UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 27, 2015

 

 

GREATBATCH, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-16137   16-1531026

(State or Other Jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

2595 Dallas Parkway, Suite 310, Frisco, Texas   75034
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (716) 759-5600

Not Applicable

(Former name or former address, if changed since last report)

 

 

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

 

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

 

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

 

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

 

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

 

 

 


Item 1.01. Entry into a Material Definitive Agreement.

On October 27, 2015, Greatbatch, Inc. (the “Company”) completed its previously announced acquisition of Lake Region Medical Holdings, Inc. (“Lake Region”), pursuant to an Agreement and Plan of Merger, dated as of August 27, 2015, by and among the Company, Provenance Merger Sub Inc., a Delaware corporation and an indirect wholly-owned subsidiary of the Company (“Merger Sub”) and Lake Region (the “Merger Agreement”). Pursuant to the Merger Agreement, Merger Sub was merged with and into Lake Region, with Lake Region continuing as the surviving corporation and an indirect wholly-owned subsidiary of the Company (the “Merger”).

Senior Secured Credit Facilities

In connection with the completion of the Merger, the Company and the Company’s wholly-owned subsidiary, Greatbatch Ltd., entered into a new credit agreement (the “Senior Secured Credit Facilities”) with Manufacturers and Traders Trust Company, as administrative agent, consisting of a $375 million term loan A facility (the “TLA Facility”), a $1,025 million term loan B facility (the “TLB Facility” and, together with the TLA Facility, the “Term Loan Facilities”), and a $200 million revolving credit facility (the “Revolving Credit Facility”). The Term Loan Facilities were funded in full on October 27, 2015 and used, together with the net proceeds from the Notes (as defined below), to fund the cash portion of the Merger Consideration (as defined below), the repayment of Greatbatch Ltd.’s outstanding indebtedness under its Second Amended and Restated Credit Agreement, dated as of September 20, 2013, and the repayment of all of Lake Region’s outstanding indebtedness. No amounts were drawn on the Revolving Credit Facility in connection with the completion of the Merger.

Term Loan Facilities

The TLA Facility will mature on October 27, 2021 and the TLB Facility will mature on October 27, 2022. Subject to certain conditions, one or more incremental term loan facilities may be added to the Term Loan Facilities so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25:1.00.

Interest Rate and Fees

Under the Term Loan Facilities, Greatbatch Ltd. has the option of LIBOR or base rate interest rates. Initially, the interest margins for (x) the TLA Facility will be 3.25% per annum for loans based on adjusted LIBOR and 2.25% per annum for loans based on the base rate and (y) the TLB Facility will be 4.25% per annum for loans based on adjusted LIBOR and 3.25% per annum for loans based on the base rate. Such initial interest margins for the TLA Facility will remain in place until five business days after the delivery of the compliance certificate for the first full fiscal quarter following the closing date (October 27, 2015) of the Senior Secured Credit Facilities (the “Closing Date”), after which it will be based on the pricing grid set forth in the Senior Secured Credit Facilities with interest margins to be determined on the basis of the Company’s total net leverage ratio, calculated quarterly on a trailing four-quarter basis.

Amortization

The TLA Facility will be subject to quarterly amortization of principal as follows: (i) 1.25% of the original aggregate principal amount of the TLA Facility in each quarter during the first two years following the Closing Date, (ii) 1.875% of the original aggregate principal amount of the TLA Facility in each quarter during the third year following the Closing Date, and (iii) 2.50% of the original aggregate principal amount of the TLA Facility in each quarter thereafter, with the balance payable at final maturity of the TLA Facility. The TLB Facility will be subject to quarterly amortization of principal equal to 0.25% per quarter of the original aggregate principal amount of the TLB Facility, with the balance payable at final maturity of the TLB Facility.

Revolving Credit Facility

The Revolving Credit Facility includes a $15 million sublimit for swingline loans and a $30 million sublimit for standby letters of credit (which will subsequently decrease to $25 million on April 27, 2016). Subject to certain conditions, commitments under the Revolving Credit Facility may be increased through an incremental revolving facility so long as, on a pro forma basis, the Company’s first lien net leverage ratio does not exceed 4.25:1.00. The Revolving Credit Facility matures on October 27, 2020.

Interest Rate and Fees

Under the Revolving Credit Facility, Greatbatch Ltd. will have the option of LIBOR or base rate interest rates. Initially, the interest margins for the Revolving Credit Facility will be 3.25% per annum for loans based on adjusted LIBOR and 2.25% per annum for loans based on the base rate. Such initial interest margins will remain in place until five business days after the delivery of the compliance certificate for the first full fiscal quarter following the Closing Date, after which it will be based on the pricing grid set forth in the Senior Secured Credit Facilities with interest margins to be determined on the basis of the Company’s total net leverage ratio, calculated quarterly on a trailing four-quarter basis.

 

2


A letter of credit fee in an amount equal to the interest margins for LIBOR loans under the Revolving Credit Facility will be paid on the aggregate face amount of letters of credit outstanding for the account of all lenders in the Revolving Credit Facility. In addition, Greatbatch Ltd. will pay to the issuing bank a 0.125% letter of credit fronting fee.

For the period from the Closing Date through the fifth day after the delivery of the compliance certificate for the first full fiscal quarter following the Closing Date, an unused commitment fee equal to 0.25% per annum of the average daily amount by which the total credit commitment of the Revolving Credit Facility exceeds the outstanding revolving loans, letters of credit and unpaid reimbursement obligations under the Revolving Credit Facility, will be payable quarterly in arrears to the lenders under the Revolving Credit Facility. Thereafter, this unused commitment fee will be based on a total net leverage-based pricing grid set forth in the Senior Secured Credit Facilities.

Guarantee and Security

The Senior Secured Credit Facilities will be guaranteed by the Company, as a parent guarantor, and all of the Company’s present and future direct and indirect wholly-owned domestic subsidiaries (other than Greatbatch Ltd., non-wholly owned joint ventures and certain other excluded subsidiaries). The Senior Secured Credit Facilities will be secured, subject to certain exceptions, by a first priority security interest in:

 

    the present and future shares of capital stock of (or other ownership or profit interests in) Greatbatch Ltd. and each guarantor (except the Company);

 

    sixty-six percent (66%) of all present and future shares of voting capital stock and 100% of all present and future shares of non-voting capital stock of each specified first-tier foreign subsidiary;

 

    substantially all of the Company’s, Greatbatch Ltd.’s and each other guarantor’s other personal property; and

 

    all proceeds and products of the property and assets of the Company, Greatbatch Ltd. and the other guarantors.

Covenants

The Senior Secured Credit Facilities contain negative covenants that restrict the Company’s and its subsidiaries ability to (i) incur additional indebtedness; (ii) create certain liens; (iii) consolidate or merge; (iv) sell assets, including capital stock of the Company’s subsidiaries; (v) engage in transactions with the Company’s affiliates; (vi) create restrictions on the payment of dividends or other amounts to Greatbatch Ltd. from the Company’s restricted subsidiaries; (vii) pay dividends on capital stock or redeem, repurchase or retire capital stock; (viii) pay, prepay, repurchase or retire certain subordinated indebtedness; (ix) make investments, loans, advances and acquisition; (x) make certain amendments or modifications to the organizational documents of the Company or its subsidiaries or the documentation governing other senior indebtedness of Parent; and (xi) change the Company’s type of business. These negative covenants are subject to a number of important limitations and exceptions that are described in the Senior Secured Credit Facilities. The Senior Secured Credit Facilities also include customary affirmative covenants and limited activity restrictive covenants applicable to the Company.

Financial Covenants

The Revolving Credit Facility and the TLA Facility contain covenants requiring (A) a maximum total net leverage ratio of 6.50:1.00, subject to step downs and (B) a minimum interest coverage ratio of Adjusted EBITDA (as defined in the Senior Secured Credit Facilities) to interest expense of not less than 3.00:1.00. The TLB Facility does not contain any financial maintenance covenants.

Mandatory Prepayment

The Senior Secured Credit Facilities include mandatory prepayments customary for credit facilities of its nature, including, without limitation, (i) 100% of the net cash proceeds from certain issuances of debt; (ii) 100% of the net cash proceeds from certain non-ordinary course asset sales, subject to customary exceptions and reinvestment rights; (iii) 100% of certain insurance proceeds and condemnation recoveries, subject to customary exceptions and reinvestment rights; and (iv) commencing in respect of the fiscal year ending on or about December 31, 2016, annual prepayments in an amount equal to a recapture rate (varying based on the Company’s total net leverage ratio) multiplied by the Company’s excess cash flow (as defined in the Senior Secured Credit Facilities) for each fiscal year.

 

3


Events of Default

The Senior Secured Credit Facilities also contains certain customary events of default (including, among others, an event of default upon a Change of Control (as defined in the Senior Secured Credit Facilities)). If an event of default occurs and is not cured or waived, the lenders under the Senior Secured Credit Facilities are entitled to take various actions, including the acceleration of amounts due under the Senior Secured Credit Facilities and all actions permitted to be taken by a secured creditor.

The above description of the Senior Secured Credit Facilities is qualified in its entirety by reference to the complete text of the Senior Secured Credit Facilities, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

Indenture and 9.125% Senior Notes due 2023

On October 27, 2015, Greatbatch Ltd. completed its previously announced offering (the “Offering”) of $360 million aggregate principal amount of 9.125% Senior Notes due 2023 (the “Notes”). In connection with the closing of the Offering, Greatbatch Ltd. and the guarantors for the Notes (the “Guarantors”) entered into an Indenture, dated as of October 27, 2015 (the “Indenture”), by and among Greatbatch Ltd., the Guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee (the “Trustee”).

The Indenture provides, among other things, that the Notes will be senior unsecured obligations of Greatbatch Ltd. Greatbatch Ltd.’s obligations under the Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by each of the Guarantors. Interest is payable on the Notes on May 1 and November 1 of each year, beginning on May 1, 2016. The Notes will mature on November 1, 2023.

The Indenture contains restrictive covenants that, among other things, limit the ability of Greatbatch Ltd. and the Guarantors to: (i) incur or guarantee additional indebtedness or issue certain disqualified stock or preferred stock; (ii) create certain liens; (iii) pay dividends or make distributions in respect of capital stock; (iv) make certain other restricted payments; (v) enter into agreements that restrict certain dividends or other payments; (vi) enter into sale-leaseback agreements; (vii) engage in certain transactions with affiliates; and (viii) consolidate or merge with, or sell substantially all of their assets to, another person. These covenants are subject to a number of important limitations and exceptions that are described in the Indenture.

The Indenture provides for customary events of default that include, among other things (subject in certain cases to customary grace and cure periods): (i) nonpayment of principal, premium, if any, and interest on the Notes when due; (ii) breach of covenants in the Indenture; (iii) defaults relating to the failure to pay at final maturity or the acceleration of certain other indebtedness; (iv) a failure to pay certain judgments; and (v) certain events of bankruptcy and insolvency. If an event of default occurs and is continuing, the Trustee or holders of at least 30% in principal amount of the then outstanding Notes may declare the principal, accrued and unpaid interest, if any, on all the Notes to be due and payable. These events of default are subject to a number of important qualifications, limitations and exceptions that are described in the Indenture.

The Notes will also be redeemable at the option of Greatbatch Ltd., in whole or in part, at any time on or after November 1, 2018 pursuant to a customary schedule of declining redemption prices. In addition, Greatbatch Ltd. may redeem the Notes, in whole or in part, prior to November 1, 2018 at a price equal to 100% of the principal amount thereof plus a “make-whole” premium. Prior to November 1, 2018, Greatbatch Ltd. may redeem up to 40% of the aggregate principal amount of the Notes using the proceeds from certain equity offerings at a redemption price equal to 109.125% of the aggregate principal amount of the Notes.

The above description of the Indenture is qualified in its entirety by reference to the complete text of the Indenture, a copy of which is attached hereto as Exhibit 4.1 and is incorporated by reference herein.

Stockholders Agreement

In connection with the completion of the Merger, the Company entered into a Stockholders Agreement (the “Stockholders Agreement”), dated as of October 27, 2015, with Kohlberg Kravis Roberts & Co. L.P. (“KKR”), Bain Capital Partners, LLC (“Bain”), an investment fund affiliated with KKR that was a stockholder of Lake Region (the “KKR Stockholder”) and certain investment funds affiliated with Bain that were stockholders of Lake Region (the “Bain Stockholders” and, together with the KKR Stockholder, the “Stockholders”). The Stockholders Agreement contains provisions relating to, among other things, restrictions on the acquisition of additional shares of common stock of the Company by the KKR Stockholder or the Bain Stockholders, as applicable, above the percentage of shares of common stock of the Company owned by the KKR Stockholder or the Bain Stockholders, as applicable, as of the closing of the Merger.

The Stockholders Agreement generally restricts, subject to limited exceptions, any transfer of shares of common stock of the Company by the Stockholders during the first six months after the closing of the Merger. Following this initial six-month period, the Stockholders are entitled to require the Company to file a shelf registration statement to register the shares of common stock received by the Stockholders as part of the Merger Consideration. In addition, each Stockholder will also be entitled to certain other customary demand and piggyback registration rights, in each case, subject to limitations as to the timing of the exercise of these rights. The foregoing description of the Stockholders Agreement does not purport to be complete and is qualified in its entirety by reference to the Stockholders Agreement, which is attached hereto as Exhibit 4.2 and is incorporated by reference herein.

 

4


Item 1.02 Termination of Material Definitive Agreement.

On October 27, 2015, concurrently with Greatbatch Ltd.’s entry into the Senior Secured Credit Facilities as described in Item 1.01 above, Greatbatch Ltd. terminated its Second Amended and Restated Credit Agreement, dated as of September 20, 2013, by and among Greatbatch Ltd., the financial institutions identified therein as lenders and Manufacturers and Traders Trust Company, as the administrative agent, and repaid all outstanding borrowings thereunder in full.

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

On October 27, 2015, the Company completed its previously announced acquisition of Lake Region. In connection with the Merger, Merger Sub was merged with and into Lake Region with Lake Region continuing as the surviving corporation and an indirect wholly-owned subsidiary of the Company. Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each outstanding share of common stock of Lake Region was converted into the right to receive a portion of the aggregate merger consideration (the “Merger Consideration”) consisting of (i) approximately $462 million in cash and (ii) 4.98 million newly issued shares of common stock of the Company. In connection with the completion of the Merger, the Company also issued 119,900 replacement options to certain members of Lake Region management and paid approximately $16.3 million to cash out all other outstanding in-the-money Lake Region equity awards. The Company also paid off all of Lake Region’s outstanding funded indebtedness, in the amount of approximately $1.0 billion.

The Company financed the cash portion of the Merger Consideration and the repayment of Lake Region’s outstanding funded indebtedness using the net proceeds from the TLA Facility, TLB Facility and Notes.

The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is filed as Exhibit 2.1 hereto and is incorporated by reference.

On October 27, 2015, the Company issued a press release announcing the closing of the Merger. A copy of the press release is attached hereto as Exhibit 99.1.

 

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

The information set forth under Item 1.01 above regarding the Senior Secured Credit Facilities and the Indenture is incorporated herein by reference.

 

Item 3.03 Material Modifications to Rights of Security Holders

The information set forth under Item 1.01 above regarding limitations upon the payment of dividends under the Senior Secured Credit Facilities and the Indenture is incorporated herein by reference.

 

5


Item 9.01. Financial Statements and Exhibits.

 

  (a) Financial statements of business acquired

The financial statements required by Item 9.01(a) will be filed by amendment within 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.

 

  (b) Pro forma financial information

The pro forma financial statements required by Item 9.01(b) will be filed by amendment within 71 calendar days after the date on which this Current Report on Form 8-K is required to be filed.

 

  (d) Exhibits

 

Exhibit

Number

  

Description of Exhibit

  2.1    Agreement and Plan of Merger, dated as of August 27, 2015, by and among Lake Region Medical Holdings, Inc., Greatbatch, Inc. and Provenance Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to Greatbatch, Inc.’s Current Report on Form 8-K filed on August 31, 2015).
  4.1    Indenture (including form of Note), dated as of October 27, 2015, by and among Greatbatch Ltd., the guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee.
  4.2    Stockholders Agreement, dated as of October 27, 2015, by and among Greatbatch, Inc., Kohlberg Kravis Roberts & Co. L.P., Bain Capital Investors, LLC and each other stockholder party thereto.
10.1    Credit Agreement, dated as of October 27, 2015, by and among Greatbatch Ltd., as the borrower, Greatbatch, Inc., as parent, the financial institutions party thereto and Manufacturers and Traders Trust Company, as administrative agent.
99.1    Press Release issued by Greatbatch, Inc., dated October 27, 2015

 

6


SIGNATURES

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

 

Date: October 28, 2015     GREATBATCH, INC.
    By:  

/s/ Michael Dinkins

      Michael Dinkins
      Executive Vice President & Chief Financial Officer


EXHIBIT INDEX

 

Exhibit

Number

  

Description of Exhibit

  2.1    Agreement and Plan of Merger, dated as of August 27, 2015, by and among Lake Region Medical Holdings, Inc., Greatbatch, Inc. and Provenance Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to Greatbatch, Inc.’s Current Report on Form 8-K filed on August 31, 2015).
  4.1    Indenture (including form of Note), dated as of October 27, 2015, by and among Greatbatch Ltd., the guarantors from time to time party thereto and Wilmington Trust, National Association, as trustee.
  4.2    Stockholders Agreement, dated as of October 27, 2015, by and among Greatbatch, Inc., Kohlberg Kravis Roberts & Co. L.P., Bain Capital Investors, LLC and each other stockholder party thereto.
10.1    Credit Agreement, dated as of October 27, 2015, by and among Greatbatch Ltd., as the borrower, Greatbatch, Inc., as parent, the financial institutions party thereto and Manufacturers and Traders Trust Company, as administrative agent.
99.1    Press Release issued by Greatbatch, Inc., dated October 27, 2015


Exhibit 4.1

Execution Version

 

 

 

GREATBATCH LTD.,

as Issuer,

the GUARANTORS from time to time party hereto

AND

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Trustee

9.125% Senior Notes due 2023

 

 

INDENTURE

Dated as of October 27, 2015

 

 

 


Table of Contents

 

         Page  
ARTICLE I   
DEFINITIONS AND INCORPORATION BY REFERENCE   

SECTION 1.1.

 

Definitions

     1   

SECTION 1.2.

 

Other Definitions

     43   

SECTION 1.3.

 

Rules of Construction

     46   
ARTICLE II   
THE NOTES   

SECTION 2.1.

 

Form, Dating and Terms

     46   

SECTION 2.2.

 

Execution and Authentication

     54   

SECTION 2.3.

 

Registrar and Paying Agent

     55   

SECTION 2.4.

 

Paying Agent to Hold Money in Trust

     56   

SECTION 2.5.

 

Holder Lists

     56   

SECTION 2.6.

 

Transfer and Exchange

     56   

SECTION 2.7.

 

[Reserved]

     61   

SECTION 2.8.

 

[Reserved]

     61   

SECTION 2.9.

 

[Reserved]

     61   

SECTION 2.10.

 

[Reserved]

     61   

SECTION 2.11.

 

Mutilated, Destroyed, Lost or Stolen Notes

     61   

SECTION 2.12.

 

Outstanding Notes

     62   

SECTION 2.13.

 

Temporary Notes

     62   

SECTION 2.14.

 

Cancellation

     63   

SECTION 2.15.

 

Payment of Interest; Defaulted Interest

     63   

SECTION 2.16.

 

CUSIP and ISIN Numbers

     64   

SECTION 2.17.

 

Joint and Several Liability

     65   
ARTICLE III   
COVENANTS   

SECTION 3.1.

 

Payment of Notes

     65   

SECTION 3.2.

 

Limitation on Indebtedness

     65   

SECTION 3.3.

 

Limitation on Restricted Payments

     70   

SECTION 3.4.

 

Limitation on Restrictions on Distributions from Restricted Subsidiaries

     76   

SECTION 3.5.

 

Limitation on Sales of Assets and Subsidiary Stock

     79   

SECTION 3.6.

 

Limitation on Liens

     84   

SECTION 3.7.

 

Limitation on Guarantees

     84   

SECTION 3.8.

 

Limitation on Affiliate Transactions

     85   

SECTION 3.9.

 

Change of Control

     87   

 

-i-


SECTION 3.10.

 

Reports

     89   

SECTION 3.11.

 

Maintenance of Office or Agency

     92   

SECTION 3.12.

 

Corporate Existence

     92   

SECTION 3.13.

 

Payment of Taxes

     92   

SECTION 3.14.

 

Compliance Certificate

     93   

SECTION 3.15.

 

[Reserved]

     93   

SECTION 3.16.

 

Statement by Officers as to Default

     93   

SECTION 3.17.

 

Suspension of Certain Covenants on Achievement of Investment Grade Status

     93   

SECTION 3.18.

 

Designation of Restricted and Unrestricted Subsidiaries

     94   

SECTION 3.19.

 

Limitation on Sale and Leaseback Transactions

     95   
ARTICLE IV   
SUCCESSOR ISSUER; SUCCESSOR PERSON   

SECTION 4.1.

 

Merger and Consolidation

     96   
ARTICLE V   
REDEMPTION OF NOTES   

SECTION 5.1.

 

Notices to Trustee

     98   

SECTION 5.2.

 

Selection of Notes to Be Redeemed or Purchased

     98   

SECTION 5.3.

 

Notice of Redemption

     98   

SECTION 5.4.

 

Effect of Notice of Redemption

     100   

SECTION 5.5.

 

Deposit of Redemption or Purchase Price

     100   

SECTION 5.6.

 

Notes Redeemed or Purchased in Part

     100   

SECTION 5.7.

 

Optional Redemption

     101   

SECTION 5.8.

 

Mandatory Redemption

     101   
ARTICLE VI   
DEFAULTS AND REMEDIES   

SECTION 6.1.

 

Events of Default

     102   

SECTION 6.2.

 

Acceleration

     104   

SECTION 6.3.

 

Other Remedies

     105   

SECTION 6.4.

 

Waiver of Past Defaults

     105   

SECTION 6.5.

 

Control by Majority

     106   

SECTION 6.6.

 

Limitation on Suits

     106   

SECTION 6.7.

 

Rights of Holders to Receive Payment

     106   

SECTION 6.8.

 

Collection Suit by Trustee

     107   

SECTION 6.9.

 

Trustee May File Proofs of Claim

     107   

SECTION 6.10.

 

Priorities

     107   

SECTION 6.11.

 

Undertaking for Costs

     108   

 

-ii-


ARTICLE VII
TRUSTEE

SECTION 7.1.

 

Duties of Trustee

   108

SECTION 7.2.

 

Rights of Trustee

   109

SECTION 7.3.

 

Individual Rights of Trustee

   111

SECTION 7.4.

 

Trustee’s Disclaimer

   111

SECTION 7.5.

 

Notice of Defaults

   111

SECTION 7.6.

 

Reports by Trustee to Holders

   112

SECTION 7.7.

 

Compensation and Indemnity

   112

SECTION 7.8.

 

Replacement of Trustee

   113

SECTION 7.9.

 

Successor Trustee by Merger

   114

SECTION 7.10.

 

Eligibility; Disqualification

   114

SECTION 7.11.

 

Preferential Collection of Claims Against the Issuer

   114

SECTION 7.12.

 

Trustee’s Application for Instruction from the Issuer

   114
ARTICLE VIII
LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.1.

 

Option to Effect Legal Defeasance or Covenant Defeasance; Defeasance

   115

SECTION 8.2.

 

Legal Defeasance and Discharge

   115

SECTION 8.3.

 

Covenant Defeasance

   115

SECTION 8.4.

 

Conditions to Legal or Covenant Defeasance

   116

SECTION 8.5.

 

Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions

   117

SECTION 8.6.

 

Repayment to the Issuer

   118

SECTION 8.7.

 

Reinstatement

   118
ARTICLE IX
AMENDMENTS

SECTION 9.1.

 

Without Consent of Holders

   118

SECTION 9.2.

 

With Consent of Holders

   120

SECTION 9.3.

 

[Reserved]

   121

SECTION 9.4.

 

Revocation and Effect of Consents and Waivers

   122

SECTION 9.5.

 

Notation on or Exchange of Notes

   122

SECTION 9.6.

 

Trustee to Sign Amendments

   122
ARTICLE X
GUARANTEE

SECTION 10.1.

 

Guarantee

   122

SECTION 10.2.

 

Limitation on Liability; Termination, Release and Discharge

   124

 

-iii-


SECTION 10.3.

 

Right of Contribution

     125   

SECTION 10.4.

 

No Subrogation

     125   
ARTICLE XI   
SATISFACTION AND DISCHARGE   

SECTION 11.1.

 

Satisfaction and Discharge

     126   

SECTION 11.2.

 

Application of Trust Money

     127   
ARTICLE XII   
MISCELLANEOUS   

SECTION 12.1.

 

[Reserved]

     127   

SECTION 12.2.

 

Notices

     127   

SECTION 12.3.

 

Communication by Holders with other Holders

     129   

SECTION 12.4.

 

Certificate and Opinion as to Conditions Precedent

     129   

SECTION 12.5.

 

Statements Required in Certificate or Opinion

     129   

SECTION 12.6.

 

When Notes Disregarded

     130   

SECTION 12.7.

 

Rules by Trustee, Paying Agent and Registrar

     130   

SECTION 12.8.

 

Legal Holidays

     130   

SECTION 12.9.

 

Governing Law

     130   

SECTION 12.10.

 

Jurisdiction

     130   

SECTION 12.11.

 

Waivers of Jury Trial

     131   

SECTION 12.12.

 

USA PATRIOT Act

     131   

SECTION 12.13.

 

No Personal Liability of Directors, Officers, Employees and Shareholders

     131   

SECTION 12.14.

 

Successors

     131   

SECTION 12.15.

 

Multiple Originals

     131   

SECTION 12.16.

 

[Reserved]

     131   

SECTION 12.17.

 

Table of Contents; Headings

     131   

SECTION 12.18.

 

Force Majeure

     131   

SECTION 12.19.

 

Severability

     132   

SECTION 12.20.

 

Waiver of Immunities

     132   

SECTION 12.21.

 

Judgment Currency

     132   

 

-iv-


EXHIBIT A

  

Form of Global Restricted Note

EXHIBIT B

  

Form of Supplemental Indenture

EXHIBIT C

  

Form of Certificate to be Delivered Upon Termination of Restricted Period

EXHIBIT D

  

Form of Certificate to be Delivered in Connection with Transfers to IAIs

EXHIBIT E

  

Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S

 

-v-


INDENTURE dated as of October 27, 2015, among GREATBATCH LTD., a New York corporation, the Guarantors from time to time party hereto and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as trustee.

W I T N E S S E T H:

WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to provide for the issuance of (i) $360,000,000 aggregate principal amount of its 9.125% Senior Notes due 2023 (the “Initial Notes”), each as issued on the date hereof and (ii) any additional Notes that may be issued after the Issue Date in compliance with this Indenture (“Additional Notes” and together with the Initial Notes, the “Notes”);

WHEREAS, the obligations of the Issuer with respect to the due and punctual payment of the principal of, premium, if any, and interest on all the Notes and the performance and observation of each covenant and agreement under this Indenture on the part of the Issuer to be performed or observed will be unconditionally and irrevocably guaranteed by the Guarantors;

WHEREAS, all things necessary (i) to make the Notes, when executed and duly issued by the Issuer and authenticated and delivered hereunder, the valid obligations of the Issuer and (ii) to make this Indenture a valid agreement of the Issuer have been done; and

WHEREAS, the Guarantors party hereto have duly authorized the execution and delivery of this Indenture as guarantors of the Notes, and all things necessary (i) to make the Note Guarantee, when the Notes are executed and duly issued by the Issuer and authenticated and delivered hereunder, the valid obligations of such Guarantor and (ii) to make this Indenture a valid agreement of such Guarantor, in accordance with its terms, have been done.

NOW, THEREFORE, in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the benefit of each other and for the equal and proportionate benefit of all Holders, as follows:

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.1. Definitions.

Acquired Indebtedness” means Indebtedness (1) of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary, or (2) assumed in connection with the acquisition of assets from such Person, in each case whether or not Incurred by such Person in connection with such Person becoming a Restricted Subsidiary of Holdings or such acquisition or (3) of a Person at the time such Person merges with or into or consolidates, amalgamates or otherwise combines with Holdings or any Restricted Subsidiary. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of assets and, with respect to clause (3) of the preceding sentence, on the date of the relevant merger, consolidation or other combination.


Acquisition” means the proposed acquisition by Holdings of Lake Region pursuant to the Merger Agreement.

Additional Assets” means:

(1) any property or assets (other than Capital Stock) used or to be used by Holdings or a Restricted Subsidiary or otherwise useful in a Similar Business (it being understood that capital expenditures on property or assets already used in a Similar Business or to replace any property or assets that are the subject of such Asset Disposition shall be deemed an investment in Additional Assets); or

(2) the Capital Stock of a Person that is engaged in a Similar Business and becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by Holdings or a Restricted Subsidiary of Holdings.

Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

Agent” means any Registrar, Paying Agent, Authenticating Agent or Notes Custodian.

Alternative Currency” means each of Euro, British Pounds Sterling, Australian Dollars, Brazilian Real, Canadian Dollars, Chinese Yuan, Danish Kroner, Egyptian Pound, Hong Kong Dollars, Indian Rupee, Indonesian Rupiah, Japanese Yen, Korean Won, Mexican Pesos, New Zealand Dollars, Russian Ruble, Singapore Dollars, Swedish Kroner, Swiss Francs and each other currency (other than United States Dollars) that is a lawful currency (other than United States Dollars) that is readily available and freely transferable and convertible into United States Dollars.

Applicable Premium” means, with respect to any Note on any redemption date, the greater of (A) 1.0% of the principal amount of such Note and (B) the excess (to the extent positive) of:

(a) the present value at such redemption date of (i) the redemption price of such Note at November 1, 2018 (such redemption price (expressed in percentage of principal amount) being set forth in Section 5.7(c)), plus (ii) all required interest payments due on such Note to and including such date set forth in clause (i) (excluding accrued but unpaid interest to the redemption date), computed on the redemption date using a discount rate equal to the Applicable Treasury Rate at such redemption date plus 50 basis points; over

(b) the outstanding principal amount of such Note;

in each case, as calculated by the Issuer or on behalf of the Issuer by such Person as the Issuer shall designate. In no case shall the Trustee be responsible for such calculations.

 

-2-


Applicable Procedures” means, with respect to any payment, tender, redemption, transfer or exchange of or for beneficial interests in any Global Note. The rules and procedures of the Depositary that apply to such payment, tender, redemption, transfer or exchange.

Applicable Treasury Rate” means 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) which has become publicly available at least two (2) Business Days (but not more than five (5) Business Days) prior to the redemption date (or, if such statistical release is not so published or available, any publicly available source of similar market data selected by the Issuer in good faith)) most nearly equal to the period from the redemption date to November 1, 2018; provided, however, that if the period from the redemption date to November 1, 2018 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Applicable 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 the redemption date to such applicable 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.

Asset Disposition” means:

(a) the sale, conveyance, transfer or other disposition, whether in a single transaction or a series of related transactions, of property or assets (including by way of a Sale and Leaseback Transaction) of Holdings or any of its Restricted Subsidiaries (in each case other than, for the avoidance of doubt, Capital Stock issued by Holdings) (each referred to in this definition as a “disposition”); or

(b) the issuance or sale of Capital Stock of any Restricted Subsidiary (other than Preferred Stock or Disqualified Stock of Restricted Subsidiaries issued in compliance with Section 3.2 or directors’ qualifying shares and shares issued to foreign nationals as required under applicable law), whether in a single transaction or a series of related transactions;

in each case, other than:

(1) a disposition by a Restricted Subsidiary to Holdings or by Holdings or a Restricted Subsidiary to a Restricted Subsidiary;

(2) a disposition of cash, Cash Equivalents or Investment Grade Securities;

(3) a disposition of inventory or other assets in the ordinary course of business or consistent with past practice (including allowing any registrations or any applications for registrations of any intellectual property rights to lapse or go abandoned in the ordinary course of business or consistent with past practice);

(4) a disposition of obsolete, worn out, uneconomic, damaged or surplus property, equipment or other assets or property, equipment or other assets that are no longer economically practical, commercially desirable to maintain, used or useful in the conduct of the business of Holdings and its Restricted Subsidiaries, whether now or hereafter owned or leased or acquired in connection with an acquisition;

 

-3-


(5) transactions permitted under Section 4.1(a) or a transaction that constitutes a Change of Control;

(6) an issuance of Capital Stock by a Restricted Subsidiary to Holdings or to another Restricted Subsidiary;

(7) any dispositions of Capital Stock, properties or assets in a single transaction or series of related transactions with a fair market value of less than $10,000,000;

(8) any Restricted Payment that is permitted to be made, and is made, under Section 3.3 and the making of any Permitted Payment or Permitted Investment;

(9) dispositions consisting of Permitted Liens;

(10) dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or consistent with past practice or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

(11) conveyances, sales, transfers, licenses or sublicenses or other dispositions of intellectual property, software or other general intangibles and licenses, sub-licenses, leases or subleases of other property, in each case, in the ordinary course of business or consistent with past practice or pursuant to a research or development agreement in which the counterparty to such agreement receives a license to use the intellectual property or software that result from such agreement;

(12) foreclosure, condemnation or any similar action with respect to any property or other assets;

(13) the sale or discount (with or without recourse, and on customary or commercially reasonable terms and for credit management purposes) of accounts receivable or notes receivable arising in the ordinary course of business or consistent with past practice, or the conversion or exchange of accounts receivable for notes receivable;

(14) any disposition of Capital Stock, Indebtedness or other securities of an Unrestricted Subsidiary;

(15) any disposition of Capital Stock of a Restricted Subsidiary of the Issuer pursuant to an agreement or other obligation with or to a Person (other than Holdings or a Restricted Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such Restricted Subsidiary acquired its business and assets (having been newly formed in connection with such acquisition), made as part of such acquisition and in each case comprising all or a portion of the consideration in respect of such sale or acquisition;

 

-4-


(16) (i) dispositions of property to the extent that such property is exchanged for credit against the purchase price of similar replacement property that is promptly purchased, (ii) dispositions of property to the extent that the proceeds of such disposition are promptly applied to the purchase price of such replacement property (which replacement property is actually promptly purchased) and (iii) to the extent allowable under Section 1031 of the Code, any exchange of like property (excluding any boot thereon) for use in a Similar Business;

(17) any sale, disposition or creation of a Lien pursuant to a Qualified Receivables Transaction, or the disposition of an account receivable in connection with the collection or compromise thereof in the ordinary course of business or consistent with past practice;

(18) dispositions of Investments in joint ventures or similar entities to the extent required by, or made pursuant to customary buy/sell arrangements between, the parties to such joint venture set forth in joint venture arrangements and similar binding arrangements;

(19) the unwinding of any Hedging Obligations pursuant to its terms;

(20) the surrender or waiver of any contractual rights and the settlement release, surrender or waiver of any contractual or other claims in each case in the ordinary course of business or consistent with past practice; and

(21) the Nuvectra Spin-Off.

Attributable Debt” in respect of a Sale and Leaseback Transaction means, as at the time of determination, the present value (discounted at the interest rate borne by the Notes, compounded annually) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction (including any period for which such lease has been extended); provided, however, that if such Sale and Leaseback Transaction results in a Capitalized Lease Obligation, the amount of Indebtedness represented thereby shall be determined in accordance with the definition of “Capitalized Lease Obligation.”

Bankruptcy Law” means Title 11 of the United States Code or similar federal, state or foreign law for the relief of debtors.

Board of Directors” means (1) with respect to Holdings, the Issuer or any other corporation, the board of directors or managers, as applicable, of the corporation, or any duly authorized committee thereof; (2) with respect to any partnership, the board of directors or other governing body of the general partner of the partnership or any duly authorized committee thereof; and (3) with respect to any other Person, the board or any duly authorized committee of such Person serving a similar function. Whenever any provision requires any action or determination to be made by, or any approval of, a Board of Directors, such action, determination or approval shall be deemed to have been taken or made if approved by a majority of the directors on any such Board of Directors (whether or not such action or approval is taken as part of a formal board meeting or as a formal board approval).

 

-5-


Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of a Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect of the date of such certification, and delivered to the Trustee.

Business Day” means each day that is not a Saturday, Sunday or other day on which the Trustee or banking institutions in New York, New York, United States or the jurisdiction of the place of payment are authorized or required by law to close.

Capital Stock” of any Person means any and all shares of, rights to purchase, warrants, options or depositary receipts for, or other equivalents of or partnership or other interests in (however designated), equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

Capitalized Lease Obligations” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes on the basis of GAAP. The amount of Indebtedness represented by such obligation shall be the capitalized amount of such obligation at the time any determination thereof is to be made as determined on the basis of GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated without penalty. For purposes of Section 3.6, a Capitalized Lease Obligation shall be deemed to be secured by a Lien on the property being leased.

Cash Equivalents” means:

 

  (1) (a) United States Dollars, Euro, or any national currency of any member state of the European Union or Canada; or (b) any other foreign currency held by Holdings and its Restricted Subsidiaries in the ordinary course of business or consistent with past practice;

 

  (2) securities issued or directly and fully Guaranteed or insured by the United States or Canadian governments, a member state of the European Union or, in each case, or any agency or instrumentality of the foregoing (provided that the full faith and credit obligation of such country or such member state is pledged in support thereof), having maturities of not more than two years from the date of acquisition;

 

  (3) certificates of deposit, time deposits, eurodollar time deposits, overnight bank deposits or bankers’ acceptances having maturities of not more than one year from the date of acquisition thereof issued by any lender or by any bank or trust company (a) whose commercial paper is rated at least “A-2” or the equivalent thereof by S&P or at least “P-2” or the equivalent thereof by Moody’s (or if at the time neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization) or (b) (in the event that the bank or trust company does not have commercial paper which is rated) having combined capital and surplus in excess of $100,000,000;

 

-6-


  (4) repurchase obligations for underlying securities of the types described in clauses (2), (3) and (7) of this definition entered into with any bank meeting the qualifications specified in clause (3) of this definition;

 

  (5) commercial paper rated at least (i) “A-1” or higher by S&P or “P-1” or higher by Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization selected by Holdings) maturing within two years after the date of creation thereof or (ii) “A-2” or higher by S&P or “P-2” or higher by Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization selected by Holdings) maturing within one year after the date of creation thereof, or, in each case, if no rating is available in respect of the commercial paper, the issuer of which has an equivalent rating in respect of its long-term debt;

 

  (6) marketable short-term money market and similar securities having a rating of at least “P-2” or “A-2” from either S&P or Moody’s, respectively (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization selected by Holdings) and in each case maturing within 24 months after the date of creation or acquisition thereof;

 

  (7) readily marketable direct obligations issued by any state, commonwealth or territory of the United States of America or any political subdivision, taxing authority or public instrumentality thereof, in each case, having one of the two highest ratings categories by S&P or Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization selected by Holdings) with maturities of not more than two years from the date of acquisition;

 

  (8) readily marketable direct obligations issued by any foreign government or any political subdivision, taxing authority or public instrumentality thereof, in each case, having one of the two highest ratings categories obtainable by S&P or Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization selected by Holdings) with maturities of not more than two years from the date of acquisition;

 

  (9) Investments with average maturities of 12 months or less from the date of acquisition in money market funds rated within the three highest ratings categories by S&P or Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization selected by Holdings);

 

  (10)

with respect to any Foreign Subsidiary: (i) obligations of the national government of the country in which such Foreign Subsidiary maintains its

 

-7-


  chief executive office and principal place of business provided such country is a member of the Organization for Economic Cooperation and Development, in each case maturing within one year after the date of investment therein, (ii) certificates of deposit of, bankers acceptance of, or time deposits with, any commercial bank which is organized and existing under the laws of the country in which such Foreign Subsidiary maintains its chief executive office and principal place of business provided such country is a member of the Organization for Economic Cooperation and Development, and whose short-term commercial paper rating from S&P is at least “A-1” or the equivalent thereof or from Moody’s is at least “P-1” or the equivalent thereof (any such bank being an “Approved Foreign Bank”), and in each case with maturities of not more than 270 days from the date of acquisition and (iii) the equivalent of demand deposit accounts which are maintained with an Approved Foreign Bank;

 

  (11) Indebtedness or Preferred Stock issued by Persons with a rating of (i) “A” or higher from S&P or “A-2” or higher from Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization selected by Holdings) with maturities of 24 months or less from the date of acquisition, or (ii) “A-” or higher from S&P or “A-3” or higher from Moody’s (or, if at the time, neither is issuing comparable ratings, then a comparable rating of another Nationally Recognized Statistical Rating Organization selected by Holdings) with maturities of 12 months or less from the date of acquisition;

 

  (12) bills of exchange issued in the United States, Canada, a member state of the European Union or Japan eligible for rediscount at the relevant central bank and accepted by a bank (or any dematerialized equivalent);

 

  (13) Cash Equivalents or instruments similar to those referred to in clauses (1) through (12) above denominated in Dollars or any Alternative Currency;

 

  (14) interests in any investment company, money market, enhanced high yield fund or other investment fund which invests 90% or more of its assets in instruments of the types specified in clauses (1) through (13) of this definition; and

 

  (15) for purposes of clause (2) of the definition of “Asset Disposition,” any marketable securities portfolio owned by Holdings and its Subsidiaries on the Issue Date.

Notwithstanding the foregoing, Cash Equivalents shall include amounts denominated in currencies other than those set forth in clause (1) of this definition; provided that such amounts are converted into any currency listed in clause (1) of this definition as promptly as practicable and in any event within ten (10) Business Days following the receipt of such amounts.

 

-8-


Cash Management Services” means any one or more of the following types of services or facilities: (a) automated clearing house transfers and transactions, (b) cash management services, including controlled disbursement services, treasury, depository, overdraft, credit or debit card, stored value card and electronic funds transfer services, (c) foreign exchange facilities, deposit and other accounts and merchant services and (d) services and facilities substantially similar to the foregoing.

Change of Control” means:

 

  (1) Holdings or the Issuer becomes aware of (by way of a report or any other filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written notice or otherwise) any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the Issue Date) becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Issue Date), directly or indirectly, of more than 35% of the total voting power of the Voting Stock of Holdings or the Issuer;

 

  (2) the sale, lease, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Holdings and its Restricted Subsidiaries, taken as a whole, to any Person or of the Issuer and its Restricted Subsidiaries, taken as a whole, to any Person; or

 

  (3) Holdings shall cease to beneficially own 100% of the Capital Stock of the Issuer.

Code” means the United States Internal Revenue Code of 1986, as amended.

Consolidated Depreciation and Amortization Expense” means, with respect to any Person for any period, the total amount of depreciation and amortization expense, including amortization or write-off of (i) intangibles and non-cash organization costs, (ii) deferred financing fees or debt issuance costs, (iii) original issue discount resulting from the issuance of Indebtedness at less than par, of such Person and its Restricted Subsidiaries for such period on a consolidated basis and otherwise determined in accordance with GAAP (but excluding amortization of prepaid cash expenses that were paid in a prior period); and any non-cash write-down of assets or asset value carried on the balance sheet (other than in respect of current assets).

