B) the terms of such Indebtedness do not provide for any scheduled repayment, mandatory redemption or sinking fund obligations prior to the Latest Maturity Date of all Classes of Term Loans then in effect (other than customary offers to repurchase or mandatory prepayments upon a change of control, asset sale or event of loss, customary acceleration rights after an event of default

 

49



 

and, with respect to such Indebtedness incurred in the form of loans, customary amortization payments, subject to clause (C) below); (C) the maturity date of such Indebtedness shall not be shorter than the Latest Maturity Date of all Classes of Term Loans then in effect and, with respect to such Indebtedness incurred in the form of loans, the Weighted Average Life to Maturity of such Indebtedness shall not be shorter than the Weighted Average Life to Maturity of the then outstanding Term Loans; (D) the covenants, events of default, Guarantees, collateral and other terms of such Indebtedness, when taken as a whole, are not more restrictive to Holdings, the Borrower and its Restricted Subsidiaries than those set forth in this Agreement (provided that a certificate of the Chief Financial Officer of the Borrower delivered to the Administrative Agent in good faith at least five (5) Business Days prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and conditions satisfy the requirement set forth in this clause (D), shall be conclusive evidence that such terms and conditions satisfy such requirement unless the Administrative Agent provides notice to the Borrower of its objection during such five (5) Business Day period); (E) immediately before and immediately after giving effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred and be continuing; (F) there shall be no borrowers or guarantors in respect of such Indebtedness that are not the Borrower or a Guarantor, and the borrower with respect to such Indebtedness shall be the borrower of the Indebtedness being refinanced; (G) if secured, such Indebtedness shall not be secured by any assets that do not constitute Collateral; and (H) the terms relating to the holding of loans under such Indebtedness by an Affiliated Lender shall be no less restrictive to such Affiliated Lender than those in Sections 10.01 and 10.07.

 

Specified Refinancing Liens” means Liens on the Collateral that secure Specified Refinancing Debt and, in the case of any such Liens on the Term Priority Collateral, that are junior to, or pari passu with, the Liens on the Term Priority Collateral securing the First Lien Obligations, provided that (x) such Liens are granted under security documents to a collateral agent for the benefit of the holders of such Specified Refinancing Debt that are not more restrictive to Holdings, the Borrower and its Restricted Subsidiaries than the Collateral Documents (provided that a certificate of the Chief Financial Officer of the Borrower delivered to the Administrative Agent in good faith at least five (5) Business Days prior to the incurrence of such Specified Refinancing Debt, together with a reasonably detailed description of the security documents with respect to such Specified Refinancing Debt or drafts of such security documents, stating that the Borrower has determined in good faith that such security documents satisfy the requirement set forth in the first proviso above, shall be conclusive evidence that such security documents satisfy such requirement unless the Administrative Agent provides notice to the Borrower of its objection during such five (5) Business Day period) and are subject to the Intercreditor Agreements or an intercreditor agreement that is reasonably satisfactory to the Administrative Agent and the Collateral Agent and that is entered into among the Collateral Agent, such other collateral agent and the Loan Parties and which provides for lien sharing and for the junior or pari passu treatment, as the case may be, of such Liens with and relative to the Liens securing the First Lien Obligations and (y) all such Liens on the ABL Priority Collateral shall be junior to the Liens on the ABL Priority Collateral securing the ABL Obligations, and pari passu with, or junior to, the Liens on the ABL Priority Collateral securing the First Lien Obligations.

 

50



 

Specified Representations” means those representations made in Sections 5.01(a) and (b)(ii), 5.02(a), 5.04, 5.13, 5.17 (as evidenced by the certificate delivered pursuant to Section 4.01(a)(xii)), 5.19 (subject to the last paragraph of Section 4.01), 5.20, 5.21, and 5.22.

 

Specified Second Lien Refinancing Debt” means, “Specified Refinancing Debt” (as defined in the Second Lien Credit Agreement).

 

Specified Second Lien Refinancing Liens” means, to the extent permitted by the Intercreditor Agreements, “Specified Refinancing Liens” (as defined in the Second Lien Credit Agreement).

 

Specified Transaction” means any incurrence or repayment of Indebtedness (other than for working capital purposes) or Investment that results in a Person becoming a Restricted Subsidiary, any Permitted Acquisition or any Disposition that results in a Restricted Subsidiary ceasing to be a Subsidiary of the Borrower, any Investment constituting an acquisition of assets constituting a business unit, line of business or division of another Person or any Disposition of a business unit, line of business or division of the Borrower or a Restricted Subsidiary, in each case whether by merger, consolidation, amalgamation or otherwise or any material restructuring of the Borrower or implementation of initiative not in the ordinary course of business and described in reasonable detail in the officer’s certificate of the Borrower.

 

Sponsor” means AEA.

 

Sponsor Management Agreement” means the Management Agreement, dated as of April 1, 2014 (as amended, supplemented or otherwise modified from time to time), by and among GYP Holdings I Corp., a Delaware corporation, the Borrower and AEA Investors LP.

 

Subject Acquisition Agreement” has the meaning specified in Section 2.12(f).

 

Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

Subsidiary Guarantor” means, collectively, the Restricted Subsidiaries of the Borrower that are Guarantors.

 

Subsidiary Guaranty” means, collectively, the Subsidiary Guaranty made by the Subsidiary Guarantors in favor of the Collateral Agent on behalf of the Secured Parties, substantially in the form of Exhibit F-2, together with each other Guaranty and Guaranty supplement delivered pursuant to Section 6.12.

 

51



 

Supplemental Administrative Agent” has the meaning specified in Section 9.14(a) and “Supplemental Administrative Agents” shall have the corresponding meaning.

 

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

 

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

 

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

 

Targetmeans GMS and its Subsidiaries.

 

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

 

Term Borrowing” means a borrowing consisting of simultaneous Term Loans of the same Class and Type made, converted or continued on the same date and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Term Lenders pursuant to Section 2.01.

 

Term Commitment” means, as to each Term Lender, its obligation to make Term Loans to the Borrower pursuant to Section 2.01 in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Term Lender’s name on

 

52



 

Schedule 2.01 under the caption “Term Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Term Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement. The aggregate amount of the Term Commitments of all Term Lenders shall be $577,615,812.50996,839,654.38 on the SecondThird Amendment Effective Date, as such amount may be adjusted from time to time in accordance with the terms of this Agreement. From and after the New Incremental First Lien Term Commitments Effective Date, the New Incremental First Lien Term Commitment (as defined in the New Incremental First Lien Term Commitments Amendment) shall constitute a Term Commitment for all purposes hereof and of the other Loan Documents. From and after the Second Amendment Effective Date, the 2017 Incremental First Lien Term Commitment (as defined in the Second Amendment) shall constitute a Term Commitment for all purposes hereof and of the other Loan Documents. From and after the Third Amendment Effective Date, the 2018 Incremental First Lien Term Commitment (as defined in the Third Amendment) shall constitute a Term Commitment for all purposes hereof and of the other Loan Documents.

 

Term Facility” means, at any time, (a) prior to the SecondThird Amendment Effective Date, the aggregate Term Commitments of all Term Lenders at such time, and (b) thereafter, the aggregate Term Loans of all Term Lenders at such time.

 

Term Intercreditor Agreement” means the First Lien/Second Lien Intercreditor Agreement substantially in the form of Exhibit Q, dated as of the date hereof (as amended, supplemented or otherwise modified from time to time in accordance with the terms thereof), among the Loan Parties, the Collateral Agent and the Second Lien Collateral Agent.

 

Term Lender” means (a) at any time on or prior to the SecondThird Amendment Effective Date, any Lender that has a Term Commitment at such time and (b) at any time after the SecondThird Amendment Effective Date, any Lender that holds Term Loans at such time.

 

Term Loan” means an advance made by any Term Lender under the Term Facility. From and after the New Incremental First Lien Term Commitments Effective Date, the New Incremental First Lien Term Loan (as defined in the New Incremental First Lien Term Commitments Amendment) shall constitute a Term Loan for all purposes hereof and of the other Loan Documents. From and after the Second Amendment Effective Date, the 2017 Incremental First Lien Term Loan (as defined in the Second Amendment) shall constitute a Term Loan for all purposes hereof and of the other Loan Documents. From and after the Third Amendment Effective Date, the 2018 Incremental First Lien Term Loan (as defined in the Third Amendment) shall constitute a Term Loan for all purposes hereof and of the other Loan Documents.

 

Term Priority Collateral” has the meaning specified in the ABL/Term Intercreditor Agreement.

 

Third Amendment” means the Third Amendment to First Lien Credit Agreement, dated as of June 1, 2018, among Holdings, the Borrower, the 2018 Incremental First Lien Lender (as defined therein), the Administrative Agent and the other parties thereto.

 

Third Amendment Effective Date” means June 1, 2018.

 

Threshold Amount” means $20,000,000.

 

53



 

Total Leverage Ratio” means, with respect to the Borrower and its Restricted Subsidiaries on a consolidated basis, as of any date, the ratio of (x) Consolidated Funded Indebtedness (net of (i) cash  and Cash Equivalents on hand that are not Restricted, (ii) cash  and Cash Equivalents restricted in favor of, without duplication, the Administrative Agent, the Collateral Agent, the ABL Collateral Agent, the ABL Administrative Agent, the Second Lien Administrative Agent, the Second Lien Collateral Agent, any Lender, any ABL Lender, or any Second Lien Lender, and (iii) Seasonal ABL Indebtedness in an amount not to exceed $20,000,000) of the Borrower and its Restricted Subsidiaries on the last day of the most recently ended fiscal quarter for which financial statements have been delivered to the Administrative Agent and the Lenders pursuant to Section 6.01(a) or (b) to (y) Consolidated EBITDA of the Borrower and its Restricted Subsidiaries for the most recently ended four (4) consecutive fiscal quarter period ending on or prior to such date for which financial statements have been delivered to the Administrative Agent and the Lenders pursuant to Sections 6.01(a) and (b).

 

Total Outstandings” means the aggregate Outstanding Amount of all Term Loans.

 

Transaction Costs” has the meaning specified in the definition of the “Transactions”.

 

Transactions” means the acquisition of the Target by the Borrower and associated funds and certain other investors (collectively, the “Investors”), together with each of the following transactions consummated or to be consummated in connection therewith:

 

(a)                                 The Acquisition.

 

(b)                                 Equity contributions in the form of common equity (“Permitted Equity”) being made in cash directly or indirectly to Holdings (which shall be contributed in cash by Holdings to the Borrower in the form of common equity) by the Investors (the “Equity Contribution”), in an aggregate amount that, when taken together with all Permitted Equity rolled over or directly or indirectly invested in Permitted Equity of Holdings and all Permitted Equity of Holdings, the Borrower, or the Guarantors issued to, or otherwise directly or indirectly held or acquired by, any existing shareholders and management of the Target (the “Other Equity”) will be not less than 25% of the sum of (i) the aggregate principal amount of the Term Facility made available on the Closing Date, (ii) the aggregate principal amount of Second Lien Loans borrowed on the Closing Date, (iii) the aggregate principal amount of ABL Loans borrowed on the Closing Date, (iv) the aggregate amount of existing Indebtedness of Holdings and its Subsidiaries not subject to the Refinancing (as defined below), (v) the Equity Contribution and (vi) the Other Equity.

 

(c)                                  Substantially all existing Indebtedness for borrowed money of the Target, other than intercompany indebtedness and existing capital leases, other Indebtedness permitted to exist beyond the Closing Date under the Acquisition Agreement and certain limited indebtedness that the Arrangers and Holdings reasonably agree may remain outstanding after the Closing Date (collectively, the “Permitted Surviving Debt”), will be refinanced by the Term Loans made on the

 

54



 

Closing Date, the Second Lien Loans made on the Closing Date, and the ABL Facility, terminated or discharged and satisfied and all liens securing any such indebtedness will be released (the “Refinancing”) at the closing of the Acquisition.  For the avoidance of doubt, letters of credit outstanding on the Closing Date no longer available to the Target may be backstopped or replaced by letters of credit issued under the ABL Facility on the Closing Date.

 

(d)                                 The Borrower obtaining the Term Facility.

 

(e)                                  The Borrower obtaining the ABL Facility in an aggregate principal amount of $200,000,000.

 

(f)                                   The Borrower obtaining the Second Lien Loans in an aggregate principal amount of $160,000,000.

 

(g)                                  All fees, premiums and expenses incurred in connection with the Transactions (the “Transaction Costs”) being paid.

 

Type” means, with respect to a Term Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

 

UBS” means UBS AG, Stamford Branch acting through such of its affiliates or branches as it deems appropriate, and its successors.

 

Uniform Commercial Code” means the Uniform Commercial Code as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.

 

United States” and “U.S.” mean the United States of America.

