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REVOLVING CREDIT AGREEMENT

Revolving Credit Agreement

REVOLVING CREDIT AGREEMENT | Document Parties: GOODMAN APPLIANCE HOLDING CO | CALYON BANK | CHILL ACQUISITION, INC | CHILL INTERMEDIATE HOLDINGS, INC | GOODMAN GLOBAL, INC You are currently viewing:
This Revolving Credit Agreement involves

GOODMAN APPLIANCE HOLDING CO | CALYON BANK | CHILL ACQUISITION, INC | CHILL INTERMEDIATE HOLDINGS, INC | GOODMAN GLOBAL, INC

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Title: REVOLVING CREDIT AGREEMENT
Governing Law: New York     Date: 4/15/2008
Law Firm: Akerman Senterfitt;Simpson Thacher;Andrews Kurth;Weil Gotshal    

REVOLVING CREDIT AGREEMENT, Parties: goodman appliance holding co , calyon bank , chill acquisition  inc , chill intermediate holdings  inc , goodman global  inc
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Exhibit 10.2

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REVOLVING CREDIT AGREEMENT

Dated as of February 13, 2008

among

CHILL INTERMEDIATE HOLDINGS, INC.,

as Holdings

CHILL ACQUISITION, INC.,

which on the Closing Date shall be merged with and into

GOODMAN GLOBAL, INC.,

(with GOODMAN GLOBAL, INC. surviving such merger as the Borrower)

The Several Lenders

from Time to Time Parties Hereto,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Administrative Agent and Collateral Agent,

GENERAL ELECTRIC CAPITAL CORPORATION,

as Letter of Credit Issuer,

BARCLAYS CAPITAL,

and

GENERAL ELECTRIC CAPITAL CORPORATION

as Joint Lead Arrangers,

and

BARCLAYS CAPITAL,

CALYON NEW YORK BRANCH,

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Joint Bookrunners,

 

 

 

 


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TABLE OF CONTENTS

 

          Page
Section 1.    Definitions    2
1.1        Defined Terms    2
1.2        Other Interpretive Provisions    51
1.3        Accounting Terms    51
1.4        Rounding    52
1.5        References to Agreements, Laws, Etc    52
1.6        Times of Day    52
1.7        Timing of Payment of Performance    52
1.8        Currency Equivalents Generally    52
1.9        UCC Terms    53
Section 2.    Amount and Terms of Revolving Credit Facility    53
2.1        Loans    53
2.2        Minimum Amount of Each Borrowing; Maximum Number of Borrowings    55
2.3        Notice of Borrowing    55
2.4        Disbursement of Funds    56
2.5        Repayment of Loans; Evidence of Debt    57
2.6        Conversions and Continuations    58
2.7        Pro Rata Borrowings    59
2.8        Interest    59
2.9        Interest Periods    60
2.10      Increased Costs, Illegality, etc    60
2.11      Compensation    62
2.12      Change of Lending Office    63
2.13      Notice of Certain Costs    63
2.14      Reserves, etc    63
Section 3.    Letters of Credit    64
3.1        Issuance of Letters of Credit    64
3.2        Letter of Credit Requests    64
3.3        Letter of Credit Participations    65
3.4        Agreement to Repay Letter of Credit Drawings    67
3.5        Increased Costs    68
3.6        New or Successor Letter of Credit Issuer    68
3.7        Cash Collateral    69
3.8        Applicability of ISP and UCP    70
3.9        Conflict with Issuer Documents    70
3.10      Letters of Credit Issued for Restricted Subsidiaries    70
Section 4.    Fees; Commitment Reductions and Terminations    70
4.1        Fees    70
4.2        Voluntary Reduction of Commitments    71
4.3        Mandatory Termination of Commitments    72

 


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Section 5.    Payments    72
5.1        Voluntary Prepayments    72
5.2        Mandatory Prepayments    72
5.3        Method and Place of Payment    74
5.4        Net Payments    74
5.5        Computations of Interest and Fees    77
5.6        Limit on Rate of Interest    77
Section 6.    Conditions Precedent to Initial Credit Event    77
6.1        Credit Documents    77
6.2        Collateral    78
6.3        Legal Opinions    79
6.4        Structure and Terms of the Transactions    79
6.5        Closing Certificates    80
6.6        Corporate Proceedings    80
6.7        Corporate Documents    80
6.8        Fees and Expenses    80
6.9        Solvency Certificate    80
6.10      Financial Statements    80
6.11      Insurance Certificates    81
6.12      Company Material Adverse Effect    81
6.13      Closing EBITDA    81
6.14      Representations and Warranties    81
Section 7.    Conditions Precedent to All Credit Events    81
7.1        No Default; Representations and Warranties    81
7.2        Notice of Borrowing; Letter of Credit Request    82
Section 8.    Representations, Warranties and Agreements    82
8.1        Corporate Status    82
8.2        Corporate Power and Authority; Enforceability    82
8.3        No Violation    83
8.4        Litigation    83
8.5        Margin Regulations    83
8.6        Governmental Approvals    83
8.7        Investment Company Act    83
8.8        True and Complete Disclosure    83
8.9        Financial Statements    84
8.10      Tax Returns and Payments, etc    84
8.11      Compliance with ERISA    84
8.12      Subsidiaries    85
8.13      Intellectual Property    85
8.14      Environmental Laws    86
8.15      Properties, Assets and Rights    86
8.16      Solvency    86
8.17      Material Adverse Change    86

 

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Section 9.    Affirmative Covenants    87
9.1        Information Covenants    87
9.2        Books, Records and Inspections    92
9.3        Maintenance of Insurance    93
9.4        Payment of Taxes    93
9.5        Consolidated Corporate Franchises    94
9.6        Compliance with Statutes    94
9.7        ERISA    94
9.8        Good Repair    94
9.9        End of Fiscal Years; Fiscal Quarters    95
9.10      Additional Guarantors and Grantors    95
9.11      Pledges of Additional Stock and Evidence of Indebtedness    95
9.12      Use of Proceeds    96
9.13      Changes in Business    96
9.14      Further Assurances    96
9.15      Designation of Subsidiaries    97
9.16      Interest Rate Protection    97
9.17      Senior Indebtedness    98
9.18      Cash Management    98
9.19      Post-Closing Covenants    99
Section 10.    Negative Covenants    99
10.1      Limitation on Indebtedness    100
10.2      Limitation on Liens    104
10.3      Limitation on Fundamental Changes    107
10.4      Limitation on Sale of Assets    109
10.5      Limitation on Investments    111
10.6      Limitation on Dividends    114
10.7      Limitations on Debt Payments and Amendments    117
10.8      Limitations on Sale Leasebacks    117
10.9      Negative Pledge Clauses    117
10.10    Passive Holding Company    118
10.11    Financial Covenant    119
10.12    Transactions with Affiliates    119
Section 11.    Events of Default    120
11.1      Payments    120
11.2      Representations, etc    120
11.3      Covenants    120
11.4      Default Under Other Agreements    121
11.5      Bankruptcy, etc    121
11.6      ERISA    122
11.7      Guarantee    122
11.8      Security Documents    122
11.9      Subordination    122
11.10    Judgments    122

 

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11.11    Change of Control    122
11.12    Borrower’s Right to Cure    123
Section 12.    The Administrative Agent and Collateral Agent    124
12.1      Appointment    124
12.2      Limited Duties    124
12.3      Binding Effect    124
12.4      Delegation of Duties    125
12.5      Exculpatory Provisions    125
12.6      Reliance by Administrative Agent    125
12.7      Notice of Default    125
12.8      Non-Reliance on Administrative Agent and Other Lenders    126
12.9      Indemnification    126
12.10    GECC in its Individual Capacity    127
12.11    Successor Agent    127
12.12    Withholding Tax    128
12.13    Duties as Collateral Agent and as paying agent    128
12.14    Authorization to Release Liens and Guarantees    128
Section 13.    Miscellaneous    129
13.1      Amendments and Waivers    129
13.2      Notices and Other Communications; Facsimile Copies    130
13.3      No Waiver; Cumulative Remedies    131
13.4      Survival of Representations and Warranties    131
13.5      Payment of Expenses and Taxes; Indemnification    131
13.6      Successors and Assigns; Participations and Assignments    133
13.7      Replacements of Lenders under Certain Circumstances    137
13.8      Adjustments; Set-off    138
13.9      Counterparts    138
13.10    Severability    138
13.11    Integration    138
13.12    GOVERNING LAW    139
13.13    Submission to Jurisdiction; Waivers    139
13.14    Acknowledgments    139
13.15    WAIVERS OF JURY TRIAL    140
13.16    Confidentiality    140
13.17    Release of Collateral and Guarantee Obligations; Subordination of Liens    140
13.18    USA PATRIOT ACT    142

 

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SCHEDULES   
Schedule 1.1(a)    Commitments and Addresses of Lenders
Schedule 1.1(b)    Mortgaged Property
Schedule 6.4(d)    Indebtedness to be refinanced on the Closing Date
Schedule 8.12    Subsidiaries
Schedule 8.15    Owned Real Property
Schedule 9.19    Post-Closing Covenants
Schedule 10.1    Indebtedness
Schedule 10.2    Liens
Schedule 10.4    Dispositions
Schedule 10.5    Investments
Schedule 10.9    Negative Pledge Clauses
Schedule 10.12    Transactions with Affiliates
Schedule 13.2    Addresses for Notices
EXHIBITS   
Exhibit A    Form of Assignment and Acceptance
Exhibit B    Form of Guarantee
Exhibit C    Form of Mortgage
Exhibit D    Form of Perfection Certificate
Exhibit E-1    Form of Security Agreement
Exhibit E-2    Form of Pledge Agreement
Exhibit F-1    Form of Notice of Borrowing
Exhibit F-2    Form of Letter of Credit Request
Exhibit G-1    Form of Legal Opinion of Simpson Thacher & Bartlett LLP
Exhibit G-2    Form of Legal Opinion of Akerman Senterfitt
Exhibit G-3    Form of Legal Opinion of Andrews Kurth LLP
Exhibit H    Form of Closing Certificate
Exhibit I    Form of Promissory Note (Revolving Credit and Swingline Loans)
Exhibit J    Form of Intercompany Note
Exhibit K    Form of Borrowing Base Certificate

 

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CREDIT AGREEMENT , dated as of February 13, 2008, among CHILL INTERMEDIATE HOLDINGS, INC. , a Delaware corporation (“ Holdings ”), CHILL ACQUISITION, INC. , a Delaware corporation (“ Merger Sub ”, which on the Closing Date shall be merged with and into GOODMAN GLOBAL, INC, a Delaware corporation (the “ Company ”), with the Company surviving such merger as the borrower) (the “ Borrower ”), the lending institutions from time to time parties hereto (each a “ Lender ” and, collectively, the “ Lenders ”), BARCLAYS CAPITAL , the investment banking division of BARCLAYS BANK PLC and GENERAL ELECTRIC CAPITAL CORPORATION , as Joint Lead Arrangers, BARCLAYS CAPITAL , the investment banking division of BARCLAYS BANK PLC , CALYON NEW YORK BRANCH and GENERAL ELECTRIC CAPITAL CORPORATION, as joint bookrunners (the “ Joint Bookrunners ”), GENERAL ELECTRIC CAPITAL CORPORATION (“ GECC” ), as the Administrative, Collateral Agent, Swingline Lender and Letter of Credit Issuer.

RECITALS:

WHEREAS , capitalized terms used and not defined in the preamble and these recitals shall have the respective meanings set forth for such terms in Section 1.1 hereof;

WHEREAS , pursuant to the Acquisition Agreement, Merger Sub will be merged with and into the Company, in accordance with the terms thereof, with the Company surviving such merger (the “ Merger ”);

WHEREAS , in order to fund, in part, the Merger Funds (as defined below), the Investors will directly or indirectly make cash equity contributions (the “ Equity Contribution ”) to Merger Sub (through Holdings) in an aggregate amount equal to, when combined with the fair market value of the equity of management and existing shareholders of the Company rolled over or invested in connection with the Transactions, at least 40% of the total sources required to consummate the Merger (the “ Merger Consideration ”), to refinance, repurchase, redeem and/or repay the Existing Notes and certain other existing indebtedness of the Company and its Subsidiaries (the “ Refinancing ”), and to pay fees and expenses incurred in connection with the Transactions (such fees and expenses, together with the Merger Consideration and the Refinancing payment, the “ Merger Funds ”), excluding cash-on-hand at the Company used to fund a portion of the Merger Funds;

WHEREAS , in order to fund, in part, the Merger Funds, the Borrower will borrow up to (x) $800,000,000 in aggregate principal amount of Term Loans pursuant to the Term Loan Credit Agreement, (y) $105,000,000 in aggregate principal amount of Revolving Credit Loans pursuant to this Agreement (plus any Existing Notes Additional Redemption Amount as the case may be) and (z) $500,000,000 in the aggregate principal amount of the Senior Subordinated Notes pursuant to the Senior Subordinated Notes Indenture;

WHEREAS , in connection with the foregoing, the Borrower and Holdings have requested that the Lenders, Swingline Lender and Letter of Credit Issuer make available Revolving Credit Loans, Letters of Credit and/or Swingline Loans for the purposes specified in this Agreement in the maximum aggregate principal amount of $300,000,000 (the “ Revolving Credit Facility ”);

 


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WHEREAS , in connection with the foregoing and as an inducement for the Lenders to extend the credit contemplated hereunder, the Borrower has agreed to secure all of its Obligations by granting to the Collateral Agent, for the benefit of Secured Parties, a first priority lien on its assets (except for Liens permitted pursuant to Section 10.2 and as otherwise set forth in the Intercreditor Agreement), including a pledge of all of the Capital Stock (other than Excluded Capital Stock) of each of its Subsidiaries; and

WHEREAS , in connection with the foregoing and as an inducement for the Lenders to extend the credit contemplated hereunder, the Guarantors have agreed to guarantee the Obligations and to secure their respective guarantees by granting to the Collateral Agent, for the benefit of Secured Parties, a first priority lien on their respective assets (except for Liens permitted pursuant to Section 10.2 and as otherwise set forth in the Intercreditor Agreement), including a pledge of all of the Capital Stock (other than Excluded Capital Stock) of each of their respective Subsidiaries.

AGREEMENT:

NOW, THEREFORE , in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto agree as follows:

SECTION 1. Definitions

1.1 Defined Terms (a) As used herein, the following terms shall have the meanings specified in this Section 1.1 unless the context otherwise requires:

ABR ” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus  1 / 2 of 1%. If the Administrative Agent is unable to ascertain the Federal Funds Effective Rate due to its inability to obtain sufficient quotations in accordance with the definition thereof, after notice is provided to the Borrower, the ABR shall be determined without regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the ABR due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

ABR Loan ” shall mean each Loan bearing interest at the rate provided in Section 2.8(a) and, in any event, shall include all Swingline Loans.

Account Debtor ” shall mean an “account debtor” as defined in Article 9 of the UCC or any Person who may become obligated to any Credit Party under, with respect to, or on account of, an Account, chattel paper or general intangibles of such Credit Party (including a payment intangible) or any guarantor of performance of an Account.

Accounts ” shall mean all “accounts,” as such term is defined in the UCC, now owned or hereafter acquired by any Credit Party, including (a) all accounts receivable, other receivables, book debts and other forms of obligations (other than forms of obligations evidenced by Chattel Paper or Instruments), (including any such obligations that may be characterized as an account or contract right under the UCC), (b) all of each Credit Party’s rights in, to and under all

 

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purchase orders or receipts for merchandise, goods or services, (c) all of each Credit Party’s rights to any goods represented by any of the foregoing (including unpaid sellers’ rights of rescission, replevin, reclamation and stoppage in transit and rights to returned, reclaimed or repossessed goods), (d) all rights to payment due to any Credit Party for property sold, leased, licensed, assigned or otherwise disposed of, for a policy of insurance issued or to be issued, for a secondary obligation incurred or to be incurred, for energy provided or to be provided, for the use or hire of a vessel under a charter or other contract, arising out of the use of a credit card or charge card, or for services rendered or to be rendered by such Credit Party or in connection with any other transaction (whether or not yet earned by performance on the part of such Credit Party), (e) all healthcare insurance receivables, and (f) all collateral security of any kind, now or hereafter in existence, given by any Account Debtor or other Person with respect to any of the foregoing.

Acquired EBITDA ” shall mean, with respect to any Pro Forma Entity for any period, the amount for such period of Consolidated EBITDA of such Pro Forma Entity (determined as if references to the Borrower and the Restricted Subsidiaries in the definition of the term “ Consolidated EBITDA ” were references to such Pro Forma Entity and its subsidiaries which will become Restricted Subsidiaries), all as determined on a consolidated basis for such Pro Forma Entity.

Acquired Entity or Business ” shall have the meaning provided in the definition of the term “ Consolidated EBITDA ”.

Acquisition Agreement ” shall mean the Agreement and Plan of Merger, dated as of October 21, 2007, among, inter alia the Company, Chill Holdings, Inc. and Merger Sub, together with all exhibits and schedules thereto.

Activation Notice ” shall have the meaning provided in Section 9.18(b)(i).

Adjusted Total Commitment ” shall mean, at any time, the Total Commitment less the aggregate Commitments of all Defaulting Lenders.

Administrative Agent ” shall mean GECC, or any successor to GECC appointed in accordance with the provisions of Section 12.11, together with its affiliates, as the administrative agent for the Lenders under this Agreement and the other Credit Documents.

Administrative Agent’s Office ” shall mean the office of the Administrative Agent located at 299 Park Avenue, Fifth Floor, New York NY, 10171 or such other office as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

Affiliate ” shall mean, 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. The term “ 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. The terms “ Controlling ” and “ Controlled ” have meanings correlative thereto.

 

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Agents ” shall mean the Joint Lead Arrangers, the Administrative Agent and the Collateral Agent.

Agreement ” shall mean this Revolving Credit Agreement.