Consolidated EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period:

 

  (1) increased (without duplication) by:

(a) provision for taxes based on income or profits or capital, including, without limitation, federal, state, provincial, local, foreign, unitary, excise, property, franchise and similar taxes and foreign withholding and similar taxes (including any penalties and interest) of such Person paid or accrued during such period, including any penalties and interest relating to any tax examinations, to the extent the same were deducted (and not added back) in computing such Consolidated Net Income; plus

 

-9-


(b) Fixed Charges of such Person for such period (including (x) net losses on any Hedging Obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, (y) bank fees and (z) costs of surety bonds in connection with financing activities, plus amounts excluded from the definition of “Consolidated Interest Expense” pursuant to clauses (u) through (z) in clause (1) thereof), to the extent the same were deducted (and not added back) in computing such Consolidated Net Income; plus

(c) Consolidated Depreciation and Amortization Expense of such Person for such period, to the extent the same were deducted (and not added back) in computing such Consolidated Net Income; plus

(d) (x) Transaction Expenses and (y) any fees, costs, expenses or charges (other than Consolidated Depreciation and Amortization Expense) related to any actual, proposed or contemplated issuance or registration (actual or proposed) of any Equity Offering, Permitted Investment, acquisition, disposition, recapitalization, or the incurrence or registration (actual or proposed) of Indebtedness (including a refinancing thereof) (in each case, whether or not consummated or successful), including (i) such fees, expenses or charges related to the offering of the Notes, this Indenture, the Credit Agreement, any other Credit Facilities and any fees related to a Qualified Receivables Transaction, and (ii) any amendment, waiver, consent or other modification of the Notes, this Indenture, the Credit Agreement, any other Credit Facilities and any fees related to a Qualified Receivables Transaction, in each case, whether or not consummated or successful, to the extent, in each case of clauses (x) and (y), the same were deducted (and not added back) in computing such Consolidated Net Income; plus

(e) the amount of any restructuring charge, reserve, integration cost, or other business optimization expense or cost (including charges directly related to implementation of cost-savings initiatives) to the extent the same were deducted (and not added back) in computing such Consolidated Net Income, including, without limitation, any one time costs Incurred in connection with acquisitions or divestitures, those related to severance, retention, signing bonuses, relocation, recruiting and other employee related costs, future lease commitments and costs related to the opening and closure and/or consolidation of facilities and to exiting lines of business; plus

(f) any other non-cash charges, write-downs, expenses, losses or items reducing such Consolidated Net Income including any impairment charges or the impact of purchase accounting; provided that if any non-cash charge or other item referred to in this clause (f) represents any accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA in such future period to such extent paid; plus

 

-10-


(g) any net loss directly attributable to the operations of Nuvectra to the extent the same were deducted (and not added back) in computing such Consolidated Net Income; provided that this clause (g) shall be of no further force or effect from and after the date that the Board of Directors of the Issuer or Holdings has made the determination not to proceed with the Nuvectra Spin-off or that is no longer probable that the Nuvectra Spin-off will be consummated (or has released or approved any public announcement to the foregoing effect); plus

(h) the amount of “run-rate” cost savings, operating expense reductions, other operating improvements and initiatives and synergies projected by Holdings in good faith to result from actions taken or to be taken prior to or during such period in connection with the Transactions or any other acquisition or disposition by such Person or any of its Restricted Subsidiaries (calculated on a pro forma basis as though such cost savings, operating expense reductions, other operating improvements and initiatives and synergies had been realized on the first day of such period), net of the amount of actual benefits realized prior to or during such period from such actions; provided that (x) such cost savings are (in the good faith determination of Holdings) reasonably identifiable, factually supportable and reasonably attributable to the actions specified and reasonably anticipated to result from such actions and (y) such actions have been taken or are to be taken within twelve (12) months after the consummation of the acquisition or disposition which is expected to result in such cost savings or other benefits referred to above; provided that the aggregate amount added back pursuant to this clause (h) shall not for any four fiscal quarter period exceed an amount equal to 10% of Consolidated EBITDA for such four fiscal quarter period (and such determination shall be made before giving effect to any adjustment pursuant to this clause (h)); plus

(i) any costs or expenses incurred by Holdings or a Restricted Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are funded with cash proceeds contributed to the capital of Holdings or Net Cash Proceeds of an issuance of Capital Stock (other than Disqualified Stock) of Holdings, solely to the extent that such Net Cash Proceeds are excluded from the calculation set forth under Section 3.3(a)(iii), to the extent the same were deducted (and not added back) in computing such Consolidated Net Income; plus

(j) cash receipts (or any netting arrangements resulting in reduced cash expenditures) not included in Consolidated EBITDA in any period to the extent non-cash gains relating to such income were deducted in the calculation of Consolidated EBITDA pursuant to clause (2) below for any previous period and not added back; plus

 

-11-


(k) any net loss included in the consolidated financial statements due to the application of Financial Accounting Standards No. 160 “Non-controlling Interests in Consolidated Financial Statements” (“FAS 160”) (Accounting Standard Codification Topic 810) to the deconsolidation of a Subsidiary, to the extent the same were deducted (and not added back) in computing such Consolidated Net Income; plus

(l) realized foreign exchange losses resulting from the impact of foreign currency changes on the valuation of assets or liabilities on the balance sheet of Holdings and its Restricted Subsidiaries, to the extent the same were deducted (and not added back) in computing such Consolidated Net Income; plus

(m) upfront fees or charges arising from any Qualified Receivables Transaction for such period, and any other amounts for such period comparable to or in the nature of interest under any Qualified Receivables Transaction, and losses on dispositions or sale of assets in connection with any Qualified Receivables Transaction for such period, to the extent the same were deducted (and not added back) in computing such Consolidated Net Income; plus

(n) IP Related Litigation Expenses to the extent the same were deducted (and not added back) in computing such Consolidated Net Income;

 

  (2) decreased (without duplication) by an amount which in the determination of such Consolidated Net Income has been included for:

(a) non-cash items increasing such Consolidated Net Income (other than the accrual of revenue in the ordinary course of business), excluding (i) any non-cash gains to the extent they represent the reversal of an accrual or reserve for a potential cash item that reduced Consolidated EBITDA in any prior period and (ii) any non-cash gains in respect of which cash was actually received in a prior period so long as such cash did not increase Consolidated EBITDA in such prior period; plus

(b) realized foreign exchange income or gains resulting from the impact of foreign currency changes on the valuation of assets or liabilities on the balance sheet of Holdings and its Restricted Subsidiaries; plus

(c) any net income included in the consolidated financial statements due to the application of FAS 160 (Accounting Standards Codification Topic 810) to the deconsolidation of a Subsidiary; plus

(d) any net income directly attributable to the operations of Nuvectra; provided that this clause (d) shall be of no further force or effect from and after the date that the Board of Directors of the Issuer or Holdings has made the determination not to proceed with the Nuvectra Spin-off or that it is no longer probable that the Nuvectra Spin-off will be consummated (or has released or approved any public announcement to the foregoing effect); and

 

-12-


  (3) increased or decreased (without duplication) by, as applicable, any adjustments resulting from the application of Accounting Standards Codification Topic 460 or any comparable regulation.

Consolidated Interest Expense” means, with respect to any Person for any period, without duplication, the sum of:

 

  (1) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including (a) amortization of original issue discount or premium resulting from the issuance of Indebtedness at less than par, (b) all commissions, discounts and other fees and charges owed with respect to letters of credit or bankers acceptances or any similar facilities or similar financing and hedging agreements, (c) non-cash interest payments (but excluding any non-cash interest expense attributable to the movement in the mark to market valuation of any Hedging Obligations or other derivative instruments pursuant to GAAP), (d) the interest component of Capitalized Lease Obligations or any deferred payment obligations, (e) net payments, if any, pursuant to interest rate Hedging Obligations with respect to Indebtedness and (f) interest accruing on any Indebtedness of any other Person to the extent such Indebtedness is Guaranteed by (or secured by the assets of) such Person or any of its Restricted Subsidiaries, and excluding (t) penalties and interest relating to taxes, (u) accretion or accrual of discounted liabilities other than Indebtedness, (v) any expense resulting from the discounting of any Indebtedness in connection with the application of purchase accounting in connection with any acquisition, (w) any fees related to a Qualified Receivables Transaction, (x) amortization of deferred financing fees, debt issuance costs, commissions, fees and expenses, (y) any expensing of bridge, commitment and other financing fees and (z) imputed interest with respect to Indebtedness of any parent of such Person appearing upon the balance sheet of such Person solely by reason of purchase accounting under GAAP; plus

 

  (2) consolidated capitalized interest of such Person and its Restricted Subsidiaries for such period, whether paid or accrued; less

 

  (3) consolidated interest income of such Person and its Restricted Subsidiaries for such period.

For purposes of this definition, interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by such Person to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP.

Consolidated Net Income” means, with respect to any Person, for any period, the net income (loss) of such Person and its Restricted Subsidiaries for such period determined on a

 

-13-


consolidated basis on the basis of GAAP; provided, however, that there shall not be included in such Consolidated Net Income (without duplication):

 

  (1) any net income (loss) of any Person if such Person is not Holdings or a Restricted Subsidiary, except that any equity in the net income of any such Person for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash or Cash Equivalents actually distributed by such Person during such period to Holdings or a Restricted Subsidiary as a dividend or other distribution or return on investment (subject, in the case of a dividend or other distribution or return on investment to Holdings or a Restricted Subsidiary, to the limitations contained in clause (2) below);

 

  (2) solely for the purpose of determining the amount available for Restricted Payments under Section 3.3(a)(iii)(A), any net income (loss) of any Restricted Subsidiary (other than the Issuer or a Subsidiary Guarantor) if such Subsidiary is subject to restrictions, directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to Holdings, the Issuer or a Subsidiary Guarantor by operation of the terms of such Restricted Subsidiary’s charter or any agreement, instrument, judgment, decree, order, statute or governmental rule or regulation applicable to such Restricted Subsidiary or its shareholders (other than (a) restrictions that have been waived or otherwise released, (b) restrictions pursuant to the Credit Agreement, the Notes or this Indenture, and (c) restrictions specified in Section 3.4(b)(13)(i), except that Holdings’ equity in the net income of any such Restricted Subsidiary for such period shall be included in such Consolidated Net Income up to the aggregate amount of cash or Cash Equivalents actually distributed during such period to Holdings or another Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend to another Restricted Subsidiary, to the limitation contained in this clause (2));

 

  (3) any net gain (or loss) realized upon the sale or other disposition of any asset or disposed operations of Holdings or any Restricted Subsidiary (including pursuant to any Sale and Leaseback Transaction), which is not sold or otherwise disposed of in the ordinary course of business or consistent with past practice (as determined in good faith by Holdings);

 

  (4) any extraordinary, exceptional, unusual or nonrecurring gain, loss, income, charge or expense (including any such gain, loss, income, charge or expense relating to the Transactions or the Nuvectra Spin-off);

 

  (5) the cumulative effect of a change in accounting principles;

 

  (6) any (i) non-cash compensation charge or expense arising from any grant of stock, stock options or other equity based awards and any non-cash deemed finance charges in respect of any pension liabilities or other retiree provisions or on the revaluation of any benefit plan obligation and (ii) income (loss) attributable to deferred compensation plans or trusts;

 

-14-


  (7) all deferred financing costs written off or amortized and premiums paid or other expenses incurred directly in connection with any early extinguishment of Indebtedness and any net gain (loss) from any write-off or forgiveness of Indebtedness;

 

  (8) any unrealized gains or losses in respect of any Hedging Obligations or any ineffectiveness recognized in earnings related to qualifying hedge transactions or the fair value of changes therein recognized in earnings for derivatives that do not qualify as hedge transactions, in each case, in respect of any Hedging Obligations;

 

  (9) any unrealized foreign currency translation gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person and any unrealized foreign exchange gains or losses relating to translation of assets and liabilities denominated in foreign currencies;

 

  (10) any unrealized foreign currency translation gains or losses in respect of Indebtedness or other obligations of Holdings or any Restricted Subsidiary owing to Holdings or any Restricted Subsidiary;

 

  (11) any purchase accounting effects, including, without limitation, adjustments to inventory, property and equipment, software and other intangible assets and deferred revenue in component amounts required or permitted by GAAP and related authoritative pronouncements (including the effects of such adjustments pushed down to Holdings and its Restricted Subsidiaries), as a result of any consummated acquisition, or the amortization or write-off of any amounts thereof (including any write-off of in process research and development);

 

  (12) any non-cash impairment charge, write-down or write-off, including without limitation, impairment charges, write-downs or write-offs relating to goodwill, intangible assets, long-lived assets, investments in debt and equity securities, in accordance with GAAP or as a result of a change in law or regulation;

 

  (13) any after-tax effect of income (loss) from the early extinguishment or cancellation of Indebtedness or any Hedging Obligations or other derivative instruments;

 

  (14) accruals and reserves that are established within twelve (12) months after the Issue Date that are so required to be established as a result of the Transactions in accordance with GAAP;

 

  (15) any net unrealized gains and losses resulting from Hedging Obligations or embedded derivatives that require similar accounting treatment and the application of Accounting Standards Codification Topic 815 and related pronouncements;

 

-15-


  (16) any deferred tax expense associated with tax deductions or net operating losses arising as a result of the Transactions, or the release of any valuation allowance related to such item;

 

  (17) non-cash charges and gains resulting from the application of Financial Accounting Standards No. 141R (Accounting Standards Codification Topic 805) (including with respect to earn-outs Incurred by Holdings or any of its Restricted Subsidiaries); and

 

  (18) any net gain (or loss) from discontinued operations and any net gain (or loss) on disposal of discontinued operations.

In addition, to the extent not already excluded in the Consolidated Net Income of such Person and its Restricted Subsidiaries, notwithstanding anything to the contrary in the foregoing, Consolidated Net Income shall exclude (i) any expenses and charges that are reimbursed by indemnification or other reimbursement provisions, or so long as Holdings has made a determination that there exists reasonable evidence that such amount shall in fact be indemnified or reimbursed (and such amount is in fact reimbursed within 365 days of the date of such charge or payment (with a deduction for any amount so added back to the extent not so reimbursed within such 365 days)), in connection with any investment or any sale, conveyance, transfer or other disposition of assets permitted hereunder, (ii) to the extent covered by insurance and actually reimbursed, or, so long as Holdings has made a determination that there exists reasonable evidence that such amount shall in fact be reimbursed by the insurer and such amount is (A) not denied by the applicable carrier in writing within 180 days and (B) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption, (iii) any expenses and charges to the extent paid for, or so long as Holdings has made a determination that there exists reasonable evidence that such amount shall in fact be reimbursed by (and such amount is in fact reimbursed within 365 days of the date of such payment (with a deduction for any amount so added back to the extent not so reimbursed within 365 days)), any third party other than such Person or any of its Restricted Subsidiaries and (iv) solely for the purpose of determining the amount available for Restricted Payments under Section 3.3(a)(iii)(A), any repurchase, redemption, sale or other disposition of Restricted Investments or any sale of stock of or distribution, dividend or asset transfer from an Unrestricted Subsidiary, in each case to the extent any of the foregoing increase the amount of Restricted Payments permitted under Section 3.3(a)(iii)(D) or Section 3.3(a)(iii)(E).

Consolidated Total Indebtedness” means, as of any date of determination, the aggregate principal amount of Indebtedness for borrowed money (other than letters of credit and bankers’ acceptances, except to the extent of unreimbursed amounts thereunder, Indebtedness with respect to Cash Management Services, Hedging Obligations entered into in the ordinary course of business or consistent with past practice and not for speculative purposes and intercompany indebtedness, but including the Receivables Transaction Amount in respect of any Qualified Receivables Transaction) of Holdings and its Restricted Subsidiaries outstanding on such date.

Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of (x) Consolidated Total Indebtedness as of such date to (y) the aggregate amount of Consolidated

 

-16-


EBITDA of Holdings for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which internal consolidated financial statements of Holdings are available, in each case with such pro forma adjustments as are consistent with the pro forma adjustments set forth in the definition of “Fixed Charge Coverage Ratio.”

Consolidated Total Secured Leverage Ratio” means, as of any date of determination, the ratio of (x) Consolidated Total Indebtedness secured by a Lien as of such date to (y) the aggregate amount of Consolidated EBITDA of Holdings for the period of the most recent four consecutive fiscal quarters ending prior to the date of such determination for which internal consolidated financial statements of Holdings are available, in each case with such pro forma adjustments as are consistent with the pro forma adjustments set forth in the definition of “Fixed Charge Coverage Ratio.”

Contingent Obligations” means, with respect to any Person, any obligation of such Person guaranteeing in any manner, whether directly or indirectly, any operating lease, dividend or other obligation that does not constitute Indebtedness (“primary obligations”) of any other Person (the “primary obligor”), including any obligation of such Person, whether or not contingent:

 

  (1) to purchase any such primary obligation or any property constituting direct or indirect security therefor;

 

  (2) to advance or supply funds:

(a) for the purchase or payment of any such primary obligation; or

(b) to maintain the working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; or

 

  (3) 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 against loss in respect thereof.

Corporate Trust Office” means the office of the Trustee at the address specified in Section 12.2 or such other address as to which the Trustee may give notice to the Holders and the Issuer.

Credit Agreement” means the Credit Agreement, dated as of the Issue Date, by and among, Holdings, the Issuer, the guarantors from time to time party thereto and Manufacturers and Traders Trust Company, as administrative agent and collateral agent, and each lender from time to time party thereto, together with the related documents thereto (including the revolving loans thereunder, any letters of credit and reimbursement obligations related thereto, any Guarantee and collateral agreement, patent and trademark security agreement, mortgages or letter of credit applications and other Guarantees, pledges, agreements, security agreements and collateral documents), as amended, extended, renewed, restated, refunded, replaced, refinanced, supplemented, modified or otherwise changed (in whole or in part, and without limitation as to

 

-17-


amount, terms, conditions, covenants and other provisions) from time to time, and any one or more additional agreements (and related documents) governing Indebtedness, including indentures, incurred to refinance, substitute, supplement, replace or add to (including increasing the amount available for borrowing or adding or removing any Person as a borrower, issuer or guarantor thereunder) in whole or in part, the borrowings and commitments then outstanding or permitted to be outstanding under (or otherwise incurred in compliance with) such Credit Agreement (whether documented in the agreement for such Credit Agreement or in a separate written instrument) or one or more successors to the Credit Agreement or one or more new credit agreements.

Credit Facility” means, with respect to Holdings or any of its Subsidiaries, one or more debt facilities, indentures or other arrangements (including the Credit Agreement or commercial paper facilities and overdraft facilities) with banks, other financial institutions or investors providing for revolving credit loans, term loans, notes, receivables financing (including through the sale of receivables to such institutions or to special purpose entities formed to borrow from such institutions against such receivables), letters of credit or other Indebtedness, in each case, as amended, restated, modified, renewed, refunded, replaced, restructured, refinanced, repaid, increased or extended in whole or in part from time to time (and whether in whole or in part and whether or not with the original administrative agent and lenders or another administrative agent or agents or other banks or institutions and whether provided under the original Credit Agreement or one or more other credit or other agreements, indentures, financing agreements or otherwise) and in each case including all agreements, instruments and documents executed and delivered pursuant to or in connection with the foregoing (including any notes, any letters of credit and reimbursement obligations related thereto, any Guarantee and collateral agreement, patent and trademark security agreement, mortgages or letter of credit applications and other Guarantees, pledges, agreements, security agreements and collateral documents). Without limiting the generality of the foregoing, the term “Credit Facility” shall include any agreement or instrument (1) changing the maturity of any Indebtedness Incurred thereunder or contemplated thereby, (2) adding Subsidiaries of Holdings as additional borrowers or guarantors thereunder, (3) increasing the amount of Indebtedness Incurred thereunder or available to be borrowed thereunder or (4) otherwise altering the terms and conditions thereof.

Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

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

Definitive Notes” means certificated Notes.

Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.3 as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Non-Cash Consideration” means the fair market value of non-cash consideration received by Holdings or one of its Restricted Subsidiaries in connection with an

 

-18-


Asset Disposition that is so designated as Designated Non-Cash Consideration pursuant to an Officer’s Certificate, setting forth the basis of such valuation, less the amount of cash or Cash Equivalents received in connection with a subsequent payment, redemption, retirement, sale or other disposition of such Designated Non-Cash Consideration. A particular item of Designated Non-Cash Consideration shall no longer be considered to be outstanding when and to the extent it has been paid, redeemed or otherwise retired or sold or otherwise disposed of in compliance with Section 3.5.

Designated Preferred Stock” means, with respect to Holdings, Preferred Stock (other than Disqualified Stock) (a) that is issued for cash (other than to Holdings or a Subsidiary of Holdings or an employee stock ownership plan or trust established by Holdings or any such Subsidiary for the benefit of their employees to the extent funded by Holdings or such Subsidiary) and (b) that is designated as “Designated Preferred Stock” pursuant to an Officer’s Certificate of Holdings at or prior to the issuance thereof, the Net Cash Proceeds of which are excluded from the calculation set forth in Section 3.3(a)(iii)(B).

Disinterested Director” means, with respect to any Affiliate Transaction, a member of the Board of Directors of Holdings having no material direct or indirect financial interest in or with respect to such Affiliate Transaction. A member of the Board of Directors of Holdings shall be deemed not to have such a financial interest by reason of such member’s holding Capital Stock of Holdings or any options, warrants or other rights in respect of such Capital Stock.

Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person 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:

 

  (1) matures or is mandatorily redeemable for cash or in exchange for Indebtedness pursuant to a sinking fund obligation or otherwise; or

 

  (2) is or may become (in accordance with its terms) upon the occurrence of certain events or otherwise redeemable or repurchasable for cash or in exchange for Indebtedness at the option of the holder of the Capital Stock in whole or in part,

in each case on or prior to the Stated Maturity of the Notes; provided, however, that (i) only the portion of Capital Stock which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock and (ii) any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require Holdings to repurchase such Capital Stock upon the occurrence of a change of control or asset sale (howsoever defined or referred to) shall not constitute Disqualified Stock if any such redemption or repurchase obligation is subject to compliance by the relevant Person with Section 3.3; provided, further, that if such Capital Stock is issued to any plan for the benefit of employees of Holdings or its Subsidiaries or by any such plan to such employees, such Capital Stock shall not constitute Disqualified Stock solely because it may be required to be repurchased by Holdings or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

 

-19-


Domestic Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person other than a Foreign Subsidiary.

DTC” means The Depository Trust Company or any successor securities clearing agency.

Equity Offering” means a sale of Capital Stock of Holdings (other than Disqualified Stock or Designated Preferred Stock) other than offerings registered on Form S-4 or S-8 (or any successor form thereto) under the Securities Act and other than any issuance pursuant to any employee benefit plans or otherwise in compensation to officers, directors, trustees or employees.

Euro” means the single currency of participating member states of the economic and monetary union as contemplated in the Treaty on European Union.

Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, as amended.

Excluded Contribution” means Net Cash Proceeds or property or assets received by Holdings as capital contributions to the equity (other than through the issuance of Disqualified Stock or Designated Preferred Stock or Capital Stock issued or sold in connection with the Transactions) of Holdings after the Issue Date or from the issuance or sale (other than to a Subsidiary or an employee stock ownership plan or trust established by Holdings or any Subsidiary of Holdings for the benefit of their employees to the extent funded by Holdings or any Subsidiary) of Capital Stock (other than Disqualified Stock or Designated Preferred Stock) of Holdings, in each case, to the extent designated as an Excluded Contribution pursuant to an Officer’s Certificate of Holdings to the Trustee.

fair market value” means, with respect to any Investment, asset, property, amount or liability, except as otherwise specified in this Indenture, the fair market value of such Investment, asset, property, amount or liability as determined by the senior management of Holdings in good faith; provided that if the senior management of Holdings in good faith expects the fair market value of any Investment, asset, property, amount or liability to exceed $50,000,000, the determination of the fair market value of such Investment, asset, property, amount or liability shall be made by the Board of Directors of Holdings in good faith.

Fixed Charge Coverage Ratio” means, with respect to any Person on any determination date, the ratio of Consolidated EBITDA of such Person for the most recent four consecutive fiscal quarters ending immediately prior to such determination date for which internal consolidated financial statements are available to the Fixed Charges of such Person for such four consecutive fiscal quarters. In the event that Holdings or any Restricted Subsidiary Incurs, assumes, Guarantees, redeems, defeases, retires or extinguishes any Indebtedness (other than Indebtedness incurred under any revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) or issues or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Fixed Charge Coverage Ratio Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma

 

-20-


effect to such Incurrence, assumption, Guarantee, redemption, defeasance, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period; provided, however, that the pro forma calculation shall not give effect to any Indebtedness Incurred on such determination date pursuant to Section 3.2(b) (other than Indebtedness Incurred pursuant to Section 3.2(b)(5)).

For purposes of making the computation referred to above, any Investments, acquisitions, dispositions, mergers, consolidations and disposed operations that have been made by Holdings or any of its Restricted Subsidiaries, during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Fixed Charge Coverage Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, acquisitions, dispositions, mergers, consolidations and disposed or discontinued operations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into Holdings or any of its Restricted Subsidiaries since the beginning of such period shall have made any Investment, acquisition, disposition, merger, consolidation or disposed or discontinued operation that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Investment, acquisition, disposition, merger, consolidation or disposed operation had occurred at the beginning of the applicable four-quarter period.

For purposes of this definition, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or chief accounting officer of Holdings subject to the restrictions set forth in the definition of “Consolidated EBITDA” (it being understood for the avoidance of doubt that this definition shall not be construed to permit adjustments to Consolidated EBITDA (including with respect to cost savings) that are not otherwise permitted by the definition of “Consolidated EBITDA”). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Fixed Charge Coverage Ratio Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Holdings to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed with a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as Holdings may designate.

Fixed Charges” means, with respect to any Person for any period, the sum of:

 

  (1) Consolidated Interest Expense of such Person for such period;

 

-21-


  (2) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Preferred Stock of such Person or any Restricted Subsidiary of such Person during such period; and

 

  (3) all cash dividends or other distributions paid (excluding items eliminated in consolidation) on any series of Disqualified Stock of such Person or any Restricted Subsidiary of such Person during such period.

Foreign Subsidiary” means, with respect to any Person, any Restricted Subsidiary of such Person that is not organized or existing under the laws of the United States, any State thereof or the District of Columbia.

GAAP” means generally accepted accounting principles in the United States of America as in effect on the date of any calculation or determination required hereunder. Except as otherwise set forth in this Indenture, all ratios and calculations based on GAAP contained in this Indenture shall be computed in accordance with GAAP. At any time after the Issue Date, Holdings may elect to establish that GAAP shall mean the GAAP as in effect on or prior to the date of such election; provided, however, that any such election, once made, shall be irrevocable. At any time after the Issue Date, Holdings may elect to apply IFRS accounting principles in lieu of GAAP and, upon any such election, references herein to GAAP shall thereafter be construed to mean IFRS (except as otherwise provided in this Indenture), including as to the ability of Holdings to make an election pursuant to the previous sentence; provided that any such election, once made, shall be irrevocable; provided, however, that any calculation or determination in this Indenture that require the application of GAAP for periods that include fiscal quarters ended prior to Holdings’ election to apply IFRS shall remain as previously calculated or determined in accordance with GAAP; provided, further, that Holdings may only make such election if it also elects to report any subsequent financial reports required to be made by Holdings, including pursuant to Section 13 or Section 15(d) of the Exchange Act and Section 3.10, in IFRS. Holdings shall give notice of any such election made in accordance with this definition to the Trustee and the Holders.

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

Guarantee” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person, including any such obligation, direct or indirect, contingent or otherwise, of such Person:

 

  (1) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take-or-pay or to maintain financial statement conditions or otherwise); or

 

-22-


  (2) entered into primarily for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part);

provided, however, that the term “Guarantee” shall not include (x) endorsements for collection or deposit in the ordinary course of business or consistent with past practice and (y) standard contractual indemnities or product warranties provided in the ordinary course of business; provided, further, that the amount of any Guarantee shall be deemed to be the lower of (i) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made and (ii) the maximum amount for which such guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guarantee or, if such Guarantee is not an unconditional guarantee of the entire amount of the primary obligation and such maximum amount is not stated or determinable, the amount of such guaranteeing Person’s maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith. The term “Guarantee” used as a verb has a corresponding meaning.

Guarantor” means Holdings and each Restricted Subsidiary (other than the Issuer) that executes this Indenture as of the Issue Date and each other Restricted Subsidiary that executes a supplemental indenture substantially in the form of Exhibit B or otherwise provides a Note Guarantee, until such Person is released from its Note Guarantee in accordance with the terms of this Indenture. For the avoidance of doubt, the Issuer is not a Guarantor.

Hedging Obligations” means, with respect to any Person, the obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, commodity swap agreement, commodity cap agreement, commodity collar agreement, foreign exchange contracts, currency swap agreement or similar agreement providing for the transfer or mitigation of interest rate, commodity price or currency risks either generally or under specific contingencies.

Holder” means each Person in whose name the Notes are registered on the Registrar’s books, which shall initially be the respective nominee of DTC.

Holdings” means Greatbatch, Inc., a Delaware corporation, or any successor thereto.

IAI” means an institution that is an “accredited investor” as that term is defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

IFRS” means International Financial Reporting standards, as adopted in the European Union.

Incur” means issue, create, assume, enter into any Guarantee of, incur, extend or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary and the terms “Incurred” and “Incurrence” have meanings correlative to the foregoing and any Indebtedness pursuant to any revolving credit or similar facility shall only be “Incurred” at the time any funds are borrowed thereunder.

 

-23-


Indebtedness” means, with respect to any Person on any date of determination (without duplication) to the extent, except with respect to clauses (6), (7) and (9) below, such obligation should appear as a liability or otherwise on the balance sheet of such Person in accordance with GAAP:

 

  (1) the principal of indebtedness of such Person for borrowed money;

 

  (2) the principal of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

  (3) all reimbursement obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (the amount of such obligations being equal at any time to the aggregate then undrawn and unexpired amount of such letters of credit or other instruments plus the aggregate amount of drawings thereunder that have been reimbursed) (except to the extent such reimbursement obligations relate to trade payables and such obligations are satisfied within 30 days of Incurrence);

 

  (4) the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), which purchase price is due more than one year after the date of placing such property in service or taking final delivery and title thereto;

 

  (5) Capitalized Lease Obligations of such Person and all Attributable Debt in respect of Sale and Leaseback Transactions entered into by such Person;

 

  (6) the principal component of all obligations, or liquidation preference, of such Person with respect to any Disqualified Stock or, with respect to any Restricted Subsidiary, any Preferred Stock (but excluding, in each case, any accrued dividends);

 

  (7) the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness shall be the lesser of (a) the fair market value of such asset at such date of determination and (b) the amount of such Indebtedness of such other Persons;

 

  (8) Guarantees by such Person of the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person;

 

  (9) the Receivables Transaction Amount in respect of any Qualified Receivables Transaction; and

 

  (10) to the extent not otherwise included in this definition, net obligations of such Person under Hedging Obligations (the amount of any such obligations to be equal at any time to the net payments under such agreement or arrangement giving rise to such obligation that would be payable by such Person at the termination of such agreement or arrangement).

 

-24-


The term “Indebtedness” shall not include any lease, concession or license of property (or Guarantee thereof) which would be considered an operating lease under GAAP as in effect on the Issue Date, any prepayments of deposits received from clients or customers in the ordinary course of business or consistent with past practice, obligations under any license, permit or other approval (or Guarantees given in respect of such obligations) Incurred prior to the Issue Date or in the ordinary course of business or consistent with past practice.

The amount of Indebtedness of any Person at any time in the case of a revolving credit or similar facility shall be the total amount of funds borrowed and then outstanding. The amount of any Indebtedness outstanding as of any date shall be (a) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (b) the principal amount of Indebtedness, or liquidation preference thereof, in the case of any other Indebtedness.

Notwithstanding the above provisions, in no event shall the following constitute Indebtedness:

(i) Contingent Obligations Incurred in the ordinary course of business or consistent with past practice;

(ii) in connection with the purchase by Holdings or any Restricted Subsidiary of any business, any post-closing payment adjustments to which the seller may become entitled to the extent such payment is determined by a final closing balance sheet or such payment depends on the performance of such business after the closing; provided, however, that, at the time of closing, the amount of any such payment is not determinable and, to the extent such payment thereafter becomes fixed and determined, the amount is paid in a timely manner;

(iii) for the avoidance of doubt, any obligations in respect of workers’ compensation claims, early retirement or termination obligations, pension fund obligations or contributions or similar claims, obligations or contributions or social security or wage Taxes; or

(iv) Capital Stock (other than Disqualified Stock or Preferred Stock of a Restricted Subsidiary).

Indenture” means this Indenture as amended or supplemented from time to time.

Independent Financial Advisor” means an investment banking or accounting firm of international standing or any third party appraiser of international standing; provided, however, that such firm or appraiser is not an Affiliate of Holdings.

Initial Purchasers” means Credit Suisse Securities (USA) LLC, KeyBanc Capital Markets Inc., Fifth Third Securities, Inc. and Mitsubishi UFJ Securities (USA), Inc.

Investment” means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of any direct or indirect advance, loan or other extensions of credit (other than advances or extensions of credit to customers, suppliers, directors, officers or employees of any Person in the ordinary course of business or consistent

 

-25-


with past practice, and excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or the Incurrence of a Guarantee of any obligation of, or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such other Persons and all other items that are or would be classified as investments on a balance sheet prepared on the basis of GAAP; provided, however, that endorsements of negotiable instruments and documents in the ordinary course of business or consistent with past practice shall not be deemed to be an Investment. If Holdings or any Restricted Subsidiary issues, sells or otherwise disposes of any Capital Stock of a Person that is a Restricted Subsidiary such that, after giving effect thereto, such Person is no longer a Restricted Subsidiary, any Investment by Holdings or any Restricted Subsidiary in such Person remaining after giving effect thereto shall be deemed to be a new Investment at such time.

For purposes of Sections 3.3 and 3.18:

 

  (1) Investment” shall include the portion (proportionate to Holdings’ equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the fair market value of the net assets of such Restricted Subsidiary of the Issuer at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary of the Issuer, Holdings shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (a) Holdings’ “Investment” in such Subsidiary at the time of such redesignation less (b) the portion (proportionate to Holdings’ equity interest in such Subsidiary) of the fair market value of the net assets of such Subsidiary at the time that such Subsidiary is so re-designated a Restricted Subsidiary of the Issuer; and

 

  (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its fair market value at the time of such transfer.

Investment Grade Securities” means:

 

  (1) securities issued or directly and fully Guaranteed or insured by the United States or Canadian government or any agency or instrumentality thereof (other than Cash Equivalents);

 

  (2) securities issued or directly and fully guaranteed or insured by a member of the European Union, or any agency or instrumentality thereof (other than Cash Equivalents);

 

  (3) debt securities or debt instruments with a rating of “A-” or higher from S&P or “A3” or higher by Moody’s or the equivalent of such rating by such rating organization or, if no rating of Moody’s or S&P then exists, the equivalent of such rating by any other Nationally Recognized Statistical Ratings Organization, but excluding any debt securities or instruments constituting loans or advances among Holdings and its Subsidiaries; and

 

-26-


  (4) investments in any fund that invests exclusively in investments of the type described in clauses (1), (2) and (3) above which fund may also hold cash and Cash Equivalents pending investment or distribution.

Investment Grade Status” shall occur when the Notes receive both of the following:

 

  (1) a rating by S&P of equal to or higher than “BBB-” (or the equivalent); and

 

  (2) a rating by Moody’s of equal to or higher than “Baa3” (or the equivalent).

IP Related Litigation Expenses” means any expenses, charges or other costs of the same nature or type as, and relating to the same litigation matter as, the expenses, charges or other costs labeled “IP Related Litigation” that were added to “Net income (loss) as reported” to calculate “Adjusted EBITDA” as set forth in “Summary — Summary Historical and Pro Forma Financial and Other Data” in the Offering Circular.

Issue Date” means October 27, 2015.

Issuer” means Greatbatch Ltd., a New York Corporation.

Lake Region” means Lake Region Medical Holdings, Inc., a Delaware corporation.

Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof).

Management Advances” means loans or advances made to, or Guarantees with respect to loans or advances made to, directors, officers, employees or consultants of Holdings or any Restricted Subsidiary:

 

  (1) (a) in respect of travel, entertainment or moving related expenses Incurred in the ordinary course of business or consistent with past practice, (b) for purposes of funding any such person’s purchase of Capital Stock (or similar obligations) of Holdings or its Subsidiaries with (in the case of this sub-clause (b)) the approval of the Board of Directors of Holdings or the senior management of Holdings or (c) in respect of moving related expenses Incurred in connection with any closing or consolidation of any facility or office; and

 

  (2) not exceeding $10,000,000 in the aggregate outstanding at any time.

Merger Agreement” means the Agreement and Plan of Merger, dated as of August 27, 2015, by and among Lake Region Medical Holdings, Inc. Holdings and Provenance Merger Sub Inc., as amended or modified from time to time.

 

-27-


Moody’s” means Moody’s Investors Service, Inc. or any of its successors or assigns that is a Nationally Recognized Statistical Rating Organization.

Nationally Recognized Statistical Rating Organization” means a nationally recognized statistical rating organization within the meaning of Rule 436 under the Securities Act.

Net Available Cash” from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of:

 

  (1) all legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses Incurred, and all Taxes paid, reasonably estimated to be actually payable or accrued as a liability under GAAP (including, for the avoidance of doubt, any income, withholding and other Taxes payable as a result of the distribution of such proceeds to Holdings and after taking into account any available tax credits or deductions and any tax sharing agreements), as a consequence of such Asset Disposition;

 

  (2) all payments made on any Indebtedness which is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or which by applicable law must be repaid out of the proceeds from such Asset Disposition;

 

  (3) all distributions and other payments required to be made to minority interest holders (other than Holdings, the Issuer or any of their respective Subsidiaries) in Subsidiaries or joint ventures as a result of such Asset Disposition; and

 

  (4) the deduction of appropriate amounts required to be provided by the seller as a reserve, on the basis of GAAP, against any liabilities associated with the assets disposed of in such Asset Disposition and retained by Holdings or any Restricted Subsidiary after such Asset Disposition.

Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and other fees and charges actually Incurred in connection with such issuance or sale and net of Taxes paid or reasonably estimated to be actually payable as a result of such issuance or sale (including, for the avoidance of doubt, any income, withholding and other Taxes payable as a result of the distribution of such proceeds to Holdings and after taking into account any available tax credit or deductions and any tax sharing agreements).

Non-Guarantor” means any Restricted Subsidiary that is not a Subsidiary Guarantor (other than the Issuer).

 

-28-


Non-U.S. Person” means a Person who is not a U.S. person (as defined in Regulation S).

Note Documents” means the Notes (including Additional Notes), the Note Guarantees and this Indenture.

Notes Custodian” means the custodian with respect to the Global Notes (as appointed by DTC), or any successor Person thereto and shall initially be the Trustee.

Nuvectra” means the business substantially described in the third paragraph under the heading “Summary—Our Company” in the Offering Circular to be spun-off pursuant to the Nuvectra Spin-off.

Nuvectra Spin-off” means a pro rata distribution to the stockholders of Holdings of all of the outstanding shares of common stock held by Holdings or any Subsidiary of Holdings of (i) QiG Group, LLC (or any successor thereto) or (ii) any Subsidiary of QiG Group LLC (as determined by the Board of Directors of Holdings) so long as such transaction conforms in all material respects to the description of the “Spin-off” in the third paragraph under the heading “Summary—Our Company” in the Offering Circular (subject to any modifications that are not adverse in any material respect to the Holders).

Obligations” means any principal, interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Issuer or any Guarantor whether or not a claim for Post-Petition Interest is allowed in such proceedings), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities payable under the documentation governing any Indebtedness.

Offering Circular” means the final offering circular dated October 20, 2015, relating to the offering by the Issuer of $360,000,000 aggregate principal amount of Notes.

Officer” means, with respect to any Person, (1) the Chairman of the Board of Directors, the Chief Executive Officer, the President, the Chief Financial Officer, any Vice President, the Treasurer, any Managing Director, or the Secretary (a) of such Person or (b) if such Person is owned or managed by a single entity, of such entity, or (2) any other individual designated as an “Officer” for the purposes of this Indenture by the Board of Directors of such Person.

Officer’s Certificate” means, with respect to any Person, a certificate signed by one Officer of such Person.

Opinion of Counsel” means a written opinion from legal counsel, who may be an employee of or counsel to Holdings, the Issuer or any of its Subsidiaries or their affiliates, or other counsel reasonably satisfactory to the Trustee in each case.

Paying Agent” means any Person authorized by the Issuer to pay the principal of (and premium, if any) or interest on any Note on behalf of the Issuer.

Permitted Asset Swap” means the concurrent purchase and sale or exchange of assets used or useful in a Similar Business or a combination of such assets and cash, Cash Equivalents

 

-29-


between Holdings or any of its Restricted Subsidiaries and another Person; provided that any cash or Cash Equivalents received in excess of the value of any cash or Cash Equivalents sold or exchanged must be applied in accordance with Section 3.5.

Permitted Investment” means (in each case, by Holdings or any of its Restricted Subsidiaries):

 

  (1) Investments in (a) a Restricted Subsidiary (including the Capital Stock of a Restricted Subsidiary) or Holdings or (b) a Person (including the Capital Stock of any such Person) that will, upon the making of such Investment, become a Restricted Subsidiary;

 

  (2) Investments in another Person if such Person is engaged in any Similar Business and as a result of such Investment such other Person is merged, consolidated or otherwise combined with or into, or transfers or conveys all or substantially all its assets to, Holdings or a Restricted Subsidiary;

 

  (3) Investments in cash, Cash Equivalents or Investment Grade Securities;

 

  (4) Investments in receivables owing to Holdings or any Restricted Subsidiary created or acquired in the ordinary course of business or consistent with past practice; provided, however, that such trade terms may include such concessionary trade terms as Holdings or any such Restricted Subsidiary deems reasonable under the circumstances;

 

  (5) Investments in payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business or consistent with past practice;

 

  (6) Management Advances;

 

  (7) Investments received in settlement of debts created in the ordinary course of business or consistent with past practice and owing to Holdings or any Restricted Subsidiary or in exchange for any other Investment or accounts receivable held by Holdings or any such Restricted Subsidiary, or as a result of foreclosure, perfection or enforcement of any Lien, or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement including upon the bankruptcy or insolvency of a debtor or otherwise with respect to any secured Investment or other transfer of title with respect to any secured Investment in default;

 

  (8) Investments made as a result of the receipt of non-cash consideration from a sale or other disposition of property or assets, including an Asset Disposition;

 

  (9)

any Investment of Holdings or a Subsidiary of Holdings existing or pursuant to agreements or arrangements in effect on the Issue Date and any modification, replacement, renewal or extension thereof; provided that the amount of any

 

-30-


  such Investment may not be increased except (a) as required by the terms of such Investment as in existence on the Issue Date or (b) as otherwise permitted under this Indenture;

 

  (10) Hedging Obligations, which transactions or obligations are Incurred in compliance with Section 3.2;

 

  (11) pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business or consistent with past practice or Liens otherwise described in the definition of “Permitted Liens” or made in connection with Liens permitted under Section 3.6;

 

  (12) any Investment to the extent made using Capital Stock of Holdings (other than Disqualified Stock) as consideration;

 

  (13) any transaction to the extent constituting an Investment that is permitted and made in accordance with Section 3.8(b) (except those described in clauses (1), (6), (7), (8), (9), (11) and (13) of Section 3.8(b));

 

  (14) Investments consisting of purchases and acquisitions of inventory, supplies, materials and equipment or licenses or leases of intellectual property, in any case, in the ordinary course of business or consistent with past practice and in accordance with this Indenture;

 

  (15) (i) Guarantees of Indebtedness not prohibited by Section 3.2 and (other than with respect to Indebtedness) guarantees, keepwells and similar arrangements in the ordinary course of business or consistent with past practice and (ii) performance guarantees with respect to obligations that are permitted by this Indenture;

 

  (16) Investments consisting of earnest money deposits required in connection with a purchase agreement, or letter of intent, or other acquisitions to the extent not otherwise prohibited by this Indenture;

 

  (17) Investments of a Restricted Subsidiary acquired on or after the Issue Date or of an entity merged into Holdings or merged into or consolidated with a Restricted Subsidiary on or after the Issue Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

 

  (18) Investments consisting of licensing or contribution of intellectual property pursuant to joint marketing arrangements with other Persons;

 

  (19) contributions to a “rabbi” trust for the benefit of employees or other grantor trust subject to claims of creditors in the case of a bankruptcy of Holdings or a bankruptcy of a Restricted Subsidiary that is a guarantor of such trust;

 

-31-


  (20) Investments in joint ventures and similar entities having an aggregate fair market value, when taken together with all other Investments made pursuant to this clause (20) that are at that time outstanding, not to exceed $10,000,000 (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

 

  (21) additional Investments having an aggregate fair market value, when taken together with all other Investments made pursuant to this clause (21) that are at that time outstanding, not to exceed the greater of $200,000,000 and 4.00% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value) plus the amount of any distributions, dividends, payments or other returns in respect of such Investments (without duplication for purposes of Section 3.3 of any amounts applied pursuant to Section 3.3(a)(iii)); provided that if such Investment is in Capital Stock of a Person that subsequently becomes a Restricted Subsidiary, such Investment shall thereafter be deemed permitted under clause (1) or (2) of this definition and shall not be included as having been made pursuant to this clause (21);

 

  (22) (i) any Investment in a Receivable Subsidiary or other Person, pursuant to the terms and conditions of a Qualified Receivables Transaction and (ii) any right to receive distributions or payments of fees related to a Qualified Receivables Transaction and any right to purchase assets of a Receivables Subsidiary in connection with a Qualified Receivables Transaction;

 

  (23) Investments in Unrestricted Subsidiaries having an aggregate fair market value, when taken together with all other Investments made pursuant to this clause (23) that are at that time outstanding, not to exceed the greater of $50,000,000 and 1.50% of Total Assets (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); and

 

  (24) Investments on the Issue Date in connection with the Transactions.

