Exhibit 10.1

Execution Version

TWELFTH AMENDMENT

TO CREDIT AGREEMENT

This TWELFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), is entered into as of June 30, 2023, among Loar Holdings, LLC, a Delaware limited liability company (“Holdings”), the other Guarantors party hereto, Loar Group Inc., a Delaware corporation (as successor by merger to Loar Merger Sub, Inc., the “Borrower”), the Lenders party hereto, and First Eagle Alternative Credit, LLC (as successor by merger to First Eagle Private Credit, LLC (f/k/a NewStar Financial, Inc.)), as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and as collateral agent for the Secured Parties (in such capacity, the “Collateral Agent”).

WITNESSETH:

WHEREAS, Holdings, the Borrower, the Guarantors party thereto from time to time, the Lenders party thereto from time to time, the Administrative Agent and the Collateral Agent are parties to that certain Credit Agreement, dated as of October 2, 2017 (as amended by the First Amendment to Credit Agreement, dated as of August 10, 2018, the Second Amendment to Credit Agreement, dated as of October 26, 2018, the Third Amendment to Credit Agreement, dated as of December 21, 2018, the Fourth Amendment to Credit Agreement, dated as of May 17, 2019, the Fifth Amendment to Credit Agreement, dated as of October 16, 2019, the Sixth Amendment to Credit Agreement, dated as of April 2, 2020, the Seventh Amendment to Credit Agreement, dated as of April 17, 2020, the Eighth Amendment to Credit Agreement, dated as of December 28, 2020, the Ninth Amendment to Credit Agreement, dated as of April 1, 2022, the Tenth Amendment to Credit Agreement, dated as of May 20, 2022, the Eleventh Amendment to Credit Agreement, dated as of July 28, 2022, and as otherwise amended, supplemented or otherwise modified prior to the date hereof, the “Credit Agreement” and, as amended by this Amendment, the “Amended Credit Agreement”; capitalized terms used herein (including in the preamble hereto) that are not otherwise defined herein shall have the respective meanings assigned to such terms in the Amended Credit Agreement); and

WHEREAS, the Loan Parties, the Lenders and the Agents are willing to amend the Credit Agreement as set forth in Section 1 of this Amendment subject to the terms and conditions set forth herein.

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

SECTION 1. Amendments to Credit Agreement. Upon satisfaction (or waiver by the Lenders) of the conditions set forth in Section 2 hereof, the Credit Agreement is hereby amended as follows:

(a) the Credit Agreement (except as expressly referenced in this Amendment, excluding the annexes, schedules and exhibits thereto, which shall remain in full force and effect) is hereby amended as set forth in Annex A attached hereto such that all of the newly inserted double underlined text (indicated textually in the same manner as the following example: double-underlined text) and any formatting changes attached hereto shall be deemed to be inserted and all stricken text (indicated textually in the same manner as the following example: stricken text) shall be deemed to be deleted therefrom.

(b) Exhibit B (Form of Borrowing Request) to the Credit Agreement is hereby amended and restated as set forth on Annex B attached hereto.

SECTION 2. Conditions to Effectiveness of this Amendment. This Amendment shall become effective on the date (the “Twelfth Amendment Effective Date”) by which there shall have occurred the prior or concurrent fulfillment of each of the conditions precedent set forth in this Section 2.

(a) Amendment. There shall have been delivered to the Lender Representative and the Agents a counterpart of this Amendment, duly executed by each Lender and each other person contemplated to be a party hereto.

(b) Corporate Documents. There shall have been delivered to the Lender Representative and the Agents: (i) customary certificates of the secretary or assistant secretary of each Loan Party dated the Twelfth Amendment Effective Date, certifying: (1) that attached thereto is a true, correct and complete copy of each Organizational Document of such Loan Party, certified (to the extent applicable) as of a recent date by the Secretary of State of the state of its organization (or other applicable Governmental Authority of its jurisdiction of organization) (or, with respect to any Loan Party, certifying that there has been no change since the most recent Organizational Document of such Loan Party delivered to the Lender Representative and the Agents); (2) that attached thereto is a true, correct and complete copy of resolutions duly adopted by the Board of Directors of such Loan Party authorizing the execution, delivery and performance of this Amendment, and that such resolutions have not been modified, rescinded or amended and are in full force and effect and (3) as to the incumbency and specimen signature of each officer executing this Amendment or any other document delivered in connection therewith on behalf of such Loan Party and (ii) a certificate as to the good standing of each Loan Party (other than a Loan Party organized under the laws of Germany) as of a recent date, from the Secretary of State (or other applicable Governmental Authority) of the jurisdiction of its organization.

(c) Opinions of Counsel. There shall have been delivered to the Lender Representative and the Agents, a customary written opinion of each of (i) Ropes & Gray LLP, counsel to the Loan Parties; (ii) Benesch, Friedlander, Coplan & Aronoff, Ohio counsel and (iii) Cozen O’Connor, Pennsylvania counsel.

(d) Fees & Expenses. All fees, costs and expenses (in the case of expenses, to the extent invoiced at least three (3) Business Days prior to the Twelfth Amendment Effective Date (except as otherwise reasonably agreed by the Borrower)), required to be paid to Blackstone and the Agents on the Twelfth Amendment Effective Date shall have been paid, or shall be paid substantially concurrently with the occurrence of the Twelfth Amendment Effective Date.

(e) Officer’s Certificate. There shall have been delivered to the Lender Representative and the Agents an Officer’s Certificate, dated the Twelfth Amendment Effective Date, confirming compliance with the conditions precedent set forth in clauses (f) and (g) of this Section 2, other than such conditions precedent the satisfaction of which are in the discretion of an Agent, the Lender Representative, the Additional Lenders, the Required Lenders or the Lenders.

(f) No Default or Event of Default. As of the Twelfth Amendment Effective Date, immediately before and immediately after giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing.

(g) Representations and Warranties. As of the Twelfth Amendment Effective Date, the representations and warranties set forth in Section 3 below shall be true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects after giving effect to such qualification and other than those representations and warranties that are expressly made as of an earlier specified date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier specified date).

(h) German Closing Deliverables. There shall have been delivered to the Lender Representative and the Agents each of the items set forth on Schedule I hereto.

 

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SECTION 3. Representations and Warranties. On and as of the Twelfth Amendment Effective Date, each Loan Party represents and warrants to each of the Agents and each of the Lenders:

(a) Authorization; Enforceability. The entering into of the Amendment by each Loan Party is within such Loan Party’s powers and has been duly authorized by all necessary limited liability company, partnership or corporate action on the part of such Loan Party. The Amendment has been duly executed and delivered by each Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(b) No Conflicts. The entering into of the Amendment by each Loan Party (i) does not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (1) such as have been obtained or made and are in full force and effect, (2) filings necessary to perfect Liens created by the Loan Documents and (3) consents, approvals, registrations, filings, permits or actions the failure to obtain or perform which could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; (ii) will not violate the Organizational Documents of any Loan Party; (iii) will not violate any Requirement of Law; (iv) will not violate or result in a default or require any consent or approval under any indenture, agreement or other instrument binding upon any Company or its property, or give rise to a right thereunder to require any payment to be made by any Company; (v) will not violate any order, judgment or decree of any court or other agency of government binding on any Company and (vi) will not result in the creation or imposition of any Lien on any property of any Company, except Liens created by the Loan Documents and Permitted Liens; except in the case of clauses (i), (iii), (iv), and (v) to the extent such violation, conflict, breach or default could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(c) Credit Agreement Representations. Immediately before and immediately after giving effect to this Amendment, the representations and warranties set forth in Article III of the Credit Agreement and each other Loan Document are true and correct in all material respects on and as of the Twelfth Amendment Effective Date (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects after giving effect to such qualification and other than those representations and warranties that are expressly made as of an earlier specified date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier specified date); provided that for purposes hereof, each reference to the Closing Date set forth in Sections 3.05, 3.06(b), 3.06(c), 3.07(a), 3.07(b), 3.14 and 3.17, shall be deemed to be a reference to the Twelfth Amendment Effective Date.

SECTION 4. Treatment of Existing Eurocurrency Rate Loans. Notwithstanding anything to the contrary contained herein, in the Amended Credit Agreement or in any other Loan Document, (i) any Loan that constitutes a Eurodollar Loan (as defined in the Credit Agreement) that is outstanding immediately prior to the occurrence of the Twelfth Amendment Effective Date with an Interest Period (as defined in the Credit Agreement) ending after the Twelfth Amendment Effective Date (such Loans, the “Existing Eurodollar Loans”) may remain outstanding as a Eurodollar Loan until the end of such applicable Interest Period for such Existing Eurodollar Loans, at which time any such Existing Eurodollar Loan shall be converted to a Term SOFR Loan bearing interest at a rate determined by reference to Term SOFR or to Base Rate Loans bearing interest at a rate determined by reference to the Base Rate, in each case, at the election of the Borrower in accordance with Section 2.06(d) of the Amended Credit Agreement (provided, that, if, upon the expiration of the applicable Interest Period with respect to such Existing Eurodollar Loans, the Borrower has failed to elect a new Interest Period to be applicable thereto as provided in Section 2.06(d) of the Amended Credit Agreement, the Borrower shall be deemed to have elected to

 

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convert such Existing Eurodollar Loans to Term SOFR Loans with an Interest Period of one month) and (ii) the terms and provisions of the Credit Agreement in respect of the calculation, payment and administration of the Existing Eurodollar Loans shall remain in effect (notwithstanding the entry into this Amendment and the occurrence of the Twelfth Amendment Effective Date) until the end of the applicable Interest Period for such Existing Eurodollar Loans, after which such provisions shall have no further force or effect and upon which date the terms of the Amended Credit Agreement, notwithstanding this Section 4, shall automatically apply to such Loans without any further action by any party; provided that, for the avoidance of doubt, at any time from and after the Twelfth Amendment Effective Date, the Borrower shall not be permitted to request a Borrowing of, conversion to, or continuation of, any Eurodollar Loans and shall instead request that any such Borrowing is made in, converted to or continued as, as applicable, a Loan bearing interest at Term SOFR or Base Rate.

SECTION 5. German Post-Closing Requirements. Not later than thirty (30) days after the Twelfth Amendment Effective Date, the Loan Parties shall have satisfied each of the requirements set forth on Schedule II hereto:

SECTION 6. Ratification of Liability. As of the Twelfth Amendment Effective Date, the Borrower and the other Loan Parties, as debtors, grantors, pledgors, guarantors, assignors, or in other similar capacities in which such parties grant liens or security interests in their properties or otherwise act as accommodation parties or guarantors, as the case may be, under the Loan Documents to which they are a party, hereby ratify and reaffirm all of their payment and performance obligations and obligations to indemnify, contingent or otherwise, under each of such Loan Documents to which they are a party, and ratify and reaffirm their grants of liens on or security interests in their properties pursuant to such Loan Documents to which they are a party, respectively, as security for the Obligations, and as of the Twelfth Amendment Effective Date, each such Person hereby confirms and agrees that such liens and security interests hereafter secure all of the Obligations, including, without limitation, all additional Obligations hereafter arising or incurred pursuant to or in connection with the Amendment, the Amended Credit Agreement or any other Loan Document. As of the Twelfth Amendment Effective Date, the Borrower and the other Loan Parties further agree and reaffirm that the Loan Documents to which they are parties now apply to all Obligations as defined in the Amended Credit Agreement (including, without limitation, all additional Obligations hereafter arising or incurred pursuant to or in connection with this Amendment, the Amended Credit Agreement or any other Loan Document). As of the Twelfth Amendment Effective Date, the Borrower and the other Loan Parties (a) further acknowledge receipt of a copy of the Amendment, (b) consent to the terms and conditions of same, and (c) agree and acknowledge that each of the Loan Documents to which they are a party remain in full force and effect and is hereby ratified and confirmed.

SECTION 7. Reference to and Effect upon the Credit Agreement.

(a) Except as specifically amended hereby, all terms, conditions, covenants, representations and warranties contained in the Amended Credit Agreement and other Loan Documents, and all rights of the Secured Parties and all of the Obligations, shall remain in full force and effect. As of the Twelfth Amendment Effective Date, the Borrower and the other Loan Parties hereby confirm that the Amended Credit Agreement and the other Loan Documents are in full force and effect and that neither the Borrower nor any other Loan Party has any right of setoff, recoupment or other offset or any defense, claim or counterclaim with respect to any of the Obligations, the Amended Credit Agreement or any other Loan Document.

(b) Except as specifically set forth herein, the execution, delivery and effectiveness of this Amendment shall not directly or indirectly (i) constitute a consent or waiver of any past, present or future violations of any provisions of the Credit Agreement or any other Loan Documents nor constitute a novation of any of the Obligations under the Credit Agreement or other Loan Documents or (ii) constitute a course of dealing or other basis for altering any Obligations or any other contract or instrument.

 

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(c) From and after the Twelfth Amendment Effective Date, (i) the term “Agreement” in the Credit Agreement, and all references to the Credit Agreement in any other Loan Document, shall mean the Credit Agreement, as amended by, among other things, this Amendment and (ii) the term “Loan Documents” in the Credit Agreement and the other Loan Documents shall include, without limitation, the Amendment and any agreements, instruments and other documents executed and/or delivered in connection herewith.

(d) This Amendment shall not be deemed or construed to be a satisfaction, reinstatement, novation or release of the Credit Agreement or any other Loan Document.

SECTION 8. Governing Law; Jurisdiction; Consent to Service of Process. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. THE PROVISIONS OF SECTION 10.09(b), (c) and (d) OF THE AMENDED CREDIT AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE, MUTATIS MUTANDIS, AS IF FULLY SET FORTH HEREIN.

SECTION 9. Counterparts; Integration. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Amendment and any separate letter agreements with respect to fees payable to the Agents or the Lenders listed on the signature pages hereto, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executed counterpart of a signature page of this Amendment by telecopier or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 10. Severability. Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 11. Headings. Article and Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

SECTION 12. Notices. All notices, requests, and demands to or upon the respective parties hereto shall be given in accordance with the Amended Credit Agreement.

SECTION 13. Expenses. The Borrower agrees to pay all reasonable documented out-of-pocket expenses of Paul Hastings LLP, counsel to the Administrative Agent and the Collateral Agent, and Willkie Farr & Gallagher LLP, counsel to the Lender Representative, in connection with the negotiation, preparation, execution and delivery of this Amendment, as well as ongoing reasonable documented out-of-pocket expenses incurred after the Twelfth Amendment Effective Date in connection herewith, in each case in accordance with Section 10.03 of the Amended Credit Agreement.

 

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SECTION 14. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE REQUIREMENTS OF LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14.

SECTION 15. Agent Authorization. Each of the undersigned Lenders hereby authorizes the Agents to execute and deliver this Amendment and the other documents entered into in connection herewith on its behalf, and by its execution below, each of the undersigned Lenders agrees to be bound by the terms and conditions of this Amendment and such other documents.

[Remainder of Page Intentionally Left Blank]

 

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

 

 

 

 

 

 

 

 

Annex A

Conformed through the Twelfth Amendment to Credit Agreement, dated as of June 30, 2023

 

 

 

CREDIT AGREEMENT

dated as of October 2, 2017

among

LOAR HOLDINGS, LLC,

as Holdings,

LOAR MERGER SUB, INC.,

as the Initial Borrower,

(to be merged with and into LOAR GROUP INC. pursuant to the Closing Date Merger, with LOAR

GROUP INC. as the surviving person and the Borrower hereunder upon and following the

consummation of the Closing Date Merger),

THE GUARANTORS PARTY HERETO,

as Guarantors,

THE LENDERS PARTY HERETO

and

FIRST EAGLE ALTERNATIVE CREDIT, LLC (as successor by merger to FIRST EAGLE

PRIVATE CREDIT, LLC (f/k/a NEWSTAR FINANCIAL, INC.)),

as Administrative Agent and Collateral Agent

 

 

 

 

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TABLE OF CONTENTS

 

				Page
ARTICLE I DEFINITIONS					2
SECTION 1.01		Defined Terms			2
SECTION 1.02		Classification of Loans			59
SECTION 1.03		Terms Generally			59
SECTION 1.04		Accounting Terms; GAAP			59
SECTION 1.05		Time Reference			60
SECTION 1.06		Limited Condition Acquisitions			60
SECTION 1.07		Resolution of Drafting Ambiguities			61
SECTION 1.08		German Terms			61
ARTICLE II THE CREDITS					62
SECTION 2.01		Commitments			62
SECTION 2.02		[Reserved]			62
SECTION 2.03		Borrowing Procedure			62
SECTION 2.04		Evidence of Debt; Repayment of Loans			63
SECTION 2.05		Fees			64
SECTION 2.06		Interest on Loans			64
SECTION 2.07		Termination and Reduction of Commitments			66
SECTION 2.08		Scheduled Repayment of Loans			67
SECTION 2.09		Prepayments of Loans			70
SECTION 2.10		Alternate Rate of Interest			72
SECTION 2.11		Yield Protection			74
SECTION 2.12		Breakage Payments.			75
SECTION 2.13		Payments Generally; Pro Rata Treatment; Sharing of Setoffs			76
SECTION 2.14		Taxes			77
SECTION 2.15		Mitigation Obligations; Replacement of Lenders			81
SECTION 2.16		Extended Term Loans			82
SECTION 2.17		Incremental Credit Extensions			84
ARTICLE III REPRESENTATIONS AND WARRANTIES					87
SECTION 3.01		Organization; Powers			87
SECTION 3.02		Authorization; Enforceability			88
SECTION 3.03		No Conflicts			88
SECTION 3.04		Financial Statements; Projections			88
SECTION 3.05		Properties			89
SECTION 3.06		Intellectual Property			89
SECTION 3.07		Equity Interests and Subsidiaries			90
SECTION 3.08		Litigation; Compliance with Laws			90
SECTION 3.09		Federal Reserve Regulations			91
SECTION 3.10		Investment Company Act			91
SECTION 3.11		Use of Proceeds			91
SECTION 3.12		Taxes			92
SECTION 3.13		No Material Misstatements			92
SECTION 3.14		Labor Matters			92

 

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SECTION 3.15		Solvency			92
SECTION 3.16		Employee Benefit Plans			93
SECTION 3.17		Environmental Matters			93
SECTION 3.18		Insurance			94
SECTION 3.19		Security Documents			94
SECTION 3.20		USA PATRIOT Act and Sanctions			94
SECTION 3.21		Anti-Corruption Laws			95
ARTICLE IV CONDITIONS TO CLOSING					95
SECTION 4.01		Conditions to Closing			95
SECTION 4.02		Conditions to each Delayed Draw Term Loan Funding Date			99
SECTION 4.03		Conditions to each Revolving Credit Loan			101
ARTICLE V AFFIRMATIVE COVENANTS					101
SECTION 5.01		Financial Statements, Reports, etc			101
SECTION 5.02		Litigation and Other Notices			103
SECTION 5.03		Existence; Properties and Intellectual Properties			104
SECTION 5.04		Insurance			105
SECTION 5.05		Taxes			106
SECTION 5.06		Employee Benefits			106
SECTION 5.07		Maintaining Records; Access to Properties and Inspections			106
SECTION 5.08		Use of Proceeds			106
SECTION 5.09		Compliance with Environmental Laws			107
SECTION 5.10		Additional Collateral; Additional Guarantors			107
SECTION 5.11		Security Interests; Further Assurances			109
SECTION 5.12		Information Regarding Collateral			109
SECTION 5.13		Compliance with Law; Regulations; Etc			109
SECTION 5.14		Cash Management			109
SECTION 5.15		Post-Closing Matters			109
SECTION 5.16		Permitted Revolving Credit Facility; Structure Changes			110
SECTION 5.17		Post-Schroth Acquisition Requirements Regarding the Schroth German Subsidiaries			110
ARTICLE VI NEGATIVE COVENANTS					111
SECTION 6.01		Indebtedness			111
SECTION 6.02		Liens			113
SECTION 6.03		Restrictions on Fundamental Changes			116
SECTION 6.04		Disposal of Assets			117
SECTION 6.05		Nature of Business			117
SECTION 6.06		Amendments			117
SECTION 6.07		Restricted Payments; Investments			117
SECTION 6.08		Limitation on Certain Restrictive Agreements			120
SECTION 6.09		Financial Covenants			121
SECTION 6.10		Change in Fiscal Year			121
SECTION 6.11		Transactions with Affiliates			122
SECTION 6.12		Holdings			123
SECTION 6.13		Compliance with Anti-Terrorism Laws; Anti-Corruption Laws; OFAC			123

 

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ARTICLE VII GUARANTEE					124
SECTION 7.01		The Guarantee			124
SECTION 7.02		Obligations Unconditional			125
SECTION 7.03		Reinstatement			127
SECTION 7.04		Subrogation; Subordination			127
SECTION 7.05		Remedies			127
SECTION 7.06		[Reserved]			127
SECTION 7.07		Continuing Guarantee			127
SECTION 7.08		General Limitation on Guarantee Obligations			127
SECTION 7.09		Release of Guarantors			127
SECTION 7.10		Keepwell			128
SECTION 7.11		Right of Contribution			128
SECTION 7.12		German Guarantee Limitation			128
ARTICLE VIII EVENTS OF DEFAULT					132
SECTION 8.01		Events of Default			132
SECTION 8.02		Rescission			134
SECTION 8.03		Application of Proceeds			135
SECTION 8.04		Right to Cure			135
ARTICLE IX THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT					136
SECTION 9.01		Appointment and Authority			136
SECTION 9.02		Rights as a Lender			137
SECTION 9.03		Exculpatory Provisions			137
SECTION 9.04		Reliance by Agent			138
SECTION 9.05		Delegation of Duties			139
SECTION 9.06		Replacement or Resignation of Agent			139
SECTION 9.07		Non-Reliance on Agent and Other Lenders			140
SECTION 9.08		No Reliance on Administrative Agent’s Customer Identification Program			140
SECTION 9.09		Withholding Tax			141
SECTION 9.10		Enforcement			141
SECTION 9.11		Collateral Matters			141
SECTION 9.12		Agency for Perfection			143
SECTION 9.13		The Lender Representative			143
SECTION 9.14		Collateral Agent May File Proofs of Claim			143
SECTION 9.15		Knowledge			144
SECTION 9.16		Reliance			144
ARTICLE X MISCELLANEOUS					145
SECTION 10.01		Notices			145
SECTION 10.02		Waivers; Amendment			148
SECTION 10.03		Expenses; Indemnity; Damage Waiver			150
SECTION 10.04		Successors and Assigns			152
SECTION 10.05		Survival of Agreement			155
SECTION 10.06		Counterparts; Integration; Effectiveness; Electronic Execution			156
SECTION 10.07		Severability			156
SECTION 10.08		Right of Setoff			156

 

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SECTION 10.09		Governing Law; Jurisdiction; Consent to Service of Process			156
SECTION 10.10		Waiver of Jury Trial			157
SECTION 10.11		Headings			157
SECTION 10.12		Treatment of Certain Information; Confidentiality			157
SECTION 10.13		USA PATRIOT Act Notice and Customer Verification			158
SECTION 10.14		Interest Rate Limitation			159
SECTION 10.15		Requirement for Further Actions			159

 

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ANNEXES
Annex I		Applicable Loan Margin
SCHEDULES
Schedule 1.01(a)		Subsidiary Guarantors
Schedule 2.01		Lender Commitments
Schedule 3.05		Real Property
Schedule 3.06(b)		Intellectual Property - Registrations
Schedule 3.06(c)		Intellectual Property - No Violations or Proceedings
Schedule 3.07(a)		Equity Interests
Schedule 3.07(b)		Organizational Chart
Schedule 3.17		Environmental Matters
Schedule 3.18		Insurance
Schedule 3.19		Filing Offices
Schedule 5.15		Post-Closing Matters
Schedule 5.17		Post-Schroth Acquisition Requirements Regarding the Schroth German Subsidiaries
Schedule 6.01(b)		Existing Indebtedness
Schedule 6.02(c)		Existing Liens
Schedule 6.07(a)		Existing Investments
Schedule 6.11		Affiliate Transactions
EXHIBITS
Exhibit A		Form of Assignment and Assumption
Exhibit B		Form of Borrowing Request
Exhibit C		Form of Compliance Certificate
Exhibit D		Form of Interest Election Request
Exhibit E		Form of Joinder Agreement
Exhibit F		Form of Note
Exhibit G-1		Form of Perfection Certificate
Exhibit G-2		Form of Perfection Certificate Supplement
Exhibit H		Form of U.S. Tax Compliance Certificate
Exhibit I		Form of Solvency Certificate
Exhibit J		Agreed Security Principles

 

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CREDIT AGREEMENT

CREDIT AGREEMENT (this “Agreement”) dated as of October 2, 2017 among LOAR MERGER SUB, INC., a Delaware corporation (the “Initial Borrower”) (to be merged with and into LOAR GROUP INC., a Delaware corporation (“Loar Group”), pursuant to the Closing Date Merger (such term and each other capitalized term used but not defined herein or in the Recitals below having the meaning given to it in Article I), with Loar Group as the survivor of such Closing Date Merger; the Initial Borrower or Loar Group, as applicable, in its capacity as the borrower hereunder being referred to herein as the “Borrower”), LOAR HOLDINGS, LLC, a Delaware limited liability company and the direct parent of the Borrower (“Holdings”), the other Guarantors party hereto from time to time, the Lenders party hereto from time to time, and FIRST EAGLE ALTERNATIVE CREDIT, LLC (as successor by merger to FIRST EAGLE PRIVATE CREDIT, LLC (f/k/a NEWSTAR FINANCIAL, INC.), as administrative agent for the Lenders (in such capacity, the “Administrative Agent”) and as collateral agent for the Secured Parties (in such capacity, the “Collateral Agent”).

WITNESSETH:

WHEREAS, the Closing Date Investors intend to acquire indirectly all of the issued and outstanding Equity Interests of each of Loar Group and Xpedition Holdings, Inc., a Delaware corporation (“Xpedition” and, together with Loar Group, the “Loar Target”), pursuant to the Stock Purchase Agreement and Agreement and Plan of Merger, dated as of September 8, 2017 (the “Loar Acquisition Agreement”), among the Initial Borrower, Holdings, Loar Group and the Seller;

WHEREAS, pursuant to the Loar Acquisition Agreement, prior to the Closing Date, (a) the Seller and its direct and indirect parents will distribute shares of capital stock of Loar Group (the “Distributed Shares”) to the Rollover Investors, (b) the Rollover Investors will contribute the Distributed Shares to Parent in exchange for equity interests of Parent and (c) Parent will contribute the Distributed Shares to Holdings (the “Contribution”);

WHEREAS, pursuant to the Loar Acquisition Agreement, Holdings will acquire (together with the Contribution, the “Loar Acquisition”) all of the issued and outstanding Equity Interests of the Loar Target that are not Distributed Shares by (a) the merger (the “Closing Date Merger”) of the Initial Borrower with and into Loar Group with Loar Group as the surviving person and (b) the acquisition by Holdings of the issued and outstanding Equity Interests of Xpedition;

WHEREAS, to fund, in part, the Loar Acquisition, the Closing Date Investors will provide an equity investment (the “Equity Contribution”) in Holdings or its direct or indirect parent company of at least 50% of an amount equal to the sum of (a) the Equity Contribution and (b) the aggregate principal amount of the Initial Term Loans incurred on the Closing Date, with all of such equity investment to be made in cash in exchange for common Equity Interests (or, solely in the case of the Rollover Investors, rollover into common Equity Interests), the cash proceeds of which shall be applied to consummate the Transactions or, to the extent not so applied, contributed to the Borrower in cash in respect of common Equity Interests;

WHEREAS, to also fund, in part, the Loar Acquisition and for the other purposes set forth in Section 3.11, the Borrower has requested the Lenders to extend credit to the Borrower in the form of (a) Initial Term Loans on the Closing Date in an aggregate principal amount of $160,000,000, (b) Delayed Draw Term Loan Commitments in an aggregate principal amount of $40,000,000, and (c) Revolving Credit Commitments in an aggregate principal amount of $20,000,000; and

 

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WHEREAS, (a) the Borrower has agreed to secure all of its Obligations by granting to the Collateral Agent, for the benefit of the Secured Parties, a Lien on substantially all of its assets pursuant to the Security Documents (subject to exceptions noted herein and therein) and (b) the Guarantors have agreed to guarantee the Obligations of the Borrower hereunder and to secure their respective Obligations by granting to the Collateral Agent, for the benefit of the Secured Parties, a Lien on substantially all of their respective assets pursuant to the Security Documents (subject to exceptions noted herein and therein).

NOW, THEREFORE, on the basis of the foregoing and the mutual covenants and other agreements set forth herein, the Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

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

“ABR Loan” shall mean any Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of Article II.

“Account” shall mean an account (as that term is defined in the UCC).

“Acquired EBITDA” shall mean, with respect to any Acquired Entity or Business for any period, the amount for such period of Consolidated EBITDA of such Acquired Entity or Business (determined as if references to Holdings and the Subsidiaries in the definition of “Consolidated EBITDA” were references to such Acquired Entity or Business and its Subsidiaries), all as determined on a consolidated basis for such Acquired Entity or Business.

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

“Acquisition” shall mean any transaction or series of related transactions, consummated on or after the Closing Date, by which the Borrower directly, or indirectly through one or more Subsidiaries, (a) acquires any business, division thereof or line of business, or all or substantially all of the assets, of any person, whether through purchase of assets, merger or otherwise, or (b) acquires Equity Interests of any person having at least a majority of the ordinary voting power of the then outstanding Equity Interests of such person (any such business, division, line of business, assets or person so acquired, a “Target”).

“Additional Lenders” shall have the meaning assigned to such term in Section 2.17(a).

“Adjusted Term SOFR” means, for purposes of any calculation, the rate per annum equal to (a) Term SOFR for such calculation plus (b) the Term SOFR Adjustment; provided that, in no event shall Adjusted Term SOFR be less than the Floor.

“Administrative Agent” shall have the meaning assigned to such term in the preamble hereto and includes each other person appointed as the successor thereof pursuant to Article IX.

“Administrative Questionnaire” shall mean an Administrative Questionnaire in the form provided by the Administrative Agent.

 

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“Affiliate” shall mean, when used with respect to a specified person, another person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the person specified; provided, however, that for purposes of Section 6.11, the term “Affiliate” shall also include (a) any person that directly or indirectly owns more than 10% of any class of Equity Interests of the person specified and (b) any person that is an executive officer or director of the person specified. Notwithstanding the foregoing, in no event shall Blackstone, any Blackstone Designees or any Affiliate of Blackstone or of any Blackstone Designee constitute an Affiliate of Holdings and its Subsidiaries for purposes of this Agreement and the other Loan Documents.

“Affiliated Lender” shall mean a Lender that is a Closing Date Investor pursuant to any of clauses (a), (b), (c) or (d) of the definition thereof, or any Affiliate of the foregoing. In no event shall Blackstone, any Blackstone Designees or any Affiliate of Blackstone or any Blackstone Designee constitute an Affiliated Lender for purposes of this Agreement and the other Loan Documents.

“Affiliate Transaction” shall have the meaning assigned to such term in Section 6.11(a).

“Agency Fee Letter” shall mean that certain Fee Letter, dated as of even date herewith, by and between the Borrower and Agents.

“Agents” shall mean the Administrative Agent and the Collateral Agent; and “Agent” shall mean either of them.

“Aggregate Commitments” shall mean the Commitments of all the Lenders.

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

“Agreed Security Principles” shall mean the security principles set forth on Exhibit J.

“All-In Yield” shall mean, with respect to any Indebtedness, the effective yield on such Indebtedness determined in a manner consistent with generally accepted financial practices, taking into account the applicable interest rate margins, any interest rate floors (the effect of which floors shall be determined in a manner set forth in the proviso below), or similar devices and upfront or similar fees or original issue discount (amortized over the shorter of (i) the remaining weighted average life to maturity of such Indebtedness and (ii) the four years following the date of incurrence thereof) payable generally to Lenders or other institutions providing such Indebtedness, but excluding any arrangement, underwriting, structuring, ticking, commitment or other fees payable in connection therewith that are not generally shared with the relevant lenders providing such Indebtedness and, if applicable, consent fees for an amendment paid generally to consenting Lenders; provided that with respect to any Indebtedness that includes an interest rate floor, (a) to the extent that Adjusted Term SOFR (with an Interest Period of three months) (without giving effect to any floors in such definitions) on the date that the All-In Yield is being calculated is less than such floor, the amount of such difference shall be deemed added to the interest rate margin for such Indebtedness for the purpose of calculating the All-In Yield, and (b) to the extent that Adjusted Term SOFR (with an Interest Period of three months) (without giving effect to any floors in such definitions) on the date that the All-In Yield is being calculated is greater than such floor, then the floor shall be disregarded in calculating the All-In Yield.

“Alternate Base Rate” shall mean, for any day, a fluctuating rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the greatest of (a) the Base Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day, plus 0.50% and (c) Adjusted Term SOFR (calculated, for the avoidance of doubt, giving effect to the proviso set forth in the definition thereof) for an Interest Period of one (1) month commencing on such day, plus 1.00%, in each instance, as of such date of determination. If the Administrative Agent shall have determined (which determination shall be

 

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conclusive absent manifest error) that it is unable to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms of the definition thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Base Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Base Rate or the Federal Funds Effective Rate, respectively.

“Anti-Corruption Laws” shall mean any and all Requirements of Law concerning or relating to bribery or corruption applicable to Holdings or its Subsidiaries by virtue of such Person being organized or operating in any applicable jurisdiction.

“Anti-Terrorism Laws” shall mean any and all Requirements of Law related to terrorism financing or money laundering issued or promulgated by a Governmental Authority that are applicable to Holdings or its Subsidiaries by virtue of such Person being organized or operating in the applicable jurisdiction of such Governmental Authority, including OFAC and the Trading with the Enemy Act.

“Applicable Loan Margin” shall mean, for any day, the applicable percentage set forth in Annex I under the appropriate caption.

“Approved Fund” shall mean, with respect to any Lender, any person (other than a natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person)) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is managed, administered, advised or sub-advised by (a) such Lender, (b) an Affiliate of such Lender or (c) an entity or an Affiliate of an entity that administers or manages such Lender.

“Asset Sale” shall mean any conveyance, sale, lease, sublease, assignment, transfer or other disposition (including by way of merger or consolidation and including any Sale and Leaseback Transaction) of any property, excluding (a) sales of inventory and dispositions of cash and Cash Equivalents, in each case, in the ordinary course of business, by Holdings or any of its Subsidiaries and in a manner not otherwise prohibited hereunder; (b) fundamental changes permitted by Section 6.03(a), (b) and (d)(ii); (c) dispositions of obsolete, worn out or permanently retired assets or the disposition in the ordinary course of business of assets no longer used or useful in the conduct of the Companies’ business; (d) Equity Issuances by Holdings; (e) any conveyance, sale, lease, sublease, assignment, transfer, or other disposition by (i) any Loan Party to any other Loan Party or (ii) any Subsidiary that is not a Loan Party to any Loan Party or any other Subsidiary that is not a Loan Party; (f) any trade-in of an asset in the ordinary course of business, or sale or other disposition of property to the extent exchanged for credit against the purchase price of similar replacement property or the proceeds of such sale or disposition are promptly applied to the purchase price of similar replacement property; (g) the incurrence of Permitted Liens, (h) the making of Permitted Investments; (i) the making of Restricted Payments permitted hereunder; (j) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for other property used or useful in the conduct of the Companies’ business; (k) (i) the lease, assignment or sublease, license or sublicense of any real or personal property in the ordinary course of business and (ii) the exercise of termination rights with respect to any lease, sublease, license or sublicense or other agreement in the ordinary course of business; (l) improvements made to leased real property disposed of to landlords pursuant to customary terms of leases entered into in the ordinary course of business; (m) any disposition of Receivables Assets in connection with any Receivables Facility permitted hereunder; (n) the conversion of accounts receivable to notes receivable or other dispositions of accounts receivable in the ordinary course of business in connection with the collection thereof; (o) the unwinding of any Hedging Obligations; and (p) the intentional lapse or abandonment of intellectual property rights in the ordinary course of business or consistent with past practice, which in the reasonable good faith determination of the Borrower, are not material to the conduct of the business of Holdings and its Subsidiaries taken as a whole.

 

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“Assignment and Assumption” shall mean an assignment and assumption entered into by a Lender and an assignee in substantially the form of Exhibit A or such other form as may be reasonably acceptable to the Administrative Agent, in each case, that is provided to the Administrative Agent.

“Auction” shall have the meaning assigned to such term in Section 10.04(f)(ii).

“Auction Manager” shall mean (a) the Administrative Agent or (b) any other financial institution or advisor engaged by the Borrower (whether or not an Affiliate of the Administrative Agent), reasonably acceptable to the Lender Representative, to act as an arranger in connection with any Auction pursuant to Section 10.04(f)(ii); provided, that the Administrative Agent shall not be designated as the Auction Manager without the written consent of the Administrative Agent (it being understood and agreed that the Administrative Agent shall be under no obligation to agree to act as the Auction Manager); provided, further, that none of Holdings or its Subsidiaries or Affiliates or any Affiliated Lender may act as the Auction Manager.

“Auditors’ Determination” shall have the meaning assigned to such term in Section 7.12(b)(vi)(F).

“Available Tenor” shall mean, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if the then-current Benchmark is a term rate or is based on a term rate, any tenor for such Benchmark or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.10(f) or (y) if the then current Benchmark is not a term rate nor based on a term rate, any payment period for interest calculated with reference to such Benchmark pursuant to this Agreement as of such date.

“Base Rate” shall mean, for any day, a rate per annum equal to the rate last quoted by The Wall Street Journal as the “base rate on corporate loans posted by at least 70% of the nation’s largest banks” in the United States or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent (which determination shall be conclusive absent manifest error)) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent (which determination shall be conclusive absent manifest error)). Any change in the Base Rate due to a change in any of the foregoing shall be effective on the effective date of such change in the base rate for corporate loans or the “bank prime loan” rate, as the case may be.

“Base Rate Term SOFR Determination Day” has the meaning set forth in the definition of “Term SOFR”.

“Benchmark” shall mean initially, Term SOFR Reference Rate; provided that if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to the Term SOFR Reference Rate or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.10(b) or (c).

 

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“Benchmark Replacement” shall mean, with respect to any Benchmark Transition Event or an Early Opt-in Election, as applicable, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent (at the direction of the Lender Representative) and the Borrower giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the then-current Benchmark for U.S. dollar-denominated syndicated credit facilities at such time and (b) the related Benchmark Replacement Adjustment; provided that in no event shall Benchmark Replacement be less than the Floor.

“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent (at the direction of the Lender Representative) and the Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for U.S. dollar-denominated syndicated credit facilities.

“Benchmark Replacement Date” shall mean the earliest to occur of the following events with respect to the then-current Benchmark:

(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);

(2) in the case of clause (3) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date; or

(3) in the case of an Early Opt-in Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election is provided to the Lenders, written notice of objection to such Early Opt-in Election from Lenders comprising the Required Lenders.

For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

 

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“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:

(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the regulatory supervisor for the administrator of such Benchmark (or such component), the Federal Reserve Board, the NYFRB, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will not be, representative.

For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

“Benchmark Unavailability Period” shall mean the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.10 and (y) ending at the time that a Benchmark Replacement has replaced the then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.10.

“Blackstone” shall mean Blackstone Alternative Credit Advisors LP.

“Blackstone Designees” shall mean (a) Blackstone Holdings Finance Co. LLC and (b) any fund or account managed, advised, or sub-advised by Blackstone or its Affiliates.

“Board” shall mean the Board of Governors of the Federal Reserve System of the United States.

“Board of Directors” shall mean, with respect to any person, (a) in the case of any corporation, the board of directors of such person, (b) in the case of any limited liability company, the board of managers, board of directors, sole member or managing member, as applicable, of such person, (c) in the case of any partnership, the board of directors (or equivalent governing body) of the general partner of such person, and (d) in any other case, the functional equivalent of the foregoing.

“Borrower” shall have the meaning assigned to such term in the preamble hereto.

 

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“Borrowing” shall mean a borrowing consisting of simultaneous Loans of the same Class and of the same Type and, in the case of Term SOFR Loans, having the same Interest Period.

“Borrowing Request” shall mean a request by the Borrower for a Borrowing of Loans in accordance with Section 2.03, substantially in the form of Exhibit B or such other form as is reasonably acceptable to the Administrative Agent.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on which banks in New York City are authorized or required by law to close; provided, however, that when used in connection with a Term SOFR Loan, the term “Business Day” shall be a day which is a U.S. Securities Business Day.

“Capital Expenditures” shall mean all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of Holdings and its Subsidiaries, but excluding expenditures made in connection with the purchase, replacement, substitution or restoration of assets to the extent (a) financed from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored, (b) financed with cash awards of compensation arising from Casualty Events, (c) made as a tenant in leasehold improvements to the extent reimbursed by a landlord or reimbursed by a third party, (d) constituting a trade-in of an asset in the ordinary course of business to the extent no cash expenditure was made in connection therewith or (e) purchases of replacement property to the extent financed with a credit from the sale or other disposition of similar property or otherwise paid for with the proceeds of a sale or disposition of similar property that are promptly applied to such purchase price.

“Capital Lease Obligations” shall mean the obligations of any person under any lease of (or other arrangement conveying the right to use) property (real or personal) which obligations are required to be capitalized on the balance sheet of such person under GAAP; provided that all obligations of any person that are or would be characterized as operating lease obligations in accordance with GAAP on the Closing Date (whether or not such operating lease obligations were in effect on such date) shall continue to be accounted for as operating lease obligations (and not as Capital Lease Obligations) for purposes of this Agreement regardless of any change in GAAP following the Closing Date that would otherwise require such obligations to be recharacterized (on a prospective or retroactive basis or otherwise) as Capital Lease Obligations.

“Cash Equivalents” shall mean, as to any person, (a) (i) Dollars, (ii) Euros, Yen, Canadian Dollars, Sterling or any national currency of any participating member state of the EMU, and (iii) in the case of any Foreign Subsidiary or any jurisdiction in which the Borrower or any Subsidiary conducts business, such other local currencies held by it from time to time in the ordinary course of business; (b) securities issued, or directly, unconditionally and fully guaranteed or insured, by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition by such person; (c) marketable direct obligations issued or fully guaranteed by any state of the United States or any political subdivision of such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Service or Moody’s Investors Service Inc.; (d) time deposits, overnight bank deposits and certificates of deposit of any Lender or any commercial bank having, or which is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any state thereof or the District of Columbia having, capital and surplus aggregating in excess of $500,000,000 with maturities of not more than one year from the date of acquisition by such person; (e) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (b) above entered into with any bank meeting the qualifications specified in clause (d) above;

 

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(f) commercial paper issued by any person incorporated in the United States rated at least A-1 or the equivalent thereof by Standard & Poor’s Rating Service or at least P-1 or the equivalent thereof by Moody’s Investors Service Inc., and in each case maturing not more than one year after the date of acquisition by such person; (g) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (a) through (f) above; and (h) demand deposit accounts maintained in the ordinary course of business.

“Cash Liquidity” shall mean the sum of all unrestricted cash and Cash Equivalents of Holdings and its Subsidiaries.

“Cash Management Agreement” shall mean any agreement entered into from time to time by Holdings or any Subsidiary in connection with cash management services for collections, other Cash Management Services and for operating, payroll and trust accounts of such Person, including automatic clearing house services, controlled disbursement services, electronic funds transfer services, information reporting services, lockbox services, stop payment services and wire transfer services.

“Cash Management Bank” shall mean any person that enters into a Cash Management Agreement with Holdings or any Subsidiary; provided that, in the case of any Secured Cash Management Agreement, if such person is not a Lender, (a) such person and the Secured Cash Management Agreement between such person and Holdings or its relevant Subsidiary are reasonably acceptable to the Lender Representative and (b) such person executes and delivers to the Agents a letter agreement in form and substance reasonably acceptable to the Agents, the Lender Representative and the Borrower pursuant to which such person (i) appoints the Agents as its agents under the applicable Loan Documents and (ii) agrees to be bound by the provisions of Article IX and Section 8.03 of this Agreement and corresponding or similar provisions in any Security Document, in each case, as if it were a Lender.

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

“Cash Management Services” shall mean (a) commercial credit cards, merchant card services, purchase or debit cards, including non-card e-payables services; (b) treasury management services (including controlled disbursement, overdraft, automatic clearing house fund transfer services, return items and interstate depository network services); (c) foreign exchange, netting and currency management services and (d) any other demand deposit or operating account relationships or other cash management services, including under any Cash Management Agreements.

“Casualty Event” shall mean 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 Holdings 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.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq., and all implementing regulations.

“CFC” shall mean a “controlled foreign corporation” within the meaning of Section 957(a) of the Code.

 

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“CFC Holdco” shall mean a direct or indirect Subsidiary that (i) has no material assets other than the capital stock and, if applicable, indebtedness of one or more subsidiaries that are Foreign Subsidiaries that are CFCs or other CFC Holdcos or (ii) is treated as a disregarded entity for U.S. federal income tax purposes and owns capital stock of one or more Foreign Subsidiaries that are CFCs or other CFC Holdcos.

“Change in Control” shall be deemed to have occurred if:

(a) at any time a change of control (or similar event) occurs as defined in any agreement, document or instrument evidencing any Material Indebtedness;

(b) the Sponsor and its Controlled Investment Affiliates, together, directly or indirectly, (i) fail to have the power to vote or direct the voting of at least 37% of the issued and outstanding Voting Stock of Holdings; or (ii) fail to own at least 37% of the total economic interests of Holdings represented by the issued and outstanding Equity Interests of Holdings;

(c) the Permitted Holders, together, directly or indirectly, fail to possess the right to elect a majority of the Board of Directors of Holdings;

(d) Holdings fails to directly legally own 100% of the outstanding Equity Interests of the Borrower; or

(e) the sale, assignment, transfer, lease, conveyance or other disposition, in a single transaction or a series of related transactions, of all or substantially all of the assets of Holdings and its Subsidiaries (taken as a whole).

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

“Charges” shall have the meaning assigned to such term in Section 10.14.

“CIP Regulations” shall have the meaning assigned to such term in Section 9.08.

“Class” shall mean, with respect to the Loans and Commitments hereunder, the nature of such Loans and Commitments as (a) Initial Term Loans and Initial Term Loan Commitments, (b) Delayed Draw Term Loans and Delayed Draw Term Loan Commitments, (c) Eleventh Amendment Incremental Term Loans and Eleventh Amendment Incremental Term Loan Commitments, (d) Incremental Term Loans and Incremental Term Loan Commitments, in each case, funded on the same date pursuant to the same terms and conditions, (e) Extended Term Loans established pursuant to the same Extension Amendment or (f) Revolving Credit Loans and Revolving Credit Commitments.

“Closing Date” shall mean the date on which the Initial Term Loans are funded pursuant to Section 2.01 hereunder.

 

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“Closing Date Investors” shall mean (a) the Sponsor and its Controlled Investment Affiliates; (b) Dirkson Charles and Brett Milgrim; (c) Glenn D’Alessandro, Mike Manella, Jim Mullen, Debra Wick, Doris Harms, Jonathan Mark Green, James M. Graham and Timothy S. Rozema; (d) Great Point Ventures, LLC (an investment vehicle of Paul Levy) and (e) Blackstone and/or certain Blackstone Designees designated by Blackstone.

“Closing Date Material Adverse Effect” shall have the meaning assigned to “Material Adverse Effect” in the Loar Acquisition Agreement.

“Closing Date Merger” shall have the meaning assigned to such term in the third recital hereto.

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

“Collateral” shall mean, collectively, all of the Security Agreement Collateral, the Mortgaged Property and all other real and personal property of whatever kind and nature subject or purported to be subject from time to time to a Lien under any Security Document.

“Collateral Agent” shall have the meaning assigned to such term in the preamble hereto and includes each other person appointed as the successor thereof pursuant to Article X.

“Commercial Tort Claims” shall have the meaning assigned to such term in the UCC.

“Commitments” shall mean Initial Term Loan Commitments, Delayed Draw Term Loan Commitments, Eleventh Amendment Incremental Term Loan Commitments, Incremental Term Loan Commitments, Term Commitments or Revolving Credit Commitments, as the context may require.

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

“Communications” shall have the meaning assigned to such term in Section 10.01(b).

“Companies” shall mean Holdings and its Subsidiaries, including the Borrower; and “Company” shall mean any one of them.

“Compliance Certificate” shall mean a certificate of a Financial Officer of Holdings, substantially in the form of Exhibit C or such other form as may be reasonably acceptable to the Lender Representative.

“Conforming Changes” shall mean, with respect to the use or administration of Adjusted Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions and other technical, administrative or operational matters) that the Administrative Agent decides, in consultation with the Borrower, may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the

 

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Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines, in consultation with the Borrower, that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides, in consultation with the Borrower, is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

“Consolidated Depreciation and Amortization Expense” shall mean, for any Test Period, all depreciation and amortization expense of Holdings and its Subsidiaries and amortization of capitalized software expenditures, all as determined for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.