Applicable Laws ” shall mean, as to any Person, any law (including common law), statute, regulation, ordinance, rule, order, decree, judgment, consent decree, writ, injunction, settlement agreement or governmental requirement enacted, promulgated or imposed or entered into or agreed by any Governmental Authority, in each case applicable to or binding on such Person or any of its property or assets or to which such Person or any of its property or assets is subject.

Applicable Margin ” shall mean a percentage per annum equal to (A) for Eurodollar Loans, 2.00%, (B) for ABR Loans (including Swingline Loans), 1.00%, (C) with respect to Letter of Credit fees, 2.00%, and (D) for commitment fee payable pursuant to Section 4.1(a), 0.50% (to be lowered to 0.375% at such time, and for so long as, the Consolidated Total Debt to Consolidated EBITDA Ratio set forth on the most recent officers’ certificate received by the Administrative Agent pursuant to Section 9.1(d) is lower than 3.50 to 1.00; it being specified that any increase or decrease in the commitment fee resulting from a change in the Consolidated Total Debt to Consolidated EBITDA Ratio shall become effective as of the first Business Day immediately following the date Section 9.1 Financials are delivered to the Administrative Agent pursuant to Sections 9.1(a) and 9.1(b); provided that at the option of the Required Lenders, the highest level of commitment fee shall apply (i) as of the first Business Day after the date on which Section 9.1 Financials were required to have been delivered but have not been delivered pursuant to Section 9.1 and shall continue to so apply to and including the date on which such Financials Section 9.1 Financials are so delivered (and thereafter the commitment fee otherwise determined in accordance with this definition shall apply), and (ii) as of the first Business Day after an Event of Default shall have occurred and be continuing and the Administrative Agent has notified that the highest commitment fees applies, and shall continue to so apply to but excluding the date on which such Event of Default shall cease to be continuing (and thereafter the commitment fee otherwise determined in accordance with this definition shall apply)).

Approved Fund ” shall have the meaning provided in Section 13.6(b).

Assignment and Acceptance ” shall mean an assignment and acceptance entered into by a Lender and an assignee substantially in the form of Exhibit A.

Attributable Indebtedness ” shall mean, 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.

Authorized Officer ” shall mean the Chairman of the Board, the President, the Chief Executive Officer, the Chief Financial Officer, the Chief Operating Officer, the Treasurer, the Assistant Treasurer, with respect to certain limited liability companies or partnerships that do not have officers, any manager, managing member or general partner thereof, any other senior officer of Holdings, the Borrower or any other Credit Party designated as such in writing to the

 

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Administrative Agent by Holdings, the Borrower or any other Credit Party, as applicable, and, with respect to any document (other than the solvency certificate) delivered on the Closing Date, the Secretary or the Assistant Secretary of any Credit Party. Any document delivered hereunder that is signed by an Authorized Officer shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company, partnership and/or other action on the part of Holdings, the Borrower or any other Credit Party and such Authorized Officer shall be conclusively presumed to have acted on behalf of such Person.

Auto-Extension Letter of Credit ” shall have the meaning provided in Section 3.2(b).

Available Amount ” shall mean, at any time (the “ Available Amount Reference Time ”), an amount equal at such time to the sum of, without duplication:

(a) the amount (which amount shall not be less than zero) equal to 50% of the Cumulative Consolidated Net Income of the Borrower and the Restricted Subsidiaries;

(b) to the extent not already included in the calculation of Consolidated Net Income, the aggregate amount of all cash dividends and other cash distributions received by the Borrower or any Restricted Subsidiary from any Minority Investments or Unrestricted Subsidiaries after the Closing Date through and including the Available Amount Reference Time (other than the portion of any such dividends and other distributions that is used by the Borrower or any Restricted Subsidiary to pay taxes);

(c) to the extent not already included in the calculation of Consolidated Net Income, the aggregate amount of all cash repayments of principal received by the Borrower or any Restricted Subsidiary from any Minority Investments or Unrestricted Subsidiaries after the Closing Date through and including the Available Amount Reference Time in respect of loans made by the Borrower or any Restricted Subsidiary to such Minority Investments or Unrestricted Subsidiaries; and

(d) to the extent not already included in the calculation of Consolidated Net Income or applied to prepay the Term Loans in accordance with Section 4.2(a)(i) of the Term Loan Credit Agreement, the aggregate amount of all net cash proceeds received by the Borrower or any Restricted Subsidiary in connection with the sale, transfer or other disposition of its ownership interest in any Minority Investment or Unrestricted Subsidiary after the Closing Date through and including the Available Amount Reference Time; and

(e) to the extent not already included in the calculation of Consolidated Net Income, the aggregate amount of any Final Refused Proceeds (as defined in the Term Loan Credit Agreement) retained by the Borrower during the period from and including the Business Day immediately following the Closing Date through and including the Available Amount Reference Time,

minus the sum of, without duplication and without taking into account the actual usage of the Available Amount being made at the applicable Available Amount Reference Time:

(i) the aggregate amount of any Investments made by Holdings, the Borrower or any Restricted Subsidiary pursuant to clause (iii) of the proviso to Section 10.5(q) and clause (iii) of the proviso to Section 10.5(r) after the Closing Date and prior to the Available Amount Reference Time;

 

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(ii) the aggregate amount of any Dividends made by Holdings pursuant to clause (ii)(B) of Section 10.6(f) after the Closing Date and prior to the Available Amount Reference Time; and

(iii) the aggregate amount of prepayments, repurchases, redemptions and defeasances made by Holdings, the Borrower or any Restricted Subsidiary pursuant to clause (B)(y) of the proviso to Section 10.7(a)(ii) after the Closing Date and prior to the Available Amount Reference Time; and

(iv) the aggregate amount of Capital Expenditures made by the Borrower or any Restricted Subsidiary pursuant to Section 9.11(c)(i)(z) of the Term Loan Credit Agreement after the Closing Date and prior to the Available Amount Reference Time.

Available Amount Reference Time ” shall have the meaning provided in the definition of the term “ Available Amount ”.

Available Equity Amount ” shall mean, at any time (the “ Available Equity Amount Reference Time ”), an amount equal to, without duplication, (a) the amount of any capital contributions or other equity issuances (other than the Equity Contribution, issuances of Permitted Cure Securities or any other capital contribution or equity issuance to the extent utilized in connection with other transactions permitted pursuant to Section 10.5 or Section 10.6) received as cash equity by the Borrower (through Holdings) during the period from and including the Business Day immediately following the Closing Date through and including the Available Equity Amount Reference Time, but excluding all proceeds from the issuance of Disqualified Capital Stock, minus (b) the sum, without duplication, of:

(i) the aggregate amount of any Investments made by Holdings, the Borrower or any Restricted Subsidiary pursuant to clause (ii) of the proviso to Section 10.5(q) and clause (ii) of the proviso to Section 10.5(r) after the Closing Date and prior to the Available Equity Amount Reference Time;

(ii) the aggregate amount of any Dividends made by Holdings pursuant to clause (i) of Section 10.6(f) after the Closing Date and prior to the Available Equity Amount Reference Time;

(iii) the aggregate amount of prepayments, repurchases, redemptions and defeasances made by Holdings, the Borrower or any Restricted Subsidiary pursuant to clause (A) of the proviso to Section 10.7(a)(ii) after the Closing Date and prior to the Available Equity Amount Reference Time; and

(iv) the aggregate amount of Capital Expenditures made by the Borrower or any Restricted Subsidiary pursuant to Section 9.11(c)(i)(y) of the Term Loan Credit Agreement after the Closing Date and prior to the Available Equity Amount Reference Time.

 

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Available Equity Amount Reference Time ” shall have the meaning provided in the definition of the term “ Available Equity Amount ”.

Bankruptcy Code ” shall mean Title 11 of the United States Code, as amended, or any similar federal or state law for the relief of debtors.

Blocked Accounts ” shall have the meaning provided in Section 9.18(a).

Board ” shall mean the Board of Governors of the Federal Reserve System of the United States (or any successor).

Borrower ” shall have the meaning provided in the preamble to this Agreement.

Borrowing ” shall mean and include (a) the incurrence of one Type of Revolving Credit Loan on a given date (or resulting from conversions of Revolving Credit Loans on a given date) having, in the case of Eurodollar Loans, the same Interest Period (provided that ABR Loans incurred pursuant to Section 2.10(b) shall be considered part of any related Borrowing of Eurodollar Loans) and (b) the incurrence of Swingline Loans from the Swingline Lender on a given date.

Borrowing Base ” shall mean, as of any date, an amount equal to the sum at such time of (without duplication):

(a) 85% multiplied by the book value of Credit Parties’ Eligible Accounts at such time; and

(b) 85% multiplied by the Net Orderly Liquidation Value Percentage multiplied by the Credit Parties’ Eligible Inventory,

in each case, less, any Reserve established or modified from time to time by the Administrative Agent or the Collateral Agent in their exercise of their Permitted Discretion in accordance with the provisions of Section 2.14.

The Borrowing Base at any time shall be determined by reference to the most recent Borrowing Base Certificate theretofore delivered to the Collateral Agent and the Administrative Agent with such adjustments as Administrative Agent and Collateral Agent deem appropriate in their Permitted Discretion to assure that the Borrowing Base is calculated in accordance with the terms of this Agreement.

Borrowing Base Certificate ” shall mean a certificate, executed by an Authorized Officer of Borrower, substantially in the form of (or in such other form as may be mutually agreed upon by Borrower, Administrative Agent and Collateral Agent), and containing the information prescribed by, Exhibit K, delivered to the Administrative Agent and the Collateral Agent setting forth Borrower’s calculation of the Borrowing Base in accordance with Section 9.1(k).

 

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Business Day ” shall mean (a) any day excluding Saturday, Sunday and any day that shall be in The City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close and (b) if the applicable Business Day relates to any Eurodollar Loans, any day on which dealings in deposits in Dollars are carried on in the London interbank eurodollar market.

Canadian Dollars ” shall mean dollars in lawful currency of Canada.

Capital Expenditures ” shall mean, for any period, the aggregate of, without duplication, (a) all expenditures (whether paid in cash or accrued as liabilities) by the Borrower and the Restricted Subsidiaries during such period that, in conformity with GAAP, are or are required to be included as additions during such period to property, plant or equipment reflected in the consolidated balance sheet of the Borrower and the Restricted Subsidiaries, (b) all Capitalized Software Expenditures during such period, and (c) all fixed asset additions financed through Capital Lease Obligations incurred by the Borrower and the Restricted Subsidiaries and recorded on the balance sheet in accordance with GAAP during such period; provided that the term “ Capital Expenditures ” shall not include (i) expenditures made in connection with the replacement, substitution, restoration or repair of assets to the extent financed from insurance proceeds or compensation awards paid on account of a Recovery Event, (ii) the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such equipment for the equipment being traded in at such time, (iii) the purchase of plant, property or equipment to the extent financed with the proceeds of sales, transfers or other dispositions that are not required to be applied to prepay Term Loans pursuant to Section 4.2(a)(i) of the Term Loan Credit Agreement, (iv) expenditures that constitute any part of Consolidated Lease Expense, (v) expenditures that are accounted for as capital expenditures by the Borrower or any Restricted Subsidiary and that actually are paid for by a Person other than the Borrower or any Restricted Subsidiary and for which neither the Borrower nor any Restricted Subsidiary has provided or is required to provide or incur, directly or indirectly, any consideration or obligation to such Person or any other Person (whether before, during or after such period, it being understood, however, that only the amount of expenditures actually provided or incurred by the Borrower or any Restricted Subsidiary in such period and not the amount required to be provided or incurred in any future period shall constitute “Capital Expenditures” in the applicable period), (vi) the book value of any asset owned by the Borrower or any Restricted Subsidiary prior to or during such period to the extent that such book value is included as a capital expenditure during such period as a result of such Person reusing or beginning to reuse such asset during such period without a corresponding expenditure actually having been made in such period; provided that (x) any expenditure necessary in order to permit such asset to be reused shall be included as a Capital Expenditure during the period in which such expenditure actually is made and (y) such book value shall have been included in Capital Expenditures when such asset was originally acquired, (vii) any expenditures that constitute Permitted Acquisitions and expenditures made in connection with the Transactions or (viii) any capitalized interest expense reflected as additions to property, plant or equipment in the consolidated balance sheet of the Borrower and the Restricted Subsidiaries or capitalized as Capitalized Software Expenditures for such period.

Capital Stock ” shall mean any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, rights or options to purchase any of the foregoing.

 

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Capitalized Lease Obligations ” shall mean, as applied to any Person, all obligations under Capitalized Leases of such Person or any of its Subsidiaries, in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP.

Capitalized Leases ” shall mean, as applied to any Person, all leases of property that have been or should be, in accordance with GAAP, recorded as capitalized leases of such Person.

Capitalized Software Expenditures ” shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by the Borrower and the Restricted Subsidiaries during such period in respect of purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of the Borrower and the Restricted Subsidiaries.

Cash Collateral Account ” shall mean a deposit account or securities account in the name of the Borrower and under the sole control (as defined in the applicable UCC) of the Collateral Agent for the benefit of the Secured Parties.

Cash Collaterize ” shall have the meaning provided in Section 3.7.

Cash Dominion Event ” shall mean the occurrence of any one of the following events: (i) the Excess Availability is less than 10% of the Total Commitment for a period of five consecutive Business Days, (ii) an Event of Default pursuant to Sections 11.1, 11.3 (but only to the extent such Event of Default was caused by a breach of Section 10 or Section 9.1(a), (b) or (k) and the Administrative Agent or the Required Lenders have reasonably determined (by written notice to the Borrower) to effect a Cash Dominion Event as a result of such breach) or 11.5 shall occur and be continuing; provided that, to the extent that the Cash Dominion Event has occurred due to clause (i) of this definition, if Excess Availability shall be equal to or greater than 10% of the Total Commitments for at least 30 consecutive days, the Cash Dominion Event shall be deemed to be over. At any time that a Cash Dominion Event shall be deemed to be over or otherwise cease to exist, the Collateral Agent shall take such actions, including delivering such notices and directions to depositary institutions at which Blocked Accounts are established, to terminate the cash sweeps and other transfers existing pursuant to Section 9.18(c) as a result of any Activation Notice or other notices or directions given by Collateral Agent during the existence of such Cash Dominion Event.

Cash Management Systems ” shall have the meaning provided in Section 9.18(b).

Cash Management Bank ” shall mean any Person that is a Lender or an Affiliate of a Lender at the time it provides any Cash Management Services or that is a Lender or an Affiliate of a Lender at any time after it has provided any Cash Management Services, including each Person deemed to be “Cash Management Bank” pursuant to the definition of the term “ Cash Management Bank ” in the Term Loan Credit Agreement or in the documentation governing any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness.

 

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Cash Management Obligations ” shall mean obligations owed by Holdings, the Company or any Restricted Subsidiary to any Cash Management Bank in connection with, or in respect of, any Cash Management Services.

Cash Management Services ” shall mean treasury, depository, overdraft, credit or debit card, including non-card e-payables services, purchase card, electronic funds transfer, automated clearing house fund transfer services and other cash management services.

Change ” shall have the meaning provided for in Section 2.14

Change of Control ” shall mean and be deemed to have occurred if (a) (i) at any time prior to a Qualifying IPO, the Sponsor and the Management Investors shall at any time not own, in the aggregate, directly or indirectly, beneficially and of record, at least 35% of the outstanding Voting Stock of Holdings and/or (ii) at any time after a Qualifying IPO, any person, entity or “ group ” (within the meaning of Section 13(d) or 14(d) of the Exchange Act, but excluding any employee benefit plan of such person, entity or “ group ” and its Subsidiaries and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than the Sponsor and the Management Investors, shall at any time have acquired direct or indirect beneficial ownership (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act) of the greater of (A) 35% of the outstanding Voting Stock of Holdings and (B) the percentage of the outstanding Voting Stock of Holdings owned in the aggregate, directly or indirectly, beneficially and of record, by the Sponsor and the Management Investors, unless in the case of either clause (i) or (ii) above, the Sponsor and the Management Investors have, at such time, the right or the ability by voting power, contract or otherwise to elect or designate for election at least a majority of the Board of Directors of Holdings;  provided that, for the purpose of this clause (a), the direct or indirect beneficial ownership of the Management Investors shall be deemed not to exceed 10% of the outstanding Voting Stock of Holdings; and/or (b) at any time Continuing Managers shall not constitute at least majority of the Board of Directors of Holdings; and/or (c) any Person other than Holdings shall acquire direct ownership, beneficially or of record, of any Voting Stock of the Borrower; and/or (d) a “Change of Control” (as defined in the Revolving Credit Agreement or in the Senior Subordinated Notes Indenture or however defined in the documentation governing any Permitted Refinancing Indebtedness incurred to Refinance any of such Indebtedness) shall have occurred.

Closing Date ” shall mean the date of the initial Credit Event hereunder.

Closing Date Indebtedness ” shall mean Indebtedness described on Schedule 10.1.

Closing EBITDA ” shall mean “ EBITDA ” as defined in the indenture governing the notes identified in clause (i) of the definition of “ Existing Notes ” modified as follows: (a) business optimization expenses and other restructuring charges under clause (4) of such definition shall only be permitted to be added back up to an aggregate amount of $5,000,000 for the twelve-month period ended December 31, 2007 and (b) EBITDA for each of the three-month periods ended March 31, 2007 and June 30, 2007, respectively, shall be deemed to be $32,700,000 and $88,300,000, respectively.

 

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Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement, and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor.

Collateral ” shall have the meaning provided to such term in each of the Security Documents.

Collateral Access Agreement ” shall mean a landlord waiver, bailee letter or any other agreement reasonably requested by and reasonably acceptable to the Administrative Agent or the Collateral Agent, as the case may be.

Collateral Agent ” shall mean GECC, or any successor thereto appointed in accordance with the provisions of Section 12.11, together with its affiliates, as the collateral agent for the Secured Parties.

Collection Account ” shall have the meaning provided in Section 9.18(b)(i).

Commitment ” shall mean, with respect to each Lender, such Lender’s Revolving Credit Commitment or Swingline Commitment.

Commitment Fee ” shall have the meaning provided in Section 4.1(a).