Permitted Liens” means, with respect to any Person:

 

  (1) Liens on assets or property of a Non-Guarantor securing Indebtedness of any Non-Guarantor;

 

  (2)

pledges, deposits or Liens under workmen’s compensation laws, payroll taxes, unemployment insurance laws, social security laws or similar legislation, or insurance related obligations (including pledges or deposits securing liability to insurance carriers under insurance or self-insurance arrangements), or in connection with bids, tenders, completion guarantees, contracts (other than for borrowed money) or leases, or to secure utilities, licenses, public or statutory obligations, or to secure surety, indemnity, judgment, appeal or performance bonds, guarantees of government contracts (or other similar bonds, instruments

 

-32-


  or obligations), or as security for contested taxes or import or customs duties or for the payment of rent, or other obligations of like nature, in each case Incurred in the ordinary course of business or consistent with past practice;

 

  (3) Liens imposed by law, including carriers’, warehousemen’s, mechanics’, landlords’, materialmen’s, repairmen’s, construction contractors’ or other like Liens, in each case for sums not yet overdue for a period of more than 60 days or that are bonded or being contested in good faith by appropriate proceedings;

 

  (4) Liens for Taxes which are not overdue for a period of more than 60 days or which are being contested in good faith by appropriate proceedings; provided that appropriate reserves required pursuant to GAAP have been made in respect thereof;

 

  (5) encumbrances, ground leases, easements (including reciprocal easement agreements), survey exceptions, or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of Holdings and its Restricted Subsidiaries or to the ownership of their properties which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of Holdings and its Restricted Subsidiaries;

 

  (6)

Liens (a) on assets or property of Holdings or any Restricted Subsidiary securing Hedging Obligations or Cash Management Services permitted under this Indenture; (b) that are contractual rights of set-off or, in the case of clause (i) or (ii) below, other bankers’ Liens (i) relating to treasury, depository and cash management services or any automated clearing house transfers of funds in the ordinary course of business or consistent with past practice and not given in connection with the issuance of Indebtedness, (ii) relating to pooled deposit or sweep accounts to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business or consistent with past practice of Holdings or any Subsidiary or (iii) relating to purchase orders and other agreements entered into with customers of Holdings or any Restricted Subsidiary in the ordinary course of business or consistent with past practice; (c) on cash accounts securing Indebtedness incurred under Section 3.2(b)(8)(iii) with financial institutions; (d) encumbering reasonable customary initial deposits and margin deposits and similar Liens attaching to commodity trading accounts or other brokerage accounts incurred in the ordinary course of business or consistent with past practice and not for speculative purposes; and/or (e) (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection and (ii) in favor of a banking institution arising as a matter of law encumbering deposits (including the right of set-off) arising in the ordinary course of business or consistent with past practice in connection with the

 

-33-


  maintenance of such accounts and (iii) arising under customary general terms of the account bank in relation to any bank account maintained with such bank and attaching only to such account and the products and proceeds thereof, which Liens, in any event, do not to secure any Indebtedness;

 

  (7) leases, licenses, subleases and sublicenses of assets (including real property and intellectual property rights), in each case entered into in the ordinary course of business or consistent with past practice;

 

  (8) Liens arising out of judgments, decrees, orders or awards not giving rise to an Event of Default so long as (a) any appropriate legal proceedings which may have been duly initiated for the review of such judgment, decree, order or award have not been finally terminated, (b) the period within which such proceedings may be initiated has not expired or (c) no more than 60 days have passed after (i) such judgment, decree, order or award has become final or (ii) such period within which such proceedings may be initiated has expired;

 

  (9) Liens (i) on assets or property of Holdings or any Restricted Subsidiary for the purpose of securing Capitalized Lease Obligations, Purchase Money Obligations or the payment of all or a part of the purchase price of, or securing other Indebtedness Incurred to finance or refinance the acquisition, improvement or construction of, assets or property acquired or constructed in the ordinary course of business or consistent with past practice; provided that (a) the aggregate principal amount of Indebtedness secured by such Liens is otherwise permitted to be Incurred under Section 3.2(b)(7) and (b) any such Liens may not extend to any assets or property of Holdings or any Restricted Subsidiary other than assets or property acquired, improved, constructed or leased with the proceeds of such Indebtedness and any improvements or accessions to such assets and property and (ii) on any interest or title of a lessor under any Capitalized Lease Obligations or operating lease with respect to the assets or property subject to such lease;

 

  (10) Liens arising from Uniform Commercial Code financing statement filings (or similar filings in other applicable jurisdictions) regarding operating leases entered into by Holdings and its Restricted Subsidiaries in the ordinary course of business or consistent with past practice;

 

  (11) Liens existing on the assets or property of Holdings or any Restricted Subsidiary of Holdings on the Issue Date (excluding Liens securing any Indebtedness under any Credit Facilities);

 

  (12)

Liens on property, other assets or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary (or at the time Holdings or a Restricted Subsidiary acquires such property, other assets or shares of stock, including any acquisition by means of a merger, consolidation or other business combination transaction with or into Holdings or any Restricted Subsidiary); provided, however, that such Liens are not created, Incurred or

 

-34-


  assumed in anticipation of or in connection with such other Person becoming a Restricted Subsidiary (or such acquisition of such property, other assets or stock); provided, further, that such Liens are limited to all or part of the same property, other assets or stock (plus improvements, accession, proceeds or dividends or distributions in connection with the original property, other assets or stock) that secured (or, under the written arrangements under which such Liens arose, could secure) the obligations to which such Liens relate;

 

  (13) Liens on assets or property of the Issuer or any Restricted Subsidiary securing Indebtedness or other obligations of the Issuer or such Restricted Subsidiary owing to Holdings, the Issuer or a Subsidiary Guarantor, or Liens in favor of Holdings, the Issuer or any Subsidiary Guarantor;

 

  (14) Liens securing Refinancing Indebtedness Incurred to refinance Indebtedness that was previously so secured, and permitted to be secured under clauses (9), (11), (12), (13), (14) and (30) of this definition; provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced;

 

  (15) (a) mortgages, liens, security interests, restrictions, encumbrances or any other matters of record that have been placed by any government, statutory or regulatory authority, developer, landlord or other third party on property over which Holdings or any Restricted Subsidiary of Holdings has easement rights or on any leased property and subordination or similar arrangements relating thereto and (b) any condemnation or eminent domain proceedings affecting any real property;

 

  (16) any encumbrance or restriction (including put and call arrangements) with respect to Capital Stock of any joint venture or similar arrangement pursuant to any joint venture or similar agreement;

 

  (17) Liens on property or assets under construction (and related rights) in favor of a contractor or developer or arising from progress or partial payments by a third party relating to such property or assets;

 

  (18) Liens arising out of conditional sale, title retention, hire purchase, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business or consistent with past practice;

 

  (19) Liens securing Indebtedness Incurred under Credit Facilities, including any letter of credit facility relating thereto, in each case that was permitted to be Incurred pursuant to Section 3.2(b)(1);

 

  (20) [reserved];

 

-35-


  (21) Liens on Capital Stock of any Unrestricted Subsidiary that secure Indebtedness of such Unrestricted Subsidiary;

 

  (22) any security granted over the marketable securities portfolio described in clause (9) of the definition of “Cash Equivalents” in connection with the disposal thereof to a third party;

 

  (23) Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

  (24) Liens on equipment of Holdings or any Restricted Subsidiary and located on the premises of any client or supplier in the ordinary course of business or consistent with past practice;

 

  (25) Liens on assets or securities deemed to arise in connection with and solely as a result of the execution, delivery or performance of contracts to sell such assets or securities if such sale is otherwise permitted by this Indenture;

 

  (26) Liens arising by operation of law or contract on insurance policies and the proceeds thereof to secure premiums thereunder, and Liens, pledges and deposits in the ordinary course of business or consistent with past practice securing liability for premiums or reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefits of) insurance carriers;

 

  (27) Liens solely on any cash earnest money deposits made in connection with any letter of intent or purchase agreement permitted under this Indenture;

 

  (28) Liens (i) on cash advances in favor of the seller of any property to be acquired in an Investment permitted pursuant to Permitted Investments to be applied against the purchase price for such Investment, and (ii) consisting of an agreement to sell any property in an asset sale permitted under Section 3.5, in each case, solely to the extent such Investment or asset sale, as the case may be, would have been permitted on the date of the creation of such Lien;

 

  (29) Liens securing Indebtedness and other obligations in an aggregate principal amount not to exceed the greater of (a) $100,000,000 and (b) 3.00% of Total Assets at any one time outstanding;

 

  (30) Liens Incurred to secure Obligations in respect of any Indebtedness permitted to be Incurred pursuant to Section 3.2; provided that at the time of Incurrence and after giving pro forma effect thereto, the Consolidated Total Secured Leverage Ratio would be less than 4.25 to 1.00; and

 

  (31) Liens on assets of a Receivables Subsidiary and other customary Liens established pursuant to a Qualified Receivables Transaction.

 

-36-


For purposes of this definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness including interest which increases the principal amount of such Indebtedness.

Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision thereof or any other entity.

Post-Petition Interest” means any interest or entitlement to fees or expenses or other charges that accrue after the commencement of any bankruptcy or insolvency proceeding, whether or not allowed or allowable as a claim in any such bankruptcy or insolvency proceeding.

Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.11 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Note.

Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

Purchase Agreement” means the Purchase Agreement, dated October 20, 2015, between the Issuer and Credit Suisse Securities (USA) LLC, as representative of the initial purchasers named in Schedule A thereto, relating to the issuance of the Initial Notes.

Purchase Money Obligations” means any Indebtedness Incurred to finance or refinance the acquisition, leasing, construction or improvement of property (real or personal) or assets (including Capital Stock), and whether acquired through the direct acquisition of such property or assets or the acquisition of the Capital Stock of any Person owning such property or assets, or otherwise.

QIB” means any “qualified institutional buyer” as such term is defined in Rule 144A.

Qualified Receivables Transaction” means any transaction or series of transactions that may be entered into by Holdings or any Restricted Subsidiary pursuant to which Holdings or any Restricted Subsidiary may sell, convey or otherwise transfer pursuant to customary terms to (a) a Receivables Subsidiary (in the case of a transfer by Holdings or any of its Restricted Subsidiaries) or (b) any other Person (in the case of a transfer by a Receivable Subsidiary) or grants a security interest in, any accounts receivable (whether now existing or arising in the future) of Holdings or any of its Restricted Subsidiaries, and any assets related thereto, including all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, all proceeds of such accounts receivable and other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with sales, factoring or securitization transactions involving accounts receivable.

 

-37-


Receivables Subsidiary” means any special purpose Wholly Owned Domestic Subsidiary of Holdings (i) that acquires accounts receivable generated by Holdings or any of its Restricted Subsidiaries, (ii) that engages in no operations or activities other than those related to a Qualified Receivables Transaction, (iii) except pursuant to Standard Securitization Undertakings, no portion of the Indebtedness or other obligations (contingent or otherwise) of which is Guaranteed by or recourse to or obligates, or secured by assets of, Holdings or any of its Restricted Subsidiaries in any way, (iv) to which none of Holdings, the Issuer or any Restricted Subsidiary has an obligation to maintain or preserve such entity’s financial condition or cause such entity to achieve certain levels of operation results, (v) that is designated by the Board of Directors of Holdings as a Receivables Subsidiary and (vi) with which none of Holdings or any of its Restricted Subsidiaries has any contract, agreement, arrangement or understanding other than on terms no less favorable to Holdings or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of Holdings.

Receivables Transaction Amount” means, with respect to any Qualified Receivables Transaction, (a) in the case of any securitization, the amount of obligations outstanding under the legal documents entered into as part of such Qualified Receivables Transaction on any date of determination that would be characterized as principal if such Qualified Receivables Transaction were structured as a secured lending transaction rather than as a purchase and (b) in the case of any other sale or factoring of accounts receivable, the cash purchase price paid by the buyer in connection with its purchase of such accounts receivable (including any bills of exchange) less the amount of collections received in respect of such accounts receivable and paid to such buyer, excluding any amounts applied to purchase fees or discount or in the nature of interest, in each case as determined in good faith and in a consistent and commercially reasonable manner by Holdings.

Refinance” means refinance, refund, replace, renew, repay, modify, restate, defer, substitute, supplement, reissue, resell, extend or increase (including pursuant to any defeasance or discharge mechanism) and the terms “refinances,” “refinanced” and “refinancing” as used for any purpose in this Indenture shall have a correlative meaning.

Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance, replace, exchange, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any Indebtedness of Holdings or any of its Restricted Subsidiaries; provided, however, that:

 

  (1) (a) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced, (b) such Refinancing Indebtedness has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness, Disqualified Stock or Preferred Stock being refunded or refinanced; and (c) to the extent such Refinancing Indebtedness refinances Subordinated Indebtedness, Disqualified Stock or Preferred Stock, such Refinancing Indebtedness is Subordinated Indebtedness, Disqualified Stock or Preferred Stock;

 

-38-


  (2) Refinancing Indebtedness shall not include:

(i) Indebtedness, Disqualified Stock or Preferred Stock of a Subsidiary of Holdings that is not the Issuer or a Subsidiary Guarantor that refinances Indebtedness, Disqualified Stock or Preferred Stock of Holdings, the Issuer or a Subsidiary Guarantor; or

(ii) Indebtedness, Disqualified Stock or Preferred Stock of Holdings or a Restricted Subsidiary that refinances Indebtedness, Disqualified Stock or Preferred Stock of an Unrestricted Subsidiary; and

 

  (3) such Refinancing Indebtedness has an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding (plus fees and expenses, including any premium and defeasance costs) under the Indebtedness being Refinanced.

Regulation S” means Regulation S under the Securities Act.

Regulation S-X” means Regulation S-X under the Securities Act.

Restricted Investment” means any Investment other than a Permitted Investment.

Restricted Notes” means Initial Notes and Additional Notes bearing one of the restrictive legends described in Section 2.1(d).

Restricted Notes Legend” means, in the case of a Rule 144A Global Notes, the legend set forth in Section 2.1(d)(1), in the case of a Regulation S Global Note, the legend set forth in Section 2.1(d)(2) and, in the case of a Temporary Regulation S Global Note, the legend set forth in Section 2.1(d)(3).

Restricted Subsidiary” means any Subsidiary of Holdings (other than an Unrestricted Subsidiary), including the Issuer. For the avoidance of doubt, each Domestic Subsidiary and each Foreign Subsidiary of Holdings shall be a Restricted Subsidiary unless and until such Domestic Subsidiary or Foreign Subsidiary, as applicable, is designated as an Unrestricted Subsidiary pursuant to, and in accordance with, the applicable provisions of this Indenture (it being understood, for the avoidance of doubt, that neither Holdings nor the Issuer may be, or may be designated as, an Unrestricted Subsidiary).

Rule 144” means Rule 144 under the Securities Act.

Rule 144A” means Rule 144A under the Securities Act.

S&P” means Standard & Poor’s Investors Ratings Services or any of its successors or assigns that is a Nationally Recognized Statistical Rating Organization.

Sale and Leaseback Transaction” means any arrangement providing for the leasing by Holdings or any of its Restricted Subsidiaries of any real or tangible personal property, which property has been or is to be sold or transferred by Holdings or such Restricted Subsidiary to a third Person in contemplation of such leasing.

 

-39-


SEC” means the U.S. Securities and Exchange Commission or any successor thereto.

Secured Indebtedness” means any Indebtedness secured by a Lien.

Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder, as amended.

Senior Indebtedness” means Indebtedness of the Issuer which ranks equally in right of payment to the Notes or of any Guarantor if such Indebtedness ranks equally in right of payment to the Note Guarantee of such Guarantor.

Significant Subsidiary” means any Restricted Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such regulation is in effect on the Issue Date.

Similar Business” means (a) any businesses, services or activities engaged in by Holdings or any of its Subsidiaries on the Issue Date and (b) any businesses, services and activities engaged in by Holdings or any of its Subsidiaries that are related, complementary, incidental, ancillary or similar to any of the foregoing or are extensions or developments of any thereof.

Standard Securitization Undertakings” means all representations, warranties, covenants and indemnities entered into by Holdings or any Restricted Subsidiary which are customary in securitization transactions involving accounts receivable.

Stated Maturity” means, with respect to any Indebtedness, the date specified in such Indebtedness as the fixed date on which the payment of principal of such Indebtedness is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

Subordinated Indebtedness” means any Indebtedness of the Issuer or any Guarantor (whether outstanding on the Issue Date or thereafter Incurred) that is expressly subordinated in right of payment to the Notes or any Note Guarantee pursuant to a written agreement.

Subsidiary” means, with respect to any Person:

 

  (1) any corporation, association, or other business entity (other than a partnership, joint venture, limited liability company or similar entity) of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time of determination owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof; or

 

-40-


  (2) any partnership, joint venture, limited liability company or similar entity of which:

(a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof whether in the form of membership, general, special or limited partnership interests or otherwise; and

(b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

Subsidiary Guarantor” means any Guarantor that is a Subsidiary of Holdings.

Taxes” means all present and future taxes, levies, imposts, deductions, charges, duties and withholdings and any charges of a similar nature (including interest, penalties and other liabilities with respect thereto) that are imposed by any government or other taxing authority.

Total Assets” means, as of any date, the total consolidated assets of Holdings and its Restricted Subsidiaries on a consolidated basis, as shown on the most recent consolidated balance sheet of Holdings and its Restricted Subsidiaries, determined on a pro forma basis in a manner consistent with the pro forma basis contained in the definition of Fixed Charge Coverage Ratio.

Transaction Expenses” means any fees or expenses incurred or paid by Holdings, the Issuer or any Restricted Subsidiary in connection with the Transactions.

Transactions” means (1) the transactions contemplated by the Merger Agreement (including the Acquisition), (2) the issuance of the Initial Notes and (3) the entry into, and the borrowings under, the Credit Agreement on the Issue Date.

Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

Trust Officer” means, when used with respect to the Trustee, any vice president, assistant vice president, any trust officer or any other officer within the corporate trust department of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such person’s knowledge of and familiarity with the particular subject.

Trustee” means Wilmington Trust, National Association, a national banking association, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

Uniform Commercial Code” means the Uniform Commercial Code from time to time in effect in the State of New York.

 

-41-


Unrestricted Subsidiary” means:

 

  (1) any Subsidiary of the Issuer that at the time of determination is an Unrestricted Subsidiary (as designated by the Board of Directors of Holdings in the manner provided below); and

 

  (2) any Subsidiary of an Unrestricted Subsidiary.

From and after the Issue Date, the Board of Directors of Holdings may designate any Subsidiary of the Issuer (including any newly acquired or newly formed Subsidiary of the Issuer or a Person becoming a Subsidiary of the Issuer through merger, consolidation or other business combination transaction, or Investment therein) to be an Unrestricted Subsidiary only if:

 

  (1) such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of, or own or hold any Lien on any property of, Holdings, the Issuer or any other Subsidiary of the Issuer which is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary; and

 

  (2) such designation and the Investment of Holdings in such Subsidiary complies with Section 3.3.

Notwithstanding anything in this Indenture to the contrary, and for the avoidance of doubt, neither Holdings nor the Issuer may be, or may be designated as, an Unrestricted Subsidiary.

U.S. Government Obligations” means securities that are (1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally Guaranteed as a full faith and credit obligation of the United States of America, which, in either case, are not callable or redeemable at the option of the issuers thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depositary receipt.

Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors.

Weighted Average Life to Maturity” means, when applied to any Indebtedness, Disqualified Stock or Preferred Stock, as the case may be, at any date, the quotient obtained by dividing the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Disqualified Stock or Preferred Stock multiplied by the amount of such payment, by the sum of all such payments.

 

-42-


Wholly Owned Domestic Subsidiary” means a Domestic Subsidiary of Holdings, all of the Capital Stock of which (other than directors’ qualifying shares or shares required by any applicable law or regulation to be held by a Person other than Holdings or another Domestic Subsidiary of Holdings) is owned by Holdings or another Domestic Subsidiary of Holdings.

SECTION 1.2. Other Definitions.

 

Term

  

Defined in Section

Acceptable Commitment

   3.5(a)(3)(ii)

Additional Notes

   Recitals

Additional Restricted Notes

   2.1(b)

Affiliate Transaction

   3.8(a)

Agent Members

   2.1(g)(2)

Approved Foreign Bank

   1.1

Asset Disposition Offer

   3.5(b)

Asset Disposition Payment Date

   3.5(g)(2)

Authenticating Agent

   2.2

Automatic Exchange

   2.6(e)

Automatic Exchange Date

   2.6(e)

Automatic Exchange Notice

   2.6(e)

Automatic Exchange Notice Date

   2.6(e)

Change of Control Offer

   3.9(a)

Change of Control Payment

   3.9(a)

Change of Control Payment Date

   3.9(a)

Clearstream

   2.1(b)

Covenant Defeasance

   8.3

Defaulted Interest

   2.15

 

-43-


Term

  

Defined in Section

Defeasance Trust

   8.4(1)

disposition

   1.1

Euroclear

   2.1(b)

Event of Default

   6.1(a)

Excess Proceeds

   3.5(b)

FAS 160

   1.1

Fixed Charge Coverage Ratio Calculation Date

   1.1

Foreign Disposition

   3.5(e)

Global Notes

   2.1(b)

Guaranteed Obligations

   10.1

Increased Amount

   3.6(c)

Initial Agreement

   3.4(b)(15)

Initial Default

   6.2(d)

Initial Lien

   3.6(a)

Initial Notes

   Recitals

Institutional Accredited Investor Global Note

   2.1(b)

Institutional Accredited Investor Notes

   2.1(b)

Issuer Order

   2.2

Judgment Currency

   12.21

Legal Defeasance

   8.2

Legal Holiday

   12.8

Note Guarantees

   10.1

Notes

   Recitals

Notes Register

   2.3

 

-44-


Term

  

Defined in Section

Paying Agent

   2.3

Permanent Regulation S Global Note

   2.1(b)

Permitted Payments

   3.3(b)

primary obligations

   1.1

primary obligor

   1.1

protected purchaser

   2.11

Refunding Capital Stock

   3.3(b)(2)

Registrar

   2.3

Regulation S Global Note

   2.1(b)

Regulation S Notes

   2.1(b)

Resale Restriction Termination Date

   2.6(b)

Restricted Global Note

   2.6(e)

Restricted Payment

   3.3(a)(4)

Restricted Period

   2.1(b)

Reversion Date

   3.17(b)

Rule 144A Global Note

   2.1(b)

Rule 144A Notes

   2.1(b)

Second Commitment

   3.5(a)(3)(ii)

Special Interest Payment Date

   2.15(a)

Special Record Date

   2.15(a)

Successor Company

   4.1(a)(1)

Suspended Covenants

   3.17(a)

Suspension Period

   3.17(b)

Temporary Regulation S Global Note

   2.1(b)

Unrestricted Global Note

   2.6(e)

 

-45-


SECTION 1.3. Rules of Construction. Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(3) “or” is not exclusive;

(4) “including” means including without limitation;

(5) words in the singular include the plural and words in the plural include the singular;

(6) “will” shall be interpreted to express a command;

(7) all amounts expressed in this Indenture or in any of the Notes in terms of money refer to the lawful currency of the United States of America;

(8) the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and

(9) unless otherwise specifically indicated, the term “consolidated” with respect to any Person refers to such Person consolidated with its Restricted Subsidiaries, and excludes from such consolidation any Unrestricted Subsidiary as if such Unrestricted Subsidiary were not an Affiliate of such Person.

(10) all references to interest shall include additional interest if payable on the Notes pursuant to Section 3.10 of this Indenture.

ARTICLE II

THE NOTES

SECTION 2.1. Form, Dating and Terms.

(a) The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited. The Initial Notes issued on the date hereof shall be in an aggregate principal amount of $360,000,000. In addition, the Issuer may issue, from time to time in accordance with the provisions of this Indenture, Additional Notes. Furthermore, Notes may be authenticated and delivered upon registration of transfer, exchange or in lieu of, other Notes pursuant to Section 2.2, 2.6, 2.11, 2.13, 5.6 or 9.5, in connection with an Asset Disposition Offer pursuant to Section 3.5 or in connection with a Change of Control Offer pursuant to Section 3.9.

 

-46-


Notwithstanding anything to the contrary contained herein, the Issuer may not issue any Additional Notes, unless such issuance is in compliance with this Indenture, including Section 3.2.

With respect to any Additional Notes, the Issuer shall set forth in (1) a Board Resolution and (2) (i) an Officer’s Certificate and (ii) one or more indentures supplemental hereto, the following information:

(A) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture;

(B) the issue price and the issue date of such Additional Notes, including the date from which interest shall accrue; and

(C) whether such Additional Notes shall be Restricted Notes.

In authenticating and delivering Additional Notes, the Trustee shall be entitled to receive and shall be fully protected in relying upon, in addition to the Opinion of Counsel and Officer’s Certificate required by Section 12.4, an Opinion of Counsel as to the due authorization, execution, delivery, validity and enforceability of such Additional Notes.

The Initial Notes and the Additional Notes shall be considered collectively as a single class for all purposes of this Indenture; provided that Additional Notes will not be issued with the same CUSIP or ISIN, as applicable, as existing Notes unless such Additional Notes, are fungible with such existing Notes for U.S. federal income tax purposes and otherwise. Holders of the Initial Notes and the Additional Notes shall vote and consent together as one class on all matters to which such Holders are entitled to vote or consent, and none of the Holders of the Initial Notes or the Additional Notes shall have the right to vote or consent as a separate class on any matter to which such Holders are entitled to vote or consent.

If any of the terms of any Additional Notes are established by action taken pursuant to a Board Resolution of the Issuer, a copy of an appropriate record of such action shall be certified by the Secretary or any Assistant Secretary of the Issuer and delivered to the Trustee at or prior to the delivery of the Officer’s Certificate and an indenture supplemental hereto setting forth the terms of the Additional Notes.

(b) The Initial Notes are being offered and sold by the Issuer pursuant to the Purchase Agreement. The Initial Notes and any Additional Notes (if issued as Restricted Notes) (the “Additional Restricted Notes”) will be resold initially only to (A) persons reasonably believed to be QIBs in reliance on Rule 144A and (B) Non-U.S. Persons in reliance on Regulation S. Such Initial Notes and Additional Restricted Notes may thereafter be transferred to, among others, QIBs, purchasers in reliance on Regulation S, and IAIs, in each case, in accordance with the procedures described herein. Additional Notes offered after the date hereof may be offered and sold by the Issuer from time to time pursuant to one or more purchase agreements or underwriting agreements, as the case may be, in accordance with applicable law.

Initial Notes and Additional Restricted Notes offered and sold to QIBs in the United States of America in reliance on Rule 144A (the “Rule 144A Notes”) shall be issued in the form

 

-47-


of a permanent global Note substantially in the form of Exhibit A, which is hereby incorporated by reference and made a part of this Indenture, including appropriate legends as set forth in Sections 2.1(d) and (e) (the “Rule 144A Global Note”), deposited with the Trustee, as custodian for DTC, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The Rule 144A Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate. The aggregate principal amount of the Rule 144A Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.

Initial Notes and any Additional Restricted Notes offered and sold outside the United States of America (the “Regulation S Notes”) in reliance on Regulation S shall initially be issued in the form of a temporary global Note (the “Temporary Regulation S Global Note”). Beneficial interests in the Temporary Regulation S Global Note will be exchanged for beneficial interests in a corresponding permanent global Note substantially in the form of Exhibit A including appropriate legends as set forth in Sections 2.1(d) and (e) (the “Permanent Regulation S Global Note” and, together with the Temporary Regulation S Global Note, each a “Regulation S Global Note”) within a reasonable period after the expiration of the Restricted Period (as defined below) upon delivery of the certification contemplated by Exhibit C. Each Regulation S Global Note shall be deposited upon issuance with, or on behalf of, the Trustee as custodian for DTC in the manner described in this Article II for credit to the respective accounts of the purchasers (or to such other accounts as they may direct), including, but not limited to, accounts at Euroclear Bank S.A./N.V. (“Euroclear”) or Clearstream Banking, société anonyme (“Clearstream”). Prior to the 40th day after the later of the commencement of the offering of the Initial Notes and the Issue Date (such period through and including such 40th day, the “Restricted Period”), interests in the Temporary Regulation S Global Note may only be transferred to non-U.S. persons pursuant to Regulation S, unless exchanged for interests in a Global Note in accordance with the transfer and certification requirements described herein.

The Regulation S Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate. The aggregate principal amount of the Regulation S Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.

Initial Notes and Additional Restricted Notes resold to IAIs (the “Institutional Accredited Investor Notes”) in the United States of America shall be issued in the form of a permanent global Note substantially in the form of Exhibit A including appropriate legends as set forth in Sections 2.1(d) and (e) (the “Institutional Accredited Investor Global Note”) deposited with the Trustee, as custodian for DTC, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The Institutional Accredited Investor Global Note may be represented by more than one certificate, if so required by DTC’s rules regarding the maximum principal amount to be represented by a single certificate. The aggregate principal amount of the Institutional Accredited Investor Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.

 

-48-


The Rule 144A Global Note, the Regulation S Global Note, the Institutional Accredited Investor Global Note and any Unrestricted Global Notes are sometimes collectively herein referred to as the “Global Notes.”

The principal of, premium, if any, and interest on the Notes shall be payable at the office or agency of the Paying Agent designated by the Issuer and maintained for such purpose (which shall initially be the office of the Trustee maintained for such purpose), or at such other office or agency of the Issuer as may be maintained for such purpose pursuant to Section 2.3; provided, however, that, at the option of the Paying Agent, each installment of interest may be paid by (i) check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the Notes Register or (ii) wire transfer to an account located in the United States maintained by the payee, subject to the last sentence of this paragraph. Payments in respect of Notes represented by a Global Note (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to the accounts specified by DTC. Payments in respect of Notes represented by Definitive Notes (including principal, premium, if any, and interest) held by a Holder of at least $1,000,000 aggregate principal amount of Notes represented by Definitive Notes will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than fifteen (15) days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion).

The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage, in addition to those set forth on Exhibit A and in Sections 2.1(d) and (e). The Issuer shall approve any notation, endorsement or legend on the Notes. Each Note shall be dated the date of its authentication. The terms of the Notes set forth in Exhibit A are part of the terms of this Indenture and, to the extent applicable, the Issuer, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to be bound by such terms.

(c) Denominations. The Notes shall be in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

(d) Restrictive Legends. Unless and until (i) an Initial Note or an Additional Note issued as a Restricted Note is sold under an effective registration statement or (ii) the Trustee receives an Opinion of Counsel reasonably satisfactory to it stating that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act:

(1) the Rule 144A Global Note and the Institutional Accredited Investor Global Note shall bear the following legend on the face thereof:

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS

 

-49-


NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE ISSUER, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) TO AN “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (V) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (VI) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (VI) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

(2) the Regulation S Global Note shall bear the following legend on the face thereof:

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

 

-50-


(3) the Temporary Regulation S Global Note shall bear the following legend on the face thereof:

THIS SECURITY IS A TEMPORARY REGULATION S GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. BENEFICIAL INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR DEFINITIVE NOTES OTHER THAN A PERMANENT REGULATION S GLOBAL NOTE IN ACCORDANCE WITH THE TERMS OF THE INDENTURE.

(e) Global Note Legend. Each Global Note, whether or not an Initial Note, shall bear the following legend on the face thereof:

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

(f) [Reserved].

(g) Book-Entry Provisions. (i) This Section 2.1(g) shall apply only to Global Notes deposited with the Trustee, as custodian for DTC.

(1) Each Global Note initially shall (x) be registered in the name of DTC or the nominee of DTC, (y) be delivered to the Notes Custodian for DTC and (z) bear the applicable legends as set forth in Section 2.1(e). Transfers of a Global Note (but not a beneficial interest therein) will be limited to transfers thereof in whole, but not in part, to DTC, its successors or its respective nominees, except as set forth in Section 2.1(g)(4)

 

-51-


and Section 2.1(h). If a beneficial interest in a Global Note is transferred or exchanged for a beneficial interest in another Global Note, the Notes Custodian will (x) record a decrease in the principal amount of the Global Note being transferred or exchanged equal to the principal amount of such transfer or exchange and (y) record a like increase in the principal amount of the other Global Note. Any beneficial interest in one Global Note that is transferred to a Person who takes delivery in the form of an interest in another Global Note, or exchanged for an interest in another Global Note, will, upon transfer or exchange, cease to be an interest in such Global Note and become an interest in the other Global Note and, accordingly, will thereafter be subject to all transfer and exchange restrictions, if any, and other procedures applicable to beneficial interests in such other Global Note for as long as it remains such an interest.

(2) Members of, or participants in, DTC (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by DTC or by the Notes Custodian as the custodian of DTC or under such Global Note, and DTC may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices of DTC governing the exercise of the rights of a holder of a beneficial interest in any Global Note.

(3) In connection with any transfer of a portion of the beneficial interest in a Global Note pursuant to Section 2.1(h) to beneficial owners who are required to hold Definitive Notes, the Notes Custodian shall reflect on its books and records the date and a decrease in the principal amount of such Global Note in an amount equal to the principal amount of the beneficial interest in the Global Note to be transferred, and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, one or more Definitive Notes of like tenor and amount.

(4) In connection with the transfer of an entire Global Note to beneficial owners pursuant to Section 2.1(h), such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, to each beneficial owner identified by DTC in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations.

(5) The registered Holder of a Global Note may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

(6) Any Holder of a Global Note shall, by acceptance of such Global Note, agree that transfers of beneficial interests in such Global Note may be effected only through a book-entry system maintained by (i) the Holder of such Global Note (or its agent) or (ii) any holder of a beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global Note shall be required to be reflected in a book entry.

 

-52-


(h) Definitive Notes. Except as provided below, owners of beneficial interests in Global Notes will not be entitled to receive Definitive Notes. Definitive Notes shall be transferred to all beneficial owners in exchange for their beneficial interests in a Global Note if (A) DTC notifies the Issuer that it is unwilling or unable to continue as Depositary for the Global Note, or DTC has ceased to be a clearing agency registered under the Exchange Act, and, in each case, a successor depositary is not appointed or (B) there shall have occurred and be continuing an Event of Default with respect to the Notes and DTC shall have requested the issuance of Definitive Notes. In the event of the occurrence of any of the events specified in clause (A) or (B) of the preceding sentence, the Issuer shall promptly make available to the Trustee a reasonable supply of Definitive Notes. In addition, any Note transferred to an affiliate (as defined in Rule 405 under the Securities Act) of the Issuer or evidencing a Note that has been acquired by an affiliate in a transaction or series of transactions not involving any public offering must, until six months (or one year if the holding period under Rule 144 then applicable to such Note is one year) after the last date on which either the Issuer or any affiliate of the Issuer was an owner of the Note, be in the form of a Definitive Note and bear the legend regarding transfer restrictions in Section 2.1(d).

(1) Any Definitive Note delivered in exchange for an interest in a Global Note pursuant to Section 2.1(g) shall, except as otherwise provided by Section 2.6(d), bear the applicable legend regarding transfer restrictions applicable to the Global Note set forth in Section 2.1(d).

(2) If a Definitive Note is transferred or exchanged for a beneficial interest in a Global Note, the Trustee will (x) cancel such Definitive Note, (y) record an increase in the principal amount of such Global Note equal to the principal amount of such transfer or exchange and (z) in the event that such transfer or exchange involves less than the entire principal amount of the canceled Definitive Note, the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, to the transferring Holder a new Definitive Note representing the principal amount not so transferred.

(3) If a Definitive Note is transferred or exchanged for another Definitive Note, (x) the Trustee will cancel the Definitive Note being transferred or exchanged, (y) the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, one or more new Definitive Notes in authorized denominations having an aggregate principal amount equal to the principal amount of such transfer or exchange to the transferee (in the case of a transfer) or the Holder of the canceled Definitive Note (in the case of an exchange), registered in the name of such transferee or Holder, as applicable, and (z) if such transfer or exchange involves less than the entire principal amount of the canceled Definitive Note, the Issuer shall execute, and the Trustee shall authenticate and make available for delivery to the Holder thereof, one or more Definitive Notes in authorized denominations having an aggregate principal amount equal to the untransferred or unexchanged portion of the canceled Definitive Notes, registered in the name of the Holder thereof.

 

-53-


(4) Notwithstanding anything to the contrary in this Indenture, in no event shall a Definitive Note be delivered upon exchange or transfer of a beneficial interest in the Temporary Regulation S Global Note prior to the end of the Restricted Period.

SECTION 2.2. Execution and Authentication. One Officer shall sign the Notes for the Issuer by manual, facsimile or other electronic signature. If the Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

A Note shall not be valid until an authorized officer of the Trustee manually authenticates the Note. The signature of the Trustee on a Note shall be conclusive evidence that such Note has been duly and validly authenticated and issued under this Indenture. A Note shall be dated the date of its authentication.

At any time and from time to time after the execution and delivery of this Indenture, the Trustee shall authenticate and make available for delivery: (1) Initial Notes for original issue on the Issue Date in an aggregate principal amount of $360,000,000 and (2) subject to the terms of this Indenture, Additional Notes for original issue in an unlimited principal amount and (3) under the circumstances set forth in Section 2.6(e), Initial Notes in the form of an Unrestricted Global Note, in each case upon a written order of the Issuer signed by one Officer (the “Issuer Order”) provided that the Trustee shall be entitled to receive an Officer’s Certificate and, except in the case of clause (1), an Opinion of Counsel addressing such matters as the Trustee may reasonably request in connection with such authentication of such Notes. Such Issuer Order shall specify whether the Notes will be in the form of Definitive Notes or Global Notes, the amount of the Notes to be authenticated, the date on which the original issue of Notes is to be authenticated, the holder of the Notes and whether the Notes are to be Initial Notes or Additional Notes.

The Trustee may appoint an agent (the “Authenticating Agent”) reasonably acceptable to the Issuer to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by the Authenticating Agent. An Authenticating Agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands.

In case the Issuer or any Guarantor, pursuant to Article IV or Section 10.2, as applicable, shall be consolidated or merged with or into any other Person or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or into which the Issuer or any Guarantor shall have been merged, or the Person which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Article IV, any of the Notes authenticated or delivered prior to such consolidation, merger, conveyance, transfer, lease or other disposition may (but shall not be required), from time to time, at the request of the successor Person, be exchanged for other Notes executed in the name of the successor Person with such changes in phraseology and form as may be appropriate to reflect such successor Person, but otherwise in substance of like tenor as the Notes surrendered for such exchange and of like principal amount;

 

-54-


and the Trustee, upon the Issuer Order of the successor Person, shall authenticate and make available for delivery Notes as specified in such order for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any new name of a successor Person pursuant to this Section 2.2 in exchange or substitution for or upon registration of transfer of any Notes, such successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all Notes at the time outstanding for Notes authenticated and delivered in such new name.

SECTION 2.3. Registrar and Paying Agent. The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the “Registrar”) and an office or agency where Notes may be presented for payment. The Registrar shall keep a register of the Notes and of their transfer and exchange (the “Notes Register”). The Issuer may have one or more co-registrars and one or more additional paying agents. The term “Paying Agent” includes any additional paying agent and the term “Registrar” includes any co-registrar.

The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee in writing of the name and address of each such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.7. The Issuer or any Guarantor may act as Paying Agent, Registrar or transfer agent.

The Issuer initially appoints The Depository Trust Company (“DTC”), its nominees and successors to act as Depositary with respect to the Global Notes. The Issuer has entered into a letter of representations with the Depositary in the form provided by the Depositary. The Trustee in any of its capacities and each Agent are hereby authorized to act in accordance with such letter of representation and the Applicable Procedures. The Issuer initially appoints the Trustee as the Registrar and Paying Agent for the Notes. The Issuer may remove any Registrar or Paying Agent without prior notice to the Holders, but upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of any appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee and the passage of any waiting or notice periods required by Applicable Procedures or (ii) written notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuer and the Trustee.

The Issuer shall be responsible for making calculations called for under the Notes and this Indenture, including but not limited to determination of interest, redemption price, Applicable Premium, premium, if any, and any additional amounts or other amounts payable on the Notes. The Issuer will make the calculations in good faith and, absent manifest error, its calculations will be final and binding on the Holders. The Issuer will provide a schedule of its calculations to the Trustee when requested by the Trustee, and the Trustee is entitled to rely conclusively on the accuracy of the Issuer’s calculations without independent verification.

 

-55-


SECTION 2.4. Paying Agent to Hold Money in Trust. Prior to 10:00 a.m. (New York City time), on each date on which the principal of, premium, if any, or interest on any Note is due and payable, the Issuer shall deposit with the Paying Agent a sum sufficient (in United States Dollars in immediately available funds) to pay such principal, premium or interest when due. The Issuer shall require the Paying Agent (other than the Trustee) to agree in writing that such Paying Agent shall hold in trust for the benefit of Holders and the Trustee all money held by such Paying Agent for the payment of principal of, premium, if any, or interest on the Notes (whether such assets have been distributed to it by the Issuer or other obligors on the Notes), shall notify the Trustee in writing of any default by the Issuer or any Guarantor in making any such payment and shall during the continuance of any default by the Issuer (or any other obligor upon the Notes) or any Guarantor in the making of any payment in respect of the Notes, upon the written request of the Trustee, forthwith deliver to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Notes together with a full accounting thereof. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund for the benefit of the Trustee and the Holders. The Issuer at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds or assets disbursed by such Paying Agent. Upon complying with this Section 2.4, the Paying Agent (if other than the Issuer or a Subsidiary of the Issuer) shall have no further liability for the money delivered to the Trustee. Upon any bankruptcy, insolvency, reorganization or similar proceeding with respect to the Issuer, the Trustee shall serve as Paying Agent for the Notes.

SECTION 2.5. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Issuer, on its own behalf and on behalf of each of the Guarantors, shall furnish or cause the Registrar to furnish to the Trustee, in writing at least five (5) Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.

SECTION 2.6. Transfer and Exchange.

(a) A Holder may transfer a Note (or a beneficial interest therein) to another Person or exchange a Note (or a beneficial interest therein) for another Note or Notes of any authorized denomination by presenting to the Registrar a written request therefor stating the name of the proposed transferee or requesting such an exchange, accompanied by any certification, opinion or other document required by this Section 2.6. The Registrar will promptly register any transfer or exchange that meets the requirements of this Section 2.6 by noting the same in the Notes Register maintained by the Registrar for the purpose, and no transfer or exchange will be effective until it is registered in such Notes Register. The transfer or exchange of any Note (or a beneficial interest therein) may only be made in accordance with this Section 2.6 and Sections 2.1(g) and 2.1(h), as applicable, and, in the case of a Global Note (or a beneficial interest therein), the Applicable Procedures and the applicable rules and procedures of Euroclear and Clearstream. The Registrar shall refuse to register any requested transfer or exchange that does not comply with this Section 2.6(a).

 

-56-


(b) Transfers of Rule 144A Notes and Institutional Accredited Investor Notes. The following provisions shall apply with respect to any proposed registration of transfer of a Rule 144A Note or an Institutional Accredited Investor Note prior to the date that is six months (or one year if the holding period under Rule 144 then applicable to such Note is one year) after the later of the Issue Date and the last date on which the Issuer or any Affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the “Resale Restriction Termination Date”):

(1) a registration of transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to a QIB shall be made upon the representation of the transferee in the form as set forth on the reverse of the Note that it is purchasing for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; provided that no such written representation or other written certification shall be required in connection with the transfer of a beneficial interest in the Rule 144A Global Note to a transferee in the form of a beneficial interest in that Rule 144A Global Note in accordance with this Indenture and the Applicable Procedures;

(2) a registration of transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to an IAI shall be made upon receipt by the Registrar or its agent of a certificate substantially in the form set forth in Exhibit D from the proposed transferee and the delivery of an Opinion of Counsel, certification and/or other information satisfactory to the Issuer; and

(3) a registration of transfer of a Rule 144A Note or an Institutional Accredited Investor Note or a beneficial interest therein to a Non-U.S. Person shall be made upon receipt by the Issuer and the Registrar or its agent of a certificate substantially in the form set forth in Exhibit E from the proposed transferee and the delivery of an Opinion of Counsel, certification and/or other information satisfactory to the Issuer.

(c) Transfers of Regulation S Notes. The following provisions shall apply with respect to any proposed transfer of a Regulation S Note prior to the expiration of the Restricted Period:

(1) a transfer of a Regulation S Note or a beneficial interest therein to a QIB shall be made upon the representation of the transferee, in the form of assignment on the reverse of the certificate, that it is purchasing the Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A, is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A;

 

-57-


(2) a transfer of a Regulation S Note or a beneficial interest therein to an IAI shall be made upon receipt by the Registrar or its agent of a certificate substantially in the form set forth in Exhibit D, respectively, from the proposed transferee and the delivery of an Opinion of Counsel, certification and/or other information satisfactory to the Issuer; and

(3) a transfer of a Regulation S Note or a beneficial interest therein to a Non-U.S. Person shall be made upon receipt by the Registrar or its agent of a certificate substantially in the form set forth in Exhibit E from the proposed transferee and receipt by the Registrar or its agent of an Opinion of Counsel, certification and/or other information satisfactory to the Issuer.

After the expiration of the Restricted Period, interests in the Regulation S Note may be transferred in accordance with applicable law without requiring the certification set forth in Exhibit D, Exhibit E or any additional certification.

(d) Restricted Notes Legend. Upon the transfer, exchange or replacement of Notes not bearing a Restricted Notes Legend, the Registrar shall deliver Notes that do not bear a Restricted Notes Legend. Upon the transfer, exchange or replacement of Notes bearing a Restricted Notes Legend, the Registrar shall deliver only Notes that bear a Restricted Notes Legend unless (1) a Note is being transferred pursuant to an effective registration statement, (2) Notes are being exchanged for other Notes that do not bear the Restricted Notes Legend in accordance with Section 2.6(e) or (3) there is delivered to the Registrar and the Issuer an Opinion of Counsel satisfactory to the Issuer stating that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. Any Additional Notes sold in a registered offering shall not be required to bear the Restricted Notes Legend.

