LOAN AND SECURITY AGREEMENT

EXHIBIT 10.1

 

$125,000,000

LOAN AND SECURITY AGREEMENT

among

COOPER-STANDARD HOLDINGS INC. ,

as a U.S. Facility Guarantor and a Canadian Facility Guarantor

COOPER-STANDARD AUTOMOTIVE INC. ,

as the U.S. Borrower, a U.S. Facility Guarantor and a Canadian Facility Guarantor

COOPER-STANDARD AUTOMOTIVE CANADA LIMITED,

as the Canadian Borrower and a Canadian Facility Guarantor

THE OTHER GUARANTORS PARTY HERETO,

CERTAIN FINANCIAL INSTITUTIONS,

as Lenders

BANK OF AMERICA, N.A.,

as Agent

and

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Syndication Agent

Dated as of May 27, 2010

BANC OF AMERICA SECURITIES LLC,

DEUTSCHE BANK SECURITIES INC.,

UBS SECURITIES LLC,

and

BARCLAYS CAPITAL

as Joint Lead Arrangers and Bookrunners

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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LIST OF EXHIBITS AND SCHEDULES

 

LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT (this “ Agreement ”) is dated as of May 27, 2010, among COOPER-STANDARD HOLDINGS INC. , a Delaware corporation (“ Holdings ”) as a U.S. Facility Guarantor and a Canadian Facility Guarantor (each as defined herein), COOPER-STANDARD AUTOMOTIVE INC . , an Ohio corporation (the “ U.S. Borrower ”), COOPER-STANDARD AUTOMOTIVE CANADA LIMITED , an Ontario corporation (together with its permitted successors, the “ Canadian Borrower ”, and together with the U.S. Borrower, the “ Borrowers ”), the other U.S. Subsidiaries (as defined herein) of Holdings which are and may hereafter become party to this Agreement as U.S. Facility Guarantors and Canadian Facility Guarantors, the other Canadian Subsidiaries (as defined herein) of Holdings which are or may hereafter become party to this Agreement as Canadian Facility Guarantors, the financial institutions party to this Agreement from time to time as lenders (collectively, “ Lenders ”), and BANK OF AMERICA, N.A. , a national banking association, in its capacity as collateral agent and administrative agent for itself and the Secured Parties (as defined herein) (together with any successor agent appointed pursuant to Section 12.8 , “ Agent ”).

R E C I T A L S:

A. On August 3, 2009, Holdings, the then-existing U.S. Domiciled Loan Parties filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code (11 U.S.C. §§101-1532, as amended, the “ U.S. Bankruptcy Code ”) in the United States Bankruptcy Court for the District of Delaware (the “ U.S. Bankruptcy Court ”), jointly administered as Case No. 09-12743(PJW) and continued in the possession of their property and in the management of their businesses pursuant to Sections 1107 and 1108 of the U.S. Bankruptcy Code (the “ U.S. Bankruptcy Cases ”).

B. On August 4, 2009, the Canadian Borrower commenced proceedings, Court File No. CV-09-8307-00CL (the “ Canadian CCAA Case ”), in the Ontario Superior Court of Justice (Commercial List) (the “ Canadian CCAA Court ”) pursuant to the Canada’s Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36 (the “ CCAA ”).

C. On March 26, 2010, the then-existing U.S. Domiciled Loan Parties filed their Second Amended Joint Chapter 11 Plan of Reorganization (the “ U.S. Plan ”) and a disclosure statement and on April 16, 2010 the Canadian Borrower filed its Second Amended Plan of Compromise and Arrangement under the CCAA (the “ Canadian Plan ”, and together with the U.S. Plan, the “ Reorganization Plans ”).

D. The U.S. Plan proposes, among other things, to: (i) issue shares of new common stock, par value $0.001 per share, of Holdings (the “ New Common Stock ”) to holders of pre-petition claims with respect to certain senior notes, (ii) issue shares of new 7% cumulative participating convertible preferred stock, par value $0.001 per share, of Holdings (the “ New Preferred Stock ”) to the Backstop Parties (as defined below), (iii) issue New Common Stock to holders of pre-petition claims with respect to certain senior subordinated notes and (iv) offer rights to purchase additional shares to certain eligible claimholders at a purchase price of $21.54 per Share (the “ Rights Offering ”).

E. On March 19, 2010, Holdings and the backstop purchasers party thereto (the “ Backstop Parties ”) entered into that certain Commitment Agreement pursuant to which, among

other things, the Backstop Parties, in order to facilitate the Rights Offering, agreed to purchase, and Holdings agreed to sell, an aggregate number of shares of New Common Stock equal to the number of shares that were not validly subscribed for and purchased pursuant to the Rights Offering by the applicable claimholders.

F. On May 12, 2010, the U.S. Bankruptcy Court entered the order confirming the U.S. Plan (the “ U.S. Confirmation Order ”) pursuant to which, among other things, the Bankruptcy Court approved the transactions contemplated by the U.S. Plan and the Rights Offering.

G. On April 16, 2010, the Canadian CCAA Court made an order (the “ Canadian Sanction Order ”) sanctioning the Canadian Plan.

H. On the date hereof (the “ U.S. Effective Date ”), concurrently with the effectiveness of this Agreement, the U.S. Plan shall become effective in accordance with its terms.

I. On the date hereof (the “ Canadian Effective Date ”) concurrently with the effectiveness of this Agreement, the Canadian Plan shall become effective in accordance with its terms.

J. In connection with the Transactions contemplated by the Confirmation Order, the Canadian Sanction Order, the Reorganization Plans and the Rights Offering, each of the Borrowers has requested that Lenders provide a revolving credit facility to such Borrower, and Lenders are willing to provide such credit facilities on the terms and conditions set forth in this Agreement.

K. Each Subsidiary of Holdings which is or hereafter becomes a party hereto as a U.S. Facility Guarantor is or will be affiliated, is or will be engaged in interrelated businesses, and is or will derive substantial direct and indirect benefit from extensions of credit to the U.S. Borrower.

L. Each Subsidiary of Holdings which is or hereafter becomes a party hereto as a Canadian Facility Guarantor is or will be affiliated, is or will be engaged in interrelated businesses, and is or will derive substantial direct and indirect benefit from extensions of credit to the Canadian Borrower.

NOW, THEREFORE , for valuable consideration hereby acknowledged, the parties agree as follows:

SECTION 1. DEFINITIONS; RULES OF CONSTRUCTION

1.1 Definitions . As used herein, the following terms have the meanings set forth below:

ABL Priority Collateral : as defined in Section 7.1 .

Account : as defined in the UCC and the PPSA, as applicable, including all rights to payment for goods sold or leased, or for services rendered.

 

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Account Debtor : a Person who is obligated under an Account, Chattel Paper or General Intangible.

Acquisition : any transaction or series of related contemporaneous transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of all or substantially all of any line of business or division of a Person (other than a Person that is already a Wholly-Owned Subsidiary of Holdings) or other assets or properties of a Person, (b) the acquisition of all or any portion of the Equity Interests of any Person (other than a Person that is already a Wholly-Owned Subsidiary of Holdings), or (c) a merger or consolidation or any other combination with another Person (other than a Person that is already a Wholly-Owned Subsidiary of Holdings).

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

Agent : as defined in the preamble to this Agreement.

Agent Fee Letter : the agent fee letter agreement between Agent, Holdings and the Borrowers dated as of April 21, 2010.

Agent Indemnitees : Agent and its officers, directors, employees, Affiliates, agents and attorneys.

Agent Professionals : attorneys, accountants, appraisers, auditors, business valuation experts, environmental engineers or consultants, turnaround consultants, and other professionals and experts retained by Agent.

Allocable Amount : as defined in Section 5.10.3 .

Anti-Terrorism Laws : any laws relating to terrorism or money laundering, including the Patriot Act and the Proceeds of Crime Act.

Applicable Law : all laws, rules and regulations applicable to the Person, conduct, transaction, agreement or matter in question, including all applicable statutory law and common law, and all provisions of constitutions, treaties, statutes, rules, regulations, orders and decrees of Governmental Authorities.

Applicable Lenders : with respect to the U.S. Borrower, U.S. Lenders, and with respect to the Canadian Borrower, Canadian Lenders.

Applicable Loan Party Group : (i) with respect to the U.S. Borrower, the U.S. Facility Loan Parties and (ii) with respect to the Canadian Borrower, the Canadian Facility Loan Parties that are domiciled in Canada and CS Automotive LLC.

 

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Applicable Margin : with respect to any Type of Loan and such other Obligations specified below, the respective margin set forth below, as determined by reference to the Average Quarterly Availability:

 

Until January 1, 2011, margins shall be determined as if Level II were applicable. Thereafter, the Applicable Margin shall be adjusted quarterly as of the first (1st) day of each calendar quarter, based upon the Average Quarterly Availability for the immediately preceding calendar quarter.

Approved Fund : any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in its ordinary course of activities, has the capacity to fund Revolver Loans hereunder and is administered or managed by a Lender, an entity that administers or manages a Lender, or an Affiliate of either.

Asset Disposition : a sale, lease, license, consignment, transfer or other disposition of Property of a Loan Party or a Subsidiary, including a disposition of Property in connection with a sale-leaseback transaction or synthetic lease.

Asset Review and Approval Conditions : with respect to any Acquisition, amalgamation or merger in respect of which the Accounts or Inventory acquired therein or thereby are requested to be included in the Canadian Borrowing Base or U.S. Borrowing Base, Agent shall have completed its review of such assets, including, without limitation, field examinations, audits, appraisals and other due diligence as Agent shall in its Permitted Discretion require; it being acknowledged and agreed that, (1) such additional assets, if any, to be included in the Canadian Borrowing Base or U.S. Borrowing Base may be subject to different advance rates or eligibility criteria or may require the imposition of additional reserves with respect thereto and (2) prior to the inclusion of any additional assets in the Canadian Borrowing Base or U.S. Borrowing Base, all actions shall have been taken to ensure that Agent has a perfected and continuing first priority security interest in and Lien on such assets (to the extent otherwise required herein).

 

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Assignment and Acceptance : an assignment agreement between a Lender and Eligible Assignee, in the form of Exhibit D .

Assignment of Claims Act : Assignment of Claims Act of 1940, 31 U.S.C. § 3727, 41 U.S.C. § 15, as amended.

Availability : at any time, the sum of the Canadian Availability and the U.S. Availability, in each case, at such time.

Average Period Availability : for any period, an amount equal to the sum of the Availability for each day of such period (determined as of the close of business of each such day) divided by the actual number of days in such period, as determined by Agent, which determination shall be conclusive absent manifest error.

Average Quarterly Availability : for any calendar quarter, an amount equal to the sum of the Availability for each day of such calendar quarter (determined as of the close of business of each such day) divided by the actual number of days in such calendar quarter, as determined by Agent, which determination shall be conclusive absent manifest error.

Backstop Parties : as defined in the Recitals hereto.

Bank of America : Bank of America, N.A., a national banking association, and its successors and assigns.

Bank of America (Canada) : Bank of America, N.A. (acting through its Canada branch).

Bank of America Indemnitees : Bank of America and its officers, directors, employees, Affiliates, agents and attorneys.

Bank Product : any of the following products, services or facilities extended to any Loan Party or Subsidiary by a Lender or any of its Affiliates: (a) Cash Management Services; (b) products under Hedging Agreements; (c) commercial credit card and merchant card services; and (d) other banking products or services as may be requested by any Loan Party or Subsidiary, other than Letters of Credit and Excluded Products; provided , however , that for any of the foregoing to be included as an “Obligation” for purposes of a distribution under Section 5.5.1 , the Lender or Affiliate providing such Bank Product and Loan Party Agent must have previously provided written notice to Agent of (i) the existence of such Bank Product, (ii) the maximum dollar amount of obligations arising thereunder to be included as a Canadian Bank Product Reserve or U.S. Bank Product Reserve, as applicable (“ Bank Product Amount ”), and (iii) the methodology to be used by such parties in determining the Bank Product Debt owing from time to time and if Agent has received no such notice with respect to any such Bank Product, then Agent shall be permitted to assume that no such Bank Product is outstanding in connection with making distributions under Section 5.5.1 ; provided , however , that no such notice from Loan Party Agent shall be required with respect to any Bank Products provided by Bank of America or its Affiliates. The Bank Product Amount may be changed from time to time by Agent (with respect to Bank Products provided by Bank of America or its Affiliates) in its Permitted Discretion or upon written notice to Agent by the Lender or Affiliate providing the related Bank Product and Loan Party Agent. No additional Bank Product Amount may be voluntarily established or increased by the Loan Parties at any time that a Default or Event of Default exists, or if a reserve in such amount would cause an Overadvance.

 

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Bank Product Amount : as defined in the definition of Bank Product.

Bank Product Debt : Debt and other obligations of a Loan Party relating to Bank Products.

Bankruptcy Debtors : the U.S. Domiciled Loan Parties and the Canadian Borrower.

Board of Governors : the Board of Governors of the Federal Reserve System.

Borrowed Money : with respect to any Person, any (a) obligation that (i) arises from the borrowing of money by such Person (including, for the avoidance of doubt, arising from any Permitted Securitizations of such Person), (ii) is evidenced by notes, drafts, bonds, debentures, credit documents or similar instruments, (iii) accrues interest or is a type upon which interest charges are customarily paid (excluding trade payables or administrative or general expenses owing in the Ordinary Course of Business) or (iv) was issued or assumed as full or partial payment for Property (excluding trade payables owing in the Ordinary Course of Business); (b) capitalized amount in respect of Capital Leases of such Person; (c) reimbursement obligations by such Person with respect to letters of credit issued for the account of such Person; and (d) guarantees by such Person of any of the foregoing owing by another Person.

Borrowers : as defined in the preamble to this Agreement.

Borrowing : a group of Loans of one Type that are made on the same day or are converted into Loans of one Type on the same day.

Borrowing Base : the Canadian Borrowing Base and/or the U.S. Borrowing Base, as the context requires.

Borrowing Base Certificate : a certificate, substantially in the form attached as Exhibit H or otherwise in form and substance satisfactory to Agent, by which Loan Party Agent certifies calculation of any Borrowing Base.

Business Day : any day excluding Saturday, Sunday and any other day that is a legal holiday under the laws of the State of North Carolina or the State of New York or is a day on which banking institutions located in such States are closed; and when used with reference to (i) a LIBOR Loan denominated in Dollars, the term shall also exclude any day on which banks are not open for the transaction of banking business in London, England, (ii) a LIBOR Loan denominated in Euros, any fundings, disbursements, settlements and payments in Euros in respect of any such LIBOR Loan, or any other dealings in Euros to be carried out pursuant to this Agreement in respect of any such LIBOR Loan, the term shall also exclude any day that is not a TARGET Day; and (iii) a Canadian Revolver Loan, the term shall also exclude a day on which banks in Toronto, Ontario, Canada are not open for the transaction of banking business.

Canadian Auto-Extension Letter of Credit : as defined in Section 2.3.1(e) .

Canadian Availability : as of any date of determination, the Canadian Borrowing Base as of such date of determination plus solely for purposes of calculating “Availability” in connection with the satisfaction of any Internal Specified Transaction Conditions, the Canadian Suppressed Amount on such date of determination plus the Canadian Designated Cash Amount on such date of determination minus the Canadian Revolver Exposure (calculated without duplication of any amounts reserved under the Canadian LC Reserve) on such date of determination.

 

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Canadian Availability Reserve : the sum (without duplication) of (a) the Inventory Reserve with respect to the Canadian Domiciled Loan Parties’ Inventory; (b) the Canadian Rent and Charges Reserve; (c) the Canadian LC Reserve; (d) the Canadian Bank Product Reserve; (e) the aggregate amount of liabilities secured by Liens upon any Canadian Facility Collateral that are senior to Agent’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (f) the Canadian Priority Payables Reserve; (g) the Wage Earner Protection Act Reserve; and (h) such additional reserves (including, without limitation, dilution reserves), in such amounts and with respect to such matters, as Agent in its Permitted Discretion may establish.

Canadian BA Rate : with respect to each Interest Period for a Canadian BA Rate Loan, the rate of interest per annum equal to the average rate applicable to Canadian Dollar Bankers’ Acceptances having an identical or comparable term as the proposed Canadian BA Rate Loan displayed and identified as such on the display referred to as the “CDOR Page” (or any display substituted therefor) of Reuter Monitor Money Rates Service as at approximately 10:00 a.m. Toronto time on such day (or, if such day is not a Business Day, as of 10:00 a.m. Toronto time on the immediately preceding Business Day), plus five (5) basis points, provided that if such rate does not appear on the CDOR Page at such time on such date, the rate for such date will be the annual discount rate (rounded upward to the nearest whole multiple of 1/100 of 1%) as of 10:00 a.m. Eastern time on such day at which a Canadian chartered bank listed on Schedule 1 of the Bank Act (Canada) as selected by Agent is then offering to purchase Canadian Dollar Bankers’ Acceptances accepted by it having such specified term (or a term as closely as possible comparable to such specified term), plus five (5) basis points.

Canadian BA Rate Loan : a Canadian Revolver Loan, or portion thereof, funded in Canadian Dollars and bearing interest calculated by reference to the Canadian BA Rate.

Canadian Bank Product Reserve : the aggregate amount of reserves, as established by Agent from time to time in its Permitted Discretion to reflect the reasonably anticipated liabilities in respect of the then outstanding Bank Product Debt of the Canadian Domiciled Loan Parties and their Subsidiaries.

Canadian Base Rate : means, for any day, the rate of interest in effect for such day as publicly announced from time to time by Bank of America (Canada) in Toronto, Ontario as its “base rate” (the “base rate” being a rate set by Bank of America (Canada) based on various factors including costs and desired return of Bank of America (Canada), general economic conditions and other factors, and used as a reference point for pricing loans in Dollars made at its “base rate”, which may be priced at, above or below such announced rate.) Any change in the “base rate” announced by Bank of America (Canada) shall take effect at the opening of business on the day specified in the public announcement of such change. Each interest rate based upon the Canadian Base Rate shall be adjusted simultaneously with any change in the “base rate”. In the event that Bank of America (Canada) (including any successor or assignee) does not at any time publicly announce a “base rate”, then “Canadian Base Rate” shall mean the “base rate” publicly announced by a Schedule 1 chartered bank in Canada selected by Agent.

Canadian Base Rate Loan : a Canadian Revolver Loan, or portion thereof, funded in Dollars and bearing interest calculated by reference to the Canadian Base Rate.

Canadian Borrower : as defined in the preamble to this Agreement.