Company ” shall have the meaning provided in the preamble to this Agreement.

Concentration Account ” shall have the meaning provided in Section 9.18(b)(i).

Concentration Account Bank ” shall have the meaning provided in Section 9.18(b)(i).

Confidential Information ” shall have the meaning provided in Section 13.16.

Confidential Information Memorandum ” shall mean the Confidential Information Memorandum of the Borrower dated January 2008, delivered to prospective lenders in connection with this Agreement.

Consolidated EBITDA ” shall mean, for any period, the Consolidated Net Income for such period, plus:

(a) without duplication and to the extent already deducted (and not added back) in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

(i) total interest expense 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 risk, net of interest income and gains on such Hedging Obligations or such derivative instruments, and bank and letter of credit fees and costs of surety bonds in connection with financing activities,

 

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(ii) provision for taxes based on income, profits or capital, including federal, foreign, state, franchise, excise, and similar taxes paid or accrued during such period,

(iii) depreciation and amortization (including amortization of intangible assets established through purchase accounting and amortization of deferred financing fees or costs),

(iv) Non-Cash Charges,

(v) net after tax extraordinary losses in accordance with GAAP,

(vi) net after tax non-recurring charges (including any unusual or non-recurring operating expenses directly attributable to the implementation of cost savings initiatives), severance, relocation costs, integration and facilities’ opening costs, signing costs, retention or completion bonuses, transition costs and costs related to closure/consolidation of facilities,

(vii) restructuring charges, accruals or reserves (including restructuring costs related to acquisitions after the Closing Date); provided that such restructuring charges, accruals and reserves shall not exceed an aggregate amount of $5,000,000 for any Test Period,

(viii) the amount of any minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-wholly owned Subsidiary deducted (and not added back in such period to Consolidated Net Income),

(ix) (A) the amount of management, monitoring, consulting and advisory fees, indemnities and related expenses paid or accrued in such period to (or on behalf of) the Sponsor and (B) the amount of expenses relating to payments made to option holders of the Borrower or any of its direct or indirect parent companies in connection with, or as a result of, any distribution being made to shareholders of such Person or its direct or indirect parent companies, which payments are being made to compensate such option holders as though they were shareholders at the time of, and entitled to share in, such distribution, in each case to the extent permitted in this Agreement,

(x) losses on asset sales, disposals or abandonments (other than asset sales, disposals or abandonments in the ordinary course of business),

(xi) the amount of “ run rate ” cost savings projected by the Borrower in good faith to be realized as a result of specified actions taken within 18 months after the Closing Date (which cost savings shall be added to Consolidated EBITDA until fully realized (but in any event for no longer than 30 months following the Closing Date if such cost savings have not be realized by that time) and calculated on a Pro Forma Basis as though such cost savings had been realized on the first day of the relevant period), net of the amount of actual benefits realized from such actions; provided that (A) such cost savings are reasonably identifiable and factually supportable, (B) no cost savings shall be added pursuant to this clause (xi) to the extent duplicative of any expenses or charges relating to such cost savings that are included in clauses (vi) and (vii) above or in the definition of the term “ Pro Forma Adjustment ” and (C) the aggregate amount of cost savings added pursuant to this clause (xi) shall not exceed $10,000,000 for any Test Period (it being understood and agreed that “ run rate ” shall mean the full recurring benefit that is associated with any action taken),

 

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(xii) the amount of any net losses from discontinued operations in accordance with GAAP,

(xiii) any non-cash loss attributable to the mark to market movement in the valuation of Hedging Obligations (including Hedging Obligations entered into for the purpose of hedging against fluctuations in the price or availability of any commodity) (to the extent the cash impact resulting from such loss has not been realized) or other derivative instruments pursuant to Financial Accounting Standards Board Statement No. 133-” Accounting for Derivative Instruments and Hedging Activities ”,

(xiv) any loss relating to amounts paid in cash prior to the stated settlement date of any Hedging Obligation (including Hedging Obligations entered into for the purpose of hedging against fluctuations in the price or availability of any commodity) that has been reflected in Consolidated Net Income for such period, and

(xv) any gain relating to Hedging Obligations (including Hedging Obligations entered into for the purpose of hedging against fluctuations in the price or availability of any commodity) associated with transactions realized in the current period that has been reflected in Consolidated Net Income in prior periods and excluded from Consolidated EBITDA pursuant to clauses (b)(v) and (b)(vi) below;

less

(b) without duplication and to the extent included in arriving at such Consolidated Net Income, the sum of the following amounts for such period:

(i) extraordinary gains and unusual or non-recurring gains,

(ii) non-cash gains (excluding any non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash item that reduced Consolidated Net Income or Consolidated EBITDA in any prior period),

(iii) gains on asset sales, disposals or abandonments (other than asset sales, disposals or abandonments in the ordinary course of business),

(iv) the amount of any net income from discontinued operations in accordance with GAAP,

(v) any non-cash gain attributable to the mark to market movement in the valuation of Hedging Obligations (including Hedging Obligations entered into for the purpose of hedging against fluctuations in the price or availability of any commodity) (to the extent the cash impact resulting from such gain has not been realized) or other derivative instruments pursuant to Financial Accounting Standards Board Statement No. 133-” Accounting for Derivative Instruments and Hedging Activities ”,

 

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(vi) any gain relating to amounts received in cash prior to the stated settlement date of any Hedging Obligation (including Hedging Obligations entered into for the purpose of hedging against fluctuations in the price or availability of any commodity) that has been reflected in Consolidated Net Income in the such period,

(vii) any loss relating to Hedging Obligations (including Hedging Obligations entered into for the purpose of hedging against fluctuations in the price or availability of any commodity) associated with transactions realized in the current period that has been reflected in Consolidated Net Income in prior periods and excluded from Consolidated EBITDA pursuant to clauses (a)(xiii) and (a)(xiv) above; and

(viii) the amount of any minority interest income consisting of Subsidiary loss attributable to minority equity interests of third parties in any non-wholly owned Subsidiary added (and not deducted in such period to Consolidated Net Income),

in each case, as determined on a consolidated basis for the Borrower and the Restricted Subsidiaries in accordance with GAAP; provided that, to the extent included in Consolidated Net Income,

(i) there shall be excluded in determining Consolidated EBITDA currency translation gains and losses related to currency remeasurements of Indebtedness (including the net loss or gain resulting from Hedging Agreements for currency exchange risk),

(ii) there shall be included in determining Consolidated EBITDA for any period, without duplication, (A) the Acquired EBITDA of any Person, property, business or asset acquired by the Borrower or any Restricted Subsidiary during such period (other than any Unrestricted Subsidiary) to the extent not subsequently sold, transferred or otherwise disposed of (but not including the Acquired EBITDA of any related Person, property, business or assets to the extent not so acquired) (each such Person, property, business or asset acquired, including pursuant to the Transactions, and not subsequently so disposed of, an “ Acquired Entity or Business ”), and the Acquired EBITDA of any Unrestricted Subsidiary that is converted into a Restricted Subsidiary during such period (each, a “ Converted Restricted Subsidiary ”), in each case based on the Acquired EBITDA of such Pro Forma Entity for such period (including the portion thereof occurring prior to such acquisition or conversion) determined on a historical Pro Forma Basis and (B) an adjustment in respect of each Pro Forma Entity equal to the amount of the Pro Forma Adjustment with respect to such Pro Forma Entity for such period (including the portion thereof occurring prior to such acquisition or conversion) as specified in the Pro Forma Adjustment Certificate delivered to the Administrative Agent (for further delivery to the Lenders); and

(iii) there shall be excluded in determining Consolidated EBITDA for any period the Disposed EBITDA of any Person, property, business or asset (other than any Unrestricted Subsidiary) sold, transferred or otherwise disposed of, closed or classified as discontinued operations by the Borrower or any Restricted Subsidiary during such period (each such Person, property, business or asset so sold, transferred or otherwise disposed of, closed or classified, a “ Sold Entity or Business ”), and the Disposed EBITDA of any Restricted Subsidiary that is converted into an Unrestricted Subsidiary during such period (each, a “ Converted

 

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Unrestricted Subsidiary ”), in each case based on the Disposed EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary for such period (including the portion thereof occurring prior to such sale, transfer, disposition, closure, classification or conversion) determined on a historical Pro Forma Basis.

Notwithstanding anything to the contrary contained herein and subject to adjustment as provided in clauses (ii)  and (iii)  of the immediately preceding proviso with respect to acquisitions and dispositions occurring following the Closing Date and adjustments as provided under clause (a)(xi) above, Consolidated EBITDA shall be deemed to be $32,200,000, $87,500,000 and $95,000,000, respectively, for the fiscal quarters ended March 31, 2007, June 30, 2007 and September 30, 2007.

Consolidated EBITDA to Consolidated Fixed Charges Ratio ” shall mean, as of any date of determination, the ratio of (a) (i) Consolidated EBITDA for the most recent Test Period ended on or prior to such date of determination minus, without duplication, (ii) Capital Expenditures incurred during such Test Period (other than Capital Expenditures financed with the proceeds of Indebtedness), minus , (iii) the portion of taxes attributable to the Borrower and its Restricted Subsidiaries based on income for such Test Period actually paid in cash or accrued during such Test Period to (b) Consolidated Fixed Charges for such Test Period; provided that, for purposes of calculating the Consolidated EBITDA to Consolidated Fixed Charges Ratio for any period ending prior to the first anniversary of the Closing Date, Consolidated Interest Expense shall be (A) with respect to all amounts of Consolidated Interest Expense, other than amounts relating to the Credit Documents, an amount equal to actual Consolidated Interest Expense from the Closing Date through the date of determination multiplied by a fraction the numerator of which is 365 and the denominator of which is the number of days from the Closing Date through the date of determination and (B) with respect to all amounts of Consolidated Interest Expense relating to the Credit Documents, calculated as if the average amount utilized and accruing Consolidated Interest Expense thereunder during any fiscal quarter prior to the first anniversary of the Closing Date, is $105,000,000 in respect of Revolving Credit Loans and $33,000,000 in respect of Letters of Credit Outstanding. In the event that the Borrower or any Restricted Subsidiary incurs, assumes, guarantees, repays, redeems, retires or extinguishes any Indebtedness (other than Indebtedness incurred under any revolving credit facility that has not been permanently repaid) subsequent to the commencement of the period for which the Consolidated EBITDA to Consolidated Fixed Charges Ratio is being calculated, but prior to or simultaneously with the event for which the calculation of the Consolidated EBITDA to Consolidated Fixed Charges Ratio is made (the “ Calculation Date ”), then the Consolidated EBITDA to Consolidated Fixed Charges Ratio shall be calculated giving Pro Forma Effect to such incurrence, assumption, guarantee, repayment, redemption, retirement or extinguishing of Indebtedness as if the same had occurred at the beginning of the applicable Test Period.

Consolidated Fixed Charges ” shall mean for any period, the sum, determined on a consolidated basis and, without duplication, of (i) Consolidated Interest Expense, (ii) any scheduled payment of principal of Consolidated Total Debt during such period, (iii) all cash Dividends paid by the Borrower and the Restricted Subsidiaries on any series of preferred Capital Stock or Disqualified Capital Stock during such period.

 

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Consolidated Interest Expense ” shall mean, for any period, the cash interest expense (including that attributable to Capitalized Leases), net of cash interest income, of the Borrower and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, with respect to all outstanding Indebtedness of the Borrower and the Restricted Subsidiaries, including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Hedging Agreements, but excluding, for the avoidance of doubt, (i) amortization of deferred financing costs, debt issuance costs, commissions, fees and expenses, pay-in-kind interest expense and any other amounts of non-cash interest (including as a result of the effects of purchase accounting), (ii) the accretion or accrual of discounted liabilities during such period, (iii) any interest in respect of items excluded from Indebtedness in the proviso to the definition thereof, (iv) non-cash interest expense attributable to the movement of the mark-to-market valuation of obligations under Hedging Agreements or other derivative instruments pursuant to Statement of Financial Accounting Standards No. 133, (v) any one-time cash costs associated with breakage in respect of Hedging Agreements for interest rates, and (vi) all non-recurring cash interest expense consisting of liquidated damages for failure to timely comply with registration rights obligations and financing fees, all as calculated on a consolidated basis in accordance with GAAP.

Consolidated Lease Expense ” shall mean, for any period, all rental expenses of the Borrower and the Restricted Subsidiaries during such period under operating leases for real or personal property (including in connection with Permitted Sale Leasebacks), but excluding real estate taxes, insurance costs and common area maintenance charges and net of sublease income;  provided that Consolidated Lease Expense shall not include (a) obligations under vehicle leases entered into in the ordinary course of business, (b) all such rental expenses associated with assets acquired pursuant to the Transactions and pursuant to a Permitted Acquisition to the extent that such rental expenses relate to operating leases (i) in effect at the time of (and immediately prior to) such acquisition and (ii) related to periods prior to such acquisition, (c) Capitalized Lease Obligations, all as determined on a consolidated basis in accordance with GAAP and (d) the effects from applying purchase accounting.

Consolidated Net Income ” shall mean, for any period, the net income (loss) of the Borrower and the Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, excluding, without duplication, (a) extraordinary items for such period (including expenditures incurred to settle environmental liabilities), (b) the cumulative effect of a change in accounting principles during such period to the extent included in Consolidated Net Income, (c) in the case of any period that includes a period ending prior to or during the fiscal quarter ending December 31, 2008, Transaction Expenses, (d) any fees and expenses incurred during such period, or any amortization thereof for such period, in connection with any acquisition, investment, asset disposition, issuance or repayment of debt, issuance of equity securities, refinancing transaction or amendment or other modification of any debt instrument (in each case, including any such transaction consummated prior to the Closing Date and any such transaction undertaken but not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, (e) any income (loss) for such period attributable to the early extinguishment of Indebtedness, Hedging Agreements or other derivative instruments (other than commodity Hedging Agreements), (f) accruals and reserves that are established or adjusted as a result of the Transactions in accordance with GAAP or changes as a result of the adoption or modification of accounting policies during such period,

 

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(g) stock-based award compensation expenses and (h) any income (loss) from investments recorded using the equity method. There shall be included in Consolidated Net Income, without duplication, the amount of any cash tax benefits related to the tax amortization of intangible assets in such period. There shall be excluded from Consolidated Net Income for any period the effects from applying purchase accounting, including applying purchase accounting to inventory, property and equipment, software and other intangible assets and deferred revenue required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to the Borrower and the Restricted Subsidiaries), as a result of the Transactions, any acquisition consummated prior to the Closing Date and any permitted acquisitions or the amortization or write-off of any amounts thereof.

Consolidated Total Assets ” shall mean, as of any date of determination, the total amount of all assets of the Borrower and the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP as of such date.

Consolidated Total Debt ” shall mean, as of any date of determination, (a) the aggregate principal amount of (i) indebtedness of the Borrower and the Restricted Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of indebtedness resulting from the application of purchase accounting in connection with the Transactions or any Permitted Acquisition), consisting of indebtedness for borrowed money, Capitalized Lease Obligations and debt obligations evidenced by promissory notes or similar instruments, minus (b) (i) the aggregate amount of cash and Permitted Investments (in each case, free and clear of all Liens, other than Permitted Liens and other non-consensual Liens permitted by Section 10.2, Liens permitted under Sections 10.2(a), 10.2(h), 10.2(j), 10.2(m) and Liens permitted under clauses (i) and (ii) of Section 10.2(n)), excluding cash and Permitted Investments which are listed as “restricted”, on the consolidated balance sheet of the Borrower and the Restricted Subsidiaries as of such date less (ii) the aggregate amount of Reinvestment Deferred Amounts in excess of $50,000,000 at the date of determination.

Consolidated Total Debt to Consolidated EBITDA Ratio ” shall mean, as of any date of determination, the ratio of (a) Consolidated Total Debt as of the last day of the relevant Test Period to (b) Consolidated EBITDA for such Test Period.

Continuing Manager ” shall mean, at any date, an individual (a) who is a member of the Board of Directors of Holdings on the Closing Date, (b) who, as at such date, has been a member of such Board of Directors for at least the 12 preceding months, (c) who has been nominated or designated to be a member of such Board of Directors, directly or indirectly, by the Sponsor or Persons nominated or designated by the Sponsor or (d) who has been nominated to be a member of such Board of Directors by a majority of the other Continuing Managers then in office.

Contractual Obligation ” shall mean, 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 other than the Obligations.

 

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Control Agreement ” shall mean a Deposit Account Control Agreement or a Securities Account Control Agreement.

Converted Restricted Subsidiary ” shall have the meaning provided in the definition of the term “ Consolidated EBITDA ”.

Converted Unrestricted Subsidiary ” shall have the meaning provided in the definition of the term “ Consolidated EBITDA ”.

Credit Documents ” shall mean this Agreement, the Security Documents, the Guarantee, the Intercreditor Agreement, each Letter of Credit and any promissory notes issued by the Borrower hereunder.

Credit Event ” shall mean and include the making (but not the conversion or continuation) of a Loan or the issuance, amendment or extension of a Letter of Credit (including an Auto-Extension Letter of Credit).

Credit Party ” shall mean each of Holdings, the Borrower, the Guarantors and each other Subsidiary of the Borrower that is a party to a Credit Document.

Cumulative Consolidated Net Income ” shall mean, as at any date of determination, Consolidated Net Income for the period (taken as one accounting period) commencing on January 1, 2008 and ending on the last day of the most recent fiscal quarter for which Section 9.1 Financials have been delivered.

Cure Amount ” shall have the meaning provided in Section 11.12(a).

Cure Right ” shall have the meaning provided in Section 11.12(a).

Default ” shall mean any event, act or condition that with notice or lapse of time, or both, would constitute an Event of Default.

Defaulting Lender ” shall mean any Lender that (a) has failed to fund any portion of the Revolving Credit Loans, Letter of Credit Participations or participations in Swingline Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, unless the subject of a good faith dispute or subsequently cured, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute or subsequently cured, (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding or (d) has notified the Borrower and/or the Administrative Agent in writing of any of the foregoing (including any written notification of its intent not to comply with its obligations under Section 2).