 

Unrestricted Subsidiary” means (1) any Subsidiary of the Borrower designated by the Borrower as an Unrestricted Subsidiary hereunder by written notice to the Administrative Agent and the Collateral Agent; provided that the Borrower shall only be permitted to so designate a Subsidiary as an Unrestricted Subsidiary after the Closing Date and so long as (a) no Default or Event of Default has occurred and is continuing or would result therefrom, (b) such Unrestricted Subsidiary shall be capitalized (to the extent capitalized by the Borrower or any of its Restricted Subsidiaries) through Investments as permitted by, and in compliance with, Section 7.02 and the designation of such Subsidiary as an Unrestricted Subsidiary shall constitute an Investment by the Borrower therein at the date of designation in an amount equal to the fair market value as determined by the Borrower in good faith of the Borrower’s (as applicable) Investment therein, (c) without duplication of clause (b), any assets owned by such Unrestricted Subsidiary at the time of the initial designation thereof shall be treated as Investments pursuant to Section 7.02, (d) such Subsidiary shall have been or will promptly be designated an “unrestricted subsidiary” (or otherwise not be subject to the covenants) under the ABL Facility, Second Lien Credit Agreement and any then outstanding Specified Second Lien Refinancing Debt, (e) no Subsidiary may be designated as an Unrestricted Subsidiary if such Subsidiary or any of its Subsidiaries owns any Equity Interests of, or owns or holds any Lien on any property of, the Borrower or any other

 

55



 

Restricted Subsidiary that is not a Subsidiary of the Subsidiary to be so designated and (f) the Borrower shall have delivered to the Administrative Agent and the Collateral Agent an officer’s certificate executed by a Responsible Officer of the Borrower, certifying compliance with the requirements of preceding clauses (a) through (e), and (2) any subsidiary of an Unrestricted Subsidiary.  The Borrower may designate any Unrestricted Subsidiary to be a Restricted Subsidiary for purposes of this Agreement (each, a “Subsidiary Redesignation”); provided that (i) no Default or Event of Default has occurred and is continuing or would result therefrom, (ii) any Indebtedness owed by such Unrestricted Subsidiary shall be permitted to be incurred under Section 7.03 on the date of such Subsidiary Redesignation, (iii) any Liens on the property or assets of such Unrestricted Subsidiary shall be permitted to be incurred under Section 7.01 on the date of such Subsidiary Redesignation and (iv) the Borrower shall have delivered to the Administrative Agent and the Collateral Agent an officer’s certificate executed by a Responsible Officer of the Borrower, certifying compliance with the requirements of preceding clauses (i) through (iii).  Notwithstanding the foregoing, any Unrestricted Subsidiary that has been re-designated a Restricted Subsidiary may not be subsequently re-designated as an Unrestricted Subsidiary.  As of the ClosingThird Amendment Effective Date, all Subsidiaries of the Borrower are Restricted Subsidiaries.

 

Voting Stock” of any specified Person as of any date means the Equity Interests of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

 

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

 

wholly owned” means, with respect to a Subsidiary of a Person, a Subsidiary of such Person all of the outstanding Equity Interests of which (other than (x) director’s qualifying shares and (y) shares issued to foreign nationals to the extent required by applicable Law) are owned by such Person and/or by one or more wholly owned Subsidiaries of such Person.

 

Withholding Agent” means the Borrower, any Loan Party, or the Administrative Agent, as applicable.

 

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

 

Yield Differential” has the meaning specified in Section 2.12(b)(iii).

 

1.02        Other Interpretive Provisions.  With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

56



 

(a)                           The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b)                           (i)                                     The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

 

(i)                                     Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

 

(ii)                                  The term “including” is by way of example and not limitation.

 

(iii)                               The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

 

(c)                            In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each mean “to but excluding”; and the word “through” means “to and including”.

 

(d)                           Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.03        Accounting Terms.

 

(a)           All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP,  except as otherwise specifically prescribed herein.

 

(b)           If at any time any change in GAAP or the application thereof would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP or the application thereof (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP or the application thereof prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders a written reconciliation in form and substance reasonably satisfactory to the Administrative Agent, between calculations of such ratio or requirement made before and after giving effect to such change in GAAP or the application thereof.

 

(c)                                 Notwithstanding anything to the contrary in this Section 1.03, any obligation of a Person under a lease that is not (or would not be) required to be classified and accounted for as a Capitalized Lease or Attributable Indebtedness on a balance sheet of such Person under GAAP as in effect on the Closing Date shall not be treated as a Capitalized

 

57



 

Lease or Attributable Indebtedness as a result of the adoption of changes in GAAP or changes in the application of GAAP.

 

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

 

1.05        References to Agreements and Laws.  Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by this Agreement or the Intercreditor Agreements; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 

1.06        Times of Day.  Unless otherwise specified, all references herein to times of day shall be references to New York Time.

 

1.07        Timing of Payment or Performance.  When the payment of any obligation or the performance of any covenant, duty or obligation is stated to be due or performance required on a day which is not a Business Day, the date of such payment (other than as specifically provided in Section 2.10 or as described in the definition of Interest Period) or performance shall extend to the immediately succeeding Business Day.

 

1.08        Currency Equivalents Generally.  Any amount specified in this Agreement (other than in Articles II, IX and X) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount to be determined at the rate of exchange quoted by Credit Suisse at the close of business on the Business Day immediately preceding any date of determination thereof, to prime banks in New York, New York for the spot purchase in the New York foreign exchange market of such amount in Dollars with such other currency.

 

1.09        Pro Forma Calculations.  Notwithstanding anything to the contrary herein, the First Lien Leverage Ratio, the Secured Leverage Ratio and the Total Leverage Ratio shall be calculated (including, but not limited to, for purposes of Section 2.12) on a Pro Forma Basis with respect to each Specified Transaction occurring during the applicable four quarter period to which such calculation relates, or subsequent to the end of such four-quarter period but not later than the date of such calculation; provided that notwithstanding the foregoing, when calculating the Total Leverage Ratio for purposes of determining the applicable percentage of Excess Cash Flow set forth in Section 2.03, the events described in the definition of Pro Forma Basis (and corresponding provisions of the definition of Consolidated EBITDA) that occurred subsequent to the end of the applicable four quarter period shall not be given Pro Forma Effect.

 

58



 

1.10        Basket Calculations.  If any of the baskets set forth in Article VII of this Agreement are exceeded solely as a result of either (x) fluctuations to Consolidated Total Assets for the most recently completed fiscal quarter after the last time such baskets were calculated for any purpose under Article VII or (y) fluctuations in applicable currency exchange rates after the last time such baskets were calculated for any purpose under Article VII, such baskets will not be deemed to have been exceeded solely as a result of such fluctuations; provided that, for the avoidance of doubt, the provisions of Section 1.09 shall otherwise apply to such baskets, including with respect to determining whether any Lien, Investment, Indebtedness, Disposition, Restricted Payment or prepayment, redemption, purchase, defeasance or other satisfaction pursuant to Section 7.13 may be incurred or made at any time under Article VII; provided, further, that, once incurred or made, the amount of such Lien, Investment, Indebtedness, Disposition, Restricted Payment or prepayment, redemption, purchase, defeasance or other satisfaction pursuant to Section 7.13 shall be always deemed to be at the Dollar amount on such date, regardless of later changes in currency exchange rates.

 

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

 

ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01        The Term Loans.  Subject to the terms and conditions set forth herein, the 20172018 Incremental First Lien Lender (as defined in the SecondThird Amendment), in its capacity as a Term Lender, agrees to make a single term loan denominated in Dollars to the Borrower on the SecondThird Amendment Effective Date in an amount not to exceed the 20172018 Incremental First Lien Lender’s Term Commitment.  The Term Borrowing shall consist of a Term Loan made by the 20172018 Incremental First Lien Lender in accordance with its Term Commitment.  Amounts borrowed under this Section 2.01 and subsequently repaid or prepaid may not be reborrowed.  Term Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

 

2.02        Term Borrowings, Conversions and Continuations of Term Loans.

 

(a)                                Term Loans and Incremental First Lien Term Loans.  Each Term Borrowing of Term Loans or Incremental First Lien Term Loans, each conversion of Term Loans or Incremental First Lien Term Loans from a Base Rate Loan to a Eurodollar Rate Loan (or vice versa) and each continuation of Eurodollar Rate Term Loans or Eurodollar Rate Incremental First Lien Term Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may initially be given by telephone and promptly confirmed in writing by delivering to the Administrative Agent a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower, prior to the applicable time specified in the immediately succeeding sentence.  Each such notice must be received by the Administrative Agent not later than (A) with respect  to Term Borrowings of Term Loans on the SecondThird Amendment Effective Date, 10:00 a.m. (New York time) one Business Day prior to the SecondThird Amendment Effective Date, (B) with respect to

 

59



 

Term Borrowings of Incremental First Lien Term Loans consisting of Eurodollar Rate Loans, conversions of Term Loans or Incremental First Lien Term Loans from one Type to the other and each continuation of Eurodollar Rate Loans, 2:00 p.m. (New York Time) three (3) Business Days prior to the requested date of such Term Borrowing, conversion or continuation or (C) with respect to Term Borrowings of Incremental First Lien Term Loans consisting of Base Rate Loans, 10:00 a.m. (New York Time) on the requested date of such Term Borrowing; provided, however, that if the Borrower wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 12:30 p.m. (New York Time) four (4) Business Days prior to the requested date of such Term Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of them.  Not later than 12:30 p.m. (New York Time) three (3) Business Days before the requested date of such Term Borrowing, conversion or continuation, the Administrative Agent shall notify the Borrower (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders.  Each Term Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof.  Each Term Borrowing of, or conversion to, Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $500,000 in excess thereof.  Each Committed Loan Notice (whether telephonic or written) shall specify (1) whether the Borrower is requesting a Term Borrowing of Term Loans or Incremental First Lien Term Loans, a conversion of Term Loans or Incremental First Lien Term Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (2) the requested date of such Term Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (3) the principal amount of Term Loans or Incremental First Lien Term Loans to be borrowed, converted or continued, (4) the Type of Term Loans or Incremental First Lien Term Loans to be borrowed or to which existing Term Loans or Incremental First Lien Term Loans are to be converted and (5) if applicable, the duration of the Interest Period with respect thereto.  If the Borrower fails to specify a Type of Term Loan or Incremental First Lien Term Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Term Loans or Incremental First Lien Term Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans.  If the Borrower requests a Term Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month.

 

(b)                                Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Pro Rata Share of the Term Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a).  Each Lender shall make the amount of its Term Loan or Incremental First Lien Term Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 12:00 noon (New York Time) on the Business Day specified in the applicable Committed

 

60



 

Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Term Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent by wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower.

 

(c)                            Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan unless the Borrower pays the amount due under Section 3.05 in connection therewith.  During the existence of an Event of Default, no Term Loans may be converted to or continued as Eurodollar Rate Loans and the Required Lenders or the Administrative Agent acting with the consent of the Required Lenders may demand that any or all of the then outstanding Term Loans be prepaid and/or any or all of the then outstanding Eurodollar Rate Loans be converted into Base Rate Loans, in each case on the last day of the then current Interest Period with respect thereto or such other day as the Required Lenders may demand.

 

(d)                           The Administrative Agent shall promptly notify the Borrower and the applicable Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate.  The determination of the Eurodollar Rate and the Screen Rate by the Administrative Agent shall be conclusive in the absence of manifest error.  At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in the Prime Rate used in determining the Base Rate promptly following the announcement of such change.

 

(e)                            After giving effect to all Term Borrowings or all conversions of Term Loans from one Type to the other, and all continuations to Term Loans of the same Type, there shall not be more than five (5) Interest Periods in effect.

 

(f)                             The failure of any Lender to make the Term Loan to be made by it as part of any Term Borrowing shall not relieve any other Lender of its obligation, if any, hereunder to make its Term Loan on the date of such Term Borrowing, but no Lender shall be responsible for the failure of any other Lender to make the Term Loan to be made by such other Lender on the date of any Term Borrowing.

 

2.03        Prepayments.

 

(a)                           Optional.

 

(i)                                     The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay any Class of Term Loans or Incremental First Lien Term Loans in whole or in part without premium or penalty (subject to Section 2.03(d)); provided that (a) such notice must be received by the Administrative Agent not later than 2:00 p.m. (New York Time), (x) three (3) Business Days prior to any date of prepayment of Eurodollar Rate Loans and (y) one (1) Business Day prior to the date of prepayment of Base Rate Loans; (b) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof; and (c) any

 

61



 

prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple of $500,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment and the Type(s) and Class(es) of Term Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Term Loans.  The Administrative Agent will promptly notify each applicable Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Pro Rata Share of the Term Facility).  If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05.  Subject to Section 2.13, each prepayment of the outstanding Term Loans pursuant to this Section 2.03(a) shall be applied in direct order of maturities to the principal repayment installments (or proportional fractions thereof) applicable to each of the Term Loans pursuant to Sections 2.05(a) or as otherwise directed by the Borrower; and each such prepayment shall be paid to the Lenders in accordance with their respective Pro Rata Shares.  All prepayments under this Section 2.03(a)(i) shall be subject to Section 2.03(d).