“Consolidated EBITDA” shall mean, for any Test Period, Consolidated Net Income for such Test Period, plus (without duplication), in each case (other than in the case of clauses (i) and (s) below), to the extent deducted in the calculation of Consolidated Net Income for such Test Period:

(a) the sum of the amounts for such Test Period included in determining such Consolidated Net Income of (i) Consolidated Interest Expense, (ii) Consolidated Income Tax Expense, and (iii) Consolidated Depreciation and Amortization Expense;

(b) any non-cash charges or losses; provided, that any non-cash charges or losses shall be treated as cash charges or losses in any subsequent Test Period during which cash disbursements attributable thereto are made;

(c) any extraordinary, unusual, non-recurring or exceptional expenses, losses or charges, in an aggregate amount pursuant to this clause (c) not to exceed 10.0% of Consolidated EBITDA determined on a Pro Forma Basis in any Test Period (or, with respect to any Test Period, such higher amount as may be agreed to in writing by the Lender Representative);

(d) reasonable and documented expenses paid to non-Affiliates (or, solely in the case of clauses (i)(x) and (iii) below, Affiliated Lenders in their capacities as Lenders hereunder) relating to (i) (x) the execution, delivery and performance of the Loan Documents and the borrowings of the Initial Term Loans hereunder or (y) the other Transactions, in each case, solely to the extent paid or accrued on or prior to December 31, 2017, (ii) any Permitted Revolving Credit Facility, (iii) refinancing transactions or amendments or other modifications of the Indebtedness under this Agreement (in each case, whether or not completed) or (iv) Permitted Acquisitions and, to the extent not prohibited hereunder, Investments, recapitalizations, dispositions, issuances or repayments of Indebtedness, issuances of Equity Interests, sale processes, refinancing transactions or amendments or other modifications of any Indebtedness (other than any such refinancing transactions or amendments or other modifications of Indebtedness to the extent covered by clause (iii) above) (in each case, whether or not completed) and any charges or non-recurring merger costs incurred during such period as a result of any such transaction in an aggregate amount pursuant to clauses (d)(iii) and (d)(iv) not to exceed 15.0% of Consolidated EBITDA determined on a Pro Forma Basis in any Test Period;

(e) any integration expenses, business optimization expenses, operating improvement expenses and other restructuring charges, accruals or reserves (including, for the avoidance of doubt, retention costs, severance costs, systems development and establishment costs, costs associated with office and facility openings, closings and consolidations, and relocation costs, conversion costs, excess pension charges, curtailments and modifications to pension and post-employment employee benefit plan costs or charges, contract termination costs, expenses

 

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attributable to the implementation of cost savings initiatives and professional and consulting fees incurred in connection with any of the foregoing) incurred during such Test Period, which costs and expenses are specified in reasonable detail in a certificate signed by a Financial Officer and delivered to the Administrative Agent and the Lender Representative, in an aggregate amount pursuant to this clause (e) not to exceed 10.0% of Consolidated EBITDA determined on a Pro Forma Basis in any Test Period;

(f) any losses incurred at “de novo” facilities, including certain non-capitalized start-up costs, which losses are directly associated with the opening of any such “de novo” facility and incurred within the twelve-month period following the opening of such “de novo” facility, in an aggregate amount pursuant to this clause (f) not to exceed $1,500,000 in any Test Period;

(g) Board of Directors fees, indemnities and related expenses paid or reimbursed to the extent permitted to be paid or reimbursed in accordance with this Agreement;

(h) any costs and expenses incurred in connection with the Borrower or any Subsidiary making a borrowing pursuant to the Paycheck Protection Program;

(i) proceeds from business interruption insurance (to the extent not reflected as revenue or income in such statement of Consolidated Net Income);

(j) (i) any loss, expense or charge (including all reasonable fees and expenses or charges relating thereto) from abandoned, closed, disposed or discontinued operations and (ii) any losses on disposal of abandoned, closed or discontinued operations;

(k) any loss, expense or charge (including all reasonable fees and expenses or charges relating thereto) attributable to business dispositions or asset dispositions, other than in the ordinary course of business, as determined in good faith by a Financial Officer;

(l) any non-cash loss attributable to the mark-to-market movement in the valuation of hedging obligations (including hedging obligations entered into for the purpose of hedging against fluctuations in the price or availability of any commodity) or other derivative instruments pursuant to Financial Accounting Standards Board Statement No. 133 “Accounting for Derivative Hedging Instruments”;

(m) any costs or expenses incurred in connection with Restricted Payments made pursuant to Section 6.07(b)(i) or (viii);

(n) except to the extent such Subsidiary income has been paid or otherwise distributed in cash to the relevant third parties, minority interest expense consisting of Subsidiary income attributable to minority equity interests of third parties in any non-wholly owned Subsidiary deducted (and not added back in such period to Consolidated Net Income);

(o) all non-cash expenses resulting from any employee retention plan, employee benefit or management compensation plan or the grant of equity and equity options to employees of such Person or any of its Subsidiaries pursuant to a written plan or agreement (including expenses arising from the grant of equity and equity options prior to the Closing Date or relating to the implementation thereof) or the treatment of such options under variable plan accounting;

(p) any costs or expenses incurred pursuant to any management equity plan or share option plan or any other management or employee benefit plan or agreement or share subscription or shareholder agreement, to the extent such costs or expenses are funded with cash proceeds contributed to the common capital of such Person or the Net Cash Proceeds of any issuance of Equity Interests not constituting Disqualified Capital Stock;

 

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(q) charges, losses, lost profits, expenses (including litigation expenses, fees and charges) or write-offs to the extent indemnified or insured by a third party, including expenses or losses covered by indemnification provisions or by any insurance provider in connection with the Transactions, a Permitted Acquisition or any other Investment, disposition or any Casualty Event, in each case, to the extent not prohibited hereunder and to the extent that coverage has not been denied and so long as such amounts are actually reimbursed in cash within twelve months after the related amount is first added to Consolidated EBITDA pursuant to this clause (r) (and if not so reimbursed within twelve months, such amount shall be deducted from Consolidated EBITDA during the next measurement period);

(r) cash receipts (or any netting arrangements resulting in reduced cash expenses) not included in Consolidated EBITDA in any period to the extent non-cash gains relating to such receipts were deducted in the calculation of Consolidated EBITDA pursuant to clauses (t) through (w) below for any previous Test Period and not added back; and

(s) Public Company Costs;

minus (without duplication), in each case, to the extent included in the calculation of Consolidated Net Income for such Test Period:

(t) non-cash gains or income; provided that any non-cash gains or income shall be treated as cash gains or income in any subsequent Test Period during which cash receipts attributable thereto are received;

(u) any extraordinary or non-recurring income or gain;

(v) any gain (including all fees and expenses or income relating thereto) attributable to business dispositions or asset dispositions, other than in the ordinary course of business, as determined in good faith by a Financial Officer; and

(w) (i) subject to the proviso in subclause (ii) of the succeeding paragraph, any gain or income (including all reasonable fees and expenses or charges relating thereto) from abandoned, closed, disposed or discontinued operations and (ii) any gains on disposal of abandoned, closed or discontinued operations;

in each case, as determined on a consolidated basis for Holdings and its Subsidiaries in accordance with GAAP; provided, however, that Consolidated EBITDA, subject to the succeeding paragraph, (a) for the fiscal quarter ended September 30, 2016, shall be deemed to be $7,223,000, (b) for the fiscal quarter ended December 31, 2016, shall be deemed to be $7,452,000, (c) for the fiscal quarter ended March 31, 2017, shall be deemed to be $8,415,000, and (d) for the fiscal quarter ended June 30, 2017, shall be deemed to be $8,892,000.

For the avoidance of doubt:

(i) there shall be included in determining Consolidated EBITDA for any period, without duplication, (A) the Acquired EBITDA of any Person or business, or attributable to any property or asset acquired by Holdings or any of its Subsidiaries during such period (but not the

 

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Acquired EBITDA of any related Person or business or any Acquired EBITDA attributable to any assets or property, in each case to the extent not so acquired) to the extent not subsequently sold, transferred, abandoned or otherwise disposed of by Holdings or such Subsidiary (each such Person, business, property or asset acquired and not subsequently so disposed of, an “Acquired Entity or Business”) and (B) an adjustment in respect of each Acquired Entity or Business equal to the amount of the Pro Forma Effect with respect to such Acquired Entity or Business for such period (including the portion thereof occurring prior to such acquisition); and

(ii) to the extent included in Consolidated Net Income, there shall be excluded in determining Consolidated EBITDA for any period (A) the Disposed EBITDA of any Person, property, business or asset sold, transferred, abandoned or otherwise disposed of, closed or classified as discontinued operations (subject to the proviso of this clause (ii)) by Holdings or any Subsidiary during such period (each such Person, property, business or asset so sold or disposed of, a “Disposed Entity or Business”) based on the Disposed EBITDA of such Disposed Entity or Business for such period and (B) an adjustment in respect of each Disposed Entity or Business equal to the amount of the Pro Forma Effect with respect to such Disposed Entity or Business for such period (including the portion thereof occurring prior to such disposition); provided that, for the avoidance of doubt, notwithstanding any classification under GAAP of any Person or business as discontinued operations as a result of the entry into a definitive agreement for the disposition thereof or as a result of constituting assets held for sale, the Disposed EBITDA of such Person or business shall not be excluded pursuant to this clause (ii) until such disposition has been consummated.

Unless the context otherwise requires, if no applicable Person is referenced, “Consolidated EBITDA” shall be deemed to refer to Consolidated EBITDA of Holdings and its Subsidiaries on a consolidated basis.

“Consolidated Income Tax Expense” shall mean, for any Test Period, all provisions for taxes based on the net income, profits or capital, including federal, provincial, territorial, foreign, state, local, franchise, excise and similar taxes and foreign withholding taxes paid or accrued during such period (including in respect of repatriated funds and any penalties and interest related to such taxes), in each case, of Holdings or any of its Subsidiaries (including, without limitation, any additions to such taxes, and any penalties and interest with respect thereto), all as determined for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.

“Consolidated Indebtedness” shall mean, as at any date of determination, the aggregate amount, without duplication, of all funded Indebtedness pursuant to clauses (a), (b), (c), (d), (f) and (i) of the definition of “Indebtedness” (in the case of clause (i) of the definition of “Indebtedness”, solely to the extent of any unpaid reimbursement obligations in respect of any drawn letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions) of Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” shall mean, with respect to Holdings and its Subsidiaries on a consolidated basis, for any Test Period, interest expense determined in accordance with GAAP, adjusted, (i) to the extent not included, to include, without duplication, (a) interest income; (b) interest expense attributable to Capital Lease Obligations; (c) gains and losses on hedging or other derivatives to hedge interest rate risk; (d) fees and costs related to letters of credit, bankers’ acceptance financing, surety bonds and similar financings and (e) amortization or write-off of deferred financing fees, debt issuance costs, debt discount or premium, terminated hedging obligations and other commissions, financing fees and expenses; and (ii) to the extent included, to exclude, without duplication, any refunds or similar credits received in connection with the purchasing or procurement of goods or services under any purchasing card or similar program.

 

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“Consolidated Net Income” shall mean, for any Test Period, the net income (or loss) of any Person on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP, excluding without duplication:

(a) any net after-tax gains or losses (and all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness or hedging obligations or other derivative instruments;

(b) (i) the net income of any Person that is not a Subsidiary of such Person, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referenced person or a subsidiary thereof in respect of such period and (ii) the net income shall include any ordinary course dividend distribution or other payment in cash received from any Person in excess of the amounts included in clause (b)(i); provided, however, that Holdings’ equity in net loss of any such Person for such period shall be included in determining Consolidated Net Income solely to the extent that Holdings or any other Subsidiary has funded such loss;

(c) the net income of any Subsidiary of Holdings that is not a Loan Party during such period to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of that income (i) is not permitted by operation of the terms of its Organizational Documents or any agreement, instrument or Requirement of Law applicable to such Subsidiary during such period, or (ii) would result in material adverse tax consequences to Holdings and its Subsidiaries, taken as a whole; provided, however, that the net income excluded from Consolidated Net Income pursuant to clause (c)(ii) shall be limited to the amount of any Tax liability that would be incurred upon payment of such dividend or similar distribution;

(d) the cumulative effect of a change in accounting principles during such period to the extent included in net income;

(e) any increase in amortization or depreciation or any one-time non-cash charges or other effects resulting from purchase accounting (including in the inventory, property and equipment, software, goodwill, intangible assets, in process research and development, deferred revenue and debt line items) in connection with the Transactions, any acquisition or Investment consummated prior to or after the Closing Date;

(f) any impairment charge or asset write-off or write-down, including impairment charges or asset write-offs or write-downs related to intangible assets, long-lived assets, investments in debt and equity securities or as a result of a change in law or regulation, in each case, pursuant to GAAP, and the amortization of intangibles arising pursuant to GAAP, which, without limiting the foregoing, shall include any impairment charges resulting from the application of Financial Accounting Standards Board Statements No. 142 and 144, and the amortization of intangibles arising pursuant to No. 141;

(g) any non-cash expenses realized or resulting from employee benefit plans or post-employment benefit plans, grants of stock appreciation or similar rights, stock options, restricted stock grants or other rights to officers, directors and employees of such Person or any of its Subsidiaries;

(h) any unrealized gain or loss due solely to fluctuations in currency values and the related tax effects, determined in accordance with GAAP; and

 

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(i) earn-out and contingent consideration obligations (including to the extent accounted for as bonuses or otherwise) and adjustments thereof and purchase price adjustments, in each case in connection with Acquisitions consummated prior to the Closing Date and Permitted Acquisitions or, to the extent permitted hereunder, other Investments.

There shall be included in Consolidated Net Income, without duplication, the amount of any cash tax benefits related to the tax amortization of intangible assets in such period. Unless the context otherwise requires, if no applicable Person is referenced, “Consolidated Net Income” shall be deemed to refer to Consolidated Net Income of Holdings and its Subsidiaries on a consolidated basis.

“Consolidated Total Assets” shall mean, as of any date of determination, the consolidated total assets of Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP.

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

“Contract Consideration” shall have the meaning assigned to such term in the definition of “Excess Cash Flow”.

“Contribution” shall have the meaning assigned to such term in the second recital hereto.

“Control” shall mean 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 ownership of voting securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have meanings correlative thereto.

“Control Agreement” shall mean a control agreement or other similar agreement with the Collateral Agent and a Grantor (as defined in the Security Agreement), in form and substance reasonably satisfactory to the Lender Representative and the Collateral Agent in order to give the Collateral Agent “control” (within the meaning set forth in Section 9-104 of the UCC) of such account.

“Controlled Investment Affiliate” shall mean, as to any person, any other person which directly or indirectly is in Control of, is Controlled by, or is under common Control with, such person and is organized by such person (or any person Controlling such person) primarily for making equity or debt investments in Holdings or other portfolio companies.

 

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“Corresponding Debt” shall have the meaning assigned to such term in Section 9.17(b).

“Corresponding Tenor” with respect to any Available Tenor shall mean, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.

“Covenant Suspension Period” shall mean the period commencing with the Seventh Amendment Effective Date through and including June 30, 2022.

“Daily Simple SOFR” shall mean, for any day, SOFR, with the conventions for this rate (which will include a lookback) being established by the Administrative Agent (in consultation with the Lender Representative) in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for syndicated business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent (in consultation with the Lender Representative) may establish another convention in its reasonable discretion.

“Daily Simple SOFR Adjustment” shall mean a percentage equal to one-tenth of one percent (0.10%) per annum.

“Debt Issuance” shall mean the Incurrence by Holdings or any of its Subsidiaries of Indebtedness on or after the Closing Date (other than as permitted by Section 6.01).

“Default” shall mean any event, occurrence or condition which is, or upon notice, lapse of time or both would constitute, an Event of Default.

“Delayed Draw Term Loan” shall mean the loans made from time to time after the Closing Date on any Delayed Draw Term Loan Funding Date pursuant to Section 2.01(b).

“Delayed Draw Term Loan Commitment” shall mean, with respect to any Lender, its obligation to make Delayed Draw Term Loans to the Borrower on any applicable Delayed Draw Term Loan Funding Date pursuant to Section 2.01(b) in the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Delayed Draw Term Loan Commitment”. The aggregate amount of the Delayed Draw Term Loan Commitments (i) on the Closing Date was $40,000,000, (ii) on the First Amendment Effective Date, after giving effect to the First Amendment, was $90,000,000, which such Delayed Draw Term Loan Commitments were reduced to $0 upon the funding of the Delayed Draw Term Loans in respect thereof, (iii) on the Fourth Amendment Effective Date, after giving effect to the Fourth Amendment, was $70,000,000 (the Delayed Draw Term Loan Commitment described in this clause (iii), the “Fourth Amendment Delayed Draw Term Loan Commitment Increase”), which such Fourth Amendment Delayed Draw Term Loan Commitment Increase was reduced to $0 upon the funding of the Delayed Draw Term Loans in respect thereof, (iv) on the Fifth Amendment Effective Date, after giving effect to the Fifth Amendment, is $44,000,000 (the Delayed Draw Term Loan Commitment described in this clause (iv), the “Fifth Amendment Delayed Draw Term Loan Commitment Increase”), which such Fifth Amendment Delayed Draw Term Loan Commitment Increase was reduced to $0 upon the funding of the Delayed Draw Term Loans in respect thereof, and (v) on the Ninth Amendment Effective Date, after giving effect to the Ninth Amendment, is $100,000,000 (the Delayed Draw Term Loan Commitment described in this clause (v), the “Ninth Amendment Delayed Draw Term Loan Commitment Increase”).

“Delayed Draw Term Loan Funding Date” shall mean one or more dates on which Delayed Draw Term Loans are made.

 

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“Delayed Draw Termination Date” shall mean the earlier to occur of (a) the date on which the Delayed Draw Term Loan Commitments have been reduced to $0 as a result of the funding thereof in full or the termination thereof in accordance with Section 2.07 and (b) April 1, 2024.

“Deposit Account” shall have the meaning assigned to such term under the UCC.

“Disposed EBITDA” shall mean, with respect to any Disposed Entity or Business for any period, the amount for such period of Consolidated EBITDA of such Disposed Entity or Business (determined as if references to Holdings and the Subsidiaries in the definition of Consolidated EBITDA were references to such Disposed Entity or Business and its respective Subsidiaries), all as determined on a consolidated basis for such Disposed Entity or Business.

“Disposed Entity or Business” shall have the meaning assigned to such term in the definition of “Consolidated EBITDA.”

“Disqualified Capital Stock” shall mean any Equity Interest which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, (a) matures (excluding any maturity as the result of an optional redemption by the issuer thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date 91 days after the earlier of the Maturity Date or the date the Loans are no longer outstanding, (b) is convertible into or exchangeable (unless at the sole option of the issuer thereof) for (i) debt securities or (ii) any Equity Interests referred to in (a) above, in each case at any time on or prior to the date 91 days after the earlier of the Maturity Date or the date the Loans are no longer outstanding, or (c) contains any repurchase obligation which may come into effect prior to Payment in Full of all Obligations; provided, however, that any Equity Interests that would not constitute Disqualified Capital Stock but for provisions thereof giving holders thereof (or the holders of any security into or for which such Equity Interests are convertible, exchangeable or exercisable) the right to require the issuer thereof to redeem such Equity Interests upon the occurrence of a change in control or an asset sale shall not constitute Disqualified Capital Stock if such Equity Interests provide that the issuer thereof will not redeem any such Equity Interests pursuant to such provisions prior to the Payment in Full of the Obligations; and provided, further, that any Equity Interest issued to or by any plan for the benefit of former, current or future employees, directors, officers, members of management or consultants shall not constitute Disqualified Capital Stock solely because it is required to be repurchased in order to satisfy applicable statutory or regulatory obligations or as a result of the termination, death or disability of any such employee, director, officer, member of management or consultant; and provided, further, however, that any Equity Interest subject to a put right pursuant to Section 7.5 of the Parent LLC Agreement shall not constitute Disqualified Capital Stock.

“Disqualified Lenders” shall mean those banks, financial institutions, and other institutional lenders and investors (a) that have been identified by name in writing by Borrower to the Lender Representative on or prior to September 8, 2017; (b) those persons who are competitors of the Loan Parties or their Subsidiaries that are identified by name in writing by Borrower to the Lender Representative, or, if after the Closing Date, by the Borrower to the Lender Representative and the Agents from time to time (which shall not apply to retroactively disqualify any person who (i) previously acquired, and continues to hold, any loans, Commitments or participations in respect of any Loans or Commitments, or (ii) is a party to a pending trade as of the date of such identification); (c) that have been identified by name in writing by Borrower after September 8, 2017 and mutually agreed by the Lender Representative; and (d) in the case of each of clauses (a), (b), and (c), any of their Affiliates (excluding bona fide debt fund affiliates in the case of competitors only) that are either (i) identified by name in writing by the Borrower to the Lender Representative, or, if after the Closing Date, by the Borrower to the Lender Representative and the Administrative Agent from time to time, which shall not apply retroactively to disqualify any person who (x) previously acquired, and continues to hold, any Loans, Commitments, or participations in respect of any Loans or Commitments or (y) is party to a pending trade as of the date of such identification) or (ii) readily identifiable solely on the basis of such Affiliate’s name.

 

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“Distributed Shares” shall have the meaning assigned to such term in the second recital hereto.

“Dividend” with respect to any person shall mean that such person has declared or paid a dividend or returned any equity capital to the holders of its Equity Interests or made any other distribution, payment or delivery of property (other than Qualified Capital Stock of such person) or cash to the holders of its Equity Interests in their capacity as such.

“Division” shall mean the division of a limited liability company into two or more limited liability companies in accordance with the Requirements of Law in the applicable jurisdiction of organization or formation, and the term “Divide” shall have the meaning correlative thereto.

“Dollars” or “dollars” or “$” shall mean lawful money of the United States.

“Domestic Subsidiary” shall mean any Subsidiary that is organized under the laws of the United States, any state thereof or the District of Columbia.

“Early Opt-in Election” shall mean the delivery of a notification by the Administrative Agent (at the request of the Borrower) to each of the other parties hereto that (a) U.S. dollar-denominated syndicated credit facilities are being executed or amended, as applicable, at such time, to incorporate or adopt a new benchmark interest rate to replace Term SOFR (and such syndicated credit facilities are identified in such notice and are publicly available for review) and (b) the joint election by the Administrative Agent and the Borrower to trigger a fallback from Term SOFR; provided that upon such joint election to trigger a fallback from Term SOFR, the Administrative Agent shall deliver a written notice of such election to the Lenders.

“Eleventh Amendment” shall mean that certain Eleventh Amendment to Credit Agreement, dated as of the Eleventh Amendment Effective Date, by and among the Borrower, Holdings, the Guarantors party thereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent.

“Eleventh Amendment Effective Date” shall mean July 28, 2022.

“Eleventh Amendment Fee Letter” shall mean that certain Fee Letter, dated as of May 20, 2022, by and among the Borrower and Blackstone.

“Eleventh Amendment Incremental Term Loan” shall have the meaning assigned to such term in the Eleventh Amendment.

“Eleventh Amendment Incremental Term Loan Commitment” shall have the meaning assigned to such term in the Eleventh Amendment.

“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund of a Lender and (d) any other Person that, in the case of an assignment of Loans or Commitments pursuant to Section 10.04(a), has been consented to by the Administrative Agent and, to the extent required by Section 10.04(a), the Borrower, in each case, in accordance with Section 10.04(a); other than, in each case, (i) a Disqualified Lender, (ii) a Sanctioned Person, (iii) a natural person or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person, other than any holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, any Closing Date Investor, (iv) Holdings and its Subsidiaries, and (v) Affiliates of Holdings and its Subsidiaries, except for Affiliated Lenders in accordance with Section 10.04(f).

 

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“EMU” means the economic and monetary union as contemplated in the Treaty on European Union.

“Environment” shall mean ambient air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, natural resources or as otherwise defined in any Environmental Law.

“Environmental Claim” shall mean any written claim, written notice, written demand, order, action, suit, proceeding alleging liability for or obligation with respect to any investigation, remediation, 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 (a) the presence, Release or threatened Release of Hazardous Material at any location or (b) any violation or alleged violation of any Environmental Law, and shall include any claim seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from, related to or arising out of the presence, Release or threatened Release of Hazardous Material.

“Environmental Law” shall mean any and all present and future applicable treaties, laws, statutes, ordinances, regulations, rules, decrees, orders, judgments, consent orders, consent decrees, code or other legally binding requirements, in each case having the force and effect of law, and the common law, relating to protection of public health as it relates to exposure to Hazardous Materials or the protection of the Environment, the Release or threatened Release of Hazardous Material, the protection of natural resources or natural resource damages, or occupational safety or health as it relates to exposure to Hazardous Materials, and any and all applicable Environmental Permits.

“Environmental Lien” shall mean any Lien in favor of any Governmental Authority pursuant to any Environmental Law.

“Environmental Permit” shall mean any permit, license, approval, registration, notification, exemption, consent or other authorization required by or from a Governmental Authority under Environmental Law.

“Equity Contribution” shall have the meaning assigned to such term in the fourth recital hereto.

“Equity Interest” shall mean, with respect to any person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or nonvoting), of equity of such person, including, if such person is a partnership, partnership interests (whether general or limited) and any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of property of, such partnership, whether outstanding on, or issued after, the Closing Date, but excluding debt securities convertible or exchangeable into such equity.

“Equity Issuance” shall mean, without duplication, (a) any issuance or sale by Holdings after the Closing Date of any Equity Interests (including any Equity Interests issued upon exercise of any warrant or option (or any warrants or options to purchase Equity Interests)) or (b) any contribution to the capital of Holdings.

 

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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” shall mean, with respect to any person, any entity, trade or business (whether or not incorporated) that, together with such person, is, or at the relevant time was, a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes or included such person, or that is, or was at the relevant time, a member of the same “controlled group” as such person pursuant to Section 4001(a)(14) of ERISA.

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA, with respect to a Plan (other than an event for which the 30-day notice period is waived by regulation), (b) the failure of any Plan to satisfy the minimum funding standard applicable to such Plan within the meaning of Section 412 of the Code or Section 302 of ERISA, whether or not waived, (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan, (d) the incurrence by Holdings, the Borrower, any other Subsidiary, or any of their ERISA Affiliates of any liability under Title IV of ERISA (other than for PBGC premiums due but not delinquent under Section 4007 of ERISA) with respect to the termination of any Plan or the withdrawal or partial withdrawal of Holdings, the Borrower, any other Subsidiary, or any of their ERISA Affiliates from any Plan or Multiemployer Plan, (e) the receipt by Holdings, the Borrower, any other Subsidiary, or any of their ERISA Affiliates from the PBGC or the administrator of any Plan or Multiemployer Plan of any written notice of intent to terminate any such Plan or Multiemployer Plan under Sections 4041 or 4041A of ERISA or the commencement of proceedings by the PBGC to appoint a trustee to administer any Plan under Section 4042 of ERISA, (f) the adoption of any amendment to a Plan that would require the provision of security pursuant to Section 436(f) of the Code or Section 206(g) of ERISA, (g) a complete or partial withdrawal by Holdings, the Borrower, any other Subsidiary, or any ERISA Affiliate, from a Multiemployer Plan or written notification that a Multiemployer Plan is insolvent (within the meaning of Section 4245 of ERISA) or in “endangered” or “critical” status (within the meaning of Section 432 of the Code or Section 305 of ERISA), (h) the occurrence of a non-exempt “prohibited transaction” with respect to which Holdings, the Borrower, any other Subsidiary, or any of their ERISA Affiliates is a “disqualified person” (within the meaning of Section 4975 of the Code) and with respect to which any of the Loan Parties or any of their ERISA Affiliates could reasonably be expected to have any liability, (i) a written determination that any Plan is, or is expected to be, in “at risk” status (within the meaning of Section 430 of the Code or Section 303 of ERISA), (j) the failure by Holdings, the Borrower, any other Subsidiary, or any of their ERISA Affiliates to make by its due date, after the expiration of any applicable grace period, a required installment under Section 430(j) of the Code with respect to any Plan, or (k) the failure by Holdings, the Borrower, any other Subsidiary, or any of their ERISA Affiliates to make any required contribution to a Multiemployer Plan, after the expiration of any applicable grace period.

“Events of Default” shall have the meaning assigned to such term in Section 8.01.

“Excess Cash Flow” shall mean, for any Excess Cash Flow Period, (a) Consolidated EBITDA for such period (calculated without giving Pro Forma Effect to any Specified Transaction and without giving effect to clauses (j)(i) and (w)(i) of the definition of Consolidated EBITDA), plus (b) any decrease in Working Capital for such period, minus, (c) in each case, without duplication:

(i) scheduled principal payments (including the principal component of payments under Capital Lease Obligations) in respect of Indebtedness of Holdings or any of its Subsidiaries made during such Excess Cash Flow Period to the extent not funded with the proceeds of Indebtedness (other than revolving Indebtedness); minus

 

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(ii) without duplication of amounts deducted pursuant to clause (xvi) below in any prior Excess Cash Flow Period, the sum of (A) Capital Expenditures made during such Excess Cash Flow Period to the extent not funded with the proceeds of Equity Issuances or Indebtedness (other than revolving Indebtedness) and (B) expenditures made during such Excess Cash Flow Period from proceeds of Asset Sales and Casualty Events to the extent such proceeds are included in Consolidated EBITDA; minus

(iii) cash payments in respect of Consolidated Interest Expense made during such Excess Cash Flow Period; minus

(iv) amounts added back to Consolidated EBITDA pursuant to clauses (d), (e), (g), (m) and (s) of the definition thereof during such Excess Cash Flow Period, in each case to the extent paid in cash during such Excess Cash Flow Period and not funded with the proceeds of Equity Issuances or Indebtedness (other than revolving Indebtedness); minus

(v) amounts added back to Consolidated EBITDA pursuant to clauses (b), (c), (f), (i), (j), (k), (n) and (q) of the definition thereof during such Excess Cash Flow Period, in each case (other than with respect to clauses (b) and (n) of the definition of Consolidated EBITDA) solely to the extent the underlying charge, expense or loss does not constitute a non-cash charge, expense or loss;

(vi) any increase in Working Capital for such period; minus

(vii) amounts paid in cash for such period in respect of long-term liabilities (other than Indebtedness), to the extent not funded with the proceeds of Indebtedness (other than revolving Indebtedness); minus

(viii) [reserved];

(ix) the aggregate amount of any premium, make-whole or penalty payments actually paid in cash during such period that are made in connection with any repayment, early extinguishment or conversion of Indebtedness or hedging obligations or other derivative instruments to the extent such payments are not (x) expensed during such period or are not deducted in calculating Consolidated Net Income or (y) funded with the proceeds of Indebtedness (other than revolving Indebtedness); minus

(x) Restricted Payments paid in cash during such period to the extent permitted pursuant to Section 6.07(b)(i), (ii) or (viii)); minus

(xi) [reserved];

(xii) without duplication of the amounts deducted pursuant to clause (xvi) below in any prior Excess Cash Flow Period, the aggregate consideration paid in cash (including Restricted Payments paid in cash during such period to the extent permitted pursuant to Section 6.07(b)(vii) and representing a portion of such consideration) for any Acquisitions consummated prior to the Closing Date, Permitted Acquisitions and other Investments not funded with the proceeds of Equity Issuances or Indebtedness (other than revolving Indebtedness); minus

(xiii) the amount of Permitted Tax Distributions and cash payments in respect of Consolidated Income Tax Expense of Holdings and its Subsidiaries with respect to such period to the extent added back to Consolidated EBITDA in accordance with this Agreement; minus

 

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(xiv) cash expenses in respect of Hedging Agreements during such period; minus

(xv) financing fees, acquisition and development of software and other Intellectual Property and any other cash expenditures, in each case, that are capitalized in accordance with GAAP; minus

(xvi) the aggregate consideration required to be paid in cash by Holdings or any of its Subsidiaries pursuant to binding contracts (the “Contract Consideration”) entered into prior to or during such period relating to Permitted Acquisitions, Investments or Capital Expenditures to be consummated or made during the period of four consecutive fiscal quarters of the Borrower following the end of such period; provided that to the extent (i) the aggregate amount of cash payments actually utilized to finance such Permitted Acquisitions, Investments or Capital Expenditures during such period of four consecutive fiscal quarters is less than the Contract Consideration or (ii) such cash payments are funded with the proceeds of Equity Issuances or Indebtedness (other than revolving Indebtedness), the amount of such shortfall or such portion funded with the proceeds of Equity Issuances or Indebtedness (other than revolving Indebtedness) shall be added to the calculation of Excess Cash Flow at the end of such period of four consecutive fiscal quarters.

“Excess Cash Flow Percentage” shall mean, with respect to an Excess Cash Flow Period, 50%; provided that (a) if the Total Net Leverage Ratio at the end of the applicable Excess Cash Flow Period is greater than 3.40:1.00 but less than or equal to 4.25:1.00, such percentage shall be 25% and (b) if the Total Net Leverage Ratio at the end of the applicable Excess Cash Flow Period is less than or equal to 3.40:1.00, such percentage shall be 0%.

“Excess Cash Flow Period” shall mean (i) the fiscal years of Holdings ending December 31, 2018 and December 31, 2019, (ii) the two fiscal quarter-period of Holdings commencing on July 1, 2022 and ending December 31, 2022 and (iii) each fiscal year of Holdings ending on or after December 31, 2023.

“Excess Proceeds” shall mean Net Cash Proceeds from Asset Sales and Casualty Events in an aggregate amount in excess of $1,500,000 per annum that are not applied or invested as provided in Section 2.09(b)(vi).

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Excluded Account” shall mean any deposit account, securities account or commodities account (a) used solely for payroll, payroll taxes and other employee wage and benefits payments, (b) constitutes a trust, fiduciary, escrow or tax payment account, including, without limitation, sales tax accounts, (c) constitutes a zero balance deposit account, (d) that is designated as an escrow account or that holds funds for the benefit of third parties, (e) in which less than $1,250,000 is maintained on average over any period of 30 consecutive days, (f) used primarily for deposits of governmental receivables or (g) that is maintained solely to hold the proceeds of any Receivables Facility that is permitted hereunder (other than any Existing Receivables Facility), is subject to the Lien of the counterparty with respect to such Receivables Facility and is prohibited by the terms of the definitive agreements with respect to such Receivables Facility from being subject to the Lien of the Collateral Agent.

 

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“Excluded Collateral” shall mean (a) any fee-owned real property with a fair market value (as reasonably determined in good faith by the Borrower as of the Closing Date, or, if such real property is acquired after the Closing Date, as of the date of acquisition thereof) of less than $3,000,000 and all leasehold interests in real property (it being understood that there shall be no requirement to obtain any landlord waivers, estoppels or collateral access letters); (b) motor vehicles, aircrafts, and other assets subject to certificates of title, but only to the extent a Lien thereon cannot be perfected by the filing of a financing statement (or equivalent); (c) Letter-of-Credit Rights with a value of less than $2,000,000 in the aggregate for all such Letter-of-Credit Rights, except to the extent constituting Supporting Obligations in respect of other Collateral which may be perfected by the filing of a financing statement (or equivalent) and Commercial Tort Claims with a value of less than $2,000,000 in the aggregate for all such Commercial Tort Claims; (d) Equity Interests of any CFC or CFC Holdco other than 65% of the outstanding Equity Interests of any first-tier CFC or first-tier CFC Holdco, and all direct or indirect assets of any CFC or CFC Holdco; (e) (i) Equity Interests constituting Margin Stock and (ii) any Equity Interests in any person not constituting a Wholly Owned Subsidiary to the extent that (x) such Equity Interests cannot be pledged without the consent of one or more third parties and which consent has not been obtained or to the extent prohibited by such person’s Organizational Documents (to the extent such consent requirement or prohibition exists on the Closing Date or on the date of acquisition of such Equity Interests and was not entered into in contemplation of such acquisition) or (y) the pledge of such Equity Interests (including any exercise of remedies) would result in a change of control, repurchase obligation or other material adverse consequence to any of the Loan Parties or such person not constituting a Wholly Owned Subsidiary; (f) any contract, lease, permit, license, or license agreement covering real or personal property or any rights or interest in any contract, lease, permit, license, or license agreement covering real or personal property of any Loan Party, in each case, to the extent permitted by this Agreement, if under the terms of such contract, lease, permit, license, or license agreement, or applicable law (including, without limitation, rules or regulations of any Governmental Authority) with respect thereto, the grant of a security interest or Lien therein does or would violate or invalidate such contract, lease, permit, license, or license agreement or create a right of termination in favor of any other party thereto (other than in favor of a Loan Party or a Subsidiary thereof); (g) any asset owned by any Loan Party on the Closing Date or hereafter acquired by a Loan Party that is subject to a Lien securing a Purchase Money Obligation (including any Capital Lease Obligations) or other obligation permitted to be incurred pursuant to Section 6.01(d), (n) or (u) or Section 6.01(b) to the extent such obligation is of the same type as any obligation permitted to be incurred pursuant to Section 6.01(d), (n) or (u), only to the extent and for so long as the contract or other agreement pursuant to which such Lien is granted (or the documentation providing for such Purchase Money Obligation (or such Capital Lease Obligation)) prohibits the creation of any other Lien on such asset and its proceeds or such Lien would violate or invalidate such contract or other agreement or create a right of termination in favor of any other party thereto (other than in favor of a Loan Party or a Subsidiary thereof); (h) governmental licenses, state or local franchises, charters and authorizations or any other particular asset or right under contract, to the extent that the grant of a security interest or Lien therein is prohibited under applicable law (including, without limitation, rules or regulations of any Governmental Authority) or the pledge or creation of a security interest in which would require governmental consent, approval, license or authorization (it being agreed that there shall be no requirement to comply with the Federal Assignment of Claims Act or any similar statute) or the consent of a third party (to the extent such consent requirement or prohibition exists on the Closing Date or on the date of acquisition of such license, franchise, charter, authorization or other asset or right under contract and was not entered into in contemplation of such acquisition); (i) any United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law; provided that upon submission and acceptance by the United States Patent and Trademark Office of an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or any successor provision), such intent-to-use trademark application shall be considered Collateral; (j) Excluded Accounts and the funds or other property held therein; (k) assets as to which the Lender Representative and the Borrower reasonably agree in writing that the cost and/or burden

 

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of obtaining such a security interest or perfection thereof (including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary)) are excessive in relation to the benefit to the Lenders of the security to be afforded thereby; or (l) any property or assets for which the creation or perfection of pledges of, or security interests in, such property or assets in favor of the Collateral Agent would result in material adverse tax consequences to Holdings and its Subsidiaries, taken as a whole (as reasonably determined in good faith by the Borrower); provided that (A) the foregoing exclusions of clause (f) through (h) shall in no way be construed (1) to apply to the extent that any described prohibition or restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the New York UCC or other applicable law or (2) to apply to the extent that any consent or waiver has been obtained that would permit Collateral Agent’s security interest or Lien to attach notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license, or license agreement or governmental licenses, state or local franchises, charters or authorizations, as applicable; and (B) the foregoing exclusions of clauses (a) through (h) shall in no way be construed to limit, impair, or otherwise affect any of Collateral Agent’s continuing security interests in and Liens upon any rights or interests of any Loan Party in or to any proceeds or receivables therefrom, including from the sale, license, lease, or other dispositions of any such contract, lease, permit, license, license agreement, governmental license, state or local franchise, charter or authorization, Accounts or Equity Interests.

“Excluded Subsidiary” shall mean, with respect to Holdings (provided, that in no event shall the Borrower constitute an Excluded Subsidiary):

(a) any Immaterial Subsidiary (provided that, to the extent any such Subsidiary no longer qualifies as an Immaterial Subsidiary, such Subsidiary shall cease to be an Excluded Subsidiary by virtue of this clause (a));

(b) each CFC Holdco (provided that, to the extent any such Subsidiary shall cease to be a CFC Holdco, such Subsidiary shall cease to be an Excluded Subsidiary by virtue of this clause (b));

(c) each Foreign Subsidiary other than the Schroth German Subsidiaries (provided that, to the extent any such Subsidiary shall become a Domestic Subsidiary, it shall cease to be an Excluded Subsidiary by virtue of this clause (c));

(d) each Subsidiary that is not a Wholly Owned Subsidiary (provided that, to the extent any such Subsidiary shall become a Wholly Owned Subsidiary, such Subsidiary shall cease to be an Excluded Subsidiary by virtue of this clause (d));

(e) any Subsidiary existing on or acquired after the Closing Date to the extent that, and for so long as, such Subsidiary is prohibited by any Requirements of Law from guaranteeing the Obligations;

(f) any Subsidiary existing on or acquired after the Closing Date, to the extent and for so long as (but only so long as) (i) the guarantee of the Obligations by such Subsidiary would require the consent, approval, license or authorization of a Governmental Authority which has not been obtained or (ii) solely in the case of Subsidiaries acquired after the Closing Date pursuant to a Permitted Acquisition, by any restriction of contract (to the extent such restriction was not entered into or did not arise in contemplation of such acquisition) (including any requirement to obtain third party consent which has not been obtained);

(g) each Subsidiary that is a direct or indirect Subsidiary of a Foreign Subsidiary (other than any Schroth German Subsidiary) or a CFC Holdco;

 

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(h) any not-for-profit Subsidiaries;

(i) any special purposes entities;

(j) any Subsidiary to the extent that the Lender Representative and the Borrower reasonably agree in writing that the cost and/or burden of obtaining a guarantee are excessive in relation to the benefit to the Lenders;

(k) any Subsidiary to the extent the provision of a guarantee by such Subsidiary would result in material adverse tax consequences to Holdings and its Subsidiaries, taken as a whole (as reasonably determined in good faith by the Borrower);

(l) captive insurance companies;

(m) any direct or indirect Subsidiary of a Subsidiary that is excluded pursuant to clauses (a) through (l) above; and

(n) solely in the case of any Hedging Obligations that would otherwise be secured by Collateral, any Subsidiary that is not an “eligible contract participant” as defined in the Commodity Exchange Act;

provided that, notwithstanding the foregoing, “Excluded Subsidiary” shall not include any of the Schroth German Subsidiaries. Upon any such Subsidiary ceasing to be an Excluded Subsidiary pursuant to clauses (a) through (n) above, such Subsidiary shall comply with Section 5.10, to the extent applicable.

“Excluded Swap Obligation” shall mean with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any guarantee thereof) is or becomes illegal or unlawful under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) (a) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act at the time the guarantee of or the grant of such security interest by such Guarantor would otherwise have become effective with respect to such related Swap Obligation or (b) in the case of a Swap Obligation that is subject to a clearing requirement pursuant to section 2(h) of the Commodity Exchange Act, because such Guarantor is a “financial entity,” as defined in section 2(h)(7)(C) of the Commodity Exchange Act, at the time the guarantee of (or grant of such security interest by, as applicable) such Guarantor becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interests is or becomes illegal.

“Excluded Taxes” shall mean, with respect to any Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder or under any other Loan Document, (a) Taxes imposed on or measured by its net income, gross income, net profits or gross profits (in each case, however denominated) and franchise or capital Taxes imposed on it, by a jurisdiction (or any political subdivision thereof) (i) as a result of such recipient being organized or having its principal office (or, in the case of any Lender, applicable lending office) in, such jurisdiction, or (ii) as a result of any other present or former connection between the jurisdiction imposing such Tax and such recipient other than a connection solely as a result of having executed or delivered, become a party to, performed its obligations or received a payment under, received or perfected a security interest under,

 

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engaged in any other transaction pursuant to or enforced any Loan Document or sold or assigned an interest in any Loan or any Loan Document, (b) any branch profits Taxes imposed under Section 884(a) of the Code or any similar Tax by any jurisdiction described in clause (a), (c) in the case of a Lender, any U.S. federal withholding Tax that is imposed on amounts payable to such Lender pursuant to laws in force at the time such Lender becomes a party hereto (or designates a new lending office), except (x) to the extent that such Lender (or its assignor, if any) was entitled, immediately prior to the designation of a new lending office (or assignment), to receive additional amounts from any Loan Party with respect to such withholding Tax pursuant to Section 2.14(a) or (y) if such Lender is an assignee pursuant to a request by the Borrower under Section 2.15, (d) Taxes attributable to a Lender’s failure to comply with Section 2.14(e), and (e) any U.S. federal withholding Tax imposed under FATCA.

“Existing Receivables Facilities” shall mean (a) the Receivables Facility of AGC Acquisition LLC pursuant to the Supplier Agreement, dated as of May 28, 2013, with Citibank, N.A. and (b) the Receivables Facility of Applied Engineering, Inc. pursuant to the Supplier Agreement, dated as of May 11, 2004, with Citibank, N.A., in each case, as amended, supplemented, modified or restated from time to time in a manner not materially adverse to the Lenders (it being agreed that any amendment, supplement, modification or restatement to any Existing Receivables Facility with the effect of adding or replacing the Buyer (as defined in the applicable Existing Receivables Facility) named therein (other than any replacement of such Buyer with its successors by operation of law) shall be deemed to be materially adverse to the Lenders).

“Existing Term Loan Tranche” shall have the meaning assigned to it in Section 2.16(a).

“Extended Term Loan” shall have the meaning assigned to such term in Section 2.16(a).

“Extending Term Loan Lender” shall have the meaning assigned to such term in Section 2.16(b).

“Extension” means the establishment of an Extension Series by amending a Loan pursuant to Section 2.16 and the applicable Extension Amendment.

“Extension Amendment” shall have the meaning assigned to it in Section 2.16(c).

“Extension Election” shall have the meaning assigned to it in Section 2.16(b).

“Extension Request” shall have the meaning assigned to it in Section 2.16(a).

“Extension Series” shall have the meaning assigned to it in Section 2.16(a).

“FATCA” shall mean (a) Sections 1471 through 1474 (including, for the avoidance of doubt, any agreement entered into pursuant to Section 1471(b)(1)) of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and the U.S. Treasury Regulations and official published guidance with respect thereto, whether in existence on the date hereof or promulgated thereafter and (b) any intergovernmental agreement implementing (a) above and including any rules or guidance implementing such intergovernmental agreements.

“FCPA” shall mean the United States Foreign Corrupt Practices Act 1977, 18 U.S.C. 78dd-1 et seq., as amended.

 

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

“Fee Letter” shall mean that certain Fee Letter, dated as of September 8, 2017, by and between the Borrower and Blackstone.

“Fifth Amendment” shall mean that certain Fifth Amendment to Credit Agreement dated as of the Fifth Amendment Effective Date by and among the Borrower, Holdings, the Guarantors party thereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent.

“Fifth Amendment Effective Date” shall mean October 16, 2019.

“Fifth Amendment Delayed Draw Term Loan Commitment Increase” shall have the meaning assigned to such term in the definition of “Delayed Draw Term Loan Commitment”.

“Financial Officer” of any person shall mean the chief executive, chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of such person or such other person reasonably acceptable to the Administrative Agent.

“First Amendment” shall mean that certain First Amendment to Credit Agreement dated as of the First Amendment Effective Date by and among the Borrower, Holdings, the Guarantors party thereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent.

“First Amendment Effective Date” shall mean August 10, 2018.

“Floor” shall mean 1.00% per annum.

“Foreign Lender” shall mean any Lender that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“Foreign Plan” shall mean, except for each plan, scheme or arrangement to which contributions are mandated by a government or governmental authority other than the United States, any employee benefit plan maintained or contributed to by any Company primarily to provide defined benefit pension benefits to employees employed outside the United States.

“Foreign Subsidiary” shall mean a Subsidiary that is not a Domestic Subsidiary.

“Fourth Amendment” shall mean that certain Fourth Amendment to Credit Agreement dated as of the Fourth Amendment Effective Date by and among the Borrower, Holdings, the Guarantors party thereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent.

“Fourth Amendment Effective Date” shall mean May 17, 2019.

“Fourth Amendment Delayed Draw Term Loan Commitment Increase” shall have the meaning assigned to such term in the definition of “Delayed Draw Term Loan Commitment”.

“GAAP” shall mean generally accepted accounting principles in the United States, applied in accordance with Section 1.04.

 

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“GE Capital Lease” shall mean the Real Property lease pursuant to the Lease Agreement, dated as of April 12, 2017, by and between 151 Sheree Boulevard Partners, LLC and General Ecology, Inc., as amended, restated, supplemented or otherwise modified from time to time.

“GE Earn-out” shall mean the future payment(s) of existing earn-out obligations incurred in connection with the acquisition of General Ecology, Inc., a Pennsylvania corporation.

“German Security Documents” means, subject to the Agreed Security Principles, the following German law governed security agreements: (a) a share or interest pledge agreement over the shares or partnership interests in any Schroth German Subsidiary; (b) account pledge agreements in respect of all bank accounts held by any Schroth German Subsidiary; (c) an assignment of German law intercompany receivables and third party trade receivables owed to any Schroth German Subsidiary and (d) a pledge agreement over any intellectual property rights owned by any Schroth German Subsidiary.

“GmbH Guarantee” shall have the meaning assigned to it in Section 7.12(a).

“GmbH Guarantee Obligations” shall have the meaning assigned to it in Section 7.12(a).

“GmbH Guarantor” shall have the meaning assigned to it in Section 7.12(a).

“GmbHG” shall mean the German Limited Liability Companies Act (Gesetz betreffend Gesellschaften mit beschränkter Haftung).

“Governmental Authority” shall mean the government of the United States or any other nation, or of any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guaranteed Obligations” shall have the meaning assigned to such term in Section 7.01.

“Guarantees” shall mean the guarantees issued pursuant to Article VII by the Guarantors.

“Guarantors” shall mean (a) Holdings and each Subsidiary of Holdings listed on Schedule 1.01(a) on the Closing Date and (b) each other Subsidiary that is or becomes a party to this Agreement pursuant to Section 5.10(b).

“Hazardous Materials” shall mean the following: hazardous substances; hazardous wastes; polychlorinated biphenyls (“PCBs”) or any substance or compound containing PCBs; asbestos or any asbestos-containing materials in any form or condition; radon or any other radioactive materials; petroleum, crude oil or any fraction thereof; and any other pollutant or contaminant or chemicals, wastes, materials, compounds, constituents or substances, regulated under any Environmental Laws.

“Hedge Bank” shall mean any person that enters into a Hedging Agreement with Holdings or any Subsidiary; provided that, in the case of any Secured Hedging Agreement, if such person is not a Lender, (a) such person and the Secured Hedging Agreement between such person and Holdings or its relevant Subsidiary are reasonably acceptable to the Lender Representative and (b) such person executes and delivers to the Agents a letter agreement in form and substance reasonably acceptable to the Agents, the Lender Representative and the Borrower pursuant to which such person (i) appoints the Agents as its agents under the applicable Loan Documents and (ii) agrees to be bound by the provisions of Article IX and Section 8.03 of this Agreement and corresponding or similar provisions in any Security Document, in each case, as if it were a Lender.

 

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“Hedging Agreement” shall mean (i) any swap, cap, collar, forward purchase or similar agreements or arrangements dealing with interest rates, currency exchange rates or commodity prices, either generally or under specific contingencies, whether or not any such transaction is governed by or subject to any master agreement, and (ii) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Hedging Obligations” shall mean obligations under or with respect to Hedging Agreements.

“Holdings” shall have the meaning assigned to such term in the preamble hereto.

“Hydra” means Hydra-Electric Company, a California corporation.

“Hydra Acquisition” means the acquisition by the Borrower of 100% of the Equity Interests of Hydra pursuant to the Hydra Purchase Agreement.

“Hydra Acquisition Equity Contribution” means the equity contribution to be provided by the Closing Date Investors or other investors reasonably satisfactory to the Lender Representative in Holdings or its direct or indirect parent company of at least $33,000,000 (as adjusted in accordance with clause (ii) of the definition of “Hydra Purchase Agreement Prohibited Amendment”), with all of such equity investment to be made in cash in exchange for common Equity Interests, the cash proceeds of which shall be applied to consummate the Hydra Acquisition.

“Hydra Purchase Agreement” means that certain Stock Purchase Agreement, dated as of the Fourth Amendment Effective Date, by and among Hydra, Wilson HEC, LLC and the Borrower, as amended, supplemented, modified or restated from time to time.

“Hydra Purchase Agreement Prohibited Amendment” means, with respect to the Hydra Purchase Agreement, any modifications, amendments or express waivers or consents thereto that are adverse in any material respect to the Lenders in their capacities as such without the consent of the Lender Representative (it being understood and agreed that (i) any change to the definition of “Material Adverse Effect” contained in the Hydra Purchase Agreement shall be deemed to be materially adverse to the Lenders and (ii) any increase or reduction in the purchase price shall be deemed not to be materially adverse to the Lenders if, (x) in the case of any increase in the purchase price, such increase shall be funded solely with an increase in the Hydra Acquisition Equity Contribution, or (y) in the case of any decrease in the purchase price, (1) such decrease shall not exceed $7,000,000 and (2) 50% of such purchase price decrease is allocated to reduce the Hydra Acquisition Equity Investment and 50% of such purchase price decrease is allocated to permanently reduce the Delayed Draw Term Loan Commitment, provided, further, that in the case of clause (ii), working capital adjustments, purchase price adjustments and other similar adjustments set forth in the Hydra Purchase Agreement shall be deemed not to be either an increase or a decrease to the purchase price.

“Immaterial Subsidiary” shall mean any Subsidiary of Holdings (provided, that in no event shall the Borrower constitute an Immaterial Subsidiary) that (a) did not, as of the last day of the fiscal quarter of Holdings most recently ended for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable (or, as of the Closing Date, the most recent financial

 

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statements delivered prior to the Closing Date), have assets (on an individual basis) with a value in excess of 2.5% of Consolidated Total Assets (for Holdings and its Subsidiaries on a consolidated basis) or Consolidated EBITDA (on an individual basis) representing in excess of 2.5% of Consolidated EBITDA (for Holdings and its Subsidiaries on a consolidated basis) as of such date for the Test Period most recently ended, and (b) taken together with all Immaterial Subsidiaries as of the last day of the fiscal quarter of Holdings most recently ended for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable (or, as of the Closing Date, the most recent financial statements delivered prior to the Closing Date), did not have assets with a value in excess of 5.0% of Consolidated Total Assets or Consolidated EBITDA representing in excess of 5.0% of Consolidated EBITDA (for Holdings and its Subsidiaries on a consolidated basis) as of such date for the Test Period most recently ended (or as of the Closing Date, as applicable); provided that if, as of the last day of the fiscal quarter of Holdings most recently ended for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable (or, as of the Closing Date, the most recent financial statements delivered prior to the Closing Date), the Consolidated Total Assets or Consolidated EBITDA of all Subsidiaries so designated by the Borrower as “Immaterial Subsidiaries” shall have, as of the last day of such Test Period, exceeded the limits set forth in clauses (a) or (b) above, then within ten (10) Business Days after the date such financial statements are so delivered (or so required to be delivered), the Borrower shall redesignate one or more Immaterial Subsidiaries in a written notice to the Administrative Agent, such that, as a result thereof, the Consolidated Total Assets and Consolidated EBITDA of all Subsidiaries that are still designated as “Immaterial Subsidiaries” do not exceed such limits. Upon any such Subsidiary ceasing to be an Immaterial Subsidiary pursuant to the preceding sentence, such Subsidiary shall comply with Section 5.10, to the extent applicable.