(e) Automatic Exchange from Global Note Bearing Restricted Notes Legend to Global Note Not Bearing Restricted Notes Legend. Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, beneficial interests in a Global Note bearing the Restricted Notes Legend (a “Restricted Global Note”) may be automatically exchanged into beneficial interests in a Global Note not bearing the Restricted Notes Legend (an “Unrestricted Global Note”) without any action required by or on behalf of the Holder (the “Automatic Exchange”) at any time on or after the date that is the 181st calendar day (or the 366th calendar day if the holding period under Rule 144 then applicable to such Note is one year) after (1) with respect to the Notes issued on the Issue Date or (2) with respect to Additional Notes, if any, the issue date of such Additional Notes, or, in each case, if such day is not a Business Day, on the next succeeding Business Day (the “Automatic Exchange Date”). Upon the Issuer’s satisfaction that the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act, the Issuer shall (i) provide written notice to DTC and the Trustee at least fifteen (15) calendar days prior to the Automatic Exchange Date, instructing DTC to exchange all of the outstanding beneficial interests in a particular Restricted Global Note to the Unrestricted Global Note, which

 

-58-


the Issuer shall have previously otherwise made eligible for exchange with the DTC, (ii) provide prior written notice (the “Automatic Exchange Notice”) to each Holder at such Holder’s address appearing in the register of Holders at least fifteen (15) calendar days prior to the Automatic Exchange Date (the “Automatic Exchange Notice Date”), which notice must include (w) the Automatic Exchange Date, (x) the section of this Indenture pursuant to which the Automatic Exchange shall occur, (y) the “CUSIP” number of the Restricted Global Note from which such Holder’s beneficial interests will be transferred and (z) the “CUSIP” number of the Unrestricted Global Note into which such Holder’s beneficial interests will be transferred, and (iii) on or prior to the Automatic Exchange Date, deliver to the Trustee for authentication one or more Unrestricted Global Notes, duly executed by the Issuer, in an aggregate principal amount equal to the aggregate principal amount of Restricted Global Notes to be exchanged into such Unrestricted Global Notes. At the Issuer’s written request on no less than five (5) calendar days’ notice prior to the Automatic Exchange Notice Date, the Trustee shall send, in the Issuer’s name and at its expense, the Automatic Exchange Notice to each Holder at such Holder’s address appearing in the register of Holders; provided that the Issuer has delivered to the Trustee the information required to be included in such Automatic Exchange Notice.

Notwithstanding anything to the contrary in this Section 2.6(e), during the fifteen (15) calendar day period prior to the Automatic Exchange Date, no transfers or exchanges of Notes other than pursuant to this Section 2.6(e) shall be permitted without the prior written consent of the Issuer. As a condition to any Automatic Exchange, the Issuer shall provide, and the Trustee shall be entitled to conclusively rely upon, an Officer’s Certificate and Opinion of Counsel to the Issuer stating that the Automatic Exchange shall be effected in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Restricted Notes Legend shall no longer be required in order to maintain compliance with the Securities Act and that the aggregate principal amount of the particular Restricted Global Note is to be transferred to the particular Unrestricted Global Note by adjustment made on the records of the Trustee, as custodian for the Depositary to reflect the Automatic Exchange. Upon such exchange of beneficial interests pursuant to this Section 2.6(e), the aggregate principal amount of the Global Notes shall be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, to reflect the relevant increase or decrease in the principal amount of such Global Note resulting from the applicable exchange. The Restricted Global Note from which beneficial interests are transferred pursuant to an Automatic Exchange shall be cancelled following the Automatic Exchange.

(f) Retention of Written Communications. The Registrar shall retain copies of all letters, notices and other written communications received pursuant to Section 2.1 or this Section 2.6, in accordance with applicable law and the Registrar’s customary procedures. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Registrar.

(g) Obligations with Respect to Transfers and Exchanges of Notes. To permit registrations of transfers and exchanges, the Issuer shall, subject to the other terms and conditions of this Article II, execute and the Trustee shall authenticate Definitive Notes and Global Notes at the Issuer’s and Registrar’s written request.

 

-59-


No service charge shall be made to a Holder for any registration of transfer or exchange, but the Issuer may require the Holder to pay a sum sufficient to cover any transfer tax assessments or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charges payable upon exchange or transfer pursuant to Section 2.2, 2.6, 2.11, 2.13, 5.6 or 9.5).

The Issuer (and the Registrar) shall not be required to register the transfer of or exchange of any Note (A) for a period beginning (1) fifteen (15) calendar days before the mailing or sending of a notice of an offer to repurchase or redeem Notes and ending at the close of business (New York City time) on the day of such mailing or sending or (2) fifteen (15) calendar days before an interest payment date and ending on such interest payment date or (B) called for redemption, except the unredeemed portion of any Note being redeemed in part or any Note not redeemed due to the failure of a condition precedent to the redemption.

Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a Note is registered as the owner of such Note for the purpose of receiving payment of principal of, premium, if any, and (subject to paragraph 2 of the form of Notes attached hereto as Exhibit A) interest on such Note and for all other purposes whatsoever, including without limitation the transfer or exchange of such Note, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary.

Any Definitive Note delivered in exchange for an interest in a Global Note pursuant to Section 2.1(h) shall, except as otherwise provided by Section 2.6(d), bear the applicable legends regarding transfer restrictions applicable to the Definitive Note set forth in Section 2.1(d).

All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

(h) No Obligation of the Trustee. The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in, DTC or other Person with respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than DTC) of any notice (including any notice of redemption or purchase) or the payment of any amount or delivery of any Notes (or other security or property) under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Notes shall be given or made only to or upon the order of the registered Holders (which shall be DTC or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through DTC and subject to the Applicable Procedures. The Trustee may rely and shall be fully protected in relying upon information furnished by DTC with respect to its members, participants and any beneficial owners.

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or

 

-60-


among DTC participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. Neither the Trustee nor any of its agents shall have any responsibility for any actions taken or not taken by DTC.

SECTION 2.7. [Reserved].

SECTION 2.8. [Reserved].

SECTION 2.9. [Reserved].

SECTION 2.10. [Reserved].

SECTION 2.11. Mutilated, Destroyed, Lost or Stolen Notes.

If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (a) satisfies the Issuer and the Trustee that such Note has been lost, destroyed or wrongfully taken within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking and the Registrar has not registered a transfer prior to receiving such notification, (b) makes such request to the Issuer and the Trustee prior to the Note being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and (c) satisfies any other reasonable requirements of the Trustee; provided, however, if after the delivery of such replacement Note, a protected purchaser of the Note for which such replacement Note was issued presents for payment or registration such replaced Note, the Trustee and/or the Issuer shall be entitled to recover such replacement Note from the Person to whom it was issued and delivered or any Person taking therefrom, except a protected purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Trustee in connection therewith. Such Holder shall furnish an indemnity bond sufficient in the judgment of the (i) Trustee to protect the Trustee and (ii) the Issuer to protect the Issuer, the Trustee, the Paying Agent and the Registrar, from any loss which any of them may suffer if a Note is replaced, and, in the absence of notice to the Issuer, any Guarantor or the Trustee that such Note has been acquired by a protected purchaser, the Issuer shall execute, and upon receipt of an Issuer Order, the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal amount, bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Issuer in its discretion may, instead of issuing a new Note, pay such Note.

Upon the issuance of any new Note under this Section 2.11, the Issuer may require that such Holder pay a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of counsel and of the Trustee) in connection therewith.

 

-61-


Subject to the proviso in the initial paragraph of this Section 2.11, every new Note issued pursuant to this Section 2.11, in lieu of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, any Guarantor (if applicable) and any other obligor upon the Notes, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section 2.11 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

SECTION 2.12. Outstanding Notes. Notes outstanding at any time are all Notes authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation, those paid pursuant to Section 2.11 and those described in this Section 2.12 as not outstanding. A Note does not cease to be outstanding in the event the Issuer or an Affiliate of the Issuer holds the Note; provided, however, that (i) for purposes of determining which Notes are outstanding for consent or voting purposes hereunder, the provisions of Section 12.6 shall apply and (ii) in determining whether the Trustee shall be protected in making a determination whether the Holders of the requisite principal amount of outstanding Notes are present at a meeting of Holders of Notes for quorum purposes or have consented to or voted in favor of any request, demand, authorization, direction, notice, consent, waiver, amendment or modification hereunder, or relying upon any such quorum, consent or vote, only Notes which a Trust Officer of the Trustee actually knows to be held by the Issuer or an Affiliate of the Issuer shall not be considered outstanding.

If a Note is replaced pursuant to Section 2.11 (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held by a protected purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement pursuant to Section 2.11.

If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date, money (in United States Dollars in immediately available funds) sufficient to pay all principal, premium, if any, and accrued interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture or the notice of redemption, if any, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

SECTION 2.13. Temporary Notes. In the event that Definitive Notes are to be issued under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form, and shall carry all rights, of Definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the

 

-62-


Issuer shall prepare and the Trustee shall authenticate Definitive Notes. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at any office or agency maintained by the Issuer for that purpose and such exchange shall be without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute, and the Trustee shall, upon receipt of an Issuer Order, authenticate and make available for delivery in exchange therefor, one or more Definitive Notes representing an equal principal amount of Notes. Until so exchanged, the Holder of temporary Notes shall in all respects be entitled to the same benefits under this Indenture as a Holder of Definitive Notes.

SECTION 2.14. Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and dispose of such Notes in accordance with its internal policies and customary procedures (subject to the record retention requirements of the Exchange Act and the Trustee). If the Issuer or any Guarantor acquires any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.14. The Issuer may not issue new Notes to replace Notes it has paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange.

At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, transferred, redeemed, repurchased or canceled, such Global Note shall be returned by DTC to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, transferred in exchange for an interest in another Global Note, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.

SECTION 2.15. Payment of Interest; Defaulted Interest. Interest on any Note which is payable, and is punctually paid or duly provided for, on any interest payment date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business (New York City time) on the regular record date for such payment at the office or agency of the Issuer maintained for such purpose pursuant to Section 2.3.

Any interest on any Note which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days shall forthwith cease to be payable to the Holder on the regular record date, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Notes (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Issuer, at its election in each case, as provided in clause (a) or (b) below:

(a) The Issuer may elect to make payment of any Defaulted Interest to the Persons in whose names the Notes (or their respective predecessor Notes) are registered at the close of

 

-63-


business (New York City time) on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Issuer shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date (not less than 30 days after such notice) of the proposed payment (the “Special Interest Payment Date”), and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as provided in this Section 2.15(a). Thereupon the Issuer shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest, which date shall be not more than twenty (20) calendar days and not less than fifteen (15) calendar days prior to the Special Interest Payment Date and not less than ten (10) calendar days after the receipt by the Trustee of the notice of the proposed payment. The Issuer shall promptly notify the Trustee in writing of such Special Record Date, and in the name and at the expense of the Issuer, the Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for in Section 12.2, not less than ten (10) calendar days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Notes (or their respective predecessor Notes) are registered at the close of business (New York City time) on such Special Record Date and shall no longer be payable pursuant to the provisions in Section 2.15(b).

(b) The Issuer may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after written notice given by the Issuer to the Trustee of the proposed payment pursuant to this Section 2.15(b), such manner of payment shall be deemed practicable by the Trustee.

Subject to the foregoing provisions of this Section 2.15, each Note delivered under this Indenture upon registration of, transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

SECTION 2.16. CUSIP and ISIN Numbers. The Issuer in issuing the Notes may use “CUSIP” and “ISIN” numbers and, if so, the Trustee may use “CUSIP” and “ISIN” numbers in notices of redemption or purchase as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption or purchase and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption or purchase shall not be affected by any defect in or omission of such CUSIP and ISIN numbers. The Issuer shall promptly notify the Trustee in writing of any change in the CUSIP and ISIN numbers.

 

-64-


SECTION 2.17. Joint and Several Liability. Except as otherwise expressly provided herein, the Issuer, and the Guarantors, shall be jointly and severally liable for the performance of all obligations and covenants under this Indenture and the Notes.

ARTICLE III

COVENANTS

SECTION 3.1. Payment of Notes. The Issuer shall promptly pay the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. Principal, premium, if any, and interest shall be considered paid on the date due if by 10:00 a.m. (New York City time) on such date the Trustee or the Paying Agent holds in accordance with this Indenture money (in United States Dollars in immediately available funds) sufficient to pay all principal, premium, if any, and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

The Issuer shall pay interest on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on overdue installments of interest at the same rate to the extent lawful.

SECTION 3.2. Limitation on Indebtedness.

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, Incur any Indebtedness (including Acquired Indebtedness); provided, however, that Holdings, the Issuer and any of the Subsidiary Guarantors may Incur Indebtedness (including Acquired Indebtedness), if on the date of such Incurrence and after giving pro forma effect thereto (including pro forma application of the proceeds thereof), the Fixed Charge Coverage Ratio for Holdings and its Restricted Subsidiaries is greater than 2.00 to 1.00.

(b) Section 3.2(a) shall not prohibit the Incurrence of the following Indebtedness:

(1) Indebtedness of Holdings, the Issuer and the Subsidiary Guarantors Incurred pursuant to any Credit Facility (including letters of credit or bankers’ acceptances issued or created under any Credit Facility), and any Guarantees by Holdings, the Issuer or any Subsidiary Guarantor in respect of such Indebtedness, in a maximum aggregate principal amount of all Indebtedness incurred under this clause (1) and clause (14) below at any time outstanding not exceeding (i) $1,700,000,000, plus (ii) in the case of any refinancing of any Indebtedness permitted under this clause (1) or any portion thereof, the aggregate amount of fees, underwriting discounts, accrued and unpaid interest, premiums and other costs and expenses Incurred in connection with such refinancing;

(2) (i) Guarantees by Holdings, the Issuer or any Subsidiary Guarantor of Indebtedness of Holdings, the Issuer or any Restricted Subsidiary so long as the Incurrence of such underlying Indebtedness being Guaranteed is permitted under the terms of this Indenture and (ii) Guarantees by Non-Guarantors of Indebtedness of other Non-Guarantors so long as the incurrence of such underlying Indebtedness being Guaranteed is permitted under the terms of this Indenture;

 

-65-


(3) Indebtedness of Holdings owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by Holdings or any Restricted Subsidiary; provided, however, that:

(i) any subsequent issuance or transfer of Capital Stock or any other event which results in any such Indebtedness being beneficially held by a Person other than Holdings or a Restricted Subsidiary; and

(ii) any sale or other transfer of any such Indebtedness to a Person other than Holdings or a Restricted Subsidiary,

shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by Holdings or such Restricted Subsidiary, as the case may be, that is not permitted by this clause (3);

(4) (i) Indebtedness represented by the Notes (other than any Additional Notes), including any Note Guarantee thereof, (ii) any Indebtedness of Holdings or any of its Subsidiaries (other than Indebtedness described in clauses (1), (3) and (4)(i) of this Section 3.2(b)) outstanding on the Issue Date and (iii) Refinancing Indebtedness Incurred in respect of any Indebtedness described in this Section 3.2(b)(4), Section 3.2(b)(5) or in respect of any Indebtedness Incurred pursuant to Section 3.2(a);

(5) (x) Indebtedness of Holdings, the Issuer or any Subsidiary Guarantor Incurred or issued to finance an acquisition or (y) Acquired Indebtedness; provided, however, that after giving pro forma effect to such acquisition, merger or consolidation, and the Incurrence of such Indebtedness (including pro forma application of the proceeds thereof), either:

(i) Holdings would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in Section 3.2(a); or

(ii) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would not be lower than such ratio immediately prior to such acquisition, merger or consolidation.

(6) Hedging Obligations (excluding Hedging Obligations entered into for speculative purposes);

(7) Indebtedness represented by Capitalized Lease Obligations or Purchase Money Obligations, and Refinancing Indebtedness in respect thereof, in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (7) and then outstanding, does not exceed $50,000,000;

 

-66-


(8) Indebtedness in respect of (i) workers’ compensation claims, self-insurance obligations, performance, indemnity, surety, judgment, appeal, advance payment, customs, value added or other tax or other guarantees or other similar bonds, instruments or obligations and completion guarantees and warranties provided by Holdings or a Restricted Subsidiary or relating to liabilities, obligations or guarantees Incurred in the ordinary course of business or consistent with past practice, (ii) the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business or consistent with past practice; provided, however, that such Indebtedness is extinguished within five (5) Business Days of Incurrence; (iii) customer deposits and advance payments received in the ordinary course of business or consistent with past practice from customers for goods or services purchased in the ordinary course of business or consistent with past practice; and (iv) any customary treasury, depositary, cash management, automatic clearinghouse arrangements, overdraft protections, cash pooling or netting or setting off arrangements or similar arrangements in the ordinary course of business or consistent with past practice;

(9) Indebtedness arising from agreements providing for guarantees, indemnification, obligations in respect of earn-outs or other adjustments of purchase price or, in each case, similar obligations, in each case, Incurred or assumed in connection with the acquisition or disposition of any business or assets or Person or any Capital Stock of a Subsidiary (other than Guarantees of Indebtedness Incurred by any Person acquiring or disposing of such business or assets or such Subsidiary for the purpose of financing such acquisition or disposition);

(10) Indebtedness of Non-Guarantors, and Refinancing Indebtedness in respect thereof, in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (10) and then outstanding, does not exceed $50,000,000;

(11) Indebtedness consisting of promissory notes issued by Holdings or any of its Subsidiaries to any current or former employee, director or consultant of Holdings or any of its Subsidiaries (or permitted transferees, assigns, estates, or heirs of such employee, director or consultant), to finance the purchase or redemption of Capital Stock of Holdings that is permitted by Section 3.3;

(12) Indebtedness of Holdings or any of its Restricted Subsidiaries consisting of (i) the financing of insurance premiums or (ii) take-or-pay obligations contained in supply arrangements, in each case Incurred in the ordinary course of business or consistent with past practice;

(13) Indebtedness of Holdings, the Issuer or any Subsidiary Guarantor, and Refinancing Indebtedness in respect thereof, in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (13) and then outstanding, does not exceed the greater of (i) $100,000,000 and (ii) 3.00% of Total Assets;

 

-67-


(14) Indebtedness Incurred by a Receivables Subsidiary pursuant to a Qualified Receivables Transaction; provided, however, that, at the time of such Incurrence, Holdings would have been entitled to Incur Indebtedness pursuant to clause (1) of this Section 3.2(b) in an amount equal to the Receivables Transaction Amount of such Qualified Receivables Transaction; and

(15) Indebtedness to the extent the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the entire aggregate principal amount of the Notes then outstanding.

(c) For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this Section 3.2:

(1) subject to Section 3.2(c)(3), in the event that all or any portion of any item of Indebtedness meets the criteria of more than one of the types of Indebtedness described in Sections 3.2(a) and (b), Holdings, in its sole discretion, may classify, and may from time to time reclassify under Section 3.2(c)(2), such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one of the clauses of Section 3.2(a) or (b);

(2) subject to Section 3.2(c)(3), all or any portion of any item of Indebtedness may later be classified as having been Incurred pursuant to any type of Indebtedness described in Sections 3.2(a) and (b) so long as such Indebtedness is permitted to be Incurred pursuant to such provision at the time of reclassification;

(3) all Indebtedness outstanding on the Issue Date under the Credit Agreement shall be deemed to have been incurred on the Issue Date under Section 3.2(b)(1) and may not be reclassified at any time pursuant to clauses (1) or (2) of this Section 3.2(c);

(4) in the case of the incurrence of any Refinancing Indebtedness under clauses (7), (10) or (13) of Section 3.2(b), such Refinancing Indebtedness shall not include the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses Incurred in connection with such Refinancing;

(5) Guarantees of, or obligations in respect of letters of credit, bankers’ acceptances or other similar instruments relating to, or Liens securing, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included;

(6) the principal amount of any Disqualified Stock of Holdings or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary, shall be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;

(7) Indebtedness permitted by this Section 3.2 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.2 permitting such Indebtedness; and

 

-68-


(8) the amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (ii) the principal amount of Indebtedness, or liquidation preference thereof, in the case of any other Indebtedness.

(d) Accrual of interest, accrual of dividends, the accretion of accreted value, the accretion or amortization of original issue discount, the payment of interest in the form of additional Indebtedness, the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock or the reclassification of commitments or obligations not treated as Indebtedness due to a change in GAAP, shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.2.

(e) If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be Incurred by a Restricted Subsidiary of Holdings as of such date (and, if such Indebtedness is not permitted to be Incurred as of such date under this Section 3.2, such will constitute a default of this Section 3.2).

(f) Notwithstanding any other provision of this Section 3.2, the maximum amount of Indebtedness that Holdings or a Restricted Subsidiary may Incur pursuant to this Section 3.2 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in the same currency as the Indebtedness being refinanced, shall be calculated based on the currency exchange rate in effect on the date such Indebtedness was originally incurred, in the case of term indebtedness, or first committed, in the case of revolving credit indebtedness. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

(g) Holdings and the Issuer shall not, and shall not permit any Guarantor to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) that is subordinated or junior in right of payment to any Indebtedness of Holdings, the Issuer or such Guarantor, as the case may be, unless such Indebtedness is expressly subordinated in right of payment to the Notes or such Guarantor’s Note Guarantee to the extent and in the same manner as such Indebtedness is subordinated to other Indebtedness of Holdings, the Issuer or such Guarantor, as the case may be.

(h) (1) Unsecured Indebtedness shall not be treated as subordinated or junior to Secured Indebtedness merely because it is unsecured, and (2) senior Indebtedness shall not be treated as subordinated or junior to any other senior Indebtedness merely because it has a junior priority with respect to the same collateral or is secured by different collateral or because it is guaranteed by different obligors.

 

-69-


SECTION 3.3. Limitation on Restricted Payments.

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any distribution on or in respect of Holdings’ or any Restricted Subsidiary’s Capital Stock or to the direct or indirect holders of Holdings’ or any Restricted Subsidiary’s Capital Stock (including, in each case, any payment, dividend or distribution in connection with any merger or consolidation) except:

(x) dividends or distributions payable in Capital Stock of Holdings (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock of Holdings; and

(y) dividends or distributions payable to Holdings or a Restricted Subsidiary (and, in the case of any such Restricted Subsidiary making such dividend or distribution, to holders of its Capital Stock other than Holdings or another Restricted Subsidiary on no more than a pro rata basis);

(2) purchase, redeem, retire or otherwise acquire for value any Capital Stock of Holdings or any direct or indirect parent company of Holdings or any Capital Stock of any Restricted Subsidiary of Holdings held by Persons other than Holdings or a Restricted Subsidiary (including, in each case, any such purchase, redemption, retirement or acquisition in connection with any merger or consolidation);

(3) make any principal payment on or purchase, repurchase, redeem, defease or otherwise acquire or retire for value any Subordinated Indebtedness (other than (i) any purchase, repurchase, redemption, defeasance or other acquisition or retirement in anticipation of satisfying a sinking fund obligation, principal installment or final principal payment at maturity, in each case due within one year of the date of purchase, repurchase, redemption, defeasance or other acquisition or retirement and (ii) any Indebtedness Incurred pursuant to Section 3.2(b)(3)); or

(4) make any Restricted Investment;

(any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition, retirement or Restricted Investment referred to in clauses (1) through (4) are referred to herein as a “Restricted Payment”), if at the time Holdings or such Restricted Subsidiary makes such Restricted Payment:

(i) a Default or an Event of Default shall have occurred and be continuing (or would result immediately therefrom);

(ii) Holdings is not able to Incur an additional $1.00 of Indebtedness pursuant to Section 3.2(a) after giving effect, on a pro forma basis, to such Restricted Payment; or

(iii) the aggregate amount of such Restricted Payment and all other Restricted Payments made since the Issue Date (and not returned or rescinded)

 

-70-


(including Permitted Payments permitted below by Section 3.3(b)(1) (without duplication), but excluding all other Restricted Payments permitted by Section 3.3(b)) would exceed the sum of (without duplication):

(A) 50% of Consolidated Net Income of Holdings for the period (treated as one accounting period) from October 3, 2015 to the end of the most recent fiscal quarter ending prior to the date of such Restricted Payment for which internal consolidated financial statements of Holdings are available (or, in the case such Consolidated Net Income is a deficit, minus 100% of such deficit);

(B) 100% of the aggregate Net Cash Proceeds, and the fair market value of property or assets or marketable securities, received by Holdings from the issue or sale of Capital Stock (other than Disqualified Stock, Designated Preferred Stock or Capital Stock issued or sold in connection with the Transactions) subsequent to the Issue Date or otherwise contributed to the equity (other than through the issuance of Disqualified Stock or Designated Preferred Stock or Capital Stock issued or sold in connection with the Transactions) of Holdings subsequent to the Issue Date (in each case other than (w) Net Cash Proceeds or property or assets or marketable securities received from an issuance or sale of such Capital Stock to a Subsidiary or an employee stock ownership plan or trust established by Holdings or any Subsidiary of Holdings for the benefit of its employees to the extent funded by Holdings or any Subsidiary, (x) Net Cash Proceeds or property or assets or marketable securities to the extent that any Restricted Payment has been made from such proceeds in reliance on clauses (2), (4) or (6) of Section 3.3(b), (y) Excluded Contributions and (z) Net Cash Proceeds or property or assets or marketable securities received in connection with the Transactions);

(C) 100% of the aggregate Net Cash Proceeds, and the fair market value of property or assets or marketable securities, received by Holdings or any Restricted Subsidiary from the issuance or sale (other than to Holdings or a Subsidiary of Holdings or an employee stock ownership plan or trust established by Holdings or any Subsidiary for the benefit of their employees to the extent funded by Holdings or any Subsidiary) by Holdings or any Restricted Subsidiary subsequent to the Issue Date of any Indebtedness, Disqualified Stock or Designated Preferred Stock that has been converted into or exchanged for Capital Stock of Holdings (other than Disqualified Stock or Designated Preferred Stock) plus, without duplication, the amount of any cash, and the fair market value of property or assets or marketable securities, received by Holdings or any Restricted Subsidiary upon such conversion or exchange;

(D) 100% of the aggregate amount received by Holdings or any Restricted Subsidiary in cash and the fair market value of marketable securities or other property received by Holdings or any Restricted

 

-71-


Subsidiary by means of: (i) the sale or other disposition by Holdings or its Restricted Subsidiaries (other than to Holdings or a Subsidiary) after the Issue Date of Restricted Investments that were made after the Issue Date and repurchases and redemptions from Holdings or its Subsidiaries after the Issue Date of Restricted Investments that were made after the Issue Date and repayments of loans or advances to Holdings or its Subsidiaries after the Issue Date which loans or advances constituted Restricted Investments that were made after the Issue Date; or (ii) the sale (other than to Holdings or a Subsidiary) of the stock of an Unrestricted Subsidiary after the Issue Date (other than to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment) or a distribution or dividend from an Unrestricted Subsidiary after the Issue Date (in each case other than to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment); and

(E) in the case of the redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary or the merger or consolidation of an Unrestricted Subsidiary into Holdings or a Restricted Subsidiary or the transfer of all or substantially all of the assets of an Unrestricted Subsidiary to Holdings or a Restricted Subsidiary in each case after the Issue Date, the fair market value of the Investment in such Unrestricted Subsidiary (or the assets transferred) at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger or consolidation or transfer of assets (after taking into consideration any Indebtedness associated with the Unrestricted Subsidiary so designated or merged or consolidated or Indebtedness associated with the assets so transferred), other than to the extent the Investment in such Unrestricted Subsidiary constituted a Permitted Investment.

(b) Section 3.3(a) shall not prohibit any of the following (collectively, “Permitted Payments”):

(1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture or the redemption, repurchase or retirement of Indebtedness if, at the date of any irrevocable redemption notice, such payment would have complied with the provisions of this Indenture;

(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Capital Stock or Subordinated Indebtedness made by exchange (including any such exchange pursuant to the exercise of a conversion right or privilege in connection with which cash is paid in lieu of the issuance of fractional shares) for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of Holdings (other than Disqualified Stock or Designated Preferred Stock and other than Capital Stock sold to a Subsidiary or Capital Stock issued or sold in connection with the Transactions) (“Refunding Capital Stock”) or a substantially concurrent contribution to the equity

 

-72-


(other than through the issuance of Disqualified Stock or Designated Preferred Stock or Capital Stock issued or sold in connection with the Transactions or through an Excluded Contribution or by any Subsidiary) of Holdings; provided, however, that to the extent so applied, the Net Cash Proceeds, or fair market value of property or assets or of marketable securities, from such sale of Capital Stock or such contribution shall be excluded from Section 3.3(a)(iii);

(3) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness made by exchange for, or out of the proceeds of the substantially concurrent sale of, Subordinated Indebtedness that constitutes Refinancing Indebtedness permitted to be Incurred pursuant to Section 3.2;

(4) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Preferred Stock of Holdings or a Restricted Subsidiary made by exchange for or out of the proceeds of the substantially concurrent sale of Preferred Stock (other than any exchange or sale to a Subsidiary and other than an issuance of Disqualified Stock of Holdings or Preferred Stock of a Restricted Subsidiary to replace Preferred Stock (other than Disqualified Stock) of Holdings) of Holdings or a Restricted Subsidiary, as the case may be, that, in each case, is permitted to be Incurred pursuant to Section 3.2;

(5) any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Indebtedness or Disqualified Stock or Preferred Stock of a Restricted Subsidiary:

(i) from Net Available Cash to the extent permitted under Section 3.5, but only if the Issuer shall have first complied with the terms described under Section 3.5 and purchased all Notes tendered pursuant to any offer to repurchase all the Notes required thereby, prior to purchasing, repurchasing, redeeming, defeasing or otherwise acquiring or retiring such Subordinated Indebtedness, Disqualified Stock or Preferred Stock; or

(ii) to the extent required by the agreement governing such Subordinated Indebtedness, Disqualified Stock or Preferred Stock, following the occurrence of a Change of Control (or other similar event described therein as a “change of control”), but only if the Issuer shall have first complied with the terms described under Section 3.9 and purchased all Notes tendered pursuant to the offer to repurchase all the Notes required thereby, prior to purchasing, repurchasing, redeeming, defeasing or otherwise acquiring or retiring such Subordinated Indebtedness, Disqualified Stock or Preferred Stock;

(6) a Restricted Payment to pay for the repurchase, retirement or other acquisition or retirement for value of Capital Stock (other than Disqualified Stock) of Holdings held by any future, present or former employee, director or consultant of Holdings or any of its Subsidiaries (or permitted transferees, assigns, estates, trusts or heirs of such employee, director or consultant) either pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or

 

-73-


agreement or upon the termination of such employee, director or consultant’s employment or directorship; provided, however, that the aggregate Restricted Payments made under this clause (6) do not exceed $20,000,000 in any calendar year (with unused amounts in any calendar year being permitted to be carried over to the immediately succeeding calendar year (but not any subsequent calendar years) up to an amount not to exceed $10,000,000); provided further that such amount in any calendar year may be increased by an amount not to exceed:

(i) the cash proceeds from the sale of Capital Stock (other than Disqualified Stock or Designated Preferred Stock or Excluded Contributions) of Holdings to members of management, directors or consultants of Holdings or of any of its Subsidiaries that occurred after the Issue Date, to the extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the payment of Restricted Payments by virtue of Section 3.3(a)(iii) and were not received in connection with the consummation of the Transactions; plus

(ii) the cash proceeds of key man life insurance policies received by Holdings and its Restricted Subsidiaries after the Issue Date; less

(iii) the amount of any Restricted Payments made in previous calendar years pursuant Sections 3.3(b)(6)(i) and (ii);

and provided further that cancellation of Indebtedness owing to Holdings or any Restricted Subsidiary from members of management, directors, employees or consultants of Holdings, or any Restricted Subsidiaries in connection with a repurchase of Capital Stock of Holdings shall not be deemed to constitute a Restricted Payment for purposes of this Section 3.3 or any other provision of this Indenture;

(7) the declaration and payment of dividends on Disqualified Stock or Preferred Stock of a Restricted Subsidiary that in each case were Incurred in accordance with the terms of Section 3.2;

(8) purchases, repurchases, redemptions, defeasances or other acquisitions or retirements of Capital Stock deemed to occur (i) upon the exercise of stock options, warrants or other rights in respect thereof if such Capital Stock represents a portion of the exercise price thereof or (ii) for purposes of satisfying any required tax withholding obligation upon the exercise or vesting of a grant or award that was granted or awarded to an employee;

(9) payments by Holdings to holders of Capital Stock of Holdings in lieu of the issuance of fractional shares of such Capital Stock, provided, however, that any such payment shall not be for the purpose of evading any limitation of this Section 3.3 or otherwise to facilitate any dividend or other return of capital to the holders of such Capital Stock (as determined in good faith by the Board of Directors or senior management of Holdings);

(10) Restricted Payments that are made with Excluded Contributions;

 

-74-


(11) (i) the declaration and payment of dividends on Designated Preferred Stock of Holdings issued after the Issue Date and (ii) the declaration and payment of dividends on Refunding Capital Stock that is Preferred Stock; provided, however, that the amount of all dividends declared or paid pursuant to clause (i) of this clause (11) shall not exceed the Net Cash Proceeds received by Holdings or the aggregate amount contributed in cash to the equity (other than through the issuance of Disqualified Stock or an Excluded Contribution) of Holdings, from the issuance or sale of such Designated Preferred Stock; provided further, in the case of clauses (i) and (ii) of this clause (11), that for the most recently ended four fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock or payment of such dividends on such Refunding Capital Stock, after giving effect to such issuance or payment on a pro forma basis Holdings would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the test set forth in Section 3.2(a);

(12) dividends or other distributions of Capital Stock of, or Indebtedness owed to Holdings or a Restricted Subsidiary by, Unrestricted Subsidiaries (unless the Unrestricted Subsidiary’s principal asset is cash or Cash Equivalents);

(13) transactions effected as part of a Qualified Receivables Transaction;

(14) any Restricted Payment made on the Issue Date in connection with the Transactions and the fees and expenses related thereto;

(15) other Restricted Payments (including loans or advances) in an aggregate amount which, when taken together with all other Restricted Payments made pursuant to this clause (15) since the Issue Date, does not exceed $250,000,000; provided, however, that, at the time of each such Restricted Payment, no Default or Event of Default shall have occurred and be continuing (or shall result therefrom);

(16) any Restricted Payment made by Holdings or any Restricted Subsidiary; provided that (i) immediately after giving pro forma effect thereto and the Incurrence of any Indebtedness the net proceeds of which are used to finance such Restricted Payment, the Consolidated Total Leverage Ratio would be less than 3.50 to 1.00 and (ii) no Default or Event of Default shall have occurred and be continuing (or shall result therefrom);

(17) mandatory redemptions of Disqualified Stock issued as a Restricted Payment or as consideration for a Permitted Investment; provided that (A) the aggregate amount paid for such redemptions with respect to any such issuance is no greater than the corresponding amount that constituted a Restricted Payment or Permitted Investment upon issuance thereof and (B) at the time of and after giving effect to each such mandatory redemption, Holdings would be entitled to Incur an additional $1.00 of Indebtedness pursuant to Section 3.2(a); and

(18) (x) the Nuvectra Spin-off and (y) other Restricted Payments made in connection with the Nuvectra Spin-off (consisting of the redemption or repurchase of Capital Stock held by minority equityholders of QiG Group, LLC (or any successor

 

-75-


thereto) or of any Subsidiary thereof prior to or substantially concurrently with the Nuvectra Spin-off) in an aggregate amount which, when taken together with all other Restricted Payments made pursuant to this Section 3.3(b)(18)(y) since the Issue Date, does not exceed $25,000,000.

(c) The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of such Restricted Payment of the asset(s) or securities proposed to be paid, transferred or issued by Holdings or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair market value of any cash Restricted Payment shall be its face amount, and the fair market value of any non-cash Restricted Payment, property or assets other than cash shall be determined in accordance with the definition of “fair market value.”

SECTION 3.4. Limitation on Restrictions on Distributions from Restricted Subsidiaries.

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(1) pay dividends or make any other distributions in cash or otherwise on its Capital Stock or pay any Indebtedness or other obligations owed to Holdings or any Restricted Subsidiary;

(2) make any loans or advances to Holdings or any Restricted Subsidiary; or

(3) sell, lease or transfer any of its property or assets to Holdings or any Restricted Subsidiary;

provided that (x) the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on common stock and (y) the subordination of (including the application of any standstill requirements to) loans or advances made to Holdings or any Restricted Subsidiary to other Indebtedness Incurred by Holdings or any Restricted Subsidiary shall not be deemed to constitute such an encumbrance or restriction.

(b) Section 3.4(a) shall not prohibit:

(1) any encumbrance or restriction pursuant to (a) any Credit Facility (and any Hedging Obligations and Cash Management Services related thereto), or (b) any other agreement or instrument of Holdings or any Subsidiary of Holdings in effect or entered into on the Issue Date;

(2) any encumbrance or restriction pursuant to this Indenture, the Notes and the Note Guarantees;

(3) any encumbrance or restriction pursuant to an agreement or instrument of a Person or relating to any Capital Stock or Indebtedness of a Person, entered into on or before the date on which such Person was acquired by or merged, consolidated or

 

-76-


otherwise combined with or into Holdings or any Restricted Subsidiary, or was designated as a Restricted Subsidiary or on which such agreement or instrument is assumed by Holdings or any Restricted Subsidiary in connection with an acquisition of assets (other than Capital Stock or Indebtedness Incurred as consideration in, or to provide all or any portion of the funds utilized to consummate, the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was acquired by Holdings or was merged, consolidated or otherwise combined with or into Holdings or any Restricted Subsidiary or entered into in contemplation of or in connection with such transaction) and outstanding on such date which encumbrance or restriction is not applicable to any Person or the properties or assets of any Person, other than the Person, or the properties or assets of the Person, so acquired; provided that, for the purposes of this clause (3), if another Person is the Successor Company, any Subsidiary thereof or agreement or instrument of such Person or any such Subsidiary shall be deemed acquired or assumed by Holdings or any Restricted Subsidiary when such Person becomes the Successor Company;

(4) any encumbrance or restriction:

(i) that restricts in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license or similar contract or agreement, or the assignment or transfer of any lease, license or other contract or agreement;

(ii) contained in mortgages, pledges, charges or other security agreements permitted under this Indenture or securing Indebtedness of Holdings or a Restricted Subsidiary permitted under this Indenture to the extent such encumbrances or restrictions restrict the transfer or encumbrance of the property or assets subject to such mortgages, pledges, charges or other security agreements; or

(iii) pursuant to customary provisions restricting dispositions of real property interests set forth in any reciprocal easement agreements of Holdings or any Restricted Subsidiary;

(5) any encumbrance or restriction pursuant to Purchase Money Obligations and Capitalized Lease Obligations permitted under this Indenture that impose encumbrances or restrictions on the property so acquired, leased, constructed or improved;

(6) any encumbrance or restriction imposed pursuant to an agreement entered into for the direct or indirect sale or disposition to a Person of all or substantially all the Capital Stock or assets of Holdings or any Restricted Subsidiary (or the property or assets that are subject to such restriction) pending the closing of such sale or disposition;

(7) customary provisions in leases, licenses, shareholder agreements, joint venture agreements, organizational documents and other similar agreements and instruments;

 

-77-


(8) encumbrances or restrictions arising or existing by reason of applicable law or any applicable law, rule, regulation or order, or required by any regulatory authority;

(9) any encumbrance or restriction on cash or other deposits or net worth imposed by customers under agreements entered into in the ordinary course of business or consistent with past practice;

(10) any customary encumbrance or restriction pursuant to Hedging Obligations;

(11) other Indebtedness, Disqualified Stock or Preferred Stock of Foreign Subsidiaries permitted to be Incurred or issued subsequent to the Issue Date pursuant to Section 3.2 that impose restrictions solely on the Foreign Subsidiaries party thereto or their Subsidiaries;

(12) any encumbrance or restriction required by the terms of any agreement relating to a Qualified Receivables Transaction; provided, however, that such encumbrance or restriction applies only to such Qualified Receivables Transaction;

(13) any encumbrance or restriction arising pursuant to an agreement or instrument (which, if it relates to any Indebtedness, shall only be permitted if such Indebtedness is permitted to be Incurred pursuant to Section 3.2) if the encumbrances and restrictions contained in any such agreement or instrument taken as a whole (i) are not materially less favorable to the Holders than the encumbrances and restrictions contained in the Credit Agreement, together with the security documents associated therewith, as in effect on the Issue Date (as determined in good faith by Holdings) or (ii) either (A) the Issuer determines at the time of entry into such agreement or instrument that such encumbrances or restrictions shall not adversely affect, in any material respect, the Issuer’s ability to make principal or interest payments on the Notes or (B) such encumbrance or restriction applies only during the continuance of a default relating to such agreement or instrument;

(14) any encumbrance or restriction existing by reason of any lien permitted under Section 3.6; or

(15) any encumbrance or restriction pursuant to an agreement or instrument effecting a refinancing of Indebtedness Incurred pursuant to, or that otherwise refinances, an agreement or instrument referred to in clauses (1) to (14) of this Section 3.4(b) or this clause (15) (an “Initial Agreement”) or contained in any amendment, supplement or other modification to an agreement referred to in clauses (1) to (14) of this Section 3.4(b) or this clause (15); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement or instrument are no less favorable in any material respect to the Holders taken as a whole than the encumbrances and restrictions contained in the Initial Agreement or Initial Agreements to which such refinancing or amendment, supplement or other modification relates (as determined in good faith by Holdings).

 

-78-


SECTION 3.5. Limitation on Sales of Assets and Subsidiary Stock.

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition unless:

(1) Holdings or such Restricted Subsidiary, as the case may be, receives consideration (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) at least equal to the fair market value (such fair market value to be determined on the date of contractually agreeing to such Asset Disposition) of the shares and assets subject to such Asset Disposition (including, for the avoidance of doubt, if such Asset Disposition is a Permitted Asset Swap);

(2) in any such Asset Disposition or series of related Asset Dispositions (except to the extent the Asset Disposition is a Permitted Asset Swap), at least 75% of the consideration from such Asset Disposition (including by way of relief from, or by any other Person assuming responsibility for, any liabilities, contingent or otherwise) received by Holdings or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents; and

(3) Holdings or any of its Restricted Subsidiaries, will apply 100% of the Net Available Cash from any Asset Disposition at its option:

(i) to the extent Holdings or any Restricted Subsidiary, as the case may be, elects (or is required by the terms of any Indebtedness), (A) to prepay, repay or purchase any Indebtedness of a Non-Guarantor or Indebtedness that is secured by a Lien (in each case, other than Indebtedness owed to Holdings or any Restricted Subsidiary) within 365 days from the later of (1) the date of such Asset Disposition and (2) the receipt of such Net Available Cash; provided, however, that, in connection with any prepayment, repayment or purchase of Indebtedness pursuant to this clause (i), Holdings or such Restricted Subsidiary will retire such Indebtedness and will cause the related commitment (if any) to be reduced in an amount equal to the principal amount so prepaid, repaid or purchased; or (B) to prepay, repay or purchase Senior Indebtedness; provided further that, to the extent Holdings redeems, repays or repurchases Senior Indebtedness pursuant to this clause (B), the Issuer shall equally and ratably reduce Obligations under the Notes pursuant to Section 5.7, through open-market purchases (to the extent such purchases are at or above 100% of the principal amount thereof) or by making an offer (in accordance with the procedures set forth below for an Asset Disposition Offer) to all Holders to purchase their Notes at 100% of the principal amount thereof, plus the amount of accrued but unpaid interest, if any, on the amount of Notes that would otherwise be prepaid; and/or

(ii) to the extent Holdings or any Restricted Subsidiary elects, to invest in or commit to invest in Additional Assets (including by means of an investment in Additional Assets by a Restricted Subsidiary with Net Available Cash received by Holdings or another Restricted Subsidiary) within 365 days from the later of

 

-79-


(A) the date of such Asset Disposition and (B) the receipt of such Net Available Cash; provided, however, that a binding agreement shall be treated as a permitted application of Net Available Cash from the date of such commitment so long as Holdings or the applicable Restricted Subsidiary has the good faith expectation that such Net Available Cash will be applied to satisfy such commitment within 180 days of such commitment (an “Acceptable Commitment”) and, in the event any Acceptable Commitment is later cancelled or terminated for any reason before the Net Available Cash is applied in connection therewith, Holdings or such Restricted Subsidiary enters into another Acceptable Commitment (a “Second Commitment”) within 180 days of such cancellation or termination; provided further that if any Second Commitment is later cancelled or terminated for any reason before such Net Available Cash is applied, then such Net Available Cash shall constitute Excess Proceeds;

provided, however, that, pending the final application of any such Net Available Cash in accordance with Section 3.5(a)(3)(i) or (ii), Holdings and its Restricted Subsidiaries may temporarily reduce Indebtedness or otherwise use such Net Available Cash in any manner not prohibited by this Indenture.

(b) Any Net Available Cash from Asset Dispositions that is not applied or invested or committed to be applied or invested as provided in Section 3.5(a) shall be deemed to constitute “Excess Proceeds” under this Indenture. On the 366th day after an Asset Disposition or the receipt of such Net Available Cash, as applicable, if the aggregate amount of Excess Proceeds under this Indenture exceeds $10,000,000, the Issuer shall within ten (10) Business Days be required to make an offer (“Asset Disposition Offer”) to all Holders of Notes issued under this Indenture and, to the extent the Issuer elects, to all holders of other outstanding Senior Indebtedness, to purchase the maximum principal amount of Notes and any such Senior Indebtedness to which the Asset Disposition Offer applies that may be purchased out of the Excess Proceeds, at an offer price equal to 100% of the principal amount of the Notes, and Senior Indebtedness, in each case, plus accrued and unpaid interest, if any, to, but not including, the date of purchase, in accordance with the procedures set forth in this Indenture or the agreements governing the Senior Indebtedness, as applicable, and, with respect to the Notes, in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. The Issuer shall deliver notice of such Asset Disposition Offer electronically or by first-class mail, with a copy to the Trustee, to each Holder of Notes at the address of such Holder appearing in the security register or otherwise in accordance with the Applicable Procedures, describing the transaction or transactions that constitute the Asset Disposition and offering to repurchase the Notes for the specified purchase price on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is delivered, pursuant to the procedures required by this Indenture and described in such notice.

(c) To the extent that the aggregate amount of Notes and Senior Indebtedness so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Excess Proceeds, the Issuer may use any remaining Excess Proceeds for any purpose not prohibited by this Indenture. If the aggregate principal amount of the Notes surrendered in any Asset Disposition Offer by Holders and other Senior Indebtedness surrendered by holders or lenders, collectively, exceeds the amount of Excess Proceeds, the Excess Proceeds shall be

 

-80-


allocated by the Issuer among the Notes and Senior Indebtedness to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Notes and Senior Indebtedness; provided that no Notes or other Senior Indebtedness shall be selected and purchased in an unauthorized denomination. Upon completion of any Asset Disposition Offer, the amount of Excess Proceeds will be reset at zero.