 

(ii)                                  Notwithstanding anything to the contrary contained in this Agreement, the Borrower may rescind any notice of prepayment under Section 2.03(a)(i) if such prepayment would have resulted from a refinancing of the Term Facility, which refinancing shall not be consummated or shall otherwise be delayed.

 

(iii)                               Voluntary Non-Pro-Rata Prepayments.

 

(A)                               Notwithstanding anything to the contrary herein, any Borrower Purchasing Party shall have the right at any time and from time to time to prepay any Class of Term Loans at a discount to the par value of such Term Loans and on a non pro rata basis (each, a “Discounted Voluntary Prepayment”) without premium or penalty (but subject to Section 3.05) pursuant to the procedures described in this Section 2.03(a)(iii), provided that, on the date of any such Discounted Voluntary Prepayment, such Borrower Purchasing Party shall deliver to the Administrative Agent a certificate of a Responsible Officer stating (1) that no Default or Event of Default has occurred and is continuing or would result from the Discounted Voluntary Prepayment (after giving effect to any related waivers or amendments obtained in connection with such Discounted Voluntary Prepayment), (2) that each of the conditions to such Discounted Voluntary Prepayment contained in this Section 2.03(a)(iii) has been satisfied, (3) the aggregate principal amount of Term Loans so prepaid pursuant to such Discounted Voluntary Prepayment and (4) that such Borrower Purchasing Party does not have any material non-public information with respect to Holdings, the Borrower, or any of its Subsidiaries or any of their respective securities that either (A) has not been disclosed to the Lenders (other than Lenders that do not wish to receive such information) or has not otherwise been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD, prior to such time or (B) if not disclosed to the Lenders, could reasonably be expected to have a material effect

 

62



 

upon, or otherwise be material to, Holdings, the Borrower and the Restricted Subsidiaries.

 

(B)                               To the extent any Borrower Purchasing Party seeks to make a Discounted Voluntary Prepayment, such Borrower Purchasing Party will provide written notice to the Administrative Agent substantially in the form of Exhibit K hereto (each, a “Discounted Prepayment Option Notice”) that such Borrower Purchasing Party desires to prepay Term Loans in each case in an aggregate principal amount specified therein by such Borrower Purchasing Party (each, a “Proposed Discounted Prepayment Amount”), in each case at a discount to the par value of such Term Loans as specified below.  The Proposed Discounted Prepayment Amount of Term Loans shall be in a principal amount of $2,000,000 or a whole multiple of $1,000,000 in excess thereof.  The Discounted Prepayment Option Notice shall further specify with respect to the proposed Discounted Voluntary Prepayment: (A) the Proposed Discounted Prepayment Amount for the Term Loans, (B) a discount range (which may be a single percentage) selected by such Borrower Purchasing Party with respect to such proposed Discounted Voluntary Prepayment equal to a percentage of par of the principal amount of Term Loans (the “Discount Range”); provided that such Borrower Purchasing Party may elect not to include a Discount Range in the Discounted Prepayment Option Notice and (C) the date by which Lenders are required to indicate their election to participate in such proposed Discounted Voluntary Prepayment which shall be at least five (5) Business Days following the date of the Discounted Prepayment Option Notice (the “Acceptance Date”).

 

(C)                               Upon receipt of a Discounted Prepayment Option Notice, the Administrative Agent shall promptly notify all Term Lenders.  On or prior to the Acceptance Date, each such Term Lender may specify by written notice substantially in the form of Exhibit L hereto (each, a “Lender Participation Notice”) to the Administrative Agent (A) a maximum discount to par (the “Acceptable Discount”), which Acceptable Discount shall be within the Discount Range, if the Discount Range is specified in the Discounted Prepayment Option Notice (for example, a Lender specifying a discount to par of 20% would accept a purchase price of 80% of the par value of the Term Loans to be prepaid), and (B) a maximum principal amount (subject to rounding requirements specified by the Administrative Agent) of Term Loans held by such Lender with respect to which such Lender is willing to permit a Discounted Voluntary Prepayment at the Acceptable Discount (the “Offered Loans”).  Based on the Acceptable Discounts and principal amounts of the Offered Loans specified by the Lenders in the applicable Lender Participation Notice, the Administrative Agent and the applicable Borrower Purchasing Party, acting jointly, shall determine the applicable discount for the Term Loans (the “Applicable Discount”), which Applicable Discount shall be (A) the percentage specified by such Borrower Purchasing Party if such Borrower Purchasing Party has selected a single percentage pursuant to Section 2.03(a)(iii)(B) for the Discounted Voluntary Prepayment or (B) otherwise, the highest Acceptable Discount at which such Borrower Purchasing Party can pay the Proposed Discounted Prepayment Amount in full (determined by adding the

 

63



 

principal amounts of Offered Loans commencing with the Offered Loans with the highest Acceptable Discount); provided, however, that in the event that such Proposed Discounted Prepayment Amount cannot be repaid in full at any Acceptable Discount, the Applicable Discount shall be (x) the highest Acceptable Discount within the Discount Range or (y) if no Discount Range was specified in the Discounted Prepayment Option Notice, the highest Acceptable Discount acceptable to such Borrower Purchasing Party.  The Applicable Discount shall be applicable for all Lenders who have offered to participate in the Discounted Voluntary Prepayment and have Qualifying Loans.  Any Lender with outstanding Term Loans whose Lender Participation Notice is not received by the Administrative Agent by the Acceptance Date shall be deemed to have declined to accept a Discounted Voluntary Prepayment of any of its Term Loans at any discount to their par value within the Applicable Discount.

 

(D)                               The applicable Borrower Purchasing Party shall make a Discounted Voluntary Prepayment by prepaying those Term Loans (or the respective portions thereof) offered by the Lenders (“Qualifying Lenders”) that specify an Acceptable Discount that is equal to or greater than the Applicable Discount (“Qualifying Loans”) at the Applicable Discount, provided that if the aggregate proceeds required to prepay all Qualifying Loans (disregarding any interest payable at such time) would exceed the amount of aggregate proceeds required to prepay the Proposed Discounted Prepayment Amount, such amounts in each case calculated by applying the Applicable Discount,  such Borrower Purchasing Party shall prepay such Qualifying Loans ratably among the Qualifying Lenders based on their respective principal amounts of such Qualifying Loans (subject to rounding requirements specified by the Administrative Agent).  If the aggregate proceeds required to prepay all Qualifying Loans (disregarding any interest payable at such time) would be less than the amount of aggregate proceeds required to prepay the Proposed Discounted Prepayment Amount, in each case calculated by applying the Applicable Discount, such Borrower Purchasing Party shall prepay all Qualifying Loans.

 

(E)                                Each Discounted Voluntary Prepayment shall be made within five (5) Business Days of the Acceptance Date (or such later date as the Administrative Agent and the applicable Borrower Purchasing Party shall reasonably agree, given the time required to calculate the Applicable Discount and determine the amount and holders of Qualifying Loans), without premium or penalty (except as set forth in Section 3.05), upon irrevocable notice substantially in the form of Exhibit M hereto (each a “Discounted Voluntary Prepayment Notice”), delivered to the Administrative Agent no later than 12:00 noon (New York Time), one (1) Business Day prior to the date of such Discounted Voluntary Prepayment, which notice shall specify the date and amount of the Discounted Voluntary Prepayment and the Applicable Discount determined by the Administrative Agent.  Upon receipt of any Discounted Voluntary Prepayment Notice the Administrative Agent shall promptly notify each relevant Lender thereof.  If any Discounted Voluntary Prepayment Notice is given, the amount specified in such notice shall be due and payable to the applicable Qualifying Lenders, subject to the Applicable Discount on the applicable

 

64



 

Term Loans, on the date specified therein together with accrued interest (on the par principal amount) to but not including such date on the amount prepaid.

 

(F)                                 To the extent not expressly provided for herein, each Discounted Voluntary Prepayment shall be consummated pursuant to procedures (including as to timing, rounding, minimum amounts, Type and Interest Periods and calculation of Applicable Discount in accordance with Section 2.03(a)(iii)(C) above) established by the Administrative Agent in consultation with the applicable Borrower Purchasing Party.

 

(G)                               Prior to the delivery of a Discounted Voluntary Prepayment Notice, upon written notice to the Administrative Agent, (A) the applicable Borrower Purchasing Party may withdraw its offer to make a Discounted Voluntary Prepayment pursuant to any Discounted Prepayment Option Notice and (B) any Lender may withdraw its offer to participate in a Discounted Voluntary Prepayment pursuant to any Lender Participation Notice.

 

(H)                              For the avoidance of doubt, each Discounted Voluntary Prepayment shall, for purposes of this Agreement, be deemed to be an automatic and immediate cancellation and extinguishment of the Term Loans prepaid.  With respect to each Discounted Voluntary Prepayment, (1) the applicable Borrower Purchasing Party shall pay all accrued and unpaid interest, if any, on the par principal amount of the applicable Term Loans to the date of the Discounted Voluntary Prepayment and, if any Eurodollar Rate Loan is prepaid on a date other than the scheduled last day of the Interest Period applicable thereto, such Borrower Purchasing Party shall also pay any amounts owing pursuant to Section 3.05 and (2) such Discounted Voluntary Prepayment shall not change the scheduled amortization of the Term Loans required by Section 2.05, except to reduce the amount outstanding and due and payable on the Maturity Date of the Class of Term Loans subject to such Discounted Voluntary Prepayment (and such reduction, for the avoidance of doubt, shall only apply, on a non-pro-rata basis, to the Term Loans that are the subject of such Discounted Voluntary Prepayment).

 

(iv)                              In connection with any voluntary prepayment of any Class of Term Loans pursuant to this Section 2.03(a), such voluntary prepayment shall be applied first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner that minimizes the amount of any payments required to be made by the Borrower pursuant to Section 3.05.

 

(b)                           Mandatory.

 

(i)                                     Within five (5) Business Days after financial statements have been delivered pursuant to Section 6.01(a) and the related Compliance Certificate has been delivered pursuant to Section 6.02(a), but in any event not later than one hundred and twenty-five (125) days after the end of each fiscal year of the Borrower beginning with the first full fiscal year ended after the Closing Date, the Borrower shall prepay an aggregate principal amount of Term Loans in an amount equal to (A) 50% (as may be adjusted

 

65



 

pursuant to the proviso below) of Excess Cash Flow for the fiscal year covered by such financial statements commencing with the first full fiscal year ended after the Closing Date minus (B) the aggregate amount of voluntary principal prepayments of (x) the Term Loans pursuant to Section 2.03(a)(i), (y) the Second Lien Loans pursuant to Section 2.03(a)(i) of the Second Lien Credit Agreement and (z) the ABL Loans pursuant to Section 2.05(a)(i) of the ABL Facility (but only to the extent accompanied by a corresponding permanent reduction in the revolving credit commitments), minus (C) the aggregate discounted amount actually paid in cash by the Borrower Purchasing Parties in connection with all Discounted Voluntary Prepayments pursuant to Section 2.03(a)(iii) and all Discounted Voluntary Prepayments (as defined in the Second Lien Credit Agreement) of the Second Lien Loans pursuant to Section 2.03(a)(iii) of the Second Lien Credit Agreement (in the case of clauses (B) and (C), to the extent financed with internally generated funds); provided that such percentage shall be reduced to 25% or 0% if the Total Leverage Ratio as of the last day of the prior fiscal year was less than 5.50:1.00 or 5.00:1.00, respectively.

 

(ii)                                  (A)                               If (x) the Borrower or any Restricted Subsidiary Disposes of any property or assets (other than any Disposition of (i) assets comprising the ABL Priority Collateral or (ii) any property or assets by the Borrower or any of its Restricted Subsidiaries permitted by Section 7.05(a), (b), (c), (d), (e), (f), (h), (i), (j), (k), (l) or (n)) or (y) any Casualty Event (other than any Casualty Event with respect to assets comprising the ABL Priority Collateral) occurs, and any transaction or series of related transactions described in the foregoing clauses (x) and (y) results in the realization or receipt by the Borrower and its Restricted Subsidiaries of Net Cash Proceeds in excess of $1,000,000 (any such transaction or series of related transactions being a “Relevant Transaction”), then if such Relevant Transaction, together with all other Relevant Transactions occurring in the same fiscal year of the Borrower, would result in the realization or receipt by the Borrower and its Restricted Subsidiaries of aggregate Net Cash Proceeds in excess of $2,500,000, the Borrower shall, except to the extent the Borrower elects to reinvest all or a portion of such Net Cash Proceeds in accordance with Section 2.03(b)(ii)(B) (which election may only be made if no Event of Default has occurred and is then continuing), prepay an aggregate principal amount of Term Loans in an amount equal to 100% of all Net Cash Proceeds received from such Relevant Transaction within two (2) Business Days of receipt thereof by the Borrower or such Restricted Subsidiary.