 

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Canadian Borrowing Base : on any date of determination, an amount equal to the lesser of (a) the Maximum Canadian Facility Amount minus (x) the Canadian Priority Payables Reserve minus (y) the Wage Earner Protection Act Reserve minus (z) the Canadian LC Reserve; and (b) (1) the sum of (x) 85% of the Value of Eligible Accounts of the Canadian Domiciled Loan Parties; plus (y) the lesser of (i) 70% of the Value of Eligible Inventory of the Canadian Domiciled Loan Parties; and (ii) 85% of the NOLV Percentage of the Value of Eligible Inventory of the Canadian Domiciled Loan Parties, minus (2) the Canadian Availability Reserve.

Canadian Cash Collateral Account : a demand deposit, money market or other account established by Agent at Bank of America (Canada) or such other financial institution as Agent may select in its discretion, which account shall be for the benefit of the Canadian Facility Secured Parties and shall be subject to Agent’s Liens securing the Canadian Facility Obligations.

Canadian CCAA Case : as defined in the Recitals hereto.

Canadian CCAA Court : as defined in the Recitals hereto.

Canadian Designated Cash Amount : the aggregate amount of cash of the Canadian Domiciled Loan Parties deposited in segregated DACA Deposit Accounts with Agent.

Canadian Dollars or Cdn $: the lawful currency of Canada.

Canadian Domiciled Loan Party : each Canadian Subsidiary of Holdings now or hereafter party hereto as a Loan Party, and “ Canadian Domiciled Loan Parties ” means all such Persons, collectively.

Canadian Dominion Account : a special account established by the Canadian Domiciled Loan Parties at Bank of America (Canada) or another bank reasonably acceptable to Agent, over which Agent has exclusive control for withdrawal purposes.

Canadian Effective Date : as defined in the Recitals hereto.

Canadian Employee Plan : any material payroll practice and other material employee benefit plan, policy, program, agreement or arrangement, including retirement, pension, profit sharing, employment, individual consultant or other compensation agreement, bonus or other incentive compensation, retention, stock purchase, equity or equity-based compensation, deferred compensation, severance, sick leave, vacation, loans, salary continuation, hospitalization, health, life insurance, educational assistance or other fringe benefit or perquisite plan, policy, agreement which is or was sponsored, maintained or contributed to by, or required to be contributed to by, a Canadian Domiciled Loan Party, or with respect to which a Canadian Domiciled Loan Party has or could reasonably be expected to have any obligation or liability, contingent or otherwise, in any case, that is subject to Canadian law (and not other foreign jurisdictions).

Canadian Facility Collateral : Collateral that now or hereafter secures (or is intended to secure) any of the Canadian Facility Obligations, including Property of the U.S. Domiciled Loan Parties pledged to secure their Obligations under their guarantee of the Canadian Facility Obligations.

 

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Canadian Facility Guarantee : each guarantee agreement (including this Agreement) at any time executed by a Canadian Facility Guarantor in favor of Agent guaranteeing all or any portion of the Canadian Facility Obligations.

Canadian Facility Guarantor : Holdings, each Canadian Subsidiary of Holdings, CS Automotive LLC, each other U.S. Subsidiary of Holdings, and each other Person (if any) who guarantees payment and performance of any Canadian Facility Obligations.

Canadian Facility Loan Party : the Canadian Borrower or a Canadian Facility Guarantor.

Canadian Facility Obligations : all applicable Obligations of the Canadian Facility Loan Parties (excluding, for the avoidance of doubt, all U.S. Facility Obligations).

Canadian Facility Secured Parties : Agent, Canadian Issuing Bank, Canadian Lenders, providers of Bank Products to Canadian Facility Loan Parties and the Lead Arrangers.

Canadian Issuing Bank : (a) Bank of America (Canada) or an Affiliate of Bank of America (Canada), as an issuer of Letters of Credit under this Agreement and (b) Deutsche Bank AG, New York Branch or an Affiliate of Deutsche Bank AG, New York Branch, as an issuer of Letters of Credit under this Agreement.

Canadian LC Obligations : the sum (without duplication) of (a) all amounts owing by the Canadian Borrower for any drawings under Letters of Credit; (b) the stated amount of all outstanding Letters of Credit issued for the account of the Canadian Borrower; and (c) all fees and other amounts owing with respect to Letters of Credit issued for the account of the Canadian Borrower.

Canadian LC Reserve : the aggregate of all Canadian LC Obligations, other than (a) those that have been Cash Collateralized; and (b) if no Default or Event of Default exists, amounts specified in clause (c)  of the definition of Canadian LC Obligations.

Canadian Lenders : Bank of America (Canada) and each other Lender that has issued a Canadian Revolver Commitment (provided that such Person or an Affiliate of such Person also has a U.S. Revolver Commitment), including Bank of America (Canada) in its capacity as a provider of Canadian Swingline Loans. Each Canadian Lender shall be a Canadian Qualified Lender.

Canadian Letter of Credit Sublimit : $500,000.

Canadian Letters of Credit : as defined in Section 2.3.1 hereof.

Canadian Multi-Employer Plan : each multi-employer plan, within the meaning of the Regulations under the Income Tax Act (Canada), but excluding, for greater certainty, any Multi-Employer Plan.

Canadian Non-Extension Notice Date : as defined in Section 2.3.1(e) .

Canadian Overadvance : as defined in Section 2.1.5 hereof.

 

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Canadian Overadvance Loan : a Loan made to the Canadian Borrower when a Canadian Overadvance exists or is caused by the funding thereof.

Canadian Overadvance Loan Balance : on any date, the amount by which the aggregate Canadian Revolver Exposure exceeds the amount of the Canadian Borrowing Base on such date.

Canadian Pension Plan : a “registered pension plan” as defined in the Income Tax Act (Canada), and any other pension plan maintained or contributed to by, or to which there is or may be an obligation to contribute by, any Loan Party in respect of its Canadian employees or former Canadian employees, excluding, for greater certainty, a Canadian Multi-Employer Plan.

Canadian Plan : as defined in the Recitals hereto.

Canadian Prime Rate : on any date, a fluctuating rate of interest per annum equal to the rate of interest in effect for such day as publicly announced from time to time by Bank of America (Canada) as its “Canadian Prime Rate”. The “Canadian Prime Rate” is a rate set by Bank of America (Canada) based upon various factors including Bank of America (Canada)’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America (Canada) shall take effect at the opening of business on the day specified in the public announcement of such change.

Canadian Prime Rate Loan : a Canadian Revolver Loan, or portion thereof, funded in Canadian Dollars and bearing interest calculated by reference to the Canadian Prime Rate.

Canadian Priority Payables Reserve : on any date of determination, a reserve in such amount as Agent may reasonably determine in its Permitted Discretion, which reflects the unpaid (when due) or un-remitted (when due) payroll tax deductions, unpaid (when due) pension plan contributions, employment insurance premiums, amounts deducted for vacation pay, wages, workers’ compensation and other unpaid (when due) or unremitted (when due) amounts by any Canadian Domiciled Loan Party which would give rise to a Lien with priority under Applicable Law over the Lien of Agent.

Canadian Qualified Lender : a financial institution that is listed on Schedule I, II, or III of the Bank Act (Canada) or is not a foreign bank for purposes of the Bank Act (Canada), and if such financial institution is not resident in Canada and is not deemed to be resident in Canada with respect to any amounts received pursuant to this Agreement for purposes of Part XIII of the Income Tax Act (Canada), that financial institution deals at arm’s length with the Canadian Borrower for purposes of the Income Tax Act (Canada).

Canadian Reimbursement Date : as defined in Section 2.3.2(a) .

Canadian Rent and Charges Reserve : the aggregate of (a) all past due rent and other past due amounts owing by any Canadian Domiciled Loan Party to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any Canadian Facility Collateral of any Canadian Domiciled Loan Party or could assert a Lien on such Canadian Facility Collateral under Applicable Law; plus (b) a reserve at least equal to three (3) months (or such shorter period as Agent determines in its Permitted Discretion as it will take to liquidate the ABL Priority Collateral at such location) rent and other charges that could reasonably be expected to be payable to any such Person who possesses any

 

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Canadian Facility Collateral of any Canadian Domiciled Loan Party and could reasonably be expected to assert a Lien on such Canadian Facility Collateral under Applicable Law, unless, in any such case, such Person has executed a Collateral Access Agreement.

Canadian Revolver Commitment : for any Canadian Lender, its obligation to make Canadian Revolver Loans and to issue Canadian Letters of Credit, in the case of Canadian Issuing Bank, or participate in Canadian LC Obligations (excluding amounts specified in clause (c)  of such definition), in the case of the other Canadian Lenders, to the Canadian Borrower up to the maximum principal amount shown on Schedule 1.1(a) , or as hereafter determined pursuant to each Assignment and Acceptance to which it is a party, as such Canadian Revolver Commitment may be adjusted from time to time in accordance with the provisions of Sections 2.1.4 or 11.2 . “ Canadian Revolver Commitments ” means the aggregate amount of such commitments of all Canadian Lenders.

Canadian Revolver Commitment Termination Date : the earliest of (a) the U.S. Revolver Commitment Termination Date (without regard to the reason therefor), (b) the date on which Loan Party Agent terminates or reduces to zero (0) all of the Canadian Revolver Commitments pursuant to Section 2.1.4 , and (c) the date on which the Canadian Revolver Commitments are terminated pursuant to Section 11.2 .

Canadian Revolver Exposure : on any date, an amount equal to the sum of the Dollar Equivalent of the Canadian Revolver Loans outstanding on such date plus the Canadian LC Obligations (excluding amounts specified in clause (c)  of such definition) on such date.

Canadian Revolver Loan : a Revolver Loan made by Canadian Lenders to the Canadian Borrower pursuant to Section 2.1.1(b) , and any Canadian Swingline Loan, which Revolver Loan shall, if denominated in Canadian Dollars, be either a Canadian BA Rate Loan or a Canadian Prime Rate Loan and, if denominated in Dollars, shall be either a Canadian Base Rate Loan or a LIBOR Loan, in each case as selected by the Canadian Borrower or Loan Party Agent.

Canadian Revolver Notes : collectively, each promissory note, if any, executed by the Canadian Borrower in favor of a Canadian Lender to evidence the Canadian Revolver Loans funded from time to time by such Canadian Lender, which shall be in the form of Exhibit A-1 to this Agreement, together with any replacement or successor notes therefor.

Canadian Sanction Order : as defined in the Recitals hereto.

Canadian Security Agreement : each general security agreement among any Canadian Domiciled Loan Party and Agent.

Canadian Subsidiary : a Subsidiary of Holdings incorporated or organized under the laws of Canada or any province or territory of Canada.

Canadian Suppressed Amount : to the extent that the amount calculated pursuant to clause (b) of the Canadian Borrowing Base definition exceeds the then-current Canadian Revolver Commitment as of any date of determination, the amount of any such excess designated in writing by Loan Party Agent to Agent as “Canadian Suppressed Amount” under this Agreement; provided, that in no event shall the Canadian Suppressed Amount exceed $5,000,000 less the U.S. Suppressed Amount as of such date of determination.

 

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Canadian Swingline Loan : any Borrowing of Canadian Prime Rate Loans made pursuant to Section 4.1.3(c).

Canadian Unused Line Fee Rate : at any date of determination, a rate per annum equal to (a) .50% when the Canadian Revolver Exposure is greater than 50% of the Canadian Revolver Commitments and (b) .75% at all other times.

Capital Expenditures : all liabilities incurred or expenditures made by a Loan Party or Subsidiary for the acquisition of any fixed assets, or any improvements, replacements, substitutions or additions thereto with a useful life of more than one (1) year that would, in any case, in accordance with GAAP, be included as additions to property, plant and equipment, but excluding (to the extent that they would otherwise be included): including, for the avoidance of doubt, any amount included in the calculation of the Fixed Charge Coverage Ratio (i) any expenditures during such period made for the replacement or restoration of assets with assets of the same or similar type to the extent paid for by any identifiable proceeds of casualty insurance or condemnation awards; (ii) the purchase price of assets purchased during such period to the extent the consideration therefor consists of the proceeds of a substantially concurrent sale of assets; (iii) any expenditures for the purchase price of assets acquired in a Permitted Acquisition during such period; (iv) liabilities incurred or expenditures made to the extent such Loan Party or Subsidiary has received reimbursement in cash from a third party during such period; (v) the non-cash book value of any asset owned by any Loan Party or Subsidiary which is included as an addition to property, plant and equipment as a result of the reuse of such asset during such period without a corresponding expenditure actually having been made or liability incurred in such period; (vi) the non-cash purchase price of equipment purchased during such period to the extent the consideration therefor consists of used or surplus equipment traded in at the time of such purchase; (vii) the non-cash purchase price of equipment that is purchased during such period and substantially contemporaneously 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; and (viii) any expenditures during such period made with the proceeds of an issuance of Equity Interests by Holdings with respect to which: (a) such proceeds shall have been received by Holdings within one-hundred eighty days (180) of such expenditure, and (b) Agent shall have received a certificate of a Senior Officer of Loan Party Agent certifying in reasonable detail as to compliance with preceding clause (a).

Capital Lease : any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP.

Cash Collateral : cash or Cash Equivalents, and any interest or other income earned thereon, that is delivered to Agent to Cash Collateralize any Obligations.

Cash Collateral Account : the Canadian Cash Collateral Account and/or the U.S. Cash Collateral Account, as the context may require.

Cash Collateralize : the delivery of cash to Agent, as security for the payment of Obligations, in an amount equal to (a) with respect to LC Obligations, 105% of the aggregate amount of such LC Obligations, and (b) with respect to any inchoate, contingent or other Obligations (including Obligations arising under Bank Products), Agent’s good faith estimate of the amount due or to become due, including all fees and other amounts relating to such Obligations. “ Cash Collateralization ” and “ Cash Collateralized ” have correlative meanings.

 

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Cash Dominion Trigger Period : the period (a) commencing on the day that an Event of Default occurs, or Average Period Availability (for a one-day period) is less than the greater of (i) $21,875,000 and (ii) 17.5% of the Commitments at such time; and (b) continuing until, during the preceding sixty (60) consecutive day period, no Event of Default has existed and Average Period Availability has been greater than the greater of (i) $21,875,000 and (ii) 17.5% of the Commitments at such time.

Cash Equivalents : (a) marketable obligations issued or unconditionally guaranteed by, and backed by the full faith and credit of, the United States or Canadian government, maturing within twelve (12) months of the date of acquisition; (b) certificates of deposit, demand deposits, time deposits and bankers’ acceptances maturing within twelve (12) months of the date of acquisition, and overnight bank deposits, in each case which are issued by (i) a commercial bank organized under the laws of the United States, Canada or any state or district of the United States or province or territory of Canada, rated A-1 (or better) by S&P or P-1 (or better) by Moody’s at the time of acquisition, and not subject to offset rights or (ii) a Lender or any Affiliate of a Lender; (c) repurchase obligations with a term of not more than thirty (30) days for underlying investments of the types described in clauses (a) and (b) entered into with any bank, Lender or any Affiliate of a Lender meeting the qualifications specified in clause (b); (d) commercial paper rated A-1 (or better) by S&P or P-1 (or better) by Moody’s, and maturing within nine (9) months of the date of acquisition; and (e) shares of any money market fund that has substantially all of its assets invested continuously in the types of investments referred to above, has net assets of at least $500,000,000 and has the highest rating obtainable from either Moody’s or S&P.

Cash Management Services : any services provided from time to time by any Lender or any of its Affiliates to any Loan Party or Subsidiary in connection with operating, collections, payroll, trust, or other depository or disbursement accounts, including automated clearinghouse, e-payable, electronic funds transfer, wire transfer, controlled disbursement, overdraft, depository, information reporting, lockbox and stop payment services.

Casualty Event : any involuntary loss of title, any involuntary loss of, damage to or any destruction of, or any condemnation or other taking (including by any Governmental Authority) of, any property of any Loan Party or any of its Subsidiaries. “Casualty Event” shall include but not be limited to any taking of all or any part of any Real Property of any Person or any part thereof, in or by condemnation or other eminent domain proceedings pursuant to any Requirement of Law, or by reason of the temporary requisition of the use or occupancy of all or any part of any Real Property of any Person or any part thereof by any Governmental Authority, civil or military, or any settlement in lieu thereof.

CCAA : as defined in the Recitals hereto.

CERCLA : the Comprehensive Environmental Response, Compensation and Liability Act, as amended (42 U.S.C. § 9601 et seq .).

Change in Law : the occurrence, after the date hereof, of (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority; or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

 

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Change of Control : if on or at any time after the Closing Date: (a) a majority of the seats (other than vacant seats) on the board of directors of Holdings shall at any time be occupied by persons who were not (i) members of the board of directors of Holdings on the Closing Date (or appointed shortly thereafter as specifically contemplated by the U.S. Plan), (ii) nominated by the board of directors of Holdings after the Closing Date or (iii) appointed by the directors referred to in clause (i)  or (ii)  after the Closing Date, (b) any person or group (within the meaning of Rule 13d-5 of the Securities and Exchange Act of 1934, as in effect on the date hereof) other than the Permitted Holders shall own, directly or indirectly, beneficially or of record, shares representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding capital stock of Holdings, (c) Holdings shall cease to own, directly or indirectly, beneficially and of record, 100% of the issued and outstanding capital stock of the U.S. Borrower, or (d) the U.S. Borrower shall cease to own, directly or indirectly, beneficially and of record, 100% of the issued and outstanding capital stock of the Canadian Borrower.

Claims : all liabilities, obligations, losses, damages, penalties, judgments, proceedings, interest, costs and expenses of any kind (including remedial response costs, reasonable attorneys’ fees and Extraordinary Expenses) at any time (including after Full Payment of the Obligations, resignation or replacement of Agent, or replacement of any Lender) incurred by or asserted against any Indemnitee in any way relating to (a) any Loans, Letters of Credit, Loan Documents, or the use thereof or transactions relating thereto, (b) any action taken or omitted to be taken by any Indemnitee in connection with any Loan Documents, (c) the existence or perfection of any Liens, or realization upon any Collateral, (d) exercise of any rights or remedies under any Loan Documents or Applicable Law, (e) failure by any Loan Party to perform or observe any terms of any Loan Document, or (f) any actual or alleged presence or Environmental Release or threatened Environmental Release of Hazardous Materials on, at, under or from any real property owned, leased or operated by any Loan Party or Subsidiary of any Loan Party at any time (other than any such presence, Environmental Release or threatened Environmental Release resulting solely from acts or omissions by Persons other than Holdings or any of its Subsidiaries after Agent sells the applicable Real Estate pursuant to a foreclosure or has accepted a deed in lieu of foreclosure), or any Environmental Claim related in any way to any Loan Party or Subsidiary, in each case, including all costs and expenses relating to any investigation, litigation, arbitration or other proceeding (including an Insolvency Proceeding or appellate proceedings), whether or not the applicable Indemnitee is a party thereto.

Closing Date : as defined in Section 6.1 .