“Increasing Lender” shall have the meaning assigned to such term in Section 2.17(a).

“Incremental Amendment” shall have the meaning assigned to such term in Section 2.17(f).

“Incremental Amendment Date” shall have the meaning assigned to such term in Section 2.17(d).

“Incremental Facility Closing Date” shall have the meaning assigned to such term in Section 2.17(b).

“Incremental Lenders” shall have the meaning assigned to such term in Section 2.17(a).

“Incremental Loan Request” shall have the meaning assigned to such term in Section 2.17(a).

“Incremental Term Loan” shall have the meaning assigned to such term in Section 2.17(b).

“Incremental Term Loan Commitments” shall have the meaning assigned to such term in Section 2.17(a).

“Incremental Term Loan Increase” shall have the meaning assigned to such term in Section 2.17(a).

“Incur” shall mean issue, assume, guarantee, incur or otherwise become directly, indirectly or contingently liable for any Indebtedness, including by a guaranty, put, purchase agreement or other agreement, contingent or otherwise, to purchase, redeem, retire, defease or otherwise acquire for value such

 

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Indebtedness; provided, however, that any Indebtedness of a person existing at the time such person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such person at the time it becomes a Subsidiary. The term “Incurrence” when used as a noun shall have a correlative meaning. Solely for purposes of determining compliance with Section 6.01, (a) amortization of debt discount or the accretion of principal with respect to a non-interest bearing or other discount security, (b) the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Equity Interests in the form of additional Equity Interests of the same class and with the same terms and (c) the obligation to pay a premium in respect of Indebtedness arising in connection with the issuance of a notice of redemption or prepayment or making of a mandatory offer to purchase such Indebtedness, in each case shall be deemed not to be the Incurrence of Indebtedness.

“Indebtedness” of any person shall mean, without duplication, (a) all obligations of such person for borrowed money; (b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of such person under conditional sale or other title retention agreements relating to property purchased by such person; (d) all obligations of such person issued or assumed as the deferred purchase price of property or services (excluding (i) trade and other ordinary course accounts payable, similar obligations to trade creditors and accruals for payroll and similar liabilities, in each case, incurred or accrued in the ordinary course of business, and, unless such payable, other obligation or liability is the subject of a bona fide dispute, not more than 180 days overdue and (ii) any earn-out obligation or similar contingent payment obligation, except to the extent that such obligation is not paid when earned and due and payable); (e) all Indebtedness of others secured by any Lien on property owned or acquired by such person, whether or not the obligations secured thereby have been assumed, but limited to the fair market value of such property; (f) all Capital Lease Obligations and Purchase Money Obligations; (g) all Hedging Obligations to the extent required to be reflected on a balance sheet of such person; (h) [reserved]; (i) all obligations of such person for the reimbursement of any obligor in respect of letters of credit, letters of guaranty, bankers’ acceptances and similar credit transactions; (j) any Disqualified Capital Stock of such Person; and (k) all Contingent Obligations of such person in respect of Indebtedness of others of the kinds referred to in clauses (a) through (j) above. The Indebtedness of any person shall include the Indebtedness of any other entity (including any partnership in which such person is a general partner) to the extent such person is liable therefor as a result of such person’s ownership interest in or other relationship with such entity, except (other than in the case of general partner liability) to the extent that terms of such Indebtedness expressly provide that such person is not liable therefor.

“Indemnified Taxes” shall mean all Taxes other than Excluded Taxes imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document.

“Indemnitee” shall have the meaning assigned to such term in Section 10.03(b).

“Information” shall have the meaning assigned to such term in Section 10.12.

“Initial Borrower” shall have the meaning assigned to such term in the preamble hereto.

“Initial Term Loan” shall mean the loans made on the Closing Date pursuant to Section 2.01(a).

“Initial Term Loan Commitment” shall mean, with respect to any Lender, its obligation to make Initial Term Loans to the Borrower on the Closing Date pursuant to Section 2.01(a) in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Initial Term Loan Commitment”. The aggregate principal amount of the Initial Term Loan Commitments on the Closing Date (prior to giving effect to the making of the Initial Term Loans on the Closing Date) is $160,000,000.00.

 

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“Intellectual Property” shall have the meaning assigned to such term in the Security Agreement.

“Intercompany Note” shall mean a promissory note by and among Holdings and each of its Subsidiaries in form and substance reasonably satisfactory to the Lender Representative.

“Interest Election Request” shall mean a request by the Borrower to convert or continue a Loan in accordance with Section 2.06, substantially in the form of Exhibit D or such other form as is reasonably acceptable to the Administrative Agent.

“Interest Payment Date” shall mean (a) with respect to any ABR Loan, the last Business Day of each March, June, September and December to occur during any period in which such Loan is outstanding, commencing December 31, 2017, (b) with respect to any Term SOFR Loan, the last day of the Interest Period applicable to the Loan and, in the case of a Term SOFR Loan with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and (c) with respect to any Loan, the Maturity Date applicable hereto.

“Interest Period” shall mean, with respect to any Term SOFR Loans, the period commencing on the date of the issuance of such Loans and ending on the numerically corresponding day in the calendar month that is one, two, three or six months (or, if agreed by all Lenders, twelve months or less than one month) thereafter, as the Borrower may elect; provided, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period, (c) no Interest Period shall extend beyond the Maturity Date and (d) at any one time there shall be no more than five different Interest Periods in effect. For purposes hereof, the date of the issuance of a Loan initially shall be the date on which such Loan is made and thereafter shall be the effective date of the most recent conversion or continuation of such Loan.

“Investment” shall mean, with respect to any person, any investment by such person in any other person (including Affiliates) in the form of loans, guarantees, advances, or capital contributions (excluding (a) commission, travel, and similar advances to officers and employees of such person made in the ordinary course of business for bona fide business purposes, and (b) bona fide Accounts arising in the ordinary course of business), purchases or other acquisitions of Indebtedness, Equity Interests, or all or substantially all of the assets of such other person (or of any division or business line of such other person).

“Investment Property” shall have the meaning assigned to such term in the Security Agreement.

“Joinder Agreement” shall mean a joinder agreement substantially in the form of Exhibit E or such other form as is reasonably acceptable to the Lender Representative.

“Latest Maturity Date” shall mean, at any time, the latest Maturity Date applicable to any Loan hereunder at such time, including the latest maturity date of any Extended Term Loan, as extended in accordance with this Agreement from time to time.

 

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“Leases” shall mean any and all leases, subleases, tenancies, options, concession agreements, rental agreements, occupancy agreements, franchise agreements, access agreements and any other agreements (including all amendments, extensions, replacements, renewals, modifications and/or guarantees thereof), whether or not of record and whether now in existence or hereafter entered into, affecting the use or occupancy of all or any portion of any Real Property.

“Lender Representative” shall mean, initially and as of the Closing Date and until the earlier of such time as Blackstone Designees cease to constitute Required Lenders or Blackstone has resigned by written notice to the Required Lenders and the Borrower, Blackstone; it being agreed that, upon and following such time, any determination to be made by the Lender Representative hereunder shall be made by the Required Lenders.

“Lenders” shall mean (a) the financial institutions that have become a party hereto on the Closing Date and (b) any financial institution that has become a party hereto pursuant to an Assignment and Assumption and in accordance with the terms of this Agreement, other than, in each case, any such financial institution that has ceased to be a party hereto pursuant to an Assignment and Assumption.

“Letter-of-Credit Rights” shall mean “letter of credit rights” as such term is defined in the UCC.

“Lien” shall mean, with respect to any property, (a) any mortgage, deed of trust, lien, pledge, encumbrance, claim, charge, collateral assignment, hypothecation, security interest or encumbrance of any kind or any filing of any financing statement under the UCC or any other similar notice of lien under any similar notice or recording statute of any Governmental Authority (other than filings or similar notices which do not evidence a valid lien or which have been filed without authorization), including any easement, right-of-way or other encumbrance on title to Real Property, in each of the foregoing cases whether voluntary or imposed by law; and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such property.

“Limited Condition Acquisition” shall mean any Permitted Acquisition or similar Permitted Investment the consummation of which is not conditioned on the availability of, or on obtaining, third-party financing.

“Limited Conditionality Election” shall have the meaning assigned to such term in Section 1.06.

“Limited Conditionality Test Date” shall have the meaning assigned to such term in Section 1.06.

“Loan Documents” shall mean this Agreement, the Notes, the Agency Fee Letter, the Fee Letter, the Eleventh Amendment Fee Letter and the Security Documents.

“Loan Parties” shall mean the Borrower and the Guarantors.

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

“Loar Acquisition” shall have the meaning assigned to such term in the third recital hereto.

“Loar Acquisition Agreement” shall have the meaning assigned to such term in the first recital hereto.

 

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“Loar Group” shall have the meaning assigned to such term in the preamble hereto.

“Loar Target” shall have the meaning assigned to such term in the first recital hereto.

“Make-Whole Premium” shall mean, with respect to a Loan at any applicable date prior to the first anniversary of the Closing Date, (a) the present value at the applicable date of (i) the prepayment price of such Loan on the first anniversary of the Closing Date plus (ii) all required remaining scheduled interest payments due on such Loan to the first anniversary of the Closing Date (assuming that the rate of interest will be equal to the rate of interest in effect on the date of notice of prepayment), other than accrued but unpaid interest to such prepayment date, computed using a discount rate equal to the Treasury Rate plus 50 basis points per annum discounted on a semi-annual bond equivalent basis, over (b) the principal amount of such Loan at the applicable date.

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

“Master Agreement” shall have the meaning assigned to such term in the definition of “Hedging Agreement”.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, assets, financial condition or results of operations, in each case, of Holdings and its Subsidiaries, taken as a whole; (b) the ability of the Loan Parties (taken as a whole) to perform any of their payment obligations under any Loan Document; or (c) the rights of or benefits or remedies (taken as a whole) available to the Lenders or the Collateral Agent under the Loan Documents (taken as a whole).

“Material Indebtedness” shall mean any Indebtedness (other than the Loans or Hedging Obligations) of Holdings or any of its Subsidiaries in an aggregate outstanding principal amount exceeding $3,500,000; provided that the Indebtedness under the GE Capital Lease shall not constitute Material Indebtedness hereunder to the extent the early termination of the GE Capital Lease could not reasonably be expected to result in a Material Adverse Effect.

“Maturity Date” shall mean, (a) with respect to the Initial Term Loans, any Delayed Draw Term Loans and the Eleventh Amendment Incremental Term Loans (other than Extended Term Loans), April 2, 2026; (b) with respect to the Revolving Credit Commitments and any Revolving Credit Loans, April 2, 2025; (c) with respect to any Incremental Term Loans, the final maturity date as specified in the applicable Incremental Amendment; and (d) with respect to any Extended Term Loans, the final maturity date as specified in the applicable Extension Amendment; provided that, in each case, if such day is not a Business Day, the Maturity Date shall be the Business Day immediately preceding such day.

“Maverick Earn-out” shall mean the future payment(s) of existing earn-out obligations incurred in connection with the acquisition of Maverick Molding Co., an Ohio corporation.

“Maximum Rate” shall have the meaning assigned to such term in Section 10.14.

“Minimum Cure Condition” shall have the meaning assigned to such term in Section 8.04.

“Mortgage” shall mean an agreement, including, but not limited to, a mortgage, deed of trust, assignment of leases and rents or any other document, creating and evidencing a Lien on a Mortgaged Property, which shall be substantially in the form reasonably satisfactory to the Lender Representative, in each case, with such schedules and including such provisions as shall be necessary to conform such document to applicable local or as shall be customary under applicable local law.

 

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“Mortgaged Property” shall mean (a) each owned Real Property identified as a Mortgaged Property on Schedule 3(b) to the Perfection Certificate dated as of the Closing Date and (b) each owned Real Property located in the United States, if any, which shall be subject to a Mortgage delivered after the Closing Date pursuant to Section 5.10.

“Multiemployer Plan” shall mean a multiemployer plan within the meaning of Section 4001(a)(3) or Section 3(37) of ERISA (a) to which any Loan Party or any ERISA Affiliate is making or accruing an obligation to make contributions; or (b) to which any Loan Party or any ERISA Affiliate has within the preceding six plan years made contributions and with respect to which any Loan Party or any ERISA Affiliate has any ongoing obligation or could reasonably be expected to incur liability.

“Net Asset Determination” shall have the meaning assigned to such term in Section 7.12(b)(vi)(F).

“Net Cash Proceeds” shall mean an amount equal to:

(a) with respect to any Asset Sale, the cash proceeds received by Holdings or any of its Subsidiaries (including cash proceeds subsequently received (as and when received by Holdings or any of its Subsidiaries) in respect of non-cash consideration initially received) net of (i) (A) reasonable and customary expenses paid or payable in connection with such sale by Holdings, any of its Subsidiaries or any of its direct or indirect parent companies to third parties who are not Affiliates of Holdings, including brokers’ fees or commissions, legal, accounting and other professional and transactional fees and (B) transfer and similar Taxes and Holdings’ good faith estimate of Taxes paid or payable in connection with such sale by Holdings, any of its Subsidiaries or any of its direct or indirect parent companies (and, without duplication, any Permitted Tax Distributions, pursuant to Section 6.07(b)(vi) to the extent paid or payable in connection with such sale); (ii) amounts provided as a reserve, in accordance with GAAP, against (x) any liabilities under any indemnification obligations associated with such Asset Sale or (y) any other liabilities retained by Holdings or any of its Subsidiaries associated with the properties sold in such Asset Sale (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds); (iii) Holdings’ good faith estimate of payments required to be made with respect to unassumed liabilities relating to the properties sold within one (1) year of such Asset Sale (provided that, to the extent such cash proceeds are not used to make payments in respect of such unassumed liabilities within one (1) year of such Asset Sale, such cash proceeds shall constitute Net Cash Proceeds); (iv) the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money which is secured by a Lien on the properties sold in such Asset Sale (so long as such Lien was permitted to encumber such properties under the Loan Documents at the time of such sale) and which is repaid with such proceeds (other than (A) any such Indebtedness assumed by the purchaser of such properties and (B) the Loans); and (v) in the case of any Asset Sale by a non-Wholly-Owned Subsidiary, the pro rata portion of the Net Cash Proceeds thereof (calculated without regard to this clause (v)) attributable to minority interests and not available for distribution to or for the account of Holdings or a Wholly-Owned Subsidiary as a result thereof;

(b) with respect to any issuance or sale of Equity Interests or Debt Issuance by Holdings or any of its Subsidiaries, the cash proceeds thereof, net of reasonable and customary fees, commissions, costs and other expenses incurred in connection therewith to third parties who are not Affiliates of Holdings; and

 

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(c) with respect to any Casualty Event, the cash insurance proceeds, cash condemnation awards and other cash compensation received in respect thereof, net of (i) all reasonable and customary costs and expenses incurred in connection with the collection of such proceeds, awards or other compensation in respect of such Casualty Event; and (ii) in the case of any Casualty Event of a non-Wholly-Owned Subsidiary, the pro rata portion of the Net Cash Proceeds thereof (calculated without regard to this clause (ii)) attributable to minority interests and not available for distribution to or for the account of Holdings or a Wholly-Owned Subsidiary as a result thereof.

“Ninth Amendment” shall mean that certain Ninth Amendment to Credit Agreement, dated as of the Ninth Amendment Effective Date, by and among the Borrower, Holdings, the Guarantors party thereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent.

“Ninth Amendment Delayed Draw Term Loan Commitment Increase” shall have the meaning assigned to such term in the definition of “Delayed Draw Term Loan Commitment”.

“Ninth Amendment Effective Date” shall mean April 1, 2022.

“Non-Consenting Lender” shall mean any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all or all affected Lenders in accordance with the terms of Section 10.02 and (b) has been approved by the Required Lenders.

“Notes” shall mean any notes evidencing the Commitments under, or the Loans issued pursuant to, this Agreement, substantially in the form of Exhibit F or such other form as is reasonably acceptable to the Administrative Agent.

“NYFRB” shall mean the Federal Reserve Bank of New York.

“Obligations” shall mean (a) obligations of Holdings, the Borrower and the other Loan Parties from time to time arising under or in respect of the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise, and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of Holdings, the Borrower and the other Loan Parties under this Agreement, the other Loan Documents, Secured Cash Management Agreements and Secured Hedging Agreements, and (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of Holdings, the Borrower and the other Loan Parties under or pursuant to this Agreement and the other Loan Documents. Notwithstanding the foregoing, the Obligations shall not include the Excluded Swap Obligations.

“OFAC” shall mean the United States Department of Treasury’s Office of Foreign Assets Control.

“Officer’s Certificate” shall mean a certificate executed by a Responsible Officer in his or her official (and not individual) capacity.

 

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“Organizational Documents” shall mean, with respect to any person, (a) in the case of any corporation, the certificate of incorporation and by-laws (or similar documents) of such person, (b) in the case of any limited liability company, the certificate of formation and operating agreement (or similar documents) of such person, (c) in the case of any limited partnership, the certificate of formation and limited partnership agreement (or similar documents) of such person, (d) in the case of any general partnership, the partnership agreement (or similar document) of such person and (e) in any other case, the functional equivalent of the foregoing, including without limitation, in the case of any entity incorporated or established in Germany, a commercial register extract (Handelsregisterauszug), its articles of association or partnership agreement (Satzung oder Gesellschaftsvertrag), any by-laws (Geschäftsordnung) and a list of shareholders (Gesellschafterliste).

“Other Taxes” shall mean all present or future stamp, court or documentary Taxes or any other excise, intangible, recording, filing, property or similar Taxes arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement or any other Loan Document, except any such Taxes that are described in clause (a)(ii) of the definition of Excluded Taxes imposed with respect to an assignment, grant of a participation, designation of a different lending office or other transfer (other than an assignment, grant of a participation, designation of a different lending office or other transfer made pursuant to Section 2.15).

“Over-Cure Amount” shall have the meaning set forth in Section 8.04.

“Paid in Full” shall mean the payment in full in cash of (x) the Obligations (other than obligations pursuant to Secured Hedging Agreements and Secured Cash Management Agreements and inchoate or contingent or reimbursable obligations for which no claim has been asserted), (y) the Guaranteed Obligations (other than obligations pursuant to Secured Hedging Agreements and Secured Cash Management Agreements, except to the extent an event of default has occurred thereunder and Section 8.03 is then applicable, and inchoate or contingent or reimbursable obligations for which no claim has been asserted) or (z) the Secured Obligations (as defined in the Security Agreement) (other than obligations pursuant to Secured Hedging Agreements and Secured Cash Management Agreements, except to the extent an event of default has occurred thereunder and Section 8.03 is then applicable, and inchoate or contingent or reimbursable obligations for which no claim has been asserted), as applicable. “Payment in Full” shall have a meaning correlative thereto.

“Parallel Debt” shall have the meaning assigned to such term in Section 9.17(b).

“Parent” shall mean Loar Acquisition 13, LLC, a Delaware limited liability company and parent company of Holdings.

“Parent LLC Agreement” shall mean the Amended and Restated Limited Liability Company Agreement of the Parent.

“Participant” shall have the meaning assigned to such term in Section 10.04(c).

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

“Paycheck Protection Program” shall mean the Paycheck Protection Program, Section 1102 of Title I of the Coronavirus Aid, Relief, and Economic Security Act, as the same may be amended from time to time, and the rules and regulations promulgated thereunder.

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

 

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“PCBs” shall have the meaning assigned to such term in the definition of “Hazardous Materials.”

“Perfection Certificate” shall mean a certificate substantially in the form of Exhibit G-1 or any other form approved by the Lender Representative, executed by the Borrower and each Guarantor, as the same shall be supplemented from time to time by a Perfection Certificate Supplement or otherwise.

“Perfection Certificate Supplement” shall mean a certificate supplement substantially in the form of Exhibit G-2 or any other form approved by the Lender Representative.

“Periodic Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.

“Permitted Acquisition” shall mean any Acquisition to the extent that:

(i) such Acquisition shall not be hostile and shall have been approved by the Board of Directors (or other similar body) and/or the stockholders or other equityholders of the Target;

(ii) no Default under Section 8.01(a) or (b) or Event of Default exists or has occurred and is continuing or would result after giving effect to such Acquisition; provided, that in connection with a Permitted Acquisition that constitutes a Limited Condition Acquisition, the condition under this clause (ii) shall be that (x) no Default under Section 8.01(a) or (b) or Event of Default shall have occurred at the time the definitive documentation relating to such Limited Condition Acquisition is executed and (y) no Event of Default pursuant to Section 8.01(a), (b), (g) or (h) has occurred and is continuing at the time the relevant Limited Condition Acquisition is consummated;

(iii) the Administrative Agent and the Lender Representative shall receive not less than five Business Days’ (or such shorter period as determined in the sole discretion of the Lender Representative) prior to the consummation of such Acquisition written notice thereof, which notice shall include a reasonably detailed description of the material proposed terms of such Acquisition and identify the anticipated closing date thereof;

(iv) with respect to any Acquisition involving Acquired EBITDA greater than 10.0% of Consolidated EBITDA determined on a Pro Forma Basis for the most recent Test Period, the Administrative Agent and the Lender Representative shall receive, not less than five (5) Business Days’ (or such shorter period as determined in the sole discretion of the Lender Representative) prior to the consummation of such Acquisition, (A) a customary business due diligence package and legal due diligence memos, in each case, to the extent available to any Loan Party or any Subsidiary and, in the case of legal due diligence memos, subject to execution by the Administrative Agent and the Lender Representative of customary confidentiality and non-reliance agreements; (B) pro forma financial projections (after giving effect to such Acquisition) for Holdings and its Subsidiaries for the current and next fiscal year; (C) appraisals, to the extent available to any Loan Party or any Subsidiary (provided, that for the avoidance of doubt, any such Loan Party or Subsidiary shall not be obligated to obtain any appraisals); and (D) copies of the drafts of the acquisition agreement and other material documents relating to the proposed Acquisition;

(v) the Administrative Agent and Lenders shall receive, to the extent available to any Loan Party, historical financial statements of the applicable Target for the two fiscal years prior to such Acquisition (or, if such Target (or its predecessor entity) has not been in existence for two years, for each year such Target (or its predecessor entity) has existed);

 

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(vi) the aggregate consideration paid directly or indirectly by Loan Parties in connection with Targets that do not become, and assets that will not be held by, Loan Parties shall not exceed, for all Acquisitions in the aggregate, the sum of (A) $30,000,000, plus (B) solely to the extent the Total Net Leverage Ratio (after giving effect to such Acquisition and the Incurrence of any Indebtedness in connection therewith on a Pro Forma Basis) for the four fiscal quarters most recently ended prior to the consummation of such Acquisition for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable, does not exceed 6.00 to 1.00, as certified in an Officer’s Certificate executed by a Financial Officer of the Borrower, (1) the Cash Equivalent proceeds of any substantially concurrent issuance of Equity Interests of Holdings (or any direct or indirect parent thereof) not constituting Disqualified Capital Stock (including upon exercise of warrants or options) which proceeds (if in respect of any Equity Interests of a direct or indirect parent) have been contributed as common equity to the capital of Holdings, plus (2) the aggregate amount of substantially concurrent contributions to the common capital of Holdings received in Cash Equivalents; provided that, with respect to the proposed acquisition disclosed to the Lenders as “Project Charge”, this clause (vi) shall not apply;

(vii) such Acquisition shall only involve Targets engaged in, or assets used or useful in, a business of the type permitted to be engaged in by the Companies pursuant to Section 6.05;

(viii) with respect to such Acquisition, the Loan Parties shall comply with the requirements of Section 5.10, to the extent applicable;

(ix) the Total Net Leverage Ratio (after giving effect to such Acquisition and the Incurrence of any Indebtedness in connection therewith on a Pro Forma Basis) for the four fiscal quarters most recently ended prior to the consummation of such Acquisition for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable, based on the combined operating results of the applicable Target and of Holdings and its Subsidiaries for such four fiscal quarter period, does not exceed 6.50 to 1.00, as certified in an Officer’s Certificate executed by a Financial Officer of the Borrower;

(x) to the extent such Acquisition is funded (in whole or in part) with the proceeds of any Revolving Credit Loans, the Revolving Credit Availability Condition shall be satisfied (after giving effect to such Acquisition and the Incurrence of any Indebtedness in connection therewith on a Pro Forma Basis); and

provided that, notwithstanding the foregoing provisions of this definition, the Schroth Acquisition shall be deemed to be a Permitted Acquisition.

“Permitted Holder” shall mean any of the Closing Date Investors and any of their respective Affiliates (other than any portfolio companies).

 

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“Permitted Investment” shall mean any of the following Investments by Holdings or any of its Subsidiaries:

(a) Investments (i) in Holdings or any Subsidiary that is a Loan Party, (ii) by a Subsidiary that is not a Loan Party in a Subsidiary that is not a Loan Party and (iii) by a Loan Party in a Subsidiary that is not a Loan Party in an aggregate amount not to exceed, together with the aggregate outstanding principal amount of any Indebtedness owing from a Subsidiary that is not a Guarantor to a Loan Party pursuant to Section 6.01(k)(iii), $5,000,000 outstanding at any time;

(b) a Permitted Acquisition;

(c) cash and Cash Equivalents;

(d) extensions of trade credit or accounts receivable credit in the ordinary course of business;

(e) 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;

(f) loans and advances in the ordinary course of business to the employees, officers and members of management of Holdings or any of its Subsidiaries, so long as the aggregate principal amount of all such loans and advances not repaid in cash at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances) shall not exceed $500,000;

(g) any person to the extent such Investment represents the non-cash portion of the consideration received for an Asset Sale as permitted pursuant to Section 6.04 or any other asset disposition not otherwise prohibited hereunder;

(h) Investments in the form of notes issued by officers, directors and employees of Holdings or any Subsidiary for the sole purpose of purchasing Equity Interests of Holdings or any parent entity thereof;

(i) Investments arising from Hedging Agreements entered into in the ordinary course of business by Holdings or any of its Subsidiaries and not for the purpose of speculation;

(j) any Investment listed on Schedule 6.07(a) and any extension, modification, replacement or renewal of any such Investments existing on the Closing Date, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the Closing Date;

(k) guarantees of Indebtedness permitted under Section 6.01 and performance guarantees and Contingent Obligations incurred in the ordinary course of business;

(l) (i) bank deposits in the ordinary course of business; and (ii) the endorsement of instruments for collection or deposit in the ordinary course of business;

(m) increases in Investments reflecting an increase in the value of the Investments;

(n) any Loan Party may capitalize or forgive any debt owed to it by any other Loan Party;

 

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(o) other Investments in an aggregate amount not exceeding at any time outstanding (i) $5,000,000, plus (ii) solely to the extent the Total Net Leverage Ratio (after giving effect to such Investment and the Incurrence of any Indebtedness in connection therewith on a Pro Forma Basis) for the four fiscal quarters most recently ended prior to the consummation of such Investment for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable, does not exceed 6.00 to 1.00, as certified in an Officer’s Certificate executed by a Financial Officer of the Borrower, (1) the Cash Equivalent proceeds of any substantially concurrent issuance of Equity Interests of Holdings (or any direct or indirect parent thereof) not constituting Disqualified Capital Stock (including upon exercise of warrants or options) which proceeds (if in respect of any Equity Interests of a direct or indirect parent) have been contributed as common equity to the capital of Holdings, plus (2) the aggregate amount of substantially concurrent contributions to the common capital of Holdings received in Cash Equivalents;

(p) Investments in the form of intercompany Indebtedness permitted pursuant to Section 6.01(k); and

(q) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations, of and other disputes with, customers and suppliers arising in the ordinary course of business.

“Permitted Liens” shall have the meaning assigned to such term in Section 6.02.

“Permitted Revolving Credit Facility” shall mean a senior secured revolving credit facility of the Borrower entered into after the Closing Date with third party revolving credit lenders reasonably acceptable to the Lender Representative, with commitments in an aggregate principal amount of up to $20,000,000, on terms and conditions reasonably satisfactory to the Lender Representative; provided that, (a) in connection with the effectiveness of any such revolving credit facility, the Revolving Credit Commitments hereunder shall have been terminated, and all Revolving Credit Loans and other Obligations related thereto shall have been repaid, (b) the Loan Parties shall have entered into any amendments to the Loan Documents or other documentation reasonably requested by the Administrative Agent, the Collateral Agent and the Lender Representative to ensure that the Obligations have the benefit of the same guarantees and the same collateral, and subject to the terms of the applicable Permitted Revolving Credit Facility Intercreditor Agreement, substantially the same enforcement rights with respect thereto, as the obligations under such revolving credit facility and (c) a Permitted Revolving Credit Facility Intercreditor Agreement shall have been executed and delivered.

“Permitted Revolving Credit Facility Intercreditor Agreement” shall mean an intercreditor agreement in form and substance reasonably satisfactory to the Lender Representative, entered into between the Administrative Agent, the Collateral Agent and the administrative agent and collateral agent under the Permitted Revolving Credit Facility, and acknowledged by the Loan Parties.

“Permitted Tax Distributions” shall mean, for any taxable period (or portion thereof) that Holdings (or any other person of which Borrower is a direct or indirect wholly owned Subsidiary) is treated as a corporation for U.S. federal income tax purposes and for which Borrower and/or any of its Subsidiaries are members (or are pass-through entities of such members) of a consolidated, combined, unitary or similar income Tax group for U.S. federal, state, local or foreign income Tax purposes for which Holdings (or such other person of which Borrower is a direct or indirect wholly owned Subsidiary) is the common parent, the Borrower may make Restricted Payments to Holdings (or such other person) to pay the portion of any U.S. federal, state, local or foreign income Taxes (as applicable) of Holdings (or such other person) for such taxable period that are attributable to the income of the Borrower and/or its applicable Subsidiaries;

 

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provided that (i) allowable loss carryovers, credits and offsets against Taxes shall, without limitation, be taken into account in computing Taxes due for all purposes under this definition and (ii) the aggregate amount of such distributions shall not exceed the aggregate Taxes the Borrower and/or its Subsidiaries, as applicable, would be required to pay in respect of such U.S. federal, state, local and foreign Taxes on a stand-alone basis for such taxable period. After the end of each taxable year, if the distributions paid to Holdings (or such other person) pursuant to this definition for such taxable year exceeds the amount of distributions permitted pursuant to this definition for such taxable year, any such excess shall reduce any Permitted Tax Distributions paid to Holdings (or such other person) by the Borrower in the following taxable year, but only to the extent such excess is not taken into account in computing the amount of the Permitted Tax Distributions for such year pursuant to clause (i) of this definition.

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

“PIK Election” shall have the meaning assigned to such term in Section 2.06(f).

“PIK Interest” shall have the meaning assigned to such term in Section 2.06(f).

“Plan” shall mean any “employee pension benefit plan” (other than a Multiemployer Plan) subject to the provisions of Title IV or Section 302 of ERISA or Section 412 or 4971 of the Code which is maintained, sponsored, contributed to, or required to be contributed to by any Loan Party or its ERISA Affiliate or with respect to which any Loan Party could reasonably be expected to incur liability.

“PPR” means Pacific Piston Ring Co., Inc., a California corporation.

“PPR Acquisition” means the acquisition by the Borrower of 100% of the Equity Interests of PPR pursuant to the PPR Purchase Agreement.

“PPR Acquisition Equity Contribution” means the equity contribution to be provided by the Closing Date Investors or other investors reasonably satisfactory to the Lender Representative in Holdings or its direct or indirect parent company of at least $44,000,000 (as adjusted in accordance with clause (ii) of the definition of “PPR Purchase Agreement Prohibited Amendment”), with all of such equity investment to be made in cash in exchange for common Equity Interests, the cash proceeds of which shall be applied to consummate the PPR Acquisition.

“PPR Purchase Agreement” means that certain Stock Purchase Agreement, dated as of the Fifth Amendment Effective Date, by and among the Borrower, PPR, the shareholders of PPR party thereto and the Shareholder Representative identified therein, as amended, supplemented, modified or restated from time to time.

“PPR Purchase Agreement Prohibited Amendment” means, with respect to the PPR Purchase Agreement, any modifications, amendments or express waivers or consents thereto that are adverse in any material respect to the Lenders in their capacities as such without the consent of the Lender Representative (it being understood and agreed that (i) any change to the definition of “Material Adverse Effect” contained in the PPR Purchase Agreement shall be deemed to be materially adverse to the Lenders and (ii) any increase or reduction in the purchase price shall be deemed not to be materially adverse to the Lenders if, (x) in the case of any increase in the purchase price, such increase shall be funded solely with an increase in the PPR Acquisition Equity Contribution, or (y) in the case of any decrease in the purchase price, (1) such decrease shall not exceed $8,200,000 and (2) 50% of such purchase price decrease is allocated to reduce the PPR Acquisition Equity Investment and 50% of such purchase price decrease is allocated to permanently reduce the Delayed Draw Term Loan Commitment, provided, further, that in the case of clause (ii), working capital adjustments, purchase price adjustments and other similar adjustments set forth in the PPR Purchase Agreement shall be deemed not to be either an increase or a decrease to the purchase price).

 

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“Premises” shall have the meaning assigned thereto in the applicable Mortgage.

“Pro Forma Basis,” “Pro Forma Compliance” and “Pro Forma Effect” shall mean, as to any Person, for any events as described below that occur subsequent to the commencement of a period for which the effect of such events is being calculated, and giving effect to the events for which such calculation is being made, such calculation will give pro forma effect to such events as if such events occurred on the first day of the four consecutive fiscal quarter period ended on or before the occurrence of such event (the “Reference Period”): (a) in making any determination of Consolidated EBITDA or any component thereof, effect shall be given to (i) any Specified Transaction or restructurings of the business of Holdings or any of the Subsidiaries and (ii) any “run-rate” synergies, operating improvements or cost savings, in each case, that occurred during the Reference Period or with respect to any event or transaction included in clauses (a) and (b) of the definition of Specified Transactions, “run-rate” synergies, operating improvements or cost savings that are expected to occur no later than twelve months after the last day of the Reference Period (calculated on a pro forma basis as though such cost savings, operating improvements and synergies had been realized on the first day of such Reference Period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period, and “run-rate” means the full recurring projected benefit (including any savings or other benefits expected to result from the elimination of a public target’s Public Company Costs) net of the amount of actual savings or other benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of any financial ratios or tests (and in respect of any subsequent pro forma calculations in which such Specified Transaction is given pro forma effect) and during any applicable subsequent Reference Period in which the effects thereof are expected to be realized) relating to such Specified Transaction, provided, that Holdings determines such “run-rate” synergies, operating improvements and cost savings are reasonable and are factually supportable as set forth in a certificate signed by a Financial Officer and delivered to the Administrative Agent and the Lender Representative; (b) in making any determination on a Pro Forma Basis, or Pro Forma Compliance or of Pro Forma Effect, (i) all Indebtedness (including Indebtedness issued, incurred or assumed as a result of, or to finance, any relevant transactions and for which the financial effect is being calculated, whether incurred under the Loan Documents or otherwise) issued, incurred, assumed or repaid (in each case, other than Indebtedness incurred or repaid under any revolving credit facility or line of credit in the ordinary course of business for working capital purposes) during the Reference Period (or with respect to Indebtedness repaid, during the Reference Period or subsequent to the end of the Reference Period and prior to, or simultaneously with, the event for which the calculation of any such ratio is made) shall be deemed to have been issued, incurred, assumed or repaid at the beginning of such period and (ii) interest expense of such Person attributable to interest on any Indebtedness, for which pro forma effect is being given as provided in preceding clause (i), bearing floating interest rates shall be computed on a pro forma basis as if the rates that would have been in effect during the period for which pro forma effect is being given had been actually in effect during such periods, and (c) notwithstanding anything to the contrary in this definition or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the asset sale, transfer, disposition or lease thereof has been entered into as discontinued operations, no Pro Forma Effect shall be given to the classification thereof as discontinued operations (and the Consolidated EBITDA or any component thereof attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such asset sale, transfer, disposition or lease shall have been consummated. If since the beginning of any applicable Reference Period any Person that subsequently became a Subsidiary of Holdings, or was merged, or consolidated with or into a Subsidiary of Holdings since the beginning of such Reference Period, shall have made any Specified Transaction that would have required adjustment pursuant to this definition, then such financial ratio or test shall be calculated to give pro forma effect thereto in accordance with this definition.

 

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Notwithstanding the foregoing, any amounts added to Consolidated EBITDA pursuant to clause (a)(ii) of this definition shall be limited to 10% of Consolidated EBITDA determined on a Pro Forma Basis in the aggregate for any Test Period (calculated before giving effect to any such add-backs) and (a) shall have been realized or (b) shall be reasonably expected to be realizable within twelve months of the date such actions are taken or are expected to be taken; provided that (i) any pro forma adjustments made pursuant to this sentence shall be set forth in a certificate signed by a Financial Officer and delivered to the Administrative Agent and the Lender Representative that certifies that such synergies, operating improvements, cost savings or restructurings meet the criteria set forth in this definition, (ii) such synergies, operating improvements or cost savings are expected to have a continuing impact and are reasonably identifiable and quantifiable and (iii) no synergies, operating improvements or cost savings shall be given pro forma effect to the extent duplicative of any expenses or charges relating to such synergies, operating improvements, cost savings or restructurings that are added back pursuant to the definition of Consolidated EBITDA.

“Projections” shall have the meaning assigned to such term in Section 3.04(c).

“Properties” shall have the meaning assigned to such term in Section 3.17(a)(i).

“property” shall mean any right, title or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including Equity Interests or other ownership interests of any person and whether now in existence or owned or hereafter entered into or acquired, including all Real Property.

“Public Company Costs” shall mean, as to any Person, reasonable costs associated with compliance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith and costs relating to compliance with the provisions of the Securities Act and the Exchange Act or any other comparable body of laws, rules or regulations, as applicable to companies with equity securities held by the public, the rules of national securities exchange companies with listed equity, as to directors’ compensation, fees and expense reimbursement, costs relating to investor relations, shareholder meetings and reports to shareholders, directors’ and officers’ insurance and other executive costs, legal and other professional fees, and listing fees, in each case to the extent arising solely by virtue of the listing of such Person’s equity securities on a national securities exchange.

“Purchase Money Obligation” shall mean, for any person, the obligations of such person in respect of Indebtedness (including Capital Lease Obligations) incurred for the purpose of financing all or any part of the purchase price of any property or the cost of installation, construction or improvement of any property and any refinancing thereof; provided, however, that (a) such Indebtedness is incurred no later than 270 days after such acquisition, installation, construction or improvement of such property by such person and (b) the amount of such Indebtedness does not exceed 100% of the cost of such acquisition, installation, construction or improvement, as the case may be.

“Qualified Capital Stock” of any person shall mean any Equity Interests of such person that are not Disqualified Capital Stock.

“Qualified ECP Guarantor” shall mean, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

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“Real Property” shall mean, collectively, all right, title and interest (including any leasehold, mineral or other estate) in and to any and all parcels of or interests in real property owned, leased or operated by any person, whether by lease, license or other means, together with, in each case, all easements and appurtenances relating thereto, all improvements and appurtenant fixtures and equipment, all general intangibles and contract rights and other property and rights incidental to the ownership, lease or operation thereof.

“Receivables Assets” shall mean (a) any accounts receivable owed to Holdings or any Subsidiary subject to a Receivables Facility and the proceeds thereof and (b) all collateral securing such accounts receivable, all contracts and contract rights, guarantees or other obligations in respect of such accounts receivable, all records with respect to such accounts receivable, any deposit accounts into which payments of such accounts receivable are made by counterparties and any other assets customarily transferred together with accounts receivable in connection with a non-recourse accounts receivable factoring arrangement and which are sold, conveyed, assigned or otherwise transferred or pledged in connection with a Receivables Facility.

“Receivables Facility” shall mean any of one or more receivables financing facilities (and any guarantee of such financing facility), the obligations of which are non-recourse (except for customary representations, warranties, covenants, and indemnities made in connection with such facilities) to Holdings and the Subsidiaries pursuant to which Holdings or any Subsidiary sells, directly or indirectly, grants a security interest in or otherwise transfers its Receivables Assets to a Person that is not Holdings or a Subsidiary.

“Refinancing Indebtedness” shall mean refinancings, renewals, or extensions of Indebtedness so long as: (a) the terms and conditions (other than pricing and premiums, so long as such pricing and premiums (including related fees) are on market terms consistent with financings of that nature) of such refinancings, renewals, or extensions (taken as a whole) are not materially more onerous to Holdings and its Subsidiaries taken as a whole than the terms and conditions of the Indebtedness being refinanced; (b) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, plus the amount of any unused commitments thereunder to the extent available to be drawn on the date of such refinancing, renewal or extension (other than attributable to the accretion of original issue discount, interest, capitalization of interest or payment premiums in respect of the Indebtedness being refinanced and reasonable and customary fees, costs and expenses related thereto (including original issue discount and upfront fees)); (c) such refinancings, renewals, or extensions (other than any refinancing, renewal or extension of any Purchase Money Obligations or Capital Lease Obligations) do not have a shorter Weighted Average Life to Maturity than the Weighted Average Life to Maturity of the Indebtedness so refinanced, renewed, or extended; (d) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are, taken as a whole, at least as favorable to the Lenders as those that were applicable to the refinanced, renewed, or extended Indebtedness; and (e) the refinancing, renewal or extension is nonrecourse to any Loan Party other than any Loan Parties which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended.

“Register” shall have the meaning assigned to such term in Section 10.04(b).

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

 

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

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

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

“Reinvestment Notice” shall mean a written notice executed by a Responsible Officer of the Borrower stating (a) that no Default or Event of Default has occurred and is continuing at the time of delivery of such Reinvestment Notice and (b) that Holdings (through one of its Subsidiaries) intends and expects to use all or a specified portion of the Net Cash Proceeds subject to such notice to make Capital Expenditures or to acquire replacement assets or assets that will be useful in the business of Holdings or any Subsidiary thereof.

“Related Parties” shall mean, with respect to any person, such person’s Affiliates and the partners, directors, officers, employees, agents, controlling persons, advisors and sub-advisors of such person and of such person’s Affiliates.

“Release” shall mean 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.

“Relevant Four Fiscal Quarter Period” shall have the meaning assigned to such term in Section 8.04.

“Relevant Governmental Body” shall mean the Board or the NYFRB, or a committee officially endorsed or convened by the Board or the NYFRB, or any successor thereto.

“Representatives” shall have the meaning assigned to such term in Section 10.12.

“Required Class Lenders” shall mean, on any date of determination, with respect to any Class, Lenders having Loans and unfunded Commitments in an aggregate principal amount of more than 50% of the aggregate principal amount of all Loans outstanding, and unfunded Commitments existing, with respect to such Class on such date.

“Required Lenders” shall mean, on any date of determination, Lenders having Loans and unfunded Commitments in an aggregate principal amount of more than 50% of the aggregate principal amount of all Loans outstanding, and unfunded Commitments existing, on such date.

“Requirements of Law” shall mean, collectively, any and all requirements of any Governmental Authority including any and all laws, judgments, orders, decrees, ordinances, rules, regulations, statutes or case law.

“Response” shall mean (a) “response” as such term is defined in CERCLA, 42 U.S.C. § 9601(24), and (b) all other actions required by any Governmental Authority under Environmental Law to (i) clean up, remove, treat or abate any Hazardous Material in the Environment; (ii) prevent the Release or threat of Release, or minimize the further Release, of any Hazardous Material; or (iii) perform studies and investigations in connection with, or as a precondition to, or to determine the necessity of the activities described in, clause (i) or (ii) above.

 

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“Responsible Officer” of any person shall mean any executive officer or Financial Officer of such person and any other officer or similar official thereof, so long as and to the extent such officer or official has been duly authorized by the Board of Directors of such person to be responsible for the administration of the obligations of such person in respect of this Agreement.

“Restricted Payments” shall have the meaning assigned to such term in Section 6.07(a).

“Revolving Credit Availability Condition” shall mean, with respect to (i) any Borrowing of Revolving Credit Loans requested to be made during the Covenant Suspension Period, that Cash Liquidity, as of the last Business Day of the fiscal quarter most recently ended for which a Cash Liquidity report has been delivered (or was required to be delivered) pursuant to Section 5.01(h), shall be less than (a) $30,000,000 (without giving effect to the Incurrence of Indebtedness in respect of such Borrowing) minus (b) the aggregate amount of (x) any Capital Expenditures in excess of $6,000,000 (per project), (y) any Acquisitions (other than the Safe Flight Acquisition or the Schroth Acquisition) to the extent not funded with (1) the Cash Equivalent proceeds of any issuance of Equity Interests of Holdings (or any direct or indirect parent thereof) substantially concurrent with such Acquisitions not constituting Disqualified Capital Stock (including upon exercise of warrants or options) which proceeds (if in respect of any Equity Interests of a direct or indirect parent) have been contributed as common equity to the capital of Holdings, or (2) contributions to the common capital of Holdings received in Cash Equivalents substantially concurrent with such Acquisitions; and (z) any other Investments made outside of the ordinary course of business, in each case of clauses (x), (y) and (z), during the Covenant Suspension Period; and (ii) any Revolving Credit Loans requested to be made outside of the Covenant Suspension Period that will be used to fund, in whole or in part, any Permitted Investments (other than Permitted Investments described in clauses (a), (e), (i) and (p) of the definition thereof) and Restricted Payments (other than Restricted Payments permitted pursuant to Section 6.07(b)(i), (ii), (vi) or (viii)), on a Pro Forma Basis (after giving Pro Forma Effect to such Permitted Investment or Restricted Payment and the Incurrence of any Indebtedness in connection therewith), that the sum of (a) the unused Revolving Credit Commitments, plus (b) Cash Liquidity in excess of $4,000,000 (it being agreed that cash and Cash Equivalents held in the Specified Earn-Out Account shall be considered unrestricted for this purpose), in each case, on a Pro Forma Basis (after giving Pro Forma Effect to such use of the Revolving Credit Commitments and the Incurrence of any Indebtedness in connection therewith), shall exceed $8,000,000.

“Revolving Credit Commitment” shall mean, with respect to any Lender, its obligation to make Revolving Credit Loans to the Borrower from time to time after the Closing Date pursuant to Section 2.01(c) in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Revolving Credit Commitment”, as such commitment may be (a) reduced from time to time pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to an Assignment and Assumption. The aggregate principal amount of the Revolving Credit Commitments on the Closing Date is $20,000,000.00.

“Revolving Credit Loans” shall mean the loans made from time to time after the Closing Date pursuant to Section 2.01(c).

“Rollover Investors” shall mean each of the Closing Date Investors specified in clauses (b) through (d) of the definition thereof.

“Safe Flight” means Safe Flight Instrument Corporation, a New York corporation.

“Safe Flight Acquisition” means the acquisition by the Borrower of 100% of the Equity Interests of Safe Flight pursuant to the Safe Flight Purchase Agreement.

 

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“Safe Flight Acquisition Equity Contribution” means the equity contribution to be provided by the Closing Date Investors or other investors reasonably satisfactory to the Lender Representative in Holdings or its direct or indirect parent company of at least $69,999,999.50 (as adjusted in accordance with clause (ii) of the definition of “Safe Flight Purchase Agreement Prohibited Amendment”), with all of such equity investment to be made in cash in exchange for common Equity Interests, the cash proceeds of which shall be applied to consummate the Safe Flight Acquisition.

“Safe Flight Escrow Account” shall have the meaning assigned to the term “Escrow Account” in the Safe Flight Escrow Agreement.

“Safe Flight Escrow Agreement” means that certain Escrow Agreement, dated as of December 28, by and among Safe Flight, the Safe Flight Seller and the Escrow Agent (as defined in the Safe Flight Purchase Agreement), as amended, supplemented, modified or restated from time to time.

“Safe Flight PPP Indebtedness” means Indebtedness of Safe Flight incurred under, or pursuant to, the Paycheck Protection Program.

“Safe Flight Purchase Agreement” means that certain Membership Interest Purchase Agreement, dated as of December 18, 2020, by and among the Borrower, SFIC Holdings, Inc. (the “Safe Flight Seller”) and Safe Flight, as amended, supplemented, modified or restated from time to time.

“Safe Flight Purchase Agreement Prohibited Amendment” means, with respect to the Safe Flight Purchase Agreement, any modifications, amendments or express waivers or consents thereto that are adverse in any material respect to the Lenders in their capacities as such without the consent of the Lender Representative (it being understood and agreed that (i) any change to the definition of “Company Material Adverse Effect” contained in the Safe Flight Purchase Agreement shall be deemed to be materially adverse to the Lenders, (ii) any increase in the purchase price shall be deemed not to be materially adverse to the Lenders if such increase shall be funded solely with an increase in the Safe Flight Acquisition Equity Contribution, or (iii) any decrease in the purchase price shall be deemed not to be materially adverse to the Lenders, provided, further, that in the case of clause (ii) and (iii) working capital adjustments, purchase price adjustments and other similar adjustments set forth in the Safe Flight Purchase Agreement shall be deemed not to be either an increase or a decrease to the purchase price).

“Safe Flight Seller” shall have the meaning assigned to such term in the definition of “Safe Flight Purchase Agreement”.

“Sale and Leaseback Transaction” shall mean an arrangement, directly or indirectly, with any person relating to property, real or personal or mixed, used or useful in the business of Holdings or any of its Subsidiaries, whether now owned or acquired after the Closing Date, whereby Holdings or any Subsidiary thereof sells or transfers such property to a person and thereafter rents or leases such property or other property which it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

“Sanctions” shall mean economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by OFAC or the U.S. Department of State, or (b) the European Union or Her Majesty’s Treasury of the United Kingdom.

“Sanctioned Country” shall mean, at any time, a country, region or territory which is the subject or target of any comprehensive, country-based Sanctions.

 

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“Sanctioned Person” shall mean, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by OFAC, the U.S. Department of State, the European Union or Her Majesty’s Treasury of the United Kingdom, (b) any other Person located, organized or ordinarily resident in a Sanctioned Country or (c) any Person 50% or more of the Equity Interests of which are owned by one or more Persons referenced in clause (a) or (b).

“Scheduled Initial Term Loan Repayment” shall have the meaning assigned to such term in Section 2.08(a).

“Scheduled Initial Term Loan Repayment Date” shall have the meaning assigned to such term in Section 2.08(a).

“Scheduled Repayment” shall have the meaning assigned to such term in Section 2.08(b).

“Scheduled Repayment Date” shall have the meaning assigned to such term in Section 2.08(b).

“Schroth Acquisition” means the acquisition by the Borrower, directly or indirectly, of 100% of the Equity Interests of each of (i) SSP International GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) under the laws of Germany, and (ii) SSP Management GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) under the laws of Germany, in each case, pursuant to the Schroth Acquisition Agreement and the transactions related thereto pursuant to the Schroth Acquisition Agreement.

“Schroth Acquisition Agreement” means that certain Sale and Purchase Agreement, dated as of May 20, 2022, by and among Schroth Buyer, the Sellers (as defined therein) and the Borrower, as amended, supplemented, modified or restated from time to time; provided that no provision thereof shall be amended or waived, nor shall any consents thereunder be given by the Borrower or any of its Affiliates, in each case in a manner materially adverse to Blackstone (in its capacity as such) without the consent of Blackstone (such consent not to be unreasonably withheld, delayed or conditioned; provided, further, that Blackstone shall be deemed to have consented to such waiver, amendment or consent unless it shall object thereto within 5 business days after receipt of written notice of such waiver, amendment or consent); provided further that (a) any amendment, waiver or consent which results in a reduction in the purchase price for the Schroth Acquisition of less than 15% of the purchase price shall not be deemed to be materially adverse to Blackstone to the extent it is applied to reduce, first, the amount of cash on hand of the Borrower and its Subsidiaries being used to finance the Schroth Acquisition (if any) to $0, and second, the amount of any Incremental Term Loan Commitments incurred to consummate the Schroth Acquisition and (b) any amendment, waiver or consent which results in an increase in purchase price for the Schroth Acquisition shall not be deemed to be materially adverse to Blackstone so long as such increase is funded with an increase in such cash contribution by the Borrower and its Subsidiaries, any equity contribution or borrowings of Revolving Credit Loans.