Deposit Account Control Agreement ” has the meaning specified in the Security Agreement.

Designated Non-Cash Consideration ” shall mean the Fair Market Value of non-cash consideration received by Holdings, the Borrower or a Restricted Subsidiary in connection

 

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with a Disposition pursuant to Section 10.4(c) that is designated as Designated Non-Cash Consideration pursuant to a certificate of an Authorized Officer of the Borrower, setting forth the basis of such valuation (which amount will be reduced by the Fair Market Value of the portion of the non-cash consideration converted to cash within 180 days following the consummation of the applicable Disposition).

Disposed EBITDA ” shall mean, with respect to any Sold Entity or Business or Converted Unrestricted Subsidiary for any period, the amount for such period of Consolidated EBITDA of such Sold Entity or Business or Converted Unrestricted Subsidiary (determined as if references to the Borrower and the Restricted Subsidiaries in the definition of the term “ Consolidated EBITDA ” (and in the component financial definitions used therein) were references to such Sold Entity or Business and its Subsidiaries or to Converted Unrestricted Subsidiary and its Subsidiaries), all as determined on a consolidated basis for such Sold Entity or Business.

Disposition ” shall have the meaning provided in Section 10.4(c).

Disqualified Capital Stock ” shall mean any Capital Stock that, by its terms (or by the terms of any security or other Capital Stock into which it is convertible or for which it is putable or exchangeable) or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Qualified Capital Stock), other than as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations (other than Cash Management Obligations under Secured Cash Management Agreements or contingent indemnification obligations), pursuant to a sinking fund obligation or otherwise, or (b) is redeemable or exchangeable at the option of the holder thereof (other than solely for Qualified Capital Stock), other than as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations (other than Cash Management Obligations under Secured Cash Management Agreements or contingent indemnification obligations), in whole or in part, or (c) provides for the scheduled payment of dividends in cash, in each case prior to the date that is ninety-one (91) days after the latest Maturity Date of any Credit Facility hereunder;  provided that if such Capital Stock is issued pursuant to any plan for the benefit of employees of Holdings (or any direct or indirect parent thereof), the Borrower or any of its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Capital Stock solely because it may be required to be repurchased by Holdings (or any direct or indirect parent company thereof), the Borrower or any of its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

Distributor Accounts ” shall mean Accounts (i) arising from delivery of products in the ordinary course of business, (ii) which are billed pursuant to a customer agreement which provides for monthly billing, (iii) which are billed not more than 40 days after the date of sale of product and (iv) for which the Borrower shall provide, from time to time at the Administrative Agent’s reasonable request, a summary setting forth the invoicing of the consigned distributors.

Dividends ” shall have the meaning provided in Section 10.6.

 

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Dollars ” and “ $ ” shall mean dollars in lawful currency of the United States of America.

Domestic Subsidiary ” shall mean each Subsidiary of the Borrower that is organized under the Applicable Laws of the United States, any state or territory thereof, or the District of Columbia.

E-Fax ” shall mean any system used to receive or transmit faxes electronically.

Eligible Accounts ” shall mean at any date of determination, the aggregate amount of all Accounts of the Credit Parties that are not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (w) below. Eligible Accounts shall not include, without duplication, any Account of any Credit Party:

(a) that does not arise from the sale of goods or the performance of services by such Credit Party in the ordinary course of its business;

(b) (i) upon which such Credit Party’s right to receive payment is not absolute or is contingent upon the fulfillment of any condition whatsoever or (ii) as to which such Credit Party is not able to bring suit or otherwise enforce its remedies against the Account Debtor through judicial process, or (iii) if the Account represents a progress billing consisting of an invoice for goods sold or used or services rendered pursuant to a contract under which the Account Debtor’s obligation to pay that invoice is subject to such Credit Party’s completion of further performance under such contract or is subject to the equitable lien of a surety bond issuer;

(c) with respect to which the Account Debtor is a creditor of any Credit Party or any Subsidiary of any Credit Party, has or has asserted any defense, counterclaim, right of setoff or has disputed its obligation to pay all or any portion of the Account, to the extent of such defense, claim, counterclaim, right of setoff or dispute, unless (i) the Administrative Agent or the Collateral Agent, in its Permitted Discretion, has established an appropriate Reserve and determines to include such Account as Eligible Account or (ii) such account Debtor has entered into an agreement reasonably acceptable to the Administrative Agent or the Collateral Agent to waive such rights;

(d) that comprises service charges or finance charges;

(e) that is not a true and correct statement of bona fide indebtedness incurred in the amount of the Account for merchandise sold to or services rendered and accepted by the applicable Account Debtor;

(f) (i) with respect to Other Accounts, with respect to which an invoice, reasonably acceptable to the Administrative Agent in form and substance (or otherwise in the form required by any Account Party), has not been sent to the applicable Account Debtor or (ii) with respect to Distributor Accounts, with respect to which an invoice, reasonably acceptable to the Administrative Agent in form and substance (or otherwise in the form required by any Account Party), has not been sent to the applicable Account Debtor within 40 days following the date of sale of product;

 

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(g) that (i) is not owned by such Credit Party or (ii) as to which the Collateral Agent’s Lien thereon, on behalf of itself and the Secured Parties, is not a first priority perfected Lien or is subject to any Lien of any other Person, other than (A) Liens in favor of the Collateral Agent, on behalf of itself and the Secured Parties or Term Loan Liens or (B) Permitted Liens for which the Administrative Agent or the Collateral Agent, in its Permitted Discretion, has established an appropriate Reserve and determines to include such Account as Eligible Account;

(h) that arises from a sale to any director, officer, other employee or Affiliate of any Credit Party;

(i) that is the obligation of an Account Debtor that is the United States government or a political subdivision thereof, or any state, county or municipality or department, agency or instrumentality thereof unless such Credit Party has complied with respect to such obligation with the Federal Assignment of Claims Act of 1940, or any applicable state, county or municipal law restricting the assignment thereof with respect to such obligation, in each case to the Administrative Agent’s reasonable satisfaction;

(j) that is the obligation of an Account Debtor located in a foreign country other than Canada unless payment thereof is assured by a letter of credit or other credit support assigned and delivered to the Administrative Agent, reasonably satisfactory to the Administrative Agent as to form, amount and issuer;

(k) to the extent such Credit Party is liable for goods sold or services rendered by the applicable Account Debtor to such Credit Party or any Subsidiary thereof but only to the extent of the potential offset;

(l) that arises with respect to goods that are delivered on a bill and hold, cash on delivery basis or placed on consignment (other than Distributor Accounts), guaranteed sale or other terms by reason of which the payment by the Account Debtor is or may be conditional;

(m) that is in default; provided, that, without limiting the generality of the foregoing, an Account shall be deemed in default upon the occurrence of any of the following:

(i) the Account Debtor obligated upon such Account suspends business, makes a general assignment for the benefit of creditors or fails to pay its debts generally as they come due; or

(ii) a petition is filed by or against any Account Debtor obligated upon such Account under any bankruptcy law or any other federal, state or foreign (including any provincial) receivership, insolvency relief or other law or laws for the relief of debtors;

(n) that is the obligation of an Account Debtor if 50% or more of the Dollar amount of all Accounts owing by that Account Debtor are ineligible under the other criteria set forth in this definition;

(o) as to which any of the representations or warranties in the Credit Documents with respect to such Account are untrue;

 

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(p) to the extent such Account is evidenced by a judgment, Instrument or Chattel Paper (other than Instruments or Chattel Paper that have been delivered to the Collateral Agent under the Security Agreement);

(q) Accounts, the collection of which the Administrative Agent believes in its Permitted Discretion to be doubtful by reason of the Account Debtor’s perceived inability to pay;

(r) which is not paid within the earlier of 60 days following its due date or 90 days following its original invoice date, or which has been written off the books of the Borrower or otherwise designated as uncollectible (in determining the aggregate amount from the same Account Debtor that is unpaid hereunder there shall be excluded the amount of any net credit balances relating to Accounts due from an Account Debtor which is not paid within the earlier of 60 days following its due date or 90 days following its original invoice date);

(s) with respect to which the Account Debtor is located in a state, province or jurisdiction (e.g., New Jersey, Minnesota and West Virginia) that requires, as a condition to access to the courts of such jurisdiction, that a creditor qualify to transact business, file a business activities report or other report or form, or take one or more other actions, unless the applicable Credit Party has so qualified, filed such reports or forms, or taken such actions (and, in each case, paid any required fees or other charges). The foregoing shall not apply to the extent that the applicable Credit Party may qualify subsequently as a foreign entity authorized to transact business in such state or jurisdiction and gain access to such courts, without incurring any cost or penalty viewed by the Administrative Agent to be material in amount, and such later qualification cures any access to such courts to enforce payment of such Account (including, for greater certainty, the requirement for a creditor to extra-provincially register in a province or territory of Canada for such purposes);

(t) to the extent such Account was created as a new receivable for the unpaid portion of an outstanding Account (including chargebacks, debit memos or other adjustments for unauthorized deductions);

(u) that does not comply in all material respects with the requirements of all Applicable Laws and regulations, whether federal, state, local or foreign, including the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

(v) to the extent that such Account, together with all other Accounts owing to such Account Debtor and its Affiliates as of any date of determination exceed 10% of all Eligible Accounts (or 20% with respect to Accounts owed by Johnstone Supply and its Affiliates or any higher percentage agreed to by the Administrative Agent, but in any event not exceeding 25% of all Eligible Accounts); or

(w) that is payable in any currency other than Dollars or Canadian Dollars; provided that the aggregate amount of all Eligible Accounts denominated in Canadian Dollars shall not exceed more than 10% of all Eligible Accounts at any time.

Subject to Sections 2.14 and 13.1(c) and the definition of Borrowing Base, the Administrative Agent may modify the foregoing in its Permitted Discretion.

 

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Eligible Inventory ” shall mean Inventory of the Credit Parties that is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (p) below. Eligible Inventory shall not include, without duplication, any Inventory of any Credit Party that:

(a) (i) is not owned by the Credit Parties or (ii) is not subject to a first priority lien in favor of the Collateral Agent on behalf of itself and the Secured Parties and is free and clear of all Liens (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure such Credit Parties’ performance with respect to that Inventory) except for (A) the Liens in favor of the Collateral Agent, on behalf of itself and the Secured Parties, and Term Loan Liens and (B) Permitted Liens for which the Administrative Agent or the Collateral Agent, in its Permitted Discretion, has established an appropriate Reserve and determines to include such Account as Eligible Inventory;

(b) (i) is not located on premises owned, leased or rented by the Credit Parties or (ii) is stored at a leased location, unless the Administrative Agent has given its prior consent thereto or unless (A) the lessor has delivered to the Collateral Agent a Collateral Access Agreement or (B) a Reserve (and, without duplication, Landlord Lien Reserve) for rent, charges and other amounts due or to become due with respect to such locations has been established by the Administrative Agent or the Collateral Agent in its Permitted Discretion, (iii) is stored with a bailee or third party warehouseman unless (A) such warehouseman or bailee has delivered to the Collateral Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may reasonably require or is evidenced by a Document which has been delivered to the Administrative Agent or (B) an appropriate Reserve has been established by the Administrative Agent or the Collateral Agent in its Permitted Discretion, or (iv) is located at an owned location subject to a mortgage in favor of a lender other than the Collateral Agent (and the collateral agent under the Term Loan Credit Documents), unless a reasonably satisfactory mortgagee waiver has been delivered to the Administrative Agent, or (v) is located at any site if the aggregate book value of Inventory at any such location is less than $100,000;

(c) is placed on consignment or is in transit, except for Inventory in transit between domestic locations of Credit Parties as to which the Collateral Agent’s Liens have been perfected at origin and destination;

(d) is covered by a negotiable document of title, unless such document has been delivered to the Administrative Agent with all necessary endorsements, free and clear of all Liens except those in favor of the Collateral Agent and the Secured Parties;

(e) consists of display items or packing or shipping materials, manufacturing supplies, work in process Inventory or replacement parts;

(f) consists of goods which have been returned by the buyer other than goods that are undamaged and are able to be resold in the ordinary course of business;

(g) is not of a type held for sale in the ordinary course of Credit Parties’ business;

 

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(h) breaches any of the representations or warranties pertaining to Inventory set forth in the Credit Documents;

(i) consists of any costs associated with “freight in” charges;

(j) consists of Hazardous Materials or goods that can be transported or sold only with licenses that are not readily available;

(k) is not located in the United States or Canada;

(l) is obsolete or unmarketable, defective or unfit for sale or which does not conform in all material respects to all standards imposed by any Governmental Authority having regulatory authority over such Credit Party;

(m) is not covered by casualty insurance which complies with the requirements of Section 9.3;

(n) which contains or bears any intellectual property rights licensed to a Credit Party unless the Administrative Agent is satisfied that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such licensor in any material respect, (ii) violating any material contract with such licensor or (iii) incurring any material liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement; or

(o) such portion of Eligible Inventory that is applicable to intercompany profits or capitalized variances.

Subject to Sections 2.14 and 13.1(c) and the definition of Borrowing Base, the Administrative Agent may modify the foregoing in its Permitted Discretion.

Environmental Claims ” shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or violation, investigations (other than internal reports prepared by the Borrower or any of its Subsidiaries (a) in the ordinary course of such Person’s business or (b) as required in connection with a financing transaction or an acquisition or disposition of real estate) or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereinafter, “ Claims ”), including (i) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law and (ii) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from the release or threatened release of Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment.

Environmental Law ” shall mean any applicable Federal, state, foreign or local statute, law, rule, regulation, ordinance, code and rule of common law now or hereafter in effect and in each case as amended, and any binding judicial or administrative interpretation thereof, including any binding judicial or administrative order, consent decree or judgment, in each case relating to the protection of the environment or, to the extent relating to exposure to substances that are harmful or deleterious to the environment, of human health or safety.

 

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Equity Contribution ” shall have the meaning provided in the recitals to this Agreement.

ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions of ERISA amendatory thereof, supplemental thereto or substituted therefor.

ERISA Affiliate ” shall mean each person (as defined in Section 3(9) of ERISA) that together with Holdings, the Borrower or a Subsidiary thereof would be deemed to be a “ single employer ” within the meaning of Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

Eurodollar Loan ” shall mean any Revolving Credit Loan bearing interest at a rate determined by reference to the Eurodollar Rate.

Eurodollar Base Rate ” shall mean, with respect to any Interest Period for any Eurodollar Loan, the greater of ((i) the rate per annum for deposits in Dollars for the applicable Interest Period appearing on the Reuters Screen LIBOR01 page as of 11:00 a.m. (London time) two Business Days prior to the first day in such Interest Period and (ii) 3.25% per annum . In the event that the rate referred to in clause (i) above does not appear on the Reuters Screen LIBOR01 page at such time, the “ Eurodollar Base Rate ” shall be determined by reference to such other comparable publicly available service for displaying the offered rate for deposit in Dollars in the London interbank market as may be agreed upon by the Administrative Agent and the Borrower or, in the absence of such agreement, the “ Eurodollar Base Rate ” for the purposes of this paragraph shall instead be the rate per annum notified to the Administrative Agent by the Reference Lender as the rate at which the Reference Lender is offered Dollar deposits at or about 11:00 a.m. (London time) two Business Days prior to the beginning of such Interest Period in the interbank Eurodollar market where the Eurodollar and foreign currency and exchange operations in respect of its Eurodollar Loans are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of its Eurodollar Loan to be outstanding during such Interest Period availability, such other method to determine such offered rate as may be selected by the Administrative Agent in its sole discretion.

Eurodollar Rate ” shall mean, with respect to any Interest Period and for any Eurodollar Loan, an interest rate per annum determined as the ratio of (a) the Eurodollar Base Rate with respect to such Interest Period for such Eurodollar Loan to (b) the Statutory Reserve Requirements with respect to such Interest Period and for such Eurodollar Loan.

E-System ” shall mean any electronic system, including Intralinks ® and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent, any of its Related Parties, or any of such Person’s respective officers, directors, employees, attorneys, agents and representatives or any other Person, providing for access to data protected by passcodes or other security system.

 

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Event of Default ” shall have the meaning provided in Section 11.

Excess Availability ” shall mean, as of any date of determination, an amount equal to the Maximum Amount less the Revolving Credit Exposure of all Lenders and Swingline Loans then outstanding.

Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Exchange Rate ” shall mean on any day with respect to any currency (other than Dollars), the rate at which such currency may be exchanged into any other currency (including Dollars), as set forth at approximately 11:00 a.m. (London time) on such day on the Reuters World Currency Page for such currency. In the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate shall be determined by reference to such other publicly available service for displaying exchange rates as may be agreed by the Administrative Agent and the Borrower, or, in the absence of such agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its foreign currency exchange operations in respect of such currency are then being conducted, at or about 11:00 a.m., local time, on such date for the purchase of the relevant currency for delivery two Business Days later.

Excluded Capital Stock ” shall mean (a) any Capital Stock with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the Borrower and the Collateral Agent), the cost or other consequences (including any adverse tax consequences) of pledging such Capital Stock shall be excessive in view of the benefits to be obtained by the Secured Parties therefrom, (b) solely in the case of any pledge of Capital Stock of any Foreign Subsidiary to secure the Obligations, any Capital Stock that is Voting Stock of such Foreign Subsidiary in excess of 65% of the outstanding Capital Stock of such class, (c) any Capital Stock to the extent the pledge thereof would be prohibited by any Applicable Law or Contractual Obligation, (d) the Capital Stock of any Subsidiary that is not wholly owned by the Borrower and its Subsidiaries at the time such Subsidiary becomes a Subsidiary (for so long as such Subsidiary remains a non-wholly owned Subsidiary), (e) the Capital Stock of any Immaterial Subsidiary or any Unrestricted Subsidiary, (f) the Capital Stock of any Subsidiary of a Foreign Subsidiary, (g) any Capital Stock of any Subsidiary to the extent that the pledge of such Capital Stock would result in adverse tax consequences to Holdings, the Borrower or any Subsidiary as reasonably determined by the Borrower and (h) such Capital Stock as has been identified on or prior to the Closing Date in writing to the Administrative Agent by an Authorized Officer of the Borrower and agreed to by the Administrative Agent.