Code : the Internal Revenue Code of 1986.

Collateral : all of each Loan Party’s right, title and interest in all Property of such Loan Party, subject to a Lien under, or purported to be subject to a Lien under, the Security Documents, that, in each case, now or hereafter secures (or is intended to secure) any of the Obligations.

Collateral Access Agreement : an agreement, in form and substance satisfactory to Agent, by which (a) for any Collateral located on premises leased by a Loan Party, the lessor waives or subordinates any Lien it may have on the Collateral, and agrees to permit Agent to enter upon the premises and remove the Collateral or to use the premises to store or dispose of the Collateral; (b)

 

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for any Collateral held by a warehouseman, processor, shipper, customs broker or freight forwarder, such Person waives or subordinates any Lien it may have on the Collateral, agrees to hold any Documents in its possession relating to the Collateral as agent for Agent, and agrees to deliver the Collateral to Agent upon request; (c) for any Collateral held by a repairman, mechanic or bailee, such Person acknowledges Agent’s Lien, waives or subordinates any Lien it may have on the Collateral, and agrees to deliver the Collateral to Agent upon request; and (d) for any Collateral subject to a Licensor’s Intellectual Property rights, the Licensor grants to Agent the right, vis-à-vis such Licensor, to enforce Agent’s Liens with respect to the Collateral, including the right to dispose of it with the benefit of the Intellectual Property, whether or not a default exists under any applicable License; it being understood that any “Landlord Waiver” in substantially the form of Exhibit I and any “Bailee Letter” in substantially the form of Exhibit J , in any case obtained by or on behalf of any Loan Party, shall be satisfactory to Agent as a Collateral Access Agreement.

Commitment : for any Lender, the aggregate amount of such Lender’s Facility Commitments. “ Commitments ” means the aggregate amount of all Facility Commitments, which amount shall be $125,000,000 on the Closing Date.

Compliance Certificate : a certificate, in form and substance satisfactory to Agent, by which Loan Party Agent, for and on behalf of the Loan Parties, certifies compliance with Section 10.3 during a Financial Covenant Trigger Period, provides a calculation of the Fixed Charge Coverage Ratio as of the last day of each month regardless of whether or not such month occurs during a Financial Covenant Trigger Period, and certifies compliance with all provisions hereof that require satisfaction of the Specified Transaction Conditions (including the calculations thereof in reasonable detail) and lists all outstanding Bank Products with Lenders (or their Affiliates) other than Bank of America (or its Affiliates).

Contingent Obligation : any obligation of a Person arising from a guarantee, indemnity or other assurance of payment or performance of any indebtedness, lease, dividend or other obligation (“ primary obligations ”) of another obligor (“ primary obligor ”) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guarantee, endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or similar payments regardless of nonperformance by any other party to an agreement; and (c) arrangement (i) to purchase any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation, or (v) otherwise to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability with respect thereto.

Creditor Representative : under any Applicable Law, a receiver, interim receiver, receiver and manager, trustee (including any trustee in bankruptcy), custodian, conservator, administrator, examiner, sheriff, monitor, assignee, liquidator, provisional liquidator, sequestrator or similar officer or fiduciary.

 

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CWA : the Clean Water Act, as amended, (33 U.S.C. §§ 1251 et seq .).

DACA Deposit Account : a Deposit Account subject to a Deposit Account Control Agreement.

Debt : as applied to any Person, without duplication, (a) all Borrowed Money; (b) all Contingent Obligations in respect of Borrowed Money; and (c) in the case of a Loan Party, the Obligations. The Debt of a Person shall include any recourse indebtedness of any partnership in which such Person is a general partner or joint venturer, except to the extent the terms of such Debt provide that (i) such Person shall not be liable therefor or (ii) no default with respect thereto would permit upon notice, lapse of time or both any holder of such Debt to declare a default or cause the payment thereof to be accelerated or payable prior to its stated maturity, and in any case, any recourse indebtedness shall not exceed the greater of the book value or fair market value of the properties to which recourse is given, if applicable. In addition, “Debt” shall not include (i) deferred compensation arrangements, (ii) earn-out obligations until matured or earned or (iii) non-compete or consulting obligations incurred in connection with Permitted Acquisitions not evidenced by a promissory note.

Debt to be Repaid : means Borrowed Money of each Loan Party and its Subsidiaries outstanding immediately before the occurrence of the Closing Date and required by the Reorganization Plans to be repaid on the Closing Date. For the avoidance of doubt, the obligations owing under the Existing Letters of Credit do not constitute “Debt to be Repaid”.

Default : an event or condition that, with the lapse of time or giving of notice, would constitute an Event of Default.

Default Rate : for any Obligation (including, to the extent permitted by law, interest not paid when due), 2.00% per annum plus the interest rate otherwise applicable thereto or if such Obligation does not bear interest, a rate equal to the U.S. Base Rate, plus 2.00% per annum.

Defaulting Lender : any Lender that (a) fails to make any payment or provide funds to Agent or any Borrower as required hereunder or fails otherwise to perform its obligations under any Loan Document, and such failure is not cured within three (3) Business Days, (b) notified the Loan Party Agent, Agent, any Issuing Bank or any Lender in writing that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit, (c) failed, within three (3) Business Days after request by Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans or (d) is the subject of any Insolvency Proceeding or has a parent company that is the subject of any Insolvency Proceeding.

Deposit Account : as defined in the UCC (and/or with respect to any Deposit Account located in Canada, any bank account with a deposit function).

Deposit Account Control Agreements : the deposit account control agreements in form and substance satisfactory to Agent executed by each lockbox servicer and financial institution maintaining a lockbox and/or Deposit Account (other than an Excluded Deposit Account) for a Loan Party, in favor of Agent and meeting the requirements set forth in Section 8.2.4 .

 

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Designated External Acquisition : an Acquisition by an External Subsidiary where: (a) some or all of the proceeds used to fund such Acquisition were transferred to such External Subsidiary by a Loan Party, (b) at the time of the transfer, the applicable Loan Party would have been prohibited by the External Specified Transaction Conditions from directly investing some or all of the amount transferred to such External Subsidiary (such amount, the “Excess Amount”), (c) the transfer was made (i) within ninety (90) days of the applicable Acquisition and (ii) for the express purpose of funding such Acquisition and (d) the External Specified Transaction Conditions have been satisfied in connection therewith as to the Excess Amount.

Designation Date : the first (1st) date after the Closing Date on which there shall occur (a) any event described in Section 11.1(i) with respect to any Borrower, or (b) an acceleration of Loans and termination of the Commitments pursuant to Section 11.2 .

DIP Agreement : that certain Debtor-In-Possession Credit Agreement dated as of December 18, 2009 (as amended, modified or supplemented), among Holdings, the U.S. Borrower, the Canadian Borrower and Metzeler Automotive Profile Systems GMBH as borrowers, the lenders party thereto, as lenders, and Deutsche Bank Trust Company Americas as administrative agent, collateral agent and documentation agent and Deutsche Bank Securities Inc. as syndication agent, sole lead bookrunner and sole lead arranger.

Disqualified Equity Interests : Equity Interests that (a) mature or are mandatorily redeemable or subject to mandatory repurchase or redemption or repurchase at the option of the holders thereof (including those Equity Interests that may be required to be redeemed upon the failure to maintain or achieve any financial performance standards), in each case in whole or in part and whether upon the occurrence of any event, pursuant to a sinking fund obligation on a fixed date or otherwise, prior to the date that is one hundred eighty (180) days after the scheduled Facility Termination Date (other than upon a “change of control,” provided that any such payment required pursuant to this parenthetical is contractually subordinated in right of payment to the Obligations on terms reasonably satisfactory to Agent and such requirement is applicable only in circumstances that are market on the date of issuance of such Equity Interests) or (b) are convertible or exchangeable, automatically or at the option of any holder thereof, into any Debt, other Disqualified Equity Interests or other assets, in each case, other than Qualified Equity Interests prior to the date that is one hundred eighty (180) days after the scheduled Facility Termination Date (other than upon a “change of control”, provided that any conversion or exchange required pursuant to this parenthetical is contractually subordinated in right of payment to the Obligations on terms reasonably satisfactory to Agent and such requirement is applicable only in circumstances that are market on the date of issuance of such Equity Interests); it being understood, for the avoidance of doubt, that Equity Interests issued pursuant to the U.S. Plan do not constitute Disqualified Equity Interests.

Distribution : any declaration or payment of a distribution, interest or dividend on any Equity Interest (other than payment-in-kind); any distribution, advance or repayment of Debt to a holder of Equity Interests; or any purchase, redemption, or other acquisition or retirement for value of any Equity Interest (other than by issuance of Equity Interests which are not Disqualified Equity Interests).

Document : as defined in the UCC (and/or with respect to any Document of a Canadian Domiciled Loan Party, a “document of title” as defined in the PPSA).

 

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Dollar Equivalent : on any date, with respect to any amount denominated in Dollars, such amount in Dollars, and with respect to any stated amount in a currency other than Dollars, the amount of Dollars that Agent determines using the Exchange Rate (which determination shall be conclusive and binding absent manifest error) would be necessary to be sold on such date at the applicable Exchange Rate to obtain the stated amount of the other currency.

Dollars or $ : lawful money of the United States.

Dominion Account : with respect to the Canadian Domiciled Loan Parties, the Canadian Dominion Account, and with respect to the U.S. Facility Loan Parties, the U.S. Dominion Account.

Dutch BV : Cooper-Standard Automotive International Holdings BV.

EBITDA : determined on a consolidated basis for Holdings and its Subsidiaries, net income plus (a) without duplication and to the extent deducted in determining net income, the sum of (i) interest expense, (ii) Permitted Securitization Expenses, (iii) provision for income taxes, (iv) depreciation and amortization expense, (v) non-cash charges, fees, losses or expenses (but excluding any non-cash charge, fee, loss or expense that was included in net income in a prior period and any non-cash charge, fee, loss or expense that relates to the write-down or write-off of Inventory, other than any write-down or write-off of Inventory as a result of purchase accounting adjustments in respect of any Permitted Acquisitions), (vi) cash fees (including legal fees and other similar advisory and consulting fees, administrative fees, working fees), charges, payments and expenses accrued or paid in connection with the consummation of the U.S. Plan in each case prior to December 31, 2010, (vii) non-cash fees, charges, payments and expenses accrued in connection with the consummation of the U.S. Plan (including all fresh start accounting adjustments), (viii) cash and non-cash expenses in connection with facility closures, severance, relocation, restructuring, integration and other similar adjustments (“ Facility Closings and Severance Expenses ”) in any period, (ix) any losses on the sale of discontinued operations, (x) any losses on business dispositions or asset dispositions, (xi) any extraordinary charges or losses during such period (calculated on an “after-tax” basis and in accordance with GAAP), (xii) earnings of joint ventures to the extent received in cash in any period, (xiii) non-recurring fees, expenses and charges made or incurred in respect of professional or financial advisory, investment banking, underwriting and similar services (including legal, accounting and consulting costs) to the extent relating to any offering of Equity Interests, Investments, Acquisitions, divestitures or discontinuations, in each case permitted hereunder and (xiv) intellectual property royalties to the extent received in cash , minus (b) without duplication and to the extent included in determining net income, the sum of (i) any cash payments for Facility Closings and Severance Expenses paid after the Closing Date in excess of $5,000,000 for the most recent twelve (12) calendar month period then ended on such date of determination, (ii) any extraordinary gains and non-cash items of income during such period (calculated on an “after-tax” basis and in accordance with GAAP), (iii) any gains for the sale of discontinued operations, (iv) any gains on business dispositions or asset dispositions (other than sales of inventory in the ordinary course of business) and (v) any cash payments made in respect of non-cash charges described in clause (a)(v) taken in a prior period; in each case of clauses (a)  and (b) , determined on a consolidated basis in accordance with GAAP. For purposes of the computation of the Fixed Charge Coverage Ratio, EBITDA for any period shall be calculated on a Pro Forma Basis to give effect to (i) any Person or business acquired during such period pursuant to an Acquisition permitted hereby and not subsequently sold or otherwise disposed of by Holdings or any of its

 

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Subsidiaries during such period and (ii) any Subsidiary or business disposed of during such period by Holdings or any of its Subsidiaries. Notwithstanding the foregoing, for each of the calendar months set forth below, EBITDA shall be deemed to be the amount set forth opposite such month:

 

Eligible Account : as determined separately for (x) the Canadian Borrower and (y) the U.S. Borrower, an Account owing to a Borrower (or a member of its Applicable Loan Party Group) that arises in the Ordinary Course of Business of such Borrower (or a member of its Applicable Loan Party Group) from the sale of goods or rendition of services, is payable in Dollars, Canadian Dollars or Mexican Pesos, and that is deemed by Agent in its Permitted Discretion to be an Eligible Account. Without limiting the foregoing, no Account shall be an Eligible Account if:

(a) it is unpaid for more than sixty (60) days after the original due date, or more than ninety (90) days after the original invoice date;

(b) fifty percent (50%) or more of the Dollar Equivalent amount of all Accounts owing to such Borrower (or a member of its Applicable Loan Party Group) by the Account Debtor are not Eligible Accounts under the foregoing clause (a);

(c) except as set forth in clause (d) below, when aggregated with other Accounts owing to such Borrower (or a member of its Applicable Loan Party Group) by the Account Debtor, it exceeds ten percent (10%) of the aggregate Eligible Accounts (or such higher percentage as Agent may establish for the Account Debtor from time to time) of each such Borrower (or a member of its Applicable Loan Party Group);

(d) when aggregated with other Accounts owing to the Loan Parties by the relevant Account Debtor or any of its respective Affiliates, it exceeds (i) twenty percent (20%) in the case of Chrysler Group, LLC, (ii) 30% in the case of General Motors Corporation and (iii) forty

 

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percent (40%) in the case of Ford Motor Company, in each case, of the aggregate Eligible Accounts (or such higher percentage as the Required Lenders may establish for the Account Debtor from time to time) of the Loan Parties;

(e) it does not conform in any material respect with a covenant or representation herein;

(f) it is owing by a creditor or supplier who has not entered into an agreement reasonably satisfactory to Agent waiving applicable rights of set-off, or is otherwise reasonably determined to be subject to a potential offset, counterclaim, dispute, deduction, discount, recoupment, reserve, defense, chargeback, credit or allowance (but ineligibility shall be limited to the amount thereof), including, without limitation, liabilities related to the “Ford Electronic Raw Material Acquisition Program” and allowances for long term agreements;

(g) an Insolvency Proceeding has been commenced by or against the Account Debtor; or the Account Debtor has failed, has suspended or ceased doing business, is liquidating, dissolving or winding up its affairs, or is not Solvent; or such Borrower (or a member of its Applicable Loan Party Group) is not able to bring suit or enforce remedies against the Account Debtor through judicial process (unless such Account is guaranteed or supported by a guarantor or support provider reasonably acceptable to Agent, on such terms as are reasonably acceptable to Agent);

(h) the Account Debtor is organized or has its principal offices outside the United States or Canada, unless (i) such Account is contracted with the United States or Canada (as applicable) operations of such entity or (ii) the United States or Canada (as applicable) operations of such entity are responsible for payment thereof;

(i) it is owing by a Government Authority, unless in the case of the Accounts of the U.S. Borrower or any other U.S. Facility Loan Party, the Account Debtor is the United States or any department, agency or instrumentality thereof and the Account has been assigned to Agent in compliance with the Assignment of Claims Act or, in the case of any Canadian Domiciled Loan Party, the Account Debtor is the federal government of Canada or any Crown corporation, department, agency or instrumentality of Canada and the applicable Canadian Domiciled Loan Party has complied, to the satisfaction of Agent, with the Financial Administration Act;

(j) it is not subject to a duly perfected, first priority Lien in favor of Agent, or is subject to any other Lien except a Permitted Collateral Lien;

(k) the goods giving rise to it have not been delivered to and accepted by the Account Debtor, the services giving rise to it have not been accepted by the Account Debtor, or it otherwise does not represent a final sale;

(l) it is evidenced by Chattel Paper or an Instrument of any kind, or has been reduced to judgment;

(m) its payment has been extended beyond the periods specified in clause (a) above, the Account Debtor has made a partial payment, or it arises from a sale on a cash-on-delivery basis;

(n) it arises from a sale to an Affiliate, from a sale on a bill-and-hold, guaranteed sale, sale-or-return, sale-on-approval, consignment, or other repurchase or return basis, or from a sale to a Person for personal, family or household purposes;

 

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(o) (A) the agreements evidencing such Accounts, in the case of Accounts of the U.S. Borrower or any other U.S. Facility Loan Party, are not governed by the laws of any state of the United States or the District of Columbia or Canada or any province or territory of Canada and (B) the agreements evidencing such Accounts, in the case of Accounts of any Canadian Domiciled Loan Party, are not governed by the laws of Canada or any province or territory of Canada, any state of the United States or the District of Columbia, or the laws of such other jurisdictions acceptable to Agent;

(p) it represents a progress billing or retainage, or relates to services for which a performance, surety or completion bond or similar assurance has been issued;

(q) it includes a billing for interest, fees or late charges, but ineligibility shall be limited to the extent thereof. In calculating delinquent portions of Accounts under clauses (a) and (b), credit balances more than ninety (90) days old will be excluded;

(r) it arises from sales of tooling;

(s) it is owing by NISCO or Nishikawa Rubber Company; or

(t) it is otherwise unacceptable to Agent in its Permitted Discretion.

Eligible Assignee : a Person that is (i) a Lender or a U.S. based Affiliate of a U.S. Lender, (ii) if such Person is to hold U.S. Facility Obligations, an Approved Fund; (iii) if such Person is to hold Canadian Facility Obligations, a Canadian Qualified Lender and a U.S. Lender or an Affiliate of a U.S. Lender ; (iv) any other financial institution approved by Agent and Loan Party Agent (which approval by Loan Party Agent shall not be unreasonably withheld or delayed, and shall be deemed given if no objection is made within five (5) Business Days after notice of the proposed assignment), that has total assets in excess of $5 billion and whose becoming an assignee would not constitute a prohibited transaction under Section 4975 of the Code or any other Applicable Law; and (v) during the continuance of any Event of Default, any Person acceptable to Agent in its discretion (excluding any Loan Party or Affiliate thereof).