 

(A)             With respect to any Net Cash Proceeds realized or received with respect to any Disposition or any Casualty Event (other than as specifically excluded in Section 2.03(b)(ii)(A)), at the option of the Borrower, and so long as no Event of Default shall have occurred and be continuing, the Borrower or the applicable Restricted Subsidiary may reinvest all or any portion of such Net Cash Proceeds in assets useful for its business within three hundred and sixty-five (365) days following receipt of such Net Cash Proceeds (or, if Holdings, the Borrower or the relevant Restricted Subsidiary, as applicable, has contractually committed within 365 days following receipt of such Net Cash Proceeds to reinvest such Net Cash Proceeds, 545 days following receipt of such Net Cash Proceeds); provided, however, that if any Net Cash Proceeds are no longer intended to be so reinvested at any time after delivery of a notice of reinvestment election, an amount equal to any such Net Cash Proceeds shall be immediately applied to the prepayment of the Term Loans as set forth in this Section 2.03.

 

66



 

(iii)                               Upon the incurrence or issuance by the Borrower or any of its Restricted Subsidiaries of any Specified Refinancing Debt or any Indebtedness not expressly permitted to be incurred or issued pursuant to Section 7.03, the Borrower shall prepay an aggregate principal amount of Term Loans in an amount equal to 100% of all Net Cash Proceeds received therefrom immediately upon receipt thereof by the Borrower or such Restricted Subsidiary.

 

(iv)                              Subject to Sections 2.12(b)(ii) and 2.13, each prepayment of Term Loans pursuant to this Section 2.03(b) shall be applied pro rata among the Term Facility and, unless otherwise provided in the documentation governing any Incremental First Lien Term Loans, any Incremental First Lien Term Loans (or, in the case of the incurrence of Specified Refinancing Debt, to the Term Facility or an Incremental First Lien Term Facility, as designated by the Borrower, to be refinanced with the proceeds thereof and allocated among the Term Facility or such Incremental First Lien Term Facilities, as specified by the Borrower) (and within any Class of the Term Facility and the Incremental First Lien Term Loans on a pro rata basis to the applicable Lenders of such Class) and (i) in the case of the Term Facility, to the principal repayment installments thereof, in direct order of maturities,  to the remaining installments of each Class of the Term Facility, or as otherwise directed by the Borrower to the remaining installments of each Class of the Term Facility, and (ii) in the case of each Incremental First Lien Term Loan Tranche, as set forth in the Incremental First Lien Term Commitments Amendment with respect to such Incremental First Lien Term Loan Tranche; and each such prepayment shall be paid to the Term Lenders and the Incremental First Lien Lenders in accordance with their respective Pro Rata Shares.

 

(v)                                 Funding Losses, Etc.  All prepayments under this Section 2.03 shall be made together with, in the case of any such prepayment of a Eurodollar Rate Loan on a date other than the last day of an Interest Period therefor, any amounts owing in respect of such Eurodollar Rate Loan pursuant to Section 3.05.  Notwithstanding any of the other provisions of Section 2.03(b), so long as no Event of Default shall have occurred and be continuing, if any prepayment of Eurodollar Rate Loans is required to be made under this Section 2.03(b), other than on the last day of the Interest Period therefor, the Borrower may, in its sole discretion, deposit the amount of any such prepayment otherwise required to be made thereunder into a Cash Collateral Account until the last day of such Interest Period, at which time the Administrative Agent shall be authorized (without any further action by or notice to or from the Borrower or any other Loan Party) to apply such amount to the prepayment of such Term Loans in accordance with this Section 2.03(b).  Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent shall also be authorized (without any further action by or notice to or from the Borrower or any other Loan Party) to apply such amount to the prepayment of the outstanding Term Loans in accordance with this Section 2.03(b).

 

(vi)                              Foreign Dispositions.  Notwithstanding any other provisions of this Section 2.03, (i) to the extent that any of or all the Net Cash Proceeds of any Disposition by a Foreign Subsidiary (a “Foreign Disposition”) or Excess Cash Flow attributable to Foreign Subsidiaries are prohibited or delayed by applicable local law from being repatriated to the United States, the portion of such Net Cash Proceeds or such Excess Cash

 

67



 

Flow so affected (any such portion being “Restricted Proceeds”) will not be required to be applied to repay Term Loans at the times provided in this Section 2.03(b) but may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable local law will not permit repatriation to the United States (the Borrower hereby agreeing to cause the applicable Foreign Subsidiary to promptly take all actions required by the applicable local law to permit such repatriation), and once such repatriation of any of such Restricted Proceeds is permitted under the applicable local law, such repatriation will be immediately effected and such repatriated Restricted Proceeds will be promptly (and in any event not later than two (2) Business Days after such repatriation) applied (net of additional taxes payable or reserved against as a result thereof) to the repayment of the Term Loans pursuant to this Section 2.03(b) and (ii) to the extent that the Borrower has determined in good faith that repatriation of any of or all the Net Cash Proceeds of any Foreign Disposition or Excess Cash Flow attributable to Foreign Subsidiaries would have material adverse tax cost consequences with respect to such Net Cash Proceeds or such portion of the Excess Cash Flow, as the case may be, such Net Cash Proceeds or portion of the Excess Cash Flow, as the case may be, so affected may be retained by the applicable Foreign Subsidiary, provided that, in the case of this clause (ii), on or before the date on which any such Net Cash Proceeds or portion of Excess Cash Flow, as the case may be, so retained would otherwise have been required to be applied to reinvestments or prepayments pursuant to Section 2.03(b), the Borrower applies an amount equal to such Net Cash Proceeds or such portion of Excess Cash Flow, as the case may be, to such reinvestments or prepayments, as applicable, as if such Net Cash Proceeds or such portion of the Excess Cash Flow, as the case may be, had been received by the Borrower rather than such Foreign Subsidiary, less, in the case of such Net Cash Proceeds only, the amount of additional taxes that would have been payable or reserved against if such Net Cash Proceeds had been repatriated.

 

(vii)                           If there are no Declining Lenders pursuant to Section 2.03(c) in connection with any prepayment of any Class of Term Loans pursuant to this Section 2.03(b), such prepayment shall be applied first to Base Rate Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner that minimizes the amount of any payments required to be made by the Borrower pursuant to Section 3.05.

 

(c)                            Term Opt-out.

 

With respect to any prepayment of the Term Facility and the Incremental First Lien Term Loans pursuant to Section 2.03(b) (other than prepayments pursuant to Section 2.03(b)(iii)), any Term Lender or Incremental First Lien Lender, at its option, may elect not to accept such prepayment; provided, for the avoidance of doubt, that no such Term Lender or Incremental First Lien Lender may elect to accept a partial prepayment.  Upon receipt by the Administrative Agent of any such prepayment of the Term Facility and the Incremental First Lien Term Loans, the amount of the prepayment that is available to prepay the Term Loans and the Incremental First Lien Term Loans (the “Prepayment Amount”) shall be deposited in a Cash Collateral Account on terms reasonably satisfactory to the Administrative Agent and the Borrower, pending application of such amount on the Prepayment Date as set forth below and promptly after the date of such receipt, the Administrative Agent shall notify the Term Lenders and the Incremental First Lien Lenders of the amount available to prepay the Term Loans and the Incremental First Lien Lenders

 

68



 

and the date on which such prepayment shall be made (the “Prepayment Date”), which date shall be ten (10) Business Days after the date of such receipt.  Any Lender declining such prepayment (a “Declining Lender”) shall give written notice to the Administrative Agent by 11:00 a.m. (New York Time) on the Business Day immediately preceding the Prepayment Date.  On the Prepayment Date, an amount equal to that portion of the Prepayment Amount accepted by the Term Lenders and the Incremental First Lien Lenders other than the Declining Lenders (such Lenders being the “Accepting Lenders”) to prepay Term Loans and the Incremental First Lien Lenders owing to such Accepting Lenders shall be withdrawn from the applicable Cash Collateral Account and applied ratably to prepay Term Loans and Incremental First Lien Term Loans owing to such Accepting Lenders in the manner described in Section 2.03(b) for such prepayment.  Any amounts that would otherwise have been applied to prepay Term Loans or Incremental First Lien Term Loans owing to Declining Lenders (x) shall instead be made available for any mandatory prepayment of the Second Lien Loans (or any Specified Second Lien Refinancing Debt) that may be required at such time pursuant to Section 2.03(b) of the Second Lien Credit Agreement (or comparable documentation governing any Specified Second Lien Refinancing Debt) and (y) to the extent declined by the lenders under the Second Lien Credit Agreement (and any Specified Second Lien Refinancing Debt), together with the amounts that would otherwise have been applied to prepay Term Loans owing to Declining Lenders but were required to be made available for any mandatory prepayment of the Second Lien Loans (or any Specified Second Lien Refinancing Debt), shall instead be retained by the Borrower (such amounts, “Declined Amounts”).

 

(d)                                 Prepayment Premium.  (x) Any optional prepayment of any portion of the outstanding Term Loans made pursuant to Section 2.03(a)(i) in connection with a Repricing Transaction (including any mandatory assignment pursuant to Section 3.07 in connection therewith) and (y) any prepayment of Term Loans pursuant to Section 2.03(b)(iii) in connection with a Repricing Transaction or any amendment to this Agreement in connection with a Repricing Transaction (in each case including any mandatory assignment pursuant to Section 3.07 in connection therewith), in each case of clause (x) and clause (y) on or prior to the date that is six months following the SecondThird Amendment Effective Date shall be subject to a premium equal to the principal amount of Term Loans subject to such prepayment or the principal amount of Term Loans affected by such amendment (or mandatorily assigned in connection therewith), as applicable, multiplied by 1%.  Any prepayment of all or any portion of the outstanding Term Loans on or after the date that is six months following the SecondThird Amendment Effective Date shall not be subject to a premium.

 

2.04                        Termination or Reduction of Term Commitments.

 

(a)                           Optional.  The Borrower may, upon written notice to the Administrative Agent, terminate the unused portions of the Term Commitments, or from time to time permanently reduce the unused portions of the Term Commitments; provided that (i) any such notice shall be received by the Administrative Agent five (5) Business Days prior to the date of termination or reduction and (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $1,000,000 in excess thereof.  The Borrower shall pay to the Administrative Agent, in each case, for the account of the applicable Lenders, on the date of each termination or reduction, any fees on the amount of the Term Commitments so terminated or reduced accrued to but excluding the date of such termination or reduction.

 

69



 

(b)                           Mandatory.  The aggregate Term Commitments shall be automatically and permanently reduced to zero after the making of the Term Borrowing, if any, on the SecondThird Amendment Effective Date.

 

(c)                            Application of Commitment Reductions.  The Administrative Agent will promptly notify the Lenders of any termination or reduction of unused portions of the Term Commitments under this Section 2.06. Upon any reduction of unused Term Commitments under the Term Facility, the Term Commitment of each Lender under such Term Facility shall be reduced by such Lender’s Pro Rata Share of the amount by which such Term Facility is reduced (other than the termination of the Term Commitment of any Lender as provided in Section 3.07).

 

2.05                        Repayment of Term Loans.

 

(a)                           Term Loans.  The Borrower shall repay to the Administrative Agent for the ratable account of the Term Lenders the aggregate principal amount of all Term Loans outstanding in consecutive quarterly installments as follows (which installments shall, to the extent applicable, be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Sections 2.03 and 2.04, or be increased as a result of any increase in the amount of Term Loans pursuant to Section 2.12 (such increased amortization payments to be calculated in the same manner (and on the same basis) as the schedule set forth below for the Term Loans made as of the SecondThird Amendment Effective Date), with each such installment due and payable on each date set forth below (or, if such day is not a Business Day, on the immediately preceding Business Day):

 

Date

 

Term Loan Principal Amortization Payment

7/31/2017

 

$1,444,039.53

10/31/2017

 

$1,444,039.53

1/31/2018

 

$1,444,039.53

4/30/2018

 

$1,444,039.53

7/31/2018

 

$1,444,039.532,492,099.14

10/31/2018

 

$1,444,039.532,492,099.14

1/31/2019

 

$1,444,039.532,492,099.14

4/30/2019

 

$1,444,039.532,492,099.14

7/31/2019

 

$1,444,039.532,492,099.14

10/31/2019

 

$1,444,039.532,492,099.14

1/31/2020

 

$1,444,039.532,492,099.14

4/30/2020

 

$1,444,039.532,492,099.14

7/31/2020

 

$1,444,039.532,492,099.14

10/31/2020

 

$1,444,039.532,492,099.14

1/31/2021

 

$1,444,039.532,492,099.14

4/30/2021

 

$1,444,039.532,492,099.14

 

70



 

Date

 

Term Loan Principal Amortization Payment

7/31/2021

 

$1,444,039.532,492,099.14

10/31/2021

 

$1,444,039.532,492,099.14

1/31/2022

 

$1,444,039.532,492,099.14

4/30/2022

 

$1,444,039.532,492,099.14

7/31/2022

 

$1,444,039.532,492,099.14

10/31/2022

 

$1,444,039.532,492,099.14

1/31/2023

 

$1,444,039.532,492,099.14

4/30/2023

 

$2,492,099.14

7/31/2023

 

$2,492,099.14

10/31/2023

 

$2,492,099.14

1/31/2024

 

$2,492,099.14

4/30/2024

 

$2,492,099.14

7/31/2024

 

$2,492,099.14

10/31/2024

 

$2,492,099.14

1/31/2025

 

$2,492,099.14

4/30/2025

 

$2,492,099.14

Maturity Date of the Term Facility

 

Remaining Balance

 

provided, however, that the final principal repayment installment of each Class of Term Loans shall be repaid on the Maturity Date for such Class of Term Loans and in any event shall be in an amount equal to the aggregate principal amount of all Term Loans of such Class outstanding on such date.