“Schroth Buyer” shall mean Stellar Acquisition GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) under the laws of Germany and registered with the commercial register (Handelsregister) at the local court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 126723.

“Schroth German Subsidiaries” means Schroth Buyer and SCHROTH Safety Products GmbH, a limited liability company (Gesellschaft mit beschränkter Haftung) under the laws of Germany and registered with the commercial register (Handelsregister) at the local court (Amtsgericht) of Arnsberg, Germany under registration number 888.

 

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“Second Amendment” shall mean that certain Second Amendment to Credit Agreement dated as of the Second Amendment Effective Date by and among the Borrower, Holdings, the Guarantors party thereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent.

“Second Amendment Effective Date” shall mean October 26, 2018.

“Secured Cash Management Agreement” shall mean any Cash Management Agreement that is entered into by and between Holdings or any Subsidiary and any Cash Management Bank, which is specified in writing by the Borrower to the Administrative Agent as constituting a “Secured Cash Management Agreement” hereunder and with respect to which the requirements of the proviso set forth in the definition of “Cash Management Agreement” have been satisfied.

“Secured Hedging Agreement” shall mean any Hedging Agreement that is entered into by and between Holdings or any Subsidiary and any Hedge Bank, which is specified in writing by the Borrower to the Administrative Agent as constituting a “Secured Hedging Agreement” hereunder and with respect to which the requirements of the proviso set forth in the definition of “Hedging Agreement” have been satisfied. For purposes of the preceding sentence, the Borrower may deliver one notice designating all Hedging Agreements entered into pursuant to a specified Master Agreement as “Secured Hedging Agreements”.

“Secured Parties” shall mean, collectively, the Administrative Agent, the Collateral Agent, each Hedge Bank in respect of Secured Hedging Agreements, each Cash Management Bank in respect of Secured Cash Management Agreements and the Lenders.

“Securities Account” shall have the meaning assigned to such term under the UCC.

“Securities Act” shall mean the Securities Act of 1933.

“Security Agreement” shall mean that certain Security Agreement among the Loan Parties and Collateral Agent for the benefit of the Secured Parties dated as of the Closing Date.

“Security Agreement Collateral” shall mean all property pledged or granted as collateral (a) pursuant to the Security Agreement on the Closing Date or (b) thereafter pursuant to the Security Agreement, the German Security Documents or Section 5.10.

“Security Documents” shall mean the Security Agreement, the German Security Documents, the Mortgages and each other security document or pledge agreement delivered in accordance with applicable law to grant a valid, perfected security interest in any property as collateral for the Obligations, and all UCC financing statements or instruments of perfection required by this Agreement, the Security Agreement, any German Security Document, any Mortgage or any other such security document or pledge agreement to be filed with respect to the security interests in property and fixtures created pursuant to the Security Agreement, any German Security Document or any Mortgage and any other document or instrument utilized to pledge or grant or purport to pledge or grant a security interest or lien on any property as collateral for the Obligations.

“Seller” shall mean Loar Group Acquisition LLC, a Delaware limited liability company.

“Seventh Amendment” shall mean that certain Seventh Amendment to Credit Agreement dated as of the Seventh Amendment Effective Date by and among the Borrower, Holdings, the Guarantors party thereto, the Administrative Agent and the Lenders party thereto.

 

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“Seventh Amendment Effective Date” shall mean April 17, 2020.

“Share Capital Impairment” shall have the meaning assigned to such term in Section 7.12(b)(i).

“SMR” means SMR Acquisition LLC, a Delaware limited liability company and a Wholly Owned Subsidiary of the Borrower.

“SMR Acquisition” means the acquisition of certain of the assets of the SMR Seller pursuant to the SMR Purchase Agreement.

“SMR Acquisition Equity Contribution” means the equity contribution to be provided by the Closing Date Investors or other investors reasonably satisfactory to the Lender Representative in Holdings or its direct or indirect parent company of at least $11,500,000 (as adjusted in accordance with clause (ii) of the definition of “SMR Purchase Agreement Prohibited Amendment”), with all of such equity investment to be made in cash in exchange for common Equity Interests, the cash proceeds of which shall be applied to consummate the SMR Acquisition.

“SMR Purchase Agreement” means that certain Purchase Agreement, dated as of May 31, 2018, by and among the SMR Seller, SMR and the Borrower, as amended by SMR Purchase Agreement Amendment No. 1, SMR Purchase Agreement Amendment No. 2, and as further amended, supplemented, modified or restated from time to time.

“SMR Purchase Agreement Amendment No. 1” means Amendment No. 1 to the SMR Purchase Agreement, dated as of October 24, 2018, by and among SMR Seller and SMR.

“SMR Purchase Agreement Amendment No. 2” means Amendment No. 2 to the SMR Purchase Agreement, dated as of December 21, 2018, by and among SMR Seller and SMR.

“SMR Purchase Agreement Outside Date” means March 31, 2019.

“SMR Purchase Agreement Prohibited Amendment” means, with respect to the SMR Purchase Agreement, any modifications, amendments or express waivers or consents thereto that are adverse in any material respect to the Lenders in their capacities as such without the consent of the Lender Representative (it being understood and agreed that (i) any change to the definition of “Material Adverse Effect” contained in the SMR Purchase Agreement shall be deemed to be materially adverse to the Lenders, (ii) any increase or reduction in the purchase price shall be deemed not to be materially adverse to the Lenders if, (x) in the case of any increase in the purchase price, such increase shall be funded solely with an increase in the SMR Acquisition Equity Contribution, or (y) in the case of any decrease in the purchase price, (1) such decrease shall not exceed $5,000,000 and (2) 50% of such purchase price decrease is allocated to reduce the SMR Acquisition Equity Investment and 50% of such purchase price decrease is allocated to permanently reduce the Delayed Draw Term Loan Commitment, provided, further, that in the case of clause (ii), working capital adjustments, purchase price adjustments and other similar adjustments set forth in the SMR Purchase Agreement shall be deemed not to be either an increase or a decrease to the purchase price and (iii) the amendments effected by SMR Purchase Agreement Amendment No. 1 and SMR Purchase Agreement Amendment No. 2 shall not constitute an SMR Purchase Agreement Prohibited Amendment).

“SMR Seller” means B/E Aerospace, Inc., a Delaware corporation.

 

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“SOFR” shall mean a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

“SOFR Administrator” shall mean the NYFRB (or a successor administrator of the secured overnight financing rate).

“SOFR Administrator’s Website” shall mean the NYFRB’s website, currently at http://www.newyorkfed.org, or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time.

“Specified Acquisition Agreement Representations” shall mean the representations and warranties made with respect to the Loar Target and its Subsidiaries in the Loar Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that the Borrower or Holdings has the right pursuant to the Loar Acquisition Agreement to terminate its or their obligations to consummate the Loar Acquisition (or the right pursuant to the Loar Acquisition Agreement not to consummate the Loar Acquisition) as a result of a breach of such representations and warranties.

“Specified Credit Agreement Representations” shall mean the representations and warranties made in (a) Section 3.01(a) solely with respect to the Loan Parties, (b) Section 3.02 solely with respect to the Loan Parties and the Loan Documentation entered into by the Loan Parties, (c) Section 3.03(b) solely with respect to the Loan Parties and with respect to the execution, delivery and performance of the Loan Documents, the incurrence of the Loans hereunder by the Borrower, the Guarantees of the Guarantors under Article VII hereof and the granting of the security interests in the Collateral pursuant to the Security Agreement, (d) Section 3.09, (e) Section 3.10, (f) Section 3.15, (g) Section 3.19 solely with respect to Collateral required to be perfected on the Closing Date (subject to Section 5.15) and (h) Section 3.20 and Section 3.21, in each case, solely with respect to the use of the proceeds of the Loans on the Closing Date not violating FCPA, OFAC and the USA PATRIOT Act.

“Specified Earn-outs” shall mean the Maverick Earn-Out and the GE Earn-out, collectively.

“Specified Earn-Out Account” shall mean a segregated account of the Borrower, established on or prior to the Closing Date, into which proceeds of the Initial Term Loans in an amount not less than the Specified Earn-Out Amount will be deposited on the Closing Date.

“Specified Earn-Out Amount” shall mean an amount equal to the lesser of (a) $4,000,000 and (b) the amount of reserves set aside on the books of the relevant Loan Party in accordance with GAAP to fund obligations in respect of the Maverick Earn-Out.

“Specified Equity Contribution” shall have the meaning assigned to such term in Section 8.04.

“Specified Event of Default” shall mean an Event of Default arising under Section 8.01(a), Section 8.01(b), Section 8.01(d) with respect to the covenant set forth in Section 6.09, Section 8.01(g) or Section 8.01(h).

“Specified Schroth Representations” shall mean the representations and warranties made in (a) Section 3.01(a) solely with respect to the Loan Parties, (b) Section 3.02 solely with respect to the Loan Parties and the Loan Documents entered into by the Loan Parties, (c) Section 3.03(b) solely with respect to the Loan Parties and with respect to the execution, delivery and performance of the Loan Documents, the incurrence of the applicable Incremental Terms Loans hereunder by the Borrower, the

 

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Guarantees of the Guarantors under Article VII hereof and the granting of the security interests in the Collateral pursuant to the Security Agreement, (d) Section 3.09, (e) Section 3.10, (f) Section 3.15, (g) Section 3.19 solely with respect to Collateral required to be perfected on the date of funding of the applicable Incremental Term Loans (subject to Section 5.15) and (h) Section 3.20 and Section 3.21, in each case, solely with respect to the use of the proceeds of the applicable Incremental Term Loans on the date of funding thereof not violating FCPA, OFAC and the USA PATRIOT Act.

“Specified Transaction” shall mean, with respect to any period, any (a) Permitted Acquisition, Investment, sale, transfer or other disposition of assets or property other than in the ordinary course, (b) any merger or consolidation, or any similar transaction, (c) any incurrence, issuance or repayment of Indebtedness, (d) any Restricted Payment or (e) any other event, in each case with respect to which the terms of the Loan Documents permitting such transaction require “Pro Forma Compliance” with a test or covenant hereunder or requires such test or covenant to be calculated on a “Pro Forma Basis” or to be given “Pro Forma Effect.”

“Sponsor” shall mean Abrams Capital Management, L.P., a Delaware limited partnership.

“Structure Changes” shall have the meaning assigned to such term in Section 5.16(b).

“Subsidiary” shall mean, with respect to any person (the “parent”) at any date, (a) any other corporation, limited liability company, association or other business entity of which securities or other ownership interests representing more than 50% of the voting power of all Equity Interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Board of Directors thereof are, as of such date, owned, controlled or held by the parent and/or one or more subsidiaries of the parent and (b) any partnership (i) the sole general partner or the managing general partner of which is the parent and/or one or more subsidiaries of the parent or (ii) the only general partners of which are the parent and/or one or more subsidiaries of the parent. Unless the context requires otherwise, “Subsidiary” refers to a Subsidiary of Holdings.

“Supporting Obligation” shall mean a supporting obligation (as that term is defined in the UCC).

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

“Target” shall have the meaning set forth in the definition of “Acquisition”.

“Tax Return” shall mean all returns, statements, filings, reports, attachments and other documents or certifications required to be filed in respect of Taxes.

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

“Tenth Amendment” shall mean that certain Tenth Amendment to Credit Agreement, dated as of the Tenth Amendment Effective Date, by and among the Borrower, Holdings, the Guarantors party thereto, the Lenders party thereto, the Administrative Agent and the Collateral Agent.

“Tenth Amendment Effective Date” shall mean May 20, 2022.

 

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“Term Commitment” shall mean, with respect to any Lender, its Initial Term Loan Commitment, Delayed Draw Term Loan Commitment, Eleventh Amendment Incremental Term Loan Commitment or Incremental Term Loan Commitment, as applicable.

“Term Loan” shall mean the Initial Term Loans, each Delayed Draw Term Loan, each Eleventh Amendment Incremental Term Loan, each Incremental Term Loan and each Extended Term Loan.

“Termination Value” shall mean, in respect of any Hedging Obligation, after taking into account the effect of any legally enforceable netting agreement related thereto (a) for any date on or after the date such Hedging Agreement has been closed out and the termination value determined in accordance therewith, such termination value, and (b) for any date prior to the date referenced in clause (a) above, the amount determined as the mark-to-market value for such Hedging Obligation, as determined based upon one or more mid-market or other readily available quotations provided by any nationally recognized dealer in Hedging Agreements).

“Term SOFR” shall mean:

(1) for any calculation with respect to a Term SOFR Loan, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided however that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and

(2) for any calculation with respect to an ABR Loan on any day, the Term SOFR Reference Rate for a tenor of one month on the day (such day, the “Base Rate Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided however that if as of 5:00 p.m. (New York City time) on any Base Rate Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Base Rate Term SOFR Determination Day.

“Term SOFR Adjustment” shall mean a percentage equal to one-tenth of one percent (0.10%) per annum.

“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited as administrator of the Term SOFR Reference Rate (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion and in consultation with the Borrower).

 

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“Term SOFR Loan” shall mean any Loan bearing interest at a rate based on Adjusted Term SOFR, other than pursuant to clause (c) of the definition of “Alternative Base Rate”.

“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.

“Test Period” shall mean, at any time, the four consecutive fiscal quarters of Holdings then most recently ended (in each case taken as one accounting period) for which financial statements have been delivered (or were required to be delivered) pursuant to Section 5.01(a) or (b).

“Third Amendment” shall mean that certain Third Amendment to Credit Agreement dated as of the Third Amendment Effective Date by and among the Borrower, Holdings, the Guarantors party thereto and the Lenders party thereto.

“Third Amendment Effective Date” shall mean December 21, 2018.

“Title Policy” shall mean a policy of title insurance (or marked up title insurance commitment having the effect of a policy of title insurance) insuring the Lien of such Mortgage described therein.

“Total Net Leverage Ratio” shall mean, at any date of determination, the ratio of (a) Consolidated Indebtedness, net of (i) amounts held in the Specified Earn-Out Account and (ii) unrestricted cash and Cash Equivalents of Holdings and its Subsidiaries to the extent held in accounts subject to a Control Agreement (or subject to other applicable perfection arrangements reasonably satisfactory to the Lender Representative), in each case, at such time, to (b) Consolidated EBITDA for the Test Period then most recently ended.

“Trading with the Enemy Act” shall mean the Trading with the Enemy Act (50 U.S.C. § 1 et seq., as amended).

“Transactions” shall mean, collectively, the transactions to occur on or immediately prior to or after the Closing Date pursuant to the Loan Documents, including (a) the Loar Acquisition, (b) the execution, delivery and performance of the Loan Documents and the borrowings of the Initial Term Loans hereunder, (c) the refinancing of certain existing Indebtedness of Holdings and its Subsidiaries, and (d) the payment of the fees and expenses incurred in connection with the consummation of the foregoing.

“Transferred Guarantor” shall have the meaning assigned to such term in Section 7.09.

“Treasury Rate” shall mean, with respect to a prepayment prior to the first anniversary of the Closing Date, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15(519) that has become publicly available at least two Business Days prior to such prepayment date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such prepayment date to the first anniversary of the Closing Date; provided, however, that if the period from such prepayment date to the first anniversary of the Closing Date is not equal to the constant maturity of the United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from such prepayment date to the first anniversary of the Closing Date, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

 

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

“UCC” shall mean the Uniform Commercial Code as in effect from time to time (except as otherwise specified) in any applicable state or jurisdiction.

“Unadjusted Benchmark Replacement” shall mean the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.

“United States” or “U.S.” shall mean the United States of America.

“Up-stream and/or Cross-stream Guarantee” shall have the meaning assigned to such term in Section 7.12(a).

“U.S. Government Securities Business Days” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.

“U.S. Tax Compliance Certificate” shall have the meaning assigned to such term in Section 2.14(e)(ii)(B)(III).

“USA PATRIOT Act” shall mean the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act.

“Voting Stock” shall mean, with respect to any person, any class or classes of Equity Interests pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect members of the Board of Directors of such person.

“Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding principal amount of such Indebtedness into (b) the product obtained by multiplying (i) the amount of each then remaining installment or other required scheduled payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; provided that for purposes of determining the Weighted Average Life to Maturity of any Indebtedness that is being modified, refinanced, refunded, renewed, replaced or extended, the effects of any amortization payments and prepayments made on such Indebtedness prior to the date of the applicable modification, refinancing, refunding, renewal, replacement or extension shall be disregarded.

“Wholly Owned Domestic Subsidiary” shall mean a Domestic Subsidiary that is a Wholly Owned Subsidiary.

“Wholly Owned Subsidiary” shall mean, as to any person, (a) any corporation 100% of whose capital stock (other than (x) directors’ qualifying shares and (y) Equity Interests of Foreign Subsidiaries issued to foreign nationals in accordance with Requirements of Law) is at the time owned by such person and/or one or more Wholly Owned Subsidiaries of such person and (b) any partnership, association, joint venture, limited liability company or other entity in which such person and/or one or more Wholly Owned Subsidiaries of such person have a 100% equity interest at such time.

 

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“Working Capital” shall mean, at any date, the excess of (i) the sum of all amounts (other than cash and Cash Equivalents) that would, in conformity with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of Holdings and its Subsidiaries at such date excluding the current portion of current and deferred income taxes over (ii) the sum of all amounts that would, in conformity with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of Holdings and its Subsidiaries on such date, but excluding, without duplication, (a) the current portion of any Indebtedness of Holdings and its Subsidiaries outstanding on such date on the consolidated balance sheet of Holdings, determined on a consolidated basis in accordance with GAAP (but excluding the effects of any discounting of Indebtedness resulting from the application of purchase accounting in connection with the Transactions or any Permitted Acquisition or other Permitted Investment) consisting only of (x) Indebtedness for borrowed money, (y) the principal component of all Capital Lease Obligations and (z) debt obligations evidenced by bonds, promissory notes, debentures or debt securities; (b) all Indebtedness consisting of Loans, loans under any Permitted Revolving Credit Facility, reimbursement obligations under any letters of credit and Capital Lease Obligations to the extent otherwise included therein; (c) the current portion of interest; (d) the current portion of current and deferred income taxes; (e) any liabilities that are not Indebtedness and will not be settled in cash or Cash Equivalents during the next succeeding twelve-month period after such date; (f) the effects from applying purchase accounting; (g) any accrued professional liability risks; (h) restricted marketable securities and (i) the current portion of deferred revenue.

“Xpedition” shall have the meaning assigned to such term in the first recital hereto.

SECTION 1.02 Classification of Loans. For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Term SOFR Loan”).

SECTION 1.03 Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any Loan Document, agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any person shall be construed to include such person’s successors and permitted assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall refer to such law or regulation as amended, modified or supplemented from time to time, (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (g) “on,” when used with respect to the Mortgaged Property or any property adjacent to the Mortgaged Property, means “on, in, under, above or about.” Except as otherwise expressly provided herein, in the event that performance of any obligation is due on a day that is not a Business Day, then the time for such performance shall be extended to the next Business Day.

SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein, all financial statements to be delivered pursuant to this Agreement shall be prepared in accordance with GAAP as in effect from time to time and all terms of an accounting or financial nature shall be construed and interpreted in accordance with GAAP; provided, however, that notwithstanding the foregoing, if at any time any change occurs after the Closing Date in GAAP or in the application thereof

 

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on the computation of any financial ratio or financial requirement, or compliance with any covenant, set forth in any Loan Document, and Holdings or the Lender Representative shall so request (regardless of whether any such request is given before or after such change), the Required Lenders, Holdings and the Borrower will negotiate in good faith to amend such ratio, requirement or covenant to preserve the original intent thereof in light of such change in GAAP; provided, further, that until so amended, such ratio, requirement or covenant shall continue to be computed in accordance with GAAP prior to such change therein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of Holdings and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded. It is hereby understood and agreed by the Loan Parties, Agents and the Lenders that any forgiveness of any loan incurred pursuant to the Paycheck Protection Program shall not result in any increase to Consolidated Net Income or Consolidated EBITDA under the Loan Documents.

SECTION 1.05 Time Reference. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

SECTION 1.06 Limited Condition Acquisitions. In connection with any Limited Condition Acquisition, to the extent that this Agreement or any other Loan Document requires (a) Pro Forma Compliance with any financial ratio or similar financial test, (b) compliance with any cap expressed as a percentage of Consolidated EBITDA or Consolidated Total Assets or any other financial metric as a condition to the consummation of such Limited Condition Acquisition, (c) that no Default or Event of Default has occurred, is continuing or would result therefrom (other than in connection with the satisfaction of any conditions to a Permitted Acquisition or the satisfaction of the conditions to any funding of any Incremental Term Loan or the Delayed Draw Term Loan, which shall remain subject to the terms and conditions thereof with respect to the impact, if any, of any Limited Condition Acquisition), or (d) compliance with any representations and warranties set forth herein (other than in connection with the satisfaction of any conditions to any funding of any Incremental Term Loan or the Delayed Draw Term Loan, which shall remain subject to the terms and conditions thereof with respect to the impact, if any, of any Limited Condition Acquisition), the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, or determination of compliance with any representations or warranties shall, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Acquisition, a “Limited Conditionality Election”, which Limited Conditionality Election shall be in respect of all of clauses (a) through (d) above, to the extent applicable), be deemed to be the date the definitive agreements (or other relevant definitive documentation) for such Limited Condition Acquisition are entered into (the “Limited Conditionality Test Date”). If on a Pro Forma Basis after giving effect to such Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any incurrence or issuance of Indebtedness and the use of proceeds thereof), with such ratios and other provisions calculated as if such Limited Condition Acquisition or other transactions had occurred at the beginning of the most recent Test Period ending prior to the Limited Conditionality Test Date, the Borrower could have taken such action on the relevant Limited Conditionality Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with. For the avoidance of doubt, (i) if, following the Limited Conditionality Test Date, any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Acquisition, such ratios and other provisions will not be deemed to have been exceeded or failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition is permitted hereunder and (ii) such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Acquisition, unless the Borrower elects, in its sole discretion, to test such ratios and compliance

 

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with such conditions on the date such Limited Condition Acquisition is consummated. If the Borrower has made a Limited Conditionality Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio, basket availability or compliance with any other provision hereunder (other than actual compliance with the covenants set forth in Section 6.09) on or following the relevant Limited Conditionality Test Date and prior to the earliest of the date on which such Limited Condition Acquisition is consummated, the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition or the date the Borrower makes an election pursuant to the immediately preceding sentence, any such ratio, basket or compliance with any other provision hereunder shall be calculated both (x) on a Pro Forma Basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) had been consummated on the Limited Conditionality Test Date and (y) without giving effect to such Limited Condition Acquisition and the other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof), and such ratio, basket availability or compliance shall only be satisfied hereunder to the extent satisfied in the circumstances described in both clauses (x) and (y) above.

SECTION 1.07 Resolution of Drafting Ambiguities. Each Loan Party acknowledges and agrees that it was represented by counsel in connection with the execution and delivery of the Loan Documents to which it is a party, that it and its counsel reviewed and participated in the preparation and negotiation hereof and thereof and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in the interpretation hereof or thereof.

SECTION 1.08 German Terms.

In this Agreement, where a translation of a word or phrase into the German language appears in the text of this Agreement, such translation of a word or phrase shall prevail and, furthermore, where it relates to a German entity or other applicable term, a reference to:

(a) a compulsory manager, receiver, administrator includes an Insolvenzverwalter, a Vorläufiger Insolvenzverwalter, a Zwangsverwalter or a custodian or creditor’s trustee (Sachwalter);

(b) secretary or director includes any statutory legal representative(s) (organschaftlicher Vertreter) of a person pursuant to the laws of its jurisdiction of incorporation, including but not limited to, in relation to a person incorporated or established in Germany, a managing director (Geschäftsführer) or member of the board of directors (Vorstand);

(c) a disposal includes a Verfügung;

(d) filing for insolvency or to file for insolvency includes the meaning Antrag auf Eröffnung des Insolvenzverfahrens; and

(e) a winding up, administration or dissolution (and each of those terms) includes insolvency proceedings (Insolvenzverfahren).

 

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ARTICLE II

THE CREDITS

SECTION 2.01 Commitments.

(a) The Initial Term Loans. Subject to the satisfaction (or waiver in accordance with the terms hereof) of the conditions set forth in Section 4.01 and subject to the other terms hereof, and relying upon the representations and warranties set forth herein, each Lender with an Initial Term Loan Commitment agrees to make an Initial Term Loan to the Borrower in Dollars on the Closing Date in a principal amount not to exceed its Initial Term Loan Commitment. The Initial Term Loan Commitments shall automatically and irrevocably terminate on the Closing Date after the funding of the Initial Term Loans. Amounts paid or prepaid in respect of Initial Term Loans may not be reborrowed.

(b) The Delayed Draw Term Loans. Subject to the satisfaction (or waiver in accordance with the terms hereof) of the conditions set forth in Section 4.01 on the Closing Date and Section 4.02 at the time of the required funding thereof, and subject to the other terms hereof, and relying upon the representations and warranties set forth herein, each Lender with a Delayed Draw Term Loan Commitment agrees to make one or more Delayed Draw Term Loans to the Borrower in Dollars from time to time from the Business Day immediately following the Closing Date until the Delayed Draw Termination Date, with a principal amount for all Delayed Draw Term Loans in the aggregate not to exceed its Delayed Draw Term Loan Commitment. The Delayed Draw Term Loan Commitments shall automatically and irrevocably terminate on the Delayed Draw Termination Date after the funding of any Delayed Draw Term Loans to the extent the Delayed Draw Termination Date occurs pursuant to clause (a) of the definition thereof and shall otherwise terminate as provided for in clauses (b) and (c) of the definition thereof. Amounts paid or prepaid in respect of Delayed Draw Term Loans may not be reborrowed.

(c) The Revolving Credit Loans. Subject to the satisfaction (or waiver in accordance with the terms hereof) of the conditions set forth in Section 4.01 on the Closing Date and Section 4.03 at the time of the required funding thereof and subject to the other terms hereof, and relying upon the representations and warranties set forth herein, each Lender with a Revolving Credit Commitment agrees to make one or more Revolving Credit Loans to the Borrower in Dollars from time to time from the Business Day immediately following Closing Date until and including the Business Day immediately preceding the applicable Maturity Date in an aggregate principal amount at any time outstanding not to exceed its Revolving Credit Commitment. The Revolving Credit Commitments shall automatically and irrevocably terminate on the applicable Maturity Date. Within the limits of each Lender’s Revolving Credit Commitment, and subject to the other terms hereof, the Borrower may borrow under this Section 2.01(c), prepay under Section 2.09 and reborrow under this Section 2.01(c), from time to time until the applicable Maturity Date.

(d) Eleventh Amendment Incremental Term Loans. On the Eleventh Amendment Effective Date, the Eleventh Amendment Incremental Term Loans shall be made to the Borrower in accordance with the Eleventh Amendment.

SECTION 2.02 [Reserved]

SECTION 2.03 Borrowing Procedure.

(a) Each Borrowing shall be made upon the Borrower’s irrevocable delivery of a Borrowing Request, appropriately completed and signed by a Responsible Officer of the Borrower, on behalf of the Borrower, to the Administrative Agent (provided that the notices in respect of (x) the Borrowing of the Initial Term Loans on the Closing Date may be conditioned on the closing of the Loar Acquisition, (y) any Borrowing of Delayed Draw Term Loans may be conditioned on the closing of a related Permitted Acquisition and (z) the Borrowing of the Eleventh Amendment Incremental Term Loans may be conditioned on the closing of the Schroth Acquisition). Each such

 

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notice must be received by the Administrative Agent not later than 1:00 p.m. (New York, New York time) five (5) Business Days prior to the requested date of any Borrowing; provided that the notices in respect of the Borrowing of the Initial Term Loans on the Closing Date may be delivered no later than one (1) Business Day prior to the Closing Date. Except as provided in Section 2.17, each Borrowing of Term SOFR Loans shall be in a minimum amount of $1,000,000 (or, with respect to Delayed Draw Term Loans, $2,000,000), or a whole multiple of $100,000 in excess thereof. Each Borrowing of ABR Loans shall be in a minimum amount of $100,000 (or, with respect to Delayed Draw Term Loans, $2,000,000) or a whole multiple of $100,000 in excess thereof. Each Borrowing Request shall specify (i) the Class of Commitment that are requested to be funded, (ii) the requested date of the Borrowing (which shall be a Business Day), (iii) the amount of Loans to be borrowed, (iv) the Type of Loans to be borrowed, (v) if applicable, the duration of the Interest Period with respect thereto, and (vi) wire instructions of the account(s) to which funds are to be disbursed. If the Borrower fails to specify a Type of Loan in a Borrowing Request, then the applicable Loans shall be made as a ABR Loan. If the Borrower fails to specify an Interest Period with respect to a Term SOFR Loan, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

(b) Following receipt of a Borrowing Request, the Administrative Agent shall promptly notify each applicable Lender of the amount of its pro rata share of the applicable Class of Loans being requested. Subject to the last sentence of this Section 2.03(b), each Lender shall make the amount of its Loan available to the Administrative Agent by wire transfer of immediately available funds at the Administrative Agent’s payment office specified by the Administrative Agent not later than 12:00 noon (New York, New York) on the Business Day specified as the applicable requested date of Borrowing in the applicable Borrowing Request. Subject to the last sentence of this Section 2.03(b), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent by causing the wire transfer of such funds, in each case, in accordance with instructions provided by the Borrower to the Administrative Agent in the Borrowing Request. Notwithstanding the foregoing provisions of this Section 2.03(b), in the case of a Borrowing Request for the Eleventh Amendment Incremental Term Loans, the Borrower, the Administrative Agent and Blackstone may mutually agree to alternative arrangements for the funding of the Eleventh Amendment Incremental Term Loans.

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

SECTION 2.04 Evidence of Debt; Repayment of Loans.

(a) Promise to Repay. The Borrower hereby unconditionally promises to pay to the Administrative Agent for the benefit of each Lender the principal amount of each Loan of such Lender as provided in Section 2.08.

(b) Lender and Administrative Agent Records. Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the Indebtedness of the Borrower to such Lender resulting from the Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time under this Agreement. The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder; (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder; and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s

 

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share thereof. The entries made in the accounts maintained pursuant to this paragraph shall be prima facie evidence of the existence and amounts of the obligations therein recorded (absent demonstrable error); provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligations of the Borrower to repay the Loans in accordance with their terms. In the event of any conflict between the records of the Administrative Agent and any Lender, the records of the Administrative Agent shall prevail, and in the event of any conflict between records maintained by the Administrative Agent or any Lender pursuant to this Section 2.04(b) and the Register maintained pursuant to Section 10.04(b), the Register shall prevail.

(c) Promissory Notes. Any Lender by written notice to the Borrower may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall promptly execute and deliver to such Lender a Note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns).

SECTION 2.05 Fees. The Borrower agrees to pay the following:

(a) to the Agents, for their own account, the administrative fees payable in the amounts and at the times separately agreed upon between the Borrower and Agents in the Agency Fee Letter;

(b) to the account or accounts designated by the Lender Representative, the fees payable in the amounts and at the times separately agreed upon between the Borrower and Blackstone in the Fee Letter and the Eleventh Amendment Fee Letter; and

(c) to the Administrative Agent, for the ratable benefit of the Lenders holding Revolving Credit Commitments, a commitment fee, which shall accrue at a rate per annum equal to 0.50% on the average daily unused amount of the Revolving Credit Commitment of such Lenders during the period from and including the Closing Date to but excluding the applicable Maturity Date, payable in arrears on the last Business Day of each March, June, September and December to occur during any period in which the Revolving Credit Commitments are outstanding, commencing December 31, 2017 and on the Maturity Date applicable thereto. The Administrative Agent shall remit such commitment fees to such Lenders at the accounts notified to the Administrative Agent by such Lenders.

SECTION 2.06 Interest on Loans.

(a) Interest Rates. Subject to the provisions of Section 2.06(b), the Borrower shall pay interest on the Loans in an aggregate amount calculated based on the following interest rates:

(i) the Alternate Base Rate plus the Applicable Loan Margin with respect to all ABR Loans, and

(ii) Adjusted Term SOFR for the relevant Interest Period in effect plus the Applicable Loan Margin with respect to all Term SOFR Loans.

(b) Default Rate. Notwithstanding the foregoing, (i) automatically during the continuance of an Event of Default arising under Section 8.01(g) or (h) and (ii) at the election of the Required Lenders during the continuance of any other Event of Default, all Obligations shall, to the extent permitted by applicable law, bear interest, after as well as before judgment, at a per annum rate equal to 2% plus the rate otherwise applicable to Loans at such time.

 

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(c) Interest Payments. Accrued interest on each Loan shall be payable to the Administrative Agent, for the ratable benefit of the Lenders, in arrears on each Interest Payment Date for such Loan; provided, that (i) interest accrued pursuant to Section 2.06(b) shall be payable on demand and (ii) in the event of any repayment or prepayment of any Loan, accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment. The Administrative Agent shall remit such interest payments to the Lenders at the accounts notified to the Administrative Agent by such Lenders.

(d) Interest Elections.

(i) Generally. On the Closing Date (or the date of funding of any Loan made after the Closing Date), Loans shall be of the Type specified in accordance with Section 2.03. Thereafter, the Borrower may elect to convert such Loans to a different Type or to continue such Loans and, in the case of a Term SOFR Loan, may elect Interest Periods therefor, all as provided in this Section.

(ii) Interest Election Notice. To make an election pursuant to this Section, the Borrower shall deliver a duly completed and executed Interest Election Request to the Administrative Agent no later than 1:00 p.m., (a) at least 3 Business Days prior to the proposed date, to convert all or any portion of ABR Loans to Term SOFR Loans, or the proposed date, to continue any Term SOFR Loans; and (b) on the proposed date, to convert all or any portion of Term SOFR Loans to ABR Loans. Each Interest Election Request shall be irrevocable. Each Interest Election Request shall specify the following information:

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

(B) whether the Loans will be converted to ABR Loans or Term SOFR Loans, and the amount to be so converted, or continued as Term SOFR Loans; and

(C) if the resulting Loans are Term SOFR Loans, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of “Interest Period.”

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

Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each applicable Lender of the details thereof.

(iii) Automatic Continuation and Conversion of Loans. If an Interest Election Request with respect to Term SOFR Loans is not timely delivered prior to the end of the Interest Period applicable thereto, then, unless such Loans are repaid as provided herein, at the end of such Interest Period such Loans shall automatically continue as Term SOFR Loans, as applicable, with an Interest Period of the same duration as the then expiring Term SOFR Loans, as applicable. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing, at the election of the Required Lenders, (A) no outstanding Loans may be converted to or continued as Term SOFR Loans and (B) unless repaid, each then existing Term SOFR Loan shall be converted to an ABR Loan at the end of the Interest Period applicable thereto.

 

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(e) Interest Calculation. Interest shall accrue from the most recent date to which interest has been paid, and if no interest has been paid, from the date the Loan is made. All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted Term SOFR shall be determined by the Administrative Agent in accordance with the provisions of this Agreement and such determination shall be conclusive absent demonstrable error.

(f) Notwithstanding anything in the Loan Documents to the contrary, with respect to any Interest Payment Date ending on or after January 1, 2021 but prior to July 1, 2022, if Cash Liquidity, as of the last Business Day of the fiscal quarter most recently ended prior to such Interest Payment Date and for which a Cash Liquidity report has been delivered (or was required to be delivered) pursuant to Section 5.01(h), is less than (i) $25,000,000 minus (ii) the aggregate amount of (x) any Capital Expenditures in excess of $6,000,000 (per project), (y) any Acquisitions (other than the Safe Flight Acquisition or the Schroth Acquisition) to the extent not funded with (1) the Cash Equivalent proceeds of any issuance of Equity Interests of Holdings (or any direct or indirect parent thereof) substantially concurrent with such Acquisitions not constituting Disqualified Capital Stock (including upon exercise of warrants or options) which proceeds (if in respect of any Equity Interests of a direct or indirect parent) have been contributed as common equity to the capital of Holdings, or (2) contributions to the common capital of Holdings received in Cash Equivalents substantially concurrent with such Acquisitions; and (z) any other Investments made outside of the ordinary course of business, in each case of clauses (x), (y) and (z), during the Covenant Suspension Period, the Borrower may elect (a “PIK Election”) to pay all or a portion of the interest accrued in accordance with Section 2.06(a) on any Term Loan on such Interest Payment Date by adding (on the applicable Interest Payment Date) the amount of such accrued and unpaid interest with respect to such Term Loan to the outstanding principal amount of such Term Loan (the “PIK Interest”); provided, however, that any interest payable upon the prepayment or repayment of any Term Loan (or portion thereof) or pursuant to Section 2.06(b) shall be paid in cash and may not be subject to a PIK Election. The Borrower shall give notice of any PIK Election to the Administrative Agent in writing at least ten (10) Business Days in advance of the Interest Payment Date in respect of which such PIK Election is made, specifying the portion of interest in respect of the Term Loans that will be paid as PIK Interest. For the avoidance of doubt, (A) all interest due on the Loans on any date not constituting PIK Interest shall be paid in cash and (B) all PIK Interest shall be added (on each Interest Payment Date or when otherwise due) to the outstanding principal amount of the Loans. PIK Interest so added to the principal amount of the Loans shall be deemed for all purposes to be principal of the Loans (including with respect to the calculation of any prepayment premium and with respect to the accrual of interest).

SECTION 2.07 Termination and Reduction of Commitments.

(a) Initial Term Loan Commitments. The Initial Term Loan Commitments shall automatically and irrevocably terminate in full upon the funding of the Initial Term Loans in the full amount of the Initial Term Loan Commitment on the Closing Date.

 

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(b) Delayed Draw Term Loan Commitments. The Delayed Draw Term Loan Commitments shall (i) automatically and irrevocably be reduced upon the funding of any Delayed Draw Term Loans by the amount of the Delayed Draw Term Loans so funded and (ii) automatically and irrevocably terminate in full upon the Delayed Draw Termination Date after the funding of any Delayed Draw Term Loans to the extent the Delayed Draw Termination Date occurs pursuant to clause (a) of the definition thereof and shall otherwise terminate as provided for in clause (b) of the definition thereof.

(c) Revolving Credit Commitments. The Revolving Credit Commitments shall automatically and irrevocably terminate upon the applicable Maturity Date.

(d) Optional Terminations and Reductions of Commitments. The Borrower shall have the right at any time to terminate or reduce any unfunded Delayed Draw Term Loan Commitments or unfunded Revolving Credit Commitments by written notice of termination or reduction not later than 11:00 a.m. three (3) Business Days before the date of termination or reduction. Promptly following receipt of any such notice, the Administrative Agent shall advise the applicable Lenders of the contents thereof. Each such notice provided under this Section 2.07(d) shall be irrevocable, provided that a notice of termination or reduction of such Commitments in full delivered by the Borrower may state that such notice is conditioned upon the effectiveness of another credit facility or the closing of a securities offering, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified termination date date) if such condition is not satisfied. Each notice shall specify the termination or reduction date and the principal amount of Commitments of each Class to be terminated (which shall be in a minimum amount of $500,000 or, if less, the remaining unfunded Commitments of such Class).

(e) Eleventh Amendment Incremental Term Loan Commitments. The Eleventh Amendment Incremental Term Loan Commitments shall automatically and irrevocably terminate in full upon the funding of the Eleventh Amendment Incremental Term Loans in the full amount of the Eleventh Amendment Incremental Term Loan Commitment in accordance with the Eleventh Amendment.

SECTION 2.08 Scheduled Repayment of Loans.

(a) Initial Term Loans. On each date set forth below (each, a “Scheduled Initial Term Loan Repayment Date”), the Borrower shall be required to repay that principal amount of Initial Term Loans, to the extent then outstanding, as is set forth opposite each such date below (each such repayment, as the same may be reduced as provided in this Agreement, or as a result of the application of prepayments in connection with any extension as provided in Section 2.16, a “Scheduled Initial Term Loan Repayment”)

 

Scheduled Initial Term Loan Repayment Date		Amount
December 31, 2017		$	400,000.00
March 31, 2018		$	400,000.00
June 30, 2018		$	400,000.00
September 30, 2018		$	400,000.00
December 31, 2018		$	400,000.00
March 31, 2019		$	400,000.00
June 30, 2019		$	400,000.00
September 30, 2019		$	400,000.00

 

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Scheduled Initial Term Loan Repayment Date		Amount
December 31, 2019		$	400,000.00
March 31, 2020		$	400,000.00
June 30, 2020		$	400,000.00
September 30, 2020		$	400,000.00
December 31, 2020		$	400,000.00
March 31, 2021		$	400,000.00
June 30, 2021		$	400,000.00
September 30, 2021		$	400,000.00
December 31, 2021		$	400,000.00
March 31, 2022		$	400,000.00
June 30, 2022		$	400,000.00
September 30, 2022		$	400,000.00
December 31, 2022		$	400,000.00
March 31, 2023		$	400,000.00
June 30, 2023		$	400,000.00
September 30, 2023		$	400,000.00
December 31, 2023		$	400,000.00
March 31, 2024		$	400,000.00
June 30, 2024		$	400,000.00
September 30, 2024		$	400,000.00
December 31, 2024		$	400,000.00
March 31, 2025		$	400,000.00
June 30, 2025		$	400,000.00
September 30, 2025		$	400,000.00
December 31, 2025		$	400,000.00
March 31, 2025		$	400,000.00
June 30, 2025		$	400,000.00
September 30, 2025		$	400,000.00
December 31, 2025		$	400,000.00
Maturity Date for Initial Loans			Any balance outstanding

(b) Delayed Draw Term Loans. On each date constituting a Scheduled Initial Term Loan Repayment Date occurring on or after March 31, 2019 (together with the Scheduled Initial Term Loan Repayment Dates, each, a “Scheduled Repayment Date”), the Borrower shall be required to pay an amount equal to 0.25% of the sum of the initial aggregate principal amounts of all Delayed Draw Term

 

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Loans funded under this Agreement prior to March 31, 2019, to the extent then outstanding (each such repayment, as the same may be reduced as provided in this Agreement, or as a result of the application of prepayments in connection with any extension as provided in Section 2.16, and together with the Scheduled Initial Term Loan Repayments, each, a “Scheduled Repayment”); provided that, (i) on the first Scheduled Repayment Date following the funding of any Delayed Draw Term Loans under the Fourth Amendment Delayed Draw Term Loan Commitment Increase, the amount of such payment referred to in this clause (b) shall be increased to an amount equal to 0.25% of the product of (x) the sum of (A) the aggregate outstanding principal amount of Delayed Draw Term Loans immediately prior to the funding of any Delayed Draw Term Loans under the Fourth Amendment Delayed Draw Term Loan Commitment Increase and (B) the aggregate outstanding principal amount of all Delayed Draw Term Loans funded under the Fourth Amendment Delayed Draw Term Loan Commitment Increase and (y) a fraction, the numerator of which is $90,000,000 and the denominator of which is the aggregate outstanding principal amount of the Delayed Draw Term Loans immediately prior to the funding of any Delayed Draw Term Loans under the Fourth Amendment Delayed Draw Term Loan Commitment Increase; (ii) on the first Scheduled Repayment Date following the funding of any Delayed Draw Term Loans under the Fifth Amendment Delayed Draw Term Loan Commitment Increase, the amount of such payment referred to in this clause (b) shall be increased to an amount equal to the product of (x) $510,709.84 and (y) a fraction, the numerator of which is the sum of (A) the aggregate outstanding principal amount of Delayed Draw Term Loans immediately prior to the funding of any Delayed Draw Term Loans under the Fifth Amendment Delayed Draw Term Loan Commitment Increase and (B) the aggregate outstanding principal amount of all Delayed Draw Term Loans funded under the Fifth Amendment Delayed Draw Term Loan Commitment Increase and the denominator of which is the aggregate outstanding principal amount of the Delayed Draw Term Loans immediately prior to the funding of any Delayed Draw Term Loans under the Fifth Amendment Delayed Draw Term Loan Commitment Increase; and (iii) on the first Scheduled Repayment Date following the funding of any Delayed Draw Term Loans under the Ninth Amendment Delayed Draw Term Loan Commitment Increase, the amount of such payment referred to in this clause (b) shall be increased to an amount equal to the product of (x) $766,945.37 and (y) a fraction, the numerator of which is the sum of (A) the aggregate outstanding principal amount of Delayed Draw Term Loans immediately prior to the funding of any Delayed Draw Term Loans under the Ninth Amendment Delayed Draw Term Loan Commitment Increase and (B) the aggregate outstanding principal amount of all Delayed Draw Term Loans funded under the Ninth Amendment Delayed Draw Term Loan Commitment Increase and the denominator of which is the aggregate outstanding principal amount of the Delayed Draw Term Loans immediately prior to the funding of any Delayed Draw Term Loans under the Ninth Amendment Delayed Draw Term Loan Commitment Increase; provided, further, that the outstanding balance of Delayed Draw Term Loans will be required to be repaid on the Maturity Date for Delayed Draw Term Loans.

(c) Revolving Credit Loans. The Borrower shall be required to repay the aggregate outstanding principal amount of all Revolving Credit Loans on the applicable Maturity Date.

(d) Eleventh Amendment Incremental Term Loans. On each date constituting a Scheduled Initial Term Loan Repayment Date occurring after the Eleventh Amendment Effective Date, the Borrower shall be required to repay an amount equal to 0.25% of the sum of the aggregate principal amount of the Eleventh Amendment Incremental Term Loans funded on the Eleventh Amendment Effective Date, to the extent then outstanding (as the same may be reduced as provided in this Agreement, or as a result of the application of prepayments in connection with any extension as provided in Section 2.16); provided that, the outstanding balance of the Eleventh Amendment Incremental Term Loans will be required to be repaid on the Maturity Date for the Eleventh Amendment Incremental Term Loans.

 

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SECTION 2.09 Prepayments of Loans.

(a) Optional Prepayments. The Borrower shall have the right at any time to prepay the Loans, in whole or in part, subject to the requirements of this Section 2.09; provided that each partial prepayment shall be in an amount not less than $500,000 or, if less, the outstanding principal amount of the Loans.

(b) Mandatory Prepayments. Subject to Section 2.09(c) and Section 2.09(d):

(i) Within five (5) Business Days following the receipt by Holdings or any of its Subsidiaries of any Net Cash Proceeds from Asset Sales or Casualty Events constituting Excess Proceeds, the Borrower shall prepay the Loans in accordance with Section 2.09(c) in an amount equal to 100% of such Excess Proceeds; provided that, except in connection with a sale, assignment, transfer, lease, conveyance or other disposition (in a single transaction or a series of related transactions) of all, or substantially all, of the assets of Holdings and its Subsidiaries, taken as a whole, the Borrower may deliver a Reinvestment Notice to the Administrative Agent (which shall promptly transmit such Reinvestment Notice to the Lenders) in accordance with Section 2.09(b)(vi) and, to the extent such Excess Proceeds are actually applied as contemplated by Section 2.09(b)(vi), no prepayment with such Excess Proceeds shall be required hereunder; it being agreed that to the extent all or any portion of such Excess Proceeds are not applied as contemplated by Section 2.09(b)(vi) in the time period described therein, the remaining portion of such Excess Proceeds shall be applied to make a prepayment pursuant to this Section 2.09(b)(i) within five (5) Business Days of the expiration of such time period. The Borrower shall notify the Administrative Agent (which shall promptly transmit such Reinvestment Notice to the Lenders) of such prepayment in accordance with Section 2.09(d). For the avoidance of doubt, in the event of a sale, assignment, transfer, lease, conveyance or other disposition (in a single transaction or a series of related transactions) of all, or substantially all, of the assets of Holdings and its Subsidiaries, taken as a whole, the Borrower shall not be permitted to reinvest any Excess Proceeds resulting therefrom, but instead shall be required to prepay the Loans in accordance with the first sentence of Section 2.09(b)(i).

(ii) Within five (5) Business Days following the receipt by Holdings or any of its Subsidiaries of Net Cash Proceeds from a Debt Issuance, the Borrower shall prepay the Loans in accordance with Section 2.09(c) in an amount equal to 100% of such Net Cash Proceeds.

(iii) Within five (5) Business Days following receipt by Holdings or any of its Subsidiaries of any Specified Equity Contribution, the Borrower shall prepay the Loans in accordance with Section 2.09(c) in an aggregate amount equal to 100% of such Specified Equity Contribution.

(iv) Within five (5) Business Days following the earlier of (x) delivery of financial statements pursuant to Section 5.01(a) and (y) the date on which the financial statements pursuant to Section 5.01(a) are required to be delivered, with respect to each Excess Cash Flow Period, the Borrower shall repay the Loans in accordance with Section 2.09(c) in an amount equal to (1) the Excess Cash Flow Percentage of the Excess Cash Flow for such Excess Cash Flow Period, minus (2) the sum of the amount of all voluntary prepayments of principal of Term Loans, in each case, excluding prepayments made with the proceeds of any Equity Issuances or Indebtedness (other than revolving Indebtedness), made at any time during the period from the first day of such Excess Cash Flow Period but without duplication of any such prepayments applied to reduce the payment required pursuant to this Section 2.09(b)(iv) with respect to any prior Excess Cash Flow Period to the date such Excess Cash Flow payment is actually made as herein provided.

 

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(v) [Reserved];

(vi) Within 15 months after the receipt of any Net Cash Proceeds from Asset Sales or Casualty Events, Holdings or any Subsidiary thereof, as applicable, may apply such Net Cash Proceeds to make Capital Expenditures or to acquire replacement assets or assets that will be useful in the business of Holdings or any Subsidiary thereof; provided, that the Borrower shall deliver a Reinvestment Notice to the Administrative Agent (which shall promptly transmit such Reinvestment Notice to the Lenders) on or prior to the date on which such mandatory prepayment would otherwise be required to be made under this Section 2.09(b). Pending the final application of any Net Cash Proceeds from Asset Sales or Casualty Events, Holdings or any Subsidiary may invest such Net Cash Proceeds in any manner that is not prohibited under this Agreement; provided that the foregoing shall not limit the obligations of the Borrower to make any prepayment as and to the extent required pursuant to the following sentence. To the extent a Reinvestment Notice is delivered but the Net Cash Proceeds are not applied to make Capital Expenditures or to acquire replacement assets or assets that will be useful in the business of Holdings or any Subsidiary thereof within such 15 month period, such Net Cash Proceeds must be prepaid in accordance with the other provisions of this Section.

(c) Application of Prepayments; Lenders’ Rights to Decline Payments. All prepayments under this Section 2.09 shall be made in accordance with Section 2.13, and applied to repay the outstanding principal amount of Term Loans, first, in direct order to the first eight (8) then upcoming Scheduled Repayments pursuant to Section 2.08, and second, pro rata to reduce the Scheduled Repayments of the applicable Class, except that if the Borrower so directs with a notice provided to the Administrative Agent either prior to or concurrently with the making of a voluntary prepayment pursuant to Section 2.09(a), such voluntary prepayment shall be applied as directed by the Borrower. Within the parameters of the applications set forth above, prepayments shall be applied first to ABR Loans and then to Term SOFR Loans in direct order of Interest Period maturities. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.06, together with any additional amounts required pursuant to Section 2.12. Notwithstanding the foregoing, any Lender may elect, by written notice to the Borrower (with a copy to the Administrative Agent) within one (1) Business Day of such Lender’s receipt of the notice from the Administrative Agent pursuant to Section 2.09(d), to decline any mandatory prepayment of the Term Loans pursuant to Section 2.09(b) (other than Section 2.09(b)(ii)) in which case the aggregate amount of the prepayment that would have been applied to prepay such Term Loans of such Lender shall be retained by the Borrower. For the avoidance of doubt, all payments required by this Section 2.09 or any other clause of this Agreement shall be for the full principal amount of the applicable Term Loans regardless of whether original issue discount is applicable to such Term Loans.