Excluded Subsidiary ” shall mean (a) any Subsidiary that is not a wholly owned Subsidiary on any date such Subsidiary would otherwise be required to become a Guarantor pursuant to the requirements of Section 9.10 (for so long as such Subsidiary remains a non-wholly owned Subsidiary), (b) any Subsidiary that is prohibited by Applicable Law or Contractual Obligation existing on the Closing Date from guaranteeing the Obligations at the

 

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time such Subsidiary becomes a Restricted Subsidiary (and for so long as such restrictions or any replacement or renewal thereof is in effect), (c) any Domestic Subsidiary that is a direct or indirect Subsidiary of a Foreign Subsidiary, (d) any Immaterial Subsidiary ( provided that the Borrower shall not be permitted to exclude Immaterial Subsidiaries from guaranteeing the Obligations to the extent that (i) the aggregate amount of gross revenue for all Immaterial Subsidiaries (other than Unrestricted Subsidiaries) excluded by clause this clause (d) exceeds 2% of the consolidated gross revenues of the Borrower and its Restricted Subsidiaries for the most recent Test Period ended prior to the date of determination or (ii) the aggregate amount of total assets for all Immaterial Subsidiaries (other than Unrestricted Subsidiaries) excluded by this clause (d) exceeds 2% of the Consolidated Total Assets of the Borrower and its Restricted Subsidiaries as at the end of the most recent Test Period ended prior to the date of determination), (e) any other Subsidiary with respect to which, in the reasonable judgment of the Administrative Agent (confirmed in writing by notice to the Borrower and the Collateral Agent), the cost or other consequences (including any adverse tax consequences) of providing a guarantee shall be excessive in view of the benefits to be obtained by the Secured Parties therefrom, (f) each Foreign Subsidiary and Unrestricted Subsidiary, (g) each other Domestic Subsidiary acquired pursuant to a Permitted Acquisition and financed with secured Indebtedness incurred pursuant to Section 10.1(k) or 10.1(l) and permitted by the proviso to subclause (z) or (y), respectively, of either of such Sections and each Restricted Subsidiary that guarantees such Indebtedness to the extent that, and for so long as, the financing documentation relating to such Permitted Acquisition to which such Restricted Subsidiary is a party prohibits such Restricted Subsidiary from guaranteeing the Obligations, (h) any Subsidiary to the extent that the guarantee of the Obligations would result in adverse tax consequences to Holdings, the Borrower or any Subsidiary as reasonably determined by the Borrower and (i) AsureCare Corp., a Florida corporation.

Existing Notes ” shall mean collectively, (i) the existing fixed rate notes 7 7/8% Senior Subordinated Notes of Goodman Global Holdings, Inc. and (ii) the outstanding Senior Floating Rate Notes of Goodman Global Holdings, Inc.

Existing Notes Additional Redemption Amount ” shall mean Revolving Credit Loans up to $25,000,000 which may be borrowed on the Closing Date exclusively to fund the Existing Notes Over-Funding Amount.

Existing Notes Over-Funding Amount ” shall mean the difference between the calculation of the amount of the redemption deposit required under the indenture governing the Existing Notes calculated on the Closing Date using a discount rate of zero and the actual redemption amount determined on the date of redemption of the Existing Notes using the market discount rate at the time of such redemption.

Fair Market Value ” shall mean with respect to any asset or group of assets on any date of determination, the value of the consideration obtainable in a sale of such asset at such date of determination assuming a sale by a willing seller to a willing purchaser dealing at arm’s length and arranged in an orderly manner over a reasonable period of time having regard to the nature and characteristics of such asset, as reasonably determined by the Borrower.

 

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Federal Funds Effective Rate ” shall mean, for any day, the weighted average of the per annum rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

Fee Letter ” shall mean the letter dated the date hereof addressed to Borrower from the Joint Bookrunners and accepted by Borrower on the date hereof, with respect to certain fees to be paid from time to time to the Administrative Agent.

Fees ” shall mean all amounts payable pursuant to, or referred to in, Section 4.1.

Financial Covenant ” shall mean the covenant of the Borrower set forth in Section 10.11.

Foreign Subsidiary ” shall mean each Subsidiary of the Borrower that is not a Domestic Subsidiary.

Fronting Fee ” shall have the meaning provided in Section 4.1(b).

Funded Debt ” shall mean all indebtedness of the Borrower and the Restricted Subsidiaries for borrowed money that matures more than one year from the date of its creation or matures within one year from such date that is renewable or extendable, at the option of such Person, to a date more than one year from 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 year from such date, including Indebtedness in respect of the Loans.

GAAP ” shall mean generally accepted accounting principles in the United States of America, as in effect from time to time;  provided , however , that if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Closing Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

Governmental Authority ” shall mean the government of the United States, any foreign country or any multinational authority, or any state or political subdivision thereof, and any entity, body or authority exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including the PBGC and other quasi-governmental entities established to perform such functions.

 

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Guarantee ” shall mean the Revolving Guarantee, made by each Guarantor in favor of the Collateral Agent for the benefit of the Secured Parties, substantially in the form of Exhibit B.

Guarantee Obligations ” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such Indebtedness or any property constituting direct or indirect security therefor, (b) to advance or supply funds (i) for the purchase or payment of any such Indebtedness or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such Indebtedness of the ability of the primary obligor to make payment of such Indebtedness or (d) otherwise to assure or hold harmless the owner of such Indebtedness against loss in respect thereof;  provided , however , that the term “ Guarantee Obligations ” shall not include endorsements of instruments for deposit or collection 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 with respect to Indebtedness). The amount of any Guarantee Obligation shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

Guarantors ” shall mean (a) Holdings (b) each Domestic Subsidiary (other than an Excluded Subsidiary) on the Closing Date and (c) each Domestic Subsidiary (other than an Excluded Subsidiary) that becomes a party to the Guarantee after the Closing Date pursuant to Section 9.10.

Hazardous Materials ” shall mean (a) any petroleum or petroleum products, radioactive materials, friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing regulated levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of “ hazardous substances ”, “ hazardous waste ”, “ hazardous materials ”, “ extremely hazardous waste ”, “ restricted hazardous waste ”, “ toxic substances ”, “ toxic pollutants ”, “ contaminants ”, or “ pollutants ”, or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, which is prohibited, limited or regulated by any Environmental Law.

Hedging Agreement ” shall mean (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),

 

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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.

Hedging Obligations ” shall mean, with respect to any Person, the obligations of such Person under Hedging Agreements.

Historical Financial Statements ” shall mean (a) the audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Company for the three most recently completed fiscal years ended December 31, 2006, (b) unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of the Company for the fiscal quarter ended September 30, 2007 and each subsequent fiscal quarter (other than the fourth fiscal quarter of 2007) ended at least 45 days before the Closing Date and (c) unaudited consolidated balance sheets and related statements of income and cash flows of the Company for each fiscal month after September 30, 2007 (other than any month with respect to which quarterly financial statements are delivered pursuant to the foregoing) ended at least 45 days before the Closing Date, which financial statements described in clauses (a) through (c) shall have been prepared in accordance with GAAP.

Holdings ” shall mean CHILL INTERMEDIATE HOLDINGS, INC, a Delaware Corporation or, after the Closing Date, any other Person (the “ New Holdings ”) that is a Subsidiary of CHILL INTERMEDIATE HOLDINGS, INC, (or the previous New Holdings as the case may be) (the “ Previous Holdings ”); provided that (a) such New Holdings owns 100% of Voting Stock of the Borrower, (b) the New Holdings shall expressly assume all the obligations of the Previous Holdings under this Agreement and the other Credit Documents pursuant to a supplement hereto or thereto in form reasonably satisfactory to the Administrative Agent, (c) such substitution concurrently occurs under Term Loan Credit Documents, (d) the New Holdings shall have delivered to the Administrative Agent an officer’s certificate stating that such substitution and any supplements to the Credit Documents preserve the enforceability of the Guarantee and the perfection and priority of the Liens under the Security Documents, (e) if reasonably requested by the Administrative Agent, an opinion of counsel to the effect that such substitution does not violate this Agreement or any other Credit Document, (f) all assets of the Previous Holdings are contributed or otherwise transferred to such New Holdings and (g) no Default or Event of Default has occurred and is continuing at the time of such substitution and such substitution does not result in any Default or Event of Default or material tax liability; provided , further , that if the foregoing are satisfied, the Previous Holdings shall be automatically released of all its obligations under the Credit Documents and any reference to “Holdings” in the Credit Documents shall be meant to refer to the “New Holdings”.

Immaterial Subsidiary ” shall mean, at any date of determination, any Restricted Subsidiary of the Borrower (a) whose total assets (when combined with the assets of such Restricted Subsidiary’s Subsidiaries after eliminating intercompany obligations) at the last day of the most recent Test Period ended on or prior to such determination date were less than 1% of the

 

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Consolidated Total Assets of the Borrower and its Restricted Subsidiaries at such date, and (b) whose gross revenues (when combined with the revenues of such Restricted Subsidiary’s Subsidiaries after eliminating intercompany obligations) for such Test Period were less than 1% of the consolidated gross revenues of the Borrower and its Restricted Subsidiaries for such period, in each case determined in accordance with GAAP.

Indebtedness ” shall mean, 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:

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

(b) the maximum amount (after giving effect to any prior drawings or reductions which may have been reimbursed) of all letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds, performance bonds and similar instruments issued or created by or for the account of such Person;

(c) net Hedging Obligations of such Person;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than (i) current trade liabilities (but not any refinancings, extensions, renewals, or replacements thereof) incurred in the ordinary course of business and maturing within 365 days after the incurrence thereof except if such trade liabilities bear interest and (ii) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP);

(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; and

(g) all Guarantee Obligations of such Person in respect of any of the foregoing;

provided that Indebtedness shall not include (i) prepaid or deferred revenue arising in the ordinary course of business and (ii) purchase price holdbacks arising in the ordinary course of business in respect of a portion of the purchase price of an asset to satisfy warrants or other unperformed obligations of the seller of such asset.

For all purposes hereof, the Indebtedness of any Person shall (A) 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, except to the extent such Person’s liability for such Indebtedness is otherwise limited and only to the extent such Indebtedness would be included in the calculation of Consolidated

 

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Total Debt and (B) in the case of Holdings, the Borrower and their Subsidiaries, exclude all intercompany Indebtedness having a term not exceeding 364 days (inclusive of any roll-over or extensions of terms) and made in the ordinary course of business consistent with past practice. The amount of any net Hedging Obligations on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of Indebtedness of any Person for purposes of clause (e) above 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 Parties ” shall have the meaning provided in Section 13.5(a).

Initial Financial Statement Delivery Date ” shall mean the date on which Section 9.1 Financials are delivered to the Administrative Agent under Section 9.1 for the first full fiscal quarter commencing after the Closing Date.

Intercreditor Agreement ” shall mean the Intercreditor Agreement dated as of the Closing Date by and between the Collateral Agent and GECC, as collateral agent under the Term Loan Credit Agreement, and acknowledged by Holdings, the Borrower and the other Guarantors.

Interest Period ” shall mean, with respect to any Revolving Credit Loan, the interest period applicable thereto, as determined pursuant to Section 2.9.

Inventory ” shall mean any “inventory,” as such term is defined in the UCC, now owned or hereafter acquired by any Credit Party, wherever located, and in any event including inventory, merchandise, goods and other personal property that are held by or on behalf of any Credit Party for sale or lease or are furnished or are to be furnished under a contract of service, or that constitute raw materials, work in process, finished goods, returned goods, supplies or materials of any kind, nature or description used or consumed or to be used or consumed in such Credit Party’s business or in the processing, production, packaging, promotion, delivery or shipping of the same, including all supplies and embedded software.

Inventory Appraisal ” shall mean (a) on the Closing Date, the appraisal prepared by Great American Group dated January 22, 2008 and (b) thereafter, the most recent inventory appraisal conducted by an independent appraiser firm pursuant to Section 9.2(b).

Investment ” shall have the meaning provided in Section 10.5.

Investors ” shall mean the Sponsor, certain other investors arranged by and/or designated by the Sponsor and identified to the Joint Bookrunners prior to the Closing Date and the Management Investors.

ISP ” shall mean, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

Issuer Documents ” shall mean with respect to any Letter of Credit, the Letter of Credit Request, and any other document, agreement and instrument entered into by the Letter of Credit Issuer and the Borrower (or any Restricted Subsidiary) or in favor of the Letter of Credit Issuer and relating to such Letter of Credit.

 

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Joint Lead Arrangers ” shall mean Barclays Capital, the investment banking division of Barclays Bank PLC and GECC.

Joint Bookrunners ” shall have the meaning provided in the preamble to this Agreement.

Landlord Lien ” shall mean any Lien of a landlord on any Credit Party’s property, granted by statute.

Landlord Lien Reserve ” shall mean an amount equal to up to 3 months’ rent for all of the Credit Parties’ leased locations where Eligible Inventory is located in each Landlord Lien State, other than leased locations with respect to which the Administrative Agent shall have received a landlord’s waiver of subordination of lien in form reasonably satisfactory to the Administrative Agent.

Landlord Lien State ” shall mean (i) each of Washington, Virginia and Pennsylvania and (ii) such other state(s) that the Administrative Agent reasonably determines after the Closing Date and notifies the Borrower thereof, that, as a result of a change in law (or in the interpretation or application thereof by any Governmental Authority) occurring after the Closing Date a landlord’s claim for rent has priority by operation of law over the Lien of the Collateral Agent in any of the Collateral consisting of Eligible Inventory.

Lender ” shall have the meaning provided in the preamble to this Agreement.

Letter of Credit ” shall have the meaning provided in Section 3.1(a).

Letter of Credit Exposure ” shall mean, with respect to any Lender, at any time, the sum of (a) the amount of any Unpaid Drawings in respect of which such Lender has made (or is required to have made) Revolving Credit Loans pursuant to Section 3.4(a) at such time and (b) such Lender’s Revolving Credit Commitment Percentage of the Letters of Credit Outstanding at such time (excluding the portion thereof consisting of Unpaid Drawings in respect of which the Lenders have made (or are required to have made) Revolving Credit Loans pursuant to Section 3.4(a)).

Letter of Credit Fee ” shall have the meaning provided in Section 4.1(c).

Letter of Credit Issuer ” shall mean GECC and any one or more Persons who shall become a Letter of Credit Issuer pursuant to Section 3.6. Any Letter of Credit Issuer may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Letter of Credit Issuer, and in each such case the term “Letter of Credit Issuer” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. In the event that there is more than one Letter of Credit Issuer at any time, references herein and in the other Credit Documents to the Letter of Credit Issuer shall be deemed to refer to the Letter of Credit Issuer in respect of the applicable Letter of Credit or to all Letter of Credit Issuers, as the context requires.

 

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Letter of Credit Maturity Date ” shall mean, the date that is 3 Business Days prior to the Revolving Credit Maturity Date.

Letter of Credit Participant ” shall have the meaning provided in Section 3.3(a).

Letter of Credit Participation ” shall have the meaning provided in Section 3.3(a).

Letter of Credit Request ” shall have the meaning provided in Section 3.2(a).

Letter of Credit Sub-Limit ” shall mean $50,000,000, as the same may be reduced from time to time pursuant to Section 4.2.

Letters of Credit Outstanding ” shall mean, at any time, the sum of, without duplication, (a) the aggregate Stated Amount of all outstanding Letters of Credit and (b) the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit.

Lien ” shall mean any mortgage, pledge, security interest, hypothecation, assignment, lien (statutory or other) or similar encumbrance, and any easement, right-of-way, license, restriction (including zoning restrictions), defect, exception or irregularity in title or similar change or encumbrance (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement or any lease in the nature thereof);  provided that in no event shall an operating lease be deemed to be a Lien.

Loan ” shall mean any Revolving Credit Loan or Swingline Loan made by any Lender hereunder.

Management Investors ” shall mean the management officers, directors and employees of Holdings, the Borrower and the Restricted Subsidiaries who become investors in Holdings, any of its direct or indirect parent entities or in the Borrower.

Mandatory Borrowing ” shall have the meaning provided in Section 2.1(c)(ii).

Master Agreement ” shall have the meaning provided in the definition of the term “ Hedging Agreement.

Material Adverse Effect ” shall mean an effect that results in or causes, or could reasonably be expected to result in or cause, a material adverse effect on (a) the business, operations, results of operations, assets, liabilities or condition (financial or otherwise) of the Borrower and the Restricted Subsidiaries taken as a whole, (b) the legality, validity or enforceability of any Credit Document, (c) the ability of the Credit Parties (taken as a whole) to perform their respective obligations under the Credit Documents or (d) the rights and remedies of the Administrative Agent, the Collateral Agent or the Lenders under the Credit Documents.

Maturity Date ” shall mean the Revolving Credit Maturity Date, the Letter of Credit Maturity Date or the Swingline Maturity Date, as applicable.

Maximum Amount ” shall mean the lesser of (i) the Borrowing Base in effect from time to time and (ii) the Total Commitments then in effect.

 

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Merger ” shall have the meaning provided in the recitals to this Agreement.

Merger Consideration ” shall have the meaning provided in the recitals to this Agreement.

Merger Funds ” shall have the meaning provided in the recitals to this Agreement.

Merger Sub ” shall have the meaning provided in the recitals to this Agreement.

Minimum Borrowing Amount ” shall mean (a) with respect to a Borrowing of Revolving Credit Loans, $1,000,000, and (b) with respect to a Borrowing of Swingline Loans, $100,000.

Minority Investment ” shall mean any Person (other than a Subsidiary) in which the Borrower or any Restricted Subsidiary owns Capital Stock.

Moody’s ” shall mean Moody’s Investors Service, Inc. or any successor by merger or consolidation to its business.