 

(b)                           Incremental First Lien Term Loans.  The Borrower shall repay to the Administrative Agent for the ratable account of the Incremental First Lien Lenders the aggregate principal amount of all Incremental First Lien Term Loans outstanding of each Incremental First Lien Term Loan Tranche in such installments as set forth in the Incremental First Lien Term Commitments Amendment with respect to such Incremental First Lien Term Loan Tranche (which installments shall, to the extent applicable, be reduced as a result of the application of prepayments in accordance with the order of priority set forth in Sections 2.03 and 2.04, or be increased as a result of any increase in the amount of Incremental First Lien Term Loans of such Incremental First Lien Term Loan Tranche pursuant to Section 2.12 (such increased amortization payments to be calculated in the same manner (and on the same basis) as the schedule set forth in the applicable Incremental First Lien Term Commitment Amendment for the Incremental First Lien Term Loans made as of the initial Incremental First Lien Term Commitments Effective Date with respect to such Incremental First Lien Term Loan Tranche).

 

71



 

2.06                        Interest.

 

(a)                           Subject to the provisions of Section 2.06(b), (i) each Eurodollar Rate Loan that is a Term Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the sum of (A) the greater of (x) the Eurodollar Rate for such Interest Period and (y) 1.000.00%, plus (B) the Applicable Rate for Eurodollar Rate Loans that are Term Loans; and (ii) each Base Rate Loan that is a Term Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of (A) the greater of (x) 2.000.00% and (y) the Base Rate, plus (B) the Applicable Rate for Base Rate Loans that are Term Loans.

 

(b)                           The Borrower shall pay interest on the principal amount of all overdue First Lien Obligations hereunder (including, for the avoidance of doubt, following the occurrence of an Event of Default pursuant to Section 8.01(f)) at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.  Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

 

(c)                            Interest on each Term Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein.  Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

 

2.07                        Fees.

 

(a)                           The Borrower shall pay to the Arrangers, the Administrative Agent and the Collateral Agent for their own respective accounts fees in the amounts and at the times specified in the Fee Letter.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

(b)                           The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

 

2.08                        Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.  All computations of interest for Base Rate Loans shall be made on the basis of a year of three hundred and sixty-five (365) or three hundred and sixty-six (366) days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a three hundred and sixty (360) day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a three hundred and sixty-five (365) day year).  Interest shall accrue on each Term Loan for the day on which the Term Loan is made, and shall not accrue on a Term Loan, or any portion thereof, for the day on which the Term Loan or such portion is paid, provided, that any Term Loan that is repaid on the same day on which it is made shall, subject to Section 2.10(a), bear interest for one (1) day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

72



 

2.09                        Evidence of Indebtedness.

 

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

 

(b)                           Entries made in good faith by each Lender in its account or accounts pursuant to Section 2.09(a), shall be prima facie evidence of the amount of principal and interest due and payable or to become due and payable from the Borrower to such Lender under this Agreement and the other Loan Documents, absent manifest error; provided, that the failure of such Lender to make an entry, or any finding that an entry is incorrect, in such account or accounts shall not limit the obligations of the Borrower under this Agreement and the other Loan Documents.

 

2.10                        Payments Generally; Administrative Agent’s Clawback.

 

(a)                           General.  Subject to Section 3.01, all payments to be made by the Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, in each case, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. (New York Time).  The Administrative Agent will promptly distribute to each Lender its Pro Rata Share in respect of the Term Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. (New York Time) shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be; provided, however, that, if such extension would cause payment of interest on or principal of Eurodollar Rate Loans to be made in the next succeeding calendar month, such payment shall be made on the immediately preceding Business Day.

 

(b)                           (i)                                     Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to 12:00 noon

 

73



 

(New York Time) on the date of a Term Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Term Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Term Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (x) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate reasonably determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any reasonable administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (y) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.  If such Lender pays its share of the applicable Term Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Term Borrowing.  Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

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

 

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this Section 2.10(b) shall be conclusive, absent manifest error.

 

(c)                            Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for any Term Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit

 

74



 

Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender on demand, without interest.

 

(d)                           Obligations of the Lenders Several.  The obligations of the Lenders hereunder to make Term Loans and to make payments pursuant to Section 9.07 are several and not joint.  The failure of any Lender to make any Term Loan or to make any payment under Section 9.07 on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Term Loan or to make its payment under Section 9.07.

 

(e)                            Funding Source.  Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Term Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Term Loan in any particular place or manner.

 

(f)                             Insufficient Funds.  If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties.

 

(g)                            Unallocated Funds.  If the Administrative Agent receives funds for application to the First Lien Obligations of the Loan Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents do not specify the manner in which such funds are to be applied, the Administrative Agent may, but shall not be obligated to, elect to distribute such funds to each of the Lenders in accordance with such Lender’s Pro Rata Share of the Outstanding Amount of all Term Loans outstanding at such time, in repayment or prepayment of such of the outstanding Term Loans or other First Lien Obligations then owing to such Lender.

 

2.11                        Sharing of Payments.  If, other than as expressly provided elsewhere herein (including the application of funds arising from the existence of a Defaulting Lender), any Lender shall obtain on account of the Term Loans made by it, any payment (whether voluntary, involuntary, through the exercise of any right of setoff, or otherwise) in excess of its ratable share (or other share contemplated hereunder) thereof, such Lender shall immediately (a) notify the Administrative Agent of such fact and (b) purchase from the other Lenders such participations in the Term Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment in respect of such Term Loans, pro rata with each of them; provided, however, that if all or any portion of such excess payment is thereafter recovered from the purchasing Lender under any of the circumstances described in Section 10.06 (including pursuant to any settlement entered into by the purchasing Lender in its discretion), such purchase shall to that extent be rescinded and each other Lender shall repay to the purchasing Lender the purchase price paid therefor, together with an amount equal to such paying Lender’s ratable share (according to the

 

75



 

proportion of (i) the amount of such paying Lender’s required repayment to (ii) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered, without further interest thereon.  The Borrower agrees that any Lender so purchasing a participation from another Lender may, to the fullest extent permitted by law, exercise all its rights of payment (including the right of setoff, but subject to Section 10.09) with respect to such participation as fully as if such Lender were the direct creditor of the Borrower in the amount of such participation.  The Administrative Agent will keep records (which shall be conclusive and binding in the absence of manifest error) of participations purchased under this Section 2.11 and will in each case notify the Lenders following any such purchases or repayments.  Each Lender that purchases a participation pursuant to this Section 2.11 shall from and after such purchase have the right to give all notices, requests, demands, directions and other communications under this Agreement with respect to the portion of the First Lien Obligations purchased to the same extent as though the purchasing Lender were the original owner of the First Lien Obligations purchased.  For the avoidance of doubt, the provisions of this Section shall not be construed to apply to the prepayments pursuant to Section 2.03(a)(iii), or Section 2.03(b)(iii) (out of proceeds of the Specified Refinancing Debt), the implementation of the Incremental First Lien Term Commitments Amendment or to the assignments and participations described in Section 10.07.

 

2.12                        Incremental First Lien Term Facilities.

 

(a)                           Upon written notice to the Administrative Agent (which shall promptly notify the Lenders), at any time after the ClosingThird Amendment Effective Date, the Borrower may request one or more additional tranches of term loans (each an “Incremental First Lien Term Commitment” and all of them, collectively, the “Incremental First Lien Term Commitments”); provided no Lender shall be required to participate in any Incremental First Lien Facility; and provided, further that after giving effect to any such addition, the aggregate amount of Incremental First Lien Term Commitments that have been added pursuant to this Section 2.12 (together with the aggregate amount of (i) Permitted Other First Lien Indebtedness incurred in lieu of the Incremental First Lien Term Facilities pursuant to clause (x) of the definition thereof, (ii) Incremental Second Lien Term Loans incurred pursuant to Section 2.12(a)(x) of the Second Lien Credit Agreement and (iii) Permitted Other Second Lien Indebtedness incurred pursuant to clause (x) of the definition thereof) shall not exceed (x) $100,000,000, plus (y) such additional amount that would not, after giving effect on a Pro Forma Basis to the incurrence thereof cause the First Lien Leverage Ratio (without netting the cash and Cash Equivalents constituting proceeds of the applicable Incremental First Lien Term Facilities) as at the end of the most recently ended fiscal quarter of the Borrower for which financial statements are available to exceed (I) 4.20:1.00 or (II) if the Incremental First Lien Term Facility is incurred to finance a Permitted Acquisition, the First Lien Leverage Ratio immediately preceding the incurrence of such Incremental First Lien Term Facility and consummation of such Permitted Acquisition, and any such addition shall be in an aggregate amount of not less than $20,000,000 or any whole multiple of $1,000,000 in excess thereof.  The Borrower may incur Incremental First Lien Term Commitments pursuant to either clause (x) or clause (y) of the second proviso of the immediately preceding sentence and shall not be obligated to initially incur Incremental First Lien Term Commitments pursuant to clause (x) prior to incurring any Incremental First Lien Term Commitments pursuant to clause (y); provided, however, that to the extent the Borrower

 

76



 

incurs Incremental First Lien Term Commitments on any Incremental First Lien Term Commitments Effective Date pursuant to clause (y), the Borrower may not in addition rely on clause (x) for the incurrence of such Incremental First Lien Term Commitments on such Incremental First Lien Term Commitments Effective Date.    Any loans made in respect of any such Incremental First Lien Term Commitments (the “Incremental First Lien Term Loans”) may be made, at the option of the Borrower, by either (i) increasing the Term Commitments with the same terms (including pricing) as the existing Term Loans, in which case such Incremental First Lien Term Loans shall constitute Term Loans for all purposes hereunder and under the other Loan Documents or (ii) creating a new tranche of term loans (an “Incremental First Lien Term Loan Tranche”, and increases of the Term Commitments pursuant to the preceding sub-clauses (i) and (ii), each an “Incremental First Lien Term Facility”).  The Incremental First Lien Term Facilities shall rank either pari passu or junior (as elected by the Borrower in its sole discretion) in right of payment and in respect of lien priority as to the Collateral with the outstanding Term Loans under the Term Facility or any other Incremental First Lien Term Facility.  The proceeds of the Incremental First Lien Term Facilities shall be used for working capital, capital expenditures and other general corporate purposes (including any actions permitted by Article VII, including permitted Restricted Payments) the Borrower and its Restricted Subsidiaries.

 

(b)                           The Incremental First Lien Term Loans comprising each Incremental First Lien Term Loan Tranche:

 

(i)                                     shall have a maturity date that is not prior to the Latest Maturity Date of all Classes of Term Loans then in effect and will have a Weighted Average Life to Maturity that is not shorter than that of the Term Loans;

 

(ii)                                  shall share ratably (and may not share more than ratably) in any prepayments of the Term Facility (unless the Incremental First Lien Lenders with respect to such Incremental First Lien Term Loans agree to receive prepayments after the prepayments of the Term Facility or any other Incremental First Lien Term Loans);

 

(iii)                               except as set forth in subsection (a) above and this subsection (b) with respect to prepayment events, maturity date, interest rate, yield, fees and original issue discounts and except with respect to the amortization schedule for the Incremental First Lien Term Loans and the permitted use of proceeds thereof, shall have terms substantially the same terms as (and in any event no more favorable than) the outstanding Term Loans (and to the extent materially differing from the terms of the outstanding Term Loans, shall be reasonably satisfactory to the Administrative Agent); provided that if the initial yield (as determined by the Administrative Agent as set forth below) on any Incremental First Lien Term Loan Tranche incurred on or prior to the date that is 1812 months following the ClosingThird Amendment Effective Date exceeds by more than 5075 basis points (the amount of such excess above 5075 basis points being herein referred to as the “Yield Differential”) the yield then in effect for outstanding Term Loans (such yield, in the case of each of such Incremental First Lien Term Loan Tranche and the Term Loans, for purposes of this proviso being deemed to include all upfront or similar fees or original issue discount paid by the Borrower generally to the Lenders who provide such Incremental First Lien Term Loan Tranche or to the Lenders who provided the outstanding Term Loans in

 

77



 

the primary syndication thereof based on an assumed four-year life to maturity), then the Applicable Rate then in effect for outstanding Term Loans shall automatically be increased by the Yield Differential, effective upon the making of the Incremental First Lien Term Loans under the Incremental First Lien Term Loan Tranche.