(d) Notice of Prepayment. For any optional prepayments under Section 2.09(a), the Borrower shall notify the Administrative Agent by written notice of any prepayment under such Section, (A) in the case of prepayment of Term SOFR Loans, not later than 11:00 a.m. three (3) Business Days before the date of prepayment, and (B) in the case of prepayment of ABR Loans, not later than 1:00 p.m., one (1) Business Day before the date of prepayment. For any mandatory prepayments under Section 2.09(b), the Borrower shall notify the Administrative Agent by written notice of any such prepayment under such Section not more than five (5) Business Days prior to the date such prepayment is required to be made under Section 2.09(b). Promptly following receipt

 

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of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each such notice provided under this Section 2.09(d) shall be irrevocable, provided that (i) a notice of prepayment made with respect to any mandatory prepayment under Section 2.09(b) may be withdrawn if the Borrower subsequently delivers a Reinvestment Notice concurrently with any such notice to withdraw or (ii) a notice of prepayment of the Loans in full delivered by the Borrower may state that such notice is conditioned upon the effectiveness of another credit facility or the closing of a securities offering, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified prepayment date) if such condition is not satisfied. Each notice shall specify the prepayment date, the principal amount of Loans to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment.

(e) Prepayment Premium. Each prepayment of Initial Term Loans and Delayed Draw Term Loans made prior to the first anniversary of the Closing Date pursuant to Section 2.09(a) or Section 2.09(b)(ii) shall be accompanied by a Make-Whole Premium. All prepayments of Term Loans pursuant to Section 2.09(a) or Section 2.09(b)(ii) made on or after the first anniversary of the Closing Date but prior to the Maturity Date shall be accompanied by a premium (expressed as a percentage of the aggregate principal amount of the Loans to be prepaid or repaid) as follows:

 

Date of Prepayment		Prepayment Premium
From the first anniversary of the Closing Date to but not including the second anniversary of the Closing Date			3.0	%
From the second anniversary of the Closing Date to but not including the fourth anniversary of the Closing Date			1.0	%
From and after the fourth anniversary of the Closing Date			0.0	%

(f) Limitations on Mandatory Prepayments. Prepayments made pursuant to Section 2.09(b)(i) and Section 2.09(b)(iv) are subject to the absence of material adverse tax consequences to Holdings and its Subsidiaries, taken as a whole, and to permissibility restrictions (while such restrictions are in actual effect) under local law (e.g., financial assistance, corporate benefit, and the fiduciary and statutory duties of the directors of the relevant Subsidiaries) and material constituent document restrictions (including as a result of minority ownership by third parties) and other material agreements (so long as any such prohibition is not created in contemplation of such prepayment of this Agreement). For the avoidance of doubt, the non-application of any prepayment amounts as a consequence of the foregoing provisions will not constitute a Default or an Event of Default, and such amounts may be used for working capital purposes of Holdings and its Subsidiaries for so long as not required to be prepaid in accordance with this Section 2.09(f). Holdings and its Subsidiaries will use commercially reasonable efforts for one year to overcome or eliminate such restrictions and to make the relevant prepayment. Notwithstanding the foregoing, any prepayments required after use of such commercially reasonable efforts may be net of any costs, expenses or taxes incurred by Holdings or any of its Subsidiaries as the result of such efforts.

SECTION 2.10 Alternate Rate of Interest.

(a) Subject to clauses (b), (c), (d), (e), (f) and (g) of this Section 2.10, if prior to the commencement of any Interest Period for Term SOFR Loans:

 

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(i) the Administrative Agent reasonably determines (which determination shall be final and conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining Adjusted Term SOFR for such Interest Period; or

(ii) the Administrative Agent reasonably determines or is advised in writing by the Required Lenders that Adjusted Term SOFR for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Term SOFR Loans for such Interest Period;

then the Administrative Agent shall give written notice thereof to the Borrower and the Lenders as promptly as practicable thereafter, and until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Loans that were to have been converted on the first day of such Interest Period to Term SOFR Loans shall be continued as ABR Loans and (ii) any outstanding Term SOFR Loans shall be converted, on the last day of the then-current Interest Period, to an ABR Loan.

Calculation of all amounts payable to a Lender under this Section 2.10 and under Section 2.11 shall be made by the applicable Lender in a written notice to the Borrower showing in reasonable detail the basis for the calculation thereof, which ,absent demonstrable error, shall be final, conclusive and binding upon the parties hereto.

(b) Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date shall have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any Loan Document in respect of any Benchmark setting at or after 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.

(c) In connection with the administration of Adjusted Term SOFR or the use, administration, adoption or implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan Document.

(d) The Administrative Agent will promptly notify the Borrower and the Lenders of (i) any occurrence of a Benchmark Transition Event or an Early Opt-in Election, as applicable, and its related Benchmark Replacement Date, (ii) the implementation of any Benchmark Replacement, (iii) the effectiveness of any Conforming Changes, (iv) the removal or reinstatement of any tenor of a Benchmark pursuant to clause (f) below and (v) the commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent in consultation with, or subject to, consent rights of Borrower as expressly set forth in this Section 2.10, including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required pursuant to this Section 2.10.

 

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(e) Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a Benchmark Replacement), (i) if the then-current Benchmark is a term rate (including Term SOFR) and either (A) any tenor for such Benchmark is not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (B) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (ii) if a tenor that was removed pursuant to clause (i) above either (A) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (B) is not, or is no longer, subject to an announcement that it is not or will not be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.

(f) Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any request for a Borrowing of, conversion to or continuation of Term SOFR Loan to be made, converted or continued during any Benchmark Unavailability Period and, failing that, the Borrower will be deemed to have converted any such request into a request for a Base Rate Loan, or conversion to Base Rate Loans. During any Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of the Alternate Base Rate based upon the then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of the Alternate Base Rate.

SECTION 2.11 Yield Protection.

(a) Increased Costs Generally. If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in, by any Lender (except any reserve requirement reflected in Adjusted Term SOFR);

(ii) subject any Lender to any additional Taxes of any kind whatsoever with respect to this Agreement or any Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Indemnified Taxes, Other Taxes and Excluded Taxes); or

(iii) impose on any Lender or the Term SOFR market any other condition (other than Taxes), cost or expense affecting this Agreement or Term SOFR Loans made by such Lender;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Term SOFR Loan or any other Loan in the case of clause (ii) above (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount), then, upon request of such Lender, the Borrower will pay to such Lender, such additional amount or amounts as will compensate such Lender, for such additional costs actually incurred or reduction actually suffered.

 

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

(c) Certificates for Reimbursement. A certificate of a Lender setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section 2.11 and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d) Delay in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to this Section 2.11 shall not constitute a waiver of such Lender’s right to demand such compensation; provided, that the Borrower shall not be required to compensate a Lender pursuant to this Section 2.11 for any increased costs incurred or reductions suffered more than six months prior to the date that such Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 2.12 Breakage Payments. In the event of (a) the payment or prepayment, whether optional or mandatory, of any principal of any Term SOFR Loan earlier than the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Term SOFR Loan earlier than the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Loan on the date specified in any notice delivered pursuant hereto or (d) the assignment of any Term SOFR Loan prior to the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.15, then, in any such event, the Borrower shall compensate each Lender for the actual loss, cost and expense (excluding the Applicable Loan Margin) incurred as a result of such event. A certificate of any Lender setting forth in reasonable detail any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.12 shall be delivered to the Borrower (with a copy to the Administrative Agent) and shall be conclusive and binding absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.

 

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SECTION 2.13 Payments Generally; Pro Rata Treatment; Sharing of Setoffs.

(a) Payments Generally. The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest or fees, or of amounts payable under Section 2.14 or 10.03, or otherwise) on or before the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 1:00 p.m.), on the date when due, in immediately available funds, without setoff, deduction or counterclaim. Any amounts received after such time on any date may, in the discretion of the Required Lenders, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All payments under the Loan Documents shall be made directly to the persons specified therein. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under each Loan Document shall be made in dollars in immediately available funds, except as may be expressly specified otherwise.

(b) Pro Rata Treatment. Unless otherwise agreed by Blackstone, on the one hand, and any one or more Lender(s), on the other hand,

(i) each payment by the Borrower of interest in respect of the Loans of any Class shall be applied to the amounts of such obligations owing to the Lenders in respect of such Class, pro rata according to the respective amounts then due and owing to the Lenders in respect of such Class; and

(ii) each payment on account of principal of the Loans of any Class shall be allocated among the Lenders in respect of such Class, pro rata based on the principal amount of the Loans held by the Lenders in respect of such Class.

(c) Insufficient Funds. If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, toward payment of interest and fees then due hereunder, ratably (unless otherwise agreed by Blackstone, on the one hand, and any one or more Lender(s), on the other hand) among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, toward payment of principal then due hereunder, ratably (unless otherwise agreed by Blackstone, on the one hand, and any one or more Lender(s), on the other hand) among the parties entitled thereto in accordance with the amounts of principal then due to such parties. It is understood that the foregoing does not apply to any adequate protection payments under any federal, state or foreign bankruptcy, insolvency, receivership or similar proceeding, and that the Required Lenders, in their sole discretion (except as the Lenders may agree among themselves), may direct the Administrative Agent, subject to any applicable federal, state or foreign bankruptcy, insolvency, receivership or similar orders, as to the distribution of any adequate protection payments it receives on behalf of the Lenders (i.e., whether to pay the earliest accrued interest, all accrued interest on a pro rata basis or otherwise). All payments made hereunder shall be applied first to any ABR Loans and then to any Term SOFR Loans.

(d) Sharing of Setoff. Subject, as among the Lenders, to any agreement between Blackstone, on the one hand, and any one or more Lender(s), on the other hand, if any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other Obligations resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other Obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent and the other Lenders of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that:

(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

 

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(ii) the provisions of this paragraph shall not be construed to apply to (x) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to Holdings or any Subsidiary thereof (as to which the provisions of this paragraph shall apply).

If under applicable bankruptcy, insolvency or any similar law any Secured Party receives a secured claim in lieu of a setoff or counterclaim to which this Section 2.13(d) applies, such Secured Party shall to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights to which the Secured Party is entitled under this Section 2.13(d) to share in the benefits of the recovery of such secured claim.

(e) Borrower Default. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. Nothing herein shall be deemed to limit the rights of the Administrative Agent or any Lender against the Borrower or any other Loan Party.

SECTION 2.14 Taxes.

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

 

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(b) Payment of Other Taxes by Borrower. Without limiting the provisions of paragraph (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Requirements of Law.

(c) Indemnification by Borrower. The Borrower shall indemnify each Agent and each Lender, within 10 days after receipt of the certificate described in the succeeding sentence, for the full amount of any Indemnified Taxes and/or Other Taxes (including Indemnified Taxes and/or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.14) payable or paid by Agent or such Lender or required to be withheld or deducted from a payment to Agent or such Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes and/or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. In connection with any request for reimbursement under this Section 2.14(c), a certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(d) Evidence of Payments. As soon as practicable (and in any event within forty-five (45) days) after any payment of Taxes by the Borrower or any other Loan Party to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Required Lenders.

(e) Status of Lenders. (i) Each Lender shall deliver to the Borrower and the Administrative Agent, at such times as are reasonably requested by the Borrower or the Administrative Agent, any documentation prescribed by law, or reasonably requested by the Borrower or the Administrative Agent, certifying as to any entitlement of such Lender to an exemption from, or reduction in, any withholding Tax with respect to any payments to be made to such Lender under any Loan Document or otherwise required or reasonably necessary to establish such Lender’s status for withholding Tax or satisfy any information reporting requirements in an applicable jurisdiction. Each Lender shall, whenever a lapse in time or change in circumstances renders such documentation (including any specific documents required below in this Section 2.14(e)) expired, obsolete or inaccurate in any material respect, deliver promptly to the Borrower and the Administrative Agent updated or other appropriate documentation (including any new documentation reasonably requested by the applicable withholding agent) or promptly notify the Borrower and the Administrative Agent of its inability to do so.

(ii) Without limiting the generality of the foregoing:

(A) each Lender that is a “United States person” within the meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent on or before the date on which it becomes a party to this Agreement, two duly executed, properly completed originals of Internal Revenue Service Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding,

(B) each Foreign Lender that is entitled under the Code or any applicable treaty to an exemption from or reduction of withholding Tax with respect to any payments hereunder or under any other Loan Document shall deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement, whichever of the following is applicable:

(I) duly executed, properly completed originals of Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable) or any successor thereto claiming eligibility for benefits of an income Tax treaty to which the United States is a party,

 

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(II) duly executed, properly completed originals of Internal Revenue Service Form W-8ECI or any successor thereto,

(III) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate (a “U.S. Tax Compliance Certificate”), in substantially the form of Exhibit H, to the effect that (i) such Foreign Lender is not (A) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (B) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code and (ii) interest payments on the Loans are not effectively connected with the Foreign Lender’s conduct of a U.S. trade or business, and (y) duly executed, properly completed copies of Internal Revenue Service Form W-8BEN or W-8BEN-E (as applicable),

(IV) to the extent a Foreign Lender is not the beneficial owner (for example, where the Foreign Lender is a partnership or a participating Lender), duly executed, properly completed originals of Internal Revenue Service Form W-8IMY, or any successor thereto, of the Foreign Lender, accompanied by Internal Revenue Service Form W-9, Form W-8ECI, Form W-8BEN or Form W-8BEN-E (as applicable), U.S. Tax Compliance Certificate, Form W-8IMY, or any other required information, or any successor forms, from each beneficial owner that would be required under this Section 2.14(e) if such beneficial owner were a Lender, as applicable (provided that, if the Foreign Lender is a partnership for U.S. federal income Tax purposes (and not a participant Lender), and one or more beneficial owners are claiming the portfolio interest exemption, the U.S. Tax Compliance Certificate may be provided by such Foreign Lender on behalf of such beneficial owners, provided such certificates are duly executed and properly completed originals), or any other form prescribed by applicable Requirements of Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax duly completed together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required to be made, or

(V) any other form prescribed by applicable requirements of U.S. federal income Tax law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax duly completed together with such supplementary documentation as may be prescribed by applicable Requirements of Law to permit the Borrower and the Administrative Agent to determine the withholding or deduction required to be made.

 

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(C) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Sections 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower or the Administrative Agent to comply with their obligations under FATCA, to determine whether such Lender has complied with such Lender’s obligations under FATCA or, if necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (C), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Notwithstanding any other provision of this clause (e), a Lender shall not be required to deliver any form that such Lender is not legally eligible to deliver.

(f) Treatment of Certain Refunds. If an Agent or a Lender determines, in its sole discretion exercised in good faith, that it has received a refund of any Indemnified Taxes as to which it has been indemnified by a Loan Party or with respect to which a Loan Party has paid additional amounts pursuant to this Section 2.14, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by a Loan Party under this Section with respect to the Indemnified Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses (including any Taxes) of such Agent or such Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the Borrower, upon the request of such Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority due to the Borrower’s delay with respect to such repayment) to such Agent or such Lender in the event such Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require any Agent or any Lender to make available its Tax Returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other person. Notwithstanding anything to the contrary, in no event will any Lender be required to pay any amount to the Borrower, the payment of which would place such Lender in a less favorable net after-Tax position than such Lender would have been in if the additional amounts giving rise to such refund of any Indemnified Taxes or Other Taxes had never been paid.

(g) Status of Agent. On or before the date First Eagle Alternative Credit, LLC (as successor by merger to First Eagle Private Credit, LLC (f/k/a NewStar Financial, Inc.)) (or any successor or replacement Agent) becomes an Agent hereunder, it shall deliver to the Borrower a duly executed, properly completed original of either (i) Internal Revenue Service Form W-9 or (ii) a U.S. branch withholding certificate on Internal Revenue Service Form W-8IMY certifying on Part I, Part II and Part VI thereof that it is a U.S. branch that has agreed to be treated as a U.S. person for U.S. federal tax purposes (with respect to amounts received on account of any Lender) and Internal Revenue Service Form W-8ECI (with respect to amounts received on its own account). At any time thereafter, the Administrative Agent shall provide updated documentation previously provided (or a successor form thereto) when any documentation previously delivered has expired or become obsolete or invalid or otherwise upon the reasonable request of the Borrower.

 

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(h) Delay in Requests. The Borrower shall not be required to compensate a Lender pursuant to this Section for any interest or penalties suffered more than 180 days prior to the date that such Lender notifies the Borrower of the relevant Taxes, and of such Lender’s intention to claim compensation therefore (except that, if the Change in Law giving rise to such Taxes or related costs is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 2.15 Mitigation Obligations; Replacement of Lenders.

(a) Designation of a Different Lending Office. If any Lender requests compensation under Section 2.11, or requires the Borrower to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.11 or 2.14, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. A certificate setting forth such costs and expenses submitted by such Lender to the Borrower shall be conclusive absent manifest error.

(b) Replacement of Lenders. If any Lender requests compensation under Section 2.11, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, or if a Lender is a Non-Consenting Lender, then notwithstanding anything to the contrary contained in this Agreement, the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.04), all of its interests, rights and obligations under this Agreement and the other Loan Documents to an Eligible Assignee that shall assume such obligations under this Agreement and the other Loan Documents (which assignee may be another Lender, if a Lender accepts such assignment); provided, that:

(i) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 2.12), assuming for this purpose (in the case of a Lender being replaced pursuant to Section 2.11 or 2.14) that the Loans of such Lender were being prepaid; provided that no premium under Section 2.09(e) shall be due in connection therewith) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

(ii) in the case of any such assignment resulting from a claim for compensation under Section 2.11 or payments required to be made pursuant to Section 2.14, such assignment will result in a reduction in such compensation or payments thereafter; and

(iii) such assignment does not conflict with applicable Requirements of Law.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

 

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Each Lender agrees that, if the Borrower elects to replace such Lender in accordance with this Section 2.15(b), it shall promptly execute and deliver to the Administrative Agent an Assignment and Assumption to evidence the assignment and shall deliver to the Administrative Agent any Note (if requested by the Eligible Assignee) subject to such Assignment and Assumption; provided, that the failure of any such Lender to execute an Assignment and Assumption shall not render such assignment invalid and such assignment shall be recorded in the Register; provided, further, that the parties to such assignment shall pay to the Administrative Agent a processing and recordation fee of $3,500 in connection with the assignment, unless otherwise waived by the Administrative Agent.

SECTION 2.16 Extended Term Loans.

(a) Notwithstanding anything to the contrary in this Agreement, subject to the terms of this Section 2.16, the Borrower may at any time and from time to time request that all or a portion of the Loans of any Class (an “Existing Term Loan Tranche”) be converted to extend the scheduled maturity date of any payment of principal with respect to all or any portion of the principal amount of such Loans (any such Loans which have been so converted, “Extended Term Loans,”) and to provide for other terms consistent with this Section 2.16. In order to establish any Extended Term Loans, the Borrower shall provide a notice to the Administrative Agent (who shall provide a copy of such notice to each of the Lenders under the applicable Existing Term Loan Tranche) (each, an “Extension Request”) setting forth the proposed terms of the Extended Term Loans to be established, which shall (x) be identical as offered to each Lender under the relevant Existing Term Loan Tranche (including as to the proposed interest rates and fees payable) and (y) be identical to the Loans under the relevant Existing Term Loan Tranche from which such Extended Term Loans are to be converted, except that: (i) all or any of the scheduled amortization payments of principal of the Extended Term Loans may be delayed to later dates than the scheduled amortization payments of principal of the Loans of such Existing Term Loan Tranche to the extent provided in the applicable Extension Amendment; (ii) the “effective yield” with respect to the Extended Term Loans (whether in the form of interest rate margin, upfront fees, original issue discount or otherwise) may be different than the “effective yield” for the Loans of such Existing Term Loan Tranche to the extent provided in the applicable Extension Amendment; (iii) the Extension Amendment may provide for other covenants and terms that apply solely to any period after the Latest Maturity Date that is in effect on the effective date of the applicable Extension Amendment (immediately prior to the establishment of such Extended Term Loans); (iv) Extended Term Loans may have mandatory prepayment terms which provide for the application of proceeds from mandatory prepayment events to be made first to prepay the Loans under the Existing Term Loan Tranche from which such Extended Term Loans have been converted before applying any such proceeds to prepay such Extended Term Loans; and (v) Extended Term Loans may have optional prepayment terms (including call protection and terms which allow Loans under the relevant Existing Term Loan Tranche from which such Extended Term Loans have been converted to be optionally prepaid prior to the prepayment of such Extended Term Loans) as may be agreed by the Borrower and the Lenders thereof; provided that no Extended Term Loans may be optionally prepaid prior to the date on which all Loans with an earlier final stated maturity (including Loans under the Existing Term Loan Tranche from which such Loans were converted) are repaid in full, unless such optional prepayment is accompanied by a pro rata optional prepayment of such other Loans; provided, however, that (A) in no event shall the final maturity date of any Extended Term Loans of a given Extension Series (as defined below) at the time of establishment thereof be earlier than the then final stated maturity of the applicable Existing Term Loan Tranche from which such Extended Term Loans have been converted and (B) the Weighted Average Life to Maturity of any Extended Term Loans of a given Extension Series at the time of establishment thereof shall be no shorter than the remaining Weighted Average Life to Maturity of the applicable Existing Term Loan Tranche from which such Extended Term Loans have been converted. Any Extended Term

 

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Loans converted pursuant to any Extension Request shall be designated a series (each, an “Extension Series”) of Extended Term Loans, as applicable, for all purposes of this Agreement; provided that any Extended Term Loans converted from an Existing Term Loan Tranche may, to the extent provided in the applicable Extension Amendment (as defined below), be designated as an increase in any previously established Extension Series with respect to such Existing Term Loan Tranche.

(b) The Borrower shall provide the applicable Extension Request at least ten (10) Business Days prior to the date on which Lenders under the Existing Term Loan Tranche are requested to respond, and shall agree to such procedures, if any, as may be established by, or acceptable to, the Administrative Agent, in each case acting reasonably to accomplish the purposes of this Section 2.16. No Lender shall have any obligation to agree to have any of its Loans of any Existing Term Loan Tranche converted into Extended Term Loans pursuant to any Extension Request. Any Lender (each, an “Extending Term Loan Lender”) wishing to have all or a portion of its Loans under the Existing Term Loan Tranche subject to such Extension Request converted into Extended Term Loans shall notify the Administrative Agent (each, an “Extension Election”) on or prior to the date specified in such Extension Request of the amount of its Loans under the Existing Term Loan Tranche which it has elected to request be converted into Extended Term Loans (subject to any minimum denomination requirements imposed by the Administrative Agent). Any Lender that does not respond to the Extension Request on or prior to the date specified therein shall be deemed to have rejected such Extension Request. In the event that the aggregate principal amount of Loans under the applicable Existing Term Loan Tranche exceeds the amount of Extended Term Loans requested pursuant to such Extension Request, Loans of such Existing Term Loan Tranche, subject to such Extension Elections, shall either (i) be converted to Extended Term Loans of such Existing Term Loan Tranche on a pro rata basis based on the aggregate principal amount of Loans of such Existing Term Loan Tranche included in such Extension Elections, or (ii) to the extent such option is expressly set forth in the applicable Extension Request, be converted to Extended Term Loans upon an increase in the amount of Extended Term Loans so that such excess does not exist.

(i) Extended Term Loans shall be established pursuant to an amendment (each, an “Extension Amendment”) to this Agreement among the Borrower, the Administrative Agent and each Extending Term Loan Lender providing an Extended Term Loan thereunder, which shall be consistent with the provisions set forth in Section 2.16(a) above (but which shall not require the consent of any other Lender). The Administrative Agent shall promptly notify each relevant Lender as to the effectiveness of each Extension Amendment.

(ii) Extensions consummated by the Borrower pursuant to this Section 2.16 shall not constitute voluntary or mandatory payments or prepayments for purposes of this Agreement. The Administrative Agent and the Lenders hereby consent to each Extension and the other transactions contemplated by this Section 2.16 (including, for the avoidance of doubt, payment of any interest or fees in respect of any Extended Term Loans on such terms as may be set forth in the applicable Extension Request) and hereby waive the requirements of any provision of this Agreement or any other Loan Document that may otherwise prohibit any Extension or any other transaction contemplated by this Section 2.16, provided that such consent shall not be deemed to be an acceptance by such Lender of any Extension Request with respect to such Lender.

 

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SECTION 2.17 Incremental Credit Extensions.

(a) Incremental Commitments. On and after (x) the Delayed Draw Termination Date or (y) solely in connection with an Incremental Term Loan incurred to consummate the Schroth Acquisition, the Tenth Amendment Effective Date, the Borrower may at any time or from time to time, by notice to the Administrative Agent (an “Incremental Term Loan Request”), request one or more new commitments of Term Loans which may be of the same Class as any outstanding Term Loans (an “Incremental Term Loan Increase”) or a new Class of term loans (collectively with any Incremental Term Loan Increase, the “Incremental Term Loan Commitments”). The Administrative Agent shall promptly forward any Incremental Term Loan Request to all Lenders, and any interested Lenders shall as soon as practicable, and in any case (but excluding any Incremental Term Loan Request for the incurrence of Incremental Term Loans to consummate the Schroth Acquisition) within ten Business Days (or such shorter period as may be agreed to by the Lender Representative) following receipt of such notice, provide the Borrower and the Administrative Agent a written offer to provide such Incremental Term Loan (including portions thereof) with terms and provisions in accordance with this Section 2.17 (any such Lender, an “Increasing Lender”); provided that (i) other than in the case of any Incremental Term Loan Request for the incurrence of Incremental Term Loans to consummate the Schroth Acquisition, if no such offer is provided by a Lender within such 10 Business Day-period (or such shorter period as may be agreed to by the Lender Representative), such Lender shall be deemed to have declined to exercise such right of offer, (ii) the Borrower shall be under no obligation to accept any such offer from such Lender and (iii) solely in the case of any Incremental Term Loan Request for the incurrence of Incremental Term Loans to consummate the Schroth Acquisition, unless otherwise agreed to in writing by Blackstone (in its sole discretion), such Incremental Term Loans (and the related Incremental Term Loan Commitments) shall only be provided by Blackstone and/or any Blackstone Designee. No Lender shall have any obligation, express or implied, to provide Incremental Term Loans, and any decision by a Lender to provide Incremental Term Loans shall be made in its sole discretion independently from any other Lender. Only the consent of each applicable Lender shall be required for it to provide Incremental Term Loans pursuant to this Section 2.17. The Borrower may accept some or all of the offered amounts or designate new lenders (provided, in any event, such new lender is an Eligible Assignee), as additional Lenders hereunder in accordance with this Section 2.17 (the “Additional Lenders”, and together with the Increasing Lenders and the Lenders providing Incremental Term Loans incurred to consummate the Schroth Acquisition, the “Incremental Lenders”), which Additional Lenders may provide all or a portion of such Incremental Term Loans. The Borrower shall have discretion to adjust the allocation of such Incremental Term Loan Commitments (other than Incremental Term Loan Commitments incurred to consummate the Schroth Acquisition) among the Increasing Lenders and the Additional Lenders.

(b) Incremental Loans. On the applicable date (each, an “Incremental Facility Closing Date”) specified in any Incremental Amendment (including through any Incremental Term Loan Increase), subject to the satisfaction of the terms and conditions in this Section 2.17 and in the applicable Incremental Amendment, (i) each Incremental Lender shall make a Loan to the Borrower (an “Incremental Term Loan”) in an amount equal to its Incremental Term Loan Commitment of such Class and (ii) each Incremental Term Lender shall become a Lender hereunder with respect to the Incremental Term Loan Commitment of such Class and the Incremental Loans made pursuant thereto.

(c) Effectiveness of Incremental Amendment. The effectiveness of any Incremental Amendment, and the Incremental Term Loan Commitments thereunder, shall be subject to the satisfaction or waiver of each of the following conditions, together with any other conditions set forth in the Incremental Amendment:

(i) Other than in the case of an Incremental Amendment and an Incremental Term Loan relating to the Schroth Acquisition, immediately before and after giving effect to such Borrowing and the application of the proceeds thereof, no Default or Event of Default shall have occurred and be continuing; provided, that in connection with any Incremental Term Loan incurred to consummate a

 

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Limited Condition Acquisition, the condition under this clause (i) shall be that (x) no Default or Event of Default shall have occurred at the time the definitive documentation relating to such Limited Condition Acquisition is executed and (y) no Event of Default pursuant to Section 8.01(a), (b), (g) or (h) has occurred and is continuing at the time the relevant Limited Condition Acquisition, is consummated and the Incremental Term Loans are funded;

(ii) Other than in the case of an Incremental Term Loan incurred to consummate the Schroth Acquisition, immediately before and after giving effect to such Borrowing and the application of the proceeds thereof, all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects after giving effect to such qualification and other than those representations and warranties that are expressly made as of an earlier specified date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier specified date); provided, however, that (A) in connection with an Incremental Term Loan incurred to consummate a Limited Condition Acquisition, the condition under this clause (ii) shall be that (x) such representations and warranties are true and correct to the extent required above as of the time the definitive documentation relating to such Limited Condition Acquisition is executed and (y) the Specified Representations are true and correct in all material respects (other than those Specified Representations that are expressly qualified by Material Adverse Effect or other materiality, in which case such Specified Representations shall be true and correct in all respects after giving effect to such qualification and other than those Specified Representations that are expressly made as of an earlier specified date, in which case such Specified Representation shall be true and correct in all material respects as of such earlier specified date) at the time the relevant Limited Condition Acquisition is consummated and the Incremental Term Loans are funded; and (B) in connection with an Incremental Term Loan incurred to consummate the Schroth Acquisition, the condition under this clause (ii) shall be that the Specified Schroth Representations are true and correct in all material respects (other than those representations and warranties that are expressly qualified by Material Adverse Effect or other materiality, in which case such Specified Schroth Representations shall be true and correct in all respects after giving effect to such qualification and other than those Specified Schroth Representations that are expressly made as of an earlier specified date, in which case such Specified Schroth Representation shall be true and correct in all material respects as of such earlier specified date) at the time the Schroth Acquisition is consummated and the Incremental Term Loans in connection therewith are funded;

(iii) each Incremental Term Loan Commitment shall be in a minimum amount of $5,000,000 or a whole multiple of $100,000 in excess hereof; provided that such amount may be less than $5,000,000 if such amount represents all remaining availability under the applicable limit set forth in Section 2.17(c)(iv));

(iv) the aggregate principal amount of Incremental Loans made does not exceed (x) $40,000,000 less the aggregate initial principal amount of funded Delayed Draw Term Loans or (y) solely in the case of any Incremental Term Loans incurred to consummate the Schroth Acquisition, $145,000,000;

(v) except in connection with an Incremental Term Loan incurred to consummate the Schroth Acquisition, the Total Net Leverage Ratio (after giving effect to the Incremental Term Loans, any Acquisition financed thereby and the Incurrence of any other Indebtedness in connection therewith on a Pro Forma Basis) for the four fiscal quarters most recently ended prior to the incurrence of such Incremental Term Loans for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable, does not exceed 5.50 to 1.00, as certified in an Officer’s Certificate executed by a Financial Officer of the Borrower; and

 

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(vi) receipt by the Administrative Agent of (A) customary legal opinions, board resolutions and officers’ certificates consistent with those delivered on the Closing Date (conformed as appropriate) other than changes to such legal opinions resulting from a change in law, change in fact or change to counsel’s form of opinion reasonably satisfactory to the Administrative Agent and (B) reaffirmation agreements and/or such amendments to the Collateral Documents as may be reasonably requested by the Incremental Lenders in order to ensure that such Administrative Agent are provided with the benefit of the applicable Loan Documents; provided that, solely in connection with an Incremental Term Loan incurred to consummate the Schroth Acquisition, the condition under this clause (vi) shall be the receipt by the Administrative Agent of (A) customary legal opinions, board resolutions and officers’ certificates and solvency and closing certificates, in each case, consistent with those delivered on the Closing Date (conformed as appropriate) other than (in the case of legal opinions) changes to such legal opinions resulting from a change in law, change in fact or change to counsel’s form of opinion reasonably satisfactory to the Administrative Agent, or any additional legal opinions of local counsel to the Loan Parties as may be reasonably requested by Blackstone and (B) reaffirmation agreements and/or such amendments to the Security Documents as may be reasonably requested by Blackstone in order to ensure that such Administrative Agent is provided with the benefit of the applicable Loan Documents.

(d) Required Terms. The terms, provisions and documentation of the Incremental Term Loans and Incremental Term Loan Commitments shall be as agreed between the Borrower and the applicable Incremental Lenders providing such Incremental Term Loan Commitments, and except as otherwise set forth herein, to the extent not consistent with the Term Loans existing on the Incremental Facility Closing Date, shall be consistent with clauses (i) through (iii) below, as applicable, and otherwise reasonably satisfactory to the Lender Representative (except for covenants or other provisions (a) conformed (or added) in the Loan Documents pursuant to the related Incremental Amendment for the benefit of the Lenders or (b) applicable only to periods after the Latest Maturity Date as of the Incremental Amendment Date); provided that in the case of an Incremental Term Loan Increase, the terms, provisions and documentation (other than the Incremental Amendment evidencing such increase) of such Incremental Term Loan Increase shall be identical (other than with respect to upfront fees, original issue discount or similar fees) to the applicable Class of Term Loans being increased, in each case, as existing on the Incremental Facility Closing Date. In any event:

(i) any collateral securing any Incremental Term Loan shall also secure all other Obligations on a pari passu basis;

(ii) the Incremental Term Loans shall not have a final scheduled maturity date earlier than the latest Maturity Date as of the Incremental Amendment Date;

(iii) the Incremental Term Loans shall have a Weighted Average Life to Maturity not shorter than the Weighted Average Life to Maturity of the Initial Term Loans, the Delayed Draw Term Loans, Eleventh Amendment Incremental Term Loans or any Extended Term Loans as to which the Initial Term Loans, the Delayed Draw Term Loans or the Eleventh Amendment Incremental Term Loans were the Existing Term Loan Tranche; provided that for purposes of determining the Weighted Average Life to Maturity of such Initial Term Loans, Delayed Draw Term Loans, Eleventh Amendment Incremental Term Loans or any Extended Term Loans as to which the Initial Term Loans, the Delayed Draw Term Loans or the Eleventh Amendment Incremental Term Loans were the Existing Term Loan Tranche, the effects of any amortization payments and prepayments made on such Initial Term Loans, Delayed Draw Term Loans, Eleventh Amendment Incremental Term Loans or Extended Term Loans prior to the incurrence of such Incremental Term Loans shall be disregarded;

(iv) the proceeds of any Incremental Term Loan may be used by the Borrower and its Subsidiaries for any purposes permitted by Section 5.08;

 

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(v) the All-In Yield applicable to any Incremental Term Loan shall be determined by the Borrower and the applicable Incremental Lenders; provided, however, if the All-In Yield applicable to any such Incremental Term Loan exceeds by more than fifty basis points per annum the All-In Yield then in effect for any Initial Term Loans, Delayed Draw Term Loans or Eleventh Amendment Incremental Term Loans, as applicable, then the Applicable Loan Margin of the existing Initial Term Loans, Delayed Draw Term Loans or Eleventh Amendment Incremental Term Loans, as applicable, shall increase by an amount equal to such difference minus fifty basis points; provided, that if the applicable Incremental Loan includes an interest rate floor greater than the applicable interest rate floor under the existing Initial Term Loans, Delayed Draw Term Loans or Eleventh Amendment Incremental Term Loans, such differential between the interest rate floors shall be equated to the Applicable Loan Margin for purposes of determining whether an increase to Applicable Loan Margin under the existing Initial Term Loans, Delayed Draw Term Loans or Eleventh Amendment Incremental Term Loans shall be required, but only to the extent an increase in the interest rate floor in the existing Initial Term Loans, Delayed Draw Term Loans or Eleventh Amendment Incremental Term Loans would cause an increase in the interest rate then in effect thereunder, and in such case, the interest rate floor (but not the Applicable Loan Margin) applicable to the existing Initial Term Loans, Delayed Draw Term Loans or Eleventh Amendment Incremental Term Loans shall be increased to the extent of such differential between interest rate floors; and

(vi) any Incremental Term Loan shall share ratably in any prepayments of the Initial Term Loans, any Delayed Draw Term Loans and the Eleventh Amendment Incremental Term Loans pursuant to Section 2.09(b) unless the Borrower and the applicable Incremental Lenders elect lesser payments.

(e) Incremental Amendment. Incremental Term Loan Commitments shall become additional Commitments pursuant to an amendment (an “Incremental Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, each Incremental Lender providing such Incremental Term Loan Commitments, and the Administrative Agent. The Incremental Amendment may, without the consent of any other Loan Party, Agent or Lender, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent (at the direction of the Lender Representative) and the Borrower, to effect the provisions of this Section 2.17, including amendments as deemed necessary by the Administrative Agent (at the direction of the Lender Representative) to address technical issues relating to funding and payments.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants to the Administrative Agent, the Collateral Agent and each of the Lenders (with references to the Companies being references thereto after giving effect to the Transactions) that:

SECTION 3.01 Organization; Powers. Each Company (a) is duly organized and validly existing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority to carry on its business as now conducted and to own and lease its material property and (c) has all requisite governmental and regulatory licenses, authorizations, consents and approvals to carry on its business, and is qualified and in good standing (to the extent such concept is applicable in the applicable jurisdiction) to do business in every jurisdiction where such qualification is required, except in the case of clause (b) and clause (c), as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

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

SECTION 3.03 No Conflicts. The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except (i) such as have been obtained or made and are in full force and effect, (ii) filings necessary to perfect Liens created by the Loan Documents and (iii) consents, approvals, registrations, filings, permits or actions the failure to obtain or perform which could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, (b) will not violate the Organizational Documents of any Company, (c) will not violate any Requirement of Law, (d) will not violate or result in a default or require any consent or approval under any indenture, agreement or other instrument binding upon any Company or its property, or give rise to a right thereunder to require any payment to be made by any Company, (e) will not violate any order, judgment or decree of any court or other agency of government binding on any Company, and (f) will not result in the creation or imposition of any Lien on any property of any Company, except Liens created by the Loan Documents and Permitted Liens; except in the case of clauses (a), (c), (d), and (e) to the extent such violation, conflict, breach or default could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 3.04 Financial Statements; Projections.

(a) Historical Financial Statements. Holdings has heretofore delivered to the Administrative Agent and the Lenders (i) the audited consolidated balance sheet of each of (a) Loar Group LLC and its subsidiary and (b) Loar Group Inc. and its subsidiaries, each consisting of the balance sheets and the related statements of operations and cash flows as of December 31, 2016 and (ii) the unaudited consolidated balance sheets and related consolidated statements of operations and cash flow of Seller and its subsidiaries for each month ended after December 31, 2016 and at least 30 days prior to the Closing Date (or at least 60 days prior to the Closing Date in the case of any month in a fiscal quarter in which the Loar Target or any of its Subsidiaries has consummated any transaction or series of related transactions by which the Loar Target or any of its Subsidiaries has acquired (x) any business, division thereof or line of business, or all or substantially all of the assets, of any person, whether through purchase of assets, merger or otherwise or (y) Equity Interests of any person having at least a majority of the ordinary voting power of the then outstanding Equity Interests of such person). Such financial statements have been prepared in accordance with GAAP and present fairly in all material respects the financial position and results of operations and cash flows of the Persons described above as of the dates and for the periods to which they relate, subject to normal year-end audit adjustments in the case of interim unaudited financial statements and the absence of footnotes.

(b) No Liabilities. As of the Closing Date, except as set forth in the financial statements referred to in Section 3.04(a), there are no material liabilities of Holdings or any of its Subsidiaries of any kind, whether accrued, contingent, absolute, determined, determinable or otherwise, other than liabilities not prohibited under the Loan Documents. Since December 31, 2016, there has been no event, change, circumstance or occurrence that, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.

 

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(c) Forecasts. The forecasts of financial performance of Holdings and its Subsidiaries (the “Projections”) furnished to the Administrative Agent by or on behalf of the representatives of the Borrower have been prepared in good faith based on assumptions that are believed by the Borrower to be reasonable at the time so made; it being understood that such Projections are as to future events and are subject to uncertainties and contingencies, many of which are beyond the control of Holdings and its Subsidiaries, that no assurance can be given that such Projections will be realized, that the actual results during the period or periods covered by any such Projections may differ significantly from the projected results and that such differences may be material.

SECTION 3.05 Properties.

(a) Generally. Each Company has good title to, or valid leasehold interests in, all its property material to its business, free and clear of all Liens except for, Permitted Liens and minor irregularities or deficiencies in title that, individually or in the aggregate, do not materially interfere with its ability to conduct its business as currently conducted or to utilize such property for its intended purpose. The property of the Companies, taken as a whole, (i) is in good operating order, condition and repair (ordinary wear and tear excepted) and (ii) constitutes all the property which is reasonably required for the business and operations of the Companies as presently conducted, in each case of clauses (i) and (ii) hereof, except where the failure of such representation or warranty to be true could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(b) Real Property. As of the Closing Date, there is no Real Property owned by any Company, except as set forth on Schedule 3.05.

(c) Leases. No default by any Loan Party or any Subsidiary exists under any of the Real Property leases to which they are parties or under which they are operating, except as could not reasonably be expected to result in a Material Adverse Effect.

(d) Collateral. Each Loan Party owns or has rights to use all of the Collateral and all rights with respect to any of the foregoing used in, necessary for or material to each Loan Party’s business as currently conducted, except where the failure to own or have rights to use such Collateral and all rights with respect to any of the foregoing could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The use by each Loan Party of such Collateral and all such rights with respect to the foregoing do not infringe on the rights of any person other than such infringement which could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. No claim has been made and remains outstanding that any Loan Party’s use of any Collateral does or may violate the rights of any third party that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 3.06 Intellectual Property.

(a) Ownership. Each Loan Party owns exclusively, or is licensed to use, all of its Intellectual Property that is material to the conduct of the business of such Loan Party as currently conducted. No claim has been asserted and is pending, or to each Loan Party’s knowledge has been threatened in writing, by any person challenging or questioning the use of any such Intellectual Property or the validity or enforceability of any such Intellectual Property, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To each Loan Party’s knowledge, the use of such Intellectual Property by and the conduct of the business of each Loan Party does not infringe, misappropriate or otherwise violate the rights of any person, except for such claims, infringements, misappropriations or other violations that could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

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(b) Licenses; Registrations. Except as disclosed on Schedule 3.06(b), and except pursuant to licenses and other user agreements entered into by each Loan Party with its customers in the ordinary course of business, on and as of the Closing Date, no Loan Party has granted to any person any license or other right to use any material Intellectual Property. All registrations listed on part (i) of Schedule 10(a) and part (i) of Schedule 10(b) to the Perfection Certificate are subsisting, valid and enforceable.

(c) No Violations. To each Loan Party’s actual knowledge, except as set forth on Schedule 3.06(c), on and as of the Closing Date, there is no misappropriation or infringement by others of any intellectual property right of such Loan Party, which could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(d) Confidentiality. Each Loan Party has taken all steps customary and reasonable in its industry to safeguard and maintain the secrecy and confidentiality of, and its proprietary rights in, all its material trade secrets, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 3.07 Equity Interests and Subsidiaries.

(a) Equity Interests. Schedule 3.07(a) sets forth a list as of the Closing Date of (i) all the Subsidiaries of Holdings and their jurisdictions of organization as of the Closing Date and (ii) the number of each class of their respective Equity Interests authorized and outstanding on the Closing Date and the number of shares covered by all outstanding options, warrants, rights of conversion or purchase and similar rights at the Closing Date. As of the Closing Date, all Equity Interests of each Company are duly and validly issued and are fully paid and (if applicable) non-assessable, and, other than the Equity Interests of Holdings, are owned by Holdings, directly or indirectly through Wholly Owned Subsidiaries of Holdings.

(b) Organizational Chart. An accurate organizational chart, showing the ownership structure of each Subsidiary of Holdings on the Closing Date, and after giving effect to the Transactions, is set forth on Schedule 3.07(b).

(c) No Consent of Third Parties Required. No consent of any person including any other general or limited partner, any other member of a limited liability company, any other shareholder or any other trust beneficiary is necessary in connection with the creation, perfection or, subject to any Permitted Revolving Credit Facility Intercreditor Agreement, priority status of the security interest of the Collateral Agent in any Equity Interests pledged to the Collateral Agent for the benefit of the Secured Parties under the Security Agreement or, subject to any Permitted Revolving Credit Facility Intercreditor Agreement, the exercise by the Collateral Agent of the voting or other rights provided for in the Security Agreement with respect to such Equity Interests or the exercise of remedies in respect of such Equity Interests.

SECTION 3.08 Litigation; Compliance with Laws. There are no actions, suits or proceedings at law or in equity by or before any Governmental Authority, and no arbitration proceeding or governmental investigation, now pending or, to the knowledge of any Responsible Officer of any Loan Party, threatened in writing against any Company or any business, property or rights of any Company (i) that involve any Loan Document or any of the Transactions and that is reasonably likely to be adversely determined and, as a result thereof, would adversely affect in any material respect the validity or

 

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enforceability of any Loan Document or (ii) that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. No Company or any of its property is in violation of, nor will the continued operation of its property as currently conducted violate, any Requirements of Law (including any zoning or building ordinance, code or approval or any building permits) or any restrictions of record or agreements affecting any Company’s Real Property or is in default with respect to any Requirement of Law, where such violation or default, could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 3.09 Federal Reserve Regulations. No Loan Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of buying or carrying Margin Stock. No part of the proceeds of any Loan will be used, whether directly or indirectly, in violation of Regulation T, U or X of the Board. The pledge of the Investment Property pursuant to the Security Agreement does not violate such regulations.

SECTION 3.10 Investment Company Act. No Loan Party is required to be registered as an “investment company” under the Investment Company Act of 1940, as amended.

SECTION 3.11 Use of Proceeds. The Borrower will use the proceeds of the Initial Term Loans and the Equity Contribution to finance the Transactions, to finance the Specified Earn-Outs (including the funding of the Specified Earn-Out Account for the purpose of financing future payments of the Maverick Earn-out) and, to the extent of any excess, to fund the ongoing working capital and other general corporate activity of the Loan Parties. The Borrower will use the proceeds of the Delayed Draw Term Loans and any Incremental Term Loans from time to time after the Closing Date to finance Permitted Acquisitions and to pay any related costs, fees, and expenses incurred in connection therewith and, to the extent any Revolving Credit Loans or loans under any Permitted Revolving Credit Facility have been incurred to finance any Permitted Acquisitions, to repay such Revolving Credit Loans; provided that (a) no more than $50,000,000 of the Delayed Draw Term Loans shall be used to finance the SMR Acquisition and to pay any related costs, fees and expenses incurred therewith; (b) Delayed Draw Term Loans under the Fourth Amendment Delayed Draw Term Loan Commitment Increase shall be used solely to finance the Hydra Acquisition and to pay any related costs, fees and expenses incurred in connection therewith; (c) Delayed Draw Term Loans under the Fifth Amendment Delayed Draw Term Loan Commitment Increase shall be used solely to finance the PPR Acquisition and to pay any related costs, fees and expenses incurred in connection therewith; (d) Delayed Draw Term Loans under the Ninth Amendment Delayed Draw Term Loan Commitment Increase shall be used solely to fund the ongoing working capital and other general corporate activity (including any transaction not prohibited by the Loan Documents) of the Loan Parties and (e) the proceeds of Eleventh Amendment Incremental Term Loans shall be used, directly or indirectly, to (i) pay a portion of the consideration pursuant to the terms and conditions of the Schroth Acquisition Agreement, and make the other payments contemplated by the Schroth Acquisition Agreement, (ii) pay the Bank Repayment Amount (as defined in the Schroth Acquisition Agreement) to the Finance Parties (as defined in the Schroth Acquisition Agreement), (iii) pay fees and expenses incurred in connection with the foregoing clauses (i) and (ii) and the transactions related thereto and (iv) otherwise fund working capital and general corporate purposes of the Loan Parties. The Borrower will use the proceeds of the Revolving Credit Loans to fund the ongoing working capital and other general corporate activities of the Loan Parties, including any transaction not prohibited by the Loan Documents, subject, in the case of Permitted Investments (other than Permitted Investments described in clauses (a), (e), (i) and (p) of the definition thereof) and Restricted Payments (other than Restricted Payments permitted pursuant to Section 6.07(b)(i), (ii), (vi) or (viii)), to the satisfaction of the Revolving Credit Availability Condition on a Pro Forma Basis (after giving Pro Forma Effect to such Permitted Investment or Restricted Payment and the Incurrence of any Indebtedness in connection therewith).

 

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SECTION 3.12 Taxes. Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, each Company has timely filed or caused to be timely filed all Tax Returns required to have been filed and all such Tax Returns are true, correct and complete, and has timely paid or caused to be timely paid all Taxes required to have been paid by it that are due and payable, including in its capacity as a withholding agent, except Taxes (or any requirement to file Tax returns with respect thereto) that are being contested in good faith by appropriate proceedings and for which the Borrower or such Restricted Subsidiary, as applicable, has set aside on its books adequate reserves in accordance with GAAP. Except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, there are no current, proposed, or, to the knowledge of Holdings or each applicable Company, pending material Tax assessments, deficiencies, or audits against any Company except those being actively contested by Holding or such Company in good faith and by appropriate proceedings and for which adequate reserves or other appropriate provisions have been provided in accordance with GAAP.

SECTION 3.13 No Material Misstatements. All written factual information (excluding the Projections, industry specific information, information of a general economic nature and forward looking information) heretofore, contemporaneously or hereafter furnished by or on behalf of any Company (including by the Sponsor) to the Administrative Agent or any Lender for purposes of or in connection with the negotiation of this Agreement or any Loan Document, taken as a whole, is or will be, when furnished, complete and correct in all material respects (after giving effect to all supplements thereto) and does not or will not, when furnished, contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements thereto).

SECTION 3.14 Labor Matters. There are no strikes, lockouts or slowdowns against any Company pending or, to the knowledge of any Company, threatened in writing as of the Closing Date. The hours worked by and payments made to employees of any Company have not been in violation of the Fair Labor Standards Act of 1938, as amended, or any other applicable federal, state, local or foreign law dealing with such matters in any manner which could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The consummation of the Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which any Company is bound.

SECTION 3.15 Solvency. Immediately after the consummation of the Transactions to occur on the Closing Date, (a) the fair value of the properties and assets of the Loan Parties and their Subsidiaries on a consolidated basis, on a going concern basis, will exceed their debts and liabilities, subordinated, contingent or otherwise; (b) the present fair saleable value of the properties and assets of the Loan Parties and their Subsidiaries on a consolidated basis, on a going concern basis, will be greater than the amount that will be required to pay the probable liability of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) the Loan Parties and their Subsidiaries on a consolidated basis will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) the Loan Parties and their Subsidiaries on a consolidated basis will not have unreasonably small capital with which to conduct the business in which they are engaged as such business is now conducted and is proposed to be conducted following the date hereof. For purposes of this representation, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

 

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SECTION 3.16 Employee Benefit Plans.

(a) None of the Loan Parties nor any of their respective ERISA Affiliates (i) maintains, sponsors, contributes to, or is required to contribute to any Plan or Multiemployer Plan or (ii) has or could reasonably be expected to have any current or potential liabilities in respect of any such Plan or Multiemployer Plan, in each case (x) without exception as of the Closing Date, and (y) as of any subsequent date, which could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. No ERISA Event has occurred or, as of the date hereof, is reasonably expected to occur which could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(b) Each Foreign Plan has been maintained in compliance with its terms and with the requirements of any and all applicable Requirements of Law and has been maintained, where required, in good standing with applicable regulatory authorities, except for any noncompliance or failure to be in good standing which could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. No Company has incurred, or could reasonably be expected to incur, any obligation in connection with the termination of or withdrawal from any Foreign Plan, except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 3.17 Environmental Matters.