Eligible Inventory : as determined separately for (x) the Canadian Borrower and (y) the U.S. Borrower, Inventory owned by a Borrower (or a member of its Applicable Loan Party Group) that Agent, in its Permitted Discretion deems to be Eligible Inventory. Without limiting the foregoing, no Inventory shall be Eligible Inventory unless it:

(a) is not packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies;

(b) is not held on consignment, nor subject to any deposit or downpayment;

(c) is in new and saleable condition and is not damaged, defective, shopworn or otherwise unfit for sale;

(d) is not slow-moving, obsolete or unmerchantable, and does not constitute returned or repossessed goods;

(e) meets all standards imposed by any Governmental Authority in all material respects;

 

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(f) conforms in all material respects with the covenants and representations herein;

(g) is subject to Agent’s duly perfected, first priority Lien, and no other Lien except a Permitted Collateral Lien;

(h) is located within the continental United States, in the case of Inventory of the U.S. Borrower or any other U.S. Facility Loan Party, or within Canada, in the case of Inventory of any Canadian Domiciled Loan Party, and is not consigned to any Person;

(i) is not in transit (other than, in the case of Inventory of the U.S. Borrower or any other U.S. Facility Loan Party, in transit between facilities of the U.S. Facility Loan Parties or from facilities of the Canadian Domiciled Loan Parties or, in the case of Inventory of any Canadian Domiciled Loan Party in transit between facilities of the Canadian Domiciled Loan Parties or from facilities of U.S. Facility Loan Parties);

(j) is not subject to any (i) warehouse receipt unless the warehouseman has delivered a Collateral Access Agreement or with respect to which an appropriate U.S. or Canadian Rent and Charges Reserve has been established or (ii) negotiable Document;

(k) is not subject to any License or other arrangement that restricts such Borrower’s or Agent’s right to dispose of such Inventory, unless Agent has received an appropriate Collateral Access Agreement;

(l) is not located on leased premises or in the possession of a warehouseman, repairman, mechanic, shipper, freight forwarder or other Person, unless the lessor or such Person has delivered a Collateral Access Agreement or with respect to which an appropriate U.S. or Canadian Rent and Charges Reserve has been established;

(m) is not located on leased premises (unless a Collateral Access Agreement has been obtained with respect to such premises) or in the possession of a processor;

(n) is reflected in the details of a current perpetual inventory report;

(o) does not constitute the portion of the cost of such Inventory which is attributable to intercompany profit; and

(p) does not constitute lower cost, market adjustment or reserves.

EMU Legislation : the legislative measures of the European Union for the introduction of, changeover to or operation of the Euro in one or more member states of the European Union.

Enforcement Action : any action to enforce any Obligations or Loan Documents or to realize upon any Collateral (whether by judicial action, self-help, notification of Account Debtors, exercise of setoff or recoupment, or otherwise).

Environment : ambient air, indoor air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata or natural resources.

Environmental Claim : any written claim, notice, demand, order, action, suit or proceeding alleging liability for or obligation with respect to any investigation, remediation,

 

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removal, cleanup, response, corrective action, damages to natural resources, personal injury, property damage, fines, penalties or other costs resulting from, related to or arising out of (i) the presence, Environmental Release or threatened Environmental Release in or into the Environment of Hazardous Material at any location or (ii) any violation or alleged violation of any Environmental Law, and shall include any written claim seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from, related to or arising out of the presence, Environmental Release or threatened Environmental Release of Hazardous Material or alleged injury or threat of injury to health, safety or the Environment.

Environmental Laws : all Applicable Laws relating to protection of human health, the protection or pollution of the Environment, the Environmental Release or threatened Environmental Release of Hazardous Material, or occupational safety or health (to the extent related to exposure to Hazardous Material), including CERCLA, RCRA and CWA, and any and all Governmental Approvals required under any Environmental Law.

Environmental Notice : a written notice (including any complaint, summons, citation, order, claim or demand) from any Governmental Authority or other Person with respect to (i) any actual or potential noncompliance with, investigation of an actual or potential violation of, litigation relating to, or potential fine or liability under any Environmental Law or (ii) any Environmental Release, environmental pollution or Hazardous Materials.

Environmental Release : any spilling, leaking, seepage, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Hazardous Material in, into, onto or through the Environment.

Equity Interest : with respect to any Person, shares of capital stock of (or other ownership interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized on any date of determination.

ERISA : the Employee Retirement Income Security Act of 1974.

ERISA Affiliate : any trade or business (whether or not incorporated) under common control with a Loan Party within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code which, together with such Loan Party, is required for purposes of provisions relating to Section 412, 430 or 4980B of the Code or Title IV of ERISA to be treated as a single employer.

ERISA Event : (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any Loan Party or ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA (other than where such Pension Plan has been merged with any Plan of a Loan Party or ERISA Affiliate); (c) a complete or partial withdrawal by any Loan Party or ERISA Affiliate from a

 

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Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) failure of any Loan Party or ERISA Affiliate to meet the minimum funding standards under Section 412 of the Code with respect to any Pension Plan or any Multiemployer Plan, or a request by such Loan Party or ERISA Affiliate of a minimum funding waiver; (f) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the imposition of any liability (including, without limitations, any Lien) under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or ERISA Affiliate;; or (h) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA).

Euro or € : the single lawful currency of the European Union as constituted by the treaty establishing the European Community being the Treaty of Rome, as amended from time to time and as referred to in the EMU Legislation.

Event of Default : as defined in Section 11 .

Excess Amount : as defined in Section 5.12 .

Exchange Rate : on any date, (i) with respect to Canadian Dollars in relation to Dollars, the spot rate as quoted by Bank of America as its noon spot rate at which Dollars are offered on such date for Canadian Dollars, (ii) with respect to Dollars in relation to Canadian Dollars, the spot rate as quoted by Bank of America as its noon spot rate at which Canadian Dollars are offered on such date for Dollars, (iii) with respect to Euros in relation to Dollars, the spot rate as quoted by Bank of America as its noon spot rate at which Dollars are offered on such date for Euros, (iv) with respect to Dollars in relation to Euros, the spot rate as quoted by Bank of America as its noon spot rate at which Euros are offered on such date for Dollars, (v) with respect to Sterling in relation to Dollars, the spot rate as quoted by Bank of America as its noon spot rate at which Dollars are offered on such date for Sterling and (vi) with respect to Dollars in relation to Sterling, the spot rate as quoted by Bank of America as its noon spot rate at which Sterling are offered on such date for Dollars.

Excluded Contracts : any rights or interest of a Loan Party in, to or under any agreement, contract, license, instrument, document or other general intangible (referred to solely for purposes of this definition as a “ Contract ”) to the extent that such Contract, by the express terms of a valid and enforceable restriction in favor of a Person who is not a Loan Party or any of its Subsidiaries, (i) prohibits, or requires any consent or establishes any other condition for, an assignment thereof or a grant of a security interest therein by a Loan Party or (ii) would give any party to such Contract other than a Loan Party or any of its Subsidiaries an enforceable right to terminate its obligations thereunder, provided, however, that such security interest shall attach immediately at such time as the condition causing such abandonment, invalidation, unenforceability or breach or termination, as the case may be, shall be remedied and, to the extent severable, shall attach immediately to any portion of such Contracts that does not result in any of the consequences specified in the immediately preceding clauses (i) or (ii) including, without limitation, any proceeds of such Contracts.

 

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Excluded Deposit Accounts : the following Deposit Accounts: (A) Deposit Accounts of any Loan Party exclusively used for payroll, payroll taxes or employee benefits, (B) cash accounts of any Loan Party the average daily balance in any month which does not exceed more than the Dollar Equivalent of $10,000 at any time for any single account, and not more than $50,000 for all accounts in the aggregate at any time and (C) accounts solely containing identifiable proceeds of assets of Holdings or any Subsidiary not constituting ABL Priority Collateral.

Excluded Products : investments held by any Lender or its Affiliates, including cash, Cash Equivalents and other products which do not constitute a monetary obligation in favor of such institution.

Excluded Tax : with respect to any Tax Indemnitee, (a) any Tax imposed on or measured by its overall net income (however denominated), franchise taxes imposed on it (in lieu of net income taxes imposed on overall net income), and branch profits taxes imposed on it, by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located; (b) any Taxes imposed, deducted or withheld at the time the Lender becomes a Lender under the Agreement (or designates a new Lending Office), except, in the case of a Lender that becomes a Lender as a result of an assignment, to the extent that the assignor was entitled, at the time of the assignment, to receive additional amounts from the applicable Borrower with respect to such payments or such Lender becomes a Lender (or designates a new Lending Office) after a Designation Date pursuant to the Reallocation Agreement; (c) any Taxes imposed, deducted or withheld by reason of a present or former connection between such Tax Indemnitee and the jurisdiction imposing such Taxes (other than solely on account of the execution and performance of, the enforcement of any right under or the receipt of any payment under, this Agreement or any of the other Loan Documents); (d) any Taxes imposed, deducted or withheld which are attributable to a Lender’s failure or inability, including an inability under Applicable Law, (other than as a result of a Change in Law but not including (A) any change to the extent that such change does not result in additional withholding being imposed but results in withholding being performed by a different withholding agent, and (B) in the case of any Tax Indemnitee providing a Form W-8IMY, any change that would result in no additional withholding if the Person or Persons with respect to which such Tax Indemnitee acted as an intermediary in providing the Form W-8IMY provided directly to Loan Party Agent or Agent the applicable Forms W-8 (or successor forms) certifying such Person’s or Persons’ entitlement to a complete exemption from or reduction in U.S. withholding tax), to comply with Section 5.9 ; or (e) any Taxes imposed, deducted or withheld under FATCA.

Existing Letters of Credit : means the letters of credit set forth on Schedule 1.1(c).

External Specified Transaction : any of the following: (a) a Permitted Acquisition, (b) an Investment to the extent and on the terms permitted pursuant to clause (k)  of the definition of “Restricted Investment”, (c) a Contingent Obligation to the extent and on the terms permitted pursuant to clause (j)  of the definition of “Permitted Contingent Obligation”, (d) a loan to a Person that is not a Subsidiary of Holdings to the extent and on the terms permitted pursuant to Section 10.2.5(f), (e) an Upstream Payment to the extent and on the terms permitted pursuant to clause (iv)  of the definition of “Upstream Payment”, (f) any payment with respect to any Debt, as specified in Section  10.2.6(b)(ii), (c)(ii), (d)(ii) or (e)(ii) , or (g) the incurrence of unsecured Debt to the extent and on the terms permitted pursuant to Section 10.2.1(n) and (h) a Designated External Acquisition.

 

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External Specified Transaction Conditions : with respect to the permissibility hereunder of any External Specified Transaction, the satisfaction of the following conditions (except as indicated): (a) no Default or Event of Default exists at the time of or would result from the making of such External Specified Transaction, (b) immediately after giving effect to such External Specified Transaction, Holdings and its Subsidiaries shall, on a consolidated basis, have a Fixed Charge Coverage Ratio of not less than 1.10:1.00 as calculated on a Pro Forma Basis for the Fixed Charge Coverage Ratio Test Period then most recently ending, (c) immediately after giving effect to such External Specified Transaction (except with respect to the External Specified Transaction specified in clause (g)  thereof), Availability (on the date of such action or proposed action) and Average Period Availability (for the 30-day period ending on the date of such action or proposed action) as calculated on a Pro Forma Basis, shall not be less than the greater of (i) $31,250,000 and (ii) 25% of the Commitments at such time and (d) Agent shall have received a certificate of a Senior Officer of Loan Party Agent certifying as to compliance with preceding clauses (a) through (c) and demonstrating (in reasonable detail) the calculations required by preceding clauses (b) and (c): (1) with respect to External Specified Transactions involving less than $5,000,000 (whether as part of the same transaction or a series of related transactions), concurrently with delivery of the applicable financial information required pursuant to Sections 10.1.2(a), (b) or (c), as applicable and (2) for all other External Specified Transactions, not less than five (5) days prior to the effectiveness of the applicable transaction.

External Subsidiary : a Wholly-Owned Foreign Subsidiary (or any Subsidiary thereof) of Holdings which is not a Loan Party.

Extraordinary Expenses : all costs, expenses or advances that Agent may incur during a Default or Event of Default, or during the pendency of an Insolvency Proceeding of a Loan Party, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against Agent, any Lender, any Loan Party, any representative of creditors of a Loan Party or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidability of Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or Obligations, including any lender liability or other Claims; (c) the exercise, protection or enforcement of any rights or remedies of Agent in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of any taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Obligations; and (g) Protective Advances. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees, appraisal fees, brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’ fees, environmental consultants’ fees, wages and salaries paid to employees of any Loan Party or independent contractors in liquidating any Collateral, and travel expenses.

Facility Commitment : with respect to the commitment of a U.S. Lender, its U.S. Revolver Commitment and, with respect to a Canadian Lender, its Canadian Revolver Commitment; and the term “ Facility Commitments ” means, collectively, the Facility Commitments of U.S. Lenders and the Facility Commitments of Canadian Lenders. To the extent any Lender has both a U.S. Revolver Commitment and a Canadian Revolver Commitment, such Commitments shall be considered as separate Commitments for purposes of this definition.

 

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Facility Commitment Increase Effective Date : as defined in Section 2.1.4(f) .

Facility Termination Date : May 27, 2014.

FATCA : Sections 1471 through 1474 of the Code and any regulations thereunder or official governmental interpretations thereof.

Federal Funds Rate : for any date, (a) the weighted average of interest rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on the applicable Business Day (or on the preceding Business Day, if the applicable day is not a Business Day), as published by the Federal Reserve Bank of New York on the next Business Day; or (b) if no such rate is published on the next Business Day, the average rate (rounded up, if necessary, to the nearest 1/100 of 1%) charged to Bank of America on the applicable day on such transactions, as determined by Agent.

Financial Administration Act : Financial Administration Act ( Canada ) and all regulations and schedules thereunder.

Financial Covenant Trigger Period : the period (a) commencing on the day that an Event of Default occurs, or Average Period Availability (for a one-day period) is less than the greater of (i) $18,750,000 and (ii) 15% of the Commitments at such time; and (b) continuing until, during the preceding sixty (60) consecutive days, no Event of Default has existed and Average Period Availability has been greater than the greater of (i) $18,750,000 and (ii) 15% of the Commitments at such time.

Fiscal Quarter : each period of three (3) calendar months, commencing on the first (1st) day of a Fiscal Year.

Fiscal Year : the fiscal year of each of the Loan Parties for accounting and tax purposes, in each case, ending on December 31 of each year.

 

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Fixed Charge Coverage Ratio : for Holdings and its Subsidiaries on any date of determination, the ratio, determined on a consolidated basis for the most recent twelve (12) calendar month period then ended on such date of determination, of (a) EBITDA minus Capital Expenditures (except those financed with Borrowed Money other than Revolver Loans), and cash taxes paid (net of cash tax refunds received during such period, which total shall not be less than $0), in each case during such period to (b) Fixed Charges during such period; provided , that, for each month set forth in the table below, Capital Expenditures (except those financed with Borrowed Money other than Revolver Loans) and cash taxes paid (net of cash tax refunds received during such period, which total shall not be less than $0) shall, in each case, be deemed to be the amount set forth below opposite such month:

 

Fixed Charge Coverage Ratio Test Period : with respect to each calendar month, the immediately preceding twelve (12) calendar month period ending on the last day of the prior calendar month.

Fixed Charges : for any period and for Holdings and its Subsidiaries included in any applicable calculation of Fixed Charge Coverage Ratio, the sum of (calculated on a consolidated basis solely with respect to those Persons specified to be included in such calculation), without duplication:

(a) cash interest expense (net of any interest income);

(b) Permitted Securitization Expenses;

(c) scheduled principal payments in respect of Borrowed Money, as determined on the first day of the applicable period (or if such Debt was incurred on a subsequent date, on such date); but excluding, for the avoidance of doubt, (i) payments made on Revolving Loans and Swingline Loans during such period and (ii) voluntary prepayments constituting External Specified Transactions pursuant to clause (f)  of the definition of External Specified Transactions;

(d) all regularly scheduled Distributions made by Holdings in cash; and

(e) cash contributions made to any Pension Plan less (without duplication) the profit and loss statement charge (or benefit with respect to such pension funding obligations for such period);

 

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provided that, for each month set forth in the table below, the amounts referenced in clauses (a)  through (e)  above shall, in each case, be deemed to be the amount set forth below opposite such month:

 

Floating Rate Loan : a U.S. Base Rate Loan, a Canadian Prime Rate Loan or a Canadian Base Rate Loan.

FLSA : the Fair Labor Standards Act of 1938.

Foreign Lender : a Lender that is (i) in the case of the Canadian Borrower resident in a jurisdiction other than Canada or a province or territory thereof, and (ii) in the case of the U.S. Borrower, resident in or organized under the laws of a jurisdiction other than a state of the United States or the District of Columbia.

 

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Foreign Plan : any material employee benefit plan or arrangement (a) maintained or contributed to by any Loan Party or Affiliate that is not subject to the laws of the United States or Canada; or (b) mandated by a government other than the United States or Canada for employees of any Loan Party or Affiliate.

Foreign Subsidiary : a Subsidiary of a U.S. Domiciled Loan Party that is a “controlled foreign corporation” under Section 957 of the Code or any Subsidiary of such a Foreign Subsidiary.

FSCO : The Financial Services Commission of Ontario or like body in any other province of Canada with whom a Canadian Pension Plan is registered in accordance with Applicable Law and any other Governmental Authority succeeding to the functions thereof.

Full Payment : with respect to any Obligations (other than indemnity obligations that are not currently due and payable): (a) the full and indefeasible cash payment thereof in the applicable currency required hereunder, including any interest, fees and other charges accruing during an Insolvency Proceeding (whether or not allowed in the proceeding) and (b) if such Obligations are LC Obligations consisting of undrawn Letters of Credit, Cash Collateralization thereof (or delivery of a standby letter of credit acceptable to Agent in its discretion, in the amount of required Cash Collateral). No Loans shall be deemed to have been paid in full until all Commitments related to such Loans have expired or been terminated.

GAAP : generally accepted accounting principles in effect in the United States or, in the case of Canadian Domiciled Loan Parties, Canada, in each case, from time to time, applied consistently.

General Intangibles : as defined in the UCC (and/or with respect to any General Intangible of a Canadian Facility Loan Party, an “intangible” as defined in the PPSA).

Governmental Approvals : all authorizations, consents, approvals, licenses and exemptions of, registrations and filings with, all Governmental Authorities.

Governmental Authority : any federal, state, provincial, municipal, foreign or other governmental department, agency, commission, board, bureau, court, tribunal, instrumentality, political subdivision, or other entity or officer exercising executive, legislative, judicial, regulatory or administrative functions for or pertaining to any government or court, in each case whether it is or is not associated with the United States, a state, district or territory thereof, Canada, a province or territory thereof.

Guarantor Payment : as defined in Section 5.10.3 .

Guarantee : each guarantee agreement (including this Agreement and the Canadian Facility Guarantee) executed by a Guarantor in favor of Agent guaranteeing all or any portion of any Canadian Facility Obligation or U.S. Facility Obligation.