 

For purposes of clause (iii) above, the initial yield on any Incremental First Lien Term Loan Tranche shall be determined by the Administrative Agent to be equal to the sum of (x) the interest rate margin for loans under the Incremental First Lien Term Loan Tranche that bear interest based on the Eurodollar Rate (for the avoidance of doubt, including the Eurodollar Rate and the margin or spread) and (y) if the Incremental First Lien Term Loan Tranche is originally advanced at a discount or the Lenders making the same receive a fee directly or indirectly from Holdings or the Borrower for doing so (the amount of such discount or fee, expressed as a percentage of the Incremental First Lien Term Loan Tranche, being referred to herein as “OID”), the amount of such OID divided by the lesser of (A) the average life to maturity of the Incremental First Lien Term Loan Tranche and (B) four); provided that for purposes of clause (x) above, if either the lowest permissible Eurodollar Rate or the lowest permissible Base Rate, in each case applicable to such Incremental First Lien Term Loan Tranche, is greater than 1.00% or the lowest permissible Base Rate applicable to such Incremental First Lien Term Loan Tranche is greater than 2.000.00%, the difference between such “floor” and 1.00%, in the case of Incremental First Lien Term Loans that are Eurodollar Rate Loans, and 2.00%, in the case of Incremental First Lien Term Loans that are Base Rate Loans,0.00% shall be equated to interest rate margin for purposes of determining whether an increase to the interest rate margin under the existing Term Facility shall be required, to the extent an increase in the interest rate floor in the existing Term Facility would cause an increase in the interest rate then in effect thereunder, and in such case the interest rate floor (but not the interest rate margin) applicable to the existing Term Facility shall be increased to the extent of such differential between interest rate floors.

 

(c)                            Each notice from the Borrower pursuant to this Section 2.12 shall set forth the requested amount and proposed terms of the Incremental First Lien Term Commitments.  At the time of the sending of such notice, the Borrower (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten (10) Business Days from the date of delivery of such notice to the Lenders).  Incremental First Lien Term Loans (or any portion thereof) may be made by any existing Lender or by any other bank or investing entity (but in no case (i) by any Loan Party, (ii) except in compliance with the proviso of Section 2.12(h) below, by an Affiliated Lender, (iii) by any Defaulting Lender or any of its Subsidiaries, (iv) by any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in clause (iii), or (v) by any natural person) (each, except to the extent excluded pursuant to the foregoing parenthetical, an “Incremental First Lien Lender”), in each case on terms permitted in this Section and otherwise on terms reasonably acceptable to the Administrative Agent, provided that the Administrative Agent shall have consented (not to be unreasonably withheld) to such Lender’s or Incremental First Lien Lender’s, as the case may be, making such Incremental First Lien Term Loans if such consent would be required under Section 10.07 for an assignment of Term Loans, to such Lender or Incremental First Lien Lender, as the case may be.  No Lender shall be obligated to provide any Incremental First Lien Term Loans unless it so agrees.  Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to provide an Incremental First Lien Term

 

78



 

Commitment and, if so, whether by an amount equal to, greater than, or less than its Pro Rata Share of such requested increase (which shall be calculated on the basis of the amount of the funded and unfunded exposure under the Term Facility held by each Lender).  Any Lender not responding within such time period shall be deemed to have declined to provide an Incremental First Lien Term Commitment.  The Administrative Agent shall notify the Borrower and each Lender of the Lenders’ responses to each request made hereunder.  To achieve the full amount of a requested increase, the Borrower may also invite additional Eligible Assignees to become Term Lenders pursuant to an accession agreement in form and substance reasonably satisfactory to the Administrative Agent.

 

(d)                           Incremental First Lien Term Commitments shall become Term Commitments under this Agreement pursuant to an amendment (an “Incremental First Lien Term Commitments Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by Holdings, the Borrower, each Lender, as the case may be agreeing to provide such Term Commitment, if any, each Incremental First Lien Lender, if any, and the Administrative Agent.  An Incremental First Lien Term Commitments Amendment may, without the consent of any other Lenders, effect such amendments to any Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section.

 

(e)                            If any Incremental First Lien Term Commitments are added in accordance with this Section 2.12, the Administrative Agent and the Borrower shall determine the effective date (the “Incremental First Lien Term Commitments Effective Date”) and the final allocation of such addition.  The Administrative Agent shall promptly notify the Borrower and the Lenders of the final allocation of such addition and the Incremental First Lien Term Commitments Effective Date.

 

(f)                             The effectiveness of any Incremental First Lien Term Commitments Amendment shall, unless otherwise agreed to by the Administrative Agent, each Lender party thereto, if any, and the Incremental First Lien Lenders, if any, with respect to the conditions set forth in clauses (ii)(A) and (ii)(C) below as set forth in the last paragraph of this clause (f), be subject to the satisfaction on the date thereof of each of the following conditions:

 

(i)                                     the Administrative Agent shall have received on or prior to the Incremental First Lien Term Commitments Effective Date each of the following, each dated the applicable Incremental First Lien Term Commitments Effective Date unless otherwise indicated or agreed to by the Administrative Agent and each in form and substance reasonably satisfactory to the Administrative Agent:  (A) the applicable Incremental First Lien Term Commitments Amendment; (B) certified copies of resolutions of each Loan Party approving the execution, delivery and performance of the Incremental First Lien Term Commitments Amendment and either certified copies of the Organization Documents of each Loan Party or a certification by a Responsible Officer of each Loan Party that there have been no changes to the Organization Documents of such Loan Party since the Closing Date; (C) to the extent requested by the Administrative Agent, a Mortgage modification or a new Mortgage with respect to each Mortgaged Property and the related documents, agreements and instruments (including legal opinions) set forth in Sections 6.12(a)(iii) and 6.12(a)(iv), which Mortgage modification, new Mortgage and

 

79



 

related documents, agreements and instruments (including legal opinions) may, if agreed to by the Administrative Agent in its sole discretion, be delivered within sixty (60) days of the date of effectiveness of the applicable Incremental First Lien Term Commitments Amendment (or such longer period as agreed to by the Administrative Agent in its sole discretion); and (D) a favorable opinion of counsel for the Loan Parties dated the Incremental First Lien Term Commitments Effective Date, to the extent requested by the Administrative Agent, addressed to the Administrative Agent, the Collateral Agent and the Lenders and in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent;

 

(ii)           (A) the conditions precedent set forth in Section 4.02 shall have been satisfied both before and after giving effect to such Incremental First Lien Term Commitments Amendment and the additional credit extensions provided thereby, (B) such increase shall be made on the terms and conditions provided for above, and (C) both at the time of any request for Incremental First Lien Term Commitments and upon the effectiveness of any Incremental First Lien Term Commitments Amendment, no Default or Event of Default shall exist and at the time that any such Incremental Loan is made (and after giving effect thereto) no Default or Event of Default shall exist; and

 

(iii)          there shall have been paid to the Administrative Agent, for the account of the Administrative Agent and the Lenders (including any Person becoming a Lender as part of such Incremental First Lien Term Commitments Amendment on the related Incremental First Lien Term Commitments Effective Date), as applicable, all fees and, to the extent required by Section 10.04, expenses (including reasonable out-of-pocket fees, charges and disbursements of counsel) that are due and payable on or before the Incremental First Lien Term Commitments Effective Date.

 

If the proceeds of any Incremental First Lien Term Facility will be used to consummate a Permitted Acquisition and the terms of the definitive acquisition agreement (the “Subject Acquisition Agreement”) in respect thereof so require, (x) the condition that, at the time of any request for Incremental First Lien Term Commitments and upon the effectiveness of any Incremental First Lien Term Commitments Amendment and at the time that any such Incremental Loan is made (and after giving effect thereto), no Default or Event of Default shall exist and (y) the condition that the representations and warranties of the Borrower and each other Loan Party contained in Article V or any other Loan Document shall be true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) at the time that any such Incremental Loan is made (and after giving effect thereto), may in each case of the foregoing clauses (x) and (y) be waived by the lenders under such Incremental First Lien Term Facility without the consent of any other Lenders.

 

(g)                            On each Incremental First Lien Term Commitments Effective Date, each Lender or Eligible Assignee which is providing an Incremental First Lien Term Commitment (i) shall become a “Lender” for all purposes of this Agreement and the other Loan Documents, (ii) shall have an Incremental First Lien Term Commitment which shall become a “Term Commitment” hereunder and (iii) in the case of an Incremental First Lien Term Commitment, shall make an Incremental First Lien Term Loan to the Borrower in a principal amount equal to such Incremental First Lien Term Commitment, and such

 

80



 

Incremental First Lien Term Loan shall be a “Term Loan” for all purposes of this Agreement and the other Loan Documents (except that the interest rate applicable to any Incremental First Lien Term Loan under an Incremental First Lien Term Loan Tranche may be higher or lower).

 

(h)                           This Section 2.12 shall supersede any provision of Section 2.11 or Section 10.01 to the contrary; provided that, notwithstanding the foregoing, any Affiliated Lender providing any Incremental First Lien Term Commitments or Incremental First Lien Term Loans pursuant to this Section 2.12 shall be subject to the restrictions with respect to Affiliated Lenders set forth in clauses (i) and (j) of Section 10.07.

 

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

 

(i)            that Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definitions of “Required Lenders” in Section 1.01 and in Section 10.01; and

 

(ii)           any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.09 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Term Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Term Loans under this Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Term Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Term Loans were made at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Term Loans of all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Term Loans of such Defaulting Lender until such time as all Term Loans are held by the Lenders pro rata in accordance with the Term Commitments.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts

 

81



 

owed by a Defaulting Lender pursuant to this Section 2.13(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(b)                                If the Borrower and the Administrative Agent agree in writing in their sole discretion that a Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein, that Lender will, to the extent applicable, purchase that portion of outstanding Term Loans of the other Lenders or take such other actions as the Administrative Agent may reasonably determine to be necessary to cause the Term Loans to be held on a pro rata basis by the Lenders in accordance with their Pro Rata Shares, whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

ARTICLE III
TAXES, INCREASED COSTS PROTECTION AND ILLEGALITY

 

3.01                        Taxes.

 

(a)                                Any and all payments by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Taxes; provided that, if any Indemnified Taxes or Other Taxes are required by applicable law (as determined in the good faith discretion of an applicable Withholding Agent) to be deducted from such payments, then (i) the sum payable by the Borrower or such Loan Party shall be increased as necessary so that after all required deductions of Indemnified Taxes or Other Taxes (including any such deductions applicable to additional sums payable under this Section 3.01) each Agent and Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the applicable Withholding Agent shall make such deductions and (iii) the applicable Withholding Agent shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

 

(b)                                In addition, the Loan Parties shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law, except for Other Taxes resulting from an assignment by any Lender pursuant to Section 10.07, which assignment is not at the request of the Borrower pursuant to Section 3.07.

 

(c)                                 The Loan Parties shall, jointly and severally, indemnify each Agent and  Lender, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes paid or payable by such Agent or Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower or any other Loan Party hereunder or under any other Loan Document and any Other Taxes paid or payable by such Agent or Lender (including Indemnified Taxes and Other Taxes imposed or asserted on or attributable

 

82



 

to amounts payable under this Section 3.01) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate setting forth in reasonable detail the basis and the calculation of the amount of such liability delivered to the Borrower by a Lender or Agent, or by the Administrative Agent on behalf of itself or a Lender or Agent, shall be conclusive absent manifest error.

 

(d)                                As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower or any other Loan Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)                                 If any Lender or Agent determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes or Other Taxes as to which indemnification or additional amounts have been paid to it by the Borrower pursuant to this Section 3.01, it shall promptly remit such refund (without interest, other than any interest paid by the relevant taxation authority with respect to such refund) to the Borrower (but only to the extent of indemnity payments made or additional amounts paid under this Section 3.01 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Lender or Agent, as the case may be; provided, however, that the Borrower, upon the request of the Lender or Agent, as the case may be, agrees promptly to return such refund to such party (plus any penalties, interest or other charges imposed by the relevant taxation authority) in the event such party is required to repay such refund to the relevant taxing authority.  Such Lender or Agent, as the case may be, shall, at the Borrower’s request, provide the Borrower with a copy of any notice of assessment or other evidence of the requirement to repay such refund received from the relevant taxing authority (provided, that such Lender or Agent may delete any information therein that such Lender or Agent deems confidential).  Notwithstanding anything to the contrary in this Section 3.01(e), in no event will any Lender or Agent be required to pay any amount to the Borrower pursuant to this Section 3.01(e) the payment of which would place such Lender or Agent in a less favorable net after-tax position than it would have been in if the Indemnified Tax or Other Tax giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect thereto had never been paid.  Nothing herein contained shall interfere with the right of a Lender or Agent to arrange its tax affairs in whatever manner it thinks fit or oblige any Lender or Agent to claim any tax refund or to disclose any information relating to its tax affairs or any computations in respect thereof or require any Lender or Agent to do anything that would prejudice its ability to benefit from any other refunds, credits, reliefs, remissions or repayments to which it may be entitled.