Mortgage ” shall mean a mortgage or a deed of trust, deed to secure debt, trust deed or other security document entered into by the owner of a Mortgaged Property and the Collateral Agent for the benefit of the Secured Parties in respect of that Mortgaged Property, substantially in the form of Exhibit C (with such changes thereto as may be necessary to account for local law matters) or otherwise in such form as agreed between the Borrower and the Collateral Agent or, in the case of any Mortgaged Property located outside the United States of America, in such form as agreed between the Borrower and the Collateral Agent.

Mortgage Supporting Documents ” shall mean the documents which are to be delivered under Section 9.14(c) with respect to any Mortgage for any Mortgaged Property.

Mortgaged Property ” shall mean, initially, each parcel of real estate and improvements thereto owned by a Credit Party and identified on Schedule 1.1(b), and each other parcel of real property and improvements thereto with respect to which a Mortgage is required to be granted pursuant to Section 9.14(b).

Net Cash Proceeds ” shall mean “Net Cash Proceeds” as defined in the Term Loan Credit Agreement.

Net Orderly Liquidation Value Percentage ” shall mean, the value of Eligible Inventory that is estimated to be recoverable in an orderly liquidation thereof, net of all costs of liquidation thereof, based upon the most recent Inventory Appraisal conducted in accordance with this Agreement and expressed as a percentage of cost of such Eligible Inventory.

Non-Cash Charges ” shall mean (a) any impairment charge or asset write-off or write-down related to intangible assets (including goodwill), long-lived assets, and investments in debt and equity securities pursuant to GAAP, (b) all losses from investments recorded using the equity method, (c) all Non-Cash Compensation Expenses, (d) the non-cash impact of

 

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purchase accounting, and (e) other non-cash charges (provided, in each case, that if any non-cash charges represent an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period).

Non-Cash Compensation Expense ” shall mean any non-cash expenses and costs that result from the issuance of stock-based awards, partnership interest-based awards and similar incentive based compensation awards or arrangements.

Non-Cash Compensation Liabilities ” shall mean any liabilities recorded in connection with stock-based awards, partnership interest-based awards and similar incentive based compensation awards or arrangements.

Non-Consenting Lender ” shall have the meaning provided in Section 13.7(b).

Non-Defaulting Lender ” shall mean and include each Lender other than a Defaulting Lender.

Non-Excluded Taxes ” shall have the meaning provided in Section 5.4(a).

Non-Extension Notice Date ” shall have the meaning provided in Section 3.2(b).

Non-U.S. Lender ” shall have the meaning provided in Section 5.4(e).

Notice of Borrowing ” shall mean a request of the Borrower in accordance with the terms of Section 2.3 and substantially in the form of Exhibit F-1 or such other form as shall be approved by the Administrative Agent (acting reasonably).

Notice of Conversion or Continuation ” shall have the meaning provided in Section 2.6.

Obligations ” shall mean the collective reference to (a) the due and punctual payment of (i) the principal of and premium, if any, and interest at the applicable rate provided in this Agreement (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Borrower under this Agreement in respect of any Letter of Credit, when and as due, including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral, and (iii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Borrower or any other Credit Party to any of the Secured Parties under this Agreement and the other Credit Documents, (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Borrower under or pursuant to this Agreement and the other Credit Documents, (c) the due and punctual payment and performance of all the covenants, agreements, and liabilities of each other Credit Party under or pursuant to this Agreement or the

 

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other Credit Documents, and (d) the due and punctual payment and performance of all Cash Management Obligations under each Secured Cash Management Agreement. Notwithstanding the foregoing, (i) the obligations of Holdings, the Borrower or any Subsidiary under any Secured Cash Management Agreement shall be secured and guaranteed pursuant to the Security Documents and the Guarantee only to the extent that, and for so long as, the other Obligations are so secured and guaranteed and (ii) any release of Collateral or Guarantors effected in the manner permitted by this Agreement and the other Credit Document shall not require the consent of the holders of the Cash Management Obligations under Secured Cash Management Agreements.

Organizational Documents ” shall mean, (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, if applicable, 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.

Other Accounts ” shall mean all Accounts other than Distributor Accounts.

Other Taxes ” shall have the meaning provided in Section 5.4(b).

Participant ” shall have the meaning provided in Section 13.6(c)(i).

PATRIOT ACT ” shall have the meaning provided in Section 13.18.

PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto.

Perfection Certificate ” shall mean a certificate of the Borrower in the form of Exhibit D or any other form approved by the Administrative Agent.

Permitted Acquisition ” shall mean any acquisition, by merger or otherwise, by the Borrower or any of the Restricted Subsidiaries of assets (including any assets constituting a business unit, line of business or division) or Capital Stock, so long as (a) such acquisition and all transactions related thereto shall be consummated in accordance with all Applicable Laws; (b) if such acquisition involves the acquisition of a Subsidiary, such acquisition shall result in the issuer of such Capital Stock becoming a Restricted Subsidiary and a Guarantor to the extent required by Section 9.10; (c) such acquisition shall result in the Collateral Agent, for the benefit of the Secured Parties, being granted a security interest in any Capital Stock or any assets so acquired to the extent required by Sections 9.10, 9.11 and/or 9.14(b); (d) after giving effect to such acquisition, no Event of Default shall have occurred and be continuing; (e) after giving effect to such acquisition, the Borrower and its Restricted Subsidiaries shall be in compliance with Section 9.13; (f) the Borrower shall be in compliance, on a Pro Forma Basis after giving effect to such acquisition (including any Indebtedness assumed or permitted to exist or incurred

 

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pursuant to Sections 10.1(k) and 10.1(l), respectively, and any related Pro Forma Adjustment), with the covenants set forth in Section 9.11 of the Term Loan Credit Agreement, as such covenants are recomputed as at the last day of the most recently ended Test Period as if such acquisition had occurred on the first day of such Test Period; and (g) the Permitted Acquisition Consideration paid in connection with such Permitted Acquisition when combined with the Permitted Acquisition Consideration of the prior Permitted Acquisitions consummated after the Closing Date shall not exceed the sum of (i) 10% of Consolidated Total Assets (determined as at the last day of the most recently ended Test Period prior to such Permitted Acquisition), plus (ii) the Reinvestment Deferred Amount.

Permitted Acquisition Consideration ” shall mean in connection with any Permitted Acquisition, the aggregate amount (as valued at the Fair Market Value of such Permitted Acquisition at the time such Permitted Acquisition is made) of, without duplication: (i) the purchase consideration paid or payable in cash for such Permitted Acquisition, whether payable at or prior to the consummation of such Permitted Acquisition or deferred for payment at any future time, whether or not any such future payment is subject to the occurrence of any contingency, and including any and all payments representing the purchase price and any assumptions of Indebtedness and/or Guarantee Obligations, “earn-outs” and other agreements to make any payment the amount of which is, or the terms of payment of which are, in any respect subject to or contingent upon the revenues, income, cash flow or profits (or the like) of any person or business; (ii) the aggregate amount of Indebtedness incurred or assumed in connection with such Permitted Acquisition;  provided in each case, that any such future payment that is subject to a contingency shall be considered Permitted Acquisition Consideration only to the extent of the reserve, if any, required under GAAP (as determined at the time of the consummation of such Permitted Acquisition) to be established in respect thereof by Holdings, the Borrower or its Restricted Subsidiaries.

Permitted Additional Notes ” shall mean unsecured senior, senior subordinated or subordinated notes issued by the Borrower; provided that (a) the terms of such notes do not provide for any scheduled repayment, mandatory redemption or sinking fund obligation prior to the date that is 91 days after the latest Maturity Date of any Credit Facility hereunder, other than, subject to the prior repayment of or the prior offer to repay the Obligations hereunder, customary offers to purchase upon a change of control, asset sale or casualty or condemnation event and customary acceleration rights upon an event of default, (b) the covenants, events of default, Subsidiary guarantees and other terms for such notes ( provided that such notes shall have interest rates and redemption premiums determined by Holdings or the Borrower, as the case may be, to be market rates and premiums at the time of issuance of such notes), taken as a whole, are determined by Holdings or the Borrower, as the case may be, to be market terms on the date of issuance and in any event are not more restrictive on Holdings, the Borrower and its Restricted Subsidiaries, or materially less favorable to the Lenders, than the terms of this Agreement (as in effect on the Closing Date) and do not require the maintenance or achievement of any financial performance standards other than as a condition to taking specified actions; provided that a certificate of an Authorized Officer of Holdings or the Borrower, as the case may be, delivered to the Administrative Agent at least five 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 Holdings or the Borrower, as the case may be, has determined in good faith that such terms and

 

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conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies Holdings and the Borrower within such five Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees), (c) if such notes are senior subordinated or subordinated notes, the terms of such notes provide for customary subordination of such notes to the Obligations and (d) no Subsidiary of the Borrower (other than a Guarantor) is an obligor under such notes.

Permitted Cure Security ” shall mean an equity security of Holdings or the Borrower (or any direct or indirect parent thereof) having no mandatory redemption, repurchase or similar requirements prior to 91 days after the latest Maturity Date of any Credit Facility hereunder, and upon which all dividends or distributions (if any) shall be, prior to 91 days after the latest Maturity Date hereunder, payable solely in additional shares of such equity security; provided that all equity securities of Holdings issued in connection with the Equity Contributions shall not be deemed to be Permitted Cure Securities.

Permitted Discretion ” shall mean, as applicable, the Administrative Agent’s or the Collateral Agent’s commercially reasonable judgment, exercised in good faith in accordance with customary business practices for similar asset-based lending transactions, as to any factor, event, condition or other circumstance which the Administrative Agent or the Collateral Agent, as applicable, reasonably determines: (a) will or could reasonably be expected to adversely affect the quantity, quality, mix or value of the Eligible Accounts and Eligible Inventory (including any Applicable Law that may inhibit collection of an Account), the enforceability or priority of the Collateral Agent’s Liens thereon or the amount which the Administrative Agent, the Lenders or the Letter of Credit Issuer would be likely to receive (after giving consideration to delays in payment and costs of enforcement) in the liquidation of such Eligible Accounts and Eligible Inventory or (b) that any collateral report or financial information delivered to the Administrative Agent or the Collateral Agent by the Credit Parties or any Person on behalf of thereof is incomplete, inaccurate or misleading in any material respect or (c) creates a Default or an Event of Default. In exercising such judgment, the Administrative Agent or the Collateral Agent may consider, without duplication, factors already included in or tested by the definition of Eligible Accounts and Eligible Inventory, and any other criteria including: (i) changes after the Closing Date in any concentration of risk with respect to Eligible Accounts and (ii) any other factors arising after the Closing Date that affect or that could reasonably be expected to affect the credit risk of lending to the Borrower on the security of the Collateral.

Permitted Investments ” shall mean (a) Dollars and, with respect to any Foreign Subsidiaries, local currencies held by such Foreign Subsidiary, in each case in the ordinary course of business; (b) securities issued or unconditionally guaranteed or insured by the United States government or any agency or instrumentality thereof, in each case having maturities of not more than 24 months from the date of acquisition thereof; (c) securities issued by any state, commonwealth or territory of the United States of America or any political subdivision or taxing authority of any such state, commonwealth or territory or any public instrumentality thereof or any political subdivision or taxing authority of any such state, commonwealth or territory or any public instrumentality thereof having maturities of not more than 24 months from the date of acquisition thereof and, at the time of acquisition, having an investment grade rating generally obtainable from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be

 

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rating such obligations, then from another nationally recognized rating service); (d) commercial paper or variable or fixed rate notes issued by or guaranteed by any Lender or any bank holding company owning any Lender; (e) commercial paper or variable or fixed rate notes maturing no more than 12 months after the date of creation thereof and, at the time of acquisition, having a rating of at least A-2 or P-2 from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized rating service); (f) time deposits with, or domestic and Eurodollar certificates of deposit or bankers’ acceptances maturing no more than two years after the date of acquisition thereof issued by, any Lender or any other bank having combined capital and surplus of not less than $250,000,000 in the case of domestic banks and $100,000,000 (or the dollar equivalent thereof) in the case of foreign banks; (g) repurchase agreements with a term of not more than 30 days for underlying securities of the type described in clauses (b), (c) and (f) above entered into with any bank meeting the qualifications specified in clause (f) above or securities dealers of recognized national standing; (h) marketable short-term money market and similar securities having a rating of at least A-2 or P-2 from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized rating service); (i) shares of investment companies that are registered under the Investment Company Act of 1940 and invest solely in one or more of the types of securities described in clauses (a) through (h) above; and (j) in the case of investments by any Restricted Foreign Subsidiary or investments made in a country outside the United States of America, other customarily utilized high-quality investments in the country where such Restricted Foreign Subsidiary is located or in which such investment is made.

Permitted Liens ” shall mean (a) Liens for taxes, assessments or other governmental charges or claims that are either (i) not yet due and payable and not subject to penalties for nonpayment or (ii) being diligently contested in good faith by appropriate proceedings for which appropriate reserves have been established in accordance with GAAP, (b) Liens in respect of property or assets of Holdings, the Borrower or any of its Subsidiaries imposed by law, such as landlord’s, carriers’, warehousemen’s, repairmen’s, construction contractors’ and mechanics’ Liens and other similar Liens, in each case so long as such Liens arise in the ordinary course of business and do not individually or in the aggregate have a Material Adverse Effect, (c) Liens arising from judgments or decrees for the payment of money in circumstances not constituting an Event of Default under Section 11.10, (d) Liens incurred or pledges or deposits made in connection with workers’ compensation, unemployment insurance and other types of social security or similar legislation and deposits securing liabilities to insurance carriers under insurance or self-insurance arrangements in respect of such obligations, or to secure the performance of tenders, statutory obligations, surety, stay, customs and appeal bonds, bids, leases (other than Capitalized Leases), government contracts, trade contracts (other than for Indebtedness), performance and return-of-money bonds and other similar obligations (including letters of credit issued in lieu of any such bonds or to support the issuance thereof and including those to secure health, safety and environmental obligations) incurred in the ordinary course of business, (e) ground leases or subleases, licenses or sublicenses in respect of real property on which facilities owned or leased by Holdings, the Borrower or any of its Subsidiaries are located, (f) easements, rights-of-way, licenses, restrictions (including zoning restrictions), minor defects, exceptions or irregularities in title, encroachments, protrusions and other similar charges or encumbrances, in each case do not, in the aggregate, materially detract from the value of the Real Estate of the Borrower and its Subsidiaries, taken as a whole, or interfere in any

 

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material respect with the business of the Borrower and its Subsidiaries, taken as a whole, and that were not incurred in connection with and do not secure any Indebtedness, and to the extent reasonably agreed by the Administrative Agent, any exception on the title policies issued in connection with any Mortgaged Property, (g) any interest or title of a lessor, sublessor, licensor or sublicensor or secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under any lease permitted by this Agreement, (h) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods, (i) Liens on goods or inventory the purchase, shipment or storage price of which is financed by a documentary letter of credit or bankers’ acceptance issued or created for the account of the Borrower or any of its Subsidiaries; provided that such Lien secures only the obligations of the Borrower or such Subsidiaries in respect of such letter of credit to the extent permitted under Section 10.1, (j) licenses of intellectual property granted in a manner consistent with past practice, (k) Liens arising from precautionary Uniform Commercial Code financing statement or similar filings made in respect of operating leases entered into by the Borrower or any of its Subsidiaries and (l) any zoning or similar law or right reserved to, or vested in, any Governmental Authority to control or regulate the use of any real property that does not materially interfere with the ordinary course of conduct of the business of the Borrower and its Restricted Subsidiaries, taken as a whole.

Permitted Overadvance ” shall have the meaning provided in Section 2.1(d).

Permitted Refinancing Indebtedness ” shall mean, with respect to any Indebtedness (the “ Refinanced Indebtedness” ) any Indebtedness issued in exchange for, or the net proceeds of which are used to modify, extend, refinance, renew, replace or refund (collectively to “ Refinance” or a “ Refinancing ” or “ Refinanced ”) such Refinanced Indebtedness (or previous refinancing thereof constituting Permitted Refinancing Indebtedness); provided that (A) the principal amount (or accreted value, if applicable) of any such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Refinanced Indebtedness outstanding immediately prior to such Refinance except by an amount equal to the unpaid accrued interest and premium thereon plus other reasonable amounts paid and fees and expenses incurred in connection with such Refinancing plus an amount equal to any existing commitment unutilized and letters of credit undrawn thereunder and (B) if the Indebtedness being Refinanced is Indebtedness permitted by Section 10.1(a)(ii), 10.1(h), 10.1(j) or 10.1(w), the direct and contingent obligors with respect to such Permitted Refinancing Indebtedness are not changed, (C) other than with respect to a Refinancing in respect of Indebtedness permitted pursuant to Section 10.1(c), such Permitted Refinancing Indebtedness shall have 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 Refinanced Indebtedness and (D) if the Indebtedness being Refinanced is Indebtedness permitted by Section 10.1(a)(ii), 10.1(h), 10.1(j) or 10.1(w), the terms and conditions of any such Permitted Refinancing Indebtedness, taken as a whole, are not materially less favorable to the Lenders than the terms and conditions of the Refinanced Indebtedness being Refinanced (including, if applicable, as to collateral and subordination, but excluding as to interest rates and redemption premiums); provided that a certificate of an Authorized Officer of Holdings or the Borrower delivered to the Administrative Agent at least 10 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

 

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thereto, stating that Holdings or the Borrower, as the case may be, has determined in good faith that such terms and conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement unless the Administrative Agent notifies Holdings and the Borrower within such 10 Business Day period that it disagrees with such determination (including a reasonable description of the basis upon which it disagrees).

Permitted Sale Leaseback ” shall mean any Sale Leaseback consummated by the Borrower or any of the Restricted Subsidiaries pursuant to Section 10.4(g).

Person ” shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, trust or other enterprise or any Governmental Authority.

PIK Interest Amount ” shall mean the aggregate principal amount of all increases in the outstanding principal amount of the Senior Subordinated Notes (or any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness) including any issuances of PIK Notes (as defined in the Senior Subordinated Notes Indenture or any similar document) in connection with the payment by the Borrower to pay interest on the Senior Subordinated Notes (or any Permitted Refinancing Indebtedness incurred to Refinance such Indebtedness) in kind.