(a) Except as set forth on Schedule 3.17 or except as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect:

(i) The facilities and properties owned or currently leased or operated by a Company (the “Properties”) are in compliance with, and the Companies have no liability under, any applicable Environmental Law;

(ii) The Companies have obtained all Environmental Permits required for the conduct of their businesses and the operation of their Properties under Environmental Law and all such Environmental Permits are valid and in good standing;

(iii) There has been no Release or threatened Release of Hazardous Material on, at, under or from any of the Properties of a Company that could reasonably be expected to result in liability of the Companies under any applicable Environmental Law;

(iv) There is no Environmental Claim pending or, to the knowledge of the Companies, threatened in writing against the Companies, or relating to any of their Properties;

(v) No person with an indemnity or contribution obligation to the Companies relating to compliance with or liability under Environmental Law is in default with respect to such obligation;

(vi) No Company is obligated to perform any action or otherwise incur any material expense under Environmental Law pursuant to any order, decree, judgment or agreement by which it is bound or has assumed by contract, agreement or operation of law, and no Company is conducting or financing any Response pursuant to any Environmental Law with respect to any Property of such Company;

 

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(vii) No Property of the Companies and, to the knowledge of the Companies, no property formerly owned, operated or leased by the Companies or any of their predecessors in interest is (A) listed or formally proposed for listing on the National Priorities List promulgated pursuant to CERCLA or (B) listed on the Comprehensive Environmental Response, Compensation and Liability Information System promulgated pursuant to CERCLA or (C) included on any similar list maintained by any Governmental Authority including any such list relating to releases of petroleum; and

(viii) No Environmental Lien has been recorded or, to the knowledge of any Company, threatened under any Environmental Law with respect to any Properties of the Companies.

(b) The representations and warranties contained in this Section 3.17 are the sole and exclusive representations and warranties of the Companies with respect to Environmental Laws and Hazardous Materials.

SECTION 3.18 Insurance. Schedule 3.18 sets forth a true, complete and correct description of all property and liability insurance maintained by each Company as of the Closing Date. All material property and material liability insurance maintained by the Companies is in full force and effect, all premiums have been duly paid, and except as promptly notified to the Administrative Agent, no Company has received notice of violation or cancellation in respect of such material property or material liability insurance policy. Each Company has insurance in such amounts and covering such risks and liabilities (after giving effect to any self-insurance reasonable and customary for companies of a similar size engaged in similar businesses in similar locations) as are customary for companies of a similar size engaged in similar businesses in similar locations.

SECTION 3.19 Security Documents. The Security Agreement is effective to create in favor of the Collateral Agent for the benefit of the Secured Parties, legal, valid and enforceable Liens on, and security interests in, the Security Agreement Collateral of the Loan Parties party thereto, and upon (a) financing statements in appropriate form being filed in the offices specified on Schedule 3.19, and (b) the taking of possession or control by the Collateral Agent (or the administrative or collateral agent under any Permitted Revolving Credit Facility on its behalf pursuant to the applicable Permitted Revolving Credit Facility Intercreditor Agreement) of such Security Agreement Collateral with respect to which a security interest may be perfected only by possession or control (which possession or control shall be given to the Collateral Agent (or, to the extent required pursuant to the applicable Permitted Revolving Credit Facility Intercreditor Agreement, the administrative or collateral agent under any Permitted Revolving Credit Facility) to the extent possession or control by the Collateral Agent is required by the Security Agreement), subject to any Permitted Revolving Credit Facility Intercreditor Agreement, the Liens created by the Security Agreement shall constitute perfected first-priority Liens on, and security interests in, all right, title and interest of the grantors in such Security Agreement Collateral (other than such Security Agreement Collateral in which a security interest cannot be perfected under the UCC as in effect at the relevant time in the relevant jurisdiction), subject to Permitted Liens.

SECTION 3.20 USA PATRIOT Act and Sanctions.

(a) To the extent applicable, each of Holdings and its Subsidiaries is in compliance, in all material respects, with (i) the Trading with the Enemy Act, and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R. Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating thereto and (ii) the USA PATRIOT Act.

 

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(b) (i) None of Holdings or its Subsidiaries will directly or, to the knowledge of Holdings or such Subsidiary, indirectly, (x) use the proceeds of the Loans in violation of Sanctions or (y) otherwise make available such proceeds to any Person for the purpose of financing activities or business of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent that such financing would be permissible for a Person required to comply with Sanctions (including pursuant to any applicable exemptions, licenses or other approvals); (ii) none of Holdings, any Subsidiary or to the knowledge of Holdings or such Subsidiary, their respective directors, officers or employees or, to the knowledge of the Borrower, any controlled Affiliate of Holdings or its Subsidiaries that will act in any capacity in connection with the Loans, is a Sanctioned Person and (iii) none of Holdings, its Subsidiaries or, to the knowledge of Holdings or such Subsidiary, their respective directors, officers and employees, are in violation of applicable Sanctions in any material respect.

(c) The representations made under paragraph (a) or (b) above in relation to Sanctions are made only to the extent that they do not result in a violation of, or conflict with, Section 7 of the German Foreign Trade Ordinance (Außenwirtschaftsverordnung (AWV)) Council Regulation (EC) No. 2271/96 of 22 November 1996 or any similar applicable anti-boycott law or regulation provided that to the extent that any Loan Party cannot make any of the representations or warranties contained in paragraph (a) or (b) above due to any such anti-boycott laws or regulations, such Loan Party shall be deemed to make such representations in relation to Anti-Corruption Laws, anti-money laundering laws and Sanctions that are applicable to or binding upon such Loan Party in its original jurisdiction.

SECTION 3.21 Anti-Corruption Laws. No part of the proceeds of the Loans will be used directly or, to the knowledge of Holdings and its Subsidiaries, indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the FCPA and Holdings, its Subsidiaries and, to the knowledge of Holdings or such Subsidiary, their respective directors, officers, employees and agents (solely to the extent acting in their capacity as agents for Holdings or any of its Subsidiaries), are in compliance in all material respects with the FCPA and any other Anti-Corruption Laws.

ARTICLE IV

CONDITIONS TO CLOSING

SECTION 4.01 Conditions to Closing. The obligation of each Lender to fund the Initial Term Loans in the amount of its Initial Term Loan Commitment to be made by it on the Closing Date, and the effectiveness of all other Commitments to be established on the Closing Date, shall be subject to the prior or concurrent satisfaction or waiver (by the Lender Representative and the Agents) of each of the conditions precedent set forth in this Section 4.01.

(a) Loan Documents. There shall have been delivered to the Lender Representative and the Agents an executed counterpart of each of the following documents from the applicable Loan Parties:

(i) a Borrowing Request with respect to the Initial Term Loans, delivered in accordance with Section 2.03 and attaching a customary funds flow memorandum and sources and uses,

(ii) this Agreement,

(iii) the Security Agreement,

 

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(iv) a Note for each Lender requesting a Note at least two (2) Business Days prior to the Closing Date,

(v) the Agency Fee Letter, and

(vi) the Perfection Certificate.

(b) Corporate Documents. The Lender Representative and the Agents shall have received:

(i) customary certificates of the secretary or assistant secretary of each Loan Party dated the Closing Date, certifying (A) that attached thereto is a true, correct and complete copy of each Organizational Document of such Loan Party certified (to the extent applicable) as of a recent date by the Secretary of State of the state of its organization, (B) that attached thereto is a true, correct and complete copy of resolutions duly adopted by the Board of Directors of such Loan Party authorizing the execution, delivery and performance of the Loan Documents to which such person is a party and, in the case of the Borrower, the borrowings hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect and (C) as to the incumbency and specimen signature of each officer executing any Loan Document delivered in connection herewith on behalf of such Loan Party; and

(ii) a certificate as to the good standing of each Loan Party as of a recent date, from the Secretary of State (or other applicable Governmental Authority) of the state of its organization.

(c) Officer’s Certificate. The Lender Representative and the Agents shall have received a customary Officer’s Certificate, dated the Closing Date, confirming compliance with the conditions precedent set forth in this Section 4.01(d), (k), and (l), other than such conditions precedent, the satisfaction of which are in the discretion of an Agent, the Lender Representative, the Required Lenders or the Lenders.

(d) Transactions, etc.

(i) The Equity Contribution shall have been, or substantially concurrently with the funding of the Loans hereunder, shall be consummated; provided, however, that for purposes of this clause (d)(i), any equity investment that Blackstone or any Blackstone Designee has committed to provide, to the extent all conditions thereto have been satisfied (or waived by Blackstone or Blackstone Designee, as applicable, in writing) and such commitment has not been terminated by Holdings or its applicable direct or indirect parent, shall be assumed to have been consummated (regardless of whether or not consummated).

(ii) The Loar Acquisition shall have been, or substantially concurrently with the funding of the Initial Term Loans hereunder shall be, consummated in accordance with the terms of the Loar Acquisition Agreement, without giving effect to any modifications, amendments or express waivers or consents thereto that are adverse in any material respect to the Lenders in their capacities as such without the consent of the Lender Representative (it being understood and agreed that (i) any change to the definition of “Material Adverse Effect” contained in the Loar Acquisition Agreement shall be deemed to be materially adverse to the Lenders and (ii) any increase or reduction in the purchase price shall not be deemed to be materially adverse to the Lenders if, (x) in the case of any increase in the

 

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purchase price, such increase shall be funded solely with an increase in the Equity Contribution, or (y) in the case of any decrease in the purchase price, (1) such decrease shall not exceed $5,000,000 and (2) 50% of such purchase price decrease is allocated to reduce the Equity Contribution and 50% of such purchase price decrease is allocated to reduce the Initial Term Loans, provided, further, that in the case of clause (ii), working capital adjustments, purchase price adjustments and other similar adjustments set forth in the Loar Acquisition Agreement shall not be deemed to be either an increase or a decrease to the purchase price).

(e) Financial Statements; Pro Forma Balance Sheet; Projections. The Lender Representative and the Agents shall have received the financial statements referred to in Section 3.04(a).

(f) Opinions of Counsel. Blackstone and the Agents shall have received customary written opinions of each of Ropes & Gray LLP, counsel to the Loan Parties; Cohn, Birnbaum & Shea, Connecticut counsel; Perkins Coie, Illinois counsel; Lathrop Gage, Kansas counsel; Benesch, Friedlander, Coplan & Aronoff, Ohio counsel; Cozen O’Connor, Pennsylvania counsel; and Gunderson Palmer Nelson Ashmore, South Dakota counsel; in each case, in form and substance reasonably satisfactory to the Lender Representative.

(g) Solvency Certificate. Blackstone and the Agents shall have received a solvency certificate substantially in the form of Exhibit I, dated the Closing Date and signed by a Financial Officer of Holdings.

(h) Fees. To the extent invoiced at least two (2) Business Days prior to the Closing Date (except as otherwise reasonably agreed by the Borrower), the Borrower shall pay the Lender Representative’s and the Agents’ reasonable and documented out-of-pocket costs and expenses (including, without limitation, all reasonable and documented out-of-pocket costs and expenses arising in connection with any due diligence investigation performed by Blackstone and the Agents and the reasonable fees and expenses of (i) Willkie Farr & Gallagher LLP, special counsel to Blackstone, (ii) Paul Hastings LLP, counsel to the Agents and (iii) any local legal counsel as shall be reasonably necessary following consultation with the Sponsor in connection with the transactions contemplated hereby) actually incurred in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documents required to be delivered on the Closing Date. In addition, the Borrower shall pay all fees required to be paid on the Closing Date set forth in the Fee Letter and the Agency Fee Letter. The foregoing fees and expenses shall, upon the funding of the Loans hereunder, have been paid (which amounts may, at the Lender Representative’s election, be offset against the proceeds of the Loans).

(i) Personal Property Requirements. The Borrower shall have taken the following actions and the Collateral Agent shall have received, in form and substance reasonably satisfactory to Blackstone and the Agents, the following documents, as applicable:

(i) the Borrower shall have used commercially reasonable efforts to deliver to the Collateral Agent the Intercompany Note, accompanied by instruments of transfer undated and endorsed in blank;

(ii) the Borrower shall have used commercially reasonable efforts to provide to the Collateral Agent all certificates, agreements and instruments necessary to perfect the Collateral Agent’s security interest in all Instruments and all Investment Property of each Loan Party (as each such term is defined in the Security Agreement and to the extent required by this Agreement and the Security Agreement);

 

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(iii) the Borrower shall have delivered to the Collateral Agent UCC financing statements in appropriate form for filing under the UCC, and the Borrower shall have used commercially reasonable efforts to provide Intellectual Property Security Agreements in form for filing with the United States Patent and Trademark Office and United States Copyright Office;

(iv) except to the extent permitted to be delivered after the Closing Date in accordance with Section 5.15, the Borrower shall have delivered to the Collateral Agent certificates and membership interest certificates (if any) of the Borrower and any wholly-owned Domestic Subsidiary of Holdings that is not an Excluded Subsidiary, together with undated stock transfer powers and membership transfer powers (if applicable); and

(v) the Borrower shall have delivered to the Collateral Agent copies of customary UCC lien searches, each of a recent date that name any Loan Party as debtor and that are filed with the secretary of state or other appropriate Governmental Authority in which such Loan Party is organized.

(j) USA PATRIOT Act. The Lender Representative and the Agents shall have received all documentation and other information about the Borrower and each Guarantor required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation, the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) at least three (3) Business Days prior to the Closing Date (to the extent such documentation and information has been requested by the Lender Representative and the Agents not less than ten (10) Business Days prior to the Closing Date).

(k) Representations and Warranties. The Specified Acquisition Agreement Representations shall be true and correct in all material respects on the Closing Date (without duplication of any materiality standards contained therein), but only to the extent that the Borrower has (or its applicable Affiliate has) the right, pursuant to the Loar Acquisition Agreement, to terminate its obligations under the Loar Acquisition Agreement to consummate the Loar Acquisition (or the right not to consummate the Loar Acquisition pursuant to the Loar Acquisition Agreement) as a result of a breach of such Specified Acquisition Agreement Representations. The Specified Credit Agreement Representations shall be true and correct in all material respects on or as of the Closing Date (without duplication of any materiality standards contained therein) (except in the case of any Specified Credit Agreement Representation which expressly relates to a given date or period, such representation and warranty shall be true and correct in all material respects as of the respective date or period, as the case may be); provided, that to the extent that any of the Specified Credit Agreement Representations are qualified by or subject to a “company material adverse effect”, “material adverse effect”, “company material adverse change”, “material adverse change” or similar term or qualification, the definition thereof shall be a Closing Date Material Adverse Effect.

(l) No Closing Date Material Adverse Effect. Since the date of the Base Balance Sheet (as defined in the Loar Acquisition Agreement), there has not occurred a Material Adverse Effect (as defined in the Loar Acquisition Agreement).

 

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(m) No Other Indebtedness. On the Closing Date, after giving effect to the Transactions and the other transactions completed hereby, Holdings and its Subsidiaries shall have outstanding no Indebtedness of the type described in clauses (a), (b) and (f) of the definition thereof other than the Obligations under this Agreement and the other Loan Documents and other Indebtedness that is permitted to remain outstanding pursuant to Section 6.01.

SECTION 4.02 Conditions to each Delayed Draw Term Loan Funding Date. The obligation of each Lender to fund any Delayed Draw Term Loans in an amount not to exceed its unfunded Delayed Draw Term Loan Commitment requested to be made by it on any Delayed Draw Term Loan Funding Date shall be subject to the prior or concurrent satisfaction or waiver (by the Required Class Lenders with respect to the Delayed Draw Term Loan Commitments and the Agents) of each of the conditions precedent set forth in this Section 4.02.

(a) Borrowing Request. There shall have been delivered to the Lender Representative and the Agents an executed Borrowing Request with respect to the requested Delayed Draw Term Loans, delivered in accordance with Section 2.03.

(b) Solvency Certificate. The Lender and the Agents shall have received a solvency certificate substantially in the form of Exhibit I, dated the applicable Delayed Draw Term Loan Funding Date and signed by a Financial Officer of Holdings.

(c) Fees. The Borrower shall pay all fees required to be paid on such Delayed Draw Term Loan Funding Date set forth in the Fee Letter. The foregoing fees and expenses shall, upon the funding of the Delayed Draw Term Loans hereunder, have been paid (which amounts may, at the Lender Representative’s election, be offset against the proceeds of the Delayed Draw Term Loans).

(d) No Default or Event of Default. Immediately before and after giving effect to such Borrowing and the application of the proceeds thereof, no Default or Event of Default shall have occurred and be continuing; provided, that in connection with a Delayed Draw Term Loan incurred to consummate a Limited Condition Acquisition, the condition under this clause (d) shall be that (i) no Default or Event of Default shall have occurred at the time the definitive documentation relating to such Limited Condition Acquisition is executed and (ii) no Event of Default pursuant to Section 8.01(a), (b), (g) or (h) has occurred and is continuing at the time the relevant Limited Condition Acquisition is consummated and the Delayed Draw Term Loans are funded.

(e) Representations and Warranties. Immediately before and after giving effect to such Borrowing and the application of the proceeds thereof, all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects after giving effect to such qualification and other than those representations and warranties that are expressly made as of an earlier specified date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier specified date); provided, that in connection with a Delayed Draw Term Loan incurred to consummate a Limited Condition Acquisition, the condition under this clause (e) shall be that (i) such representations and warranties are true and correct to the extent required above as of the time the definitive documentation relating to such Limited Condition Acquisition is executed and (ii) the Specified Credit Agreement Representations are true and correct in all material respects (other than those representations and warranties that are expressly qualified by Material Adverse Effect or other materiality, in which case such Specified Credit Agreement Representations shall be true and correct in all respects after giving effect to such qualification and other than those Specified Credit Agreement Representations that are expressly made as of an earlier specified date, in which case such Specified Credit Agreement Representation shall be true and correct in all material respects as of such earlier specified date) at the time the relevant Limited Condition Acquisition is consummated and the Delayed Draw Term Loans are funded.

 

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(f) In the case of any funding of the Delayed Draw Term Loans to fund the SMR Acquisition: (i) the SMR Acquisition Equity Contribution shall have been, or substantially concurrently with the funding of such Delayed Draw Term Loans hereunder, shall be consummated; provided, however, that for purposes of this clause (f), any equity investment that Blackstone or any Blackstone Designee has committed to provide, to the extent all conditions thereto have been satisfied (or waived by Blackstone or Blackstone Designee, as applicable, in writing) and such commitment has not been terminated by Holdings or its applicable direct or indirect parent, shall be assumed to have been consummated (regardless of whether or not consummated); and (ii) the SMR Acquisition shall have been, or substantially concurrently with the funding of such Delayed Draw Term Loans hereunder, shall be consummated in accordance with the terms of the SMR Purchase Agreement without giving effect to any SMR Purchase Agreement Prohibited Amendment; provided, further, that the conditions set forth in clauses (i), (iii), (iv), (v) and (vii) of the definition of “Permitted Acquisition” shall be deemed satisfied with respect to the SMR Acquisition as of the First Amendment Effective Date.

(g) In the case of any funding of the Delayed Draw Term Loans under the Fourth Amendment Delayed Draw Term Loan Commitment Increase: (i) there shall have been delivered to the Lender Representative and the Agents an executed Borrowing Request with respect to the requested Delayed Draw Term Loans at least twelve (12) Business Days in advance of the requested funding date; (ii) the Hydra Acquisition Equity Contribution shall have been, or substantially concurrently with the funding of such Delayed Draw Term Loans hereunder, shall be consummated; provided, however, that for purposes of this clause (g), any equity investment that Blackstone or any Blackstone Designee has committed to provide, to the extent all conditions thereto have been satisfied (or waived by Blackstone or Blackstone Designee, as applicable, in writing) and such commitment has not been terminated by Holdings or its applicable direct or indirect parent, shall be assumed to have been consummated (regardless of whether or not consummated); and (iii) the Hydra Acquisition shall have been, or substantially concurrently with the funding of such Delayed Draw Term Loans hereunder, shall be consummated in accordance with the terms of the Hydra Purchase Agreement without giving effect to any Hydra Purchase Agreement Prohibited Amendment; provided, further, that the conditions set forth in clauses (i), (iii), (iv), (v) and (vii) of the definition of “Permitted Acquisition” shall be deemed satisfied with respect to the Hydra Acquisition as of the Fourth Amendment Effective Date.

(h) In the case of any funding of the Delayed Draw Term Loans under the Fifth Amendment Delayed Draw Term Loan Commitment Increase: (i) there shall have been delivered to the Lender Representative and the Agents an executed Borrowing Request with respect to the requested Delayed Draw Term Loans at least twelve (12) Business Days in advance of the requested funding date; (ii) the PPR Acquisition Equity Contribution shall have been, or substantially concurrently with the funding of such Delayed Draw Term Loans hereunder, shall be consummated; provided, however, that for purposes of this clause (h), any equity investment that Blackstone or any Blackstone Designee has committed to provide, to the extent all conditions thereto have been satisfied (or waived by Blackstone or Blackstone Designee, as applicable, in writing) and such commitment has not been terminated by Holdings or its applicable direct or indirect parent, shall be assumed to have been consummated (regardless of whether or not consummated); and (iii) the PPR Acquisition shall have been, or substantially concurrently with the funding of such Delayed Draw Term Loans hereunder, shall be consummated in accordance with the terms of the PPR Purchase Agreement without giving effect to any PPR Purchase Agreement Prohibited Amendment; provided, further, that the conditions set forth in clauses (i), (iii), (iv), (v) and (vii) of the definition of “Permitted Acquisition” shall be deemed satisfied with respect to the PPR Acquisition as of the Fifth Amendment Effective Date.

 

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SECTION 4.03 Conditions to each Revolving Credit Loan. The obligation of each Lender to fund any Revolving Credit Loan in an amount not to exceed its unfunded Revolving Credit Commitment requested to be made by it on any date hereunder shall be subject to the prior or concurrent satisfaction or waiver (by the Required Class Lenders with respect to the Revolving Credit Commitments and the Agents) of each of the conditions precedent set forth in this Section 4.03.

(a) Borrowing Request. There shall have been delivered to the Lender Representative and the Agents an executed Borrowing Request with respect to the requested Revolving Credit Loans, delivered in accordance with Section 2.03.

(b) No Default or Event of Default. Immediately before and after giving effect to such Borrowing and the application of the proceeds thereof, no Default or Event of Default shall have occurred and be continuing.

(c) Representations and Warranties. Immediately before and after giving effect to such Borrowing and the application of the proceeds thereof, all representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects (other than those representations and warranties that are expressly qualified by a Material Adverse Effect or other materiality, in which case such representations and warranties shall be true and correct in all respects after giving effect to such qualification and other than those representations and warranties that are expressly made as of an earlier specified date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier specified date).

(d) Revolving Credit Availability Condition. If applicable, the Revolving Credit Availability Condition shall be satisfied.

ARTICLE V

AFFIRMATIVE COVENANTS

Each Loan Party covenants and agrees with each Lender that so long as this Agreement shall remain in effect and until the principal of and interest on each Loan and all expenses or amounts payable under any Loan Document shall have been Paid in Full and all Commitments have been terminated, each Loan Party will, and will cause each of its Subsidiaries to:

SECTION 5.01 Financial Statements, Reports, etc. Furnish to the Administrative Agent (which shall promptly furnish to each Lender) (it being understood that posting of an electronic copy of any document or information required pursuant to this Section 5.01 in a manner providing the Administrative Agent and each Lender with reasonably unrestricted access thereto is among the acceptable methods by which any such document or information may be delivered):

(a) Annual Reports. Not later than 120 days after the end of each fiscal year (provided that, for each of the fiscal year ended December 31, 2019 and the fiscal year ended December 31, 2020, such deliveries under this Section 5.01(a) shall be required to be delivered not later than 150 days after the end of such fiscal year), (i) for the fiscal year ending December 31, 2017, (A) the

 

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consolidated statements of income, cash flows and members’ equity of Loar Group LLC for the period commencing January 1, 2017 and ending October 1, 2017 and (B) the consolidated balance sheet of Holdings as of the end of such fiscal year and related consolidated statements of income, cash flows and members’ equity for the period commencing October 2, 2017 and ending on December 31, 2017; and (ii) for each fiscal year ending after December 31, 2017, the consolidated balance sheet of Holdings as of the end of such fiscal year and related consolidated statements of income, cash flows and members’ equity for such fiscal year, and commencing with the financial statements for the fiscal year ending December 31, 2019, in comparative form with such financial statements as of the end of, and for, the preceding fiscal year, and notes thereto, in each case of clauses (i) and (ii), (x) which consolidated statements shall be accompanied by a certificate of a Financial Officer stating that such financial statements present fairly in all material respects the financial position and results of operations and cash flows of Holdings and its consolidated Subsidiaries as of the dates and for the periods to which they relate in accordance with GAAP and (y) which consolidated statements shall be accompanied by an unqualified opinion of Ernst & Young or other independent public accountants of recognized national standing reasonably satisfactory to the Lender Representative (which opinion shall not be qualified as to scope or contain any going concern or other material qualification (other than qualifications related to current scheduled debt maturities under the Loan Documents or any Permitted Revolving Credit Facility and any prospective (but not actual) Default under Section 6.09 or default under any financial covenant under any Permitted Revolving Credit Facility)) stating that such financial statements present fairly in all material respects the financial position and results of operations and cash flows of Holdings and its consolidated Subsidiaries as of the dates and for the periods to which they relate.

(b) Quarterly Reports. Not later than (i) 60 days after the end of the fiscal quarter ending on September 30, 2017, the consolidated balance sheet of Loar Group Acquisition LLC as of the end of such fiscal quarter and related consolidated statements of income and cash flows for such fiscal quarter and for the then-elapsed portion of the fiscal year and (ii) 45 days after the end of the first three fiscal quarters of each fiscal year other than the fiscal quarter ending on September 30, 2017 (provided that (A) for any fiscal quarter in which a Permitted Acquisition occurs, such deliveries under this Section 5.01(b) shall be required to be delivered not later than 60 days after the end of such fiscal quarter, (B) the financial statements required to be delivered under this clause (b) for the fiscal quarter ending on September 30, 2017 shall include October 1, 2017 and (C) for the fiscal quarter in which the PPR Acquisition is consummated, such deliveries under this Section 5.01(b) shall be required to be delivered not later than 90 days after the end of such fiscal quarter), the consolidated balance sheet of Holdings as of the end of such fiscal quarter and related consolidated statements of income and cash flows for such fiscal quarter and for the then-elapsed portion of the fiscal year, and commencing with the financial statements for the fiscal quarter ending March 31, 2019, in comparative form with the consolidated statements of income and cash flows for the comparable periods in the previous fiscal year, which consolidated statements delivered pursuant to clauses (i) and (ii) shall be accompanied by a certificate of a Financial Officer stating that such financial statements present fairly in all material respects the financial position and results of operations and cash flows of Holdings and its consolidated Subsidiaries as of the dates and for the periods to which they relate in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes.

(c) Monthly Reports. Not later than 30 days after the end of the first two fiscal months of each fiscal quarter (provided that (A) for the fiscal months ending on October 31, 2017 and November 30, 2017, such deliveries hereunder shall be required to be delivered not later than 45 days of the end of such fiscal month, (B) for any fiscal month in a fiscal quarter in which a Permitted Acquisition or Acquisition consummated prior to the Closing Date occurs (including the fiscal

 

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month ending on August 31, 2017), such deliveries under this Section 5.01(c) shall be required to be delivered not later than 60 days after the end of such fiscal month, (C) the financial statements required to be delivered under this clause (c) for the fiscal month ending on October 31, 2017 shall not include October 1, 2017 and (D) following the consummation of the PPR Acquisition. for any fiscal month in such fiscal quarter in which the PPR Acquisition is consummated, such deliveries under this Section 5.01(c) shall be required to be delivered not later than 90 days after the end of such fiscal month), the consolidated balance sheet of Holdings as of the end of such month and the related consolidated statements of income and cash flows of Holdings for such month and for the then elapsed portion of the fiscal year, and commencing with the financial statements for the month ending October 31, 2018, in comparative form with the consolidated statements of income and cash flows for the comparable periods in the previous fiscal years.

(d) Compliance Certificate. Concurrently with any delivery of financial statements under Section 5.01(a) or (b), a Compliance Certificate (A) certifying that no Default has occurred or, if such a Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto, (B) solely with respect to any delivery of financial statements under Section 5.01(a) above with respect to an Excess Cash Flow Period, setting forth Holdings’ calculation of Excess Cash Flow, (C) setting forth computations in reasonable detail with respect to compliance with the covenant contained in Section 6.09(a) and (D) showing a reconciliation of Consolidated EBITDA to Consolidated Net Income.

(e) Annual Collateral Updates. Concurrently with any delivery of financial statements under Section 5.01(a), the information required pursuant to the Perfection Certificate Supplement or confirming that there has been no change in such information since the date of the Perfection Certificate or latest Perfection Certificate Supplement.

(f) Management Letters. Promptly after the receipt thereof by any Loan Party, a copy of any “management letter” received by any such person from its certified public accountants in connection with any annual, interim or special audit of the books of such Person.

(g) Budgets. As soon as practicable but no later than 90 days after the beginning of each fiscal year commencing with the fiscal year beginning on January 1, 2018, an annual budget for Holdings including balance sheets, statements of income, and statements of cash flow for each fiscal quarter of such fiscal year prepared in reasonable detail consistent with the practices of the Loar Target as of the Closing Date.

(h) Cash Liquidity. During the Covenant Suspension Period, on or before the fifth Business Day after the end of each fiscal quarter, commencing July 8, 2020, the Borrower shall deliver to the Administrative Agent a certificate of an appropriate Responsible Officer of the Borrower certifying as to Cash Liquidity as of the last Business Day of such immediately preceding fiscal quarter.

(i) Other Information. Promptly, from time to time, such other financial information or other information regarding compliance with the Loan Documents as the Administrative Agent or any Lender may reasonably request.

SECTION 5.02 Litigation and Other Notices. Furnish to the Administrative Agent (which shall promptly transmit such notice to the Lenders) written notice of the following promptly after obtaining knowledge thereof (and, in any event, within five Business Days (or three Business Days in the case of clause (j) below) after obtaining knowledge thereof):

(a) any Default or Event of Default that is continuing, specifying the nature and extent thereof and the corrective action (if any) taken or proposed to be taken with respect thereto;

 

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(b) the filing or commencement of, or any threat in writing or written notice of intention of any person to file or commence, any action, suit, litigation or proceeding, whether at law or in equity by or before any Governmental Authority (including but not limited to alleged violations of any Environmental Laws), (i) against any Company that could reasonably be expected to result in a Material Adverse Effect or (ii) with respect to any Loan Document;

(c) any development that has resulted in, or could reasonably be expected to result in, a Material Adverse Effect;

(d) any Responsible Officer of any Loan Party shall become aware of the incurrence of any Lien (other than Permitted Liens) on, or claim asserted against, any of the Collateral having a value in excess of $1,000,000;

(e) copies of (i) all regular, periodic or special reports of each Loan Party filed with the Securities and Exchange Commission, (ii) all registration statements of each Loan Party filed with the Securities and Exchange Commission (other than on Form S-8) and (iii) all proxy statements made to security holders generally;

(f) with respect to any Organizational Documents or any agreement or instrument governing Material Indebtedness:

(i) notice and copies of any material amendment, restatement, supplement or other modification thereto, or termination thereof; and

(ii) notice of any default by Holdings and its Subsidiaries thereunder, or receipt of any written notice of any counterparty thereto of any intent to exercise any remedy available to such counterparty thereunder;

(g) the existence of any current or potential material liabilities of Holdings, the Borrower, any other Subsidiary, or any of their ERISA Affiliates in respect of any Plan or Multiemployer Plan;

(h) the occurrence of any ERISA Event;

(i) any material reduction in amount of, or material change in coverage under, the insurance policies of the Companies; and

(j) a default pursuant to Section 6.09(b).

SECTION 5.03 Existence; Properties and Intellectual Properties.

(a) Preserve, renew and maintain in full force and effect its legal existence, except as otherwise permitted under Section 6.03 or Section 6.04 or, in the case of any Subsidiary, where the failure to perform such obligations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(b) Take all reasonable action to maintain all material rights, privileges and franchises necessary in the normal conduct of its business and comply with all material Requirements of Law.

 

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(c) Keep all material property useful and necessary in its business in good working order and condition (ordinary wear and tear excepted).

(d) Preserve, renew and maintain in full force and effect all material trademarks, trade names, copyrights and patents registered with the United States Patent and Trademark Office or the United States Copyright Office material to the conduct of a Loan Party’s business.

(e) Nothing in this Section 5.03 shall prevent (i) sales of property, consolidations or mergers by or involving any Company in accordance with Section 6.03 or Section 6.04; (ii) the withdrawal by any Company of its qualification as a foreign corporation in any jurisdiction where such withdrawal could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; or (iii) the abandonment by any Company of any rights, franchises, licenses, trademarks, trade names, copyrights or patents that such person reasonably determines are not material to its business or no longer commercially desirable.

SECTION 5.04 Insurance.

(a) Generally. Keep its insurable property adequately insured at all times, in at least such amounts and covering such risks and liabilities (after giving effect to any self-insurance reasonable and customary for companies of a similar size engaged in similar businesses in similar locations), including insurance with respect to Mortgaged Properties and other properties material to the business of the Companies, as are customary for companies of a similar size engaged in similar businesses in similar locations.

(b) Requirements of Insurance. All such insurance shall (i) provide that no cancellation shall be effective until at least 30 days after receipt by the Collateral Agent of written notice thereof (or 10 days after written notice thereof in the case of cancellation due to non-payment of premium), and (ii) contain an endorsement, reasonably satisfactory in form and substance to the Administrative Agent that names the Collateral Agent as mortgagee (in the case of property insurance) with respect to Mortgaged Properties, if any, or additional insured on behalf of the Secured Parties (in the case of liability insurance) or lender loss payee (in the case of property insurance), as applicable. In the case of each insurance policy, Borrower shall provide prompt notice to the Collateral Agent upon receipt of any notice of cancellation thereof received from the insurer. Unless the Borrower provides the Collateral Agent with evidence (to the extent requested) of the continuing insurance coverage required by this Agreement, with advance notice to the Borrower, the Collateral Agent may purchase insurance at the Borrower’s expense to protect the Collateral Agent’s and Lenders’ interests in the Collateral. This insurance may, but need not, protect the Borrower’s and each other Loan Party’s interests. Any such coverage that the Collateral Agent purchases may, but need not, pay any claim that is made against the Borrower or any other Loan Party in connection with the Collateral. The Borrower may later cancel any insurance purchased by the Collateral Agent, but only after providing the Collateral Agent with evidence that the Borrower has obtained the insurance coverage required by this Agreement. If the Collateral Agent purchases insurance for the Collateral, as set forth above, the Borrower will be responsible for the costs of that insurance, including interest and any other charges that may be imposed with the placement of the insurance, until the effective date of the cancellation or expiration of the insurance and the costs of the insurance may be added to the principal amount of the Loans owing hereunder.

 

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(c) Flood Insurance. If any building on any Mortgaged Property is at any time located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the National Flood Insurance Act of 1968 (as now or hereafter in effect or successor act thereto), then the Borrower shall, or shall cause each of the Loan Parties to (i) maintain, or cause to be maintained, with a financially sound and reputable insurer, flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood Insurance Laws and (ii) deliver to the Agents and Lender Representative evidence of such compliance in form and substance reasonably acceptable to the Lender Representative.

SECTION 5.05 Taxes.

(a) Payment of Taxes. Pay and discharge promptly when due all federal, state income and other material Taxes imposed upon it or upon its income or profits or in respect of its property or businesses, before the same shall become delinquent or in default; provided that such payment shall not be required with respect to any such Tax so long as (i) the validity or amount thereof shall be contested in good faith by appropriate proceedings and the applicable Company shall have set aside on its books adequate reserves or other appropriate provisions with respect thereto in accordance with GAAP or (ii) the failure to pay could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(b) Filing of Returns. Timely and correctly file all Tax Returns required to be filed by it, except to the extent the failure to timely or correctly file such Tax Returns could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 5.06 Employee Benefits.

(a) Comply with the applicable provisions of ERISA and the Code, except where the failure to so comply could not, individually or in the aggregate, reasonably be expected have a Material Adverse Effect.

(b) Maintain all Foreign Plans in compliance with all applicable laws, except where the failure to so comply could not, individually or in the aggregate, reasonably be expected have a Material Adverse Effect.

SECTION 5.07 Maintaining Records; Access to Properties and Inspections. Keep proper books of record and account in which full, true and correct entries in conformity in all material respects with GAAP and all Requirements of Law are made of all dealings and transactions in relation to its business and activities. Each Company will permit any representatives designated by the Administrative Agent or the Lender Representative (subject to any such representatives agreeing to be bound by confidentiality provisions comparable to those set forth in Section 10.12) to visit and inspect the financial records and the property of such Company at reasonable times and upon not less than 48 hours’ prior written notice, but no more frequently than two (2) times per fiscal year unless an Event of Default has occurred and is continuing, and to make extracts from and copies of such financial records, and permit any representatives designated by the Administrative Agent or the Lender Representative to discuss the affairs, finances, accounts and condition of any Company with the Responsible Officers therefor; provided, however, that unless an Event of Default has occurred and is continuing, the Borrower shall be obligated to pay for no more than one (1) such visit in any 12 month period.

SECTION 5.08 Use of Proceeds. Use the proceeds of the Loans (a) only for the purposes set forth in Section 3.11 and (b) in compliance with the provisions of Regulations T, U and X.

 

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SECTION 5.09 Compliance with Environmental Laws.

(a) Comply, and use commercially reasonable efforts to cause all lessees and other persons occupying Real Property of any Company to comply, with all Environmental Laws and Environmental Permits applicable to its operations and Real Property, except for noncompliance that could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; obtain and renew all Environmental Permits applicable to its operations and Real Property, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; and conduct all Responses required by, and in accordance with, Environmental Laws, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect; provided, that no Company shall be required to undertake any Response to the extent that its obligation to do so is being contested in good faith.

(b) Each Loan Party shall, and shall cause each of its Subsidiaries to, (i) notify Administrative Agent promptly after such Loan Party obtains knowledge of any violation of Environmental Laws or Environmental Permits or any Release on, at, in, under, above, to, or from any Real Property, which violation or Release is reasonably likely to result in an Environmental Claim against any Loan Party in excess of $1,000,000 (including any material developments in respect of matters disclosed in Schedule 3.17 that could reasonably be likely to materially increase the expected liabilities of the Loan Parties and their Subsidiaries in respect thereof); and (ii) promptly forward to Administrative Agent a copy of any order, notice, request for information or any other material communication or report received by such Loan Party in connection with any such violation or Release or any other matter relating to any Environmental Laws or Environmental Permits that could reasonably be expected to result in Environmental Liabilities in excess of $2,000,000.

SECTION 5.10 Additional Collateral; Additional Guarantors.

(a) Subject to Section 5.17, with respect to any property (other than owned Real Property, which is covered in Section 5.10(c) below) acquired after the Closing Date by any Loan Party that is intended to be subject to the Lien created by any of the Security Documents (but excluding, for the avoidance of doubt, any assets that are Excluded Collateral) but is not so subject, promptly (and in any event within 30 days (or such longer period as may be agreed to by the Lender Representative) after the acquisition thereof) (i) execute and deliver to the Collateral Agent such amendments or supplements to the relevant Security Documents or such other documents as the Lender Representative shall reasonably deem necessary or advisable to grant to the Collateral Agent, for its benefit and for the benefit of the other Secured Parties, subject to any Permitted Revolving Credit Facility Intercreditor Agreement, a first-priority Lien on such property subject to Permitted Liens, and (ii) take all actions necessary to cause such Lien to be duly perfected to the extent required by such Security Document in accordance with all applicable Requirements of Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by the Collateral Agent or the Lender Representative. Notwithstanding anything to the contrary contained in this Agreement, other than with respect to any Foreign Subsidiary (other than the Schroth German Subsidiaries) that the Borrower has elected, in its sole discretion, to cause to become a Guarantor, in no event shall any Company be required to take any action in any non-U.S. jurisdiction or under any laws of any non-U.S. jurisdiction to create any security interests (including the execution of any pledge agreements or security agreements governed under the laws of any non-U.S. jurisdiction) in assets located or titled outside of the United States or to perfect or make enforceable any security interests in any such assets.

 

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(b) Promptly (and in any event within 30 days (or such longer period as may be agreed to by the Lender Representative)) after any person (i) becomes a Wholly Owned Domestic Subsidiary of Holdings (other than an Excluded Subsidiary) after the Closing Date, (ii) ceases to be an Excluded Subsidiary after the Closing Date (but remains a Wholly Owned Domestic Subsidiary of Holdings) or (iii) who is an Excluded Subsidiary but with respect to whom the Borrower has elected, in its sole discretion, to cause to become a Guarantor, in each case, (A) deliver to the Collateral Agent (or the administrative or collateral agent under any Permitted Revolving Credit Facility on its behalf pursuant to the applicable Permitted Revolving Credit Facility Intercreditor Agreement) the certificates, if any, representing all of the Equity Interests of such Subsidiary, together with undated stock powers or other appropriate instruments of transfer executed and delivered in blank by a duly authorized officer of the holder(s) of such Equity Interests, and all intercompany notes owing from such Subsidiary to any Loan Party together with instruments of transfer executed and delivered in blank by a duly authorized officer of such Loan Party and (B) cause such Subsidiary (1) to execute a Joinder Agreement or such comparable documentation to become a Guarantor and a joinder agreement to the Security Agreement and/or each other applicable Security Document (other than, if applicable, any Mortgages that may be required with respect to owned Real Property, which are addressed in Section 5.10(c) below), substantially in the form annexed thereto and (2) to take all actions necessary or advisable in the reasonable opinion of the Administrative Agent, the Collateral Agent or the Lender Representative to cause the Lien created by the Security Agreement and/or any other applicable Security Document to be duly perfected to the extent required hereby and thereby in accordance with all applicable Requirements of Law, including the filing of financing statements in such jurisdictions as may be reasonably requested by the Administrative Agent, the Collateral Agent or the Lender Representative, but excluding, other than with respect to any Foreign Subsidiary (other than the Schroth German Subsidiaries) that the Borrower has elected, in its sole discretion, to cause to become a Guarantor, all actions in any non-U.S. jurisdiction or to create and perfect any security interests under any non-U.S. laws; provided, that no Excluded Subsidiary shall be required to guarantee the Obligations and any election to cause an Excluded Subsidiary to guarantee the Obligations shall be at the Borrower’s sole discretion. Notwithstanding the foregoing, including Section 5.10(a), in no event shall (i) assets of any Subsidiary that is a CFC or CFC Holdco be required to secure the Obligations of a Loan Party or (ii) more than 65% of the Equity Interests of any Subsidiary that is a first-tier CFC or first-tier CFC Holdco be required to secure the Obligations.

(c) Promptly grant to the Collateral Agent, within 90 days (or such longer period as may be agreed to by the Lender Representative) of the acquisition thereof, a security interest in and Mortgage on each Real Property owned in fee by such Loan Party as is acquired by such Loan Party after the Closing Date, except to the extent such Real Property constitutes Excluded Collateral. Such Mortgages shall be granted pursuant to documentation reasonably satisfactory in form and substance to the Required Lenders and, upon recording in the applicable land records and subject to any Permitted Revolving Credit Facility Intercreditor Agreement, shall constitute valid and enforceable perfected first-priority Liens subject to Permitted Liens. The Mortgages or instruments related thereto shall be duly recorded or filed in such manner and in such places as are required by law to establish, perfect, preserve and protect the Liens in favor of the Collateral Agent required to be granted pursuant to the Mortgages. In the event any owned Real Property is located in a jurisdiction which imposes mortgage recording taxes, or intangibles tax or any similar fees or charges, such Mortgage shall only secure an amount equal to the fair market value of such Real Property as reasonably determined by the Borrower in good faith. Such Loan Party shall otherwise take such actions and execute and/or deliver to the Collateral Agent such documents as the Collateral Agent or the Required Lenders shall reasonably require to confirm the validity, perfection and priority of the Lien of any existing Mortgage or new Mortgage against such after-acquired Real Property.

 

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SECTION 5.11 Security Interests; Further Assurances. Promptly, upon the reasonable request of the Administrative Agent, the Collateral Agent or the Lender Representative, at the Borrower’s expense, execute, acknowledge and deliver, or cause the execution, acknowledgment and delivery of, and thereafter register, file or record, or cause to be registered, filed or recorded, in an appropriate governmental office, any document or instrument supplemental to or confirmatory of the Security Documents or otherwise deemed by the Administrative Agent, the Collateral Agent or the Lender Representative to be reasonably necessary for the continued validity, perfection and priority of the Liens on the Collateral covered thereby subject to no other Liens other than Permitted Liens. Deliver or use its commercially reasonable efforts to cause to be delivered to the Collateral Agent from time to time such other documentation, consents, authorizations, approvals and orders in form and substance reasonably satisfactory to the Administrative Agent, the Collateral Agent or the Lender Representative, as applicable, as the Administrative Agent, the Collateral Agent or the Lender Representative shall reasonably deem necessary to perfect or maintain the Liens on the Collateral pursuant to the Security Documents. Notwithstanding the foregoing to the contrary, nothing herein shall require the Loan Parties to enter into security documents or provide materials for filing or to make filings to perfect Liens in any non-U.S. jurisdiction or other action not required as set forth more fully in Section 5.10(a).

SECTION 5.12 Information Regarding Collateral. Not effect any change (a) in any Loan Party’s legal name, (b) in the location of any Loan Party’s chief executive office, (c) in any Loan Party’s identity or organizational structure, (d) in any Loan Party’s Federal Taxpayer Identification Number or organizational identification number, if any, or (e) in any Loan Party’s jurisdiction of organization (in each case, including by merging with or into any other entity, reorganizing, dissolving, liquidating, reorganizing or organizing in any other jurisdiction), unless (i) it shall have given the Collateral Agent written notice thereof promptly thereafter (and in any event within 5 Business Days or such longer period as may be agreed to by the Lender Representative) and such other information in connection therewith as the Collateral Agent or the Required Lenders may reasonably request and (ii) it shall have taken all action reasonably satisfactory to the Collateral Agent and the Lender Representative to maintain the perfection and priority of the security interest of the Collateral Agent for the benefit of the Secured Parties in the Collateral, if applicable. Each Loan Party agrees to promptly (and in any event within 5 Business Days or such longer period as may be agreed to by the Lender Representative) provide the Collateral Agent with certified Organizational Documents reflecting any of the changes described in the preceding sentence.

SECTION 5.13 Compliance with Law; Regulations; Etc. Each Loan Party will, and will cause each Subsidiary to, comply with (a) any and all regulations promulgated by the Office of Foreign Assets Control, the FCPA, the USA PATRIOT Act and margin regulations, and (b) any and all laws, ordinances and governmental and regulatory rules and regulations to which such Loan Party or such Subsidiary, as the case may be, is subject, in the case of this clause (b), the violation of which or failure to comply with which could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

SECTION 5.14 Cash Management. Subject to Section 5.15, other than with respect to Excluded Accounts, each Loan Party shall maintain at all times cash and Cash Equivalents only in Deposit Accounts and Securities Accounts subject to a Control Agreement with the Collateral Agent, it being agreed that within 60 days (or such longer period agreed to by the Lender Representative) of acquiring or opening any Deposit Accounts or Securities Accounts (other than Excluded Accounts) after the Closing Date, the applicable Loan Parties shall cause this Section 5.14 to be satisfied with respect to such new Deposit Accounts or Securities Accounts that are not Excluded Accounts.

SECTION 5.15 Post-Closing Matters. To the extent not completed prior to the Closing Date, the Borrower shall satisfy the requirements set forth on Schedule 5.15 on or prior to the dates set forth on such schedule (or such later dates as shall be reasonably acceptable to the Collateral Agent and the Required Lenders).

 

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SECTION 5.16 Permitted Revolving Credit Facility; Structure Changes.

(a) Each Loan Party will (i) use commercially reasonable efforts until the date that is six months after the Closing Date, at the sole cost and expense of the Loan Parties (it being acknowledged by the Loan Parties that certain fees and expenses will be incurred in connection therewith by the Loan Parties), to obtain a Permitted Revolving Credit Facility and (ii) reasonably cooperate with the Lender Representative, all at the sole cost and expense of the Loan Parties, with respect to any bona fide potential providers of a Permitted Revolving Credit Facility identified by the Lender Representative (other than any Disqualified Lenders); provided that (x) nothing herein shall be deemed to require the Loan Parties to enter into any Permitted Revolving Credit Facility the terms and conditions of which are not reasonably satisfactory to the Loan Parties, it being understood and agreed that it would not be unreasonable for the Loan Parties to decline to enter into any Permitted Revolving Credit Facility (1) the terms and conditions of which with respect to (A) pricing and fees or (B) financial maintenance covenants are, in either case, less favorable to the Loan Parties than the terms and conditions of the Revolving Credit Commitments or (2) that is an asset-based revolving credit facility.

(b) Each Loan Party will cooperate with the Lender Representative, to the extent the Lender Representative determines to modify the structure of the credit facilities provided hereunder; provided that such modifications shall be limited solely to establishing “first out” and “last out” facilities or otherwise modifying the lien or payment priority among Lenders to create up to two classes of Lenders or two tranches of Loans, in each case, under the Initial Term Loan Commitments and the Delayed Draw Term Loan Commitments (collectively, the “Structure Changes”); provided, further, for the avoidance of doubt, such Structure Changes do not (i) reduce the aggregate principal amount of the Commitments hereunder, (ii) impose additional mandatory prepayment requirements with respect to the Loans hereunder, (iii) increase the percentage of annual amortization required to be paid with respect to the Term Loans when taken as a whole such that the annual amortization exceeds the amounts otherwise set forth herein, (iv) increase (x) the pricing applicable to the Revolving Credit Commitments and the Revolving Credit Loans or (y) the aggregate pricing of the Term Commitments and the Term Loans when taken together as a whole such that the blended pricing of the Term Commitments and the Term Loans exceeds the rates otherwise set forth herein as of the Closing Date, (v) establish any prepayment premium applicable to the Revolving Credit Commitments and the Revolving Credit Loans or increase any prepayment premiums applicable to the Term Commitments and the Term Loans or (vi) shorten the Maturity Date applicable to any Class of Loans; and provided, further, that the ability of the Lender Representative to effect the Structure Changes shall cease if Blackstone is no longer the Lender Representative or the Blackstone Designees cease to constitute the Required Lenders.

SECTION 5.17 Post-Schroth Acquisition Requirements Regarding the Schroth German Subsidiaries. The Borrower shall satisfy the requirements set forth on Schedule 5.17 on or prior to the dates set forth on such schedule (or such later dates as shall be reasonably acceptable to the Agents and the Lender Representative).