(d) To the extent that any portion of Net Available Cash payable in respect of the Notes is denominated in a currency other than United States Dollars, the amount thereof payable in respect of the Notes shall not exceed the net amount of funds in United States Dollars that is actually received by the Issuer upon converting such portion into United States Dollars.

(e) Notwithstanding any other provisions of this Section 3.5, (i) to the extent that any of or all the Net Available Cash of any Asset Disposition by a Foreign Subsidiary of Holdings (a “Foreign Disposition”) is prohibited or delayed by applicable local law, or would give rise to a violation of a third-party agreement of Holdings, the Issuer or any Restricted Subsidiary, from being repatriated to the United States, the portion of such Net Available Cash so affected will not be required to be applied in compliance with this Section 3.5, and such amounts may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable local law or third-party agreement will not permit repatriation to the United States (the Issuer hereby agreeing to use reasonable efforts (as determined in the Issuer’s reasonable business judgment) to otherwise cause the applicable Foreign Subsidiary to within one year following the date on which the respective payment would otherwise have been required, to promptly take all actions reasonably required by the applicable local law or third-party agreement to permit such repatriation), and if within one year following the date on which the respective payment would otherwise have been required, such repatriation of any of such affected Net Available Cash is permitted under the applicable local law or third-party agreement, such repatriation will be promptly effected and such repatriated Net Available Cash will be promptly (and in any event not later than five (5) Business Days after such repatriation could be made) applied by the Issuer (net of additional Taxes payable or reserved against as a result thereof) in compliance with this Section 3.5 and (ii) to the extent that the Issuer has determined in good faith that repatriation of any of or all the Net Available Cash of any Foreign Disposition would have an adverse Tax cost consequence with respect to such Net Available Cash (which for the avoidance of doubt, includes, but is not limited to, any prepayment whereby doing so the Issuer, any Restricted Subsidiary or any of their respective affiliates would incur a tax liability, including a tax dividend, deemed dividend pursuant to Code Section 956 or a withholding tax), the Net Available Cash so affected may be retained by the applicable Foreign Subsidiary. The nonapplication of any prepayment amounts as a consequence of the foregoing provisions will not, for the avoidance of doubt, constitute a Default or an Event of Default.

(f) For the purposes of Section 3.5(a)(2), the following will be deemed to be cash:

(i) the assumption by the transferee of Indebtedness or other liabilities contingent or otherwise of Holdings or a Restricted Subsidiary (other than Subordinated Indebtedness of Holdings, the Issuer or a Subsidiary Guarantor) and the release of Holdings or such Restricted Subsidiary from all liability on such Indebtedness or other liability in connection with such Asset Disposition;

 

-81-


(ii) securities, notes or other obligations received by Holdings or any Restricted Subsidiary of Holdings from the transferee that are converted by Holdings or such Restricted Subsidiary into cash or Cash Equivalents within 180 days following the closing of such Asset Disposition;

(iii) Indebtedness of any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of such Asset Disposition, to the extent that Holdings and each other Restricted Subsidiary are released from any Guarantee of payment of such Indebtedness in connection with such Asset Disposition;

(iv) consideration consisting of Indebtedness of Holdings (other than Subordinated Indebtedness) received after the Issue Date from Persons who are not Holdings or any Restricted Subsidiary; and

(v) any Designated Non-Cash Consideration received by Holdings or any Restricted Subsidiary in such Asset Dispositions having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this Section 3.5 that is at that time outstanding, not to exceed $50,000,000 (with the fair market value of each item of Designated Non-Cash Consideration being measured at the time received and without giving effect to subsequent changes in value).

(g) Upon the commencement of an Asset Disposition Offer, the Issuer shall send, or cause to be sent, electronically or by first class mail, a notice to the Trustee and to each Holder at its registered address, in accordance with the Applicable Procedures. The notice shall contain all instructions and materials necessary to enable such Holder to tender Notes pursuant to the Asset Disposition Offer. Any Asset Disposition Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Disposition Offer, shall state:

(1) that the Asset Disposition Offer is being made pursuant to this Section 3.5 and that, to the extent lawful, all Notes tendered and not withdrawn shall be accepted for payment (unless prorated);

(2) the Asset Disposition payment amount, the Asset Disposition offered price, and the date on which Notes tendered and accepted for payment shall be purchased, which date shall be at least 30 days and not later than 60 days from the date such notices are mailed or sent (the “Asset Disposition Payment Date”);

(3) that any Notes not tendered or accepted for payment shall continue to accrue interest in accordance with the terms thereof;

(4) that, unless the Issuer defaults in making such payment, any Notes accepted for payment pursuant to the Asset Disposition Offer shall cease to accrue interest on and after the Asset Disposition Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to any Asset Disposition Offer shall be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice at least three (3) Business Days before the Asset Disposition Payment Date;

 

-82-


(6) that Holders shall be entitled to withdraw their election if the Paying Agent receives, not later than two (2) Business Days prior to the Asset Disposition Payment Date, a notice setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing its election to have such Note purchased;

(7) that if the aggregate principal amount of Notes surrendered by Holders exceeds the Asset Disposition payment amount, the Issuer shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Issuer so that only Notes in denominations of $2,000 or integral multiples of $1,000 remain outstanding after purchase); and

(8) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry).

(h) If the Asset Disposition Payment Date is on or after a record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business (New York City time) on such record date, and no other interest, if any, shall be payable to Holders who tender Notes pursuant to the Asset Disposition Offer.

(i) On the Asset Disposition Payment Date, the Issuer will, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Asset Disposition Offer,

(2) deposit by 10:00 a.m. (New York City time) with the Paying Agent an amount (in United States Dollars in immediately available funds) equal to the aggregate Asset Disposition payment in respect of all Notes or portions thereof so tendered, and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer.

(j) The Issuer will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to this Section 3.5. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

 

-83-


SECTION 3.6. Limitation on Liens.

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or permit to exist any Lien (except Permitted Liens) (each, an “Initial Lien”) that secures obligations under any Indebtedness or any related guarantee, on any asset or property of Holdings or any Restricted Subsidiary, unless:

(1) in the case of Liens securing Subordinated Indebtedness, the Notes and related Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; or

(2) in all other cases, the Notes and the related Note Guarantees are equally and ratably secured with the Obligations secured by such Initial Lien.

(b) Any Lien created for the benefit of the Holders pursuant to Section 3.6(a) shall provide by its terms that such Lien shall be automatically and unconditionally released and discharged upon the release and discharge of the Initial Lien.

(c) With respect to any Lien securing Indebtedness that was permitted to secure such Indebtedness at the time of the Incurrence of such Indebtedness, such Lien shall also be permitted to secure any Increased Amount of such Indebtedness. The “Increased Amount” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional Indebtedness with the same terms, accretion of original issue discount or liquidation preference and increases in the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies or increases in the value of property securing Indebtedness.

SECTION 3.7. Limitation on Guarantees.

(a) Holdings shall not permit any of its Domestic Subsidiaries, other than the Issuer or a Guarantor, to Guarantee the payment of any capital markets debt securities of Holdings, the Issuer or any Guarantor or Indebtedness under the Credit Agreement or any other Credit Facilities of Holdings, the Issuer or any Guarantor, in each case unless:

(1) such Restricted Subsidiary within 30 days executes and delivers a supplemental indenture to this Indenture substantially in the form of Exhibit B providing for a Note Guarantee by such Restricted Subsidiary, except that with respect to a guarantee of Indebtedness of Holdings, the Issuer or any Subsidiary Guarantor, if such Indebtedness is by its express terms subordinated in right of payment to the Notes or such Guarantor’s Note Guarantee, any such guarantee by such Restricted Subsidiary with respect to such Indebtedness shall be subordinated in right of payment to such Guarantee substantially to the same extent as such Indebtedness is subordinated to the Notes or such Guarantor’s Note Guarantee; and

(2) such Restricted Subsidiary shall deliver to the Trustee an Officer’s Certificate stating that:

(i) such Note Guarantee has been duly authorized, executed and delivered; and

 

-84-


(ii) such Note Guarantee constitutes a valid, binding and enforceable obligation of such Restricted Subsidiary, except insofar as enforcement thereof may be limited by bankruptcy, insolvency or similar laws (including all laws relating to fraudulent transfers) and except insofar as enforcement thereof is subject to general principals of equity;

provided that this Section 3.7 shall not be applicable in the event that the Guarantee of the Issuer’s obligations under the Notes or this Indenture by such Subsidiary would not be permitted under applicable law.

(b) Holdings may elect, in its sole discretion, to cause any Subsidiary that is not otherwise required to be a Guarantor to become a Guarantor.

SECTION 3.8. Limitation on Affiliate Transactions.

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or conduct any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of Holdings (an “Affiliate Transaction”) involving aggregate value in excess of $10,000,000 unless:

(1) the terms of such Affiliate Transaction taken as a whole are not materially less favorable to Holdings or such Restricted Subsidiary, as the case may be, than those that could be obtained in a comparable transaction at the time of such transaction or the execution of the agreement providing for such transaction in arm’s length dealings with a Person who is not such an Affiliate; and

(2) in the event such Affiliate Transaction involves an aggregate value in excess of $25,000,000, the terms of such transaction have been approved by a majority of the members of the Disinterested Directors.

(b) Section 3.8(a) shall not apply to:

(1) any Restricted Payment permitted to be made pursuant to Section 3.3, or any Permitted Investment;

(2) any issuance or sale of Capital Stock, options, other equity-related interests or other securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, or entering into, or maintenance of, any employment, consulting, collective bargaining or benefit plan, program, agreement or arrangement, related trust or other similar agreement and other compensation arrangements, options, warrants or other rights to purchase Capital Stock of Holdings or any Restricted Subsidiary, restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits or consultants’ plans (including valuation, health, insurance, deferred compensation, severance, retirement, savings or similar plans, programs or arrangements) or indemnities provided on behalf of officers, employees, directors or consultants, in each case in the ordinary course of business or consistent with past practice;

 

-85-


(3) [reserved];

(4) any transaction between or among Holdings and any Restricted Subsidiary (or entity that becomes a Restricted Subsidiary as a result of such transaction), or between or among Restricted Subsidiaries;

(5) the payment of compensation, fees and reimbursement of expenses to, and customary indemnities (including under customary insurance policies) and employee benefit and pension expenses provided on behalf of, directors, officers, consultants or employees of Holdings or any Restricted Subsidiary (whether directly or indirectly and including through any Person owned or controlled by any of such directors, officers or employees);

(6) the entry into and performance of obligations of Holdings or any Restricted Subsidiary under the terms of any transaction arising out of, and any payments pursuant to or for purposes of funding, any agreement or instrument in effect as of or on the Issue Date, in each case, as these agreements and instruments may be amended, modified, supplemented, extended, renewed or refinanced from time to time in accordance with the other terms of this Section 3.8 or to the extent not more disadvantageous to the Holders in any material respect;

(7) any transaction pursuant to a Qualified Receivables Transaction;

(8) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business or consistent with past practice, which are fair to Holdings or the relevant Restricted Subsidiary in the reasonable determination of the Board of Directors of Holdings or the senior management of Holdings or the relevant Restricted Subsidiary, or are on terms no less favorable than those that could reasonably have been obtained at such time from an unaffiliated party;

(9) issuances or sales of Capital Stock (other than Disqualified Stock or Designated Preferred Stock) of Holdings’ or options, warrants or other rights to acquire such Capital Stock and the granting of registration and other customary rights in connection therewith or any contribution to capital of Holdings or any Restricted Subsidiary;

(10) the Transactions and the payment of all fees and expenses related to the Transactions;

(11) transactions in which Holdings or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to Holdings or such Restricted Subsidiary from a financial point of view or meets the requirements of Section 3.8(a)(1);

(12) any purchases by Holdings’ Affiliates of Indebtedness or Disqualified Stock of Holdings or any Restricted Subsidiary the majority of which Indebtedness or Disqualified Stock is purchased by Persons who are not Holdings’ Affiliates; provided that such purchases by Holdings’ Affiliates are on the same terms as such purchases by such Persons who are not Holdings’ Affiliates; and

 

-86-


(13) the transactions contemplated by the Nuvectra Spin-off.

SECTION 3.9. Change of Control.

(a) If a Change of Control occurs, subject to Section 3.9(c), the Issuer shall make an offer to purchase all of the Notes pursuant to the offer described below (the “Change of Control Offer”) at a price in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to but not including the date of repurchase, subject to the right of Holders of the Notes of record on the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control, the Issuer will deliver notice of such Change of Control Offer electronically or by first-class mail, with a copy to the Trustee, to each Holder of Notes at the address of such Holder appearing in the security register or otherwise in accordance with the Applicable Procedures, as provided for in Section 2.3, describing the transaction or transactions that constitute the Change of Control and including the following information:

(1) that a Change of Control Offer is being made pursuant to this Section 3.9, and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuer;

(2) the purchase price and the purchase date, which date will be no earlier than 30 days and no later than 60 days from the date such notice is delivered (the “Change of Control Payment Date”);

(3) that any Note not properly tendered will remain outstanding and continue to accrue interest;

(4) that unless the Issuer defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest, on and after the Change of Control Payment Date;

(5) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed (subject to any Applicable Procedures with respect to Global Notes), to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that Holders will be entitled to withdraw their tendered Notes and their election to require the Issuer to purchase such Notes; provided that the Paying Agent receives, not later than the close of business (New York City time) on the second Business Day prior to the expiration date of the Change of Control Offer, a telegram, facsimile transmission or letter setting forth the name of the Holder of the Notes, the principal amount of Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered Notes and its election to have such Notes purchased;

 

-87-


(7) that Holders whose Notes are being purchased only in part will be issued new Notes and such new Notes will be equal in principal amount to the unpurchased portion of the Notes surrendered (with the unpurchased portion of the Notes required to be equal to at least $2,000 or any integral multiple of $1,000 in excess of $2,000);

(8) if such notice is delivered prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and

(9) the other instructions, as determined by the Issuer, consistent with this Section 3.9, that a Holder must follow.

The Paying Agent will promptly deliver to each Holder of the Notes tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and send (or cause to be transferred by book-entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. The Issuer will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. Any Change of Control Offer shall comply with the Applicable Procedures.

If the Change of Control Payment Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest will be paid on the relevant interest payment date to the Person in whose name a Note is registered at the close of business (New York City time) on such record date.

(b) On the Change of Control Payment Date, the Issuer will, to the extent permitted by law,

(1) accept for payment all Notes issued by it or portions thereof properly tendered pursuant to the Change of Control Offer,

(2) deposit by 10:00 a.m. (New York City time) with the Paying Agent an amount (in United States Dollars in immediately available funds) equal to the aggregate Change of Control Payment in respect of all Notes or portions thereof so tendered, and

(3) deliver, or cause to be delivered, to the Trustee for cancellation the Notes so accepted together with an Officer’s Certificate to the Trustee stating that such Notes or portions thereof have been tendered to and purchased by the Issuer and directing the Trustee to cancel such Notes.

(c) The Issuer will not be required to make a Change of Control Offer following a Change of Control if (1) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (2) a notice of redemption of all outstanding Notes has been given pursuant to Section 5.7, unless and until there is a default in the payment of the redemption price on the applicable redemption date or the redemption is not consummated

 

-88-


for any reason on or before the 60th day after such Change of Control. Notwithstanding anything to the contrary in this Section 3.9, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

(d) If Holders of not less than 90% in aggregate principal amount of the outstanding Notes validly tender and do not withdraw such Notes in a Change of Control Offer and the Issuer, or any third party making a Change of Control Offer in lieu of the Issuer as described in this Section 3.9, purchases all of the Notes validly tendered and not withdrawn by such Holders, the Issuer or such third party will have the right, upon not less than 30 nor more than 60 days’ prior notice to the Holders with a copy to the Trustee, given not more than 30 days following such purchase pursuant to the Change of Control Offer described above, to redeem all Notes that remain outstanding following such purchase at a price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to but not including the redemption date.

(e) The Issuer will comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws or regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue thereof.

SECTION 3.10. Reports.

(a) Whether or not required by the SEC, so long as any Notes are outstanding, Holdings shall (i) file electronically with the SEC through the SEC’s Electronic Data Gathering, Analysis, and Retrieval System (“EDGAR”) or any successor system or (ii) otherwise furnish to the Trustee and the Holders:

(1) within the time period then in effect under the rules and regulations of the Exchange Act with respect to the filing of a Form 10-K for a non-accelerated filer, all information that would be required to be contained in an annual report on Form 10-K, or any successor or comparable form, filed with the SEC, including a “Management’s discussion and analysis of financial condition and results of operations” and a report on the annual financial statements by Holdings’ independent registered public accounting firm;

(2) within the time period then in effect under the rules and regulations of the Exchange Act with respect to the filing of a Form 10-Q for a non-accelerated filer, all information that would be required to be contained in a quarterly report on Form 10-Q, or any successor or comparable form, filed with the SEC, including a “Management’s discussion and analysis of financial condition and results of operations”; and

(3) within the time period then in effect under the rules and regulations of the Exchange Act with respect to the filing of a Form 8-K after the occurrence of each event that would be required to be reported in a current report on Form 8-K, all information that would be required to be contained in a current report on Form 8-K, or any successor or comparable form, filed with the SEC;

 

-89-


in each case, in a manner that complies in all material respects with the requirements specified in such form. At any time that any of Holdings’ Subsidiaries are Unrestricted Subsidiaries, then the quarterly and annual financial information required by this Section 3.10 shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of the financial condition and results of operations of Holdings and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Issuer; provided, however, that such reasonably detailed presentation shall not be required if the total assets of all Unrestricted Subsidiaries are less than 5.0% of Holdings’ Total Assets. Promptly after filing (or, if applicable, furnishing to the Trustee and the Holders) information pursuant to the immediately preceding paragraph, Holdings shall also post copies of such information required by the immediately preceding paragraph on its public website. To the extent any such information is not so filed or furnished, as applicable, within the time periods specified above and such information is subsequently filed or furnished, as applicable, Holdings will be deemed to have satisfied its obligations with respect thereto at such time and any Default or Event of Default with respect thereto shall be deemed to have been cured at such time; provided that such cure shall not otherwise affect the rights of the Holders under Section 6.1, Section 6.2 or otherwise in Article VI if Holders of at least 30% in principal amount of the then total outstanding Notes have declared the principal of, and accrued and unpaid interest on, all the Notes to be due and payable immediately and such declaration shall not have been rescinded or cancelled prior to such cure. In addition, to the extent not satisfied by the foregoing, the Issuer will agree that, for so long as any Notes are outstanding, it will furnish to Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(b) Unless Holdings is otherwise obligated to do so under the Exchange Act or the rules and regulations promulgated by the SEC thereunder, such reports referred to in Sections 3.10(a)(1), (2) and (3) will not be required:

(1) to comply with Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related Items 307 and 308 of Regulation S-K promulgated by the SEC;

(2) to contain the separate financial information for Guarantors as contemplated by Rule 3-10 of Regulation S-X or any financial statements of unconsolidated subsidiaries or 50% or less owned persons as contemplated by Rule 3-09 of Regulation S-X or any schedules required by Regulation S-X, or in each case any successor provisions (it being understood however that Holdings will be required to furnish summary financial information with respect to the Guarantors and Non-Guarantors on a basis substantially consistent with the financial information presented in the first and second sentences of the second paragraph under “Description of the Notes—Guarantees” in the Offering Circular); and

(3) to comply with Regulation G under the Exchange Act or Item 10(e) of Regulation S-K with respect to any non-GAAP financial measures contained therein.

 

-90-


(c) Notwithstanding any other provision of this Indenture, the sole remedy for an Event of Default relating to the failure to comply with the reporting obligations set forth in this Section 3.10, for the 270 days after the occurrence of such an Event of Default, consist exclusively of the right to receive additional interest on the principal amount of the Notes at a rate equal to 0.50% per annum. This additional interest shall be payable in the same manner and subject to the same terms as other interest payable under this Indenture. This additional interest will accrue on all outstanding Notes from and including the date on which an Event of Default relating to a failure to comply with the reporting obligations described in Section 3.10(a) first occurs to, but excluding, the 270th day thereafter (or such earlier date on which the Event of Default relating to such reporting obligations is cured or waived). If the Event of Default resulting from such failure to comply with the reporting obligations is continuing on such 270th day, such additional interest will cease to accrue and the Notes will be subject to the other remedies provided under Article VI. If additional interest is payable on the Notes, the Issuer shall provide an Officer’s Certificate to the Trustee on or before the record date for each Interest Payment Date such additional interest is payable setting forth the accrual period and the amount of such additional interest in reasonable detail. The Trustee may provide a copy of such Officer’s Certificate received from the Issuer relating to additional interest to any Holder upon request. Unless and until a Trust Officer of the Trustee receives at the Corporate Trust Office such Officer’s Certificate, the Trustee may assume without inquiry that no such additional interest is payable. The Trustee shall not at any time be under any duty or responsibility to any Holder to determine whether any additional interest is payable, or with respect to the nature, extent, or calculation of the amount of any additional interest owed, or with respect to the method employed in such calculation of any additional interest. If the Issuer has paid additional interest directly to the Holders entitled to it, the Issuer shall deliver to the Trustee an Officer’s Certificate setting forth the particulars of such payment in reasonable detail.

(d) Holdings will also hold quarterly conference calls for the Holders to discuss financial information for the previous quarter (it being understood that such quarterly conference call may be the same conference call as with Holdings’ equity investors and analysts). The conference call will be following the last day of each fiscal quarter of Holdings and not later than ten (10) Business Days from the time Holdings files (or, if applicable, furnishes) the applicable financial information in respect of such fiscal quarter as set forth in Section 3.10(a). No fewer than two (2) days prior to the conference call, Holdings will issue a press release announcing the time and date of such conference call and providing instructions for Holders, securities analysts and prospective investors to obtain access to such call. The Trustee has no duty to participate in or monitor any conference calls required by this Section 3.10(d). The Trustee will not be deemed to have received notice of any such conference calls unless notice is provided by the Issuer to the Trustee in writing.

(e) Delivery of reports, information and documents under this Section 3.10 to the Trustee is for informational purposes only and the Trustee’s receipt of such reports shall not constitute actual or constructive notice of any information contained therein or determinable from information contained therein, including the Issuer’s compliance with any of its covenants under this Indenture or the Notes (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates). The Trustee shall have no obligation whatsoever to determine whether or not such information, documents or reports have been filed pursuant to the EDGAR filing system (or its successor) or whether or not postings to any website have occurred.

 

-91-


SECTION 3.11. Maintenance of Office or Agency.

The Issuer shall maintain an office or agency where the Notes will be payable at the office or agency of the Issuer maintained for such purpose and where, if applicable, the Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be delivered. The Corporate Trust Office of the Trustee, which initially shall be located at 1100 N. Market Street, Wilmington, DE 19890, Attention: Capital Markets & Agency Services, shall be such office or agency of the Issuer unless the Issuer shall designate and maintain some other office or agency for one or more of such purposes. The Issuer will give prompt written notice to the Trustee of any change in the location of any such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations and surrenders may be made at the Corporate Trust Office of the Trustee, and the Issuer hereby appoints the Trustee as its agent to receive all such presentations and surrenders.

The Issuer may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation. The Issuer will give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

SECTION 3.12. Corporate Existence. Except as otherwise permitted by Article IV, each of Holdings and the Issuer will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate, partnership, limited liability company or other existence of each Restricted Subsidiary and the rights (charter and statutory), licenses and franchises of Holdings, the Issuer and each Restricted Subsidiary; provided, however, that each of Holdings and the Issuer shall not be required to preserve any such right, license or franchise or the corporate, partnership, limited liability company or other existence of any Restricted Subsidiary of the Issuer if the respective Board of Directors or, with respect to a Restricted Subsidiary of the Issuer that is not a Significant Subsidiary (or group of Restricted Subsidiaries that taken together would not be a Significant Subsidiary), senior management of Holdings determines that the preservation thereof is no longer desirable in the conduct of the business of Holdings and each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not, and will not be, disadvantageous in any material respect to the Holders.

SECTION 3.13. Payment of Taxes. Holdings shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all material taxes, assessments and governmental charges levied or imposed upon Holdings or any Subsidiary thereof; provided, however, that Holdings shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of management of Holdings), are being maintained in accordance with GAAP or where the failure to effect such payment will not be disadvantageous in any material respect to the Holders.

 

-92-


SECTION 3.14. Compliance Certificate. The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer an Officer’s Certificate that need not comply with the requirements set forth in Section 12.5, signed by the Chief Executive Officer, Chief Financial Officer or the Treasurer of the Issuer, stating that in the course of the performance by the signer of his or her duties as an Officer of the Issuer he or she would normally have knowledge of any Default or Event of Default and whether or not the signer knows of any Default or Event of Default that occurred during the previous fiscal year; provided that no such Officer’s Certificate shall be required for any fiscal year ended prior to the Issue Date. If such Officer does have such knowledge, the certificate shall describe the Default or Event of Default, its status and the action the Issuer is taking or proposes to take with respect thereto.

SECTION 3.15. [Reserved].

SECTION 3.16. Statement by Officers as to Default. The Issuer shall deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any events of which it is aware which would constitute a Default or Event of Default, their status and what action the Issuer is taking or proposes to take in respect thereof.

SECTION 3.17. Suspension of Certain Covenants on Achievement of Investment Grade Status.

(a) Following the first day that: (1) the Notes have achieved Investment Grade Status; and (2) no Default or Event of Default has occurred and is continuing under this Indenture, then, beginning on that day and continuing until the Reversion Date (as defined below), Holdings and its Restricted Subsidiaries will not be subject to Sections 3.2, 3.3, 3.4, 3.5, 3.7, 3.8 and 4.1(a)(3) (collectively, the “Suspended Covenants”).

(b) If at any time the Notes cease to have such Investment Grade Status or if a Default or Event of Default occurs and is continuing, then the Suspended Covenants will thereafter be reinstated as if such covenants had never been suspended (the “Reversion Date”) and be applicable pursuant to the terms of this Indenture (including in connection with performing any calculation or assessment to determine compliance with the terms of this Indenture), unless and until the Notes subsequently attain Investment Grade Status and no Default or Event of Default is in existence (in which event the Suspended Covenants shall no longer be in effect for such time that the Notes maintain an Investment Grade Status and no Default or Event of Default is in existence); provided, however, that no Default, Event of Default or breach of any kind shall be deemed to exist under this Indenture, the Notes or the Note Guarantees with respect to the Suspended Covenants based on, and none of Holdings or any of its Subsidiaries shall bear any liability for, any actions taken or events occurring during the Suspension Period (as defined below), or any actions taken at any time pursuant to any contractual obligation arising prior to the Reversion Date (in each case to the extent such actions or events are permitted at such time, regardless of whether such actions or events would have been permitted if the applicable Suspended Covenants remained in effect during such period). The period of time between the date of suspension of the covenants and the Reversion Date is referred to as the “Suspension Period.”

 

-93-


(c) On the Reversion Date, all Indebtedness Incurred during the Suspension Period will be classified to have been Incurred pursuant to Section 3.2(a) or one of the clauses set forth in Section 3.2(b) (to the extent such Indebtedness would be permitted to be Incurred thereunder as of the Reversion Date and after giving effect to the Indebtedness Incurred prior to the Suspension Period and outstanding on the Reversion Date). To the extent such Indebtedness would not be so permitted to be Incurred pursuant to Sections 3.2(a) or (b), such Indebtedness will be deemed to have been outstanding on the Issue Date so that it is classified as permitted under Section 3.2(b)(4)(ii). Calculations made after the Reversion Date of the amount available to be made as Restricted Payments under Section 3.3 will be made as though Section 3.3 had been in effect since the Issue Date and throughout the Suspension Period; provided, however, that, no Subsidiaries may be designated as Unrestricted Subsidiaries during the Suspension Period, unless such designation would have complied with Section 3.3 as if such Section would have been in effect during such period. Accordingly, Restricted Payments made during the Suspension Period will reduce the amount available to be made as Restricted Payments under Section 3.3(a).

(d) The Trustee shall have no obligation to independently determine or verify if circumstances set forth in Section 3.17(a), Section 3.17(b) or Section 3.17(c) have occurred or notify the Holders (or beneficial owners of Notes) of the continuance and termination of any Suspension Period.

(e) The Issuer shall reasonably promptly provide an Officer’s Certificate to the Trustee indicating the occurrence of any Suspended Covenants or the Reversion Date. The Trustee may provide a copy of such Officer’s Certificate to any Holders (or beneficial owners of Notes) upon request.

SECTION 3.18. Designation of Restricted and Unrestricted Subsidiaries.

(a) The Board of Directors of Holdings may designate any Restricted Subsidiary of the Issuer to be an Unrestricted Subsidiary if no Default or Event of Default would be in existence following such designation and subject to the requirements set forth in the definition of “Unrestricted Subsidiary”. If a Restricted Subsidiary of the Issuer is designated as an Unrestricted Subsidiary, the aggregate fair market value of all outstanding Investments owned by Holdings and its Restricted Subsidiaries in the Subsidiary of the Issuer designated as an Unrestricted Subsidiary will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under Section 3.3 or under one or more clauses of the definition of Permitted Investments, as determined by Holdings. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary of the Issuer otherwise meets the definition of an Unrestricted Subsidiary.

(b) Any designation of a Subsidiary of the Issuer as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a resolution of the Board of Directors of Holdings giving effect to such designation and an Officer’s Certificate certifying that such designation complies with the preceding conditions and was permitted by Section 3.3. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of

 

-94-


this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Issuer as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 3.2, the Issuer will be in default of Section 3.2.

(c) The Board of Directors of Holdings may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the Issuer; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Issuer of any outstanding Indebtedness of such Unrestricted Subsidiary, and such designation will only be permitted if (1) such Indebtedness is permitted under Section 3.2 calculated on a pro forma basis as if such designation had occurred at the beginning of the applicable reference period; and (2) no Default or Event of Default would be in existence following such designation. Any such designation by the Board of Directors of Holdings shall be evidenced to the Trustee by filing with the Trustee a certified copy of a resolution of the Board of Directors of Holdings giving effect to such designation and an Officer’s Certificate certifying that such designation complies with the preceding conditions.

(d) Notwithstanding anything in this Indenture to the contrary, and for the avoidance of doubt, neither Holdings nor the Issuer may be, or may be designated as, an Unrestricted Subsidiary.

SECTION 3.19. Limitation on Sale and Leaseback Transactions.

(a) Holdings shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction with respect to any property unless:

(1) Holdings or such Restricted Subsidiary would be entitled to (i) Incur Indebtedness in an amount equal to the Attributable Debt with respect to such Sale and Leaseback Transaction pursuant to Section 3.2 and (ii) create a Lien on such property securing such Attributable Debt without equally and ratably securing the Notes pursuant to Section 3.6.

(2) the net proceeds received by Holdings or such Restricted Subsidiary in connection with such Sale and Leaseback Transaction are at least equal to the fair market value of such property; and

(3) Holdings or such Restricted Subsidiary applies the proceeds of such transaction in compliance with Section 3.5.

 

-95-


ARTICLE IV

SUCCESSOR ISSUER; SUCCESSOR PERSON

SECTION 4.1. Merger and Consolidation.

(a) The Issuer shall not consolidate with or merge with or into or convey, transfer or lease all or substantially all its assets, in one or more related transactions, to any Person, unless:

(1) the resulting, surviving or transferee Person (the “Successor Company”) will be a Person organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and the Successor Company (if not the Issuer) will expressly assume, by supplemental indenture, executed and delivered to the Trustee, all the obligations of the Issuer under the Notes and this Indenture and if such Successor Company is not a corporation, a co-obligor of the Notes that is a corporation organized or existing under such laws shall be appointed pursuant to such supplemental indenture;

(2) immediately after giving effect to such transaction (and treating any Indebtedness that becomes an obligation of the applicable Successor Company or any Subsidiary of the applicable Successor Company as a result of such transaction as having been Incurred by the applicable Successor Company or such Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

(3) immediately after giving effect to such transaction, either (i) the applicable Successor Company would be able to Incur at least an additional $1.00 of Indebtedness pursuant to Section 3.2(a) or (ii) the Fixed Charge Coverage Ratio of Holdings and its Restricted Subsidiaries would not be lower than it was immediately prior to giving effect to such transaction; and

(4) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture and an Opinion of Counsel stating that such supplemental indenture (if any) has been duly authorized, executed and delivered and is a legal, valid and binding agreement enforceable against the applicable Successor Company (in each case, in form satisfactory to the Trustee); provided that in giving an Opinion of Counsel, counsel may rely on an Officer’s Certificate as to any matters of fact, including as to satisfaction of Sections 4.1(a)(2) and (3).

(b) For purposes of this Section 4.1, the sale, lease, conveyance, assignment, transfer, or other disposition of all or substantially all of the properties and assets of one or more Subsidiaries of the Issuer, which properties and assets, if held by the Issuer instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Issuer on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Issuer.

(c) The Successor Company will succeed to, and be substituted for, and may exercise every right and power of, the Issuer under the Note Documents, but in the case of a lease of all or substantially all its assets, the predecessor company will not be released from its obligations under the Note Documents.

(d) Notwithstanding Sections 4.1(a)(2), (3) and (4) (which do not apply to transactions referred to in this sentence), any Restricted Subsidiary of the Issuer may consolidate or otherwise combine with, merge into or transfer all or part of its properties and assets to the Issuer. Notwithstanding Sections 4.1(a)(2) and (3) (which do not apply to the transactions referred to in this sentence), the Issuer may consolidate or otherwise combine with or merge into an Affiliate incorporated or organized for the purpose of changing the legal domicile of the Issuer, reincorporating the Issuer in another jurisdiction, or changing the legal form of the Issuer.

 

-96-


(e) Holdings may not:

(1) consolidate with or merge with or into any Person, or

(2) sell, convey, transfer or dispose of, all or substantially all its assets, in one transaction or a series of related transactions, to any Person, or

(3) permit any Person to merge with or into Holdings, unless:

(i) either (A) Holdings is the surviving Person or (B) the resulting, surviving or transferee Person is a Person organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and expressly assumes by supplemental indenture all of the obligations of Holdings under its Note Guarantee and under this Indenture; and

(ii) immediately after giving effect to the transaction, no Default or Event of Default has occurred and is continuing.

(f) No Subsidiary Guarantor may:

(1) consolidate with or merge with or into any Person, or

(2) sell, convey, transfer or dispose of, all or substantially all its assets, in one transaction or a series of related transactions, to any Person, or

(3) permit any Person to merge with or into the Subsidiary Guarantor, unless:

(i) the other Person is the Issuer or a Subsidiary Guarantor or becomes a Subsidiary Guarantor concurrently with the transaction; or

(ii) (A) either (x) a Subsidiary Guarantor is the surviving Person or (y) the resulting, surviving or transferee Person is a Person organized and existing under the laws of the United States of America, any State of the United States or the District of Columbia and expressly assumes by supplemental indenture all of the obligations of the Subsidiary Guarantor under its Note Guarantee and under this Indenture; and

(B) immediately after giving effect to the transaction, no Default or Event of Default has occurred and is continuing; or

(iii) the transaction is made in compliance with Section 3.5.

 

-97-


ARTICLE V

REDEMPTION OF NOTES

SECTION 5.1. Notices to Trustee. If the Issuer elects to redeem Notes pursuant to the optional redemption provisions of Section 5.7, it must furnish to the Trustee, at least five (5) Business Days prior to the issuance of the notice of redemption to the Holders (unless a shorter period shall be satisfactory to the Trustee), an Officer’s Certificate setting forth:

(1) the clause of this Indenture pursuant to which the redemption shall occur, that such redemption complies with this Indenture and whether the redemption will be subject to any conditions;

(2) the redemption date;

(3) the principal amount of Notes to be redeemed; and

(4) the redemption price.

Any optional redemption referenced in such Officer’s Certificate may be cancelled by the Issuer at any time prior to notice of redemption being sent to any Holder. If the redemption price is not known at the time such notice is to be given, the actual redemption price calculated as described in the terms of the Notes will be set forth in an Officer’s Certificate delivered to the Trustee no later than two (2) Business Days prior to the redemption date.

SECTION 5.2. Selection of Notes to Be Redeemed or Purchased. If less than all of the Notes are to be redeemed at any time, the Trustee will select the Notes for redemption in compliance with the requirements of the principal securities exchange, if any, on which the Notes are listed, as certified to the Trustee by the Issuer, and in compliance with the Applicable Procedures, or if the Notes are not so listed or such exchange prescribes no method of selection and the Notes are not held through DTC or DTC prescribes no method of selection, in accordance with the Trustee’s procedures, subject to adjustments so that no Note in an unauthorized denomination is redeemed in part; provided, however, that no Note of $2,000 in aggregate principal amount or less will be redeemed in part.

SECTION 5.3. Notice of Redemption.

(a) Notices of redemption will be delivered electronically or mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at the address of such Holder appearing in the security register or otherwise in accordance with the Applicable Procedures, except that redemption notices may be delivered electronically or mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article VIII or XI.

The notice will identify the Notes (including the CUSIP or ISIN number) to be redeemed and will state:

(1) the redemption date;

 

-98-


(2) the redemption price;

(3) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note;

(4) the name and address of the Paying Agent;

(5) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(6) that, unless the Issuer defaults in making such redemption payment, interest on Notes called for redemption cease to accrue on and after the redemption date;

(7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed;

(8) if such redemption or notice is subject to satisfaction of one or more conditions precedent, that, in the Issuer’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by 3:00 p.m. (New York City time) on the Business Day prior to the redemption date (or by 3:00 p.m. (New York City time) on the Business Day prior to the redemption date so delayed); and

(9) that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number listed in such notice or printed on the Notes.

(b) If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof to be redeemed, in which case the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. In the case of a Global Note, an appropriate notation shall be made on such Note to decrease the principal amount thereof to an amount equal to the unredeemed portion thereof. Subject to the terms of the applicable redemption notice (including any conditions contained therein), Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, unless the Issuer defaults in the payment of the redemption price, interest ceases to accrue on Notes or portions of them called for redemption.

(c) For Notes which are represented by global certificates held on behalf of DTC, notices may be given by delivery of the relevant notices to DTC, in accordance with their procedures for communication to entitled account holders in substitution for the aforesaid electronic delivery or first- class mailing.

(d) At the Issuer’s request, the Trustee shall give the notice of redemption in the Issuer’s name and at the Issuer’s expense. In such event, the Issuer shall provide the Trustee

 

-99-


with an Officer’s Certificate with the notice to be given as an exhibit thereto containing the information required by this Section 5.3 at least five (5) Business Days prior to the date on which the Issuer instructs the Trustee to send the notice (or such shorter period as the Trustee may agree).

SECTION 5.4. Effect of Notice of Redemption. Subject to the following sentence, once notice of redemption is sent in accordance with Section 5.3, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. Any optional redemption may, at the Issuer’s option and discretion, be subject to one or more conditions precedent, including, but not limited to, completion of an Equity Offering in the case of a redemption related to an Equity Offering. If any such condition precedent has not been satisfied, the Issuer will provide notice to the Holders and the Trustee not later than 3:00 p.m. New York City time on the Business Day prior to the redemption date that such condition precedent has not been satisfied and will specify in such notice that the notice of redemption is either rescinded or delayed and that either the redemption shall not occur or shall be delayed subject to the satisfaction of such condition precedent.

SECTION 5.5. Deposit of Redemption or Purchase Price. Prior to 10:00 a.m., New York City time, on the redemption or purchase date, the Issuer will deposit with the Trustee or with the Paying Agent money (in United States Dollars in immediately available funds) sufficient to pay the redemption or purchase price of and accrued interest, if any, on, all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Issuer any money deposited with the Trustee or the Paying Agent by the Issuer in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest, if any, on, all Notes to be redeemed or purchased.

If the Issuer complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business (New York City time) on such record date, and no other interest will be payable to Holders whose Notes will be subject to redemption by the Issuer. If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Issuer to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 3.1.

SECTION 5.6. Notes Redeemed or Purchased in Part. Upon surrender of a Note that is redeemed or purchased in part, the Issuer will issue and, upon receipt of an Issuer Order, the Trustee will authenticate for the Holder at the expense of the Issuer a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered; provided, that each such new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

 

-100-


SECTION 5.7. Optional Redemption.

(a) Except as set forth in Sections 5.7(b), (c) and (d), the Notes are not redeemable at the option of the Issuer.

(b) At any time and from time to time prior to November 1, 2018, the Issuer may redeem the Notes in whole or in part, at its option, upon notice in accordance with Section 5.3, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but not including, the redemption date.

(c) At any time and from time to time on or after November 1, 2018, the Issuer may redeem the Notes in whole or in part, upon notice in accordance with Section 5.3, at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, to, but not including, the applicable redemption date, if redeemed during the twelve-month period beginning on November 1 of the years indicated below:

 

Year    Percentage

2018

   106.844%

2019

   104.563%

2020

   102.281%

2021 and thereafter

   100.000%

(d) At any time and from time to time prior to November 1, 2018, the Issuer may redeem Notes, upon notice in accordance with Section 5.3, with the net cash proceeds received by the Issuer from any Equity Offering (other than Excluded Contributions) that are contributed by Holdings to the common equity capital of the Issuer at a redemption price (expressed as a percentage of principal amount) equal to 109.125% plus accrued and unpaid interest, if any, to, but not including, the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the original aggregate principal amount of the Notes (including Additional Notes); provided that:

(1) in each case the redemption takes place not later than 90 days after the closing of the related Equity Offering, and

(2) not less than 60% of the original aggregate principal amount of the Notes issued under this Indenture remains outstanding immediately thereafter (excluding Notes held by the Issuer or any of its Restricted Subsidiaries).

(e) Any redemption pursuant to this Section 5.7 shall be made pursuant to the provisions of Sections 5.1 through 5.6.

SECTION 5.8. Mandatory Redemption. The Issuer is not required to make mandatory redemption or sinking fund payments with respect to the Notes; provided however, that under certain circumstances, the Issuer may be required to offer to purchase Notes under Section 3.5 and Section 3.9. The Issuer may at any time and from time to time purchase Notes in the open market or otherwise.

 

-101-


ARTICLE VI

DEFAULTS AND REMEDIES

SECTION 6.1. Events of Default.

(a) Each of the following is an “Event of Default”:

(1) default in any payment of interest on any Note when due and payable, which default continues for a period of 30 days;

(2) default in the payment of the principal amount of or premium, if any, on any Note issued under this Indenture when due at its Stated Maturity, upon redemption, upon required repurchase, upon declaration or otherwise;

(3) failure by Holdings, the Issuer or any Subsidiary Guarantor to comply with its obligations under Article IV;

(4) failure by Holdings or any of its Restricted Subsidiaries to comply for 60 days after written notice by the Trustee to the Issuer or by the Holders of 30% in principal amount of the outstanding Notes to the Issuer and the Trustee with any agreement or obligation contained in the Notes or this Indenture (other than those specified in clauses (1), (2) and (3) of this Section 6.1(a));

(5) default under any mortgage, indenture, agreement or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Holdings or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by Holdings or any of its Restricted Subsidiaries) other than Indebtedness owed to Holdings or a Restricted Subsidiary whether such Indebtedness or Guarantee now exists, or is created after the date hereof, which default:

(A) is caused by a failure to pay principal of such Indebtedness, at its stated final maturity (after giving effect to any applicable grace periods) provided in such Indebtedness; or

(B) results in the acceleration of such Indebtedness prior to its stated final maturity;

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $100,000,000 or more;

(6) Holdings, the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements for Holdings and its Restricted Subsidiaries) would constitute a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law:

(A) commences a voluntary case or proceeding;

 

-102-


(B) consents to the entry of an order for relief against it in an involuntary case or proceeding;

(C) consents to the appointment of a Custodian of it or for substantially all of its property;

(D) makes a general assignment for the benefit of its creditors;

(E) consents to or acquiesces in the institution of a bankruptcy or an insolvency proceeding against it; or

(F) takes any comparable action under any foreign laws relating to insolvency;

(7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(A) is for relief against Holdings, the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements for Holdings and its Restricted Subsidiaries) would constitute a Significant Subsidiary in an involuntary case;

(B) appoints a Custodian of Holdings, the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements for Holdings and its Restricted Subsidiaries) would constitute a Significant Subsidiary, for substantially all of its property;

(C) orders the winding up or liquidation of Holdings, the Issuer or a Significant Subsidiary or group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements for Holdings and its Restricted Subsidiaries) would constitute a Significant Subsidiary; or

(D) is similar to the relief described in clauses (A), (B) and/or (C) and is granted under any foreign laws and the order, decree or relief remains unstayed and in effect for 60 consecutive days;

(8) failure by Holdings, the Issuer or any Significant Subsidiary (or group of Restricted Subsidiaries that together (as of the latest audited consolidated financial statements for Holdings and its Restricted Subsidiaries) would constitute a Significant Subsidiary) to pay final judgments aggregating in excess of $100,000,000 (other than any judgments covered by indemnities provided by, or insurance policies issued by, reputable and creditworthy companies), which final judgments remain unpaid, undischarged and unstayed for a period of more than 60 days after such judgment becomes final, and in the event such judgment is covered by an indemnity or insurance as aforesaid, an enforcement proceeding has been commenced by any creditor upon such judgment or decree which is not promptly stayed; or

 

-103-


(9) the Note Guarantee of Holdings or of any Subsidiary Guarantor that is a Significant Subsidiary ceases to be in full force and effect (other than in accordance with the terms of this Indenture) or shall be held in any judicial proceeding to be unenforceable or invalid or Holdings or any Subsidiary Guarantor that is a Significant Subsidiary (or any Person acting on behalf of Holdings or such Subsidiary Guarantor) denies or disaffirms Holdings’ or such Subsidiary Guarantor’s obligations under its Note Guarantee.