Guarantors : Canadian Facility Guarantors, U.S. Facility Guarantors, and each other Person (if any) who guarantees payment or performance of any Obligations.

Hazardous Materials : hazardous substances; hazardous wastes; polychlorinated biphenyls (“PCBs”) or any substance or compound containing PCBs; exposed friable asbestos;

 

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radon or any other radioactive materials including any source, special nuclear or by-product material; petroleum, crude oil or any fraction thereof; and any other pollutant or contaminant or chemicals, wastes, materials, compounds, constituents or substances, subject to regulation or which can give rise to liability under any Environmental Laws.

Hedging Agreement : an agreement relating to any swap, cap, floor, collar, option, forward (excluding contracts for the acquisition of raw materials in the Ordinary Course of Business), cross right or obligation, or combination thereof or similar transaction, with respect to interest rate, foreign exchange, currency, commodity, credit or equity risk.

Holdings : as defined in the preamble to this Agreement.

Indemnified Taxes : Taxes other than Excluded Taxes.

Indemnitees : Agent Indemnitees, Lender Indemnitees, Issuing Bank Indemnitees and Bank of America Indemnitees.

Insolvency Proceeding : any case or proceeding or proposal commenced by or against a Person under any state, provincial, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the U.S. Bankruptcy Code, or any other insolvency, debtor relief, bankruptcy, receivership, debt adjustment law or other similar law (whether state, provincial, federal or foreign), including the Bankruptcy and Insolvency Act (Canada) and the CCAA; (b) the appointment of a Creditor Representative or other custodian for such Person or any part of (i) the ABL Priority Collateral or (ii) any material potion of its Property not constituting ABL Priority Collateral; or (c) an assignment or trust mortgage for the benefit of creditors.

Insurance Assignment : each collateral assignment of insurance pursuant to which a Loan Party assigns to Agent such Loan Party’s rights under any insurance policies as Agent deems appropriate, as security for the Obligations.

Intellectual Property : all intellectual property rights and similar Property of a Person, including inventions, designs, patents, copyrights, trademarks, service marks, trade names, domain names, trade secrets, confidential or proprietary information, customer lists, know-how, software and databases, all embodiments or fixations of any of the foregoing; all related documentation; all applications and registrations thereof; and all licenses or other rights to use, or otherwise relating to, any of the foregoing; and all books and records relating to any of the foregoing.

Intellectual Property Claim : any claim or assertion (whether in writing, by suit or otherwise) that a Loan Party’s or Subsidiary’s ownership, use, marketing, sale or distribution of any Inventory, Equipment, Intellectual Property or other Property violates another Person’s Intellectual Property.

Intercompany Equity Investments : Investments consisting of cash capital contributions made by Holdings and its Wholly-Owned Subsidiaries to their respective Wholly-Owned Subsidiaries, and capitalizations or forgiveness of any Debt owed to them by a Wholly-Owned Foreign Subsidiary and outstanding under Section 10.2.5(e) ; provided that at no time shall any such contributions, capitalizations and forgiveness be made by the Loan Parties to External Subsidiaries unless the Specified Transaction Conditions applicable to such Investment shall have been satisfied in connection therewith.

 

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Intercompany Loans : as defined in Section 10.2.5(e) .

Intercompany Note : a promissory note evidencing Intercompany Loans, duly executed and delivered substantially in the form of Exhibit F , with blanks completed in conformity herewith.

Interest Period : as defined in Section 3.1.4 .

Interest Period Loan : a LIBOR Loan or a Canadian BA Rate Loan.

Internal Specified Transaction : any of the following: (a) a Contingent Obligation to the extent and on the terms permitted pursuant to clause (i)(z) of the definition of “Permitted Contingent Obligation”, (b) an Intercompany Equity Investment (other than any investment in any Loan Party, or any investment by an External Subsidiary in another External Subsidiary) and (c) an Intercompany Loan (other than any Intercompany Loan to any Loan Party, or any Intercompany Loan by an External Subsidiary to another External Subsidiary); and it being understood for the avoidance of doubt that any transfer made by Holdings or any of its Subsidiaries to any Subsidiary as payment for goods and services in the Ordinary Course of Business shall not be an “Internal Specified Transaction”.

Internal Specified Transaction Conditions : with respect to the permissibility hereunder of any Internal Specified Transaction, the satisfaction of the following conditions: (a) no Default or Event of Default exists at the time of or would result from the making of such Internal Specified Transaction, (b) immediately after giving effect to such Internal Specified Transaction, Holdings and its Subsidiaries shall, on a consolidated basis, have a Fixed Charge Coverage Ratio of not less than 1.10:1.00 as calculated on a Pro Forma Basis for the Fixed Charge Coverage Ratio Test Period then most recently ending and (c) immediately after giving effect to such Internal Specified Transaction, Availability (on the date of such action or proposed action) and Average Period Availability (for the 30-day period ending on the date of such action or proposed action) as calculated on a Pro Forma Basis, shall not be less than the greater of (i) $25,000,000 and (ii) 20% of the Commitments at such time; provided , that such Internal Specified Transaction shall be permitted irrespective of clause (b)  of this definition so long as Availability (on the date of such action or proposed action) and Average Period Availability (for the 30-day period ending on the date of such action or proposed action) as calculated on a Pro Forma Basis, shall not be less than the greater of (i) $43,750,000 and (ii) 35% of the Commitments at such time.

Inventory : as defined in the UCC and the PPSA, as applicable, including all goods intended for sale, lease, display or demonstration; all work in process; and all raw materials, and other materials and supplies of any kind that are or could be used in connection with the manufacture, printing, packing, shipping, advertising, sale, lease or furnishing of such goods, or otherwise used or consumed in a Borrower’s business (but excluding equipment).

Inventory Reserve : reserves established by Agent in its Permitted Discretion, to reflect factors that may negatively impact the Value of Inventory, including change in salability, obsolescence, seasonality, theft, shrinkage, imbalance, change in composition or mix, markdowns and vendor chargebacks.

 

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Investment : any acquisition of all or substantially all assets of a Person; any acquisition of record or beneficial ownership of any Debt or Equity Interests of a Person; any loan, advance or capital contribution to or other investment in a Person; any guarantee (or other similar arrangement having the effect of a guarantee) of any payment of amounts owing by any Person; or any purchase or ownership of a Hedging Agreement.

IRS : the United States Internal Revenue Service.

Issuing Bank Indemnitees : Issuing Banks and their officers, directors, employees, Affiliates, agents and attorneys.

Issuing Banks : U.S. Issuing Bank and Canadian Issuing Bank.

Joint Commitment Letter : the joint commitment letter agreement among the Lead Arrangers (other than Barclays Capital), Bank of America, Deutsche Bank Trust Company Americas, UBS Loan Finance LLC, Barclays Bank PLC, Holdings and the Borrowers dated as of April 21, 2010.

Joint Fee Letter : the joint fee letter agreement among the Lead Arrangers (other than Barclays Capital), Bank of America, Deutsche Bank Trust Company Americas, UBS Loan Finance LLC, Barclays Bank PLC, Holdings and the Borrowers dated as of April 21, 2010.

LC Application : an application by Loan Party Agent on behalf of a Borrower to an Issuing Bank for issuance of a Letter of Credit, in form and substance satisfactory to such Issuing Bank.

LC Conditions : the following conditions necessary for the issuance of a Letter of Credit: (a) each of the conditions set forth in Section 6.2 (or with respect to Letters of Credit issued on the Closing Date, in Section 6.1) ; (b) after giving effect to the issuance of a Letter of Credit for the account of the U.S. Borrower, total U.S. LC Obligations (excluding amounts specified in clause (c)  of such definition) do not exceed the U.S. Letter of Credit Sublimit and no U.S. Overadvance exists or would result therefrom; (c) after giving effect to the issuance of a Letter of Credit for the account of the Canadian Borrower, total Canadian LC Obligations (excluding amounts specified in clause (c)  of such definition) do not exceed the Canadian Letter of Credit Sublimit and no Canadian Overadvance exists or would result therefrom; (d) the expiration date of such Letter of Credit is (i) no more than three hundred sixty five (365) days from issuance, in the case of standby Letters of Credit; provided that such Letters of Credit may contain automatic extension provisions in accordance with Section 2.2.1(e) or Section 2.3.1(e) , as applicable, (ii) no more than one hundred twenty (120) days from issuance, in the case of documentary Letters of Credit, and (iii) at least fifteen (15) Business Days prior to the Facility Termination Date; (e) with respect the issuance of Letters of Credit for the account of the U.S. Borrower, the Letter of Credit and payments thereunder are denominated in Dollars, Euros or Sterling; (f) with respect to the issuance of Letters of Credit for the account of the Canadian Borrower, the Letter of Credit and payments thereunder are denominated in Dollars or Canadian Dollars; and (g) the form of the proposed Letter of Credit is reasonably satisfactory to Agent and the applicable Issuing Bank in their discretion.

LC Documents : all documents, instruments and agreements (including LC Requests and LC Applications) delivered by Loan Party Agent on behalf of a Borrower or by any other Person to an Issuing Bank or Agent in connection with issuance, amendment or renewal of, or payment under, any Letter of Credit.

 

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LC Obligations : U.S. LC Obligations and Canadian LC Obligations.

LC Request : a request for issuance of a Letter of Credit, to be provided by Loan Party Agent on behalf of a Borrower to an Issuing Bank, in form satisfactory to Agent and such Issuing Bank.

Lead Arrangers : Banc of America Securities LLC, Deutsche Bank Securities Inc., UBS Securities LLC and Barclays Capital.

Lender Indemnitees : Lenders and their officers, directors, employees, Affiliates, agents and attorneys.

Lenders : as defined in the preamble to this Agreement and shall include Agent in its capacity as a provider of Swingline Loans and U.S. Lenders and Canadian Lenders and their respective permitted successors and assigns and, where applicable, Issuing Banks, and any other Person who hereafter becomes a “Lender” pursuant to an Assignment and Acceptance or a joinder agreement entered into pursuant to Section 2.1.4.

Lending Office : the office designated as such by the applicable Lender at the time it becomes party to this Agreement or thereafter by notice to Agent and Loan Party Agent.

Letter of Credit : any U.S. Letters of Credit or Canadian Letters of Credit; and each Existing Letter of Credit shall be deemed to be a “Letter of Credit” for all purposes of this Agreement.

LIBOR : for any Interest Period with respect to a LIBOR Loan, the per annum rate of interest (rounded up, if necessary, to the nearest 1/100th of 1%), determined by Agent at approximately 11:00 a.m. (London time) two (2) Business Days prior to commencement of such Interest Period, for a term comparable to such Interest Period, equal to (a) the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source designated by Agent); or (b) if BBA LIBOR is not available for any reason, the interest rate at which Dollar deposits in the approximate amount of the LIBOR Loan would be offered by Bank of America’s London branch to major banks in the London interbank Eurodollar market. If the Board of Governors imposes a Reserve Percentage with respect to LIBOR deposits, then LIBOR shall be the foregoing rate, divided by one (1) minus the Reserve Percentage.

LIBOR Loan : each set of LIBOR Revolver Loans having a common length and commencement of Interest Period.

LIBOR Revolver Loan : a Revolver Loan that bears interest based on LIBOR; provided , however, that a U.S. Base Rate Loan bearing interest as set forth in clause (c) of the definition of U.S. Base Rate shall not constitute a LIBOR Revolver Loan.

License : any license or agreement under which a Loan Party or Subsidiary is authorized to use Intellectual Property in connection with any manufacture, marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.

 

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Licensor : any Person from whom a Loan Party or Subsidiary obtains the right to use any Intellectual Property.

Lien : any Person’s interest in Property securing an obligation owed to, or a claim by, such Person, whether such interest is based on common law, statute or contract, including liens, security interests, pledges, security transfers, security assignments, hypothecations, secured claims, statutory trusts, deemed trusts, reservations of title, exceptions, encroachments, easements, servitudes, rights-of-way, covenants, conditions, restrictions, leases, and other title exceptions and encumbrances affecting Property, but excluding for the avoidance of doubt, any licenses granted with respect to Intellectual Property.

List of Closing Documents : the List of Closing Documents attached hereto as Schedule 6.1.

Loan : a Revolver Loan.

Loan Account : the loan account established by each Lender on its books pursuant to Section 5.7 .

Loan Documents : this Agreement, the Other Agreements and the Security Documents.

Loan Parties : the Canadian Facility Loan Parties and the U.S. Facility Loan Parties, collectively and “ Loan Party ” means any of the Loan Parties, individually.

Loan Party Agent : as defined in Section 4.4 .

Loan Party Group : a group consisting of (i) Canadian Facility Loan Parties or (ii) U.S. Facility Loan Parties.

Loan Party Group Obligations : with respect to the Canadian Borrower and the other Canadian Facility Loan Parties, the Canadian Facility Obligations, and with respect to the U.S. Borrower and the other U.S. Facility Loan Parties, the U.S. Facility Obligations.

Loan Year : each twelve (12) month period commencing on the Closing Date and on each anniversary of the Closing Date.

Margin Stock : as defined in Regulation U of the Board of Governors.

Material Adverse Effect : (A) a material adverse effect on, the operations, business, assets, properties, liabilities (actual or contingent) or condition (financial or otherwise) of Holdings and its Subsidiaries, taken as a whole; (B) a material impairment of the rights and remedies of Agent or any Lender under any Loan Document; (C) a material impairment of the ability of the Loan Parties, taken as a whole, to perform their material obligations under the Loan Documents, taken as a whole; or (D) a material adverse effect on the value of any substantial portion of the ABL Priority Collateral.

Material Contract : any agreement or arrangement to which a Loan Party or Subsidiary is party (other than the Loan Documents) (a) that is deemed to be a material contract in respect of Holdings and its Subsidiaries, taken as a whole, under any securities law applicable to such Loan Party or Subsidiary, including the Securities Act of 1933; or (b) for which breach, termination, nonperformance or failure to renew could reasonably be expected to have a Material Adverse Effect.

 

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Maximum Canadian Facility Amount : on any date of determination, the lesser of (i) the Canadian Revolver Commitments on such date and (ii) $25,000,000 (or such greater or lesser amount after giving effect to any increases or reductions in the Commitments pursuant to Section 2.1.4); it being acknowledged and agreed that at no time can the sum of the Maximum Canadian Facility Amount plus the Maximum U.S. Facility Amount exceed the Maximum Facility Amount in effect at such time.

Maximum Facility Amount : $125,000,000, or such greater or lesser amount as shall then be in effect after giving effect to any increase or reduction in the Commitments pursuant to Section 2.1.4.

Maximum U.S. Facility Amount : on any date of determination, the lesser of (i) the U.S. Revolver Commitments on such date and (ii) $100,000,000 (or such greater or lesser amount after giving effect to any increases or reductions in the Commitments pursuant to Section 2.1.4 ; it being acknowledged and agreed that at no time can the sum of the Maximum U.S. Facility Amount plus the Maximum Canadian Facility Amount exceed the Maximum Facility Amount in effect at such time.

Moody’s : Moody’s Investors Service, Inc., and its successors.

Multiemployer Plan : any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Loan Party or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions, but excluding, for greater certainty, any Canadian Multi-Employer Plan.

Net Proceeds : with respect to an Asset Disposition, proceeds (including, when received, any deferred or escrowed payments) received by a Loan Party or Subsidiary in cash from such disposition, net of (a) reasonable and customary costs and expenses actually incurred in connection therewith, including legal fees and sales commissions; (b) amounts applied to repayment of Debt secured by a Permitted Lien senior to Agent’s Liens on Collateral sold; (c) transfer or similar taxes; and (d) reserves and escrows for indemnities and any other contingent liabilities, until such reserves are no longer needed (after which, any such amounts previously held as reserves or escrows shall become Net Proceeds when received).

New Common Stock : as defined in the Recitals hereto.

New Preferred Stock : as defined in the Recitals hereto.

NOLV Percentage : the net orderly liquidation value of Inventory, expressed as a percentage of the Value of Inventory expected to be realized at an orderly, negotiated sale held within a reasonable period of time, net of all liquidation expenses, as determined from the most recent appraisal of the Loan Parties’ Inventory performed by an appraiser and on terms reasonably satisfactory to Agent; it being acknowledged that there may be different NOLV Percentages for different segments of Inventory (e.g., raw materials, intermediate goods, finished goods).

 

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Notes : each Revolver Note or other promissory note executed by a Borrower to evidence any Obligations.

Notice of Borrowing : a Notice of Borrowing to be provided by Loan Party Agent to request a Borrowing of Loans, in the form attached hereto as Exhibit B or otherwise in form satisfactory to Agent.

Notice of Conversion/Continuation : a Notice of Conversion/Continuation to be provided by Loan Party Agent to request a conversion or continuation of any Loans as LIBOR Loans or Canadian BA Rate Loans, in the form attached hereto as Exhibit C or otherwise in form satisfactory to Agent.

Obligations : all (a) principal of and premium, if any, on the Loans, (b) U.S. LC Obligations and other obligations of the U.S. Facility Loan Parties with respect to Letters of Credit issued for the account of the U.S. Borrower, (c) Canadian LC Obligations and other obligations of the Canadian Facility Loan Parties with respect to Letters of Credit issued for the account of the Canadian Borrower, (d) interest, expenses, fees and other sums payable by the Loan Parties under the Loan Documents, (e) obligations of the Loan Parties under any indemnity for Claims, (f) Extraordinary Expenses, (g) Bank Product Debt, and (h) other Debts, obligations and liabilities of any kind owing by the Loan Parties pursuant to the Loan Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guarantee, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several.

Ordinary Course of Business : the ordinary course of business of any Person, consistent with past practices or reasonable extensions thereof, and undertaken in good faith.

Organic Documents : with respect to any Person, its charter, certificate or articles of incorporation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, memorandum of association, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person.

OSHA : the Occupational Safety and Hazard Act of 1970.

Other Agreement : each: Note; LC Document; Fee Letter; Collateral Access Agreement; Permitted Senior Secured Debt Intercreditor Agreement (if any); Borrowing Base Certificate, Compliance Certificate; or other document or agreement (other than this Agreement or a Security Document) now or hereafter delivered by or on behalf of a Loan Party or other Person to Agent or a Lender in connection with any transactions relating hereto.

Other Taxes : all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document.

Overadvance : a Canadian Overadvance or U.S. Overadvance, as the context requires.

 

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Overadvance Loan : a Canadian Overadvance Loan and/or a U.S. Overadvance Loan, as the context requires.

Participant : as defined in Section 13.2.1 .

Patriot Act : the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001).

Payment Item : each check, draft or other item of payment payable to a Loan Party, including those constituting proceeds of any Collateral.

PBA : the Pensions Benefits Act (Ontario) or any other Canadian federal or provincial pension benefit standards legislation pursuant to which any Canadian Pension Plan is registered.