Plan ” shall mean (a) any multiemployer, as defined in Section 4001 of ERISA and subject to Title IV of ERISA, that (i) is maintained or contributed to by the Borrower, a Subsidiary or an ERISA Affiliate, (ii) was so maintained or contributed to and in respect of which the Borrower, any Restricted Subsidiary or any ERISA Affiliate could have liability under Section 4212 (c) of ERISA in the event such plan has been or were to be terminated or (b) any single employer plan, as defined in Section 4001(a)(15) of ERISA that (i) is maintained for employees of the Borrower, any Restricted Subsidiary or any ERISA Affiliate or (ii) was so maintained and in respect of which the Borrower, any Restricted Subsidiary or ERISA Affiliate could have liability under Section 4069 of ERISA in the event such plan has been or were to be terminated.

Pledge Agreement ” shall mean the Revolving Pledge Agreement, entered into by Holdings, the Borrower, the other pledgors party thereto and the Collateral Agent for the benefit of the Secured Parties, substantially in the form of Exhibit E-2.

Post-Acquisition Period ” shall mean, with respect to any Specified Transaction, the period beginning on the date such Specified Transaction is consummated and ending on the last day of the fourth full consecutive fiscal quarter immediately following the date on which such Specified Transaction is consummated.

Prime Rate ” shall mean the rate of interest per annum published by the Wall Street Journal from time to time, as the prime lending rate.

Pro Forma Adjustment ” shall mean, for any Test Period that includes all or any part of a fiscal quarter included in any Post-Acquisition Period with respect to the Acquired EBITDA of the applicable Pro Forma Entity or the Consolidated EBITDA of the Borrower, the pro forma increase or decrease in such Acquired EBITDA or such Consolidated EBITDA, as the case may be, projected by the Borrower in good faith as a result of (a) actions taken, prior to or

 

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during such Post-Acquisition Period, for the purposes of realizing reasonably identifiable and factually supportable cost savings, or (b) any additional costs incurred prior to or during such Post-Acquisition Period in connection with the combination of the operations of such Pro Forma Entity with the operations of the Borrower and the Restricted Subsidiaries; provided that (A) so long as such actions are taken prior to or during such Post-Acquisition Period or such costs are incurred prior to or during such Post-Acquisition Period it may be assumed, for purposes of projecting such pro forma increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, that such cost savings will be realizable during the entirety of such Test Period, or such additional costs will be incurred during the entirety of such Test Period, and (B) any such pro forma increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may be, shall be without duplication for cost savings or additional costs already included in such Acquired EBITDA or such Consolidated EBITDA, as the case may be, for such Test Period.

Pro Forma Adjustment Certificate ” shall mean any certificate of an Authorized Officer of the Borrower delivered pursuant to Section 9.1(i) or setting forth the information described in clause (iv) to Section 9.1(d).

Pro Forma Basis ”, “ Pro Forma Compliance ” and “ Pro Forma Effect ” shall mean, with respect to compliance with any test or covenant hereunder, that (A) to the extent applicable, the Pro Forma Adjustment shall have been made and (B) all Specified Transactions and the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such test or covenant: (a) income statement items (whether positive or negative) attributable to the property or Person subject to such Specified Transaction, (i) in the case of a sale, transfer or other disposition of all or substantially all Capital Stock in any Subsidiary of the Borrower or any division, product line, or facility used for operations of the Borrower or any of its Subsidiaries, shall be excluded, and (ii) in the case of a Permitted Acquisition or Investment described in the definition of the term “ Specified Transaction ”, shall be included, (b) any retirement or repayment of Indebtedness and (c) any Indebtedness incurred or assumed by the Borrower or any of the 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 that is or would be in effect with respect to such Indebtedness as at the relevant date of determination;  provided that, without limiting the application of the Pro Forma Adjustment pursuant to (A) above (but without duplication thereof), the foregoing pro forma adjustments may be applied to any such test or covenant solely to the extent that such adjustments are consistent with the definition of Consolidated EBITDA and give effect to events (including operating expense reductions) that are (i) (x) directly attributable to such transaction, (y) expected to have a continuing impact on the Borrower and the Restricted Subsidiaries and (z) factually supportable or (ii) otherwise consistent with the definition of the term “ Pro Forma Adjustment ”.

Pro Forma Entity ” shall mean any Acquired Entity or Business or any Converted Restricted Subsidiary.

Pro Rata Share ” shall mean, with respect to any Lender at any time, the percentage obtained by dividing (a) the sum of the Revolving Credit Commitments (or, if such

 

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Revolving Credit Commitments are terminated, the Revolving Credit Exposure therein) of such Lender then in effect by (b) the sum of the Revolving Credit Commitments (or, if such Commitments are terminated, the Revolving Credit Exposure therein) of all Lenders then in effect; provided, however, that, if there are no Revolving Credit Commitments and no Revolving Credit Exposure, such Lender’s Pro Rata Share shall be determined based on the Pro Rata Share most recently in effect, after giving effect to any subsequent assignment and any subsequent non-pro rata payments of any Lender pursuant to Section 13.7.

Qualified Capital Stock ” shall mean any Capital Stock that is not Disqualified Capital Stock.

Qualifying IPO ” shall mean the issuance by Holdings (or any direct or indirect parent of Holdings) of its common Capital Stock generating (individually or in the aggregate together with any prior initial public offering) gross proceeds exceeding $100,000,000, 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).

Real Estate ” shall have the meaning provided in Section 9.1(g).

Recovery Event ” shall mean (a) any damage to, destruction of or other casualty or loss involving any property or asset or (b) any seizure, condemnation, confiscation or taking under the power of eminent domain of, or any requisition of title or use of or relating to, or any similar event in respect of, any property or asset.

Reference Lender ” shall mean Barclays Bank PLC.

Refinance ” shall have the meaning provided in the definition of the term “ Permitted Refinancing Indebtedness .”

Refinancing ” shall have the meaning provided in the recitals to this Agreement.

Register ” shall have the meaning provided in Section 13.6(b)(v).

Regulation D ” shall mean Regulation D of the Board as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements.

Regulation T ” shall mean Regulation T of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

Regulation U ” shall mean Regulation U of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

Regulation X ” shall mean Regulation X of the Board as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

 

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Reinvestment Deferred Amount ” shall “Reinvestment Deferred Amount” as defined in the Term Loan Credit Agreement.

Related Parties ” shall mean, with respect to any specified Person, such Person’s Affiliates and the directors, officers, employees, agents, trustees, advisors of such Person or such Person’s Affiliates and any Person that possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of such Person, whether through the ability to exercise voting power, by contract or otherwise.

Reportable Event ” shall mean an event described in Section 4043 of ERISA and the regulations thereunder.

Required Lenders ” shall mean, at any date, Non-Defaulting Lenders having at such time in excess of 50% of (a) the Adjusted Total Commitment or (b) if the Total Commitment has been terminated or for the purposes of acceleration pursuant to Section 11, the outstanding principal amount of the Revolving Credit Loans and Letters of Credit Outstanding in the aggregate at such date.

Reserves ” shall mean, reserves deemed necessary in its Permitted Discretion by the Administrative Agent (a) on the Closing Date as set forth in the Borrowing Base delivered to the Administrative Agent on the Closing Date and (b) thereafter, from time to time, established against the gross amount of Eligible Accounts and Eligible Inventory in accordance with Section 2.14. Without limiting the generality of the foregoing, Reserves established to ensure the payment of accrued and unpaid interest pursuant to this Agreement shall be deemed to be a reasonable exercise of the Administrative Agent’s Permitted Discretion.

Restricted Foreign Subsidiary ” shall mean each Restricted Subsidiary that is also a Foreign Subsidiary.

Restricted Subsidiary ” shall mean any Subsidiary of the Borrower other than an Unrestricted Subsidiary.

Revolving Credit Commitment ” shall mean, (a) with respect to each Lender that is a Lender on the Closing Date, the amount set forth opposite such Lender’s name on Schedule 1.1(a) as such Lender’s “Revolving Credit Commitment” and (b) in the case of any Lender that becomes a Lender after the date hereof, the amount specified as such Lender’s “Revolving Credit Commitment” in the Assignment and Acceptance pursuant to which such Lender assumed a portion of the Total Commitment, in each case as such Revolving Credit Commitment maybe reduced or increased from time to time as permitted hereunder. The aggregate amount of the Revolving Credit Commitments as of the date hereof is $300,000,000.

Revolving Credit Commitment Percentage ” shall mean at any time, for each Lender, the percentage obtained by dividing (a) such Lender’s Revolving Credit Commitment by (b) the aggregate amount of the Revolving Credit Commitments;  provided that at any time when the Total Commitment shall have been terminated, each Lender’s Revolving Credit Commitment Percentage shall be its Revolving Credit Commitment Percentage as in effect immediately prior to such termination.

 

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Revolving Credit Exposure ” shall mean, with respect to any Lender at any time, the sum of (a) the aggregate principal amount of the Revolving Credit Loans of such Lender then outstanding and (b) such Lender’s Letter of Credit Exposure at such time.

Revolving Credit Facility ” shall have the meaning provided in the recitals to this Agreement.

Revolving Credit Loan ” shall have the meaning provided in Section 2.1(a).

Revolving Credit Maturity Date ” shall mean the date that is five years after the Closing Date, or, if such date is not a Business Day, the next preceding Business Day.

S&P ” shall mean Standard & Poor’s Ratings Services or any successor by merger or consolidation to its business.

Sale Leaseback ” shall mean any transaction or series of related transactions pursuant to which the Borrower or any of the Restricted Subsidiaries (a) sells, transfers or otherwise disposes of any property, real or personal, whether now owned or hereafter acquired, and (b) as part of such transaction, thereafter rents or leases such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold, transferred or disposed of.

SEC ” shall mean the Securities and Exchange Commission or any successor thereto.

Section 9.1 Financials ” shall mean the financial statements delivered, or required to be delivered, pursuant to Section 9.1(a) or 9.1(b) together with the accompanying officer’s certificate delivered, or required to be delivered, pursuant to Section 9.1(d).

Secured Cash Management Agreement ” shall mean any agreement relating to Cash Management Services that is entered into by and between Holdings, the Borrower or any Restricted Subsidiary and a Cash Management Bank.

Secured Parties ” shall mean, collectively, (a) the Lenders, (b) the Letter of Credit Issuers, (c) the Swingline Lender (d) the Administrative Agent, (e) the Collateral Agent, (f) each Cash Management Bank, (g) the beneficiaries of each indemnification obligation undertaken by any Credit Party under the Credit Documents and (h) any successors, endorsees, transferees and assigns of each of the foregoing.

Securities Account Control Agreement ” has the meaning specified in the Security Agreement.

Securities Act ” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

Security Agreement ” shall mean the Revolving Security Agreement, entered into by the Borrower, the other grantors party thereto and the Collateral Agent for the benefit of the Secured Parties, substantially in the form of Exhibit E-1.

 

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Security Documents ” shall mean, collectively, the Security Agreement, the Pledge Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Sections 9.10, 9.11 or 9.14 or pursuant to any of the Security Documents to secure any of the Obligations.

Senior Subordinated Notes ” shall mean those 13.5/14% senior subordinated notes due 2016 issued by the Borrower under the Senior Subordinated Notes Indenture in an initial aggregate principal amount of $500,000,000, including any “Exchange Note” issued in an “Exchange Offer” therefore (as such term is defined in the Senior Subordinated Notes Indenture).

Senior Subordinated Notes Indenture ” shall mean the indenture for the Senior Subordinated Notes, dated February 13, 2008 among the Borrower and Wells Fargo Bank, National Association, as trustee.

Senior Subordinated Notes Documents ” shall mean the Senior Subordinated Notes Indenture and the other credit documents referred to therein (including the related guarantee, the notes, the notes purchase agreement and the registration rights agreements).

Sold Entity or Business ” shall have the meaning provided in the definition of the term “ Consolidated EBITDA ”.

Solvent ” shall mean, with respect to any Person, at any date, that (a) the sum of such Person’s debt (including contingent liabilities) does not exceed the present fair saleable value of such Person’s present assets, (b) such Person’s capital is not unreasonably small in relation to its business as contemplated on such date, (c) such Person has not incurred and does not intend to incur, or believe that it will incur, debts including current obligations beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is “ solvent ” within the meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

Specified Obligations ” shall mean Obligations consisting of (a) the principal of and interest on Loans and (b) reimbursement obligations in respect of Letters of Credit.

Specified Subsidiary ” shall mean, at any date of determination, (a) any Restricted Subsidiary whose total assets (when combined with the assets of such Restricted Subsidiary’s Subsidiaries after eliminating intercompany obligations) at the last day of the most recent Test Period ended on or prior to such date of determination were equal to or greater than 5% of the Consolidated Total Assets of the Borrower and the Restricted Subsidiaries at such date, (b) any Restricted Subsidiary whose gross revenues (when combined with the revenues of such Restricted Subsidiary’s Subsidiaries after eliminating intercompany obligations) for such Test Period were equal to or greater than 5% of the consolidated gross revenues of the Borrower and the Restricted Subsidiaries for such period, in each case determined in accordance with

 

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GAAP or (c) each other Restricted Subsidiary that, when such Restricted Subsidiary’s total assets or gross revenues (when combined with the total assets or revenues of such Restricted Subsidiary’s Subsidiaries after eliminating intercompany obligations) are aggregated with each other Restricted Subsidiary (when combined with the total assets or revenues of such Restricted Subsidiary’s Subsidiaries after eliminating intercompany obligations) that is the subject of an Event of Default described in Section 11.5 would constitute a “Specified Subsidiary” under clause (a) or (b) above.

Specified Transaction ” shall mean, with respect to any period, any Investment, sale, transfer or other disposition of assets, incurrence or repayment of Indebtedness, Dividend, Subsidiary designation or other event that by the terms of the Credit Documents requires “ Pro Forma Compliance ” with a test or covenant hereunder or requires such test or covenant to be calculated on a “ Pro Forma Basis ”.

Sponsor ” shall mean Hellman & Friedman LLC and/or its Affiliates.

Stated Amount ” of any Letter of Credit shall mean the maximum amount from time to time available to be drawn thereunder, determined without regard to whether any conditions to drawing could then be met.

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

Subsidiary ” of any Person shall mean and include (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any limited liability company, partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than a 50% equity interest at the time. Unless otherwise expressly provided, all references herein to a “ Subsidiary ” shall mean a Subsidiary of Holdings or the Borrower, as applicable.

Subsidiary Guarantor ” shall mean each Guarantor that is a Subsidiary of the Borrower.

 

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Successor Borrower ” shall have the meaning provided in Section 10.3(a).

Supermajority Lenders ” shall mean, at any date, Non-Defaulting Lenders having at such time in excess of 75% of (a) the Adjusted Total Commitment or (b) if the Total Commitment has been terminated or for the purposes of acceleration pursuant to Section 11, the outstanding principal amount of the Revolving Credit Loans and Letters of Credit Outstanding in the aggregate at such date.

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

Swingline Commitment ” shall mean $30,000,000.

Swingline Lender ” shall mean GECC in its capacity as lender of Swingline Loans hereunder, or such other financial institution who, after the date hereof, shall agree to act in the capacity of lender of Swingline Loans hereunder.

Swingline Loan ” shall have the meaning provided in Section 2.1(c)(i).

Swingline Maturity Date ” shall mean, with respect to any Swingline Loan, the date that is five Business Days prior to the Revolving Credit Maturity Date.

Term Loan ” shall mean a Term Loan as applicable, as defined in the Term Loan Credit Agreement.

Term Loan Liens ” shall mean Liens securing the Obligations outstanding under, and as defined in, the Term Loan Credit Documents.

Term Loan Credit Agreement ” shall mean the credit agreement dated on or about the date hereof amongst Holdings, the Borrower, the institutions party thereto as lenders, the Term Loan Credit Agent, Barclays Capital the investment banking division of Barclays Bank PLC and Calyon New York Branch as joint lead arrangers, Barclays Bank PLC, Calyon New York Branch and GECC as joint book-runners.

Term Loan Credit Documents ” shall mean the Term Loan Credit Agreement and the other credit documents referred to in the Term Loan Credit Agreement (other than the Intercreditor Agreement).

Test Period ” shall mean, for any determination under this Agreement, the four consecutive fiscal quarters of the Borrower then last ended and for which Section 9.1 Financials have been delivered to the Administrative Agent.

 

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Total Commitment ” shall mean the sum of the Revolving Credit Commitments of all the Lenders.

Total Revolving Credit Outstandings ” shall mean, at any date, the sum of all Lenders’ Revolving Credit Exposure at such date plus all Swingline Loans then outstanding.

Transaction Expenses ” shall mean any fees or expenses incurred or paid by Holdings, the Borrower or any of their Subsidiaries in connection with the Transactions and the transactions contemplated hereby and thereby.

Transactions ” shall mean, collectively, (a) the Merger, (b) the Equity Contribution, (c) the Refinancing, (d) the entering into the Term Loan Credit Documents and the funding of the Term Loans, (e) the entering into the Revolving Credit Documents and the funding of the Revolving Credit Loans on the Closing Date, (f) the entering into the Senior Subordinated Notes Documents and the issuance of the Senior Subordinated Notes pursuant to the Senior Subordinated Notes Indenture on the Closing Date and, as applicable, the exchange offer required to be consummated by the Senior Subordinated Notes Documents, (g) the consummation of any other transactions connected with the foregoing and (h) the payment of fees and expenses in connection with any of the foregoing.

Transferee ” shall have the meaning provided in Section 13.6(e).

Type ” shall mean as to any Revolving Credit Loan, its nature as an ABR Loan or a Eurodollar Loan.