(b) Notwithstanding the foregoing, a Default under Section 6.1(a)(4) will not constitute an Event of Default until the Trustee or the Holders of 30% in principal amount of the outstanding Notes notify the Issuer (and the Trustee if given by the Holders) of the Default and the Issuer does not cure such Default within the time specified in Section 6.1(a)(4) after receipt of such notice.

SECTION 6.2. Acceleration.

(a) If an Event of Default (other than an Event of Default described in Section 6.1(a)(6) or (7)) occurs and is continuing, the Trustee by written notice to the Issuer (or the Holders of at least 30% in principal amount of the outstanding Notes by written notice to the Issuer and the Trustee), may declare the principal of and accrued and unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and accrued and unpaid interest will be due and payable immediately.

(b) In the event of a declaration of acceleration of the Notes because an Event of Default described in Section 6.1(a)(5) has occurred and is continuing, the declaration of acceleration of the Notes shall be automatically annulled if:

(1) the event of default or payment default triggering such Event of Default pursuant to Section 6.1(a)(5) shall be remedied or cured, or waived by the holders of the Indebtedness, or the Indebtedness that gave rise to such Event of Default shall have been discharged in full, in each case, within 30 days after the declaration of acceleration with respect thereto;

(2) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction; and

(3) all existing Events of Default, except nonpayment of principal or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.

(c) If an Event of Default described in Section 6.1(a)(6) or (7) occurs, the principal of, and accrued and unpaid interest on, all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

 

-104-


(d) (i) If a Default for a failure to report, or for a failure to deliver a required certificate in connection with, another Default (the “Initial Default”) occurs, then at the time such Initial Default is cured, such Default for a failure to report or failure to deliver a required certificate in connection with another Default that resulted solely because of that Initial Default shall also be cured without any further action and (ii) any Default or Event of Default for the failure to comply with the time periods prescribed under Section 3.10, or otherwise to deliver any notice or certificate pursuant to any other provision of this Indenture shall be deemed to be cured upon the delivery of any such report required by Section 3.10 or such notice or certificate, as applicable, even though such delivery is not within the prescribed period specified herein.

SECTION 6.3. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, or premium, if any, or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceedings, the Issuer, the Guarantors, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding has been instituted.

SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of all of the Holders, (a) waive, by their consent (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), all past or existing Defaults or Events of Default and its consequences under this Indenture except (i) a Default or Event of Default in the payment of the principal of, or premium, if any, or interest, on a Note or (ii) a Default or Event of Default in respect of a provision that under Section 9.2(b) cannot be amended, supplemented or waived without the consent of each Holder affected and (b) rescind any acceleration with respect to the Notes and its consequences if (1) such rescission would not conflict with any judgment or decree of a court of competent jurisdiction, (2) all existing Events of Default have been cured or waived except nonpayment of principal, premium, if any, or interest that has become due solely because of the acceleration, (3) to the extent the payment of such interest is lawful, interest on overdue installments of interest, premium, if any, and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid and (4) in the event of the cure or waiver of an Event of Default of the type described in clause (4) of Section 6.1(a), the Trustee shall have received an Officer’s Certificate and an Opinion of Counsel stating that such Event of Default has been cured or waived. No such rescission shall affect any subsequent Default or impair any right consequent thereto. When a Default or Event of Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any consequent right.

 

-105-


SECTION 6.5. Control by Majority. The Holders of a majority in principal amount of the outstanding Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or the Notes or, subject to Sections 7.1 and 7.2, that the Trustee determines is unduly prejudicial to the rights of other Holders (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not any actions are unduly prejudicial to such other Holders) or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any such action hereunder, the Trustee shall be entitled to indemnification or security satisfactory to it against all fees, losses and expenses (including attorney’s fees and expenses) that may be caused by taking or not taking such action.

SECTION 6.6. Limitation on Suits. If an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given the Trustee written notice that an Event of Default is continuing;

(2) Holders of at least 30% in principal amount of the outstanding Notes have requested in writing the Trustee to pursue the remedy;

(3) such Holders have offered in writing the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt of the written request and the offer of security or indemnity; and

(5) the Holders of a majority in principal amount of the outstanding Notes have not given the Trustee a written direction that, in the opinion of the Trustee, is inconsistent with such request within such 60-day period.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture (including, without limitation, Section 6.6), the right of any Holder to receive payment of principal of, premium, if any, or interest, if any, on the Notes held by such Holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

-106-


SECTION 6.8. Collection Suit by Trustee. If an Event of Default specified in Section 6.1(a)(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.7.

SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders allowed in any judicial proceedings relative to Holdings, the Issuer, its Subsidiaries or its or their respective creditors or properties and, unless prohibited by law or applicable regulations, may be entitled and empowered to participate as a member of any official committee of creditors appointed in such matter and may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.7. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7 hereof out of the estate in any such proceeding, shall be unpaid for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.

No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

SECTION 6.10. Priorities.

(a) If the Trustee collects any money or property pursuant to this Article VI it shall pay out the money or property in the following order:

FIRST: to the Trustee for amounts due to it under Section 7.7;

SECOND: to Holders for amounts due and unpaid on the Notes for principal of, or premium, if any, and interest ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal of, or premium, if any, and interest, respectively; and

THIRD: to the Issuer, or to the extent the Trustee collects any amount from any Guarantor, to such Guarantor.

 

-107-


(b) The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. At least fifteen (15) days before such record date, the Issuer shall send or cause to be sent to each Holder and the Trustee a notice that states the record date, the payment date and amount to be paid.

SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by the Issuer, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in outstanding principal amount of the Notes.

ARTICLE VII

TRUSTEE

SECTION 7.1. Duties of Trustee.

(a) If an Event of Default has occurred and is continuing of which a Trust Officer has actual knowledge or of which written notice has been provided to a Trust Officer as described in Section 7.2(f), the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise as a prudent Person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth as duties of the Trustee in this Indenture or the Notes, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, opinions or orders furnished to the Trustee and conforming to the requirements of this Indenture or the Notes, as the case may be. However, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture or the Notes, as the case may be (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that:

(1) this Section 7.1(c) does not limit the effect of Section 7.1(b);

 

-108-


(2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts;

(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5; and

(4) no provision of this Indenture or the Notes shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or thereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(d) Every provision of this Indenture that in any way relates to the Trustee is subject to clauses (a), (b) and (c) of this Section 7.1.

(e) The Trustee shall not be liable for interest or investment income on any money received by it except as the Trustee may agree in writing with the Issuer.

(f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section 7.1.

(h) The permissive rights or powers of the Trustee to do things enumerated in the Indenture shall not be construed as a duty of the Trustee.

SECTION 7.2. Rights of Trustee. Subject to Section 7.1:

(a) The Trustee may conclusively rely on and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order or other paper or document (whether in its original or facsimile form) reasonably believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall receive and retain financial reports and statements of the Issuer as provided herein, but shall have no duty to review or analyze such reports or statements to determine compliance with covenants or other obligations of the Issuer.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.

(c) The Trustee may execute any of the trusts and powers hereunder or perform any duties hereunder either directly or by or through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care by it hereunder.

 

-109-


(d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers conferred upon it by this Indenture.

(e) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel relating to this Indenture or the Notes shall be full and complete authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder or under the Notes in good faith and in reliance on the advice or opinion of such counsel.

(f) The Trustee shall not be deemed to have notice of any Default or Event of Default or whether any entity or group of entities constitutes a Significant Subsidiary unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice by the Issuer or by a Holder of the Notes of any event which is in fact such a Default or of any such Significant Subsidiary is received by a Trust Officer at the Corporate Trust Office of the Trustee specified in Section 3.11, and such notice references the Notes and this Indenture.

(g) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be compensated, reimbursed and indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, each Agent and to each agent, custodian and other Person employed to act hereunder.

(h) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture or the Notes at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which may be incurred therein or thereby.

(i) The Trustee shall not be deemed to have knowledge of any fact or matter unless such fact or matter is actually known to a Trust Officer of the Trustee or if written notice has been provided to a Trust Officer as described in Section 7.2(f).

(j) Whenever in the administration of this Indenture or the Notes the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder or thereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith or willful misconduct on its part, conclusively rely upon an Officer’s Certificate.

(k) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, report, notice, request, direction, consent, order, bond, debenture, coupon or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine, during business hours and upon reasonable notice, the books, records and premises of Holdings and the Restricted Subsidiaries, personally or by agent or attorney at the sole cost of the Issuer and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(l) The Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder.

 

-110-


(m) The Trustee may request that the Issuer deliver an Officer’s Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture or the Notes.

(n) In no event shall the Trustee be liable to any Person for special, punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including, but not limited to, lost profits), even if the Trustee has been advised of the likelihood of such loss or damage.

(o) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Issuer shall be sufficient if signed by one Officer of the Issuer or sufficiently evidenced by an Officer’s Certificate or by an Issuer Order, and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution.

(p) The Trustee shall have the right, but shall not be required, to rely upon and comply with instructions and directions sent by e-mail, facsimile and other similar unsecured electronic methods by persons believed by the Trustee to be authorized to give instructions and directions on behalf of the Issuer, the Guarantors or any Person. The Trustee shall have no duty or obligation to verify or confirm that the Person who sent such instructions or directions is, in fact, a Person authorized to give instructions or directions on behalf of the Issuer or Guarantors; and the Trustee shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by the Issuer or Guarantors as a result of such reliance upon or compliance with such instructions or directions. The Issuer or Guarantors agree to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee, including, without limitation, the risk of the Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.

SECTION 7.3. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer, Guarantors or their Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. In addition, the Trustee shall be permitted to engage in transactions with the Issuer; provided, however, that if the Trustee acquires any conflicting interest as defined by the Trust Indenture Act, the Trustee must (i) eliminate such conflict within 90 days of acquiring such conflicting interest or (ii) resign.

SECTION 7.4. Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes or the Note Guarantees, shall not be accountable for the Issuer’s use of the proceeds from the sale of the Notes, shall not be responsible for the use or application of any money received by any Paying Agent (other than the Trustee to the extent the Trustee is the Paying Agent) or any money paid to the Issuer or upon the Issuer’s direction pursuant to the terms of this Indenture and shall not be responsible for any statement of the Issuer in this Indenture, in the Offering Circular or in any document issued in connection with the sale of the Notes or in the Notes (other than, in the case of the Trustee, the Trustee’s certificate of authentication).

SECTION 7.5. Notice of Defaults. If a Default or Event of Default occurs and is continuing and the Trustee is informed in writing of such occurrence by the Issuer, the Trustee

 

-111-


must give notice of the Default or Event of Default to the Holders within 60 days after being notified by the Issuer. Except in the case of a Default or Event of Default in payment of principal of, or premium, if any, or interest on any Note, the Trustee may withhold notice if and so long as the Trustee in good faith determines that withholding notice is in the interests of the Holders.

SECTION 7.6. Reports by Trustee to Holders. Within 60 days after each December 31 beginning December 31, 2015, the Trustee shall mail to each Holder a brief report dated as of such December 31 that complies with Section 313(a) of the Trust Indenture Act if and to the extent required thereby. The Trustee also shall comply with Section 313(c) of the Trust Indenture Act.

A copy of each report at the time of its mailing to Holders shall be filed with the SEC and each stock exchange (if any) on which the Notes are listed. The Issuer agrees to notify the Trustee promptly in writing whenever the Notes become listed on any stock exchange and of any delisting thereof and the Trustee shall comply with Section 313(d) of the Trust Indenture Act.

SECTION 7.7. Compensation and Indemnity. The Issuer and Guarantors shall, jointly and severally, pay to the Trustee from time to time compensation for its services hereunder and under the Notes as the Issuer and the Trustee shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer and Guarantors shall, jointly and severally, reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including, but not limited to, costs of collection, costs of preparing reports, certificates and other documents, costs of preparation and mailing or sending of notices to Holders. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the agents, counsel, accountants and experts of the Trustee. The Issuer and the Guarantors shall jointly and severally indemnify the Trustee against any and all fees, loss, liability, damages, claims or expense, including taxes (other than taxes based upon the income of the Trustee) (including reasonable attorneys’ and agents’ fees and expenses) incurred by it without willful misconduct or gross negligence, as determined by a final non-appealable order of a court of competent jurisdiction, on its part in connection with the administration of this trust and the performance of its duties hereunder and under the Notes, including the fees, costs and expenses of enforcing this Indenture (including this Section 7.7), the Note Guarantees and the Notes and of defending itself against any claims (whether asserted by any Holder, the Issuer, the Guarantors or otherwise). The Trustee shall notify the Issuer promptly of any claim for which it may seek indemnity of which it has received written notice. Failure by the Trustee to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall defend the claim and the Trustee shall provide reasonable cooperation at the Issuer’s expense in the defense. The Trustee may have separate counsel and the Issuer shall pay the reasonable fees and expenses of such counsel. The Issuer and the Guarantors need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. All indemnifications and releases from liability granted hereunder to the Trustee shall extend to its officers, directors, employees, custodians, successors and assigns.

To secure the Issuer’s and Guarantors’ payment obligations in this Section 7.7, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the

 

-112-


Trustee. Such lien shall survive the satisfaction and discharge of this Indenture. The Trustee’s respective right to receive payment of any amounts due under this Section 7.7 shall not be subordinate to any other liability or Indebtedness of the Issuer.

The Issuer’s payment obligations pursuant to this Section 7.7 shall survive the payment of the Notes and the discharge of this Indenture and the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs fees, expenses or renders services after the occurrence of a Default specified in Section 6.1(a)(6) or (a)(7), the fees and expenses (including the reasonable fees and expenses of its counsel) are intended to constitute expenses of administration under any Bankruptcy Law. “Trustee” for the purposes of this Section 7.7 shall include any predecessor Trustee and the Trustee in each of its capacities hereunder and each agent, custodian and other person employed to act hereunder; provided, however, that the gross negligence or willful misconduct of any Trustee hereunder shall not affect the rights of any other Trustee hereunder.

SECTION 7.8. Replacement of Trustee. The Trustee may resign at any time by so notifying the Issuer in writing not less than 30 days prior to the effective date of such resignation. The Holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the removed Trustee in writing not less than 30 days prior to the effective date of such removal and may appoint a successor Trustee with the Issuer’s written consent, which consent will not be unreasonably withheld. The Issuer shall remove the Trustee (and any Holder that has been a bona fide Holder for not less than six months may petition any court for removal of the Trustee and appointment of a successor Trustee) if:

(1) the Trustee fails to comply with Section 7.10;

(2) the Trustee is adjudged bankrupt or insolvent;

(3) a receiver or other public officer takes charge of the Trustee or its property;

(4) the Trustee otherwise becomes incapable of acting as trustee hereunder; or

(5) the Trustee acquires a conflicting interest, as defined by the Trust Indenture Act.

If the Trustee resigns or is removed by the Issuer (or a bona fide Holder described above) or by the Holders of a majority in principal amount of the Notes and such Holders do not reasonably promptly appoint a successor Trustee as described in the preceding paragraph, or if a vacancy exists in the office of the Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail or send a notice of its succession to Holders. The retiring Trustee shall, at the expense of the Issuer, promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.7.

 

-113-


If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of the Notes may petition, at the Issuer’s expense, any court of competent jurisdiction for the appointment of a successor Trustee.

Notwithstanding the replacement of the Trustee pursuant to this Section 7.8, the Issuer’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee. The predecessor Trustee shall have no liability for any action or inaction of any successor Trustee.

SECTION 7.9. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; provided that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Notes in the name of any predecessor Trustee shall only apply to its successor or successors by merger, consolidation or conversion.

SECTION 7.10. Eligibility; Disqualification. There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50.0 million as set forth in its most recent published annual report of condition.

SECTION 7.11. Preferential Collection of Claims Against the Issuer. The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A Trustee who has resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the extent indicated.

SECTION 7.12. Trustee’s Application for Instruction from the Issuer. Any application by the Trustee for written instructions from the Issuer may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three (3) Business Days after the date any Officer of the Issuer actually receives such application, unless any such Officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

 

-114-


ARTICLE VIII

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

SECTION 8.1. Option to Effect Legal Defeasance or Covenant Defeasance; Defeasance. The Issuer may, at its option and at any time, elect to have either Section 8.2 or Section 8.3 be applied to all outstanding Notes upon compliance with the conditions set forth in this Article VIII.

SECTION 8.2. Legal Defeasance and Discharge. Upon the Issuer’s exercise under Section 8.1 of the option applicable to this Section 8.2, the Issuer and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.4, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set forth in Section 8.4 are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Issuer and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.5 and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all of their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee, on written demand of and at the expense of the Issuer, shall execute proper instruments acknowledging the same) and to have cured all then existing Events of Default, except for the following provisions which will survive until otherwise terminated or discharged hereunder:

(1) the rights of Holders of Notes issued under this Indenture to receive payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due solely out of the trust referred to in Section 8.4;

(2) the Issuer’s obligations with respect to the Notes under Article II concerning issuing temporary Notes, registration of such Notes, mutilated, destroyed, lost or stolen Notes and Section 3.11 concerning the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties, indemnities and immunities of the Trustee and the Issuer’s or Guarantors’ obligations in connection therewith; and

(4) this Article VIII with respect to provisions relating to Legal Defeasance.

Subject to compliance with this Section 8.2, the Issuer may exercise its option under this Section 8.2 notwithstanding the prior exercise of its option under Section 8.3.

SECTION 8.3. Covenant Defeasance. Upon the Issuer’s exercise under Section 8.1 of the option applicable to this Section 8.3, the Issuer and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.4, be released from each of their obligations under the covenants contained in Section 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.14, 3.17, 3.18, 3.19 and Section 4.1 (except Section 4.1(a)(1) and (a)(2)) with respect to the outstanding Notes on and after the date of the conditions set forth in Section 8.4 are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed not “outstanding” for the

 

-115-


purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but will continue to be deemed “outstanding” for all other purposes hereunder. For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Note Guarantees, the Issuer and the Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.1(a), but, except as specified in this Section 8.3, the remainder of this Indenture and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Issuer’s exercise under Section 8.1 of the option applicable to this Section 8.3, subject to the satisfaction of the conditions set forth in Section 8.4, Sections 6.1(a)(3) (solely with respect to the defeased covenants listed above), 6.1(a)(4) (solely with respect to the defeased covenants listed above), 6.1(a)(5), 6.1(a)(6) (with respect only to a Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that taken together would constitute a Significant Subsidiary), 6.1(a)(7) (with respect only to a Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that taken together would constitute a Significant Subsidiary) and 6.1(a)(8) shall not constitute Events of Default. In addition, upon the occurrence of Covenant Defeasance, the Note Guarantees shall terminate as provided in Section 10.2 and, as a result, the Event of Default specified in Section 6.1(a)(9) shall cease to apply upon the occurrence of Covenant Defeasance.

SECTION 8.4. Conditions to Legal or Covenant Defeasance. In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.2 or 8.3:

(1) the Issuer must irrevocably deposit in trust with the Trustee (the “Defeasance Trust”), for the benefit of the Holders, cash in United States Dollars or U.S. Government Obligations or a combination thereof in such amounts as will be sufficient (without consideration of any reinvestment of interest), in the opinion of an Independent Financial Advisor delivered to the Trustee, to pay the principal, premium, if any and interest due on the Notes on the stated maturity date or on the applicable redemption date, as the case may be, and the Issuer must specify whether such Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance pursuant to Section 8.2, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States confirming that, subject to customary assumptions and exclusions:

(i) the Issuer has received from, or there has been published by, the United States Internal Revenue Service a ruling; or

(ii) since the issuance of the Initial Notes, there has been a change in the applicable U.S. federal income tax law

in either case stating that, and based thereon such Opinion of Counsel in the United States shall confirm that, subject to customary assumptions and exclusions, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

 

-116-


(3) in the case of Covenant Defeasance pursuant to Section 8.3, the Issuer shall have delivered to the Trustee an Opinion of Counsel in the United States stating that, subject to customary assumptions and exclusions, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) no Default or Event of Default (other than that resulting from borrowing funds to be applied to make such deposit and the granting of Liens in connection therewith) shall have occurred and be continuing on the date of such deposit;

(5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under any Credit Facilities or any other material agreement or instrument (other than this Indenture) to which, the Issuer or any Guarantor is a party or by which the Issuer or any Guarantor is bound;

(6) the Issuer shall have delivered to the Trustee an Officer’s Certificate stating that the deposit was not made by the Issuer with the intent of defeating, hindering, delaying, defrauding or preferring any creditors of the Issuer; and

(7) the Issuer shall have delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent provided for or relating to Legal Defeasance or Covenant Defeasance, as the case may be, have been complied with.

SECTION 8.5. Deposited Money and U.S. Government Obligations to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.6, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.5, the “Trustee”) pursuant to Section 8.4 in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law.

The Issuer will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or U.S. Government Obligations deposited pursuant to Section 8.4 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

Notwithstanding anything in this Article VIII to the contrary, the Trustee will deliver or pay to the Issuer from time to time upon the request of the Issuer any money or U.S. Government

 

-117-


Obligations held by it as provided in Section 8.4 which, in the opinion of an Independent Financial Advisor in a written certification thereof delivered to the Trustee (which may be the Independent Financial Advisor delivering the opinion delivered under Section 8.4(1)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.6. Repayment to the Issuer. Subject to the requirements of any applicable abandoned property laws, any money deposited with the Trustee or any Paying Agent, or then held by the Issuer, in trust for the payment of the principal of, premium, if any, or interest on, any Note and remaining unclaimed for two years after such principal, premium, if any, or interest has become due and payable shall be paid to the Issuer on its written request unless an abandoned property law designates another Person or (if then held by the Issuer) will be discharged from such trust; and the Holder of such Note will thereafter be permitted to look only to the Issuer for payment thereof unless an abandoned property law designates another Person, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Issuer as trustee thereof, will thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Issuer cause to be published once, in The New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which will not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Issuer.

SECTION 8.7. Reinstatement. If the Trustee or Paying Agent is unable to apply any money or United States Dollars or U.S. Government Obligations in accordance with Section 8.2 or Section 8.3, as the case may be, by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting such application, then the Issuer’s and the Guarantors’ obligations under the Note Documents, the Note Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.2 or Section 8.3 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.2 or Section 8.3, as the case may be; provided, however, that, if the Issuer makes any payment of principal of, premium, if any, or interest on, any Note following the reinstatement of its obligations, the Issuer will be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

ARTICLE IX

AMENDMENTS

SECTION 9.1. Without Consent of Holders. Notwithstanding Section 9.2, without the consent of any Holder, the Issuer, the Trustee and the other parties thereto, as applicable, may amend or supplement any Note Documents and the Issuer may direct the Trustee, and the Trustee will, enter into an amendment to any Note Document, to:

(1) cure any ambiguity, omission, mistake, defect, error or inconsistency, conform any provision of a Note Document to the “Description of the Notes” in the Offering Circular or reduce the minimum denomination of the Notes;

 

-118-


(2) provide for the assumption by a successor Person of the obligations of the Issuer under any Note Document;

(3) provide for uncertificated Notes in addition to or in place of certificated Notes;

(4) add to the covenants or provide for a Note Guarantee for the benefit of the Holders or surrender any right or power conferred upon Holdings or any Restricted Subsidiary;

(5) make any change that does not adversely affect the rights of any Holder in any material respect;

(6) comply with any requirement of the SEC in connection with the qualification of this Indenture under the Trust Indenture Act, if such qualification is required;

(7) make such provisions as necessary (as determined in good faith by the Issuer) for the issuance of Additional Notes otherwise permitted to be issued under this Indenture;

(8) provide for any Restricted Subsidiary to provide a Note Guarantee in accordance with Section 3.2, to add Guarantees with respect to the Notes, to add security to or for the benefit of the Notes, or to confirm and evidence the release, termination, discharge or retaking of any Guarantee or Lien with respect to or securing the Notes when such release, termination, discharge or retaking is provided for under this Indenture;

(9) evidence and provide for the acceptance and appointment under this Indenture of a successor Trustee pursuant to the applicable requirements hereof or to provide for the accession by the Trustee to any Note Document;

(10) comply with the rules of any applicable securities depositary; or

(11) make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including to facilitate the issuance and administration of Notes; provided, however, that (i) compliance with this Indenture as so amended would not result in Notes being transferred in violation of the Securities Act or any applicable securities law and (ii) such amendment does not adversely affect the rights of Holders to transfer Notes in any material respect.

Subject to Section 9.2, upon the request of the Issuer accompanied by a Board Resolution authorizing the execution of any such amendment or supplement to the applicable Note Document, and upon receipt by the Trustee of the documents described in Section 9.6 and Section 12.4, the Trustee will join with the Issuer and the Guarantors in the execution of such amendment or supplement unless such amendment or supplement directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amendment or supplement.

 

-119-


After an amendment or supplement under this Section 9.1 becomes effective, the Issuer shall mail or otherwise deliver to Holders a notice briefly describing such amendment or supplement. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment or supplement under this Section 9.1.

SECTION 9.2. With Consent of Holders.

(a) Except as otherwise provided in this Section 9.2, the Note Documents may be amended, supplemented or otherwise modified with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, such Notes), and, subject to Sections 6.4 and 6.7, any existing Default or Event of Default or compliance with any provisions thereof may be waived with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a purchase of, or tender offer or exchange offer for, such Notes). Section 2.12 and Section 12.6 shall determine which Notes are considered to be “outstanding” for the purposes of this Section 9.2.

Upon the request of the Issuer accompanied by a resolution of its Board of Directors authorizing the execution of any such amendment, supplement or waiver to the applicable Note Document, and upon the filing with the Trustee of evidence of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Sections 9.6 and 12.4, the Trustee will join with the Issuer and the Guarantors in the execution of such amendment, supplement or waiver unless such amendment, supplement or waiver directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amendment, supplement or waiver.

(b) Without the consent of each affected Holder of Notes, an amendment, supplement, modification or waiver may not:

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the stated rate of or extend the stated time for payment of interest on any Note;

(3) reduce the principal of or change the Stated Maturity of any Note;

(4) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed, in each case as set forth in Section 5.7;

(5) amend, change or modify the obligation of the Issuer to make and consummate an Asset Disposition Offer in accordance Section 3.5 after the obligation to make such Asset Disposition Offer has arisen, or the obligation of the Issuer to make and consummate a Change of Control Offer in the event of a Change of Control in accordance with Section 3.9 after such Change of Control has occurred, including, in each case, amending, changing or modifying any definition relating thereto;

 

-120-


(6) make any Note payable in currency other than that stated in such Note;

(7) impair the right of any Holder to receive payment of principal of and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any such payment on or with respect to such Holder’s Notes;

(8) waive a Default or Event of Default with respect to the nonpayment of principal, premium or interest (except pursuant to a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);

(9) make any change in the ranking of any Note that would adversely affect the Holders;

(10) [Reserved];

(11) make any change to the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders to receive payments of principal of, or premium, if any, or interest on the Notes;

(12) release any Guarantor from its obligations under its Note Guarantee or under this Indenture, except in accordance with the express terms of this Indenture or such Note Guarantee; or

(13) make any change to Section 9.2(a) or this Section 9.2(b).

(c) The consent of the Holders is not necessary under this Indenture to approve the particular form of any proposed amendment, supplement or waiver of any Note Document. It is sufficient if such consent approves the substance of the proposed amendment, supplement or waiver. A consent to any amendment, supplement or waiver under this Indenture by any Holder of Notes given in connection with a tender of such Holder’s Notes will not be rendered invalid by such tender.

(d) After an amendment, supplement or waiver under this Section 9.2 becomes effective, the Issuer shall mail or send to Holders a notice briefly describing such amendment, supplement or waiver. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment, supplement or waiver.

(e) Neither the Issuer nor any Affiliate of the Issuer may, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to all Holders and is paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement.

SECTION 9.3. [Reserved].

 

-121-


SECTION 9.4. Revocation and Effect of Consents and Waivers. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to such Holder’s Note or portion of its Note if the Trustee receives written notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described in this Section 9.4 or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date.

SECTION 9.5. Notation on or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Issuer in exchange for all Notes may issue and the Trustee shall, upon receipt of an Issuer Order, authenticate new Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.

SECTION 9.6. Trustee to Sign Amendments. The Trustee shall sign any amendment, supplement or waiver to any Note Document authorized pursuant to this Article IX if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Issuer may not sign an amendment, supplement or waiver to any Note Document until the Board of Directors of the Issuer approves it. In executing any amendment, supplement or waiver to any Note Document, the Trustee shall receive and (subject to Sections 7.1 and 7.2) shall be fully protected in conclusively relying upon, in addition to the documents required by Section 12.4, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amendment, supplement or waiver is authorized or permitted by this Indenture and is valid, binding and enforceable against the Issuer or any Guarantor, as the case may be, in accordance with its terms.

ARTICLE X

GUARANTEE

SECTION 10.1. Guarantee. The obligations of the Issuer under the Notes and this Indenture shall be, jointly and severally, unconditionally guaranteed on a senior unsecured basis (the “Note Guarantees”) by the Guarantors. Subject to the provisions of this Article X, each Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally with each other Guarantor, to each Holder of the Notes

 

-122-


and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the principal of, premium, if any, and interest, if any, on the Notes and all other obligations and liabilities of the Issuer under the Note Documents (including without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Issuer or any Guarantor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and the obligations under Section 7.7) (all the foregoing being hereinafter collectively called the “Guaranteed Obligations”). Each Guarantor agrees that the Guaranteed Obligations will rank equally in right of payment with other Indebtedness of such Guarantor, except to the extent such other Indebtedness is subordinate to the Guaranteed Obligations, in which case the obligations of the Guarantors under the Note Guarantees will rank senior in right of payment to such other Indebtedness.

Each Guarantor hereby agrees that its Note Guarantee set forth in this Section 10.1 shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Guarantee on the Notes.

If an Officer whose signature is on the applicable supplemental indenture to this Indenture no longer holds that office at the time the Trustee authenticates the Note, the Note Guarantee shall be valid nevertheless.

Each Guarantor further agrees (to the extent permitted by law) that the Guaranteed Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it will remain bound under this Article X notwithstanding any extension or renewal of any Guaranteed Obligation.

Each Guarantor waives presentation to, demand of payment from and protest to the Issuer of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each Guarantor waives notice of any default under the Notes or the Guaranteed Obligations.

Each Guarantor further agrees that its Note Guarantee herein constitutes a Guarantee of payment when due (and not a Guarantee of collection) and waives any right to require that any resort be had by any Holder to any security held for payment of the Guaranteed Obligations.

Except as set forth in Section 10.2, the obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Guaranteed Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise. Without limiting the generality of the foregoing, the Guaranteed Obligations of each Guarantor herein shall not be discharged or impaired or otherwise affected by (a) the failure of the Trustee or any Holder to assert any claim or demand or to enforce any right or remedy against the Issuer or any other person under this Indenture, the Notes or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (d) the release of any security held by any Holder for the Guaranteed Obligations; (e) the failure of the Trustee or any Holder to exercise

 

-123-


any right or remedy against any other Guarantor; (f) any change in the ownership of the Issuer; (g) any default, failure or delay, willful or otherwise, in the performance of the Guaranteed Obligations; or (h) any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Guarantor or would otherwise operate as a discharge of such Guarantor as a matter of law or equity.

Each Guarantor agrees that its Note Guarantee herein shall remain in full force and effect until payment in full of all the Guaranteed Obligations or such Guarantor is released from its Note Guarantee in compliance with Section 10.2, Article VIII or Article XI. Each Guarantor further agrees that its Note Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of, premium, if any, or interest on any of the Guaranteed Obligations is rescinded or must otherwise be restored by any Holder upon the bankruptcy or reorganization of the Issuer or otherwise.

In furtherance of the foregoing and not in limitation of any other right which any Holder has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Issuer to pay any of the Guaranteed Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, each Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders (or the Trustee on behalf of the Holders) an amount equal to the sum of (i) the unpaid amount of such Guaranteed Obligations then due and owing and (ii) accrued and unpaid interest, if any, on such Guaranteed Obligations then due and owing (but only to the extent not prohibited by law) (including interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Issuer or any Guarantor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding).

Each Guarantor further agrees that, as between such Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity of the Guaranteed Obligations guaranteed hereby may be accelerated as provided in this Indenture for the purposes of its Note Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guaranteed Obligations guaranteed hereby and (y) in the event of any such declaration of acceleration of such Guaranteed Obligations, such Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purposes of this Note Guarantee.

Each Guarantor also agrees to pay any and all fees, costs and expenses (including attorneys’ fees and expenses) incurred by the Trustee or the Holders in enforcing any rights under this Section 10.1.

SECTION 10.2. Limitation on Liability; Termination, Release and Discharge.

(a) Any term or provision of this Indenture to the contrary notwithstanding, the obligations of each Guarantor hereunder will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Note Guarantee or pursuant to its contribution

 

-124-


obligations under this Indenture, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, foreign or state law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally.

(b) The Note Guarantee of a Subsidiary Guarantor shall automatically terminate upon:

(1) a sale or other disposition (including by way of consolidation or merger) of the Capital Stock of such Subsidiary Guarantor after which such Subsidiary Guarantor is no longer a Subsidiary of Holdings but only to the extent such sale or disposition is otherwise permitted under this Indenture;

(2) the designation in accordance with this Indenture of such Subsidiary Guarantor as an Unrestricted Subsidiary;

(3) defeasance or discharge of the Notes pursuant to Article VIII or XI; or

(4) in the case of a Note Guarantee made by a Subsidiary Guarantor as a result of its Guarantee of other Indebtedness of the Issuer or a Guarantor pursuant to Section 3.7, such Guarantor being released from all of its obligations under its Guarantee of such other Indebtedness, except a release as a result of the repayment or discharge of such other Indebtedness (it being understood that a release or discharge subject to a contingent reinstatement is still considered a release or discharge, and if any such other Indebtedness is reinstated, such Note Guarantee shall also be reinstated).

(c) The Note Guarantee of Holdings or any other direct or indirect parent of the Issuer that provides a Guarantee will terminate upon defeasance or discharge of the Notes, pursuant to Article VIII or Article XI.

(d) If the Note Guarantee of any Guarantor is terminated, the Issuer shall deliver to the Trustee an Officer’s Certificate stating the identity of the Guarantor, the basis for termination in reasonable detail, and that such termination complies with this Indenture.

SECTION 10.3. Right of Contribution. Each Guarantor hereby agrees that to the extent that any Guarantor shall have paid more than its proportionate share of any payment made on the obligations under the Note Guarantees, such Guarantor shall be entitled to seek and receive contribution from and against the Issuer or any other Guarantor who has not paid its proportionate share of such payment. The provisions of this Section 10.3 shall in no respect limit the obligations and liabilities of each Guarantor to the Trustee and the Holders and each Guarantor shall remain liable to the Trustee and the Holders for the full amount guaranteed by such Guarantor hereunder.

SECTION 10.4. No Subrogation. Notwithstanding any payment or payments made by each Guarantor hereunder, no Guarantor shall be entitled to be subrogated to any of the rights of the Trustee or any Holder against the Issuer or any other Guarantor or any collateral security or guarantee or right of offset held by the Trustee or any Holder for the payment of the Guaranteed Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or

 

-125-


reimbursement from the Issuer or any other Guarantor in respect of payments made by such Guarantor hereunder, until all amounts owing to the Trustee and the Holders by the Issuer on account of the Guaranteed Obligations are paid in full. If any amount shall be paid to any Guarantor on account of such subrogation rights at any time when all of the Guaranteed Obligations shall not have been paid in full, such amount shall be held by such Guarantor in trust for the Trustee and the Holders, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the Trustee in the exact form received by such Guarantor (duly indorsed by such Guarantor to the Trustee, if required), to be applied against the Guaranteed Obligations.

ARTICLE XI

SATISFACTION AND DISCHARGE

SECTION 11.1. Satisfaction and Discharge. This Indenture will be discharged and cease to be of further effect (except as to surviving rights of transfer or exchange of the Notes the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuer’s and Guarantors’ obligations in connection therewith, and as expressly provided for in this Indenture) as to all outstanding Notes when:

(a) either:

(1) all the Notes previously authenticated and delivered (other than lost, stolen or destroyed Notes and Notes for which provision for payment was previously made and thereafter the funds have been released to the Holders) have been delivered to the Trustee for cancellation; or

(2) all Notes not previously delivered to the Trustee for cancellation (i) have become due and payable, (ii) will become due and payable at their Stated Maturity within one year or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer;

(b) the Issuer has deposited or caused to be deposited with the Trustee, money in United States Dollars or U.S. Government Obligations, or a combination thereof, as applicable, in an amount sufficient (without consideration of any reinvestment of interest) to pay and discharge the entire indebtedness on the Notes not previously delivered to the Trustee for cancellation, for principal, premium, if any, and interest to the date of deposit (in the case of Notes that have become due and payable), or to the Stated Maturity or redemption date, as the case may be;

(c) the Issuer has paid or caused to be paid all other sums payable under this Indenture;

(d) the Issuer has delivered irrevocable instructions to the Trustee to apply the deposited money toward the payment of such notes issued hereunder at maturity or the redemption date, as the case may be; and

 

-126-


(e) the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion of Counsel each stating that all conditions precedent under this Article XI relating to the satisfaction and discharge of this Indenture have been complied with; provided that any such counsel may rely on any Officer’s Certificate as to matters of fact (including as to compliance with the foregoing clauses (a), (b) and (c)).

Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to clause (b) of this Section 11.1, the provisions of Sections 11.2 and 8.6 will survive. After the conditions to discharge contained in this Article XI have been satisfied, and the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer, and delivered to the Trustee an Officer’s Certificate and Opinion of Counsel, each stating that all conditions precedent to satisfaction and discharge have been satisfied, the Trustee upon Issuer Order shall (i) acknowledge in writing the discharge of the obligations of the Issuer and the Guarantors under this Indenture (except for those surviving obligations specified in Section 11.2 and the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Issuer’s and Guarantors’ obligations in connection therewith) and (ii) transfer funds then on deposit with the Trustee in excess of those required for such satisfaction and discharge in accordance with such Issuer Order.

SECTION 11.2. Application of Trust Money. Subject to the provisions of Section 8.6, all money deposited with the Trustee pursuant to Section 11.1 shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with Section 11.1 by reason of any legal proceeding or by reason of any order or judgment of any court or Governmental Authority enjoining, restraining or otherwise prohibiting such application, the Issuer’s and any Guarantor’s obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.1; provided that if the Issuer has made any payment of principal of, premium or interest on, any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

ARTICLE XII

MISCELLANEOUS

SECTION 12.1. [Reserved].

SECTION 12.2. Notices. Any notice, request, direction, consent or communication made pursuant to the provisions of this Indenture or the Notes to any party hereto shall be in writing and delivered in person, sent by facsimile, sent by electronic mail in pdf format,

 

-127-


delivered by commercial courier service or mailed by first-class mail, postage prepaid, addressed as follows:

if to the Issuer or a Guarantor:

Greatbatch Ltd.

10000 Wehrle Drive

Clarence, NY 14031

Attention: General Counsel

Facsimile: (716) 759-5028

in each case, with a copy (which copy shall not constitute notice) to:

Hodgson Russ LLP

The Guaranty Building

140 Pearl Street

Suite 100

Buffalo, NY 14202

Attention: John J. Zak

Facsimile: (716) 819-4623

Email: jzak@hodgsonruss.com

if to the Trustee, at its corporate trust office, which corporate trust office for purposes of this Indenture is at the date hereof located at:

Wilmington Trust, National Association

Capital Markets & Agency Services

1100 N. Market Street, Wilmington, DE 19890

Attention: Capital Markets & Agency Services

Facsimile: (302) 636-4149

The Issuer or the Trustee by written notice to each other may designate additional or different addresses for subsequent notices or communications.

Any notice or communication to the Issuer or the Guarantors shall be deemed to have been given or made as of the date so delivered if personally delivered or if delivered electronically, in pdf format; when receipt is acknowledged, if telecopied; the next Business Day, if sent by overnight mail guaranteeing next day delivery; and four (4) calendar days after mailing if sent by registered or certified mail, postage prepaid (except that a notice of change of address shall not be deemed to have been given until actually received by the addressee). Any notice or communication to the Trustee shall be deemed delivered upon receipt.

Any notice or communication sent to a Holder shall be electronically delivered or mailed to the Holder at the Holder’s address as it appears in the Notes Register and shall be sufficiently given if so sent within the time prescribed.

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is sent in the manner provided above, it is duly given, whether or not the addressee receives it, except that notices to the Trustee shall be effective only upon receipt.

 

-128-


Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event (including any notice of redemption or purchase) to a Holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to DTC (or its designee) pursuant to the standing instructions from DTC or its designee; provided that, if any such notice is mailed to DTC, such notice shall be deemed to have been given on the later of its publication by DTC and the third (3rd) Business Day after being so mailed.

SECTION 12.3. Communication by Holders with other Holders. Holders may communicate with other Holders with respect to their rights under this Indenture or the Notes.

SECTION 12.4. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer or any of the Guarantors to the Trustee to take or refrain from taking any action under this Indenture or the Notes, the Issuer or such Guarantor, as the case may be, shall furnish to the Trustee:

(1) an Officer’s Certificate in form satisfactory to the Trustee (which shall include the statements set forth in Section 12.5) stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture or the Notes relating to the proposed action have been satisfied; and

(2) an Opinion of Counsel in form satisfactory to the Trustee (which shall include the statements set forth in Section 12.5) stating that, in the opinion of such counsel, all such conditions precedent have been satisfied and all covenants have been complied with.

In the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

SECTION 12.5. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture or the Notes shall include:

(1) a statement that the individual making such certificate or opinion has read such covenant or condition;

(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

-129-


(4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officer’s Certificate or on certificates of public officials.

SECTION 12.6. When Notes Disregarded. In determining whether the Holders of the required aggregate principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer, any Guarantor or any Affiliate of any of them shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. In connection with any such direction, waiver or consent, the Issuer shall furnish to the Trustee an Officer’s Certificate listing and identifying all Notes, if any, known by the Issuer to be owned by or for the account of any of the above-described Persons. Also, subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination.

SECTION 12.7. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by, or at meetings of, Holders. The Registrar and the Paying Agent may make reasonable rules for their functions.

SECTION 12.8. Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York, New York or the state of the place of payment. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

SECTION 12.9. Governing Law. THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 12.10. Jurisdiction. The Issuer and the Guarantors agree that any suit, action or proceeding against the Issuer or any Guarantor brought by any Holder or the Trustee arising out of or based upon this Indenture, the Note Guarantees or the Notes may be instituted in any state or Federal court in the Borough of Manhattan, New York, New York, and any appellate court from any thereof, and each of them irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding. The Issuer and the Guarantors irrevocably waive, to the fullest extent permitted by law, any objection to any suit, action, or proceeding that may be brought in connection with this Indenture, the Note Guarantees or the Notes, including such actions, suits or proceedings relating to securities laws of the United States of America or any state thereof, in such courts whether on the grounds of venue, residence or domicile or on the ground that any such suit, action or proceeding has been brought in an inconvenient forum. The Issuer and the Guarantors agree that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the Issuer or the Guarantors, as the case may be, and may be enforced in any court to the jurisdiction of which the Issuer or the Guarantors, as the case may be, are subject by a suit upon such judgment.

 

-130-


SECTION 12.11. Waivers of Jury Trial. EACH OF THE ISSUER, THE GUARANTORS AND THE TRUSTEE HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE NOTE GUARANTEES AND FOR ANY COUNTERCLAIM THEREIN.

SECTION 12.12. USA PATRIOT Act. The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account. The parties to this Indenture agree that they will provide the Trustee with such information as each may request in order to satisfy the requirements of the USA PATRIOT Act.

SECTION 12.13. No Personal Liability of Directors, Officers, Employees and Shareholders. No director, officer, employee, incorporator or shareholder of the Issuer or any of its Subsidiaries or Affiliates, solely in their capacities as such (other than the Issuer and the Guarantors), shall have any liability for any obligations of the Issuer under the Note Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation.

Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

SECTION 12.14. Successors. All agreements of the Issuer and each Guarantor in this Indenture and the Notes shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

SECTION 12.15. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or other electronic transmission shall be deemed to be their original signatures for all purposes.

SECTION 12.16. [Reserved].

SECTION 12.17. Table of Contents; Headings. The table of contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

SECTION 12.18. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural

 

-131-


catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, or other unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility, it being understood that the Trustee shall use reasonable best efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

SECTION 12.19. Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

SECTION 12.20. Waiver of Immunities. To the extent that Issuer or any Guarantor or any of its properties, assets or revenues may have or may hereafter become entitled to, or have attributed to them, any right of immunity, on the grounds of sovereignty, from any legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any court, from service of process, from attachment upon or prior to judgment, or from attachment in aid of execution of judgment, or from execution of judgment, or other legal process or proceeding for the giving of any relief or for the enforcement of any judgment, in any jurisdiction in which proceedings may at any time be commenced, with respect to their obligations, liabilities or any other matter under or arising out of or in connection with this Indenture, the Notes or the Note Guarantees, the Issuer and each Guarantor hereby irrevocably and unconditionally, to the extent permitted by applicable law, waives and agrees not to plead or claim any such immunity and consents to such relief and enforcement.