 

(f)                                  Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 3.01(a) or (c) with respect to such Lender it will, if requested by the Borrower, use commercially reasonable efforts (subject to such Lender’s overall internal policies of general application and legal and regulatory restrictions) to avoid or reduce to the greatest extent possible any indemnification or additional amounts due under this

 

83



 

Section 3.01, which may include the designation of another Lending Office for any Term Loan affected by such event; provided, that such efforts are made on terms that, in the reasonable judgment of such Lender, cause such Lender and its Lending Office(s) to suffer no material economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section 3.01(f) shall affect or postpone any of the First Lien Obligations of the Borrower or the rights of such Lender pursuant to Sections 3.01(a) and (c).

 

(g)                                 (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(g)(ii) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

(i)            Each Foreign Lender shall, to the extent it is legally able to do so, furnish to the Borrower and the Administrative Agent, on or prior to the date it becomes a party to this Agreement, two accurate and complete originally executed copies of (i) IRS Form W-8BEN or W-8BEN-E (or the applicable successor form) certifying exemption from or a reduction in the rate of United States federal withholding tax under an applicable treaty to which the United States is a party, (ii) IRS Form W-8ECI (or successor form) certifying that the income receivable pursuant to the Loan Documents is effectively connected with the conduct of a trade or business in the United States, (iii) IRS Form W-8EXP or W-8IMY (or successor form), together with required attachments, certifying exemption from or reduction in the rate of United States federal withholding tax, or (iv) in the case of a Foreign Lender claiming exemption from United States federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest,” IRS Form W-8BEN or W-8BEN-E (or the applicable successor form) together with a statement substantially in the form of Exhibit N.  Each Foreign Lender shall, to the extent it is legally able to do so, deliver such forms promptly upon the obsolescence or invalidity of any form previously delivered by such Foreign Lender. In addition, each Foreign Lender shall promptly notify the Borrower and the Administrative Agent at any time it determines that it is no longer in a position to provide any previously delivered form (or any other form of certification adopted by the United States taxing authorities for such purpose).  Solely for purposes of this Section 3.01(g), the term “Foreign Lender” shall include any Agent that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code.

 

84



 

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

 

(h)                                Each Lender and Agent that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall, to the extent it is legally able to do so, furnish to the Borrower and the Administrative Agent, on or prior to the date it becomes a party to this Agreement, two accurate and complete originally executed copies of IRS Form W-9 (or successor form) establishing that such Lender or Agent is not subject to United States backup withholding tax.

 

(i)                                    If a payment made to a Lender under any Loan Document would be subject to United States federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 3.01(i), “FATCA” shall include any applicable intergovernmental agreements and any fiscal or regulatory legislation, rules or official practices adopted pursuant to any such intergovernmental agreements, in each case with respect to the implementation of such Sections of the Code and any amendments made to FATCA after the Closing Date.

 

(j)                                   Each party’s obligations under this Section 3.01 shall survive the termination of the Aggregate Commitments, repayment of all other First Lien Obligations hereunder and the resignation of the Administrative Agent.  For purposes of this Section 3.01 and Section 9.01, the term “applicable law” includes FATCA.

 

3.02                        Illegality.  If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Term Loans whose interest is determined by reference to the Eurodollar Rate, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Loans to

 

85



 

Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, (x) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate component thereof until the Administrative is advised in writing by such Lender that it is no longer illegal  for such Lender to determine or charge interest rates based upon the Eurodollar Rate.  Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.  Each Lender agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be disadvantageous to such Lender.

 

3.03                        Inability to Determine Rates.  If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation of any of the foregoing that (a) deposits are not being offered to banks in the European interbank market, the London interbank Eurodollar market or other offshore interbank market for Dollars for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Term Loan, the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrower may revoke any pending request for a Term Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Term Borrowing of Base Rate Loans in the amount specified therein.

 

3.04                        Increased Cost and Reduced Return; Capital Adequacy.

 

(a)                                If any Lender determines that as a result of the introduction of or any Change in Law, in each case after the Closing Date, or such Lender’s compliance therewith, there shall be any increase in the cost to such Lender of agreeing to make or making, funding

 

86



 

or maintaining any Term Loan the interest on which is determined by reference to the Eurodollar Rate (or, in the case of any Change in Law with respect to Taxes, any Term Loan), or a reduction in the amount received or receivable by such Lender in connection with any of the foregoing (excluding for purposes of this Section 3.04(a) any such increased costs or reduction in amount resulting from (i) Indemnified Taxes imposed on or with respect to any payment made by or on account of any Loan Party under any Loan Document and Other Taxes (as to which Section 3.01 shall govern), (ii) Excluded Taxes (other than clause (a)(ii) of the definition of Excluded Taxes), (iii) Connection Income Taxes, and (iv) reserve requirements reflected in the Eurodollar Rate), then from time to time upon demand of such Lender setting forth in reasonable detail such increased costs (with a copy of such demand to the Administrative Agent given in accordance with Section 3.06), the Borrower shall pay to such Lender such additional amounts as will compensate such Lender for such increased cost or reduction.

 

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

 

(c)                                 The Borrower shall not be required to compensate a Lender pursuant to Section 3.04(a) or (b) for any such increased cost or reduction incurred more than one hundred and eighty (180) days prior to the date that such Lender demands, or notifies the Borrower of its intention to demand, compensation therefor; provided, that, if the circumstance giving rise to such increased cost or reduction is retroactive, then such 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

3.05                        Funding Losses.  Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

 

(a)                           any assignment pursuant to Section 3.07, continuation, conversion, payment or prepayment of any Term Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Term Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

 

(b)                           any failure by the Borrower (for a reason other than the failure of such Lender to make a Term Loan) to prepay, borrow, continue or convert any Term Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower;

 

87



 

including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Term Loan or from fees payable to terminate the deposits from which such funds were obtained.

 

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Term Loan by a matching deposit or other borrowing in the London interbank Eurodollar market for Dollars in a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

 

3.06                        Matters Applicable to All Requests for Compensation

 

(a)                                A certificate of any Agent or any Lender claiming compensation under this Article III and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error.  In determining such amount, such Agent or such Lender may use any reasonable averaging and attribution methods.

 

(b)                                With respect to any Lender’s claim for compensation under Section 3.02, 3.03 or 3.04, the Borrower shall not be required to compensate such Lender for any amount incurred more than one hundred and eighty (180) days prior to the date that such Lender notifies the Borrower of the event that gives rise to such claim; provided, that, if the circumstance giving rise to such increased cost or reduction is retroactive, then such 180-day period referred to above shall be extended to include the period of retroactive effect thereof.  If any Lender requests compensation by the Borrower under Section 3.04, the Borrower may, by notice to such Lender (with a copy to the Administrative Agent), suspend the obligation of such Lender to make or continue from one Interest Period to another Eurodollar Rate Loans, or to convert Base Rate Loans into Eurodollar Rate Loans, until the event or condition giving rise to such request ceases to be in effect (in which case the provisions of Section 3.06(c) shall be applicable); provided, that such suspension shall not affect the right of such Lender to receive the compensation so requested.

 

(c)                                 If the obligation of any Lender to make or continue from one Interest Period to another any Eurodollar Rate Loan, or to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended pursuant to Section 3.06(b) hereof, such Lender’s Eurodollar Rate Loans shall be automatically converted into Base Rate Loans on the last day(s) of the then current Interest Period(s) for such Eurodollar Rate Loans (or, in the case of an immediate conversion required by Section 3.02, on such earlier date as required by Law) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 3.02, 3.03 or 3.04 hereof that gave rise to such conversion no longer exist:

 

(i)            to the extent that such Lender’s Eurodollar Rate Loans have been so converted, all payments and prepayments of principal that would otherwise be applied to such Lender’s Eurodollar Rate Loans shall be applied instead to its Base Rate Loans; and

 

(ii)           all Term Loans that would otherwise be made or continued from one Interest Period to another by such Lender as Eurodollar Rate Loans shall be made or

 

88



 

continued instead as Base Rate Loans, and all Base Rate Loans of such Lender that would otherwise be converted into Eurodollar Rate Loans shall remain as Base Rate Loans.

 

(d)                                If any Lender gives notice to the Borrower (with a copy to the Agent) that the circumstances specified in Section 3.02, 3.03 or 3.04 hereof that gave rise to the conversion of such Lender’s Eurodollar Rate Loans pursuant to this Section 3.06 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurodollar Rate Loans made by other Lenders are outstanding, such Lender’s Base Rate Loans shall be automatically converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar Rate Loans, to the extent necessary so that, after giving effect thereto, all Term Loans held by the Lenders holding Eurodollar Rate Loans and by such Lender are held pro rata (as to principal amounts, interest rate basis, and Interest Periods) in accordance with their respective Term Commitments.

 

3.07                        Replacement of Lenders under Certain Circumstances

 

(a)                                If at any time (i) the Borrower becomes obligated to pay additional amounts or indemnity payments described in Section 3.01 or 3.04 as a result of any condition described in such Sections or any Lender ceases to make Eurodollar Rate Loans as a result of any condition described in Section 3.02 or 3.03, (ii) any Lender becomes a Defaulting Lender, (iii) any Lender becomes a “Non-Consenting Lender” (as defined below in this Section 3.07) or (iv) any Lender is an Ineligible Assignee, then the Borrower may, at its sole expense and effort, on five (5) Business Days’ prior written notice to the Administrative Agent and such Lender (or such lesser time as may be agreed by the Administrative Agent), replace such Lender by causing such Lender to (and such Lender shall be obligated to) assign pursuant to Section 10.07(b) (with the assignment fee to be paid by the Borrower in such instance) all of its rights and obligations under this Agreement to one or more Eligible Assignees; provided that (A) neither the Administrative Agent nor any Lender shall have any obligation to the Borrower to find a replacement Lender or other such Person, (B) such replaced Lender shall have received payment of an amount equal to the outstanding principal of its Term Loans (or, in the case of the preceding clause (iv), the lesser of (x) the purchase price paid by such Ineligible Assignee for its Term Loans and (y) the outstanding principal thereof), accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Sections 2.03 (if applicable) and 3.05) in accordance with the Assignment and Assumption with respect to such assignment, (C) such assignment does not conflict with applicable Law and (D) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

 

(b)                                Any Lender being replaced pursuant to Section 3.07(a) above shall (i) execute and deliver an Assignment and Assumption with respect to such Lender’s outstanding Term Loans, and (ii) deliver any Notes evidencing such Term Loans to the Borrower or the Administrative Agent.  If such replaced Lender fails to execute and deliver such Assignment and Assumption within three Business Days after the receipt of notice referred to in the foregoing clause (a), the Administrative Agent is hereby authorized to execute such Assignment and Assumption instead of such replaced Lender (and each Lender, by its becoming a Lender hereunder is deemed to have granted to the Administrative Agent

 

89



 

an irrevocable proxy, which proxy shall be deemed to be coupled with interest, to execute and deliver the Assignment and Assumption, as provided in this Section).  Pursuant to such Assignment and Assumption, (A) the assignee Lender shall acquire all or a portion, as the case may be, of the assigning Lender’s outstanding Term Loans, (B) all obligations of the Borrower owing to the assigning Lender relating to the Term Loans so assigned shall be paid in full to such assigning Lender in accordance with such Assignment and Assumption concurrently with such assignment and assumption and (C) upon such payment and, if so requested by the assignee Lender, delivery to the assignee Lender of the appropriate Note or Notes executed by the Borrower, the assignee Lender shall become a Lender hereunder and the assigning Lender shall cease to constitute a Lender hereunder with respect to such assigned Term Loans, except with respect to indemnification provisions under this Agreement, which shall survive as to such assigning Lender.

 

(c)                                 Notwithstanding anything to the contrary contained above, the Lender that acts as (or whose Affiliate acts as) the Administrative Agent may not be replaced hereunder except in accordance with the terms of Section 9.09.

 

(d)                                In the event that (i) the Borrower has requested the Lenders to consent to a departure or waiver of any provisions of the Loan Documents or to agree to any amendment thereto, (ii) the consent, waiver or amendment in question requires the agreement of all affected Lenders in accordance with the terms of Section 10.01 or all the Lenders with respect to a certain class of the Term Loans and (iii) the Required Lenders have agreed to such consent, waiver or amendment, then any Lender who does not agree to such consent, waiver or amendment shall be deemed a “Non-Consenting Lender.”