PBGC : the Pension Benefit Guaranty Corporation.

Pension Plan : any employee pension benefit plan (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Loan Party or ERISA Affiliate or to which the Loan Party or ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the preceding five (5) plan years, and, for greater certainty, excludes any Canadian Pension Plan or any Canadian Multi-Employer Plan.

Perfection Certificate : a certificate in the form of Exhibit G or any other form approved by Agent.

Permitted Acquisition : any Acquisition by a Loan Party which is consented to by Agent and Required Lenders or where:

(i) the business, division or operating units or other assets or properties acquired are for use, or the Person acquired is engaged, in the same or substantially similar businesses or manufacturing processes (or reasonable extensions thereof or incidental thereto) engaged in by such Borrower or Subsidiary on such date;

(ii) the External Specified Transaction Conditions shall have been satisfied in connection therewith;

(iii) in the case of the Acquisition of any Person, the board of directors or similar governing body of such Person has approved such Acquisition and such Person shall not have announced that it will oppose such Acquisition or shall not have commenced any action which alleges that such Acquisition will violate any Applicable Law;

(iv) reasonably prior to such Acquisition, Agent shall have received an acquisition summary with respect to the Person and/or business or division to be acquired, such summary to include a reasonably detailed description thereof (including financial statements for the most recent twelve (12) month period for which they are available and as otherwise available), including the basic terms and conditions of the proposed Acquisition;

 

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(v) if such Acquisition is of 100% of the Equity Interests of a Person (including via merger or consolidation) organized under the laws of Canada or any province or territory thereof or the laws of the United States or any state or district hereof, the provisions of Section 10.1.9 shall have been fully satisfied with respect to such acquired Person;

(vi) if the assets acquired in such Acquisition are intended to be included in the U.S. Borrowing Base or the Canadian Borrowing Base, prior to any such inclusion, (1) Agent and the Applicable Lenders shall be provided with such information as they shall reasonably request to complete their evaluation of any such Collateral and (2) the Asset Review and Approval Conditions shall have been satisfied;

(vii) if the Acquisition is structured as a merger or amalgamation involving a Loan Party, or, to the extent permitted pursuant to Section 10.2.7(a), a Borrower, such Loan Party (unless such Loan Party is a newly formed inactive merger Subsidiary formed for purposes of effecting such Acquisition) or, if applicable, such Borrower, shall be the surviving entity and such merger or amalgamation is permitted pursuant to Section 10.2.7(a) ; and

(viii) no Loan Party or Affiliate thereof shall, in connection with any such Acquisition, assume or remain liable with respect to any Debt or other liability (including any material tax liability or liability with respect to any Pension Plan, a Plan providing for post-employment medical or life insurance benefits, Foreign Plan or Canadian Pension Plan) of the seller or the business, person or properties acquired, except to the extent permitted by Section 10.2.1(f) .

Permitted Collateral Liens : the Liens described in Section 10.2.2(a), (c), (d), (f), (g), (i), (j), (n), (p), (q), (r), (s), (z), (aa) and (bb) .

Permitted Contingent Obligations : Contingent Obligations (a) arising from endorsements of Payment Items for collection or deposit in the Ordinary Course of Business; (b) arising from Hedging Agreements permitted hereunder; (c) existing on the Closing Date and set forth on Schedule 1.1(b) , and any extension or renewal thereof that does not increase the amount of such Contingent Obligation when extended or renewed and otherwise satisfies the Refinancing Condition; (d) incurred in the Ordinary Course of Business with respect to surety, appeal or performance bonds, or other similar obligations; (e) arising from customary indemnification obligations in favor of purchasers in connection with dispositions of Property permitted hereunder; (f) arising under the Loan Documents; (g) arising under the Senior Note Documents to the extent the underlying Senior Note Debt is otherwise permitted pursuant to Section 10.2.1(i) ; (h) arising under the Permitted Senior Secured Debt Documents to the extent the underlying Permitted Senior Secured Debt is otherwise permitted pursuant to Section 10.2.1(l) ; (i) consisting of guarantees (x) by the Loan Parties of each other’s Debt and lease and other contractual obligations permitted under this Agreement and (y) by External Subsidiaries of each other’s and each Loan Party’s Debt and lease and other contractual obligations permitted under this Agreement or (z) by any Loan Party of any Debt and lease and other contractual obligations permitted under this Agreement of any External Subsidiary; provided that at no time shall any Contingent Obligations under this sub-clause (z)  be incurred unless the Specified Transaction Conditions applicable to the incurrence of such Contingent Obligations shall have been satisfied in connection therewith; and (j) consisting of Contingent Obligations of a type not described in clauses (a)  through (i)  of this definition and not otherwise prohibited by the terms of this Agreement or the other Loan Documents so long as the Specified Transaction Conditions applicable to the incurrence of such Contingent Obligations shall have been satisfied in connection therewith.

 

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Permitted Discretion : a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment, following either (x) consultation with the Loan Party Agent or (y) two (2) Business Days’ advance notice to the Borrowers.

Permitted Lien : as defined in Section 10.2.2 .

Permitted Holders : Barclays Bank PLC and its subsidiaries and any funds or accounts managed by Capital Research and Management Company, Lord, Abbott & Co., Oak Hill Advisors, L.P., Silver Point Capital, L.P., TCW Asset Management Company and TD Asset Management Inc.

Permitted Purchase Money Debt : Purchase Money Debt of the Loan Parties and Subsidiaries that is unsecured or secured only by a Purchase Money Lien, as long as the aggregate amount does not exceed $50,000,000.

Permitted Securitization : means any transaction or series of transactions that may be entered into by any External Subsidiary pursuant to which it may sell, convey, contribute to capital or otherwise transfer (which sale, conveyance, contribution to capital or transfer may include or be supported by the grant of a security interest) accounts receivable or interests therein and all collateral securing such receivables, all contracts and contract rights, purchase orders, security interests, financing statements or other documentation in respect of such receivables, any guarantees, indemnities, warranties or other obligations in respect of such receivables, any other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving receivables similar to such receivables and any collections or proceeds of any of the foregoing (collectively, the “ Related Assets ”) (i) to a trust, partnership, corporation or other Person (other than Holdings or any Subsidiary, other than a Subsidiary formed solely for the purpose of, and that engages only in, Permitted Securitizations, an “ SPE Subsidiary ”), which transfer is funded in whole or in part, directly or indirectly, by the incurrence or issuance by the transferee or any successor transferee of Debt, fractional undivided interests or other securities that are to receive payments from, or that represent interests in, the cash flow derived from such receivables and Related Assets or interests in such receivables and Related Assets, or (ii) directly to one or more investors or other purchasers (other than Holdings or any Subsidiary), it being understood that a Permitted Securitization may involve (A) one or more sequential transfers or pledges of the same receivables and Related Assets, or interests therein (such as a sale, conveyance or other transfer to an SPE Subsidiary followed by a pledge of the transferred receivables and Related Assets to secure Debt incurred by the SPE Subsidiary), and all such transfers, pledges and Debt incurrences shall be part of and constitute a single Permitted Securitization, and (B) periodic transfers or pledges of receivables and/or revolving transactions in which new receivables and Related Assets, or interests therein, are transferred or pledged upon collection of previously transferred or pledged receivables and Related Assets, or interests therein, provided that any such transactions shall provide for recourse to such External Subsidiary (other than any SPE Subsidiary) only in respect of the cash flows in respect of such receivables and Related Assets and to the extent of other customary securitization undertakings (as determined in good faith by the board of directors of the appropriate External Subsidiary) in the jurisdiction relevant to such

 

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transactions (such undertakings, “ Standard Securitization Undertakings ”); provided that, for the avoidance of doubt, (1) no portion of the Debt or any other obligations (contingent or otherwise) of any External Subsidiary or SPE Subsidiary is guaranteed by any Loan Party, is recourse to or obligates any Loan Party, or subjects any property or asset of any Loan Party, directly or indirectly (other than with respect to its equity ownership interest in any External Subsidiary), contingently or otherwise, to the satisfaction of obligations incurred in such transactions; and (2) no Loan Party has any obligation to maintain or preserve the financial condition of an SPE Subsidiary or cause such entity to achieve certain levels of operating results. The “amount” or “principal amount” of any Permitted Securitization shall be deemed at any time to be (1) the aggregate principal or stated amount of the Debt, fractional undivided interests (which stated amount may be described as a “net investment” or similar term reflecting the amount invested in such undivided interest) or other securities incurred or issued pursuant to such Permitted Securitization, in each case outstanding at such time, or (2) in the case of any Permitted Securitization in respect of which no such Debt, fractional undivided interests or securities are incurred or issued, the cash purchase price paid by the buyer in connection with its purchase of receivables less the amount of collections received in respect of such receivables and paid to such buyer, excluding any amounts applied to purchase fees or discount or in the nature of interest.

Permitted Securitization Expenses : commissions, discounts, yield, other fees and charges, and any other amounts during any applicable period comparable to or in the nature of interest, in each case accrued during any applicable period in connection with Permitted Securitizations.

Permitted Senior Secured Debt : one or more issues of secured Debt incurred by any Loan Party or any of its Subsidiaries pursuant to Section 10.2.1(l) and designated as Permitted Senior Secured Debt by written notice to Agent so long as (i) any such Debt of a U.S. Domiciled Loan Party and/or a Canadian Domiciled Loan Party does not have a maturity prior to May 27, 2015 and (ii) in case such debt is incurred by a U.S. Domiciled Loan Party and/or a Canadian Domiciled Loan Party, such Loan Party shall have delivered such collateral documents as Agent has reasonably requested in connection with the incurrence of such Debt in order to grant to Agent a perfected second priority security interest in the Collateral other than the ABL Priority Collateral of the U.S. Domiciled Loan Parties and/or Canadian Domiciled Loan Parties, as applicable, and such documents shall be in full force and effect and (iii) in case such debt is incurred by a U.S. Domiciled Loan Party and/or a Canadian Domiciled Loan Party, the Permitted Senior Secured Debt Intercreditor Agreement is entered into and in full force and effect and, to the extent the Permitted Senior Secured Debt Collateral Agent in respect of such Debt is not a party thereto (in its capacity as Permitted Senior Secured Debt Collateral Agent in respect of such Debt), such Permitted Senior Secured Debt Collateral Agent shall become a party to the Permitted Senior Secured Debt Intercreditor Agreement on or before entering into the Permitted Senior Secured Debt Documents in respect of such Debt by executing and delivering a joinder thereto, in the form specified therein.

Permitted Senior Secured Debt Collateral Agent : each relevant Person that acts as a collateral agent, collateral trustee or in a similar capacity under the Permitted Senior Secured Debt Documents in respect of an issuance of Permitted Senior Secured Debt (and its successors and assigns in such capacity).

Permitted Senior Secured Debt Documents : all loan agreements, indentures, purchase agreements, notes, guarantees, security documents and other documents executed and delivered

 

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with respect to any Permitted Senior Secured Debt, as in effect on the date of first incurrence of such Permitted Senior Secured Debt and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and the Permitted Senior Secured Debt Intercreditor Agreement.

Permitted Senior Secured Debt Intercreditor Agreement : a lien subordination and intercreditor agreement, in form and substance acceptable to the Lead Arrangers on prevailing market terms for similar transactions (as reasonably determined by the Lead Arrangers in their discretion), among Agent, the Loan Parties party to any Permitted Senior Secured Debt Document and the Permitted Senior Secured Debt Collateral Agent, as amended, modified or supplemented from time to time in accordance with the terms thereof and hereof.

Permitted Senior Secured Debt Priority Collateral : any and all Collateral other than the ABL Priority Collateral.

Permitted Senior Secured Debt Security Documents : the “Security Documents” (or similar term) as defined in the Permitted Senior Secured Debt Documents.

Person : any individual, corporation, limited liability company, unlimited liability company, partnership, joint venture, joint stock company, land trust, business trust, unincorporated organization, Governmental Authority or other entity.

Plan Documents : the U.S. Confirmation Order, the Canadian Sanction Order and the Reorganization Plans.

Plan : any material “employee benefit plan” (as defined in Section 3(3) of ERISA), and any material payroll practice and other material employee benefit plan, policy, program, agreement or arrangement, including retirement, pension, profit sharing, employment, individual consulting or other compensation agreement, collective bargaining agreement, bonus or other incentive compensation, retention, stock purchase, equity or equity-based compensation, deferred compensation, change of control, severance, sick leave, vacation, loans, salary continuation, hospitalization, health, life insurance, educational assistance, or other fringe benefit or perquisite plan, policy, agreement which is or was sponsored, maintained or contributed to by, or required to be contributed to by, any Loan Party or Affiliate thereof or with respect to which a Loan Party or ERISA Affiliate has or could have any obligation or liability, contingent or otherwise, in any case, that is subject to U.S. law (and not other foreign jurisdictions) and excluding, for greater certainty, Canadian Employee Plans and Foreign Plans.

PPSA : the Personal Property Security Act (Ontario) and the regulations thereunder; provided, however, if validity, perfection and effect of perfection and non-perfection of Agent’s security interest in and Lien on any Collateral of any Canadian Domiciled Loan Party are governed by the personal property security laws of any jurisdiction other than Ontario, PPSA shall mean those personal property security laws (including the Civil Code of Quebec) in such other jurisdiction for the purposes of the provisions hereof relating to such validity, perfection, and effect of perfection and non-perfection and for the definitions related to such provisions, as from time to time in effect.

Prepetition Agreement : that certain Credit Agreement dated as of December 23, 2004 (as amended, modified or supplemented), among Holdings, the U.S. Borrower, the Canadian

 

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Borrower and Cooper-Standard Automotive International Holdings B.V. as borrowers, the lenders party thereto, as lenders, and Deutsche Bank Trust Company Americas as administrative agent, Lehman Commercial Paper Inc., as syndication agent, Goldman Sachs Credit Partners L.P., UBS Securities LLC and The Bank of Nova Scotia, as co-documentation agents, and Deutsche Bank Securities Inc. and Lehman Brothers Inc., as joint lead arrangers and book runners.

Pro Forma Basis : in connection with any calculation of compliance with any financial covenant or financial term under this Agreement, (a) such compliance with the Fixed Charge Coverage Ratio shall be calculated giving effect to any Specified Transaction as if such Specified Transaction (and all other Specified Transactions consummated or made since the first (1st) day of the Fixed Charge Coverage Ratio Test Period most recently ended) happened on the first (1st) day of the Fixed Charge Coverage Ratio Test Period most recently ended, including (i) the incurrence of any Debt by any Loan Party or any of their Subsidiaries in connection with any such Specified Transaction, (ii) any repayment or redemption of other Debt of any Loan Party or any of their Subsidiaries in connection with any such Specified Transaction and (iii) the making of any Distribution by any Loan Party or any of their Subsidiaries in connection with any such Specified Transaction, (b) determinations of EBITDA shall be made giving pro forma effect to any Acquisition consummated since the first (1st) day of the Fixed Charge Coverage Ratio Test Period most recently ended, with such EBITDA to be determined as if such Acquisition was consummated on the first (1st) day of the Fixed Charge Coverage Ratio Test Period most recently ended, and (c) maintenance of Availability shall be calculated giving effect to such Specified Transaction, including (i) any disposition of Collateral in any such Specified Transaction and (ii) the acquisition of any additional Collateral in any such Specified Transaction which is approved by Agent for inclusion in the calculation of the Canadian Borrowing Base or the U.S. Borrowing Base, to the extent applicable. In calculating interest expense on Debt incurred under clause (a) (i) of the immediately preceding sentence, such Debt shall be deemed to have borne interest (a) in the case of fixed rate Debt, at the rate applicable thereto or (b) in the case of floating rate Debt, at the rates which were or would have been applicable thereto during the period when such Debt was or was deemed to be outstanding, in each case as reasonably calculated by Loan Party Agent.

Pro Rata : (a) when used with reference to a Lender’s (i) share on any date of (A) the total Facility Commitments to a Borrower or (B) Loans to be made to a Borrower, (ii) participating interests in LC Obligations (excluding amounts specified in clause (c)  of such definition) to such Borrower, (iii) share of payments made by such Borrower with respect to such Borrower’s Obligations, (iv) increases or reductions to the Canadian Revolver Commitments or the U.S. Revolver Commitments pursuant to Section 2.1.4 , and (v) obligation to pay or reimburse Agent for Extraordinary Expenses owed by or in respect of such Borrower or to indemnify any Indemnitees for Claims relating to such Borrower, a percentage (expressed as a decimal, rounded to the ninth decimal place) derived by dividing the amount of the Facility Commitment of such Lender to such Borrower on such date by the aggregate amount of the Facility Commitments of all Lenders to such Borrower on such date (or if such Facility Commitments have been terminated, by reference to the respective Facility Commitments as in effect immediately prior to the termination thereof) or (b) when used for any other reason, a percentage (expressed as a decimal, rounded to the ninth (9th) decimal place) derived by dividing the aggregate amount of Lender’s Commitments on such date by the aggregate amount of the Commitments of all Lenders on such date (or if any such Commitments have been terminated, such Commitments as in effect immediately prior to the termination thereof).

 

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Proceeds of Crime Act : the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) (or any successor statute), as amended from time to time, and includes all regulations thereunder.

Properly Contested : with respect to any obligation of any Person, (a) the obligation is subject to a bona fide dispute regarding amount or such Person’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP; and (d) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal or other judicial review or covered by insurance.

Property : any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.

Protective Advances : as defined in Section 2.1.6 .

Purchase Money Debt : (a) Debt (other than the Obligations, the Senior Note Debt and the Permitted Senior Secured Debt) for payment of any of the purchase price of fixed assets or the costs of improvement or construction thereof; (b) Debt (other than the Obligations, the Senior Note Debt and the Permitted Senior Secured Debt) incurred within one-hundred eighty (180) days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price, improvement or construction thereof; (c) any renewals, extensions or refinancings thereof; provided that the Refinancing Conditions are satisfied with respect thereto; and (d) to the extent not covered above, obligations under Capital Leases permitted hereunder.

Purchase Money Lien : a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired, constructed or improved with such Debt.

RCRA : the Resource Conservation and Recovery Act, as amended, (42 U.S.C. §§ 6991-6991i).

RDPRM : Quebec Register of Personal and Movable Real Rights or Registre des droits personnels et reels mobiliers du Quebec.

Real Estate : all right, title and interest (whether as owner, lessor or lessee) in any real Property or any buildings, structures, parking areas or other improvements thereon.

Reallocation Agreement : the reallocation agreement dated as of the date hereof among Agent, the Lenders and each Issuing Bank transferring ownership of debt among the Lenders after a Designation Date, as amended, modified or supplemented from time to time.