SECTION 12.21. Judgment Currency. The Issuer and each Guarantor shall jointly and severally indemnify the recipient against any loss incurred by such recipient as a result of any judgment or order being given or made against the Issuer or any Guarantor for any amount due hereunder and such judgment or order being expressed and paid in a currency (the “Judgment Currency”) other than United States Dollars and as a result of any variation as between (i) the rate of exchange at which the United States Dollar amount is converted into the Judgment Currency for the purpose of such judgment or order, and (ii) the rate of exchange in The City of New York at which such party on the date of payment of such judgment or order is able to purchase United States Dollars with the amount of the Judgment Currency actually received by such party if such party had utilized such amount of Judgment Currency to purchase United States dollars as promptly as practicable upon such party’s receipt thereof. The foregoing indemnity shall constitute a separate and independent obligation of the Issuer and each Guarantor and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term “rate of exchange” shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, the relevant currency.

[Signature on following pages]

 

-132-


IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed all as of the date and year first written above.

 

GREATBATCH LTD.
By:  

/s/ Timothy G. McEvoy

Name:   Timothy G. McEvoy
Title:   Senior Vice President, General Counsel and Secretary

 

[Signature Page to the Indenture]


GUARANTORS:
ACCELLENT ACQUISITION CORP.
ACCELLENT HOLDINGS CORP.
ACCELLENT LLC
AMERICAN TECHNICAL MOLDING, INC.
BRIMFIELD ACQUISITION, LLC
BRIMFIELD PRECISION, LLC
CE HUNTSVILLE, LLC
ELECTROCHEM SOLUTIONS, INC.
G&D, LLC
GBV, LLC
GREATBATCH, INC.
GREATBATCH-GLOBE TOOL, INC.
KELCO ACQUISITION LLC
LAKE REGION MANUFACTURING, INC.
LAKE REGION MEDICAL HOLDINGS, INC.
LAKE REGION MEDICAL, INC.
MACHINING TECHNOLOGY GROUP, LLC
MEDSOURCE TECHNOLOGIES HOLDINGS, LLC
MEDSOURCE TECHNOLOGIES PITTSBURGH, INC.
MEDSOURCE TECHNOLOGIES, LLC
MEDSOURCE TECHNOLOGIES, NEWTON INC.
MEDSOURCE TRENTON LLC
MICRO POWER ELECTRONICS, INC.
MICRO-GUIDE, INC.
NATIONAL WIRE & STAMPING, INC.
NEURONEXUS TECHNOLOGIES, INC.
NOBLE-MET LLC
PORTLYN, LLC
PRECIMED INC.
PROVENANCE MERGER SUB INC.
QIG GROUP, LLC
SPECTRUM MANUFACTURING, INC.
THERMAT ACQUISITION LLC
UTI HOLDING COMPANY
UTI HOLDINGS, LLC
VENUSA, LTD.
By:  

/s/ Timothy G. McEvoy

Name:   Timothy G. McEvoy
Title:   Senior Vice President, General Counsel and Secretary

 

[Signature Page to the Indenture]


WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
By:  

/s/ John T. Needham, Jr.

Name:   John T. Needham, Jr.
Title:   Vice President

 

 

[Signature Page to the Indenture]


EXHIBIT A

[FORM OF FACE OF GLOBAL RESTRICTED NOTE]

[Applicable Restricted Notes Legend]

[Depository Legend, if applicable]

[Temporary Regulation S Legend, if applicable]

 

No. [                    ]   

Principal Amount $[        ] [as revised by the Schedule of Increases and Decreases in Global Note attached hereto]1

 

CUSIP NO.                    

ISIN NO.                    

GREATBATCH LTD.

9.125% Senior Notes due 2023

Greatbatch Ltd., a New York corporation (the “Issuer”), promises to pay to Cede & Co., or its registered assigns, the principal sum of              Dollars, [as revised by the Schedule of Increases and Decreases in Global Note attached hereto], on November 1, 2023.

Interest Payment Dates: May 1 and November 1, commencing on May 1, 20162

Record Dates: April 15 and October 15

Additional provisions of this Note are set forth on the other side of this Note.

 

 

1  Insert in Global Notes only.
2  In the case of Notes issued on the Issue Date.

 

A-1


IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed.

 

GREATBATCH LTD.
By:  

 

Name:  
Title:  

 

A-2


TRUSTEE CERTIFICATE OF AUTHENTICATION

This Note is one of the Notes referred to in the within-mentioned Indenture.

 

WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee
By:  

 

  Authorized Signatory

Dated:                                                  

 

A-3


[FORM OF REVERSE SIDE OF NOTE]

GREATBATCH LTD.

9.125% Senior Notes due 2023

Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.

 

1. Interest

The Issuer promises to pay interest on the principal amount of this Note at 9.125% per annum from October 27, 20153 until maturity. The Issuer will pay interest semi-annually in arrears every May 1 and November 1 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each, an “Interest Payment Date”). Interest on the Notes shall accrue from the most recent date to which interest has been paid or, if no interest has been paid, from October 27, 20154; provided, that the first Interest Payment Date shall be May 1, 2016.5 The Issuer shall pay interest on overdue principal at the rate specified herein, and the Issuer shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful. Interest on the Notes will be computed on the basis of a 360-day year comprised of twelve 30-day months. Each interest period will end on (but not include) the relevant Interest Payment Date.

 

2. Method of Payment

By no later than 10:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Note is due and payable, the Issuer shall deposit with the Paying Agent a sum sufficient (in United States Dollars in immediately available funds) to pay such principal, premium, and interest when due. Interest on any Note which is payable, and is timely paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the preceding April 15 or October 15, as applicable, at the office or agency of the Issuer maintained for such purpose pursuant to Section 2.3 of the Indenture. The principal of, premium, if any and interest on the Notes shall be payable at the office or agency of Paying Agent or Registrar designated by the Issuer maintained for such purpose (which shall initially be the office of the Trustee maintained for such purpose), or at such other office or agency of the Issuer as may be maintained for such purpose pursuant to Section 2.3 of the Indenture; provided, however, that, at the option of the Paying Agent, each installment of interest may be paid by (i) check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the Notes Register or (ii) wire transfer to an account located in the United States maintained by the payee, subject to the last sentence of this paragraph. Payments in respect of Notes represented by a Global Note (including principal, premium, if any, and interest) will be made by wire transfer of immediately available funds to the accounts specified by The Depository Trust Company or any successor depository. Payments in respect of Notes represented by Definitive

 

3  In the case of Notes issued on the Issue Date.
4  In the case of Notes issued on the Issue Date.
5 

In the case of Notes issued on the Issue Date.

 

A-4


Notes (including principal, premium, if any, and interest) held by a Holder of at least $1,000,000 aggregate principal amount of Notes represented by Definitive Notes will be made by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than fifteen (15) days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). If an Interest Payment Date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. All payments will be made in United States Dollars.

 

3. Paying Agent and Registrar

The Issuer initially appoints Wilmington Trust, National Association (the “Trustee”) as Registrar and Paying Agent for the Notes. The Issuer may change any Registrar or Paying Agent without prior notice to the Holders. The Issuer or any Guarantor may act as Paying Agent, Registrar or transfer agent.

 

4. Indenture

The Issuer issued the Notes under an Indenture dated as of October 27, 2015 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Issuer, the Guarantors from time to time party thereto and the Trustee. The terms of the Notes include those stated in the Indenture. The Notes are subject to all terms and provisions of the Indenture, and Holders are referred to the Indenture for a statement of those terms.

 

5. Guarantees

To guarantee the due and punctual payment of the principal and interest, if any (including post-filing or post-petition interest) on the Notes and all other amounts payable by the Issuer under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Guarantors will unconditionally guarantee (and future guarantors, jointly and severally with the Guarantors, jointly and severally, will fully and unconditionally Guarantee) such obligations on a senior unsecured basis pursuant to the terms of the Indenture.

 

6. Optional Redemption

(a) At any time and from time to time prior to November 1, 2018, the Issuer may redeem the Notes in whole or in part, at its option, upon notice in accordance with Section 5.3 of the Indenture, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus the Applicable Premium as of, and accrued and unpaid interest, if any, to, but not including, the redemption date.

(b) At any time and from time to time on or after November 1, 2018, the Issuer may redeem the Notes in whole or in part, upon notice in accordance with Section 5.3 of the Indenture, at a redemption price equal to the percentage of principal amount set forth below plus

 

A-5


accrued and unpaid interest, if any, to but not including, the applicable redemption date, if redeemed during the twelve-month period beginning on November 1 of the years indicated below:

 

Year

   Percentage

2018

   106.844%

2019

   104.563%

2020

   102.281%

2021 and thereafter

   100.000%

(c) At any time and from time to time prior to November 1, 2018, the Issuer may redeem Notes, upon notice in accordance with Section 5.3 of the Indenture, with the net cash proceeds from any Equity Offering (other than Excluded Contributions) that are contributed by Holdings to the common equity capital of the Issuer at a redemption price (expressed as a percentage of principal amount) equal to 109.125% plus accrued and unpaid interest, if any, to but not including, the redemption date, in an aggregate principal amount for all such redemptions not to exceed 40% of the original aggregate principal amount of the Notes (including Additional Notes); provided that:

(1) in each case the redemption takes place not later than 90 days after the closing of the related Equity Offering; and

(2) not less than 60% of the original aggregate principal amount of the Notes issued under the Indenture remains outstanding immediately thereafter (excluding Notes held by the Issuer or any of its Restricted Subsidiaries).

(d) Any redemption and notice of any such redemption may, at the Issuer’s discretion, be subject to the satisfaction of one or more conditions precedent (including, in the case of a redemption related to an Equity Offering, the consummation of such Equity Offering).

(e) If the optional redemption date is on or after an interest record date and on or before the related interest payment date, the accrued and unpaid interest will be paid to the Person in whose name the Note is registered at the close of business (New York City time) on such record date, and no additional interest will be payable to Holders whose Notes will be subject to redemption by the Issuer.

(f) Unless the Issuer defaults in the payment of the redemption price, interest will cease to accrue on the Notes or portions thereof called for redemption on the applicable redemption date.

(g) Any redemption pursuant to this paragraph 6 shall be made pursuant to the provisions of Sections 5.1 through 5.6 of the Indenture.

The Issuer is not required to make mandatory redemptions or sinking fund payments with respect to the Notes; provided, however, that under certain circumstances, the Issuer may be required to offer to purchase Notes under Section 3.5 and Section 3.9 of the Indenture. The Issuer may at any time and from time to time purchase Notes in the open market or otherwise.

 

A-6


7. [Reserved]

 

8. Repurchase Provisions

If a Change of Control occurs, subject to Section 3.5(c) of the Indenture, each Holder will have the right to require the Issuer to repurchase from each Holder all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to but not including the date of purchase, subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date as provided in, and subject to the terms of, the Indenture.

Upon certain Asset Dispositions, the Issuer may be required to use the Excess Proceeds from such Asset Dispositions to offer to purchase the maximum aggregate principal amount of Notes and, at the Issuer’s option, Senior Indebtedness that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest to but not including the date of purchase, in accordance with the procedures set forth in, and subject to the terms of, the Indenture.

 

9. Denominations; Transfer; Exchange

The Notes shall be issuable only in fully registered form in minimum denominations of principal amount of $2,000 and any integral multiple of $1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay a sum sufficient to cover any tax and fees required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange of any Note (A) for a period beginning (1) fifteen (15) days before the mailing of a notice of an offer to repurchase or redeem Notes and ending at the close of business on the day of such mailing or sending or (2) fifteen (15) days before an Interest Payment Date and ending on such Interest Payment Date or (B) called for redemption, except the unredeemed portion of any Note being redeemed in part.

 

10. Persons Deemed Owners

The registered Holder of this Note may be treated as the owner of it for all purposes.

 

11. Discharge and Defeasance

Subject to certain exceptions and conditions and the other terms set forth in the Indenture, the Issuer at any time may terminate some or all of its obligations under the Notes and the Indenture if the Issuer deposits with the Trustee money in United States Dollars or U.S. Government Obligations for the payment of principal, premium, if any, and interest, if any on the Notes to redemption or maturity, as the case may be.

 

12. Amendment, Supplement, Waiver

Subject to certain exceptions and other items contained in the Indenture, Note Documents may be amended, supplemented or waived, with the consent of the Holders of a majority in

 

A-7


aggregate principal amount of the outstanding Notes (including consents obtained in connection with a purchase, or tender offer or exchange offer for, such Notes). Without notice to or the consent of any Holder, the Issuer, the Guarantors and the Trustee may amend or supplement the Note Documents as provided in the Indenture.

 

13. Defaults and Remedies

If an Event of Default (other than an Event of Default described in Section 6.1(a)(6) or (7) of the Indenture) occurs and is continuing, the Trustee by notice to the Issuer, or the Holders of at least 30% in principal amount of the outstanding Notes by notice to the Issuer and the Trustee, may declare the principal of, and accrued and unpaid interest, on all the Notes to be due and payable immediately. Upon the effectiveness of such declaration, such principal and accrued and unpaid, interest will be due and payable immediately. If an Event of Default described in Section 6.1(a)(6) or (7) occurs, the principal of, and accrued and unpaid interest on, all the Notes will become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Notes may rescind an acceleration with respect to the Notes and its consequences.

 

14. Trustee Dealings with the Issuer

Subject to certain limitations set forth in the Indenture, the Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer, Guarantors or their Affiliates with the same rights it would have if it were not Trustee. In addition, the Trustee shall be permitted to engage in transactions with the Issuer; provided, however, that if the Trustee acquires any conflicting interest under the Trust Indenture Act, the Trustee must (i) eliminate such conflict within 90 days of acquiring such conflicting interest or (ii) resign.

 

15. No Recourse Against Others

No director, officer, employee, incorporator or shareholder of the Issuer or any of its Subsidiaries or Affiliates, solely in their capacities as such (other than the Issuer and the Guarantors), shall have any liability for any obligations of the Issuer under the Note Documents or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

 

16. Authentication

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent acting on its behalf) manually signs the certificate of authentication on the other side of this Note.

 

17. Abbreviations

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).

 

A-8


18. CUSIP and ISIN Numbers

The Issuer has caused CUSIP and ISIN numbers, if applicable, to be printed on the Notes and has directed the Trustee to use CUSIP and ISIN numbers, if applicable, in notices of redemption or purchase as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption or purchase and reliance may be placed only on the other identification numbers placed thereon.

 

19. Governing Law

This Note shall be governed by, and construed in accordance with, the laws of the State of New York.

The Issuer will furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture. Requests may be made to:

Greatbatch Ltd.

10000 Wehrle Drive

Clarence, NY 14031

Attention: General Counsel

 

A-9


ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to:

 

 

(Print or type assignee’s name, address and zip code)

 

 

(Insert assignee’s social security or tax I.D. No.)

and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.

 

Date:                         Your Signature:   

 

 

Signature Guarantee:   

 

   (Signature must be guaranteed)

 

 

Sign exactly as your name appears on the other side of this Note.

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15.

The undersigned hereby certifies that it ¨ is / ¨ is not an Affiliate of the Issuer and that, to its knowledge, the proposed transferee ¨ is / ¨ is not an Affiliate of the Issuer.

In connection with any transfer or exchange of any of the Notes evidenced by this certificate occurring prior to the date that is one year after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Issuer or any Affiliate of the Issuer, the undersigned confirms that such Notes are being:

CHECK ONE BOX BELOW:

 

(1) ¨ acquired for the undersigned’s own account, without transfer; or

 

(2) ¨ transferred to the Issuer; or

 

(3) ¨ transferred pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”); or

 

(4) ¨ transferred pursuant to an effective registration statement under the Securities Act; or

 

(5) ¨ transferred pursuant to and in compliance with Regulation S under the Securities Act; or

 

A-10


(6) ¨ transferred to an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) or an “accredited investor” (as defined in Rule 501(a)(4) of Regulation D under the Securities Act), that has furnished to the Trustee a signed letter containing certain representations and agreements (the form of which letter appears as Exhibit D of the Indenture, respectively); or

 

(7) ¨ transferred pursuant to another available exemption from the registration requirements of the Securities Act of 1933, as amended.

Unless one of the boxes is checked, the Registrar will refuse to register any of the Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided, however, that if box (5), (6) or (7) is checked, the Issuer may require, prior to registering any such transfer of the Notes, in its sole discretion, such legal opinions, certifications and other information as the Issuer may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, as amended, such as the exemption provided by Rule 144 under such Act.

 

 

     

 

Signature

Signature Guarantee:      
     

 

(Signature must be guaranteed)

     

 

Signature

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15.

TO BE COMPLETED BY PURCHASER IF BOX

(1) OR (3) ABOVE IS CHECKED.

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

 

     

 

Dated:                    

 

A-11


[TO BE ATTACHED TO GLOBAL NOTES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTES

The following increases or decreases in this Global Note have been made:

 

Date of Exchange

   Amount
of
decrease
in
Principal
Amount
of this
Global
Note
   Amount
of
increase
in
Principal
Amount
of this
Global
Note
   Principal
Amount
of this
Global
Note
following
such
decrease
or
increase
   Signature
of
authorized
signatory
of Trustee
or Notes
Custodian
           
           
           

 

A-12


OPTION OF HOLDER TO ELECT PURCHASE

If you elect to have this Note purchased by the Issuer pursuant to Section 3.5 or 3.9 of the Indenture, check either box:

Section 3.5  ¨ Section 3.9  ¨

If you want to elect to have only part of this Note purchased by the Issuer pursuant to Section 3.5 or 3.9 of the Indenture, state the amount in principal amount (must be in denominations of $2,000 or an integral multiple of $1,000 in excess thereof): $ and specify the denomination or denominations (which shall not be less than the minimum authorized denomination) of the Notes to be issued to the Holder for the portion of the within Note not being repurchased (in the absence of any such specification, one such Note will be issued for the portion not being repurchased):

 

Date:                         Your Signature   

 

      (Sign exactly as your name appears on the other side of the Note)

 

Signature Guarantee:   

 

   (Signature must be guaranteed)

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15.

 

A-13


EXHIBIT B

Form of Supplemental Indenture

SUPPLEMENTAL INDENTURE, (this “Supplemental Indenture”) dated as of [            ], 20[    ], by and among Greatbatch Ltd., a New York corporation (“Issuer”), the parties that are signatories hereto as Guarantors (each a “Guaranteeing Subsidiary”) and Wilmington Trust, National Association, as Trustee under the Indenture referred to below.

W I T N E S S E T H:

WHEREAS, each of the Issuer, the Guarantors party thereto and the Trustee have heretofore executed and delivered an indenture dated as of October 27, 2015 (as amended, supplemented, waived or otherwise modified, the “Indenture”), providing for the issuance on such date of an aggregate principal amount of $360,000,000 of 9.125% Senior Notes due 2023 (the “Notes”) of the Issuer;

WHEREAS, the Indenture provides that the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall unconditionally guarantee all of the Issuer’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein and under the Indenture (the “Note Guarantee”), each on the terms and conditions set forth herein; and

WHEREAS, pursuant to Section 9.1 of the Indenture, the Issuer, any Guarantor and the Trustee are authorized to execute and deliver this Supplemental Indenture to amend or supplement the Indenture, without the consent of any Holder;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Issuer, the Guaranteeing Subsidiaries and the Trustee mutually covenant and agree for the benefit of each other and for the equal and proportionate benefit of all Holders of the Notes as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1. Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recitals hereto are used herein as therein defined. The words “herein,” “hereof’ and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any particular section hereof.

ARTICLE II

AGREEMENT TO BE BOUND; GUARANTEE

SECTION 2.1. Agreement to be Bound. Each of the Guaranteeing Subsidiaries hereby becomes a party to the Indenture as a “Guarantor” and a “Subsidiary Guarantor” and as such will have all of the rights and be subject to all of the obligations and agreements of a “Guarantor” and a “Subsidiary Guarantor” under the Indenture.

 

B-1


SECTION 2.2. Guarantee. Each of the Guaranteeing Subsidiaries agrees, on a joint and several basis with all the existing Guarantors, to fully, unconditionally and irrevocably Guarantee to each Holder of the Notes and the Trustee the Guaranteed Obligations pursuant to Article X of the Indenture as and to the extent provided for therein.

ARTICLE III

MISCELLANEOUS

SECTION 3.1. Notices. All notices and other communications to the Guarantors shall be given as provided in the Indenture.

SECTION 3.2. Merger and Consolidation. Each Guaranteeing Subsidiary shall not sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into, another Person (other than the Issuer or any Restricted Subsidiary that is a Guarantor or becomes a Guarantor concurrently with the transaction) except in accordance with Section 4.1(f) of the Indenture.

SECTION 3.3. Release of Guarantee. The Note Guarantees hereunder may be released in accordance with Section 10.2 of the Indenture.

SECTION 3.4. Parties. Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained

SECTION 3.5. Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State of New York.

SECTION 3.6. Severability. In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

SECTION 3.7. Benefits Acknowledged. Each Guaranteeing Subsidiary’s Note Guarantee is subject to the terms and conditions set forth in the Indenture. Each Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to its Note Guarantee are knowingly made in contemplation of such benefits.

SECTION 3.8. Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every Holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

 

B-2


SECTION 3.9. The Trustee. The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture, the Note Guarantee of the Guaranteeing Subsidiary, or with respect to the recitals contained herein, all of which recitals are made solely by the other parties hereto.

SECTION 3.10. Counterparts. The parties hereto may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or other electronic transmission shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or other electronic transmission shall be deemed to be their original signatures for all purposes.

SECTION 3.11. Execution and Delivery. Each Guaranteeing Subsidiary agrees that its Note Guarantee shall remain in full force and effect notwithstanding any absence on each Note of a notation of any such Note Guarantee.

SECTION 3.12. Headings. The headings of the Articles and the Sections in this Supplemental Indenture are for convenience of reference only and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

B-3


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

 

[SUBSIDIARY GUARANTORS],
as a Guarantor
By:  

 

Name:  
Title:  

 

B-4


Acknowledged by:
GREATBATCH LTD.
By:  

 

Name:  
Title:  

 

B-5


WILMINGTON TRUST, NATIONAL ASSOCIATION,
as Trustee
By:  

 

Name:  
Title:  

 

B-6


EXHIBIT C

Form of Certificate to be Delivered Upon Termination of Restricted Period

[Date]

Greatbatch Ltd.

10000 Wehrle Drive

Clarence, NY 14031,

Attention: General Counsel

Facsimile: (716) 759-5028

Wilmington Trust, National Association

as Trustee and Registrar

Corporate Trust Services

Capital Markets & Agency Services

1100 N. Market Street, Wilmington, DE 19890

Facsimile: (302) 636-4149

with a copy to:

Hodgson Russ LLP

The Guaranty Building

140 Pearl Street

Suite 100

Buffalo, NY 14202

Attention: John J. Zak

Facsimile: (716) 819-4623

 

Re: Greatbatch Ltd. (the “Issuer”).

9.125% Senior Notes due 2023 (the “Notes”)

Ladies and Gentlemen:

This letter relates to Notes represented by a temporary global Note (the “Temporary Regulation S Global Note”). Pursuant to Section 2.1 of the Indenture dated as of October 27, 2015 relating to the Notes (the “Indenture”), we hereby certify that the persons who are the beneficial owners of $[        ] principal amount of Notes represented by the Temporary Regulation S Global Note are persons outside the United States to whom beneficial interests in such Notes could be transferred in accordance with Rule 904 of Regulation S promulgated under the Securities Act of 1933, as amended. Accordingly, you are hereby requested to issue a Permanent Regulation S Global Note representing the undersigned’s interest in the principal amount of Notes represented by the Temporary Regulation S Global Note, all in the manner provided by the Indenture. We certify that we [are][are not] an Affiliate of the Issuer.

The Trustee, Registrar and the Issuer are entitled to conclusively rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this letter have the meanings set forth in Regulation S.


Very truly yours,
[Name of Transferor]
By:  

 

  Authorized Signature


EXHIBIT D

Form of Certificate to be Delivered in Connection with Transfers to IAIs

[Date]

Greatbatch Ltd.

10000 Wehrle Drive

Clarence, NY 14031,

Attention: General Counsel

Facsimile: (716) 759-5028

Wilmington Trust, National Association

as Trustee and Registrar

Corporate Trust Services

Capital Markets & Agency Services

1100 N. Market Street, Wilmington, DE 19890

Facsimile: (302) 636-4149

with a copy to:

Hodgson Russ LLP

The Guaranty Building

140 Pearl Street

Suite 100

Buffalo, NY 14202

Attention: John J. Zak

Facsimile: (716) 819-4623

 

Re: Greatbatch Ltd. (the “Issuer”).

9.125% Senior Notes due 2023 (the “Notes”)

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $[        ] principal amount of the 9.125% Senior Notes due 2023 (the “Notes”) of Greatbatch Ltd. (the “Issuer”).

Upon transfer, the Notes would be registered in the name of the new beneficial owner as follows:

 

Name:  

 

 
Address:  

 

 
Taxpayer ID Number:  

 

 

 

D-1


The undersigned represents and warrants to you that:

1. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”)) purchasing for our own account or for the account of such an institutional “accredited investor” at least $250,000 principal amount of the Notes, and we are acquiring the Notes not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of our investment in the Notes and we invest in or purchase securities similar to the Notes in the normal course of our business. We and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

2. We understand that the Notes have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Notes to offer, sell or otherwise transfer such Notes prior to the date that is one year after the later of the date of original issue and the last date on which the Issuer or any affiliate of the Issuer was the owner of such Notes (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Issuer or any Subsidiary thereof, (b) pursuant to an effective registration statement under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act, to a person we reasonably believe is a “qualified institutional buyer” under Rule 144A of the Securities Act (a “QIB”) that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act, (e) to an institutional “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act that is purchasing for its own account or for the account of such an institutional “accredited investor,” in each case in a minimum principal amount of Notes of $250,000 for investment purposes and not with a view to or for offer or sale in connection with any distribution in violation of the Securities Act or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Notes is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Issuer and the Trustee, which shall provide, among other things, that the transferee is an institutional “accredited investor” (within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and that it is acquiring such Notes for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Issuer and the Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale Termination Date of the Notes pursuant to clauses (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to the Issuer.

 

D-2


3. We [are][are not] an Affiliate of the Issuer.

 

TRANSFEREE:  

 

 

BY:  

 

 

D-3


EXHIBIT E

Form of Certificate to be Delivered in Connection with Transfers Pursuant to Regulation S

[Date]

Greatbatch Ltd.

10000 Wehrle Drive

Clarence, NY 14031,

Attention: General Counsel

Facsimile: (716) 759-5028

Wilmington Trust, National Association

as Trustee and Registrar

Corporate Trust Services

Capital Markets & Agency Services

1100 N. Market Street, Wilmington, DE 19890

Facsimile: (302) 636-4149

 

Re: Greatbatch Ltd. (the “Issuer”).

9.125% Senior Notes due 2023 (the “Notes”)

Ladies and Gentlemen:

In connection with our proposed sale of $[         ] aggregate principal amount of the Notes, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, we represent that:

(a) the offer of the Notes was not made to a U.S. person (within the meaning of Regulation S);

(b) either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;

(c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(a)(2) or Rule 904(a)(2) of Regulation S, as applicable; and

(d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act.

 

E-1


In addition, if the sale is made during a restricted period and the provisions of Rule 903(b)(2), Rule 903(b)(3) or Rule 904(b)(1) of Regulation S are applicable thereto, we confirm that such sale has been made in accordance with the applicable provisions of Rule 903(b)(2), Rule 903(b)(3) or Rule 904(b)(1), as the case may be.

We also hereby certify that we [are][are not] an Affiliate of the Issuer and, to our knowledge, the transferee of the Notes [is][is not] an Affiliate of the Issuer.

The Trustee, Registrar and the Issuer are entitled to conclusively rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate have the meanings set forth in Regulation S.

 

Very truly yours,

[Name of Transferor]

By:

 

 

  Authorized Signature

 

E-2



Exhibit 4.2

EXECUTION VERSION

 

 

STOCKHOLDERS AGREEMENT

by and among

GREATBATCH, INC.,

KOHLBERG KRAVIS ROBERTS & CO. L.P.,

BAIN CAPITAL PARTNERS, LLC,

and

EACH OF THE STOCKHOLDERS PARTY HERETO

 

 

Dated as of October 27, 2015


STOCKHOLDERS AGREEMENT

THIS STOCKHOLDERS AGREEMENT, dated as of October 27, 2015 (the “Agreement”), is by and among GREATBATCH, INC., a Delaware corporation (the “Company”), KOHLBERG KRAVIS ROBERTS & CO. L.P. (“KKR”), BAIN CAPITAL PARTNERS, LLC (“Bain”), and each of the stockholders whose name appears on the signature pages hereto and any person who becomes a party pursuant to Section 1.1(b)(i) hereof.

WHEREAS, on August 27, 2015, the Company, Lake Region Medical Holdings, Inc., a Delaware corporation (“Lake Region”), and Provenance Merger Sub Inc., a Delaware corporation and wholly-owned indirect subsidiary of the Company (“Merger Subsidiary”), entered into an Agreement and Plan of Merger (as it may be amended from time to time, the “Merger Agreement”) pursuant to which, among other things, the Merger Subsidiary will be merged with and into Lake Region on the Closing Date (the “Merger”), with Lake Region continuing as the surviving company and a wholly-owned indirect subsidiary of the Company, on the terms and subject to the conditions set forth in the Merger Agreement;

WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, each share of outstanding common stock, par value $0.01 per share, of Lake Region (the “Lake Region Common Stock”) shall be converted in the Merger into (i) shares of common stock, par value $0.001 per share, of the Company (the “Company Common Stock”) and (ii) cash, on the terms and subject to the conditions set forth in the Merger Agreement;

WHEREAS, pursuant to and subject to the terms and conditions of the Merger Agreement, in connection with the Merger, the Investors (as defined below) are expected to receive shares of Company Common Stock (the shares of Company Common Stock to be received by the Investors in the Merger, the “Shares”) representing, in the aggregate, approximately 12.9% of the Company’s outstanding shares, after giving effect to the issuance of such Shares; and

WHEREAS, each of the parties hereto wishes to set forth in this Agreement certain terms and conditions regarding the Investors’ ownership of the Shares.

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties agree as follows:

ARTICLE I

TRANSFERS; STANDSTILL PROVISIONS

1.1. Transfer Restrictions.

(a) Other than solely in the case of a Permitted Transfer, no Investor shall Transfer any Shares prior to the date that is six (6) months after the Closing (such period, the “Restricted Period”).

 

2


(b) “Permitted Transfers” mean, in each case, so long as such Transfer is in accordance with Applicable Law and, solely in the case of sub-clause (i) below, any such Transfer would not result in the Bain Investors or the KKR Investors, as applicable, exceeding the Bain Ownership Limit or the KKR Ownership Limit, respectively:

(i) a Transfer to a Permitted Transferee of the applicable Investor, so long as such Permitted Transferee, in connection with such Transfer, executes a joinder to this Agreement in the form attached as Exhibit A hereto, in which such Permitted Transferee agrees to be a “Bain Investor,” in the case of a Transfer by a Bain Investor or a “KKR Investor,” in the case of a Transfer by a KKR Investor; or

(ii) a Transfer solely to tender into a tender or exchange offer commenced by a third party (for the avoidance of doubt, not in violation of this Agreement) or by the Company; provided, that with respect to an unsolicited tender or exchange offer commenced by a third party, such Transfer shall be permitted only if (A) such tender or exchange offer includes an irrevocable minimum tender condition of no less than a majority of the then-outstanding shares of Company Common Stock and (B) as of the expiration of such offer (x) no stockholder rights plan or analogous “poison pill” of the Company is in effect or (y) the Board has affirmatively publicly recommended to the Company’s stockholders that such stockholders tender into such offer and has not publicly withdrawn or changed such recommendation.

(c) Notwithstanding anything to the contrary contained herein, including Article IV hereof and the expiration or inapplicability of the Restricted Period, no Investor shall Transfer any Voting Securities other than in accordance with all Applicable Laws and, in the case of Transfers made pursuant to Article IV hereof, the other terms and conditions of this Agreement.

(d) Any Transfer or attempted Transfer of Voting Securities in violation of this Section 1.1 shall, to the fullest extent permitted by Applicable Law, be null and void ab initio, and the Company shall not, and shall instruct its transfer agent and other third parties not to, record or recognize any such purported transaction on the share register of the Company.

(e) With respect to any Bain Investor or KKR Investor, any certificates for Shares shall bear a legend or legends (and appropriate comparable notations or other arrangements will be made with respect to any uncertificated Shares) referencing restrictions on Transfer of such Shares under the Securities Act and under this Agreement, which legend shall state in substance:

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS REGISTERED UNDER THE ACT OR UNLESS AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE.

 

3


THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER SET FORTH IN A STOCKHOLDERS AGREEMENT, DATED AS OF OCTOBER 27, 2015, AMONG GREATBATCH, INC. AND THE OTHER PARTIES THERETO, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF GREATBATCH, INC.”

(f) Notwithstanding the foregoing subsection (e), the holder of any certificate(s) for Shares shall be entitled to receive from the Company new certificates for a like number of Shares not bearing such legend (or the elimination or termination of such notations or arrangements) upon the request of such holder (i) at such time as such restrictions are no longer applicable, and (ii) with respect to the restriction on Transfer of such Shares under the Securities Act or any other applicable Foreign or State Act, unless such Shares are sold pursuant to a registration statement, subject to delivery of an opinion of counsel to such holder, which opinion is reasonably satisfactory in form and substance to the Company and its counsel, that the restriction referenced in such legend (or such notations or arrangements) is no longer required in order to ensure compliance with the Securities Act or any such other applicable Foreign or State Act.

1.2. Standstill Provisions.

(a) During the Standstill Period, the Bain Investors, the KKR Investors, Bain and KKR shall not, directly or indirectly, and shall not permit any of their Controlled Affiliates, directly or indirectly, to, and neither Bain nor KKR shall permit any Bain Investment Fund or KKR Investment Fund, respectively, directly or indirectly, to (i) acquire, agree to acquire, propose or offer to acquire, or facilitate the acquisition or ownership of, Voting Securities, or securities of the Company that are convertible, exchangeable or exercisable into Voting Securities, other than (A) as a result of any stock split, stock dividend or subdivision of Voting Securities or (B) any acquisition of shares of Company Common Stock by any Bain Non-Private Equity Business or KKR Non-Private Equity Business, so long as after giving effect to such acquisition, all Bain Non-Private Equity Businesses, in the aggregate, or KKR Non-Private Equity Businesses, in the aggregate, respectively, would each Beneficially Own less than five percent (5%) of the Total Voting Power and the Total Economic Interest, (ii) deposit any Voting Securities into a voting trust or similar Contract or subject any Voting Securities to any voting agreement, pooling arrangement or similar arrangement or other Contract (other than solely between (x) the Bain Investors, Bain and the Bain Investment Funds or (y) the KKR Investors, KKR and the KKR Investment Funds, and, in the case of each of the foregoing (x) and (y), their respective Controlled Affiliates), or grant any proxy with respect to any Voting Securities (other than to the Company or a Person specified by the Company in a proxy card provided to stockholders of the Company by or on behalf of the Company), (iii) enter, agree to enter, propose or offer to enter into or facilitate any merger, business combination, recapitalization, restructuring, change in control transaction or other similar extraordinary transaction involving the Company or any of its subsidiaries (unless (1) such transaction is affirmatively publicly recommended by the Board and there has otherwise been no breach of this Section 1.2 in connection with or relating to such transaction or (2) such action is expressly permitted by Section 1.1(b)(ii)), (iv) make, or in any way participate or engage in, any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Commission) to vote, or advise or

 

4


knowingly influence any Person with respect to the voting of, any Voting Securities, (v) call, or seek to call, a meeting of the stockholders of the Company or initiate any stockholder proposal for action by stockholders of the Company, (vi) form, join or in any way participate in a Group (other than with its Permitted Transferee that is bound by the restrictions of this Section 1.2(a) or a Group which consists solely of any of (1) Bain, any Bain Investment Fund and the Bain Investors or (2) KKR, any KKR Investment Fund, and the KKR Investors and, in each case, their respective Controlled Affiliates), with respect to any Voting Securities, (vii) otherwise act, alone or in concert with others, to seek to Control or influence the management or the policies of the Company, (viii) publicly disclose any intention, plan, arrangement or other Contract prohibited by, or inconsistent with, the foregoing or (ix) advise or knowingly assist or encourage or enter into any discussions, negotiations, agreements, or arrangements or other Contracts with any other Persons in connection with the foregoing. The Bain Investors the KKR Investors, Bain and KKR further agree that, during the Standstill Period, the Bain Investors the KKR Investors, Bain and KKR shall not, directly or indirectly, and shall not permit any of their Controlled Affiliates, directly or indirectly, to, and neither of Bain or KKR shall permit any Bain Investment Fund or KKR Investment Fund, respectively, directly or indirectly, to (x) request the Company to amend or waive any provision of this Section 1.2 (including this sentence) or (y) take any action that would reasonably be expected to require the Company to make a public announcement regarding the possibility of a business combination, merger or other type of transaction or matter described in this Section 1.2.

(b) For the avoidance of doubt, notwithstanding anything to the contrary contained herein, at all times during the Standstill Period, each of (A) Bain and the Bain Investors and (B) KKR and the KKR Investors agree that their Beneficial Ownership, on a fully diluted basis, of Voting Securities or securities of the Company that are convertible, exchangeable or exercisable into Voting Securities, shall not exceed the Bain Ownership Limit or the KKR Ownership Limit, respectively.

(c) “Standstill Period” shall mean, with respect to each of (i) Bain and the Bain Investors and (ii) KKR and the KKR Investors, the period from the Closing Date until the date on which (A) Bain and the Bain Investors (with respect to Bain) or (B) KKR and the KKR Investors (with respect to KKR) Beneficially Own twenty five percent (25%) or less of the Shares Beneficially Owned by such Persons as of immediately following the Closing.

ARTICLE II

NON-SOLICIT

2.1. Non-Solicit.

(a) In order to induce the Company to enter into the transactions contemplated by the Merger Agreement, Bain, each of the Bain Investors, KKR and each of the KKR Investors each hereby covenants and agrees that, until the one-year anniversary of the Effective Time, such Person shall not solicit for employment any person that is (or was within the six-month period prior to the date of determination) the Chief Executive Officer of Lake Region or any of his direct reports; provided, that (i) employing any person who contacts such Person on his or her own initiative and without any direct solicitation by such Person or as a result of general, non-targeted

 

5


media advertising, (ii) soliciting or employing any such person through the use of an independent search firm that contacts employees of the Company or any of its subsidiaries, or of Lake Region or any of its subsidiaries, without the direction or advice of any of the Persons whose activities are restricted by this Section 2.1 or (iii) soliciting or hiring any Person whose employment with Lake Region or any of its subsidiaries has been terminated for any reason, shall, in each case, not be deemed to be direct or indirect solicitations.

(b) For the avoidance of doubt, in the event of a breach of the obligations under this Section 2.1, in addition to all other available remedies, the Company shall be entitled to seek specific performance to enforce the provisions of this Section 2.1 in any court of competent jurisdiction in accordance with Section 6.9.

(c) Each of Bain, the Bain Investors, KKR and the KKR Investors acknowledges that the restrictions contained in this Section 2.1 are reasonable and necessary to protect the legitimate interests of the Company and constitute a material inducement to the Company to enter into this Agreement and the Merger Agreement and consummate the transactions contemplated by this Agreement and the Merger Agreement. It is the intent of the parties that the provisions of this Section 2.1 shall be enforced to the fullest extent permissible under the Applicable Law and public policies applied in each jurisdiction in which enforcement is sought. If any particular provision or portion of this Section 2.1 shall be adjudicated to be invalid or unenforceable, such provision or portion thereof shall be deemed amended to the minimum extent necessary to render such provision or portion valid and enforceable, such amendment to apply only with respect to the operation of such provision or portion in the particular jurisdiction in which such adjudication is made.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1. Representations and Warranties of the Investors. Each Investor, on behalf of itself and not any other Investor, hereby represents and warrants to the Company as follows as of the date hereof:

(a) Such Investor: (i) will be acquiring at Closing the Shares for its own account, solely for investment and not with a view toward, or for sale in connection with, any distribution thereof in violation of any foreign, federal, state or local securities or “blue sky” laws, or with any present intention of distributing or selling such Shares in violation of any such laws, (ii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Shares and of making an informed investment decision and (iii) is an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act. Such Investor understands that the Shares may not be Transferred except pursuant to the registration provisions of the Securities Act (and in compliance with any other Applicable Law) or pursuant to an applicable exemption therefrom.

 

6


3.2. Representations and Warranties of Bain. Each of Bain and each Initial Bain Investor hereby represents and warrants to the Company as follows:

(a) It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. It has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.

(b) The execution and delivery by it of this Agreement and the performance by it of its obligations under this Agreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals which have been obtained) under, (x) Applicable Law, (y) its organizational documents or (z) any Contract or agreement to which it is a party.

(c) The execution and delivery by it of this Agreement and the performance by it of its obligations under this Agreement have been duly authorized by all necessary corporate or other analogous action on its part. This Agreement has been duly executed and delivered by it and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

3.3. [Reserved.]

3.4. Representations and Warranties of KKR. Each of KKR and each Initial KKR Investor hereby represents and warrants to the Company as follows:

(a) It is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. It has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.

(b) The execution and delivery by it of this Agreement and the performance by it of its obligations under this Agreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals which have been obtained) under, (x) Applicable Law, (y) its organizational documents or (z) any Contract or agreement to which it is a party.

(c) The execution and delivery by it of this Agreement and the performance by it of its obligations under this Agreement have been duly authorized by all necessary corporate or other analogous action on its part. This Agreement has been duly executed and delivered by it and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of it, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

3.5. Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors as follows:

(a) The Company is a corporation, duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement.

 

7


(b) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under this Agreement do not and will not conflict with or violate any provision of, or require the consent or approval of any Person (except for any such consents or approvals which have been obtained) under, (x) Applicable Law, (y) the organizational documents of the Company or (z) any Contract or agreement to which the Company is a party.

(c) The execution and delivery by the Company of this Agreement and the performance of the obligations of the Company under this Agreement have been duly authorized by all necessary corporate action on the part of the Company. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency and other laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

ARTICLE IV

REGISTRATION

4.1. Demand Registrations.

(a) From and after the expiration of the Restricted Period, subject to the terms and conditions hereof (x) solely during any period that the Company is then-ineligible under Applicable Law to register Registrable Securities on Form S-3 pursuant to Section 4.3 or, if the Company is so eligible but has failed to comply with its obligations under Section 4.3 or (y) following the expiration of the Company’s obligation to keep the Shelf Registration Statement continuously effective pursuant to Section 4.3(c), but only if there is no Shelf Registration Statement then in effect, any Demand Stockholders (the “Requesting Stockholders”) shall be entitled to make an unlimited number of written requests of the Company (each, a “Demand”) for registration under the Securities Act of an amount of Registrable Securities then held by such Requesting Stockholders that equals or is greater than the Registrable Amount (a “Demand Registration”). Thereupon the Company will, subject to the terms of this Agreement, use its reasonable best efforts to effect the registration as promptly as reasonably practicable under the Securities Act of:

(i) the Registrable Securities which the Company has been so requested to register by the Requesting Stockholders for disposition in accordance with the intended method of disposition stated in such Demand;

(ii) all other Registrable Securities which the Company has been requested to register pursuant to Section 4.1(b), but subject to Section 4.1(g); and

(iii) all shares of Company Common Stock which the Company may elect to register in connection with any offering of Registrable Securities pursuant to this Section 4.1, but subject to Section 4.1(g);

 

8


all to the extent necessary to permit the disposition (in accordance with the intended methods thereof) of the Registrable Securities and the additional shares of Company Common Stock, if any, to be so registered.

(b) A Demand shall specify: (i) the aggregate number of Registrable Securities requested to be registered in such Demand Registration, (ii) the intended method of disposition in connection with such Demand Registration, to the extent then known and (iii) the identity of the Requesting Stockholder(s). Within three (3) Business Days after receipt of a Demand, the Company shall give written notice of such Demand to all holders of Registrable Securities. The Company shall include in the Demand Registration covered by such Demand all Registrable Securities with respect to which the Company has received a written request (which written requests shall specify the number of Registrable Securities requested to be disposed of by such holder of Registrable Securities) for inclusion therein from any holder of Registrable Securities (any such holders requesting to include Registrable Securities in such Demand, together with the Requesting Stockholder, the “Demanding Selling Holders”) within five (5) days after the Company’s notice required by this paragraph has been given, subject to Section 4.1(g). Each such written request shall comply with the requirements of a Demand as set forth in this Section 4.1(b).

(c) A Demand Registration shall not be deemed to have been effected and shall not count as a Demand Registration (i) unless a registration statement with respect thereto has become effective and has remained effective for a period of at least one hundred eighty (180) days or such shorter period in which all Registrable Securities included in such Demand Registration have actually been sold thereunder (provided, that such period shall be extended for a period of time equal to the period the holder of Registrable Securities refrains from selling any securities included in such registration statement at the request of the Company or the lead managing underwriter(s) pursuant to the provisions of this Agreement) or (ii) if, after it has become effective, such Demand Registration becomes subject, prior to one hundred eighty (180) days after effectiveness, to any stop order, injunction or other order or requirement of the Commission or other Governmental Authority, other than by reason of any act or omission by the applicable Selling Stockholders.