 

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ARTICLE VI

NEGATIVE COVENANTS

Each Loan Party covenants and agrees with each Lender that, so long as this Agreement shall remain in effect and until the principal of and interest on each Loan and all expenses, fees and amounts payable under any Loan Document have been Paid in Full and all Commitments have been terminated, no Loan Party will, nor will they cause or permit any Subsidiary to:

SECTION 6.01 Indebtedness. Incur, directly or indirectly, any Indebtedness, except:

(a) Indebtedness evidenced by this Agreement and the other Loan Documents;

(b) Indebtedness existing on the Closing Date and set forth on Schedule 6.01(b) hereto and Refinancing Indebtedness in respect thereof;

(c) Indebtedness under any Permitted Revolving Credit Facility and refinancings, renewals or extensions thereof to the extent permitted by (and subject to) the applicable Permitted Revolving Credit Facility Intercreditor Agreement;

(d) Purchase Money Obligations in an aggregate principal amount outstanding at any one time not in excess of $5,000,000 and Refinancing Indebtedness in respect thereof;

(e) unsecured Indebtedness expressly subordinated to the Obligations on terms reasonably satisfactory to the Lender Representative incurred in connection with or to consummate Permitted Investments (including Permitted Acquisitions), in an aggregate principal amount not to exceed $2,500,000 at any time outstanding, and Refinancing Indebtedness in respect thereof;

(f) Hedging Agreements entered into in the ordinary course of business permitted to be Incurred by Holdings and its Subsidiaries pursuant to this Agreement and not for the purpose of speculation;

(g) the incurrence of (a) Indebtedness owed to banks and other financial institutions incurred in the ordinary course of business in connection with ordinary banking arrangements to manage cash balances of the Borrower and its Restricted Subsidiaries and (b) Indebtedness in respect of Cash Management Services, including Cash Management Obligations;

(h) obligations in respect of performance, bid, surety and appeal bonds and performance and completion guarantees provided by Holdings or any of its Subsidiaries or obligations in respect of letters of credit, in each case in the ordinary course of business, in an aggregate amount not to exceed $600,000 at any time outstanding;

(i) Indebtedness consisting of the financing of insurance premiums in the ordinary course of business on an unsecured basis or secured solely by the insurance policies financed;

(j) Indebtedness arising from agreements of Holdings or any of its Subsidiaries providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided, however, that (A) such Indebtedness is not reflected as a liability on the balance sheet of Holdings or any Subsidiary prepared in accordance with GAAP (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (A)), (B) the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by Holdings or any Subsidiary in connection with such disposition and (C) the maximum

 

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assumable liability in respect of all such Indebtedness by any Loan Parties shall at no time exceed the gross proceeds actually received by the Loan Parties in connection with such disposition; provided, further, that the foregoing proviso shall not apply if such Indebtedness has been repaid since the date of such balance sheet or otherwise promptly (and in any event within thirty (30) days after due) satisfied;

(k) Indebtedness of (i) any Loan Party owed to and held by any other Loan Party, (ii) a Subsidiary that is not a Guarantor owed to and held by a Subsidiary that is not a Guarantor, (iii) a Subsidiary that is not a Guarantor owed to and held by any Loan Party, so long as, in the case of this clause (iii), the aggregate principal amount thereof, together with the aggregate outstanding amount of any Investments made by any Loan Party in any Subsidiary that is not a Guarantor pursuant to clause (a)(iii) of the definition of Permitted Investments, does not exceed $5,000,000 at any one time outstanding, and (iv) a Loan Party owed to and held by a Subsidiary that is not a Guarantor, subject, in the case of clauses (iii) and (iv), to the Intercompany Note (including any applicable subordination provisions set forth therein);

(l) (i) any guarantee by a Loan Party of Indebtedness or other obligations of any other Loan Party so long as the incurrence of such Indebtedness incurred by such Loan Party is permitted under the terms of this Agreement; provided, that if such Indebtedness is by its express terms subordinated in right of payment to the Obligations, any such guarantee of such Guarantor with respect to such Indebtedness shall be subordinated in right of payment to the Obligations substantially to the same extent as such Indebtedness is subordinated to the Loans or the Guarantee of such Guarantor, as applicable; (ii) any guarantee by a Subsidiary that is not a Guarantor of Indebtedness of another Subsidiary so long as the incurrence of such Indebtedness incurred by such Subsidiary is permitted under the terms of this Agreement; and (iii) any guarantee by a Loan Party of Indebtedness or other obligation of any Subsidiary that is not a Loan Party so long as the incurrence of such Indebtedness incurred by such Subsidiary is permitted under the terms of this Agreement;

(m) unsecured Indebtedness consisting of deferred purchase price or promissory notes issued by Holdings to current or former officers, directors and employees, their respective estates, assigns, heirs, permitted transferees, spouses or former spouses to finance the purchase or redemption of Equity Interests of Holdings or any direct or indirect parent permitted by Section 6.07 so long as such Indebtedness is subordinated to the Obligations on terms and conditions reasonably acceptable to the Lender Representative;

(n) Purchase Money Obligations that are in existence when a person becomes a Subsidiary or that are secured by an asset when acquired by Holdings or any of its Subsidiaries, as long as such purchase money obligations were not incurred in contemplation of such person becoming a Subsidiary or such acquisition, and Refinancing Indebtedness in respect thereof;

(o) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price, earn-outs or similar obligations, or from guarantees or letters of credit, securing the performance of Holdings or any of its Subsidiaries pursuant to such agreements, incurred or contracted for on or before the Closing Date or in connection with Permitted Acquisitions and any other Acquisition constituting Permitted Investments; provided that no payments shall be made in respect of any earn-out if, (i) in the case of any Specified Earn-Out or any earn-out incurred after the Closing Date and approved by the Lender Representative at the time of incurrence thereof, a Specified Event of Default has occurred and is continuing, or (ii) in the case of any earn-out not addressed in clause (i) above, any Event of Default has occurred and is continuing;

 

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(p) obligations under incentive, non-compete, consulting, deferred compensation, or other similar employment or consulting arrangements incurred by it in the ordinary course of business;

(q) accrual and capitalization of interest (including post-petition interest), premiums, fees, expenses, charges, accretion or amortization of original issue discount, and additional or contingent interest on any Indebtedness permitted pursuant to this Section;

(r) Indebtedness arising under (i) the Existing Receivables Facilities and (ii) additional Receivables Facilities; provided that no additional Receivables Facilities implemented after the Closing Date or any amendment, supplement, modification or restatement of any additional Receivables Facilities implemented after the Closing Date, shall be permitted hereunder to the extent that, on a Pro Forma Basis after giving effect thereto, on the last day of any month, the amount of accounts receivable subject to a Receivables Facility on such day shall exceed 20.0% of the accounts receivable of Holdings and its Subsidiaries as set forth (or would be set forth) on a consolidated balance sheet of Holdings prepared in accordance with GAAP as at such date;

(s) (i) Indebtedness of a person existing at the time such person became a Subsidiary of Holdings pursuant to a transaction permitted hereunder in an amount not to exceed $1,000,000 in the aggregate for all such persons at any time outstanding; provided, that, such Indebtedness shall not have been created or incurred in contemplation of such person becoming a Subsidiary or in contemplation of such Permitted Acquisition or other Permitted Investment; and (ii) Refinancing Indebtedness in respect of Indebtedness permitted pursuant to clause (s)(i) above;

(t) Indebtedness of Subsidiaries that are not Guarantors in an aggregate principal amount not to exceed $1,000,000 at any time outstanding;

(u) (i) Indebtedness under the loan facility made available to Applied Engineering, Inc. pursuant to the letter agreement, dated as of March 14, 2017, from the South Dakota Board of Economic Development and Refinancing Indebtedness in respect thereof, (ii) Indebtedness under similar facilities in an aggregate principal amount not to exceed $1,000,000 at any time outstanding and (iii) Refinancing Indebtedness in respect of Indebtedness permitted pursuant to clauses (u)(i) and (u)(ii) above;

(v) other Indebtedness of Holdings or any of its Subsidiaries in an aggregate principal amount as to all such persons not to exceed, at any time outstanding, $10,000,000; and

(w) Safe Flight PPP Indebtedness in an aggregate principal amount not to exceed, at any time outstanding, $2,500,000.

SECTION 6.02 Liens. Create, incur, assume or permit to exist, directly or indirectly, any Lien on any property now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except the following (collectively, the “Permitted Liens”):

(a) Liens for Taxes, assessments or other governmental levies not yet due and payable or delinquent and Liens for Taxes, assessments or other governmental levies that are being contested in good faith by appropriate actions for which adequate reserves have been established in accordance with GAAP;

 

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(b) Liens in respect of property of any Company imposed by Requirements of Law, which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlords’, workmen’s, suppliers’, repairmen’s and mechanics’ Liens and other similar Liens arising in the ordinary course of business, and (i) which do not in the aggregate materially impair the use thereof in the operation of the business of the Companies, taken as a whole and (ii) which, if they secure obligations that are then due and delinquent, are being contested in good faith by appropriate actions for which adequate reserves have been established in accordance with GAAP;

(c) any Lien in existence on the Closing Date and set forth on Schedule 6.02(c), any Lien securing any Refinancing Indebtedness in respect thereof and any Lien granted as a replacement or substitute therefor; provided that any such replacement or substitute Lien (i) except as permitted by Section 6.01(b), does not secure an aggregate amount of Indebtedness, if any, greater than that permitted under such Section 6.01(b) and (ii) does not encumber any property other than the property subject thereto on the Closing Date;

(d) (i) easements, rights-of-way, restrictions (including zoning and other land use restrictions), covenants, conditions, reservations, licenses, encroachments, protrusions and other similar charges or encumbrances, and minor title deficiencies on or with respect to any Real Property, in each case whether now or hereafter in existence, not (x) securing Indebtedness, (y) individually or in the aggregate materially impairing the value or use of such Real Property owned in fee or (z) individually or in the aggregate materially interfering with the ordinary conduct of the business of the Companies at such Real Property; and (ii) any exceptions set forth in any title policy issued to the Collateral Agent in connection with any Mortgage;

(e) Liens arising out of judgments, attachments or awards not resulting in an Event of Default;

(f) Liens (i) imposed by Requirements of Law or deposits made in connection therewith in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security legislation, (ii) incurred in the ordinary course of business to secure letters of credit, the performance of tenders, statutory obligations, surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or (iii) arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers;

(g) Leases of the properties of any Company, in each case entered into in the ordinary course of such Company’s business so long as such Leases do not, individually or in the aggregate, (i) interfere in any material respect with the ordinary conduct of the business of any Company and (ii) materially impair the use (for its intended purposes) of the property subject thereto;

(h) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by any Company in the ordinary course of business in accordance with the past practices of such Company;

(i) Liens securing Indebtedness incurred pursuant to Section 6.01(d), (n) and (u); provided, that any such Liens attach only to the property or project being financed pursuant to such Indebtedness and additions and accessions thereto and do not encumber any other property of any Company;

 

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(j) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Company, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements; provided, that unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness other than in respect of cash management services in the ordinary course of business;

(k) Liens on property of a person existing at the time such person is acquired or merged with or into or consolidated with any Company to the extent such acquisition or merger is permitted hereunder and to the extent the Indebtedness securing such Liens is permitted hereunder (and not created in anticipation or contemplation thereof); provided, that such Liens do not extend to property not subject to such Liens at the time of acquisition (other than improvements thereon) and are no more favorable to the lienholders than such existing Lien;

(l) (i) Liens granted pursuant to the Security Documents to secure the Obligations and (ii) Liens granted to the applicable secured parties on the Collateral to secure the obligations under any Permitted Revolving Credit Facility; provided, that such Liens are subject to the applicable Permitted Revolving Credit Facility Intercreditor Agreement;

(m) licenses of Intellectual Property granted by any Company to a third party in the ordinary course of business and not interfering in any material respect with the ordinary conduct of business of the Companies;

(n) the filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

(o) Liens encumbering customary initial deposits and margin deposits, and similar Liens in favor of the broker thereof attaching to commodity trading accounts and other brokerage accounts incurred in the ordinary course of business to the extent that the underlying Investment is permitted hereunder;

(p) non-exclusive licenses, sublicenses, leases or subleases granted to third parties in the ordinary course of business not interfering with the business of Holdings or any of its Subsidiaries;

(q) Liens on goods in the possession of customs authorities in favor of such customs authorities which secure payment of customs duties in connection with importation of goods;

(r) Liens deemed to exist in connection with permitted repurchase obligations or set-off rights;

(s) Liens in favor of collecting banks arising under Section 4-210 of the UCC;

(t) Liens securing Indebtedness permitted under Section 6.01(k);

(u) Liens securing Indebtedness permitted under Section 6.01(t) and Liens incurred by any Subsidiary that is not a Loan Party;

(v) additional Liens with respect to obligations that do not in the aggregate exceed $5,000,000 at any time outstanding;

 

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(w) (i) any interest of a lessor or sublessor under any lease or sublease of Real Property and any matters affecting title of such lessor or sublessor or (ii) landlord liens under the terms of any Lease;

(x) Liens on Receivables Assets securing Indebtedness permitted under Section 6.01(r); and

(y) Liens on the Safe Flight Escrow Account and the property therein.

SECTION 6.03 Restrictions on Fundamental Changes. Wind up, liquidate or dissolve its affairs or enter into any transaction of merger, or consolidation, or, in the case of Holdings (and Borrower, if Borrower at any time has converted to a limited liability company), Divide or enter into any transaction of Division, except that the following shall be permitted:

(a) any Subsidiary of Holdings may merge or consolidate with or into, or dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to, the Borrower or any Guarantor (other than Holdings) (as long as the Borrower is the surviving person in the case of any merger or consolidation involving the Borrower, and a Guarantor is the surviving person and remains a Guarantor in any other case); provided, that the Lien on and security interest in such property granted or to be granted in favor of the Collateral Agent under the Security Agreement shall be maintained or created in accordance with the provisions of Section 5.11;

(b) the Borrower or any Guarantor (other than Holdings) may merge or consolidate with another person (other than another Loan Party), so long as (i) the Borrower is the surviving person in the case of any merger or consolidation involving the Borrower, and a Guarantor is the surviving person and remains a Guarantor in any other case and (ii) such merger or consolidation constitutes a Permitted Acquisition;

(c) any (i) Subsidiary that is not a Loan Party may merge or consolidate with or into, or dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to, any other Subsidiary that is not a Loan Party and (ii) Subsidiary that is a Guarantor may merge or consolidate with or into, or dispose of all or substantially all of its assets (upon voluntary liquidation or otherwise) to, any Subsidiary that is not a Loan Party, provided, that in the case of this clause (c)(ii), such merger, consolidation or sale shall be permitted solely to the extent it constitutes a Permitted Investment;

(d) any Subsidiary of Holdings may merge or consolidate with any other person in order to effect (i) an Asset Sale permitted by Section 6.04 or (ii) an Investment permitted by Section 6.07;

(e) any merger the sole purpose of which is to reincorporate or reorganize a Loan Party in another jurisdiction in the United States;

(f) any Subsidiary (other than the Borrower) may liquidate or dissolve or change its legal form if Holdings determines in good faith that such action is in the best interests of Holdings and its Subsidiaries and is not materially disadvantageous to the Lenders; provided, that the Person who receives the assets of any dissolving or liquidated Subsidiary that is a Guarantor shall be a Loan Party or, to the extent such Person who receives the assets is not a Loan Party, such disposition shall be permitted solely to the extent permitted under Section 6.07 to the extent it constitutes a “Permitted Investment”; and

 

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(g) the Transactions (including the Closing Date Merger).

SECTION 6.04 Disposal of Assets. Directly or indirectly consummate any Asset Sale (other than Casualty Events) unless:

(i) No Event of Default exists or would result therefrom;

(ii) Holdings or such Subsidiary receives consideration at the time of such Asset Sale at least equal to the fair market value (including as to the value of all non-cash consideration), as determined in good faith by the Borrower, of the shares and assets subject to such Asset Sale;

(iii) for any such Asset Sale for consideration exceeding $1,000,000, at least 75% of the consideration thereof received by Holdings or such Subsidiary is in the form of cash or Cash Equivalents;

(iv) the aggregate consideration received in respect of such Asset Sale, together with the aggregate consideration received in respect of all other Asset Sales consummated in such fiscal year, does not exceed the greater of $10,000,000 and 5.0% of consolidated total assets (for Holdings and its Subsidiaries on a consolidated basis) as reflected in the most recent financial statements delivered pursuant to Section 5.01(a) or (b), as applicable; and

(v) an amount equal to 100% of the Net Cash Proceeds from such Asset Sale is applied by the Borrower in accordance with Section 2.09 (subject to the reinvestment election set forth therein).

SECTION 6.05 Nature of Business. Engage in any business other than any business or activity conducted by them on the Closing Date and any business or business activities incidental or reasonably related thereto, or any business or activity that is reasonably similar thereto or a reasonable extension, development or expansion thereof or ancillary thereto, including the consummation of the Transactions.

SECTION 6.06 Amendments.

(a) (i) Directly or indirectly amend, modify, alter or change the terms of any Organizational Documents of any Loan Party in any manner materially adverse to the interests of the Agents or the Lenders.

(b) After execution thereof, directly or indirectly amend, modify, alter, increase or change any of the terms or conditions of the definitive documentation relating to any Permitted Revolving Credit Facility in violation of the provisions of the applicable Permitted Revolving Credit Facility Intercreditor Agreement.

SECTION 6.07 Restricted Payments; Investments.

(a) Make any distribution or declare or pay any Dividends (in cash or other property, other than Stock (other than Disqualified Capital Stock)) on, or purchase, acquire, redeem or retire, any Stock, of any class, whether now or hereafter outstanding, or voluntarily prepay any Indebtedness subordinated in right of payment to the Loans or make any payment in respect of any earn-out obligation or similar contingent payment obligation or make any Investment other than a Permitted Investment (collectively, “Restricted Payments”).

 

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(b) The provisions of paragraph (a) of this Section 6.07 shall not prohibit:

(i) so long as no Specified Event of Default has occurred and is continuing or would immediately result therefrom, the purchase, redemption or other acquisition of Equity Interests of Holdings or any of its direct or indirect parent entities, pursuant to the Parent LLC Agreement, any management equity plan or stock option plan or any other management or employment benefit plan or stock option plan or arrangement or sale bonus or similar agreement, from (A) any Closing Date Investor specified in clause (b) of the definition thereof; provided, that the aggregate amount of such Restricted Payments made under this clause (b)(i)(A) shall not exceed the amount that would have been payable in respect of the Equity Interests of such Closing Date Investor pursuant to clause (b)(viii) below if the specified put right had been exercised instead); and (B) employees, former employees, directors, former directors, consultants or former consultants of Holdings or any of its Subsidiaries (or permitted transferees of such employees, former employees, directors, former directors, consultants or former consultants); provided, that the aggregate amount of such Restricted Payments made under this clause (b)(i)(B) (excluding amounts representing cancellation of Indebtedness) shall not exceed for any calendar year $2,000,000 (with unused amounts in any calendar year being carried forward to subsequent calendar years and amounts carried forward from prior calendar years being used first); provided, however, that the aggregate amount of such Restricted Payments made under this clause (b)(i)(B) during any period in which the Total Net Leverage Ratio for the four fiscal quarters most recently ended for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable, exceeds 6.00 to 1.00, shall not exceed $4,000,000 during the term of this Agreement; provided, further, that the aggregate amount of Restricted Payments made under this clause (b)(i)(B) in any calendar year, including unused amounts carried forward from prior calendar years, shall not exceed $10,000,000; and provided, further, that cancellation of Indebtedness owed to Holdings from members of management, directors, managers or consultants of Holdings or any of its Subsidiaries in connection with a repurchase of Stock of Holdings will not be deemed to constitute a Restricted Payment for purposes of this covenant or any other provision of this Agreement;

(ii) the declaration and payment of Dividends to, or the making of loans to, Holdings in amounts required for Holdings to pay (or to make Restricted Payments to allow any direct or indirect parent entity thereof to pay), without duplication, any of the following:

(A) franchise Taxes and other fees, Taxes and expenses required to maintain its organizational existence as an entity; and

(B) reasonable general organizational, administrative or compliance (including expenses related to auditing or other accounting matters) and overhead costs and expenses, to the extent such costs and expenses are reasonable and customary, incurred in the ordinary course of business and attributable to the ownership or operation of Holdings and its Subsidiaries not to exceed, together with amounts under clause (A) above, $500,000 in any fiscal year of Holdings;

(iii) Affiliate Transactions permitted under Section 6.11(b)(iv);

 

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(iv) cashless repurchases of Stock deemed to occur upon the exercise of stock options or warrants if such Stock represents a portion of the exercise price of such options or warrants;

(v) the payment of Dividends or other distributions by a Subsidiary of Holdings to Holdings or one of its Subsidiaries, so long as, in the case of any Dividend payable on or in respect of any class or series of securities issued by a Subsidiary other than a Wholly Owned Subsidiary, Holdings or a Subsidiary receives at least its pro rata share of such Dividend in accordance with its Equity Interests in such class or series of securities or such other amount to which it is entitled pursuant to the terms of such Equity Interest;

(vi) any Permitted Tax Distribution;

(vii) the payment (A) of (x) the Specified Earn-Outs (with the funds held in the Specified Earn-Out Account being applied first to the Maverick Earn-Out) and (y) earn-out obligations or similar contingent payment obligations in connection with Permitted Acquisitions, or, to the extent permitted hereunder, other similar Investments, incurred after the Closing Date and approved by the Lender Representative at the time of incurrence thereof, in each case, so long as no Specified Event of Default shall have occurred and be continuing or would immediately result therefrom and (B) of any earn-out obligation or similar contingent payment obligations in connection with Permitted Acquisitions, or, to the extent permitted hereunder, other similar Investments, not addressed in clause (A) above so long as no Event of Default shall have occurred and be continuing or would immediately result therefrom;

(viii) the repurchase of Equity Interests of Holdings or any of its direct or indirect parent entities from certain Closing Date Investors described in clause (b) of the definition thereof in accordance with the put right pursuant to Section 7.5 of the Parent LLC Agreement, so long as no Specified Event of Default shall have occurred and be continuing or would immediately result therefrom; and

(ix) so long as no Default or Event of Default shall have occurred and be continuing or would immediately result therefrom, Holdings may make additional Restricted Payments in an aggregate amount not to exceed (A) $1,500,000 plus (B) solely to the extent the Total Net Leverage Ratio (after giving effect to such Restricted Payment and the Incurrence of any Indebtedness in connection therewith on a Pro Forma Basis) for the four fiscal quarters most recently ended prior to the consummation of such Restricted Payment for which financial statements are required to be delivered pursuant to Section 5.01(a) or Section 5.01(b), as applicable, does not exceed 6.00 to 1.00, as certified in an Officer’s Certificate executed by a Financial Officer of the Borrower, (1) the Cash Equivalent proceeds of any substantially concurrent issuance of Equity Interests of Holdings (or any direct or indirect parent thereof) not constituting Disqualified Capital Stock (including upon exercise of warrants or options) which proceeds (if in respect of any Equity Interests of a direct or indirect parent) have been contributed as common equity to the capital of Holdings, plus (2) the aggregate amount of substantially concurrent contributions to the common capital of Holdings received in Cash Equivalents.

 

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SECTION 6.08 Limitation on Certain Restrictive Agreements.

(a) Create or otherwise cause or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Subsidiary to (x) pay Dividends or make any other distributions on its Stock to any Loan Party or pay any Indebtedness owed to any Loan Party, (y) make any loans or advances to, or repay any loans or advances from, any Loan Party or (z) transfer any of its property or assets to any Loan Party, except:

(i) any encumbrance or restriction contained in the Loan Documents;

(ii) contractual encumbrances or restrictions in effect (x) pursuant any Permitted Revolving Credit Facility or (y) on the Closing Date, including, without limitation, pursuant to the Indebtedness set forth on Schedule 6.01(b) or (z) in any agreement or instrument evidencing Indebtedness permitted under Section 6.01(r) or (t);

(iii) any agreement or other instrument of a person acquired by Holdings or a Subsidiary in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any person, or the properties or assets of any person, other than the person, or the property or assets of the person, so acquired;

(iv) any encumbrance or restriction arising under any Requirements of Law;

(v) any encumbrance or restriction consisting of customary non-assignment provisions in leases governing leasehold interests solely to the extent such provisions restrict the transfer of the lease or the property leased thereunder;

(vi) any encumbrance or restriction contained in security agreements, pledges or mortgages securing Purchase Money Obligations to the extent such encumbrance or restriction restricts solely the transfer of the property subject to such security agreements, pledges, mortgages or Purchase Money Obligations;

(vii) any encumbrance or restriction consisting of customary provisions limiting the disposition or distribution of assets or property in joint venture agreements or license agreements, which limitation is applicable only to the assets that are the subject of such agreements and solely to the extent the disposition, distribution or agreement is permitted under this Agreement;

(viii) restrictions pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of Holdings or any Subsidiary;

(ix) any encumbrance or restriction on escrowed amounts representing the purchase price for an acquisition or Investment, in each case solely to the extent such acquisition or Investment is permitted under this Agreement;

(x) customary provisions restricting subletting or assignment of any Lease governing a leasehold interest of Holdings or any Subsidiary;

(xi) customary restrictions and conditions contained in any agreement relating to the sale of any property permitted under Section 6.04 pending the consummation of such sale;

 

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(xii) restrictions arising in connection with cash or other deposits permitted under Section 6.02(f) or (o);

(xiii) any other agreement or instrument governing any Indebtedness permitted to be incurred or issued pursuant to Section 6.01 entered into after the Closing Date that contains encumbrances and restrictions that are no more restrictive in any material respect, taken as a whole, with respect to Holdings or any Subsidiary than the restrictions contained in the Loan Documents as of the Closing Date;

(xiv) Requirements of Law in any jurisdiction where Indebtedness of Foreign Subsidiaries permitted to be incurred pursuant to Section 6.01 is incurred; or

(xv) any encumbrances or restrictions imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in this Section 6.08, provided, however, that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Holdings’ Board of Directors, not materially more restrictive, taken as a whole, with respect to such encumbrances and restrictions than those contained in the encumbrances and restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

(b) Enter into any agreement that (A) prohibits or otherwise restricts the existence of any Lien upon property of a Loan Party in favor of the Collateral Agent for the purpose of securing the Obligations, whether now owned or hereafter acquired, or (B) requires the grant of any security for any obligation if such property is given as security for the Obligations, except (i) any document or instrument governing Purchase Money Obligations, provided, that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith; (ii) any document or instrument governing any Permitted Revolving Credit Facility in the case of clause (B) above; (iii) in connection with any Permitted Lien or any document or instrument governing any Permitted Lien, provided, that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien; and (iv) pursuant to customary restrictions and conditions contained in any agreement relating to the sale of any property permitted under Section 6.04, pending the consummation of such sale.

SECTION 6.09 Financial Covenants.

(a) Permit the Total Net Leverage Ratio, as of the end of each Test Period ending (i) on or after December 31, 2017 through the Test Period ending March 31, 2020 or (ii) on or after September 30, 2022, in each case, to be greater than 9.00:1.00.

(b) During the Covenant Suspension Period, permit the Cash Liquidity to be less than $2,500,000 at any time.

SECTION 6.10 Change in Fiscal Year. Without the prior written consent of the Required Lenders which shall not be unreasonably withheld, modify or change its fiscal year or its method of accounting (other than as may be required or permitted by GAAP).

 

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SECTION 6.11 Transactions with Affiliates.

(a) Make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any contract, agreement, loan, advance or guarantee or other transaction (including the purchase, sale, lease or exchange of any property, employee compensation arrangements or the rendering of any service) with, or for the benefit of, any Affiliate of Holdings or a Subsidiary (each of the foregoing, an “Affiliate Transaction”), unless:

(i) the terms of the Affiliate Transaction are no less favorable taken as a whole to Holdings or such Subsidiary than those that would be obtained at the time of the Affiliate Transaction in arm’s-length dealings with a person who is not an Affiliate; and

(ii) if such Affiliate Transaction involves an amount in excess of $1,000,000, the terms of the Affiliate Transaction are set forth in writing and a majority of the directors of Holdings disinterested with respect to such Affiliate Transaction have determined in good faith that the criteria set forth in clause (i) above are satisfied and have approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of Directors.

(b) The provisions of clause (a) of this Section 6.11 shall not prohibit (and the following shall not be deemed to be Affiliate Transactions):

(i) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise, pursuant to, or the funding of, employment arrangements, stock options, stock ownership plans and other compensatory arrangements for employees approved by the Board of Directors in the ordinary course of business;

(ii) Indebtedness permitted by Section 6.01(n), (o) or (p);

(iii) the payment of compensation and reasonable and customary fees to, and indemnities provided on behalf of, officers and directors of Holdings or any Subsidiary in the ordinary course of business;

(iv) the payment or reimbursement of expenses and indemnities pursuant to the Parent LLC Agreement;

(v) any Permitted Investments;

(vi) any transaction between or among (i) Holdings and any Loan Party or any person that becomes a Loan Party as a result of such transactions, (ii) any Loan Party and any Subsidiary of a Loan Party, to the extent otherwise not prohibited hereunder, and (iii) Subsidiaries that are not Loan Parties;

(vii) any Restricted Payment permitted pursuant to Section 6.07 hereof;

(viii) transactions with customers, clients, suppliers, or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of this Agreement that are fair to Holdings and its Subsidiaries, in the reasonable determination of the members of the Board of Directors of Holdings or the senior management thereof, or are on terms no less favorable taken as a whole as could reasonably have been entered into at such time with an unaffiliated party;

 

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(ix) if otherwise not prohibited hereunder, the issuance of Equity Interests (other than Disqualified Capital Stock) of Holdings to any direct or indirect parent of Holdings or to any Permitted Holder or any director, officer, employee or consultant of Holdings, its Subsidiaries or any direct or indirect parent of Holdings;

(x) if not otherwise prohibited by this Agreements, transactions between the Loan Parties and their Subsidiaries, on the one hand, and officers, directors and employees, on the other hand;

(xi) transactions pursuant to the agreements set forth on Schedule 6.11; and

(xii) transactions with Affiliated Lenders in their capacities as Lenders pursuant to the Loan Documents that are on terms consistent with (or no more favorable than) terms offered to all other Lenders.

SECTION 6.12 Holdings. In the case of Holdings only, engage in any material business activities or have any material properties or liabilities, other than (a) its ownership of the Equity Interests of its Subsidiaries, including receipt and payment of Restricted Payments and other amounts in respect of Equity Interests; (b) obligations under the Loan Documents, any Permitted Revolving Credit Facility, any other Indebtedness permitted hereby, the Loar Acquisition Agreement and any other document or agreement entered into in connection with the Loar Acquisition or any other Permitted Acquisition; (c) maintenance of its existence (including the ability to incur and pay, as applicable, fees, costs and expenses and taxes relating to such maintenance); (d) any public offering of its common equity or any other issuance or sale of its Equity Interests; (e) the issuance of Equity Interests, receipt and payment of Dividends, making contributions to the capital of its Subsidiaries and guaranteeing the obligations of its Subsidiaries; (f) if applicable, participating in tax, accounting and other administrative matters as a member of the consolidated group and the provision of administrative and advisory services (including treasury and insurance services) to its Subsidiaries of a type customarily provided by a holding company to its Subsidiaries; (g) holding any cash or property (but not operating any property); (h) providing indemnification to officers and directors; (i) activities incidental to Permitted Acquisitions or similar Investments consummated by its Subsidiaries, including the formation of acquisition vehicle entities and intercompany loans and/or Investments incidental to such Permitted Acquisitions or similar Investments; (j) merging with or into any Person (in compliance with Section 6.03(e)); and (k) activities and properties incidental to the foregoing clauses (a) through (j).

SECTION 6.13 Compliance with Anti-Terrorism Laws; Anti-Corruption Laws; OFAC.

(a) Directly or indirectly, in connection with the Loans, knowingly (i) conduct any business or engage in making or receiving any contribution of funds, goods or services to or for the benefit of any Sanctioned Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests in property blocked pursuant to any Anti-Terrorism Law in violation of Anti-Terrorism Law, (iii) engage in or conspire to engage in any transaction that evades or avoids, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law or (iv) engage in or conspire to engage in any transaction that violates the FCPA.

(b) Directly or indirectly, in connection with the Loans, knowingly cause or permit any of the funds of such Loan Party that are used to repay the Loans to be derived from any unlawful activity with the result that the making of the Loans would be in violation of any Anti-Terrorism Law.

 

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(c) Knowingly cause or permit (i) a Sanctioned Person to have any direct or indirect interest in or benefit of any nature whatsoever in the Loan Parties in violation of Sanctions or (ii) any of the funds or properties of the Loan Parties that are used to repay the Loans to constitute property of, or be beneficially owned directly or indirectly by, a Sanctioned Person in violation of Sanctions.

(d) Directly or indirectly use the proceeds of any Loan, or lend, contribute or otherwise make available such proceeds to any Subsidiary, joint venture partner or other person or entity, to fund or facilitate any activity of or business with any person that is a Sanctioned Person or in any country or territory that at the time of such funding is the subject of comprehensive economic sanctions imposed by the United States government, in each case, in violation of Sanctions.

(e) Paragraphs (a) through (d) above shall apply only to the extent that compliance with such undertakings does not result in a violation of, or conflict with, Section 7 of the German Foreign Trade Ordinance (Außenwirtschaftsverordnung (AWV)) Council Regulation (EC) No. 2271/96 of 22 November 1996 or any similar applicable anti-boycott law or regulation provided that to the extent that any Loan Party cannot comply with the undertakings contained in paragraphs (a) through (d) above due to any such anti-boycott laws or regulations, such Loan Party shall comply with such provisions relating to any Anti-Corruption Laws, anti-money laundering laws and Sanctions that are applicable to or binding upon such Loan Party in its original jurisdiction. Should any Loan Party or any Subsidiary of a Loan Party plan to enter into any transaction which would trigger the limitation made in the previous sentence, the relevant Loan Party shall notify the Administrative Agent in writing not less than 20 Business Days prior to the proposed execution date of such transaction (such written notice shall include a description of the parties to the relevant transaction (including their jurisdiction of domicile) and the key commercial terms of the relevant transaction).

ARTICLE VII

GUARANTEE

SECTION 7.01 The Guarantee. The Guarantors hereby jointly and severally guarantee, as a primary obligor and not as a surety to each Secured Party and their respective successors and permitted assigns, the prompt payment in full when due (whether at stated maturity, by required prepayment, declaration, demand, by acceleration or otherwise) of the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of the Title 11 of the United States Code after any bankruptcy or insolvency petition under Title 11 of the United States Code) on the Loans made by the Lenders to, and the Notes held by each Lender of, the Borrower, and all other Obligations from time to time owing to the Secured Parties by any Loan Party under any Loan Document, any Secured Cash Management Agreement or any Secured Hedging Agreement, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the “Guaranteed Obligations”). The Guarantors hereby jointly and severally agree that if the Borrower or other Guarantor(s) shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the same in cash, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

 

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Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability under this Section 7.01 shall be limited to the amount that could be claimed by the Administrative Agent and the Lenders from such Guarantor under this Section 7.01 without rendering such claim voidable or avoidable under Section 548 of the United States Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, such Guarantor’s right of contribution and indemnification from each other Guarantor under this Section 7.01.

To the extent that any Guarantor shall make a payment under this Section 7.01 of all or any of the Guaranteed Obligations (other than Guaranteed Obligations related to Loans and other extensions of credit made directly or indirectly to that Guarantor, or on such Guarantor’s behalf, in which case such Guarantor shall be primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount that such Guarantor would otherwise have paid if each Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion that such Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following Payment in Full of the Guaranteed Obligations and termination of the Commitments, such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

As of any date of determination, the Allocable Amount in respect of any Guarantor shall be equal to the maximum amount of the claim that could have been recovered from such Guarantor under this Section 7.01 without rendering such claim voidable of avoidable under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute common law.

The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor to which such contribution and indemnification is owing.

SECTION 7.02 Obligations Unconditional. The obligations of the Guarantors under Section 7.01 shall constitute a guaranty of payment and to the fullest extent permitted by applicable Requirements of Law, are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations of the Borrower under this Agreement, the Notes, if any, or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or Guarantor (except for Payment in Full). Without limiting the generality of the foregoing, to the fullest extent permitted by applicable Requirements of Law it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of the Guarantors hereunder which shall (subject to Section 7.09 hereof with respect to any Guarantor released pursuant thereto) remain absolute, irrevocable and unconditional under any and all circumstances as described above:

(a) at any time or from time to time, without notice to the Guarantors, to the extent permitted by any Requirement of Law, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

(b) any of the acts mentioned in any of the provisions of this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein shall be done or omitted;

 

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(c) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under the Loan Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations or, subject to Section 7.09, any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

(d) any Lien or security interest granted to, or in favor of, any Lender or Agent as security for any of the Guaranteed Obligations shall fail to be perfected;

(e) the release of any Guarantor pursuant to Section 7.09;

(f) any change in the time, manner or place of payment of, or in any other term of, all or any of the Guaranteed Obligations, or any other amendment or waiver of or any consent to any departure from any Loan Document or any other agreement or instrument relating thereto;

(g) any exchange, release or non-perfection of any other Collateral, or any release or amendment or waiver of or consent to any departure from any guarantee, for all or any of the Guaranteed Obligations;

(h) any exercise or non-exercise, or any waiver of any right, remedy, power or privilege under or in respect hereof or any Loan Document; or

(i) any other circumstances which might otherwise constitute a defense available to, or a discharge of, the Loan Parties (other than the payment in full in cash of the Guaranteed Obligations).

The Guarantors hereby expressly waive to the fullest extent permitted by applicable Requirements of Law diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that any Secured Party exhaust any right, power or remedy or proceed against the Borrower under this Agreement or the Notes, if any, or any other agreement or instrument referred to herein or therein, or against any other person under any other guarantee of, or security for, any of the Guaranteed Obligations. The Guarantors waive, to the extent permitted by any Requirement of Law, any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Secured Party upon this Guarantee or acceptance of this Guarantee, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this Guarantee, and all dealings between the Borrower and the Secured Parties shall likewise be conclusively presumed to have been had or consummated in reliance upon this Guarantee. This Guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time held by Secured Parties, and the obligations and liabilities of the Guarantors hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any other person at any time of any right or remedy against the Borrower or against any other person which may be or become liable in respect of all or any part of the Guaranteed Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Guarantors and the successors and assigns thereof, and shall inure to the benefit of the Lenders, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guaranteed Obligations outstanding.

 

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SECTION 7.03 Reinstatement. The obligations of the Guarantors under this Article VII shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower or other Loan Party in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.

SECTION 7.04 Subrogation; Subordination. Each Guarantor hereby agrees that until all Guaranteed Obligations are Paid in Full and the expiration and termination of the Commitments of the Lenders under this Agreement it shall not exercise any right or remedy, direct or indirect, arising by reason of any performance by it of its guarantee in Section 7.01, whether by subrogation, contribution, reimbursement or otherwise, against the Borrower or any Guarantor of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations. Any Indebtedness of any Loan Party permitted pursuant to Section 6.01(k)(iv) shall be subordinated to such Loan Party’s Guaranteed Obligations in the manner set forth in the Intercompany Note.

SECTION 7.05 Remedies. The Guarantors jointly and severally agree that, as between the Guarantors and the Lenders, the obligations of the Borrower under this Agreement and the Notes, if any, may be declared to be forthwith due and payable as provided in Section 8.01 (and shall be deemed to have become automatically due and payable in the circumstances provided in Section 8.01) for purposes of Section 7.01, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Borrower) shall forthwith become due and payable by the Guarantors for purposes of Section 7.01.

SECTION 7.06 [Reserved]

SECTION 7.07 Continuing Guarantee. The guarantee in this Article VII is a continuing guarantee of payment, and shall apply to all Guaranteed Obligations whenever arising.

SECTION 7.08 General Limitation on Guarantee Obligations. In any action or proceeding involving any state corporate limited partnership or limited liability company law, or any applicable state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor under Section 7.01 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 7.01, then, notwithstanding any other provision to the contrary, the amount of such liability shall, without any further action by such Guarantor, any Loan Party or any other person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

SECTION 7.09 Release of Guarantors. Upon (a) the Payment in Full of the Obligations, (b) any Guarantor ceasing to constitute a Subsidiary in compliance with the terms and provisions of the Loan Documents or (c) any Guarantor becomes an Excluded Subsidiary in compliance with the terms and provisions of the Loan Documents, the applicable Guarantors shall be automatically released from their obligations under this Agreement (including under Section 10.03 hereof) and the other Loan Documents, including their obligations to pledge and grant any Collateral owned by them pursuant to any Security Document, and, in the case of clauses (a) and (b), any pledge of the Equity Interests of such Guarantors to the Collateral Agent pursuant to the Security Documents shall be automatically released. The Lenders hereby authorize the Collateral Agent to execute and deliver any instruments, documents, and agreements necessary or desirable to evidence and confirm the release of any Guarantor and security

 

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interests pursuant to the foregoing provisions of this paragraph. When all Commitments hereunder have terminated, and all Loans or other Obligations have been Paid in Full, this Agreement and the Guarantees made herein shall terminate with respect to all Obligations, except with respect to Obligations that expressly survive such repayment pursuant to the terms of this Agreement.

SECTION 7.10 Keepwell. Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Loan Party to honor all of its obligations under this Guarantee in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 7.10 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 7.10, or otherwise under this Guarantee, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Guarantor under this Section 7.10 shall remain in full force and effect until the Guaranteed Obligations have been indefeasibly paid in full. Each Qualified ECP Guarantor intends that this Section 7.10 constitute, and this Section 7.10 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

SECTION 7.11 Right of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more than its proportionate share (measured by the book value of assets of the various Guarantors) of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms and conditions of Section 7.04.

SECTION 7.12 German Guarantee Limitation.

(a) For the purposes of this Section 7.12:

(i) “GmbH Guarantor” means a Guarantor incorporated as a limited liability company (Gesellschaft mit beschränkter Haftung) under German law;

(ii) “GmbH Guarantee” means the guarantees and indemnities given by the relevant GmbH Guarantor pursuant to this Agreement;

(iii) “GmbH Guarantee Obligations” means the obligations of the relevant GmbH Guarantor granted or incurred under this Agreement and includes, in addition, any other payment obligation created or incurred by such GmbH Guarantor under the Loan Documents (including, for the avoidance of doubt, any parallel debt or similar undertaking); and

(iv) “Up-stream and/or Cross-stream Guarantee” means any GmbH Guarantee if and to the extent such GmbH Guarantee secures the obligations of the Borrower or another Guarantor which is a direct or indirect shareholder of the GmbH Guarantor or an affiliated company (verbundenes Unternehmen) of such shareholder within the meaning of Section 15 et seq. of the German Stock Corporation Act (Aktiengesetz) (other than the GmbH Guarantor and its Subsidiaries).

(b) Limitations relating to the GmbH Guarantor.

 

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(i) Each Secured Party agrees that the enforcement of the GmbH Guarantee shall be limited, if and to the extent that, in relation to the relevant GmbH Guarantor:

(A) the GmbH Guarantee constitutes an Up-stream and/or Cross-stream Guarantee; and

(B) payment under that GmbH Guarantee would cause the relevant GmbH Guarantor’s Net Assets to fall below its registered share capital (Stammkapital) (calculated in accordance with applicable law at that time) or, if the Net Assets are already below its registered share capital, cause the Net Assets to be further reduced,

and, as a result, cause a violation of Sections 30, 31 of the GmbHG (the “Share Capital Impairment”).

(ii) For the purposes of this Section 7.12, Net Assets (Nettovermögen) means an amount equal to the sum of the amount of the GmbH Guarantor’s assets (consisting of all assets which correspond to the items set forth in Section 266 paragraphs 2 A, B, (but disregarding any accruals (Rückstellungen) in respect of a potential enforcement of the GmbH Guarantee or any security interest granted by the Security Documents), C, D and E of the German Commercial Code (Handelsgesetzbuch) less the aggregate amount of the GmbH Guarantor’s liabilities (consisting of all liabilities and liability reserves which correspond to the items set forth in Section 266 paragraphs 3 B, C, D and E of the German Commercial Code minus any profits which are not available for distribution in accordance with Section 253 paragraph 6, Section 268 paragraph 8 and Section 272 paragraph 5 of the German Commercial Code.

(iii) The Net Assets shall be determined in accordance with the generally accepted accounting principles applicable from time to time in Germany (Grundsätze ordnungsmäßiger Buchführung), be based on the same principles that were consistently applied by the GmbH Guarantor in the preparation of its most recent annual balance sheet (Jahresbilanz) save for the adjustments pursuant to paragraph (iv) below.

(iv) For the purposes of the calculation of the Net Assets, the following balance sheet items shall be adjusted as follows:

(A) the amount of any increase of the stated share capital (Stammkapital) of the GmbH Guarantor, effected after the date of this Agreement if and to the extent (i) effected without the prior written consent of the Administrative Agent and made out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) or (ii) it is not fully paid up, shall be deducted from the relevant stated share capital;

(B) the amount of any loans provided by Holdings of any of its Subsidiaries to and other liabilities incurred by the GmbH Guarantor shall be disregarded if such loans and/or liabilities are subordinated (for the benefit of the GmbH Guarantor’s creditors in general) or are considered as subordinated in an insolvency proceeding over the GmbH Guarantor’s assets pursuant to Section 39 paragraph 1 no. 5 and/or subsection 2 German Insolvency Code (Insolvenzordnung) provided that a waiver or conversion into equity of, or other form of extinguishing, the relevant repayment claim under loans and other liabilities subordinated pursuant to Section 39 paragraph 1 no. 5 and/or subsection 2 InsO does not lead to personal liability of the directors of the relevant Subsidiary as lender; and

 

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(C) the amount of any loans or other liabilities incurred by the GmbH Guarantor in violation of the Loan Documents, shall be disregarded.

(v) The GmbH Guarantor shall (within three months upon the written request of the Administrative Agent and to the extent legally permitted) for the purposes of the determination of the Net Assets dispose of any and all assets which are shown in the balance sheet of the GmbH Guarantor with a book value (Buchwert) which is significantly lower than the market value of such assets, if such disposal is commercially justifiable with respect to the cost and efforts involved and such asset is not necessary for the GmbH Guarantor’s business (betriebsnotwendig).

(vi) The limitations set out in this Section 7.12 shall in any event not apply:

(A) to any amounts due and payable under the GmbH Guarantee which relate to funds borrowed under a Loan Document which have been on-lent to or otherwise passed on to, or issued for the benefit of, the GmbH Guarantor, to any of its Subsidiaries and/or for the benefit of any of its creditors if and to the extent such amount on-lent or otherwise passed on to, or issued for the benefit of such persons, is still outstanding,

(B) to the extent the GmbH Guarantor is a party to a domination and/or profit and loss pooling agreement (Beherrschungsvertrag und/oder Gewinnabführungsvertrag) as dominated entity and/or transferor (beherrschtes Unternehmen und/oder übertragendes Unternehmen) directly or indirectly via an uninterrupted chain of domination and/or profit and loss pooling agreements with the Borrower or Guarantor whose obligations under this Agreement (other than under this Section 7.12) are enforced as dominating entity (herrschendes Unternehmen), unless the existence of such a domination agreement (Beherrschungsvertrag) and/or a profit transfer agreement (Gewinnabführungsvertrag) does not lead to the full inapplicability of Section 30 paragraph 1 sentence 1 GmbHG,

(C) if and to the extent, at the time of enforcement of the GmbH Guarantee Obligations such limitations are not required to protect the managing directors of the GmbH Guarantor from the risk of personal liability resulting from a violation of the GmbH Guarantor’s obligation to maintain its registered share capital pursuant to Sections 43, 30 et seq. GmbHG or similar provisions under the then applicable laws,

(D) if and to the extent the GmbH Guarantor has on the date of enforcement of the GmbH Guarantee a fully recoverable indemnity or claim for refund (vollwertiger Gegenleistungs- oder Rückgewähranspruch) covering the GmbH Guarantee,

 

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(E) following the opening of insolvency proceedings (Eröffnung eines Insolvenzverfahrens) in respect of the GmbH Guarantor and consequential payments no longer result in any personal liability of any managing director of the GmbH Guarantor, or

(F) if following notification by the Administrative Agent that it intends to demand payment under the GmbH Guarantee, (i) the GmbH Guarantor fails to provide within fifteen (15) Business Days after the date of such notification evidence satisfactory to the Administrative Agent, including, in particular, interim financial statements of the GmbH Guarantor together with a detailed calculation (satisfactory to the Administrative Agent (acting reasonably)) of the amount of the Net Assets of the GmbH Guarantor taking into account the adjustments and treatments set forth in paragraph (b)(iv) above and confirming to what extent the GmbH Guarantee is an Up-stream and/or Cross-stream Guarantee and which amount thereof cannot be enforced as it would cause the relevant GmbH Guarantor’s Net Assets to be zero or fall further below zero (if already zero or below zero) (a “Net Asset Determination”), or (ii) if after receipt of such Net Asset Determination, notification is given by the Administrative Agent to the GmbH Guarantor to provide a confirmation in accordance with applicable accounting principles of the Net Asset Determination by the GmbH Guarantor’s auditor (the “Auditors’ Determination”) that confirmation is not provided within forty-five (45) days after the date of such notification.

(c) The Administrative Agent, on behalf of the Secured Parties, shall be entitled to demand payment under the GmbH Guarantee in an amount which would, in accordance with the Net-Asset Determination or, if applicable and taking into account any previous enforcement in accordance with the Net Asset Determination, the Auditors’ Determination, not result in a Share Capital Impairment. If and to the extent that the Net Assets as determined by the Auditors’ Determination are lower than the amount enforced in accordance with the Net Asset Determination, the Administrative Agent shall release, within ten (10) Business Days of delivery of the Auditors’ Determination, to the GmbH Guarantor such excess enforcement proceeds.

(d) No reduction of the amount enforceable under the GmbH Guarantee in accordance with the above limitations will prejudice the rights of the Administrative Agent, on behalf of the Secured Parties, to continue enforcing the GmbH Guarantee (subject always to the operation of the limitation set out above at the time of such enforcement) at a later point in time until full satisfaction of the Guaranteed Obligations (including due to a change in law or jurisprudence of the Federal Court of Justice (Bundesgerichtshof)).

(e) If the relevant Guarantor is incorporated as a limited liability partnership (Kommanditgesellschaft) under German law with a limited liability company (Gesellschaft mit beschränkter Haftung) as its sole general partner (Komplementär) (GmbH & Co. KG) the rules in this Section 7.12 shall apply mutatis mutandis to such general partner.