Refinancing Conditions : the following conditions for Refinancing Debt: (a) it is in an aggregate principal amount that does not exceed the principal amount of the Debt being extended, refinanced or renewed, except by an amount equal to a reasonable premium or other reasonable amounts paid, and fees and expenses reasonably incurred in connection with such extension, refinancing or renewal, and by an amount equal to any existing commitments unutilized thereunder or as otherwise permitted hereunder; (b) it has a final maturity no sooner than, and a weighted average life no less than, the Debt being extended, refinanced or renewed; (c) it is subordinated to the Obligations at least to the same extent, if any, as the Debt being extended, refinanced or renewed; (d) the representations, covenants and defaults applicable to it, taken as a

 

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whole, are no less favorable to the Loan Parties than those applicable to the Debt being extended, refinanced or renewed; (e) no additional Lien is granted to secure it; (f) no additional Person is obligated on such Debt, except with respect to any additional guarantees given by additional Loan Parties hereunder; and (g) upon giving effect to it, no Default or Event of Default exists or would result therefrom.

Refinancing Debt : Debt that is the result of an extension, renewal, or refinancing of Debt permitted under Section 10.2.1 (b), (d) , (f), (h), (i) or (t).

Reorganization Plans : as defined in the Recitals hereto.

Report : as defined in Section 12.2.3 .

Reportable Event : any of the events set forth in Section 4043(b) or (c) of ERISA and regulations thereunder, excluding, however, such events as to which the PBGC by regulations has waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event.

Required Facility Lenders : at any date of determination thereof, Lenders having Facility Commitments to a Borrower representing more than 50% of the aggregate Facility Commitments to such Borrower at such time; provided , however , that if and for so long as any such Lender shall be a Defaulting Lender, the term “ Required Facility Lenders ” shall mean Lenders (excluding each Defaulting Lender) having Facility Commitments to such Borrower representing more than 50% of the aggregate Facility Commitments to such Borrower (excluding the Facility Commitments of each Defaulting Lender) at such time; provided further , however , that if all of the Facility Commitments to such Borrower have been terminated, the term “ Required Facility Lenders ” shall mean Lenders to such Borrower holding Revolver Loans to, and participating interest in LC Obligations (excluding amounts specified in clause (c)  of such definition) owing by, such Borrower representing more than 50% of the aggregate outstanding principal amount of Revolver Loans and LC Obligations (excluding amounts specified in clause (c)  of such definition) owing by such Borrower at such time.

Required Lenders : at any date of determination thereof, Lenders having Facility Commitments representing more than 50% of the aggregate Facility Commitments at such time; provided , however , that for so long as any Lender shall be a Defaulting Lender, the term “ Required Lenders ” shall mean Lenders (excluding such Defaulting Lender) having Commitments representing more than 50% of the aggregate Commitments (excluding the Commitments of each Defaulting Lender) at such time; provided further , however , that if any of the Facility Commitments have been terminated, the term “ Required Lenders ” shall be calculated using (x) in lieu of such Lender’s terminated Facility Commitment, the outstanding principal amount of the Revolver Loans by such Lender to, and participation interests in LC Obligations (excluding amounts specified in clause (c)  of such definition) owing by, such Borrower and (y) in lieu of the aggregate Commitments under such terminated Facility Commitment, the aggregate outstanding Revolver Loans to, and LC Obligations (excluding amounts specified in clause (c)  of such definition) owing by such Borrower.

Reserve Percentage : the reserve percentage (expressed as a decimal, rounded up to the nearest 1/100th of 1%) applicable to member banks under regulations issued from time to time by the Board of Governors for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to Eurocurrency funding (currently referred to as “ Eurocurrency liabilities ”).

 

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Restricted Investment : any Investment by a Loan Party or Subsidiary, other than: (a) Investments existing on the Closing Date, and other Investments, in each case set forth on Schedule 1.1(d) ; (b) cash and Cash Equivalents; (c) loans and advances permitted under Section 10.2.5 ; (d) Investments by the U.S. Borrower or any of its Subsidiaries in payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the Ordinary Course of Business; (e) Investments constituting (i) Acquisitions by External Subsidiaries (so long as, with respect to any Designated External Acquisition, the External Specified Transaction Conditions applicable to such Acquisition shall have been satisfied in connection therewith) and (ii) Permitted Acquisitions; (f) Hedging Agreements entered into in the Ordinary Course of Business of such Loan Party or Subsidiary and for nonspeculative purposes (determined as of the date such Hedging Agreement was entered into by such Loan Party or Subsidiary) to the extent that entry into such Hedging Agreement is permitted by Sections 10.2.1(e) and 10.2.13 hereof; (g) Permitted Contingent Obligations; (h) Intercompany Equity Investments; (i) Investments arising or made under Permitted Securitizations; (j) Investments of any Person existing at the time such Person is merged into, amalgamated or consolidated with a Loan Party or any of its Subsidiaries, or becomes a Subsidiary, in each case as permitted under Section 10.2.1(f) ; provided that any such Investments were not made in contemplation of such merger, amalgamation, consolidation or acquisition; (k) other Investments of a type not described in clauses (a) through (j) or (l) of this definition and not otherwise prohibited by the terms of this Agreement or the other Loan Documents so long as the Specified Transaction Conditions applicable to such Investments shall have been satisfied in connection therewith and the Loan Parties shall have complied with the collateral requirements (if any) of this Agreement (including, without limitation, those contained in Section 7 and Section 10.1.9 ) in connection with such Investment; and (l) Investments consisting of Equity Interests, obligations, securities or other property received in settlement of delinquent accounts of and disputes with customers and suppliers in the Ordinary Course of Business and owing to the U.S. Borrower or any of its Subsidiaries or in satisfaction of judgments.

Restrictive Agreement : an agreement that conditions or restricts the right of any Loan Party or Subsidiary to grant Liens on any assets securing the Obligations or to declare or make Distributions.

Revolver Loan : a loan made pursuant to Section 2.1 , and any Swingline Loan, Overadvance Loan or Protective Advance.

Revolver Notes : collectively, the U.S. Revolver Notes and the Canadian Revolver Notes.

Rights Offering : as defined in the Recitals hereto.

Royalties : all royalties, fees, expense reimbursement and other amounts payable by a Loan Party or a Subsidiary under a License.

S&P : Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.

 

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Secured Parties : Canadian Facility Secured Parties and/or U.S. Facility Secured Parties, as the context requires.

Security Documents : this Agreement, the Guarantees, Insurance Assignments, Canadian Security Agreements, Deposit Account Control Agreements and all other documents, instruments and agreements now or hereafter securing (or given with the intent to secure) any Obligations.

Senior Officer : the chairman of the board, president, chief executive officer, chief financial officer or treasurer (or, in each case, with respect to any External Subsidiary, any similarly designated officer or director under local practice).

Senior Note Debt : the Debt of the U.S. Domiciled Loan Parties outstanding under and pursuant to the Senior Note Documents, to the extent permitted hereunder.

Senior Note Documents : the Senior Notes, the Senior Note Indenture and all other documents executed and delivered with respect to the Senior Notes, in each case as in effect on the Closing Date and as the same may be modified or amended from time to time in accordance with the terms hereof.

Senior Note Indenture : the Indenture dated as of May 11, 2010 among CSA Escrow Corporation, the U.S. Borrower and the other parties thereto, as in effect on the Closing Date and as the same may be modified or amended from time to time in accordance with the terms hereof.

Senior Noteholders : the “Holders” as defined in the Senior Note Indenture.

Senior Notes : the U.S. Borrower’s 8-1/2% Senior Notes due 2018, issued pursuant to the Senior Note Indenture, as in effect on the Closing Date and as the same may be modified or amended from time to time in accordance with the terms hereof.

Settlement Report : a report delivered by Agent to the Applicable Lenders summarizing the Loans and, if applicable, participations in U.S. LC Obligations (excluding amounts specified in clause (c)  of such definition) of the U.S. Borrower and Canadian LC Obligations (excluding amounts specified in clause (c)  of such definition) of the Canadian Borrower outstanding as of a given settlement date, allocated to the Applicable Lenders on a Pro Rata basis in accordance with their Commitments.

Solvent : as to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities); (b) owns Property whose present fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured and unliquidated liabilities) of such Person as they become absolute and matured; (c) is able to pay all of its debts as they mature; (d) has capital that is not unreasonably small for the business in which it is engaged or about to engage; (e) is not “insolvent” within the meaning of Section 101(32) of the U.S. Bankruptcy Code; (f) has not incurred (by way of assumption or otherwise) any obligations or liabilities (contingent or otherwise) or made any conveyance in connection therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates; and (g) as to any Person incorporated or organized under the laws of Canada or any province or territory of Canada, is not an “insolvent person” as defined in the Bankruptcy and Insolvency Act ( Canada ). “ Fair salable value ” means

 

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the amount that could be obtained for assets within a reasonable time, either through collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing (but under no compulsion) to purchase.

Specified Transaction Conditions : the External Specified Transaction Conditions or the Internal Specified Transaction Conditions, as applicable.

Specified Transactions : an External Specified Transaction and/or an Internal Specified Transaction, as applicable.

Sterling or £ : the lawful currency of the United Kingdom of Great Britain and Northern Ireland.

Subordinated Debt : Debt incurred by a Loan Party or Subsidiary that is expressly subordinate and junior in right of payment to Full Payment of all Obligations, and is on subordination terms reasonably satisfactory to Agent.

Subsidiary : any entity more than 50% of whose voting securities or Equity Interests is owned by any Loan Party or any combination of the Loan Parties (including indirect ownership by any Loan Party through other entities in which any Loan Party directly or indirectly owns 50% of the voting securities or Equity Interests). Unless the context otherwise requires, each reference to Subsidiaries herein shall be a reference to Subsidiaries of Holdings.

Supermajority Required Facility Lenders : at any date of determination thereof, Lenders having Facility Commitments to a Borrower representing more than 66 2/3% of the aggregate Facility Commitments to such Borrower at such time; provided , however , that if and for so long as any such Lender shall be a Defaulting Lender, the term “ Supermajority Required Facility Lenders ” shall mean Lenders (excluding each Defaulting Lender) having Facility Commitments to such Borrower representing more than 66 2/3% of the aggregate Facility Commitments to such Borrower (excluding the Facility Commitments of each Defaulting Lender) at such time; provided further , however , that if all of the Facility Commitments to such Borrower have been terminated, the term “ Supermajority Required Facility Lenders ” shall mean Lenders to such Borrower holding Revolver Loans to, and participating interest in LC Obligations (excluding amounts specified in clause (c)  of such definition) owing by, such Borrower representing at least 66 2/3% of the aggregate outstanding principal amount of Revolver Loans and LC Obligations (excluding amounts specified in clause (c)  of such definition) owing by such Borrower at such time.

Swingline Loan : a U.S. Swingline Loan or a Canadian Swingline Loan, as applicable.

TARGET Day : any day on which the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) determined by Agent to be a suitable replacement) is open for the settlement of payments in Euros.

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

 

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Termination Event : (a) the voluntary full or partial wind up of a Canadian Pension Plan by a Canadian Facility Loan Party; (b) the institution of proceedings by any Governmental Authority to terminate in whole or in part or have a trustee appointed to administer a Canadian Pension Plan; or (c) any other event or condition which might constitute grounds for the termination of, winding up or partial termination of winding up or the appointment of trustee to administer, any Canadian Pension Plan.

Total Revolver Exposure : as of any date of determination the sum of the Canadian Revolver Exposure and the U.S. Revolver Exposure on such date of determination.

Transactions : collectively, (a) the consummation of the Reorganization Plans and the other transactions contemplated by the Plan Documents to be consummated on the Closing Date, (b) the entering into by the Loan Parties of the Loan Documents and the Senior Note Documents to which they are or are intended to be a party, and the borrowings hereunder and thereunder on the Closing Date and application of the proceeds as contemplated hereby and thereby, (c) the issuance of the New Common Stock and New Preferred Stock, (d) the Full Payment and termination of all Debt to be Repaid and (e) the payment of the fees and expenses incurred in connection with the consummation of the foregoing that are required to be paid on the Closing Date.

Transferee : any actual or potential Eligible Assignee, Participant or other Person acquiring an interest in any Obligations.

Type : any type of a Loan (i.e., U.S. Base Rate Loan, LIBOR Loan, Canadian BA Rate Loan, Canadian Base Rate Loan, or Canadian Prime Rate Loan).

UCC : the Uniform Commercial Code as in effect in the State of New York or, when the laws of any other jurisdiction govern the creation, perfection, priority or enforcement of any Lien, the Uniform Commercial Code of such jurisdiction.

Unfunded Pension Liability : as of any date, the excess of the present value of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, over the current value of that Pension Plan’s assets, and includes any unfunded going-concern deficit or solvency deficiency as identified in an actuarial valuation report prepared for the purposes of the PBA and filed with any applicable Governmental Authority in respect of any Canadian Pension Plan.

Upstream Payment : any of the following Distributions by a Person to any holder of its Equity Interests:

(i) a Distribution by a Subsidiary of a Loan Party (other than Holdings) to such Loan Party;

(ii) a Distribution by Holdings to its then existing shareholders paid solely in Equity Interests (other than Disqualified Equity Interests);

(iii) a Distribution by a Loan Party (other than Holdings) or a Subsidiary ratably to such Person’s then existing shareholders paid solely in Equity Interests (other than Disqualified Equity Interests); and

 

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(iv) a Distribution by a Borrower to Holdings or a Subsidiary of a Borrower to its Loan Party parent and, ultimately, to Holdings to the extent promptly used by Holdings for any purpose not otherwise prohibited by the terms of this Agreement or the other Loan Documents, including to pay cash dividends to its shareholders, so long as the External Specified Transaction Conditions applicable to such Upstream Payment shall have been satisfied in connection therewith.

U.S. Auto-Extension Letter of Credit : as defined in Section 2.2.1(e) .

U.S. Availability : as of any date of determination, the U.S. Borrowing Base as of such date of determination plus solely for purposes of calculating “Availability” in connection with the satisfaction of any Internal Specified Transaction Conditions, the U.S. Suppressed Amount on such date of determination plus the U.S. Designated Cash Amount on such date of determination minus the U.S. Revolver Exposure (calculated without duplication of any amounts reserved under the U.S. LC Reserve) on such date of determination.

U.S. Availability Reserve : the sum (without duplication) of (a) the Inventory Reserve with respect to the U.S. Borrower’s Inventory; (b) the U.S. Rent and Charges Reserve; (c) the U.S. LC Reserve; (d) the U.S. Bank Product Reserve; (e) the aggregate amount of liabilities secured by Liens upon the U.S. Facility Collateral that are senior to Agent’s Liens (but imposition of any such reserve shall not waive an Event of Default arising therefrom); (f) the Canadian Overadvance Loan Balance, if any, outstanding on such date; and (g) such additional reserves (including, without limitation, dilution reserves), in such amounts and with respect to such matters, as Agent in its Permitted Discretion may establish.

U.S. Bank Product Reserve : the aggregate amount of reserves, as established by Agent from time to time in its Permitted Discretion to reflect the reasonably anticipated liabilities in respect of the then outstanding Bank Product Debt of the U.S. Facility Loan Parties and their Subsidiaries.

U.S. Bankruptcy Cases : as defined in the Recitals hereto.

U.S. Bankruptcy Code : as defined in the Recitals hereto.

U.S. Bankruptcy Court : as defined in the Recitals hereto.

U.S. Base Rate : for any day, a per annum rate equal to the greater of (a) the U.S. Prime Rate for such day; (b) the Federal Funds Rate for such day, plus 0.50%; or (c) LIBOR for a thirty (30) day interest period as determined on such day, plus 1.0%.

U.S. Base Rate Loan : any Loan that bears interest based on the U.S. Base Rate.

U.S. Borrower : as defined in the preamble to this Agreement.

U.S. Borrowing Base : on any date of determination, an amount equal to the lesser of (a) the Maximum U.S. Facility Amount minus (x) the Canadian Overadvance Loan Balance, if any, outstanding on such date minus (y) the U.S. LC Reserve; and (b) (1) the sum of (x) 85% of the Value of Eligible Accounts of the U.S. Borrower; plus (y) the lesser of (i) 70% of the Value of Eligible Inventory of the U.S. Borrower; and (ii) 85% of the NOLV Percentage of the Value of Eligible Inventory of the U.S. Borrower, minus (2) the U.S. Availability Reserve.

 

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U.S. Cash Collateral Account : a demand deposit, money market or other account established by Agent at Bank of America or such other financial institution as Agent may select in its discretion, which account shall be for the benefit of the Secured Parties and shall be subject to Agent’s Liens securing the Obligations.

U.S. Confirmation Order : as defined in the Recitals hereto.

U.S. Designated Cash Amount : the aggregate amount of cash of the U.S. Domiciled Loan Parties deposited in segregated DACA Deposit Accounts with Agent (excluding any portion thereof which is subject to a Lien in favor of a Person other than Agent or is otherwise restricted).

U.S. Domiciled Loan Party : Holdings and each U.S. Subsidiary of Holdings (other than CS Automotive LLC), in each case, now or hereafter party hereto as a Loan Party; and “ U.S. Domiciled Loan Parties ” means all such Persons, collectively.

U.S. Dominion Account : a special account established by the U.S. Facility Loan Parties at Bank of America or another bank reasonably acceptable to Agent, over which Agent has exclusive control for withdrawal purposes.

U.S. Effective Date : as defined in the Recitals hereto.

U.S. Facility Collateral : Collateral that now or hereafter secures (or is intended to secure) any of the U.S. Facility Obligations.

U.S. Facility Guarantee : each guarantee agreement (including this Agreement) at any time executed by a U.S. Facility Guarantor in favor of Agent guaranteeing all or any portion of the U.S. Facility Obligations.

U.S. Facility Guarantor : each U.S. Domiciled Loan Party (excluding CS Automotive LLC) and each other Person (if any) who guarantees payment and performance of any U.S. Facility Obligations.

U.S. Facility Loan Party : the U.S. Borrower and each U.S. Facility Guarantor.

U.S. Facility Obligations : all applicable Obligations of the U.S. Facility Loan Parties (including, for the avoidance of doubt, the Obligations of the U.S. Domiciled Loan Parties as guarantors of the Canadian Facility Obligations).

U.S. Facility Secured Parties : Agent, U.S. Issuing Bank, U.S. Lenders, providers of Bank Products to U.S. Facility Loan Parties and the Lead Arrangers.

U.S. Issuing Bank : (a) Bank of America or an Affiliate of Bank of America, as an issuer of Letters of Credit under this Agreement, (b) Deutsche Bank AG, New York Branch or an Affiliate of Deutsche Bank AG, New York Branch, as an issuer of Letters of Credit under this Agreement, and (c) Deutsche Bank Trust Company Americas, in its capacity as the issuer of the Existing Letters of Credit. With respect to any Letter of Credit, “U.S. Issuing Bank” shall mean the issuer thereof.