 

3.08                        Eurodollar Rate Amendment.  Notwithstanding anything to the contrary in this Agreement or any other Loan Document, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or the Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to the Borrower) that the Borrower or the Required Lenders (as applicable) have determined, that:

 

(a)                                adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for any requested Interest Period, including, without limitation, because the Eurodollar Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or

 

(b)                                the administrator of the Eurodollar Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the Eurodollar Rate or the Eurodollar Screen Rate shall no longer be made available, or used for determining the interest rate of loans (such specific date, the “Scheduled Unavailability Date”), or

 

(c)                                 syndicated loans currently being executed, or that include language similar to that contained in this Section 3.08, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace the Eurodollar Rate,

 

90



 

then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace the Eurodollar Rate with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks (any such proposed rate, a “Eurodollar Successor Rate”), together with any proposed Eurodollar Successor Rate Conforming Changes and any such amendment shall become effective at 5:00 p.m. (New York time) on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders do not accept such amendment.

 

If no Eurodollar Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended, (to the extent of the affected Eurodollar Rate Loans or Interest Periods), and (y) the Eurodollar Rate component shall no longer be utilized in determining the Base Rate.  Upon receipt of such notice, the Borrower may revoke any pending request for a Term Borrowing of, conversion to or continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Term Borrowing of Base Rate Loans (subject to the foregoing clause (y)) in the amount specified therein.

 

Notwithstanding anything else herein, any definition of Eurodollar Successor Rate shall provide that in no event shall such Eurodollar Successor Rate be less than zero for purposes of this Agreement.

 

3.09                        3.08 Survival.  All of the Borrower’s obligations under this Article III shall survive termination of the Aggregate Commitments and repayment of all other First Lien Obligations hereunder and resignation of the Administrative Agent.

 

ARTICLE IV
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01                        Conditions to Initial Credit Extension.  The obligation of each Lender to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:

 

(a)                     The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated as of the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance reasonably satisfactory to the Administrative Agent and its counsel:

 

91



 

(i)            executed counterparts of this Agreement, a Guaranty from each Guarantor (subject to the last paragraph of this Section 4.01) and the Intercompany Note, as applicable;

 

(ii)           a Note executed by the Borrower in favor of each Lender requesting a Note;

 

(iii)          the Security Agreement, duly executed by each Loan Party, together with (subject to the last paragraph of this Section 4.01):

 

(A)                               certificates (including original share certificates and/or original certificates of title)  representing the Pledged Interests referred to therein accompanied by undated stock powers executed in blank and instruments evidencing the Pledged Debt indorsed in blank,

 

(B)                               copies of financing statements, filed or duly prepared for filing under, the Uniform Commercial Code in all jurisdictions necessary in order to perfect and protect the Liens created under the Security Agreement, covering the Collateral described in the Security Agreement, and

 

(C)                               evidence that all other actions, recordings and filings of or with respect to the Security Agreement that the Collateral Agent may deem reasonably necessary or desirable in order to perfect and protect the Liens created thereby shall have been taken, completed or otherwise provided for in a manner reasonably satisfactory to the Collateral Agent (including, without limitation, receipt of duly executed payoff letters and UCC-3 termination statements);

 

(iv)          the Intellectual Property Security Agreement, duly executed by each Loan Party, together with (subject to the last paragraph of this Section 4.01) evidence that all action that the Collateral Agent in its reasonable judgment may deem reasonably necessary or desirable in order to perfect and protect the Liens created under the Intellectual Property Security Agreement has been taken;

 

(v)           (i) the Term Intercreditor Agreement, duly executed by the Loan Parties, the Collateral Agent and the Second Lien Collateral Agent and (ii) the ABL/Term Intercreditor Agreement, duly executed by the Loan Parties, the Collateral Agent, the ABL Collateral Agent and the Second Lien Collateral Agent;

 

(vi)          such customary certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Loan Party as the Administrative Agent or the Collateral Agent may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party or is to be a party and authorizing the execution, delivery and performance of the Loan Documents to which such Loan Party is a party and, in the case of the Borrower, the borrowings

 

92



 

hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect;

 

(vii)         such documents and certifications (including, without limitation, Organization Documents and good standing certificates) as the Administrative Agent or the Collateral Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each of the Borrower and the Guarantors is validly existing, in good standing (where such concept is applicable) and qualified to engage in business (as applicable) in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to be so qualified could not reasonably be expected to have a Material Adverse Effect;

 

(viii)        an opinion of (i) Fried, Frank, Harris, Shriver & Jacobson LLP, counsel to the Loan Parties, and (ii) each local counsel listed on Schedule 4.01(a)(viii), in each case addressed to each Agent and each Lender, as to the matters set forth in Exhibit I;

 

(ix)          a customary certificate, substantially in the form of Exhibit J,  from the chief financial officer of Holdings, certifying that Holdings and its Subsidiaries, on a consolidated basis after giving effect to the Transactions and the other transactions contemplated hereby, are Solvent;

 

(x)           (a) consolidated audited financial statements (consisting of consolidated balance sheets, consolidated statements of operations, consolidated cash flow statements and consolidated statements of stockholders’ equity) of the Target as of April 30, 2012 and April 30, 2013, (b) consolidated unaudited financial statements (consisting of consolidated balance sheets, consolidated statements of operations and consolidated statements of stockholders’ equity) of the Target as of and for the six (6) months’ period ended October 31, 2013, (c) consolidated unaudited financial statements (consisting of consolidated balance sheets, consolidated statements of operations and consolidated statements of stockholders’ equity) of the Target as of and for each fiscal quarter (and the corresponding portion of the fiscal year and the preceding fiscal year) ending after October 31, 2013 and at least 45 days prior to the Closing Date (if such period is a fiscal quarter) or at least 60 days prior to the Closing Date (if such period is a fiscal year) and (d) a pro forma consolidated balance sheet and related pro forma consolidated statement of operations of the Target as of and for the four quarter period for which financial statements have been delivered pursuant to the preceding clauses (b) or (c), prepared by the Sponsor after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of the statement of operations), in each case of the foregoing clauses (a), (b), (c) and (d) prepared in accordance with GAAP.

 

(xi)          a Committed Loan Notice relating to the initial Credit Extension;

 

93



 

(xii)         a certificate, dated as of the Closing Date, duly executed by of a Responsible Officer of Holdings certifying that the conditions precedent set forth in Sections 4.01(d), 4.01(e), 4.01(i) and 4.01(j) have been satisfied as of the Closing Date;

 

(xiii)        evidence that the Second Lien Loan Documents shall have been executed and delivered by all of the Persons stated to be party thereto in their respective forms then most recently delivered to the Administrative Agent, and evidence that the “Closing Date” (as defined in the Second Lien Credit Agreement) will occur on the Closing Date; and

 

(xiv)        evidence that the ABL Loan Documents shall have been executed and delivered by all of the Persons stated to be party thereto in their respective forms then most recently delivered to the Administrative Agent, and evidence that the “Closing Date” (as defined in the ABL Facility) will occur on the Closing Date.

 

(b)                                 Holdings and the Borrower shall have received the Equity Contribution and Other Equity in the manner and amount described in the definition of the “Transactions”.

 

(c)                                  On the Closing Date, after giving effect to the Transactions, neither Holdings nor the Borrower nor any of their Subsidiaries shall have any outstanding Indebtedness for borrowed money other than the Term Facility, Second Lien Loans in an aggregate principal amount of $160,000,000, loans under the ABL Facility, and Permitted Surviving Debt.

 

(d)                                 The Acquisition shall be consummated pursuant to the Acquisition Agreement, substantially concurrently with the initial funding of the Term Facility, without giving effect to any amendments thereto, waivers thereof or consents with respect thereto that are materially adverse to the Lenders in their capacity as Lenders, without the consent of each Initial Lender, such consent not to be unreasonably withheld or delayed.

 

(e)                                  (a) Between November 30, 2013 and February 11, 2014, there shall not have occurred a Closing Material Adverse Effect and (b) between February 11, 2014 and the Closing Date, no fact, event or circumstance shall have occurred or arisen that, individually or in combination with any other fact, event or circumstance, has had or could reasonably be expected to have a Closing Material Adverse Effect.

 

(f)                                   The Administrative Agent shall have received, at least three (3) Business Days prior to the Closing Date, all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act, as is reasonably requested in writing by the Administrative Agent at least ten (10) Business Days prior to the Closing Date.

 

(g)                                  All fees and expenses required to be paid on the Closing Date shall have been paid in full in cash from the proceeds of the initial funding under the Term Facility.

 

94



 

(h)                                 All actions necessary to establish that the Collateral Agent will have a perfected (with the priority required by the Intercreditor Agreements) security interest (subject to liens permitted by Section 7.01) in the Collateral shall have been taken, in each case, to the extent such Collateral (including the creation or perfection of any security interest) is required to be provided on the Closing Date pursuant to the last paragraph of this Section 4.01.

 

(i)                                     The representations made by or with respect to the Target, its subsidiaries and their respective businesses in the Acquisition Agreement that are material to the interests of the Lenders, but only to the extent that the Borrower has the right to terminate its obligations under the Acquisition Agreement or to decline to consummate the Acquisition as a result of a breach of such representations in the Acquisition Agreement, shall be true and correct in all material respects as of the Closing Date (except in the case of any such representation and warranty which expressly relates to a given date or period, such representation and warranty shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be); provided that any such representation or warranty qualified by or subject to a “material adverse effect”, “material adverse change” or similar term or qualification shall be true and correct in all respects (after giving effect to any such qualification of materiality).

 

(j)                                    The Specified Representations shall be true and correct in all material respects as of the Closing Date (except in the case of any such representation and warranty which expressly relates to a given date or period, such representation and warranty shall be true and correct in all material respects as of the respective date or for the respective period, as the case may be); provided that any such representation or warranty qualified by or subject to a “material adverse effect”, “material adverse change” or similar term or qualification shall be true and correct in all respects (after giving effect to any such qualification of materiality).

 

(k)                                 The Administrative Agent shall have received the results of a recent Lien and judgment search in each relevant jurisdiction with respect to the Loan Parties, and such search shall reveal no Liens on any of the assets of the Loan Parties except, in the case of assets other than Pledged Interests, for Liens permitted under Section 7.01.

 

Without limiting the generality of the provisions of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted, or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to a Lender, unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

 

Notwithstanding anything herein to the contrary, it is understood that (x) to the extent any Lien search or Collateral (including the creation or perfection of any security interest) is not or cannot be provided on the Closing Date (other than (i) customary Uniform Commercial Code Lien searches with respect to Holdings, the Borrower and the Subsidiary Guarantors, in each case, in its jurisdiction of organization, (ii) execution and delivery of a customary personal property security agreement, (iii) the perfection of Liens on Collateral that may be perfected by the filing

 

95



 

of financing statements under the Uniform Commercial Code or by intellectual property filings with the United States Patent and Trademark Office or the United States Copyright Office and (iv) the pledge and perfection of security interests in the capital stock or other Equity Interests of the Borrower and its Restricted Subsidiaries with respect to which a Lien may be perfected by the delivery of a stock or equivalent certificate) after Holdings’ and the Borrower’s use of commercially reasonable efforts to do so without undue burden or expense, then the provision of any such Lien search and/or Collateral shall not constitute a condition precedent to the availability of the Term Facility on the Closing Date, but instead shall be required to be provided within ninety (90) days after the Closing Date, subject to such extensions as are reasonably agreed by the Collateral Agent pursuant to arrangements to be mutually agreed between the Collateral Agent and the Borrower and (y) to the extent any Guarantee of any Subsidiary Guarantor cannot be provided as a condition precedent to the availability of the Term Facility on the Closing Date because the directors or managers of such Subsidiary Guarantor have not authorized such Guarantee and the election of new directors or managers to authorize such Guarantee has not taken place prior to the funding of the Term Facility (such Guarantee, a “Duly Authorized Guarantee”), such election shall take place and such Duly Authorized Guarantee shall be provided no later than 5:00 p.m., New York Time, on the Closing Date (it being understood that, notwithstanding the foregoing, the execution of all such Guarantees shall be a condition to the availability of the Term Facility on the Closing Date; provided, however, that the release of such executed Guarantees shall not be a condition to the availability of the Term Facility on the Closing Date).

 

4.02                        Conditions to All Credit Extensions.  The obligation of each Lender to honor any Request for Credit Extension (other than on the Closing Date and other than a Committed Loan Notice requesting only a conversion of Term Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent:

 

(a)                           The representations and warranties of the Borrower and each other Loan Party contained in Article V or any other Loan Document shall be true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality) as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in Section 5.05(a) and Sections 5.05(b) and (c) shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b), respectively.

 

(b)                           No Default or Event of Default shall exist, or would result from, such proposed Credit Extension or from the application of the proceeds therefrom.

 

(c)                            The Administrative Agent shall have received a Request for Credit Extension in accordance with the requirements hereof.

 

Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Term Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified

 

96



 

in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

 

ARTICLE V
REPRESENTATIONS AND WARRANTIES

 

Each of Holdings and the Borrower represents and warrants to the Agents and the Lenders that:

 

5.01                        Existence, Qualification and Power; Compliance with Laws.  Each Loan Party and each of its Subsidiaries (a) is a Person duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification and (d) has all requisite valid and subsisting governmental l