UCC ” shall mean the Uniform Commercial Code as the same may, from time to time, be enacted and in effect in the State of New York;  provided , that to the extent that the UCC is used to define any term herein or in any Credit Document and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern;  provided further , that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Collateral Agent’s or any Lender’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “ UCC ” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

Unfunded Current Liability ” of any Plan shall mean the amount, if any, by which the present value of the accrued benefits under the Plan as of the close of its most recent plan year, determined in accordance with Statement of Financial Accounting Standards No. 87 as in effect on the Closing Date, based upon the actuarial assumptions that would be used by the Plan’s actuary in a termination of the Plan, exceeds the Fair Market Value of the assets allocable thereto.

Unpaid Drawing ” shall have the meaning provided in Section 3.4(a).

Unrestricted Subsidiary ” shall mean (a) any Subsidiary of the Borrower that is formed or acquired after the Closing Date and is designated as an Unrestricted Subsidiary by the

 

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Borrower pursuant to Section 9.15 subsequent to the Closing Date, (b) any existing Restricted Subsidiary of the Borrower that is designated as an Unrestricted Subsidiary by the Borrower pursuant to Section 9.15 subsequent to the Closing Date and (c) any Subsidiary of an Unrestricted Subsidiary.

Voting Stock ” shall mean, with respect to any Person, shares of such Person’s Capital Stock having the right to vote for the election of directors of such Person under ordinary circumstances.

Weighted Average Life to Maturity ” shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying (i) 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 (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Indebtedness.

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

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

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

(c) Section, Exhibit and Schedule references are to the Credit Document in which such reference appears.

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

(e) 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.

(f) 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 ”.

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

1.3 Accounting Terms . (a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this

 

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Agreement shall be prepared in conformity with GAAP, applied in a manner consistent with that used in preparing the Historical Financial Statements, except as otherwise specifically prescribed herein.

(b) Notwithstanding anything to the contrary herein, for purposes of determining compliance with any test or covenant contained in this Agreement with respect to any period during which any Specified Transaction occurs, the Consolidated Total Debt to Consolidated EBITDA Ratio and the Consolidated EBITDA to Consolidated Fixed Charges Ratio (to the extent necessary) shall be calculated with respect to such period and such Specified Transaction on a Pro Forma Basis.

1.4 Rounding . Any financial ratios required to be maintained or complied with by the Borrower pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under 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).

1.5 References to Agreements, Laws, Etc . Unless otherwise expressly provided herein, (a) references to Organizational Documents, agreements (including the Credit Documents) and other Contractual Obligations shall be deemed to include all subsequent amendments, restatements, amendment and restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, amendment and restatements, extensions, supplements and other modifications are permitted by any Credit Document; and (b) references to any Applicable Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.

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

1.7 Timing of Payment of 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 described in Section 2.9) or performance shall extend to the immediately succeeding Business Day.

1.8 Currency Equivalents Generally . For purposes of determining compliance under Sections 10.4, 10.5, 10.6 and 10.11 with respect to any amount denominated in any currency other than Dollars (other than with respect to (a) any amount derived from the financial statements of the Borrower and the Subsidiaries of the Borrower and (b) any Indebtedness), such amount shall be deemed to equal the Dollar equivalent thereof based on the average Exchange Rate for such other currency for the most recent twelve-month period immediately prior to the date of determination determined in a manner consistent with that used in calculating Consolidated EBITDA for the related period. For purposes of determining compliance with Sections 10.1, 10.2 and 10.5, with respect to any amount of Indebtedness in a currency other than Dollars, compliance will be determined at the date of incurrence thereof using the Dollar equivalent thereof at the Exchange Rate in effect at the date of such incurrence.

 

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1.9 UCC Terms . The following terms have the meanings given to them in the applicable UCC: “chattel paper”, “commodity account”, “commodity contract”, “commodity intermediary”, “deposit account”, “entitlement holder”, “entitlement order”, “equipment”, “financial asset”, “general intangible”, “goods”, “instruments”, “inventory”, “securities account”, “securities intermediary” and “security entitlement”.

SECTION 2. Amount and Terms of Revolving Credit Facility

2.1 Loans . (a) Subject to and upon the terms and conditions herein set forth, each Lender severally agrees to make a loan or loans (each, a “ Revolving Credit Loan ”) to the Borrower, which Revolving Credit Loans (i) shall not exceed the Revolving Credit Commitment of such Lender (after giving effect thereto and to the application of the proceeds thereof), (ii) shall not, after giving effect thereto and to the application of the proceeds thereof, at any time result in the Total Revolving Credit Outstandings at such time exceed the Maximum Amount then in effect, (iii) shall be made at any time and from time to time on and after the Closing Date and prior to the Revolving Credit Maturity Date, (iv) may, at the option of the Borrower, be incurred and maintained as, and/or converted into, ABR Loans or Eurodollar Loans;  provided that all Revolving Credit Loans made by each of the Lenders pursuant to the same Borrowing shall, unless otherwise specifically provided herein, consist entirely of Revolving Credit Loans of the same Type and (v) may be repaid and reborrowed in accordance with the provisions hereof. On the Revolving Credit Maturity Date, all outstanding Revolving Credit Loans shall be repaid in full. The obligations of each Lender hereunder shall be several and not joint.

(b) Each Lender may at its option make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan;  provided that (i) any exercise of such option shall not affect the obligation of the Borrower to repay such Loan and (ii) in exercising such option, such Lender shall use its reasonable efforts to minimize any increased costs to the Borrower resulting therefrom (which obligation of the Lender shall not require it to take, or refrain from taking, actions that it determines would result in increased costs for which it will not be compensated hereunder or that it determines would be otherwise disadvantageous to it and in the event of such request for costs for which compensation is provided under this Agreement, the provisions of Section 2.10 shall apply).

(c) (i) Subject to and upon the terms and conditions herein set forth, the Swingline Lender in its individual capacity agrees, at any time and from time to time on and after the Closing Date and prior to the Swingline Maturity Date, to make a loan or loans (each, a “ Swingline Loan ”) to the Borrower, which Swingline Loans (A) shall be ABR Loans, (B) shall have the benefit of the provisions of Section 2.1(c)(ii), (C) shall not exceed at any time outstanding the Swingline Commitment, (D) shall not exceed, for any such Lender, the Revolving Credit Commitment of such Lender, (E) shall not, after giving effect thereto and to the application of the proceeds thereof, result at any time in Total Revolving Credit Outstandings at such time exceeding the Maximum Amount then in effect, and (G) may be repaid and reborrowed in accordance with the provisions hereof. On the Swingline Maturity Date, all

 

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outstanding Swingline Loans shall be repaid in full. The Swingline Lender shall not make any Swingline Loan after receiving a written notice from the Borrower or the Required Lenders stating that a Default or an Event of Default exists and is continuing until such time as the Swingline Lender shall have received written notice of (x) rescission of all such notices from the party or parties originally delivering such notice or (y) the waiver of such Default or Event of Default in accordance with the provisions of Section 13.1 or that such Default or Event of Default is no longer continuing.

(ii) On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the Lenders, with a copy to the Borrower, that all then-outstanding Swingline Loans shall be funded with a Borrowing of Revolving Credit Loans, in which case Revolving Credit Loans constituting ABR Loans (each such Borrowing, a “ Mandatory Borrowing ”) shall be made on the same Business Day (provided that such notice is given to the Lenders by the Swingline Lender before 1:00 p.m. (New York Time), or otherwise, on the next Business Day) by all Lenders pro rata based on each such Lender’s Revolving Credit Commitment Percentage, and the proceeds thereof shall be applied directly to the Swingline Lender to repay the Swingline Lender for such outstanding Swingline Loans. Each Lender hereby irrevocably agrees to make such Revolving Credit Loans upon one Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified to it in writing by the Swingline Lender notwithstanding (i) that the amount of the Mandatory Borrowing may not comply with the minimum amount for each Borrowing specified in Section 2.2, (ii) whether any conditions specified in Section 7 are then satisfied, (iii) whether a Default or an Event of Default has occurred and is continuing, (iv) the date of such Mandatory Borrowing or (v) any reduction in the Total Commitment after any such Swingline Loans were made. In the event that, in the sole judgment of the Swingline Lender, any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including as a result of the commencement of a proceeding under the Bankruptcy Code in respect of the Borrower), each Lender hereby agrees that it shall forthwith purchase from the Swingline Lender (without recourse or warranty) such participation of the outstanding Swingline Loans as shall be necessary to cause each such Lender to share in such Swingline Loans ratably based upon their respective Revolving Credit Commitment Percentages;  provided that all principal and interest payable on such Swingline Loans shall be for the account of the Swingline Lender until the date the respective participation is purchased and, to the extent attributable to the purchased participation, shall be payable to the Lender purchasing same from and after such date of purchase.

(d) Permitted Overadvances . Any provision of this Agreement to the contrary notwithstanding, (i) at the request of the Borrower, in its discretion Administrative Agent may (but shall have absolutely no obligation to), make Revolving Credit Loans to the Borrower on behalf of Lenders in amounts that cause the Total Revolving Credit Outstandings to exceed the Borrowing Base (any such excess Revolving Credit Advances are herein referred to collectively as “ Permitted Overadvances ”);  provided that (A) no such event or occurrence shall cause or constitute a waiver of the Administrative Agent’s, the Swingline Lender’s or the Lenders’ right to refuse to make any further Permitted Overadvances, Swingline Loans or Revolving Credit Loans, issue any Letter of Credit or incur any Letter of Credit Exposure, as the case may be, at any time that an Permitted Overadvance exists, and (B) no Permitted Overadvance shall result in a Default or Event of Default due to the Borrower’s failure to comply with Section 5.2(b) for so

 

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long as the Administrative Agent permits such Permitted Overadvance to remain outstanding, but solely with respect to the amount of such Permitted Overadvance. In addition, Permitted Overadvances may be made even if the conditions to lending set forth in Section 7 have not been met. All Permitted Overadvances shall constitute ABR Loans, shall bear interest at a rate equal to 2% per annum in excess of the sum of the ABR plus the Applicable Margin and shall be payable on the earlier of demand or the Revolving Credit Maturity Date. No Permitted Overadvance may remain outstanding for more than 45 days without the consent of the Required Lenders. The authority of the Administrative Agent to make Permitted Overadvances is limited to 5% of the Borrowing Base as determined on the date of such proposed Permitted Overadvance at any time, shall not cause the Revolving Credit Loan to exceed the Total Commitments, and may be revoked prospectively by a written notice to the Administrative Agent signed by the Required Lenders.

(e) Refinancing Permitted Overadvances . The Administrative Agent may at any time forward a demand to each Lender that each Lender pay to the Administrative Agent, for its account, such Lender’s Pro Rata Share of all or a portion of the outstanding Permitted Overadvances. Each Lender shall pay such Pro Rata Share to the Administrative Agent. Upon receipt by the Administrative Agent of such payment (other than during the continuation of any Event of Default under Section 11.5), such Lender shall be deemed to have made a Revolving Credit Loan to the Borrower, which, upon receipt of such payment by the Administrative Agent, the Borrower shall be deemed to have used in whole to refinance such Permitted Overadvance. In addition, regardless of whether any such demand is made, upon the occurrence of any Event of Default under Section 11.5, each Lender shall be deemed to have acquired, without recourse or warranty, an undivided interest and participation in each Permitted Overadvance in an amount equal to such Lender’s Pro Rata Share of such Permitted Overadvance. If any payment made by any Lender as a result of any such demand is not deemed a Revolving Credit Loan, such payment shall be deemed a funding by such Lender of such participation. Such participation shall not be otherwise required to be funded. Upon receipt by the Administrative Agent of any payment from any Lender pursuant to this Section 2.1(e) with respect to any portion of any Permitted Overadvance, the Administrative Agent shall promptly pay over to such Lender all payments of principal (to the extent received after such payment by such Lender) and interest (to the extent accrued with respect to periods after such payment) received by the Administrative Agent with respect to such portion.

2.2 Minimum Amount of Each Borrowing; Maximum Number of Borrowings . The aggregate principal amount of each Borrowing of Revolving Credit Loans shall be in a multiple of $1,000,000 and Swingline Loans shall be in a multiple of $100,000 and in each case shall not be less than the Minimum Borrowing Amount with respect thereto (except that (i) Mandatory Borrowings shall be made in the amounts required by Section 2.1(c) and (ii) Minimum Borrowing Amount shall not apply while a Cash Dominion Event is continuing). More than one Borrowing may be incurred on any date;  provided that at no time shall there be outstanding more than 10 Borrowings of Eurodollar Loans under this Agreement.

2.3 Notice of Borrowing

(a) Whenever the Borrower desires to incur Revolving Credit Loans hereunder (other than Mandatory Borrowings or borrowings to repay Unpaid Drawings under

 

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Letters of Credit), it shall give the Administrative Agent at the Administrative Agent’s Office, (i) prior to 1:00 p.m. (New York time) at least three Business Days’ prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Eurodollar Loans, and (ii) prior to 1:00 p.m. (New York time) at least one Business Day’s prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Revolving Credit Loans that are to be ABR Loans. Such notice (together with each notice of a Borrowing of Swingline Loans pursuant to Section 2.3(b), a “ Notice of Borrowing ”), except as otherwise expressly provided in Section 2.10, shall be irrevocable and shall specify (i) the aggregate principal amount of the Revolving Credit Loans to be made pursuant to such Borrowing, (ii) the date of Borrowing (which shall be a Business Day) and (iii) whether the respective Borrowing shall consist of ABR Loans or Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall promptly give each Lender written notice (or telephonic notice promptly confirmed in writing) of each proposed Borrowing of Revolving Credit Loans, of such Lender’s proportionate share thereof and of the other matters covered by the related Notice of Borrowing.

(b) Whenever the Borrower desires to incur Swingline Loans hereunder, it shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Swingline Loans prior to 2:00 p.m. (New York time) or such later time as may be agreed by the Swingline Lender on the date of such Borrowing. Each such notice shall be irrevocable and shall specify (i) the aggregate principal amount of the Swingline Loans to be made pursuant to such Borrowing and (ii) the date of Borrowing (which shall be a Business Day). The Administrative Agent shall promptly give the Swingline Lender written notice (or telephonic notice promptly confirmed in writing) of each proposed Borrowing of Swingline Loans and of the other matters covered by the related Notice of Borrowing.

(c) Mandatory Borrowings shall be made upon the notice specified in Section 2.1(c)(ii), with the Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set forth in such Section.

(d) Borrowings of Revolving Credit Loans to reimburse Unpaid Drawings under Letters of Credit shall be made upon the notice specified in Section 3.4(a).

(e) Without in any way limiting the obligation of the Borrower to confirm in writing any notice it may give hereunder by telephone, the Administrative Agent may act prior to receipt of written confirmation without liability upon the basis of such telephonic notice believed by the Administrative Agent in good faith to be from an Authorized Officer of the Borrower. In each such case, the Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of any such telephonic notice.

2.4 Disbursement of Funds . (a) No later than 2:00 p.m. (New York time) on the date specified in each Notice of Borrowing (including Mandatory Borrowings), each Lender will make available its pro rata portion, if any, of each Borrowing requested to be made on such date in the manner provided below;  provided that all Swingline Loans shall be made available in the full amount thereof by the Swingline Lender no later than 5:00 p.m. (New York time) on the date requested.

 

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(b) Each Lender shall make available all amounts it is to fund to the Borrower under any Borrowing in immediately available funds to the Administrative Agent at the Administrative Agent’s Office and the Administrative Agent will (except in the case of Mandatory Borrowings and Borrowings to repay Unpaid Drawings under Letters of Credit) make available to the Borrower, by depositing to an account designated by the Borrower to the Administrative Agent in writing, the aggregate of the amounts so made available in Dollars. Unless the Administrative Agent shall have been notified by any Lender prior to the date of any such Borrowing that such Lender does not intend to make available to the Administrative Agent its portion of the Borrowing or Borrowings to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing, and the Administrative Agent, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender and the Administrative Agent has made available same to the Borrower, the Administrative Agent shall be entitled to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower, to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) if paid by such Lender, the Federal Funds Effective Rate or (ii) if paid by the Borrower, the then-applicable rate of interest, calculated in accordance with Section 2.8, for the respective Loans.

(c) Nothing in this Section 2.4 shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that the Borrower may have against any Lender as a result of any default by such Lender hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to fulfill its commitments hereunder).

2.5 Repayment of Loans; Evidence of Debt . (a) The Borrower shall repay to the Administrative Agent, for the benefit of the applicable Lenders, (i) on the Revolving Credit Maturity Date, all then outstanding Revolving Credit Loans and (ii) on the Swingline Maturity Date, all then outstanding Swingline Loans.

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

(c) The Administrative Agent, on behalf of the Borrower, shall maintain the Register pursuant to Section 13.6(b), and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each Loan made hereunder, whether such Loan is a Revolving Credit Loan or a Swingline Loan, the Type of each Loan made

 

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and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender or the Swingline Lender and (iii) the amount of any sum received by the Administrative Agent from the Borrower and each Lender’s share thereof.

(d) The entries made in the Register and accounts and subaccounts maintained pursuant to Sections 2.5(b) and 2.5(c) shall, to the extent permitted by Applicable Law, be prima facie evidence of the existence and amounts of the obligations of the Borrower therein recorded;  provided , however , that the failure of any Lender or the Administrative Agent to maintain such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay (with applicable interest) the Loans made to the Borrower in accordance with the terms of this Agreement.

2.6 Conversions and Continuations . (a) The Borrower shall have the option on any Business Day to convert all or a portion equal to at least the Minimum Borrowing Amount of the outstanding principal amount of Revolving Credit Loans of one Type into a Borrowing or Borrowings of another Type and the Borrower shall have the option on any Business Day to continue the outstanding principal amount of any Eurodollar Loans for an additional Interest Period;  provided that (i) no partial conversion of Eurodollar Loans shall reduce the outstanding principal amount of Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum Borrowing Amount, (ii) ABR Loans may not be converted into Eurodollar Loans if an Event of Default is in existence on the date of the conversion and the Administrative Agent has, or the Required Lenders have, determined in its or their sole discretion not to permit such conversion, (iii) Eurodollar Loans may not be continued as Eurodollar Loans for an additional Interest Period if an Event of Default is in existence on the date of the proposed continuation and the Administrative Agent has, or the Required Lenders have, determin


 
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