 

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U.S. LC Obligations : the sum (without duplication) of (a) all amounts owing by the U.S. Borrower for any drawings under Letters of Credit; (b) the stated amount of all outstanding Letters of Credit issued for the account of the U.S. Borrower; and (c) all fees and other amounts owing with respect to Letters of Credit issued for the account of the U.S. Borrower.

U.S. LC Reserve : the aggregate of all U.S. LC Obligations, other than (a) those that have been Cash Collateralized; and (b) if no Default or Event of Default exists, amounts specified in clause (c)  of the definition of U.S. LC Obligations.

U.S. Lenders : Bank of America and each other Lender (other than Canadian Lenders) party hereto, including Agent in its capacity as a provider of U.S. Swingline Loans.

U.S. Letter of Credit Sublimit : $44,500,000; provided , however, that the aggregate amount of U.S. LC Obligations that may be denominated in Euros and Sterling shall not exceed the Dollar Equivalent of $10,000,000 less the Dollar Equivalent of the outstanding U.S. Revolver Loans denominated in Euros.

U.S. Letters of Credit : as defined in Section 2.2.1 hereof.

U.S. Non-Extension Notice Date : as defined in Section 2.2.1(e) .

U.S. Overadvance : as defined in Section 2.1.5 hereof.

U.S. Overadvance Loan : a U.S. Base Rate Loan made to the U.S. Borrower when a U.S. Overadvance exists or is caused by the funding thereof.

U.S. Plan : as defined in the Recitals hereto.

U.S. Prime Rate : the rate of interest announced by Bank of America from time to time as its U.S. prime rate. Such rate is set by Bank of America on the basis of various factors, including its costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above or below such rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

U.S. Reimbursement Date : as defined in Section 2.2.2(a) .

U.S. Rent and Charges Reserve : the aggregate of (a) all past due rent and other past due amounts owing by any U.S. Facility Loan Party to any landlord, warehouseman, processor, repairman, mechanic, shipper, freight forwarder, broker or other Person who possesses any U.S. Facility Collateral or could assert a Lien on any such U.S. Facility Collateral; plus (b) a reserve at least equal to three (3) months (or such shorter period as Agent determines in its Permitted Discretion as it will take to liquidate the ABL Priority Collateral at such location) rent and other charges that could reasonably be expected to be payable to any such Person who possesses any U.S. Facility Collateral or could reasonably be expected to assert a Lien thereon under Applicable Law, unless, in any such case, such Person has executed a Collateral Access Agreement.

U.S. Revolver Commitment : for any U.S. Lender, its obligation to make U.S. Revolver Loans and to issue U.S. Letters of Credit, in the case of U.S. Issuing Bank, or participate in U.S.

 

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LC Obligations (excluding amounts specified in clause (c)  of such definition), in the case of the other U.S. Lenders, to the U.S. Borrower up to the maximum principal amount, in each case, shown on Schedule 1.1(a) , or as hereafter determined pursuant to each Assignment and Acceptance to which it is a party, as such U.S. Revolver Commitment may be adjusted from time to time in accordance with the provisions of Section 2.1.4 or 11.2 . “ U.S. Revolver Commitments ” means the aggregate amount of such commitments of all U.S. Lenders.

U.S. Revolver Commitment Termination Date : the earliest of (a) the Facility Termination Date, (b) the date on which Loan Party Agent terminates or reduces to zero (0) the U.S. Revolver Commitments pursuant to Section 2.1.4 , and (c) the date on which the U.S. Revolver Commitments are terminated pursuant to Section 11.2 .

U.S. Revolver Exposure : on any date, an amount equal to the sum of the Dollar Equivalent of the U.S. Revolver Loans outstanding on such date plus the U.S. LC Obligations (excluding amounts specified in clause (c)  of such definition) on such date.

U.S. Revolver Loan : a Revolver Loan made by a U.S. Lender to the U.S. Borrower pursuant to Section 2.1.1(a) , and any U.S. Swingline Loan, which Loan shall be denominated in Dollars and shall be either a U.S. Base Rate Loan or a LIBOR Loan, in each case as selected by Agent or Loan Party Agent.

U.S. Revolver Notes : collectively, each promissory note, if any, executed by the U.S. Borrower in favor of a U.S. Lender to evidence the U.S. Revolver Loans funded from time to time by such U.S. Lender, which shall be in the form of Exhibit A-2 to this Agreement, together with any replacement or successor notes therefor.

U.S. Subsidiary : a Subsidiary of Holdings that is organized under the laws of a state of the United States or the District of Columbia and is not a Foreign Subsidiary.

U.S. Suppressed Amount : to the extent that the amount calculated pursuant to clause (b) of the U.S. Borrowing Base definition exceeds the then-current U.S. Revolver Commitment as of any date of determination, the amount of any such excess designated in writing by Loan Party Agent to Agent as “U.S. Suppressed Amount” under this Agreement; provided, that in no event shall the U.S. Suppressed Amount exceed $5,000,000 less the Canadian Suppressed Amount as of such date of determination.

U.S. Swingline Loan : any Borrowing of Base Rate U.S. Revolver Loans made pursuant to Section 4.1.3(a).

U.S. Unused Line Fee Rate : a rate per annum equal to (a) .50% when the U.S. Revolver Exposure is greater than 50% of the U.S. Revolver Commitments and (b) .75% at all other times.

Value : without duplication of any item enumerated in the definition of Eligible Inventory or Eligible Account: (a) for Inventory, its Dollar Equivalent value determined on the basis of the lower of cost or market, calculated on a first-in, first-out basis, and excluding any portion of cost attributable to intercompany profit among the Borrowers, the other Loan Parties and their Affiliates; and (b) for an Account, its Dollar Equivalent face amount, net of any returns, rebates, discounts (calculated on the shortest terms), credits, allowances or Taxes (including sales, excise or other taxes) that have been or could be claimed by the Account Debtor or any other Person.

 

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Wage Earner Protection Act Reserve : on any date of determination, a reserve established from time to time by Agent in its Permitted Discretion in such amount as Agent determines reflects the amounts that may become due under the Wage Earner Protection Program Act with respect to the employees of any Loan Party employed in Canada which would give rise to a Lien with priority under Applicable Law over the Lien of Agent.

Wholly-Owned Subsidiary : with respect to any Person at any time, any Subsidiary, 100% of whose Equity Interests (other than, in the case of any Foreign Subsidiary, nominal directors’ qualifying shares) are at such time owned, directly or indirectly, by such Person.

1.2 Accounting Terms . Under the Loan Documents (except as otherwise specified herein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP applied on a basis consistent with the most recent audited financial statements of the Loan Parties delivered to Agent before the Closing Date and using the same inventory valuation method as used in such financial statements, except for any change required or permitted by GAAP if the Loan Parties’ certified public accountants concur in such change and the change is disclosed to Agent. The Loan Party Agent, Lenders and Agent shall negotiate in good faith to amend Section 10.3 to preserve the original intent in light of such change in GAAP; provided , that until so amended Section 10.3 shall continue to be computed in accordance with GAAP prior to such change therein.

1.3 Uniform Commercial Code/PPSA . As used herein, the following terms are defined in accordance with the UCC in effect in the State of New York from time to time: “Chattel Paper,” “Commercial Tort Claim,” “Equipment,” “Goods,” “Instrument,” “Investment Property,” “Letter-of-Credit Right” and “Supporting Obligation” and, as such terms relate to any such Property of any Canadian Domiciled Loan Party, such terms shall refer to such Property as defined in the PPSA. In addition, other terms relating to Collateral used and not otherwise defined herein that are defined in the UCC and/or the PPSA shall have the meanings set forth in the UCC and/or the PPSA, as applicable

1.4 Certain Matters of Construction . The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision. Any pronoun used shall be deemed to cover all genders. In the computation of periods of time from a specified date to a later specified date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.” The terms “including” and “include” shall mean “including, without limitation” and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit any provision. Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document. All references to (a) laws or statutes include all related rules, regulations, interpretations, amendments and successor provisions; (b) any document, instrument or agreement includes any amendments, waivers and other modifications, extensions or renewals (to the extent not prohibited by the Loan Documents); (c) any section mean, unless the context otherwise requires, a section of this Agreement; (d) any exhibits or schedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated by reference; (e) any Person includes its successors and assigns; (f) time of day mean time of day at Agent’s notice address under Section 14.3.1 ; or (g) except as expressly provided, discretion of Agent, Issuing Bank or any Lender mean the sole and absolute discretion of such Person. All calculations of Value, fundings of Loans, issuances of Letters of Credit and

 

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payments of Obligations shall be in Dollars (except as otherwise expressly provided herein) and, unless the context otherwise requires, all determinations (including calculations of Borrowing Base and financial covenants) made from time to time under the Loan Documents shall be made in light of the circumstances existing at such time. Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to Agent (and not necessarily calculated in accordance with GAAP). The Loan Parties shall have the burden of establishing any alleged negligence, misconduct or lack of good faith by Agent, any Issuing Bank or any Lender under any Loan Documents. No provision of any Loan Documents shall be construed against any party by reason of such party having, or being deemed to have, drafted the provision. Whenever the phrase “to the best of a Loan Parties’ knowledge” or words of similar import are used in any Loan Documents, it means actual knowledge of a Senior Officer of a Loan Party. Whenever any payment, certificate, notice or other delivery shall be stated to be due on a day other than a Business Day, the due date for such payment or delivery shall be extended to the next succeeding Business Day, and such extension of time shall in such case be included in the computation of interest or fees, as the case may be; provided , however , that if such extension would cause payment of interest on or principal of any LIBOR Loan to be made in the next calendar month, such payment shall be made on the immediately preceding Business Day.

1.5 Interpretation (Quebec) . For purposes of any Collateral located in the Province of Quebec or charged by any deed of hypothec (or any other Loan Document) and for all other purposes pursuant to which the interpretation or construction of a Loan Document may be subject to the laws of the Province of Quebec or a court or tribunal exercising jurisdiction in the Province of Québec, (q) “personal property” shall be deemed to include “movable property”, (r) “real property” shall be deemed to include “immovable property”, (s) “tangible property” shall be deemed to include “corporeal property”, (t) “intangible property” shall be deemed to include “incorporeal property”, (u) “security interest” and “mortgage” shall be deemed to include a “hypothec”, (v) all references to filing, registering or recording under the UCC or the PPSA shall be deemed to include publication under the Civil Code of Québec, (w) all references to “perfection” of or “perfected” Liens shall be deemed to include a reference to the “opposability” of such Liens to third parties, (x) any “right of offset”, “right of setoff” or similar expression shall be deemed to include a “right of compensation”, (y) “goods” shall be deemed to include “corporeal movable property” other than chattel paper, documents of title, instruments, money and securities, and (z) an “agent” shall be deemed to include a “mandatory”.

SECTION 2. CREDIT FACILITIES

2.1 Commitment .

2.1.1 Revolver Loans .

(a) U.S. Revolver Loans to the U.S. Borrower . Each U.S. Lender agrees, severally and not jointly with the other U.S. Lenders, upon the terms and subject to the conditions set forth herein, to make U.S. Revolver Loans to the U.S. Borrower on any Business Day during the period from the Closing Date to the U.S. Revolver Commitment Termination Date, not to exceed in aggregate principal amount outstanding at any time such U.S. Lender’s U.S. Revolver Commitment at such time, which U.S. Revolver Loans may be repaid and reborrowed in accordance with the provisions of this Agreement; provided , however, that such U.S. Lenders shall have no obligation to the U.S. Borrower whatsoever to honor any request for a U.S.

 

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Revolver Loan on or after the U.S. Revolver Commitment Termination Date or if the amount of the proposed U.S. Revolver Loan exceeds U.S. Availability on the proposed funding date for such U.S. Revolver Loan. Each Borrowing of U.S. Revolver Loans shall be funded by U.S. Lenders on a Pro Rata basis. The U.S. Revolver Loans shall bear interest as set forth in Section 3.1 . Each U.S. Revolver Loan shall, at the option of the U.S. Borrower, be made or continued as, or converted into, part of one or more Borrowings that, unless specifically provided herein, shall consist entirely of U.S. Base Rate Loans or LIBOR Loans. The U.S. Revolver Loans shall be repaid in accordance with the terms of this Agreement and shall be secured by all of the U.S. Facility Collateral. Each U.S. Revolver Loan shall be funded in Dollars or, at the option of the U.S Borrower, Euros and repaid in the same currency as the underlying U.S. Revolver Loan was made; provided , however, that the aggregate amount of U.S. Revolver Loans that may be denominated in Euros shall not exceed the Dollar Equivalent of $10,000,000 less the Dollar Equivalent of the outstanding U.S. LC Obligations (excluding amounts specified in clause (c)  of such definition) denominated in Euros and Sterling; provided , further , however, U.S. Revolver Loans denominated in Euros shall consist entirely of LIBOR Loans.

(b) Canadian Revolver Loans to Canadian Borrower . Each Canadian Lender agrees, severally and not jointly with the other Canadian Lenders, upon the terms and subject to the conditions set forth herein, to make Canadian Revolver Loans to the Canadian Borrower on any Business Day during the period from the Closing Date to the Canadian Revolver Commitment Termination Date, not to exceed in aggregate principal amount outstanding at any time, such Canadian Lender’s Canadian Revolver Commitment at such time, which Canadian Revolver Loans may be repaid and reborrowed in accordance with the provisions of this Agreement; provided , however, that Canadian Lenders shall have no obligation to the Canadian Borrower whatsoever to honor any request for a Canadian Revolver Loan on or after the Canadian Revolver Commitment Termination Date or if the amount of the proposed Canadian Revolver Loan exceeds Canadian Availability on the proposed funding date for such Canadian Revolver Loan. Each Borrowing of Canadian Revolver Loans shall be funded by Canadian Lenders on a Pro Rata basis. The Canadian Revolver Loans shall bear interest as set forth in Section 3.1 . Each Canadian Revolver Loan shall, at the option of the Canadian Borrower, be made or continued as, or converted into, part of one or more Borrowings that, unless specifically provided herein, shall consist entirely of Canadian Prime Rate Loans or Canadian BA Rate Loans if denominated in Canadian Dollars, or Canadian Base Rate Loans or LIBOR Loans if denominated in Dollars. The Canadian Revolver Loans shall be repaid in accordance with the terms of this Agreement and shall be secured by all of the Canadian Facility Collateral. Each Canadian Revolver Loan shall be funded in Canadian Dollars or, at the option of the Canadian Borrower, Dollars and repaid in the same currency as the underlying Canadian Revolver Loan was made.

(c) Cap on Total Revolver Exposure . Notwithstanding anything to the contrary contained in this Section 2.1.1 , in no event shall any Borrower be entitled to receive a Revolver Loan if at the time of the proposed funding of such Loan (and after giving effect thereto and the application of the proceeds thereof and all pending requests for Loans), the Total Revolver Exposure exceeds (or would exceed) the lesser of the Maximum Facility Amount and the Commitments.

2.1.2 Revolver Notes . The Revolver Loans made by each Lender and interest accruing thereon shall be evidenced by the records of Agent and such Lender. At the request of any Lender, the Borrower to which such Lender has extended Commitments shall deliver a Revolver Note to such Lender in the amount of such Lender’s aggregate U.S. or Canadian Revolver Commitment, as applicable.

 

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2.1.3 Use of Proceeds . The proceeds of Revolver Loans shall be used by the Borrowers solely (a) to repay, in combination with other cash of the Borrowers, the Borrowers’ and the other Bankruptcy Debtors’ existing indebtedness outstanding on the Closing Date, including the outstanding obligations under the Prepetition Agreement and the DIP Agreement (in each case, to the extent required under the Reorganization Plans), (b) to otherwise enable the Borrowers to consummate the U.S. Plan on the U.S. Effective Date, and the Canadian Borrower to consummate the Canadian Plan on the Canadian Effective Date, (c) to pay certain unsecured claims, administrative expenses and administrative claims as contemplated by the Reorganization Plans, (d) to fund certain fees and expenses associated with the consummation of the U.S. Plan and the Canadian Plan, including those relating to the credit facilities provided by the Lenders pursuant to this Agreement and the other Loan Documents, (e) to issue standby or commercial letters of credit, and (f) to finance ongoing working capital needs and other lawful general corporate purposes of the Borrowers and their Subsidiaries.

2.1.4 Reduction or Termination of Commitments; Increase of Commitments .

(a) The Canadian Revolver Commitments shall terminate on the Canadian Revolver Commitment Termination Date and the U.S. Revolver Commitments shall terminate on the U.S. Revolver Commitment Termination Date, in each case, unless sooner terminated in accordance with this Agreement. Upon at least three (3) Business Days’ prior written notice to Agent from Loan Party Agent, (i) the U.S. Borrower may, at its option, terminate the U.S. Revolver Commitments and this credit facility and/or (ii) the Canadian Borrower may, at its option, terminate the Canadian Revolver Commitment, in each case, without premium or penalty (other than funding losses payable pursuant to Section 3.9 ). If the U.S. Borrower elects to reduce to zero (0) or terminate the U.S. Revolver Commitments pursuant to the previous sentence, the Canadian Revolver Commitments shall automatically terminate concurrently with the termination of the U.S. Revolver Commitments. Any notice of termination given by the Borrowers pursuant to this Section 2.1.4 shall be irrevocable; provided , however , that notice may be contingent on the occurrence of a refinancing or the consummation of a sale, transfer, lease or other disposition of assets and may be revoked or the termination date deferred if the refinancing or sale, transfer, lease or other disposition of assets does not occur. On the Canadian Revolver Commitment Termination Date, the Canadian Borrower (and other Canadian Facility Loan Parties, if applicable) shall make Full Payment of all Canadian Facility Obligations. On the U.S. Revolver Commitment Termination Date, the U.S. Borrower (and other U.S. Facility Loan Parties, if applicable) shall make Full Payment of all U.S. Facility Obligations.

(b) So long as (i) no Default or Event of Default then exists or would result therefrom, (ii) no U.S. Overadvance or Canadian Overadvance then exists or would result therefrom, and (iii) after giving effect thereto, U.S. Availability would exceed $10,000,000, Loan Party Agent may permanently and irrevocably reduce the Maximum Facility Amount by giving Agent at least three (3) Business Days’ prior irrevocable written notice thereof from a Senior Officer of Loan Party Agent, which notice shall (1) specify the date (which shall be a Business Day) and amount of such reduction (which shall be in a minimum amount of $5,000,000 and increments of $1,000,000 in excess thereof), (2) specify the allocation of such reduction to, and the corresponding reductions of, each of the Maximum Canadian Facility Amount and/or the

 

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Maximum U.S. Facility Amount (and the respective Canadian Revolver Commitments and the U.S. Revolver Commitments in respect thereof,