 

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ARTICLE VIII

EVENTS OF DEFAULT

SECTION 8.01 Events of Default. Upon the occurrence and during the continuance of the following events (“Events of Default”):

(a) default shall be made in the payment of any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment (whether voluntary or mandatory) thereof or by acceleration thereof or otherwise;

(b) default shall be made in the payment of any interest on any Loan or any fee or other amount (other than an amount referred to in paragraph (a) above) due under any Loan Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of three (3) Business Days;

(c) any representation or warranty under any Loan Document shall prove to be false or misleading in any material respect (without duplication of any materiality standards contained therein) when so made or deemed made;

(d) default shall be made in the due observance or performance by any Company of any covenant, condition or agreement contained in Section 5.02(a), Section 5.03(a) (solely with respect to the Borrower), Section 5.06, Section 5.08, Section 5.15 (solely as it relates to item 4 of Schedule 5.15) or Article VI;

(e) default shall be made in the due observance or performance by any Loan Party of any covenant, condition or agreement contained in (i) Section 5.01(a), (b), (c) or (d) and such default shall continue unremedied or shall not be waived for a period of fifteen (15) days or (ii) any Loan Document (other than those specified in paragraphs (a), (b), (d) or (e)(i) immediately above) and such default shall continue unremedied or shall not be waived for a period of 30 days, in each case of clauses (e)(i) and (e)(ii) hereof, after the earlier of (i) a Responsible Officer of any Loan Party becoming aware of such default and (ii) written notice thereof from the Administrative Agent or any Lender to the Borrower;

(f) (i) (A) any Company shall fail to pay any principal, interest or other amount due in respect of any Material Indebtedness (other than the Obligations), when and as the same shall become due and payable beyond any applicable grace period; or (B) fail to observe or perform any other term, covenant, condition or agreement contained in any agreement or instrument evidencing or governing any such Material Indebtedness if the effect of any failure referred to in this clause (B) is to cause, or to permit the holder or holders of such Material Indebtedness or a trustee or other representative on its or their behalf (with or without the giving of notice) to cause, such Material Indebtedness to become due prior to its stated maturity or become subject to a mandatory offer to purchase by the obligor; provided, however, that an Event of Default shall not be deemed to exist under this clause (f)(i)(B) as a result of an event of default under any financial maintenance covenant under any Permitted Revolving Credit Facility, unless and until (x) the lenders under such Permitted Revolving Credit Facility shall have accelerated their revolving loans and other outstanding obligations under such Permitted Revolving Credit Facility as a result of such event of default, (b) the lenders or agent under such Permitted Revolving Credit Facility shall have exercised any secured creditor remedies as a result of such event of default or (c) 60 days shall have elapsed since the occurrence of such event of default under such Permitted Revolving Credit Facility with such event of default continuing at all times during such period; or (ii) there occurs under any Hedging Agreement an Early Termination Date (or any analogous term thereof) (as defined in such Hedging Agreement) resulting from any event of default under the applicable Hedging Agreement as to which a Company is the Defaulting Party (as defined in such Hedging Agreement) and the Termination Value owed by a Company as a result thereof is greater than $5,000,000;

 

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(g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction seeking (i) relief in respect of any Company (other than any Immaterial Subsidiary), or of a substantial part of the property of any Company (other than any Immaterial Subsidiary), under Title 11 of the U.S. Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law, including without limitation, any Company (other than any Immaterial Subsidiary) incorporated under German law that is generally unable, or admits in writing its inability to, pay its debts as they fall due (zahlungsunfähig) within the meaning of section 17 of the German Insolvency Code (Insolvenzordnung) or is over-indebted within the meaning of section 19 of the German Insolvency Code (Insolvenzordnung); (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Company (other than any Immaterial Subsidiary) or for a substantial part of the property of any Company (other than of any Immaterial Subsidiary); or (iii) the winding-up or liquidation of any Company (other than any Immaterial Subsidiary); and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(h) any Company (other than any Immaterial Subsidiary) shall (i) voluntarily commence any proceeding or file any petition seeking relief under Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law; (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in clause (g) above; (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Company (other than any Immaterial Subsidiary) or for a substantial part of the property of any Company (other than of any Immaterial Subsidiary); (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding; (v) make a general assignment for the benefit of creditors; (vi) admit in writing its inability or fail generally to pay its debts as they become due; or (vii) take any action for the purpose of effecting any of the foregoing;

(i) one or more final judgments, orders or decrees for the payment of money in an aggregate amount in excess of $3,500,000 for all such final judgments, orders and decrees (net of any insurance coverage or indemnification provided by third parties as to which coverage or liability, as applicable, has not been denied) shall be entered against any Company and such final judgment, order or decree shall not have been satisfied, vacated, discharged or stayed or bonded pending an appeal for a period of 45 consecutive days;

(j) any security interest and Lien on a material portion of the Collateral purported to be created by any Security Document shall cease to be in full force and effect, or shall cease to give the Collateral Agent, for the benefit of the Secured Parties, the Liens, rights, powers and privileges purported to be created and granted under such Security Document, or shall be asserted by the Borrower or any other Loan Party not to be a valid, perfected first-priority security interest in or Lien, subject to Permitted Liens, on the Collateral covered thereby; provided that no Event of Default shall occur under this clause (j) if any of the foregoing results from the willful misconduct or gross negligence of the Collateral Agent, the Administrative Agent or any Lender or the failure of the Agent (or any person acting on behalf of the Agent) to maintain possession of any Collateral or to file UCC amendments or continuation statements;

(k) any Loan Document or any material provisions thereof shall at any time and for any reason be declared by a court of competent jurisdiction to be null and void, or a proceeding shall be commenced by any Loan Party or any other person, or by any Governmental Authority, seeking to establish the invalidity or unenforceability thereof (exclusive of questions of interpretation of any provision thereof), or any Loan Party shall repudiate or deny any portion of its liability or obligation for the Obligations;

 

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(l) there shall have occurred a Change in Control; or

(m) any Company shall have current or potential liabilities in respect of any Plan or Multiemployer Plan that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect;

(n) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect;

then, and in every such event (other than an event described in paragraph (g) or (h) above), and at any time thereafter during the continuance of such event, the Administrative Agent shall, at the request of the Required Lenders, by notice to the Borrower, terminate the Commitments, and/or declare the Loans then outstanding to be forthwith due and payable in whole or in part, whereupon the Commitments shall terminate and/or the principal of the Loans so declared to be due and payable, together with accrued interest thereon and any unpaid accrued Obligations of the Borrower accrued hereunder and under any other Loan Document, shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived (to the extent permissible by applicable law) by the Borrower and the Guarantors, anything contained herein or in any other Loan Document to the contrary notwithstanding; and with respect to any event described in paragraph (g) or (h) above, the Commitments and the principal of the Loans then outstanding, together with accrued interest thereon and any unpaid accrued Obligations of the Borrower accrued hereunder and under any other Loan Document, shall automatically terminate (in the case of the Commitments) and automatically become due and payable (in the case of Loans and other Obligations), without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived (to the extent permissible by applicable law) by the Borrower and the Guarantors, anything contained herein or in any other Loan Document to the contrary notwithstanding.

Notwithstanding the foregoing, if an Event of Default pursuant to Section 8.01(h) or Section 8.01(l) has occurred and is continuing at a time when, were the Loans to be prepaid by the Borrower pursuant to Section 2.09(a) on such date, a prepayment premium pursuant to Section 2.09(e) would be applicable to such prepayment, then the Make-Whole Premium (in the case of any such Event of Default prior to the first anniversary of the Closing Date) or such prepayment premium, as the case may be, shall be added to the principal amount of such Loans declared due and payable, in addition to all other amounts payable pursuant to this Section 8.01.

SECTION 8.02 Rescission. If at any time after acceleration of the maturity of the Loans, the Borrower shall pay all arrears of interest due other than by acceleration and all payments on account of principal of the Loans owing by it that shall have become due other than by acceleration (with interest on principal and, to the extent permitted by law, on overdue interest, at the rates specified herein) and all Defaults (other than non-payment of principal of and accrued interest on the Loans due and payable solely by virtue of acceleration) shall be remedied or waived pursuant to Section 10.02, then upon the written consent of the Required Lenders and written notice to the Borrower, the acceleration and its consequences may be rescinded and annulled; but such action shall not affect any subsequent Default or impair any right or remedy consequent thereon. The provisions of the preceding sentence are intended merely to bind the Lenders to a decision that may be made at the election of the Required Lenders, and such provisions are not intended to benefit the Borrower and does not give the Borrower the right to require the Lenders to rescind or annul any acceleration hereunder, even if the conditions set forth herein are met.

 

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SECTION 8.03 Application of Proceeds. Subject to any Permitted Revolving Credit Facility Intercreditor Agreement, the proceeds received by the Collateral Agent in respect of any sale of, collection from or other realization upon all or any part of the Collateral pursuant to the exercise by the Collateral Agent of its remedies shall be applied, in full or in part, together with any other sums then held by the Collateral Agent pursuant to this Agreement, promptly by the Collateral Agent as follows (or, with respect to clauses (b) through (d), in such other order as each of the Lenders may agree):

(a) First, to the payment of all reasonable and documented costs and expenses, fees, commissions and Taxes of such sale, collection or other realization, and all reasonable and documented expenses, liabilities and advances made or incurred by the Agents in connection therewith and all amounts for which the Agents are entitled to indemnification pursuant to the provisions of any Loan Document, together with interest on each such amount at the rate then in effect under this Agreement from and after the date such amount is due, owing or unpaid until paid in full;

(b) Second, to the payment of all other reasonable and documented costs and expenses of such sale, collection or other realization and all reasonable and documented costs, liabilities and advances made or incurred by the other Secured Parties in connection therewith, together with interest on each such amount at the rate then in effect under this Agreement from and after the date such amount is due, owing or unpaid until paid in full;

(c) Third, to the payment in full in cash of the Obligations consisting of accrued interest, premium and fees payable to the Agents, the Lenders and any other Secured Parties and any breakage, termination or similar payments under agreements constituting Obligations;

(d) Fourth, to the payment in full in cash of the principal amount of the Obligations;

(e) Fifth, to the payment in full in cash of all other amounts constituting Obligations, Guaranteed Obligations or Secured Obligations (as defined in the Security Agreement); and

(f) Sixth, the balance, if any, to the person lawfully entitled thereto (including the applicable Loan Party or its successors or assigns) or as a court of competent jurisdiction may direct.

In the event that any such proceeds are insufficient to pay in full the items described in clauses (a) through (f) of this Section 8.03, the Loan Parties shall remain liable, jointly and severally, for any deficiency.

SECTION 8.04 Right to Cure. Notwithstanding anything to the contrary contained in this Article VIII, for purposes of determining whether an Event of Default has occurred under the financial covenant set forth in Section 6.09(a), any cash equity contribution (including any Over-cure Amount) to Holdings or any Subsidiary funded with the proceeds of common equity not constituting Disqualified Capital Stock issued by Parent or any direct or indirect parent company of Holdings after the last day of any fiscal quarter and on or prior to the date that is 10 Business Days after the earlier of (a) the day on which the financial statements for such quarter are required to be delivered or (b) the day on which the financial statements for such quarter are delivered will, at the request of the Borrower, be included in the calculation of Consolidated EBITDA solely for the purposes of determining compliance with such financial covenant at the end of such fiscal quarter and any subsequent period that includes such fiscal quarter (any such equity contribution, a “Specified Equity Contribution”); provided, that (i) the Borrower shall not be permitted to so request that a Specified Equity Contribution be included in the calculation of Consolidated EBITDA with respect to any fiscal quarter, unless after giving effect to such requested Specified Equity Contribution, there will not be more than two Specified Equity Contributions in the Relevant Four Fiscal Quarter Period; (ii) no more than four Specified Equity Contributions will be made in the aggregate during

 

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the term of this Agreement; (iii) the amount of any Specified Equity Contribution shall be no less than $1,000,000 (the “Minimum Cure Condition”), and unless a greater amount is necessary to satisfy the Minimum Cure Condition, the amount of any Specified Equity Contribution shall be no greater than the amount required to cause Holdings to be in compliance with such financial covenant (any excess amount contributed solely to satisfy the Minimum Cure Amount Condition, an “Over-cure Amount”); (iv) no more than $16,000,000 of Specified Equity Contributions may be made in the aggregate during the term of this Agreement; (v) 100% of the proceeds of any Specified Equity Contribution shall be used by the Borrower to prepay the Loans in accordance with Section 2.09(b)(iii); provided that the portion of any such Indebtedness so prepaid shall, for purposes of compliance with the financial covenant set forth in Section 6.09(a), be deemed to remain outstanding for the Relevant Four Fiscal Quarter Period and any subsequent measurement period that includes such fiscal quarter with respect to which the Specified Equity Contribution was made and (vi) all Specified Equity Contributions and the use of proceeds therefrom will be disregarded for all other purposes under the Loan Documents (including calculating Consolidated EBITDA, for purposes of determining basket levels, and any other items governed by reference to Consolidated EBITDA). For the avoidance of doubt, the application of proceeds of any Specified Equity Contribution to prepay the Term Loans shall be taken into account for purposes of determining the Total Net Leverage Ratio for any period commencing after the end of the applicable period for which the Specified Equity Contribution is applied. For purposes of this Section, the term “Relevant Four Fiscal Quarter Period” shall mean, with respect to any requested Specified Equity Contribution, the four fiscal quarter period ending with (and including) the fiscal quarter in which Consolidated EBITDA will be increased as a result of such Specified Equity Contribution.

ARTICLE IX

THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

SECTION 9.01 Appointment and Authority.

(a) Each of the Lenders hereby irrevocably appoints First Eagle Alternative Credit, LLC (as successor by merger to First Eagle Private Credit, LLC (f/k/a NewStar Financial, Inc.)) to act on its behalf as the Administrative Agent and the Collateral Agent hereunder and under the other Loan Documents and authorizes such Agents to take such actions on its behalf and to exercise such powers as are delegated to such Agents by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto, including executing the Loan Documents (other than this Agreement) on behalf of the Lenders; provided, that, except as expressly set forth herein, such Agents may not execute any amendments to the Loan Documents, without the written consent of the Required Lenders (or such other number or percentage of Lenders as shall be necessary under the circumstances as provided in Section 10.02). The Agents agree, upon the written request of the Required Lenders, to take any action of the type specified in this Agreement or any of the other Loan Documents as being within the Agents’ rights, duties, powers or discretion. Notwithstanding the foregoing, an Agent shall be fully justified in failing or refusing to take any action requested by the Lenders hereunder, unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liabilities, losses, costs and expenses (including, without limitation, attorneys’ fees and expenses) which may be incurred by it by reason of taking or continuing to take any such action, other than any liability which may arise out of Agent’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final, nonappealable order. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with written instructions signed by the Required Lenders, and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. In the absence of a request by the Required Lenders, each Agent shall have authority, in its reasonable discretion exercised in good faith, to take or not to take any action on behalf of the

 

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Lenders, unless this Agreement or any of the other Loan Documents specifically requires the consent of the Required Lenders or of all of the Lenders. Each Lender hereby releases the Administrative Agent and the Collateral Agent from any restrictions imposed by section 181 of the German Civil Code (Bürgerliches Gesetzbuch) and similar restrictions applicable to it pursuant to any other law, in each case, to the fullest extent legally possible to that Lender so that the Administrative Agent and the Collateral Agent can make use of any authorization granted under this Agreement or any other Loan Document and perform its duties and obligations and exercise its rights granted thereunder. A Lender which is barred by its constitutional documents or by law from granting such release shall notify the Administrative Agent and the Collateral Agent accordingly without undue delay and, upon reasonable request of the Collateral Agent, either act in accordance with the terms of the Loan Document as required pursuant to the Loan Documents or grant a special power of attorney to a party acting on its behalf, in a manner that is not prohibited pursuant to section 181 of the German Civil Code (Bürgerliches Gesetzbuch) and similar restrictions applicable to it pursuant to any other law).

(b) Each of the Lenders hereby irrevocably appoints Blackstone Alternative Credit Advisors LP to act on its behalf as the Lender Representative hereunder and under the other Loan Documents and authorizes the Lender Representative to take such actions on its behalf and to exercise such powers as are delegated to the Lender Representative by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The Lender Representative shall be fully justified in failing or refusing to take any action hereunder, unless it shall first be indemnified to its satisfaction by the Lenders pro rata against any and all liabilities, losses, costs and expenses (including attorneys’ fees and expenses) which may be incurred by it by reason of taking or continuing to take any such action. The Lender Representative shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with written instructions signed by the Required Lenders (or such greater percentage of Lenders expressly required hereunder), and such instructions and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. Notwithstanding the foregoing, the Lender Representative shall have authority, in its sole discretion, to take or not to take any action, unless this Agreement or any of the other Loan Documents specifically requires the consent of the Required Lenders (or such other number or percentage of Lenders as shall be necessary under the circumstances as provided in Section 10.02).

SECTION 9.02 Rights as a Lender. If a Lender is serving as an Agent or the Lender Representative hereunder, such Lender shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent or the Lender Representative, as applicable, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each Lender serving as an Agent or the Lender Representative hereunder in its individual capacity. Such person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with Holdings or any Subsidiary or other Affiliate thereof as if such person were not an Agent or the Lender Representative hereunder and without any duty to account therefor to the Lenders.

SECTION 9.03 Exculpatory Provisions. No Agent shall have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and Agents’ duties hereunder shall be administrative in nature. The Lender Representative shall have no duties or obligations hereunder or under any other Loan Documents. Without limiting the generality of the foregoing, neither any Agent nor the Lender Representative:

(i) shall be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

 

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(ii) shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that such Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that such Agent shall not be required to take any action directed by the Lenders that, in its judgment or the judgment of its counsel, may expose such Agent to liability or that is contrary to any Loan Document or applicable Requirements of Law; and

(iii) shall, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and neither any Agent nor the Lender Representative shall be liable for the failure to disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the person serving as such Agent or the Lender Representative or any of their respective Affiliates in any capacity.

No Agent shall be liable for any action taken or not taken by it (x) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as such Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 10.02) or (y) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by a final and nonappealable judgment. No Agent shall be deemed to have knowledge of any Default unless and until written notice describing such Default is given to such Agent by the Borrower or a Lender in accordance with the provisions of this Agreement. The Lender Representative shall not be liable for any action taken or not taken by it (in its capacity as the Lender Representative) for any reason.

No Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to such Agent. Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement with reference to the Administrative Agent or the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term us used merely as a matter of market custom and is intended to create or reflect only an administrative relationship between independent contracting parties.

Each party to this Agreement acknowledges and agrees that the Agents and the Required Lenders may use an outside service provider for the tracking of all UCC financing statements required to be filed pursuant to the Loan Documents and notification to the Agents or the Required Lenders, as the case may be, of, among other things, the upcoming lapse or expiration thereof.

SECTION 9.04 Reliance by Agent. Each Agent and the Lender Representative shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or

 

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intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper person. Each Agent and the Lender Representative also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan that by its terms must be fulfilled to the satisfaction of a Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from such Lender prior to the making of such Loan. Each Agent and the Lender Representative may consult with legal counsel, independent accountants and other experts selected by it, and shall be entitled to rely upon the advice of any such counsel, accountants or experts and shall not be liable for any action taken or not taken by it in accordance with such advice.

SECTION 9.05 Delegation of Duties. Each Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through, or delegate any and all such rights and powers to, any one or more sub-agents appointed by such Agent. The Lender Representative may exercise its rights and powers hereunder or under any other Loan Document by or through, or delegate any and all such rights and powers to, any Affiliate of the Lender Representative designated by the Lender Representative. Each Agent, the Lender Representative and any such sub-agent or designee may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent, designee and to the Related Parties of each Agent, the Lender Representative and any such sub-agent and designee, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities of such persons. No Agent shall incur any liability for any action or inaction taken by a sub-agent, except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that such Agent acted with gross negligence or willful misconduct in the selection of such sub-agent. The Lender Representative shall not incur any liability for any action or inaction taken by a designee thereof.

SECTION 9.06 Replacement or Resignation of Agent.

(a) Each Agent may at any time resign from its position as Agent hereunder by giving notice of its resignation to the Lenders and the Borrower 30 days prior to such resignation, such resignation to become effective upon the appointment of a successor agent as set forth below prior to the effectiveness of such resignation. The Required Lenders shall have the right, at any time, to remove an Agent. The Required Lenders shall have the right, at any time, to appoint a successor Agent with the Borrower’s consent (which consent shall not be unreasonably withheld or delayed and which shall not be required if a Specified Event of Default has occurred and is continuing), such successor Agent shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States and shall be a “U.S. person” and a “financial institution” within the meaning of Treasury Regulations Section 1.1441-1. If, in the case of the resignation of an Agent, no such successor shall have been so appointed by the Required Lenders with the consent of the Borrower as provided above and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation, then the retiring Agent may on behalf of the Lenders, appoint a successor Agent meeting the qualifications set forth above and subject to the Borrower’s consent set forth above. Upon appointment of a successor Agent and the effectiveness of the retiring Agent’s resignation, (1) the retiring Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except in the case of the confidentiality obligations set forth in Section 10.12 hereof and that in the case of any collateral security held by the Collateral Agent on behalf of the Secured Parties under any of the Loan Documents, the retiring Collateral Agent shall, at the expense of the Loan Parties, without representation, warranty or recourse, execute and deliver such documents, instruments and agreements as are reasonably

 

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necessary to effect any assignment of the rights and obligations of the retiring Collateral Agent to the successor Collateral Agent (and, if no successor Collateral Agent has been appointed, to the successor Administrative Agent or a Lender appointed by the Required Lenders) and deliver all Collateral then in its possession to the successor Collateral Agent (or the successor Administrative Agent or Lender, as the case may be)) and (2) all payments, communications and determinations provided to be made by, to or through an Agent shall instead be made by or to each Lender directly, until such time as the Required Lenders appoint a successor Agent as provided for above in this Section 9.06.

(b) Upon the acceptance of a successor’s appointment as Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired or replaced) Agent (other than any rights to indemnity payments owed to the retiring, retired or replaced Agent) and the retiring or replaced Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents; provided, that such retiring or replaced Agent shall not be discharged from its duties and obligations pursuant to Section 10.12. The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Agent’s resignation or replacement hereunder and under the other Loan Documents, the provisions of this Article IX and Section 10.03 shall continue in effect for the benefit of such retiring or replaced Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or replaced Agent was acting as Agent. For the avoidance of doubt, any successor agent appointed pursuant to this Section 9.06 shall be a “U.S. person” and a “financial institution” within the meaning of Treasury Regulations Section 1.1441-1.

(c) The Lender Representative may at any time resign from its position as the Lender Representative hereunder by giving written notice of its resignation to the Lenders and the Borrower, such resignation to become effective upon the date set forth in such notice of resignation.

SECTION 9.07 Non-Reliance on Agent and Other Lenders. Each Lender acknowledges that it has, independently and without reliance upon any Agent, the Lender Representative, or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon any Agent, the Lender Representative, or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder. Notwithstanding anything herein to the contrary, each Lender also acknowledges that the Lien and security interest granted to the Collateral Agent pursuant to the Security Documents and the exercise of any right or remedy by the Collateral Agent thereunder are subject to the provisions of any Permitted Revolving Credit Facility Intercreditor Agreement. In the event of any conflict between the terms of any Permitted Revolving Credit Facility Intercreditor Agreement and the Security Documents, the terms of any Permitted Revolving Credit Facility Intercreditor Agreement shall govern and control.

SECTION 9.08 No Reliance on Administrative Agent’s Customer Identification Program. Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, Participants or Eligible Assignees, may rely on the Administrative Agent to carry out such Lender’s, Affiliate’s, Participant’s or Eligible Assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to

 

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or in connection with any of the Loan Parties, their Affiliates or their agents, the Loan Documents, the Transactions or the other transactions hereunder or contemplated hereby: (a) identity verification procedures; (b) recordkeeping; (c) comparisons with government lists; (d) customer notices; or (e) other procedures required under the CIP Regulations or such other laws.

SECTION 9.09 Withholding Tax. To the extent required by any applicable law, the Administrative Agent may withhold from any payment to any Lender an amount equivalent to any applicable withholding Tax. Without limiting or expanding the provisions of Section 2.14(a) or (c), each Lender shall, and does hereby, indemnify the Administrative Agent against, and shall make payable in respect thereof within 30 days after demand therefor, any and all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Administrative Agent) incurred by or asserted against the Administrative Agent by the Internal Revenue Service or any other Governmental Authority as a result of the failure of the Administrative Agent to properly withhold Tax from amounts paid to or for the account of any Lender for any reason (including, without limitation, because the appropriate form was not delivered or not property executed, or because such Lender failed to notify the Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of withholding Tax ineffective). A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Loan Document against any amount due the Administrative Agent under this Section 9.09. The agreements in this Section 9.09 shall survive the resignation and/or replacement of the Administrative Agent, any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.

SECTION 9.10 Enforcement. Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent, or as the Required Lenders may require or otherwise direct, for the benefit of all the Lenders; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any Lender from exercising setoff rights in accordance with, and subject to, the terms of this Agreement, or (c) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any bankruptcy or insolvency law.

SECTION 9.11 Collateral Matters.

(a) Lenders hereby irrevocably authorize the Collateral Agent to enter into and take actions under and pursuant to any Permitted Revolving Credit Facility Intercreditor Agreement and to enter into any amendments pursuant to Section 10.02(c), as well as to release (i) any security interest in, mortgage or Lien upon, any of the Collateral (A) upon Payment in Full of the Obligations, (B) constituting property being sold or disposed of to a person that is not a Loan Party if, in the case of any non-ordinary course sale or disposition, any Loan Party certifies in an Officer’s Certificate to the Collateral Agent that the sale or disposition is made in compliance with Section 6.04 (and the Collateral Agent may rely conclusively on any such certificate, without further inquiry), (C) constituting property in which any Loan Party did not own an interest at the time the security interest, mortgage or Lien was granted or at any time thereafter, (D) if required or expressly permitted under the terms of any Loan Documents, including any Permitted Revolving Credit Facility Intercreditor Agreement and any other intercreditor agreement entered into in

 

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accordance with the terms and conditions of this Agreement, (E) approved, authorized or ratified in writing by the Required Lenders or all Lenders, as applicable, (F) constituting “Excluded Collateral”, or (G) to the extent the property constituting such Collateral is owned by any Guarantor, upon the release of such Guarantor from its obligations under the Guarantee (in accordance with Section 7.09); and (ii) any Guarantee as provided in Section 7.09. Except as provided above or in Section 7.09, and subject to Section 10.02(b)(vi), the Collateral Agent will not release any security interest in, mortgage or Lien upon, any of the Collateral without the prior written authorization of the Required Lenders. Upon request by the Collateral Agent at any time, Lenders will promptly confirm in writing the Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section.

(b) Without in any manner limiting the Collateral Agent’s authority to act without any specific or further authorization or consent by the Required Lenders, each Lender agrees to confirm in writing, upon request by the Collateral Agent, the authority to release Collateral conferred upon the Collateral Agent under this Section and to enter into any amendments pursuant to Section 10.02(c). The Collateral Agent shall (and is hereby irrevocably authorized by Lenders to) execute such documents as may be necessary or appropriate to evidence the release of the security interest, mortgage or Liens granted to Collateral Agent upon any Collateral to the extent set forth above; provided, that (i) Collateral Agent shall not be required to execute any such document on terms which, in Collateral Agent’s opinion, would expose Collateral Agent to liability or create any obligations or entail any consequence other than the release of such security interest, mortgage or Liens without recourse or warranty, and (ii) other than in connection with the Payment in Full of all Obligations and termination of this Agreement, such release shall not in any manner discharge, affect or impair the Obligations or any security interest in, or mortgage or Lien upon (or obligations of any Loan Party in respect of) the Collateral retained by such Loan Party.

(c) The Collateral Agent shall have no obligation whatsoever to any Lender to investigate, confirm or assure that the Collateral exists or is owned by any Loan Party or is cared for, protected or insured or has been encumbered, or that any particular items of Collateral meet the eligibility criteria applicable in respect of the Loans hereunder, or that the Liens and security interests granted to the Collateral Agent pursuant hereto or any of the Loan Documents or otherwise have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to the Collateral Agent in this Agreement or in any of the other Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission or event related thereto, subject to the other terms and conditions contained herein, the Collateral Agent shall have no duty or liability whatsoever to any other Lender.

(d) Without limiting the generality of the foregoing, each Lender (i) consents to the terms and provisions of any Permitted Revolving Credit Facility Intercreditor Agreement, entered into in accordance with the terms hereof, (ii) agrees that it is and will be bound (as a Lender) by the terms and conditions of any Permitted Revolving Credit Facility Intercreditor Agreement, whether or not such Lender executes such agreement, (iii) authorizes the Administrative Agent and Collateral Agent to enter into any Permitted Revolving Credit Facility Intercreditor Agreement and (iv) will not take any actions contrary to the provisions of any Permitted Revolving Credit Facility Intercreditor Agreement.

 

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(e) Notwithstanding anything to the contrary, in relation to any German Security Document, the Collateral Agent shall:

(i) hold, administer and, as the case may be, enforce or release, any security interest created or purported to be created under a German Security Document which is assigned or transferred to it (Sicherungsübereigung/-abtretung) or otherwise transferred to it under non-accessory security interest (nicht-akzessorische Sicherheit) to it as trustee (Treuhänder) in its own name and for the benefit of the Secured Parties and any proceeds thereof; and

(ii) administer and, as the case may be, enforce or release, any security interest created or purported to be created under a German Security Document which is created by way of a pledge (Pfandrecht) or otherwise transferred to it under an accessory security interest (akzessorische Sicherheit) as agent and as a creditor in its own rights granted to it in accordance with the Parallel Debt or otherwise.

SECTION 9.12 Agency for Perfection. Each Lender hereby appoints the Collateral Agent and each other Lender as collateral agent and bailee for the purpose of perfecting the security interests in and Liens upon the Collateral of the Collateral Agent in assets which, in accordance with Article 9 of the UCC can be perfected only by possession (or where the security interest of a secured party with possession has priority over the security interest of another secured party) and each of the Collateral Agent and each Lender hereby acknowledges that it holds possession of any such Collateral for the benefit of the Collateral Agent as secured party. Should any Lender obtain possession of any such Collateral, such Lender shall notify the Collateral Agent thereof and, promptly upon the Collateral Agent’s request therefor, shall deliver such Collateral to the Collateral Agent or in accordance with the Collateral Agent’s instructions.

SECTION 9.13 The Lender Representative. The Lender Representative, in its capacity as such, shall not have any obligation, liability, responsibility, or duty under this Agreement other than those applicable to it in its capacity as a Lender. Without limiting the foregoing, the Lender Representative, shall not have or be deemed to have any fiduciary relationship with any Lender or any Loan Party. Each Lender, each Agent, and each Loan Party acknowledges that it has not relied, and will not rely, on the Lender Representative in deciding to enter into this Agreement or in taking or not taking action hereunder. The Lender Representative, in its capacity as such, shall be entitled to resign at any time as provided herein.

SECTION 9.14 Collateral Agent May File Proofs of Claim.

(a) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Loan Party, the Collateral Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Collateral Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(i) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of Lenders and the Collateral Agent (including any claim for the reasonable expenses, disbursements and advances of Lenders and the Collateral Agent and their respective agents and counsel and all other amounts due Lenders and the Collateral Agent) allowed in such judicial proceeding; and

 

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(ii) to collect and receive any monies or other property payable or deliverable on any such claims; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Collateral Agent and, in the event that the Collateral Agent shall consent to the making of such payments directly to Lenders, to pay to the Collateral Agent any amount due for the reasonable expenses, disbursements and advances of the Collateral Agent and its agents and counsel, and any other amounts due the Collateral Agent.

(b) Nothing contained herein shall be deemed to authorize the Collateral Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Collateral Agent to vote in respect of the claim of any Lender in any such proceeding.

SECTION 9.15 Knowledge. No Agent shall be deemed to have knowledge or notice of the occurrence of any Default or Event of Default under the Loan Documents unless it has received notice of such Default or Event of Default from a Lender or Borrower referring to the Loan Documents describing such Default or Event of Default and stating that such notice is a “notice of default.”

SECTION 9.16 Reliance. Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, email, telecopy, telex or teletype message, statement, order or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper person or persons and upon advice and statements of legal counsel, independent accountants and other experts selected by such Agent.

SECTION 9.17 Parallel Debt.

(a) Each Loan Party, by way of an independent payment obligation, hereby irrevocably and unconditionally undertakes to pay to the Collateral Agent, as creditor in its own right and not as representative of the Lenders, sums equal to and in the currency of each amount payable by such Loan Party to the Lenders under the Obligations as and when that amount falls due for payment under the Obligations. The parties to this Agreement acknowledge and confirm that the parallel debt provisions contained herein shall not be interpreted so as to increase the maximum total amount of the obligations under the Obligations.

(b) The obligations of each Loan Party under paragraph Error! Reference source not found. above are several and are separate and independent from, and shall not in any way limit or affect, the corresponding obligations of such Loan Party to the Lenders under the Obligations (its “Corresponding Debt”) nor shall the amounts for which each Loan Party is liable under paragraph Error! Reference source not found. above (its “Parallel Debt”) be limited or affected in any way by its Corresponding Debt, provided that (i) the Collateral Agent shall not demand payment with regard to the Parallel Debt of any Loan Party to the extent that such Loan Party’s Corresponding Debt has been paid or (in the case of guarantee obligations) discharged, (ii) neither the Collateral Agent nor the Lenders shall demand payment with regard to the Corresponding Debt of any Loan Party to the extent that such Loan Party’s Parallel Debt has been paid or (in the case of guarantee obligations) discharged and (iii) the amount of the Parallel Debt of a Loan Party shall at all times be equal to the amount of its Corresponding Debt.

(c) The Collateral Agent acts in its own name and not as trustee and it shall have its own independent right to demand payment of the amounts payable by each Credit Party under this Section 9.17. Any security granted under the Security Documents to the Collateral Agent to secure the Parallel Debt is granted to the Collateral Agent in its capacity as creditor of the Parallel Debt and shall not be held on trust. The Collateral Agent may not assign or transfer any claim arising from the Parallel Debt other than to any successor Collateral Agent.

 

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(d) Any amount due and payable by any Loan Party to the Collateral Agent in respect of a Parallel Debt under this Section 9.17 shall be decreased to the extent that such Loan Party has paid the corresponding amount under the Corresponding Debt and any amount due and payable by a Loan Party to the Lenders under the Corresponding Debt shall be decreased to the extent that such Loan Party has paid the corresponding amount to the Collateral Agent under its Parallel Debt. Loan Parties shall have all objections and defenses against the Parallel Debt which they have against the Corresponding Debt.

(e) Without limiting or affecting the Collateral Agent’s rights against the Guarantors (whether under this Section 9.17 or under any other provision of the Loan Documents), each Loan Party acknowledges that (i) nothing in this Section 9.17 shall impose any obligation on the Collateral Agent to advance any sum to any Guarantor or otherwise under any Loan Document; and (ii) for the purpose of any vote taken under any Loan Document, the Collateral Agent shall not be regarded as having any participation or commitment.

(f) The rights of the Lender to receive payment of amounts payable by each Loan Party under the Corresponding Debt are several and are separate and independent from, and without prejudice to, the rights of the Collateral Agent to receive payment under the Parallel Debt.

(g) All monies received or recovered by the Collateral Agent pursuant to this Section 9.17, and all amounts received or recovered by the Collateral Agent from or by the enforcement of any security interest securing the Parallel Debt, shall be applied in accordance with Section 8.03; provided that, for such purpose, the Parallel Debt of each Loan Party shall be deemed to be owing to the Administrative Agent, the Collateral Agent, each Hedge Bank in respect of Secured Hedging Agreements, each Cash Management Bank in respect of Secured Cash Management Agreements and the Lenders (as applicable).

ARTICLE X

MISCELLANEOUS

SECTION 10.01 Notices.

(a) Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows:

(i) if to any Loan Party, to the Borrower at:

Loar Group Inc.

450 Lexington Avenue, 4th Floor

New York, NY 10017

Attention: [*]

Telephone: [*]

Email: [*] and [*]

 

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with a copy to (which copy shall not constitute notice hereunder):

Abrams Capital Management L.P.

222 Berkeley Street, 21^st Floor

Boston, MA 02116

Attention: [*]and [*]

Telephone: [*]

Email: [*], [*] and [*]

with a copy to (which copy shall not constitute notice hereunder):

Ropes & Gray LLP

Prudential Tower, 800 Boylston Street

Boston, MA 02199-3600

Attention: [*]

Telephone: [*]

Telecopier No.: [*]

Email: [*]

(ii) if to the Administrative Agent or the Collateral Agent, to it at:

First Eagle Alternative Credit, LLC

500 Boylston Street, Suite 1250

Boston, MA 02116

Attention: Agency Services – [*]

Telephone No.: [*]

Telecopier No.: [*]

with a copy (which copy shall not constitute notice hereunder) to:

Paul Hastings LLP

515 South Flower Street, 25^th Floor

Los Angeles, CA 90071

Attention: [*]

Telephone No.: [*]

Telecopier No.: [*]

(iii) if to Blackstone

Blackstone / Blackstone Debt Funds Management LLC

345 Park Avenue, 31^st Floor

New York, NY 10154

Attention: [*]

Telephone: [*]

Email: [*]

 

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with a copy to (which copy shall not constitute notice hereunder):

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Attention: [*]

Telephone: [*]

Telecopier No.: [*]

Email: [*]

(iv) if to any other Lender, to it at its address (or telecopier number) set forth in its Administrative Questionnaire.

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b). Any party hereto may change its address or telecopier number for notices and other communications hereunder by notice to the Borrower and the Agents.

(b) Electronic Communications. Notices and other communications to the Lenders hereunder may (subject to the provisions of this Section 10.01) be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Required Lenders; provided, that the foregoing shall not apply to notices to any Lender pursuant to Article II if such Lender, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. Each of the Administrative Agent, the Collateral Agent, the Lenders or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it (including pursuant to the provisions of this Section 10.01); provided, that approval of such procedures may be limited to particular notices or communications.

Each Loan Party hereby agrees that it will provide to the Administrative Agent all information, documents and other materials that it is obligated to furnish to the Administrative Agent or the Lenders pursuant to this Agreement and any other Loan Document, including all notices, requests, financial statements, financial and other reports, certificates and other information materials (the “Communications”), by transmitting them in an electronic medium in a format reasonably acceptable to the Administrative Agent at agencyservices@feim.com or at such other e-mail address(es) provided to the Borrower from time to time or in such other form as the Administrative Agent shall require. In addition, each Loan Party agrees to continue to provide the Communications to the Administrative Agent in the manner specified in this Agreement or any other Loan Document. Nothing in this Section 10.01 shall prejudice the right of the Agents, any Lender or any Loan Party to give any notice or other communication pursuant to this Agreement or any other Loan Document in any other manner specified in this Agreement or any other Loan Document.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement); provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

 

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To the extent consented to by the Administrative Agent in writing from time to time, the Administrative Agent agrees that receipt of the Communications (other than any such Communication that (i) relates to a request for new, or a conversion of existing, Loans or other extension of credit (including any election of an interest rate or interest period relating thereto), (ii) relates to the payment of any principal or other amount due under this Agreement prior to the scheduled date therefor, (iii) provides notice of any Default under this Agreement or (iv) is required to be delivered to satisfy any condition precedent to the effectiveness of this Agreement) by the Administrative Agent at its e-mail address(es) set forth above shall constitute effective delivery of the Communications to the Administrative Agent for purposes of the Loan Documents.

SECTION 10.02 Waivers; Amendment.

(a) Generally. No failure or delay by any Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of each Agent and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by this Section 10.02, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether any Agent or any Lender may have had notice or knowledge of such Default at the time. No notice or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances unless expressly required by this Agreement.

(b) Required Consents. Subject to Section 10.02(c), neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended, supplemented or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders (or, in the case of any amendment that by its express terms affects solely a particular Class of Commitments or Loans, the Required Class Lenders of such Class) or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent, the Collateral Agent (in the case of any Security Document) and the Loan Party or Loan Parties that are party thereto, if any, in each case with the written consent of the Required Lenders; provided, that no such agreement shall be effective if the effect thereof would:

(i) increase the Commitment of any Lender without the written consent of such Lender (it being understood that no amendment, modification, termination, waiver or consent with respect to any condition precedent, covenant, Default or Event of Default shall constitute an increase in the Commitment of any Lender);

(ii) reduce the principal amount or extend the final scheduled date of maturity of any Loan or reduce the rate of interest thereon (other than interest pursuant to Section 2.06(b)) or premium applicable thereto (including under Section 2.09(e)), reduce any fees, extend the timing of any payments or change the form or currency of payment of any Obligation, without the written consent of each Lender directly affected thereby (it being

 

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understood that any amendment or modification to the financial definitions in this Agreement or the amendment, modification, termination, waiver or consent with respect to any Default, Event of Default or of any mandatory prepayment set forth in Section 2.09 (including the component definitions used with respect to any mandatory prepayment set forth in such Section, including the definitions of Asset Sales, Casualty Events, Debt Issuances, Excess Proceeds, Net Cash Proceeds, Specified Equity Contribution and Excess Cash Flow) shall not constitute a reduction in the rate of interest, premium or fees or a reduction in the principal amount of any Loan, an extension of the timing of any payment or an extension of the final scheduled date of maturity of any Loan for purposes of this clause (ii));

(iii) [reserved];

(iv) permit the assignment or delegation by the Borrower of any of its rights or obligations under any Loan Document, without the written consent of each Lender;

(v) release Guarantors comprising all or substantially all of the value of the Guarantee from their Guarantee (except as expressly provided in Article VII), or limit their liability in respect of such Guarantee, without the written consent of each Lender;

(vi) release all or substantially all of the Collateral from the Liens of the Security Documents or alter the relative priorities of the Obligations entitled to the Liens of the Security Documents, in each case without the written consent of each Lender;

(vii) change Section 2.13(b), (c) or (d) in a manner that would alter the pro rata sharing of payments or setoffs required thereby, without the written consent of each Lender directly and adversely affected thereby;

(viii) change any provision of this Section 10.02(b) or Section 10.02(c), without the written consent of each Lender directly and adversely affected thereby;

(ix) change the percentage set forth in the definition of “Required Lenders” or any other provision of any Loan Document (including this Section) specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender, other than to increase such percentage or number or to give any additional Lender or group of Lenders such right to waive, amend or modify or make any such determination or grant any such consent;

(x) change or waive any provision of Article X as the same applies to any Agent, or any other provision hereof as the same applies to the rights or obligations of any Agent, in each case without the written consent of such Agent; or

(xi) this Agreement in a manner that adversely affects any particular Class as compared to all other Classes of Loans, without the consent of the Required Class Lenders of such adversely affected Class.

Notwithstanding anything to the contrary herein, the Loan Parties, the Lender Representative, the Administrative Agent and the Collateral Agent shall negotiate in good faith to amend this Agreement and any other Loan Documents (x) to provide for the implementation of a Permitted Revolving Credit Facility and (y) to implement any Structure Changes.

 

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(c) Collateral. Without the consent of any other person, the applicable Loan Party or Loan Parties and the Administrative Agent and/or Collateral Agent may (in its or their respective sole discretion, or shall, to the extent required by any Loan Document) enter into any amendment or waiver of any Loan Document, or enter into any new agreement or instrument, to effect the granting, perfection, protection, expansion or enhancement of any security interest in any Collateral (including, without limitation, amendments to the German Security Documents to include any increase in the Obligations in the definition of “Secured Claims” contained therein) or additional property to become Collateral for the benefit of the Secured Parties, or as required by local law in the United States to give effect to, or protect any security interest for the benefit of the Secured Parties, in any property or so that the security interests therein comply with applicable Requirements of Law.

SECTION 10.03 Expenses; Indemnity; Damage Waiver.

(a) Costs and Expenses. The Borrower shall pay on the Closing Date and, thereafter, within 30 days after written demand therefor, (i) all reasonable documented out-of-pocket costs and expenses incurred by the Administrative Agent, the Collateral Agent, the Lender Representative and Blackstone (including, without limitation, the reasonable and documented fees, costs and expenses of (A) one counsel for the Agents, (B) one counsel for the Lender Representative, (C) one local counsel of the Agents and Blackstone in each applicable jurisdiction and, if reasonably necessary any special or regulatory counsel of the Agents and Blackstone, and (D) examiners, appraisers and third party consultants hired by any such party with the prior written consent of the Borrower (such consent not to be unreasonably withheld or delayed)) in connection with the preparation, due diligence, negotiation, execution, delivery, closing, and administration of this Agreement and the other Loan Documents or any amendment, amendment and restatement, modification or waiver of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), including in connection with post-closing searches to confirm that security filings and recordations have been properly made, and (ii) all reasonable documented out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, Blackstone, the Lender Representative or any Lender (including the reasonable and documented fees, costs or expenses of (A) one counsel for the Agents, (B) one counsel for the Lender Representative, (C) one local counsel of the Agents and the Lender Representative in each applicable jurisdiction and, if reasonably necessary any special or regulatory counsel of the Agents and the Lender Representative and (D) in the case of an actual conflict of interest among the Agents, the Lender Representative and the Lenders, one additional counsel for the affected Persons as a whole, in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section 10.03, or (B) in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or similar negotiations in respect of such Loans; provided that, for the avoidance of doubt, expenses subject to indemnification or reimbursement under this Section 10.03(a) shall not include Taxes, other than Taxes that represent expenses arising from any non-Tax claim.

(b) Indemnification by Borrower. The Borrower shall indemnify and hold harmless the Administrative Agent (and any sub-agent thereof), the Collateral Agent (and any sub-agent thereof), the Lender Representative, each Lender, each of their respective successors and permitted assigns and each Related Party of any of the foregoing persons (each such person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable and documented fees, charges and disbursements of any counsel to the Indemnitees (excluding allocated costs of internal counsel) (limited to one primary outside counsel for all Indemnitees and one special or local counsel in each

 

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relevant jurisdiction and, in the case of an actual conflict of interest of another firm of counsel for all such affected Indemnitees)) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document, or any amendment, amendment and restatement, modification or waiver of the provisions hereof or thereof, or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged presence or Release or threatened Release or disposal of Hazardous Materials on, at, under or from any property owned, leased or operated by any Company at any time, or any Environmental Claim related in any way to any Company, or the violation of any applicable Environmental Law, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and non-appealable judgment to have resulted from the gross negligence, bad faith, fraud, or willful misconduct of such Indemnitee (or such Indemnitees’ Related Parties), (y) are attributable to a material breach of such Indemnitee (or such Indemnitee’s Related Parties) of its obligations under the Loan Documents or (z) relate to disputes solely among or between Lenders and/or Agents (other than any claims against any Agent in such capacity or in fulfilling its role as an Agent to the extent such disputes do not arise from any act or omission of the Borrower); provided, further, that, for the avoidance of doubt, losses, claims, damages, liabilities or related expenses subject to indemnification or reimbursement under this Section 10.03(b) shall not include Taxes, other than Taxes that represent losses, claims, damages, liabilities or related expenses arising from any non-Tax claim.

(c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to pay any amount required under paragraph (a) or (b) of this Section 10.03 to be paid by it to the Administrative Agent (or any sub-agent thereof), the Collateral Agent, the Lender Representative, or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the Collateral Agent (or any sub-agent thereof), the Lender Representative or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the Collateral Agent (or any sub-agent thereof) or the Lender Representative in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the Collateral Agent (or any sub-agent thereof) or the Lender Representative in connection with such capacity. For purposes hereof, a Lender’s “pro rata share” shall be determined based upon its share of the sum of the outstanding Loans and unused Commitments at the time.

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Requirements of Law, (i) no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, and (ii) no Indemnitee shall assert, and each Indemnitee hereby waives, any claim against any Loan Party or any Related Party of any Loan Party, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. Except to the extent arising from

 

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an Indemnitee’s gross negligence or willful misconduct, no Indemnitee referred to in paragraph (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e) Payments. All amounts due under this Section shall be payable not later than 10 Business Days after demand therefor.

(f) No Personal Liability for Directors, Officers, Employees and Stockholders. No director, officer, employee, incorporator, member, manager, partner or stockholder or other Related Party of any Loan Party shall have any liability for any obligations of any Loan Party under the Loan Documents or for any claim based on, in respect of, or by reason of such obligations or their creation to the extent permitted by applicable law.

SECTION 10.04 Successors and Assigns.

(a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent, the Collateral Agent and each Lender. Assignments by the Borrower or other transfers by the Borrower of any rights or obligations hereunder made in contravention with this Section 10.04(a) shall be null and void. Subject to the restrictions and limitations set forth in this Section 10.04, each Lender may assign (pursuant to an Assignment and Assumption and in minimum amounts of at least $1,000,000 or such Lender’s remaining Loans or Commitments (provided, that this minimum amount shall not apply to assignments between Lenders and their Affiliates and Approved Funds)) or otherwise transfer any of its rights or obligations hereunder to one or more Eligible Assignees; provided that any assignment to an Eligible Assignee that is not a Lender, an Affiliated Lender or an Approved Fund of a Lender shall require the consent of (x) the Administrative Agent (not to be unreasonably withheld, conditioned and delayed) and (y) so long as no Event of Default pursuant to Section 8.01(a), (b), (g) or (h) has occurred and is continuing, the Borrower (not to be unreasonably withheld, conditioned and delayed; it being agreed that (1) the investment objective or history of any prospective assignee or its Affiliates shall be a reasonable basis for the Borrower to withhold consent and (2) the Borrower may withhold its consent, in its sole discretion, to any assignment to any person that is not a Disqualified Lender but is known by the Borrower to be an Affiliate of a Disqualified Lender regardless of whether such person is identifiable as an Affiliate of a Disqualified Institution on the basis of such Affiliate’s name or otherwise), which consent of the Borrower, in connection with any assignment of Term Loans or Term Loan Commitments, shall be deemed given if the Borrower does not object in writing to the Administrative Agent to a request for consent within ten (10) Business Days after receipt of such consent request). Each Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and, unless waived by the Administrative Agent in its sole discretion, a processing and recordation fee of $3,500; provided, however, that such processing and recordation fee shall not be payable in connection with any assignment among Blackstone and the Blackstone Designees. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section 10.04 and, to the extent expressly contemplated hereby, the other Indemnitees) any legal or equitable right, remedy or claim under or by reason of this Agreement.

 

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(b) Register. The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation in book entry form of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and interest amounts) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders shall treat each person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower, the Collateral Agent and any Lender (with respect to its own interest only), at any reasonable time and from time to time upon reasonable prior notice. Notwithstanding anything to the contrary contained in this the Loan Documents, the Loans are intended to be treated as registered obligations for tax purposes and the right, title and interest of the Lenders in and to such Loans shall be transferable only in accordance with the terms hereof. This Section 10.04(b) shall be construed so that the Loans are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and Section 5f.103-1(c) of the Treasury Regulations.

(c) Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent sell participations to any Eligible Assignee (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided, that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Collateral Agent and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents; provided, that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in clause (i) or (ii) of the first proviso of Section 10.02(b) that affects such Participant. Subject to clause (d) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.12, 2.14 and 2.15 (subject to the requirements and limitations of such Sections) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender; provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation to a Participant pursuant to this Section 10.04(c) shall, acting solely for this purpose as a non-fiduciary agent of the Borrower (and such agency being solely for tax purposes), maintain a register on which it enters the name and address of each Participant and the principal amounts (and interest amounts) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”). The entries in the Participant Register shall be conclusive and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of the Loan Documents, notwithstanding any notice to the contrary. This Section 10.04(c) shall be construed so that the participations are at all times maintained in “registered form” within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and Section 5f.103-1(c) of the Treasury Regulations.

(d) Limitations on Participant Rights. A Participant shall not be entitled to receive any greater payment under Sections 2.12, 2.14 and 2.15 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant.

 

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(e) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided, that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. In the case of any Lender that is a fund that invests in bank loans, such Lender may, without the consent of the Borrower or the Administrative Agent, collaterally assign or pledge all or any portion of its rights under this Agreement, including the Loans and Notes or any other instrument evidencing its rights as a Lender under this Agreement, to any holder of, trustee for, or any other representative of holders of, obligations owed or securities issued, by such fund, as security for such obligations or securities.

(f) Assignments to Affiliated Lenders. Notwithstanding anything to the contrary contained herein, any Affiliated Lender may purchase Term Loans hereunder from any Lender pursuant to an Auction or on a non-pro rata basis pursuant to open market purchases; provided that:

(i) no Default or Event of Default has occurred or is continuing or would result therefrom;

(ii) if such sale, assignment or transfer is pursuant to one or more Dutch auctions (each, an “Auction”), then (A) such Affiliated Lender must provide notice of, and the option to participate in, the Auction to all Lenders and (B) the Auction shall be conducted pursuant to such procedures as the Auction Manager may establish, consistent with this Section 10.04(f) and otherwise reasonably acceptable to such Affiliated Lender, the Auction Manager and the Administrative Agent;

(iii) with respect to all assignments to an Affiliated Lender pursuant to this Section 10.04(f), the assigning Lender and the Affiliated Lender shall execute and deliver to the Administrative Agent and, in the case of an Auction, the Auction Manager, an Assignment and Assumption with respect to such assignment;

(iv) no Term Loan may be assigned to an Affiliated Lender pursuant to this Section 10.04(f), if, at the time of such assignment, after giving effect to such assignment, Affiliated Lenders in the aggregate would own Term Loans with a principal amount in excess of 25% of the principal amount of all Term Loans then outstanding;

(v) such Affiliated Lender, if it shall be a Lender, shall deliver to the Administrative Agent any tax forms required to be delivered pursuant to this Agreement; and

(vi) Affiliated Lenders and assignments to Affiliated Lenders will be subject to, and further governed by, the following provisions:

(A) Subject to clause (B) below, each Affiliated Lender, in connection with any (1) consent (or decision not to consent) to any amendment, modification, waiver, consent or other action with respect to any of the terms of any Loan Document, (2) other action on any matter related to any Loan Document or (3) direction to the Administrative Agent, Collateral Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Loan Document, agrees that, except with respect to any amendment, modification, waiver, consent or other action described in clause (i) or (ii) or (vii) of the first proviso of Section 10.02(b) or that adversely affects such Affiliated Lender in any material respect as compared to other Lenders of the same Class of Loans, shall be

 

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