(d) Demand Registrations shall be on such appropriate registration form of the Commission as shall be selected by the Company and reasonably acceptable to the Requesting Stockholders.

(e) The Company shall not be obligated to (i) subject to Section 4.1(c), maintain the effectiveness of a registration statement under the Securities Act filed pursuant to a Demand Registration, for a period longer than one hundred eighty (180) days or (ii) effect or act upon any request for a Demand Registration (A) if the Company is diligently pursuing a primary Underwritten Offering for which all Demand Stockholders will be offered “piggyback” rights pursuant to Section 4.2, (B) within six (6) months of the completion of a “firm commitment” Underwritten Offering in which all holders of Registrable Securities were offered “piggyback” rights pursuant to Section 4.2 (subject to Section 4.2(b)) and at least 75% of the number of Registrable Securities requested by such holders of Registrable Securities to be included in such Demand Registration were included and sold, (C) within six (6) months of the completion of any other Demand Registration (including, for the avoidance of doubt, any Underwritten Offering

 

9


pursuant to any Shelf Registration Statement) or (D) if, in the Company’s reasonable judgment, it is not feasible for the Company to proceed with the Demand Registration because of the unavailability of audited or other required financial statements; provided, that the Company shall use its reasonable best efforts to obtain such financial statements as promptly as reasonably practicable.

(f) The Company shall be entitled (upon written notice to the Demand Stockholders and Bain) to postpone or delay the filing or the effectiveness of, or suspend the continued use of, a registration statement for any Demand Registration in the event of a Blackout Period until the expiration of the applicable Blackout Period. In the event of a Blackout Period under clause (ii) of the definition thereof, the Company shall deliver to the Demand Stockholders and Bain a certificate signed by either the chief executive officer or the chief financial officer of the Company certifying that, in the good faith judgment of the Company, the conditions described in clause (ii) of the definition of Blackout Period are met. Such certificate shall contain an approximation of the anticipated delay or, if the Company is unable to provide an approximation of the anticipated delay, a certification that the Company is unable to provide an approximation of the anticipated delay. During the Blackout Period, the holders of Registrable Securities agree to suspend use of the applicable prospectus and any Free Writing Prospectus in connection with any sale or purchase, or offer to sell or purchase, Registrable Securities, upon distribution of the written notice referred to above. After the termination of the Blackout Period and without any further request from a Demand Stockholder, the Company shall, to the extent necessary, as promptly as reasonably practicable, supplement, make amendments to or prepare a post-effective amendment or supplement to the registration statement for the Demand Registration or the prospectus, or any document incorporated therein by reference, or any Free Writing Prospectus or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the prospectus does not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(g) If, in connection with a Demand Registration that involves an Underwritten Offering, the lead managing underwriter(s) advise(s) the Company that, in its (their) opinion, the inclusion of all of the securities sought to be registered in connection with such Demand Registration would adversely affect the success thereof, then the Company shall include in such registration statement only such securities as the Company is advised by such lead managing underwriter(s) can be sold without such adverse effect as follows and in the following order of priority: (i) first, up to the number of Registrable Securities requested to be included in such Demand Registration by the Demanding Selling Holders, with any required reductions to such amounts requested to be included made in the following manner: (x) first, to the extent that the Demanding Selling Holders are each selling a different percentage of the total Registrable Securities owned by each such Demanding Selling Holder, by reducing the number of Registrable Securities requested to be included by a Demanding Selling Holder that is selling a greater percentage of its total Registrable Securities than is requested to be included by the other Demanding Selling Holders until each such Demanding Selling Holder is selling in such Demand the same percentage of the total number of Registrable Securities owned by it after giving effect to such reductions (for example, if the first Demanding Selling Holder is requesting to sell 50% of the total Registrable Securities owned by it and the second Demanding Selling

 

10


Holder is requesting to sell 10% of the total Registrable Securities owned by it, then the number of Registrable Securities requested to be included by the first Demanding Selling Holder will be reduced as required until such first Demanding Selling Holder is selling only 10% of its total Registrable Securities and no reductions will be made to the number of Registrable Securities requested to be included by the second Demanding Selling Holder under this clause (x)) and (y) if additional reductions are required to be made, pro rata among such Demanding Selling Holders on the basis of the number of such Registrable Securities requested to be included by such Demanding Selling Holders after giving effect to the reductions in clause (x); (ii) second, securities the Company proposes to sell; and (iii) third, all other securities of the Company duly requested to be included in such registration statement, pro rata on the basis of the amount of such other securities requested to be included or such other allocation method determined by the Company.

(h) Any time that a Demand Registration involves an Underwritten Offering, the Requesting Stockholder(s) shall select the investment banker(s) and manager(s) that will serve as managing underwriters (including which such managing underwriters will serve as lead or co-lead) and underwriters with respect to the offering of such Registrable Securities; provided, that such investment banker(s) and manager(s) shall be reasonably acceptable to the Company (such acceptance not to be unreasonably withheld, conditioned or delayed).

4.2. Piggyback Registrations.

(a) From and after the expiration of the Restricted Period, subject to the terms and conditions hereof, whenever the Company proposes to register any Company Common Stock under the Securities Act (other than a registration by the Company (i) on Form S-4 or any successor form thereto, (ii) on Form S-8 or any successor form thereto, (iii) on a Shelf Registration Statement pursuant to Section 4.3 or (iv) pursuant to Section 4.1) (a “Piggyback Registration”), whether for its own account or for the account of others, the Company shall give reasonably prompt written notice thereof (but not less than ten (10) Business Days prior to the filing by the Company with the Commission of any registration statement with respect thereto) to all holders of Registrable Securities. Such notice (a “Piggyback Notice”) shall specify the number of shares of Company Common Stock that the Company proposes to register, the proposed date of filing of such registration statement with the Commission, the proposed means of distribution, the proposed managing underwriter(s) (if any) and a good faith estimate by the Company of the proposed minimum offering price of such shares of Company Common Stock, in each case to the extent then known. Subject to Section 4.2(b), the Company shall include in each such Piggyback Registration all Registrable Securities held by holders of Registrable Securities (a “Piggyback Seller”) with respect to which the Company has received written requests (which written requests shall specify the number of Registrable Securities requested to be disposed of by such Piggyback Seller) for inclusion therein from any holder of Registrable Securities within ten (10) days after such Piggyback Notice is given by the Company.

(b) If, in connection with a Piggyback Registration that involves an Underwritten Offering, the lead managing underwriter(s) advises the Company that, in its opinion, the inclusion of all the shares of Company Common Stock sought to be included in such Piggyback Registration by (i) the Company, (ii) other Persons who have sought to have shares of Company Common Stock registered in such Piggyback Registration pursuant to rights to demand

 

11


(other than pursuant to so-called “piggyback” or other incidental or participation registration rights) such registration (such Persons being “Other Demanding Sellers”), (iii) the Piggyback Sellers and (iv) any other proposed sellers of shares of Company Common Stock (such Persons being “Other Proposed Sellers”), as the case may be, would adversely affect the success thereof, then the Company shall include in the registration statement applicable to such Piggyback Registration only such shares of Company Common Stock as the Company is advised by such lead managing underwriter(s) can be sold without such an effect, as follows, and in the following order of priority:

(i) if the Piggyback Registration relates to an offering for the Company’s own account, then (A) first, such number of shares of Company Common Stock to be sold by the Company as the Company, acting in good faith, shall have determined, (B) second, Registrable Securities of Piggyback Sellers, with any required reductions to such amounts requested to be included made in the following manner: (x) first, to the extent that the Piggyback Sellers are each selling a different percentage of the total Registrable Securities owned by each such Piggyback Seller, by reducing the number of Registrable Securities requested to be included by a Piggyback Seller that is selling a greater percentage of its total Registrable Securities than is requested to be included by the other Piggyback Sellers until each such Piggyback Seller is selling in such Piggyback Registration the same percentage of the total number of Registrable Securities owned by it after giving effect to such reductions; and (y) if additional reductions are required to be made, pro rata on the basis of the number of Registrable Securities proposed to be sold by such Piggyback Sellers, (C) third, shares of Company Common Stock sought to be registered by Other Demanding Sellers, pro rata on the basis of the number of shares of Company Common Stock proposed to be sold by such Other Demanding Sellers and (D) fourth, other shares of Company Common Stock proposed to be sold by any Other Proposed Sellers, pro rata on the basis of the number of shares of Company Common Stock proposed to be sold by such Other Proposed Sellers; or

(ii) if the Piggyback Registration relates to an offering other than for the Company’s own account, then (A) first, such number of shares of Company Common Stock sought to be registered by each Other Demanding Seller pro rata in proportion to the number of securities sought to be registered by all such Other Demanding Sellers, (B) second, Registrable Securities of Piggyback Sellers, with any required reductions to such amounts requested to be included made in the following manner: (x) first, to the extent that the Piggyback Sellers are each selling a different percentage of the total Registrable Securities owned by each such Piggyback Seller, by reducing the number of Registrable Securities requested to be included by a Piggyback Seller that is selling a greater percentage of its total Registrable Securities than is requested to be included by the other Piggyback Sellers until each such Piggyback Seller is selling in such Piggyback Registration the same percentage of the total number of Registrable Securities owned by it after giving effect to such reductions and (y) if additional reductions are required to be made, pro rata on the basis of the number of shares of Company Common Stock proposed to be sold by such Piggyback Sellers, (C) third, shares of Company Common Stock to be sold by the Company and (D) fourth, other shares of Company Common Stock proposed to be sold by any Other Proposed Sellers, pro rata on the basis of the number of shares of Company Common Stock proposed to be sold by such Other Proposed Sellers.

 

12


(c) For clarity, in connection with any Underwritten Offering under this Section 4.2 for the Company’s account, the Company shall not be required to include the Registrable Securities of a Piggyback Seller in the Underwritten Offering unless (i) such Piggyback Seller accepts the terms of the underwriting as agreed upon between the Company and the lead managing underwriter(s), which shall be selected by the Company in its sole discretion, and (ii) completes and executes all questionnaires, powers of attorney, custody agreements, indemnities, underwriting agreements, lock-up letters and any other documents reasonably required under the terms of such arrangements within the timeframes set forth in Section 4.8(a) hereof.

(d) If, at any time after giving written notice of its intention to register any shares of Company Common Stock as set forth in this Section 4.2 and prior to the time the registration statement filed in connection with such Piggyback Registration is declared effective, the Company shall determine for any reason not to register such shares of Company Common Stock, the Company may, at its election, give written notice of such determination to any Piggyback Seller within five (5) Business Days thereof and thereupon shall be relieved of its obligation to register any Registrable Securities in connection with such particular withdrawn or abandoned Piggyback Registration; provided, that Demand Stockholders may continue the registration as a Demand Registration pursuant to the terms of Section 4.1.

4.3. Shelf Registration Statement.

(a) From and after the expiration of the Restricted Period, subject to the terms and conditions hereof, and further subject to the availability of a registration statement on Form S-3 or any successor form thereto (“Form S-3”) to the Company, any of the Demand Stockholders may by written notice delivered to the Company (the “Shelf Notice”) require the Company to file as soon as reasonably practicable, and to use reasonable best efforts to cause to be declared effective by the Commission as soon as reasonably practicable after such filing date, a Form S-3 providing for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (the “Shelf Registration Statement”) relating to the offer and sale, from time to time, of an amount of Registrable Securities then held by such Demand Stockholders that equals or is greater than the Registrable Amount. Notwithstanding the foregoing, to the extent that upon the expiration of the Restricted Period the Company is a well-known seasoned issuer (as defined in Rule 405 under the Securities Act), a Shelf Notice shall not be required and the Company shall file, as soon as reasonably practicable following the expiration of the Restricted Period, the Shelf Registration Statement in the form of an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) or any successor form thereto registering all Registrable Securities then held by any holder of Registrable Securities.

(b) Within five (5) days after receipt of a Shelf Notice pursuant to Section 4.3(a), the Company will deliver written notice thereof to all holders of Registrable Securities. Each other holder of Registrable Securities may elect to participate with respect to its Registrable Securities in the Shelf Registration Statement in accordance with the plan and method of distribution set forth, or to be set forth, in such Shelf Registration Statement by delivering to the Company a written request to so participate within five (5) days after the Shelf Notice is given by the Company.

 

13


(c) Subject to Section 4.3(d), the Company will use its reasonable best efforts to keep the Shelf Registration Statement, or any renewal Shelf Registration Statement upon the expiration of the prior Shelf Registration Statement, continuously effective until the earlier of (i) three (3) years after the initial Shelf Registration Statement has been declared effective; (ii) the date on which all Registrable Securities covered by the Shelf Registration Statement have been sold thereunder in accordance with the plan and method of distribution disclosed in the prospectus included in the Shelf Registration Statement, or otherwise cease to be Registrable Securities; and (iii) the date on which this Agreement terminates pursuant to Section 6.1.

(d) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providing written notice to any holder of Registrable Securities who elected to participate in the Shelf Registration Statement, to require such holder of Registrable Securities to suspend the use of the prospectus for sales of Registrable Securities under the Shelf Registration Statement during any Blackout Period. In the event of a Blackout Period under clause (ii) of the definition thereof, the Company shall deliver to the Demand Stockholders and Bain, a certificate signed by either the chief executive officer or the chief financial officer of the Company certifying that, in the good faith judgment of the Company, the conditions described in clause (ii) of the definition of Blackout Period are met. Such certificate shall contain an approximation of the anticipated delay or, if the Company is unable to provide an approximation of the anticipated delay, a certification that the Company is unable to provide an approximation of the anticipated delay. During such Blackout Period, holders of Registrable Securities who elected to participate in the Shelf Registration Statement agree to suspend use of the applicable prospectus or any Free Writing Prospectus in connection with any sale or purchase, or offer to sell or purchase, Registrable Securities, upon distribution of the written notice referred to above. After the termination of the Blackout Period and without any further request from a holder of Registrable Securities, the Company shall, to the extent necessary, as promptly as reasonably practicable, supplement, make amendments to or prepare a post-effective amendment or supplement to the Shelf Registration Statement or the prospectus, or any document incorporated therein by reference, or any Free Writing Prospectus or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the prospectus will not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(e) At any time that a Shelf Registration Statement is effective, if any Demand Stockholder delivers a notice to the Company (a “Take-Down Notice”) stating that it intends to sell all or part of its Registrable Securities included by it on the Shelf Registration Statement in an Underwritten Offering (a “Shelf Offering”), then, the Company shall promptly amend or supplement the Shelf Registration Statement as may be necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf Offering (taking into account

 

14


the inclusion of Registrable Securities by any other holders pursuant to this Section 4.3). In connection with any Shelf Offering that is an Underwritten Offering:

(i) the Company shall within three (3) Business Days send the Take-Down Notice to any holder of Registrable Securities included on the Shelf Registration Statement and the Company and such proposing Demand Stockholder(s) shall permit each such holder to include its Registrable Securities included on the Shelf Registration Statement in such Underwritten Offering if such holder notifies the proposing Demand Stockholder(s) and the Company within three (3) days after distribution of the Take-Down Notice by the Company;

(ii) the Company shall not be required to include the Registrable Securities of a holder in such Underwritten Offering unless (A) such holder accepts the terms of the underwriting as agreed upon between the Demand Stockholder and the lead managing underwriter(s), and (B) completes and executes all questionnaires, powers of attorney, custody agreements, indemnities, underwriting agreements, lock-up letters and any other documents reasonably required under the terms of such arrangements within the timeframes reasonably required by the Company and the lead managing underwriter(s); and

(iii) if the lead managing underwriter(s) advises the Company and the proposing Demand Stockholder(s) that, in its opinion, the inclusion of all of the securities sought to be sold in connection with such Underwritten Offering would adversely affect the success thereof, then there shall be included in such Underwritten Offering only such securities as the proposing Demand Stockholder(s) is advised by such lead managing underwriter(s) can be sold without such adverse effect, and such number of Registrable Securities shall be allocated in the same manner as described in Section 4.1(g). Except as otherwise expressly specified in this Section 4.3, any Shelf Offering that is an Underwritten Offering where the plan of distribution set forth in the applicable Take-Down Notice includes a customary “road show” (including an electronic road show) or other substantial marketing effort by the Company and the underwriters (a “Marketed Underwritten Shelf Offering”) shall be subject to the same requirements, limitations and other provisions of this Article IV as would be applicable to a Demand Registration (i.e., as if such Marketed Underwritten Shelf Offering were a Demand Registration), including Section 4.1(e)(ii) (provided that references therein to six (6) months shall be deemed to be references to four (4) months) and Section 4.1(g).

4.4. Withdrawal Rights. Any holder of Registrable Securities having notified or directed the Company to include any or all of its Registrable Securities in a registration statement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securities designated by it for registration by giving written notice to such effect to the Company prior to the effective date of such registration statement. In the event of any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shall continue to be Registrable Securities for all purposes of this Agreement (subject to the other terms and conditions of this Agreement). No such withdrawal shall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn; provided, however, that in the case of a Demand Registration, if such withdrawal shall reduce the number of Registrable Securities sought to be included in such registration below the Registrable Amount, then the Company shall as promptly as practicable give each Demand Stockholder seeking to register Registrable

 

15


Securities notice to such effect and, within ten (10) days following the mailing of such notice, such Demand Stockholders still seeking registration shall, by written notice to the Company, elect to register additional Registrable Securities to satisfy the Registrable Amount or elect that such registration statement not be filed or, if theretofore filed, be withdrawn. During such ten (10) day period, the Company shall not file such registration statement if not theretofore filed or, if such registration statement has been theretofore filed, the Company shall not seek, and shall use reasonable best efforts to prevent, the effectiveness thereof.

4.5. Holdback Agreements. (a) In connection with any Underwritten Offering, each holder of Registrable Securities, agrees to enter into customary agreements, subject to customary carve-outs, restricting the public sale or distribution of equity securities of the Company (including sales pursuant to Rule 144 under the Securities Act) to the extent requested by the lead managing underwriter(s) with respect to an applicable Underwritten Offering during the period commencing on the tenth (10th) day prior to the date of the “pricing” of such Underwritten Offering and continuing for not more than sixty (60) days after the date of the “final” prospectus (or “final” prospectus supplement if the Underwritten Offering is made pursuant to a Shelf Registration Statement), pursuant to which such Underwritten Offering shall be made, or such lesser period as may be requested by the lead managing underwriter(s). Any discretionary waiver or termination of the requirements under the foregoing provisions made by the Company or applicable lead managing underwriter(s) shall apply to each holder of Registrable Securities on a pro rata basis.

(b) If any Demand Registration or Shelf Offering involves an Underwritten Offering, the Company, if requested by the lead managing underwriter(s), will not effect any public sale or distribution of any common equity (or securities convertible into or exchangeable or exercisable for common equity) (other than a registration statement on Form S-4, Form S-8 or any successor forms thereto) for its own account, subject to customary carve outs, within sixty (60) days after the effective date of such registration, except as may otherwise be agreed (including as to the length of the restricted period) between the Company and the lead managing underwriter(s) of such Underwritten Offering.

4.6. Registration Procedures.

(a) If and whenever the Company is required to use reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 4.1, Section 4.2 or Section 4.3, the Company shall as expeditiously as reasonably practicable:

(i) prepare and file with the Commission a registration statement to effect such registration in accordance with the intended method or methods of distribution of such securities and thereafter use reasonable best efforts to cause such registration statement to become and remain effective pursuant to the terms of this Article IV; provided, however, that the Company may discontinue any registration of its securities which are not Registrable Securities at any time prior to the effective date of the registration statement relating thereto; provided, further, that before filing such registration statement or any amendments thereto, the Company will furnish to the Demand Stockholders, on behalf of all holders of Registrable Securities that are including

 

16


Registrable Securities in such registration (such holders of Registrable Securities collectively, the “Selling Stockholders”), their counsel and the lead managing underwriter(s), if any, copies of all such documents proposed to be filed, which documents will be subject to the review and reasonable comment of such counsel, and other documents reasonably requested by such counsel, including any comment letter from the Commission, and, if requested by such counsel, provide such counsel reasonable opportunity to participate in the preparation of such registration statement and each prospectus included therein and such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers, accountants and other advisors. The Company shall not file any such registration statement or prospectus or any amendments or supplements thereto with respect to a Demand Registration to which the holders of a majority of Registrable Securities held by the Demand Stockholders, their counsel or the lead managing underwriter(s), if any, shall reasonably object, in writing, on a timely basis, unless, in the opinion of the Company, such filing is reasonably necessary to comply with Applicable Law;

(ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective pursuant to the terms of this Article IV, and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

(iii) if requested by the lead managing underwriter(s), if any, or the holders of a majority of the then outstanding Registrable Securities being sold in connection with an Underwritten Offering, promptly include in a prospectus supplement or post-effective amendment such information as the lead managing underwriter(s), if any, and such holders may reasonably request in order to permit the intended method of distribution of such securities and make all required filings of such prospectus supplement or such post-effective amendment as soon as reasonably practicable after the Company has received such request; provided, however, that the Company shall not be required to take any actions under this Section 4.6(a)(iii) that are not, in the opinion of counsel for the Company, in compliance with Applicable Law;

(iv) furnish to the Selling Stockholders and each underwriter, if any, of the securities being sold by such Selling Stockholders such number of conformed copies of such registration statement and of each amendment and supplement thereto, such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and each free writing prospectus (as defined in Rule 405 of the Securities Act) (a “Free Writing Prospectus”) utilized in connection therewith and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents as such Selling Stockholders and underwriter, if any, may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such Selling Stockholders;

 

17


(v) use reasonable best efforts to register or qualify or cooperate with the Selling Stockholders, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities covered by such registration statement under such other securities laws or “blue sky” laws of such jurisdictions as the Selling Stockholders and any underwriter of the securities being sold by such Selling Stockholders shall reasonably request, and to keep each such registration or qualification (or exemption therefrom) effective during the period such registration statement is required to be kept effective and take any other action which may be necessary or reasonably advisable to enable such Selling Stockholders and underwriters to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Selling Stockholders, except that the Company shall not for any such purpose be required to (A) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause (v) be obligated to be so qualified, (B) subject itself to taxation in any such jurisdiction or (C) file a general consent to service of process in any such jurisdiction;

(vi) use reasonable best efforts to cause such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if no such securities are so listed, use reasonable best efforts to cause such Registrable Securities to be listed on the New York Stock Exchange, the NYSE MKT or the NASDAQ Stock Market;

(vii) use reasonable best efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be reasonably necessary to enable the Selling Stockholder(s) thereof to consummate the disposition of such Registrable Securities;

(viii) use reasonable best efforts to provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such registration statement from and after a date not later than the effective date of such registration statement;

(ix) enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and use its reasonable best efforts to take all such other actions reasonably requested by the holders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the lead managing underwriter(s), if any) to expedite or facilitate the disposition of such Registrable Securities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an Underwritten Offering (A) make such representations and warranties to the holders of such Registrable Securities and the underwriters, if any, with respect to the business of the Company and its subsidiaries, and the registration statement, prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers in underwritten offerings, and, if true, confirm the same if and when requested, (B) if an

 

18


underwriting agreement has been entered into, the underwriting agreement shall contain indemnification provisions and procedures reasonably similar to those set forth in Section 4.9 hereof with respect to all parties to be indemnified pursuant to said Section except as otherwise agreed by the holders of a majority of the Registrable Securities being sold or to the extent the lead managing underwriter(s) for an Underwritten Offering requires otherwise as a condition of completing such Underwritten Offering and (C) deliver such documents and certificates as reasonably requested by the holders of a majority of the Registrable Securities being sold, their counsel and the lead managing underwriters(s), if any, to evidence the continued validity in all material respects of the representations and warranties made pursuant to sub-clause (A) above and to evidence compliance in all material respects with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder;

(x) in connection with an Underwritten Offering, use reasonable best efforts to obtain for the Selling Stockholders and underwriter(s) (A) opinions of counsel for the Company, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Selling Stockholders and underwriters and (B) “comfort” letters and updates thereof (or, in the case of any such Person which does not satisfy the conditions for receipt of a “comfort” letter specified in Statement on Auditing Standards No. 72, an “agreed upon procedures” letter) signed by the independent public accountants who have certified the Company’s financial statements and, to the extent required, any other financial statements included in such registration statement, covering the matters customarily covered in “comfort” letters in connection with underwritten offerings;

(xi) upon reasonable notice and at reasonable times and for reasonable periods, make available for inspection by the Selling Stockholders, any underwriter participating in any disposition pursuant to any registration statement, and any attorney, accountant or other agent or representative retained in connection with such offering by such Selling Stockholders or underwriter (collectively, the “Inspectors”), financial and other records, pertinent corporate documents and instruments of the Company (collectively, the “Records”), as shall be reasonably necessary, or as shall otherwise be reasonably requested, to enable them to exercise their due diligence responsibility, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each case reasonably requested by any such Inspector in connection with such registration statement; provided, however, that the Company shall not be required to provide any information under this clause (xi) if (A) the Company believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such information or (B) if either (1) the Company has requested and been granted from the Commission confidential treatment of such information contained in any filing with the Commission or documents provided supplementally or otherwise or (2) the Company reasonably determines in good faith that such Records are confidential and so notifies the Inspectors in writing; unless prior to furnishing any such information with respect to clause (1) or (2) such Selling Stockholder requesting such information enters into, and causes each of its Inspectors to enter into, a confidentiality agreement on terms and conditions

 

19


reasonably acceptable to the Company; provided, further, that each Selling Stockholder agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction or by another Governmental Authority, give notice to the Company and allow the Company, at its expense, to undertake appropriate action seeking to prevent disclosure of the Records deemed confidential;

(xii) as promptly as practicable notify in writing the Selling Stockholder and the underwriters, if any, of the following events: (A) the filing of the registration statement, any amendment thereto, the prospectus or any prospectus supplement related thereto or post-effective amendment to the registration statement or any Free Writing Prospectus utilized in connection therewith, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (B) any request by the Commission or any other U.S. or state governmental authority for amendments or supplements to the registration statement or the prospectus or for additional information; (C) the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for that purpose; (D) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (E) if at any time the representations and warranties of the Company contained in any mutual agreement (including any underwriting agreement) contemplated by Section 4.6(a)(ix) cease to be true and correct in any material respect; and (F) upon the happening of any event that makes any statement made in such registration statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such registration statement, prospectus or documents so that, in the case of the registration statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and, at the request of any Selling Stockholder, promptly prepare and furnish to such Selling Stockholder a reasonable number of copies of a supplement to or an amendment of such registration statement or prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

(xiii) use reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest reasonable practicable date, except that, subject to the requirements of Section 4.6(a)(v), the Company shall not for any such purpose be required to (A) qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause (xiii) be obligated to be so qualified, (B) subject itself to taxation in any such jurisdiction or (C) file a general consent to service of process in any such jurisdiction;

 

20


(xiv) cooperate with the Selling Stockholders and the lead managing underwriter(s) to facilitate the timely preparation and delivery of certificates (which shall not bear any restrictive legends unless required under Applicable Law) representing securities sold under any registration statement, and enable such securities to be in such denominations and registered in such names as the lead managing underwriter(s) or such Selling Stockholders may request and keep available and make available to the Company’s transfer agent prior to the effectiveness of such registration statement a supply of such certificates;

(xv) cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA; and

(xvi) have appropriate senior officers of the Company participate in reasonable marketing efforts (which marketing efforts will not, for the avoidance of doubt, include a “road show” requiring such officers to travel outside of the city in which they are primarily located) organized by the underwriters for the offering, marketing or selling of the Registrable Securities.

(b) The Company may require each Selling Stockholder and each underwriter, if any, to furnish the Company in writing such information regarding each Selling Stockholder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably request in writing to complete or amend the information required by such registration statement.

(c) Each Selling Stockholder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in clauses (B), (C), (D), (E) or (F) of Section 4.6(a)(xii), such Selling Stockholder shall forthwith discontinue such Selling Stockholder’s disposition of Registrable Securities pursuant to the applicable registration statement and prospectus relating thereto until such Selling Stockholder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 4.6(a)(xi), or until it is advised in writing by the Company that the use of the applicable prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such prospectus; provided, however, that the Company shall extend the time periods under Section 4.1(c) with respect to the length of time that the effectiveness of a registration statement must be maintained by the amount of time the holder is required to discontinue disposition of such securities.

(d) With a view to making available to the holders of Registrable Securities the benefits of Rule 144 under the Securities Act and any other rule or regulation of the Commission that may at any time permit a holder to sell securities of the Company to the public

 

21


without registration or pursuant to a registration on Form S-3 (or any successor form), the Company shall:

(i) use reasonable best efforts to make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act;

(ii) use reasonable best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Exchange Act, at any time when the Company is subject to such reporting requirements; and

(iii) furnish to any holder so long as the holder owns Registrable Securities, promptly upon request, a written statement by the Company as to its compliance with the reporting requirements of Rule 144 under the Securities Act and of the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents so filed or furnished by the Company with the Commission as such holder may reasonably request in connection with the sale of Registrable Securities without registration (in each case to the extent not readily publicly available).

4.7. Registration Expenses. All fees and expenses incident to the Company’s performance of its obligations under this Article IV, including (a) all registration and filing fees, including all fees and expenses of compliance with securities and “blue sky” laws (including the reasonable and documented fees and disbursements, subject to any cap on fees as may be agreed upon between the Company and the underwriters, of counsel for the underwriters in connection with “blue sky” qualifications of the Registrable Securities pursuant to Section 4.6(a)(v)) and all fees and expenses associated with filings required to be made with FINRA (including, if applicable, the fees and expenses of any “qualified independent underwriter” as such term is defined in FINRA Rule 5121), (b) all printing (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with the Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by a holder of Registrable Securities) and copying expenses, (c) all messenger, telephone and delivery expenses, (d) all fees and expenses of the Company’s independent certified public accountants and counsel (including with respect to “comfort” letters and opinions), (e) expenses of the Company incurred in connection with any “road show” and (f) reasonable and documented fees and disbursements of one counsel for all holders of Registrable Securities whose shares are included in a registration statement, which counsel shall be selected by the Demand Stockholder, shall be borne solely by the Company whether or not any registration statement is filed or becomes effective. In connection with the Company’s performance of its obligations under this Article IV, the Company will pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties and the expense of any annual audit) and the expenses and fees for listing the securities to be registered on each securities exchange and included in each established over-the-counter market on which similar securities issued by the Company are then listed or traded. Each Selling Stockholder shall pay its portion of all underwriting discounts and commissions and transfer taxes, if any, relating to the sale of such Selling Stockholder’s Registrable Securities pursuant to any registration.

4.8. Miscellaneous.

(a) Not less than seven (7) Business Days before the expected filing date of each registration statement pursuant to this Agreement, the Company shall notify each holder of

 

22


Registrable Securities who has timely provided the requisite notice hereunder entitling such holder to register Registrable Securities in such registration statement of the information, documents and instruments from such holder that the Company or any underwriter reasonably requests in connection with such registration statement, including, to the extent applicable, a questionnaire, custody agreement, power of attorney, lock-up letter, underwriting agreement and any other documents reasonably required under the terms of such arrangements (the “Requested Information”). If the Company has not received, on or before the third Business Day before the expected filing date, the Requested Information from such holder, the Company may file the registration statement without including Registrable Securities of such holder. The failure to so include in any registration statement the Registrable Securities of a holder of Registrable Securities (with regard to that registration statement) shall not result in any liability on the part of the Company to such holder.

(b) The Company shall not grant any demand, piggyback or shelf registration rights the terms of which are senior to or conflict with the rights granted to the holders of Registrable Securities hereunder to any other Person without the prior written consent of Demand Stockholders holding a majority of the Registrable Securities then held by all Demand Stockholders.

4.9. Registration Indemnification.

(a) The Company agrees, without limitation as to time, to indemnify and hold harmless, to the fullest extent permitted by Applicable Law, each Selling Stockholder and its Affiliates and their respective officers, directors, members, shareholders, employees, managers, partners, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such Selling Stockholder, from and against all losses, claims, damages, liabilities, costs, expenses (including reasonable expenses of investigation and reasonable attorneys’ fees and expenses), judgments, fines, penalties, charges and amounts paid in settlement (collectively, the “Losses”), as incurred, arising out of, caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading and (without limitation of the preceding portions of this Section 4.9(a)) will reimburse each such Selling Stockholder, each of its Affiliates, and each of their respective officers, directors, members, shareholders, employees, managers, partners, and each such Person who controls each such Selling Stockholder, for any documented legal expenses reasonably incurred in connection with investigating and defending or settling any such claim, Loss, damage, liability or action, except insofar as the same are caused by any information furnished in writing to the Company by any other party expressly for use therein.

(b) In connection with any registration statement in which a Selling Stockholder is participating, without limitation as to time, each such Selling Stockholder shall, severally and not jointly, indemnify the Company, its directors, officers and employees, and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company, from and against all Losses, as incurred, arising out of, caused

 

23


by, resulting from or relating to any untrue statement (or alleged untrue statement) of material fact contained in the registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (without limitation of the preceding portions of this Section 4.9(b)) will reimburse the Company, its directors, officers and employees and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, Loss, damage, liability or action, in each case solely to the extent, but only to the extent, that such untrue statement or omission is made in such registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto in reliance upon and in conformity with written information furnished to the Company by such Selling Stockholder for inclusion in such registration statement, prospectus or preliminary prospectus or Free Writing Prospectus or any amendment or supplement thereto. Notwithstanding the foregoing, no Selling Stockholder shall be liable under this Section 4.9(b) for amounts in excess of the net proceeds received by such holder in the offering giving rise to such liability.

(c) Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to the extent that the indemnifying party has been actually and materially prejudiced by such failure to provide such notice on a timely basis.

(d) In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and acknowledging the obligations of the indemnifying party with respect to such proceeding, the indemnifying party will not (so long as it shall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnified party hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it which are different from or in addition to the defenses available to such indemnifying party and, as a result, a conflict of interest exists or (ii) the indemnifying party shall have failed within a reasonable period of time to assume such defense and the indemnified party is or would reasonably be expected to be materially prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for the expenses incurred in connection with retaining one separate legal counsel (for the avoidance of doubt, for all indemnified parties in connection therewith)). For the avoidance of doubt, notwithstanding any such assumption by an indemnifying party, the indemnified party shall have the right to employ separate counsel in any such matter and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party except as provided in the previous sentence. An

 

24


indemnifying party shall not be liable for any settlement of an action or claim effected without its consent (which consent shall not be unreasonably withheld, conditioned or delayed). No matter shall be settled by an indemnifying party without the consent of the indemnified party (which consent shall not be unreasonably withheld, conditioned or delayed), unless such settlement (x) includes as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation, (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any indemnified party and (z) is settled solely for cash for which the indemnified party would be entitled to indemnification hereunder.

(e) The indemnification provided for under this Agreement shall survive the Transfer of the Registrable Securities and the termination of this Agreement.

(f) If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, any Person who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses with respect to which such Person would be entitled to such indemnification but for such reason or reasons, in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party, the Persons’ relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and other equitable considerations appropriate under the circumstances. It is hereby agreed that it would not necessarily be equitable if the amount of such contribution were determined by pro rata or per capita allocation. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, no Selling Stockholder shall be required to make a contribution in excess of the amount received by such Selling Stockholder from its sale of Registrable Securities in connection with the offering that gave rise to the contribution obligation.

ARTICLE V

DEFINITIONS

5.1. Defined Terms. Capitalized terms when used in this Agreement have the following meanings:

Affiliate” means, with respect to any Person, an “affiliate” as defined in Rule 405 of the regulations promulgated under the Securities Act and with respect to each Investor, an “affiliate” of such Investor as defined in Rule 405 of the regulations promulgated under the Securities Act and any investment fund, vehicle or holding company of which such Investor or an Affiliate of such Investor serves as the general partner, managing member or discretionary manager or

 

25


advisor; provided, however, that notwithstanding the foregoing, an Affiliate of an Investor shall not include any portfolio company or other investment of any such Person or of such Investor or any investment fund, vehicle or holding company, or any limited partners of such Investor.

Agreement” has the meaning set forth in the preamble.

Applicable Law” means, with respect to any Person, any foreign, federal, state or local statute, law (including common law), ordinance, rule, regulation or regulatory guideline having the force of law or any order, judgment, injunction, award, decision, determination, stipulation, ruling, subpoena, writ, decree or verdict entered by or with any Governmental Authority applicable to such Person, its assets, properties, operations or business.

Bain” shall have the meaning set forth in the recitals.

Bain Investment Fund” means any investment fund, investment vehicle or other account that is, directly or indirectly, managed or advised by Bain or any of its Controlled Affiliates.

Bain Investors” means (i) the Initial Bain Investors, (ii) any Permitted Transferee of any Initial Bain Investor to which Shares are Transferred by such Initial Bain Investor in compliance with the terms of this Agreement and (iii) any Permitted Transferee of any of the Persons included in clause (ii) of this definition to which Shares are Transferred by such Person in compliance with the terms of this Agreement.

Bain Non-Private Equity Business” means any business or investment of Bain and its Affiliates distinct from the private equity business of Bain and its Affiliates; provided, that such business or investment shall not be deemed to be distinct from such private equity business if and at such time that Bain or any of its Affiliates instructs or overtly encourages any such business or investment to take any action that would violate any provision of this Agreement that would be applicable to such business or investment were it to be deemed to be a Bain Investor hereunder.

Bain Ownership Limit” means a percentage equal to the percentage of the outstanding shares of Company Common Stock Beneficially Owned, on a collective basis, by the Initial Bain Investors as of immediately following the Closing; provided, that, the effect of any share repurchases by the Company shall not be counted for purposes of any measurement of the Bain Ownership Limit (and, for the avoidance of doubt, none of the Bain Investors shall be required to sell or otherwise dispose of any shares of Company Common Stock as a consequence of any such repurchase or any other similar action undertaken by the Company) unless and until any Bain Investor has acquired Beneficial Ownership of additional Voting Securities following such repurchase.

Beneficial Owner” or “Beneficially Own” has the meaning assigned to such term in Rule 13d-3 under the Exchange Act, and a Person’s beneficial ownership of securities shall be calculated in accordance with the provisions of such Rule (in each case, irrespective of whether or not such Rule is actually applicable in such circumstance).

Blackout Period” means (i) any regular quarterly period during which directors and executive officers of the Company are not permitted to trade under the insider trading policy of the Company then in effect and (ii) in the event that the Company determines in good faith that

 

26


the registration would reasonably be expected to materially adversely affect or materially interfere with any bona fide material financing of the Company or any material transaction under consideration by the Company or would require disclosure of information that has not been, and is not otherwise required to be, disclosed to the public, the premature disclosure of which would materially adversely affect the Company or for which the Company has a bona fide business purposes for not disclosing, a period of up to seventy five (75) days; provided, that a Blackout Period described in this clause (ii) may not occur more than twice in any period of eighteen (18) consecutive months.

Board” means the Company’s board of directors.

Business Day” means any day other than Saturday, a Sunday or a day on which banks in Buffalo, New York are authorized or required to be closed for regular banking business.

Closing” shall have the meaning set forth in the Merger Agreement.

Closing Date” shall have the meaning set forth in the Merger Agreement.

Commission” means the Securities and Exchange Commission or any other federal agency administering the Securities Act.

Company” has the meaning set forth in the preamble.

Company Common Stock” has the meaning set forth in the recitals.

Contract” means any contract, lease, license, indenture, loan, note, agreement or other legally binding commitment, arrangement or undertaking (whether written or oral and whether express or implied).

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

Controlled Affiliate” means any Affiliate of the specified Person that is, directly or indirectly, Controlled by the specified Person.

Demand” has the meaning set forth in Section 4.1(a).

Demand Registration” has the meaning set forth in Section 4.1(a).

Demand Stockholder” means any KKR Investor that holds Registrable Securities.

Demanding Selling Holders” has the meaning set forth in Section 4.1(b).

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

FINRA” means the Financial Industry Regulatory Authority, Inc. or any successor entity thereto.

 

27


Foreign or State Act” means, with respect to any Person, any applicable foreign, state or local securities or “blue-sky” laws.

Form S-3” has the meaning set forth in Section 4.3(a).

Free Writing Prospectus” has the meaning set forth in Section 4.6(a)(iv).

Governmental Authority” means any federal, national, state, local, cantonal, municipal, international or multinational government or political subdivision thereof, governmental department, commission, board, bureau, agency, taxing or regulatory authority, instrumentality or judicial or administrative body, or arbitrator or SRO, having jurisdiction over the matter or matters in question.

Group” has the meaning assigned to such term in Section 13(d)(3) of the Exchange Act.

Initial Bain Investors” means Bain Capital Integral Investors LLC and BCIP TCV LLC.

Initial KKR Investor” means Accellent Holdings LLC.

Inspectors” has the meaning set forth in Section 4.6(a)(xi).

Investors” means the Bain Investors and the KKR Investors.

KKR” shall have the meaning set forth in the recitals.

KKR Investment Fund” means any investment fund, investment vehicle or other account that is, directly or indirectly, managed or advised by KKR or any of its Controlled Affiliates.

KKR Investors” means (i) the Initial KKR Investor, (ii) any Permitted Transferee of any Initial KKR Investor to which Shares are Transferred by such Initial KKR Investor in compliance with the terms of this Agreement and (iii) any Permitted Transferee of any of the Persons included in clause (ii) of this definition to which Shares are Transferred by such Person in compliance with the terms of this Agreement.

KKR Non-Private Equity Business” means any business or investment of KKR and its Affiliates distinct from the private equity business of KKR and its Affiliates; provided, that such business or investment shall not be deemed to be distinct from such private equity business if and at such time that KKR or any of its Affiliates instructs or overtly encourages any such business or investment to take any action that would violate any provision of this Agreement that would be applicable to such business or investment were it to be deemed to be a KKR Investor hereunder.

KKR Ownership Limit” means a percentage equal to the percentage of the outstanding shares of Company Common Stock Beneficially Owned, on a collective basis, by the Initial KKR Investor as of immediately following the Closing; provided, that, the effect of any share repurchases by the Company shall not be counted for purposes of any measurement of the KKR Ownership Limit (and, for the avoidance of doubt, none of the KKR Investors shall be required to sell or otherwise dispose of any shares of Company Common Stock as a consequence of any

 

28


such repurchase or any other similar action undertaken by the Company) unless and until any KKR Investor has acquired Beneficial Ownership of additional Voting Securities following such repurchase.

Lake Region” shall have the meaning set forth in the recitals.

Lake Region Common Stock” shall have the meaning set forth in the recitals.

Losses” has the meaning set forth in Section 4.9(a).

Marketed Underwritten Shelf Offering” has the meaning set forth in Section 4.3(e)(iii).

Merger” has the meaning set forth in the recitals.

Merger Agreement” has the meaning set forth in the recitals.

Merger Subsidiary” has the meaning set forth in the recitals.

Non-Liable Person” has the meaning set forth in Section 7.12.

Other Demanding Sellers” has the meaning set forth in Section 4.2(b).

Other Proposed Sellers” has the meaning set forth in Section 4.2(b).

Permitted Transfer” has the meaning set forth in Section 1.1(b).

Permitted Transferee” means, with respect to any Investor, any Affiliate of such Investor.

Person” has the meaning set forth in the Merger Agreement.

Piggyback Notice” has the meaning set forth in Section 4.2(a).

Piggyback Registration” has the meaning set forth in Section 4.2(a).

Piggyback Seller” has the meaning set forth in Section 4.2(a).

Records” has the meaning set forth in Section 4.6(a)(xi).

Registrable Amount” means an amount of Registrable Securities having an aggregate value of at least $100 million (based on the anticipated offering price (as reasonably determined in good faith by the Company)), without regard to any underwriting discount or commission, or such lesser amount of Registrable Securities as would result in the disposition of all of the Registrable Securities Beneficially Owned by the applicable Requesting Stockholder or Demand Stockholder, as applicable; provided, that if, and as often as, there is any change in the outstanding shares of Company Common Stock by reason of stock dividends, splits, reverse splits, spin-offs, split-ups, mergers, reclassifications, reorganizations, recapitalizations, combinations or exchanges of shares and the like, appropriate adjustment shall be made to the Registrable Amount so as to fairly and equitably preserve, as far as practicable, the rights and obligations set forth herein that continue to be applicable on the date of such change.

 

29


Registrable Securities” means the Shares held by the Investors and any shares of Company Common Stock received by the Investors in respect of the Shares in connection with any stock split or subdivision, stock dividend, distribution or similar transaction; provided, that any such Shares shall cease to be Registrable Securities when (i) they are sold pursuant to an effective registration statement under the Securities Act, (ii) they are sold pursuant to Rule 144 under the Securities Act or (iii) they shall have ceased to be outstanding.

Requested Information” has the meaning set forth in Section 4.8(a).

Requesting Stockholders” has the meaning set forth in Section 4.1(a).

Restricted Period” has the meaning set forth in Section 1.1(a).

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

Selling Stockholders” has the meaning set forth in Section 4.6(a)(i).

Shares” has the meaning set forth in the recitals.

Shelf Notice” has the meaning set forth in Section 4.3(a).

Shelf Offering” has the meaning set forth in Section 4.3(e).

Shelf Registration Statement” has the meaning set forth in Section 4.3(a).

SRO” means (i) any “self regulatory organization” as defined in Section 3(a)(26) of the Exchange Act, (ii) any other United States or foreign securities exchange, futures exchange, commodities exchange or contract market, or (iii) any other securities exchange.

Standstill Period” has the meaning set forth in Section 1.2(c).

Take-Down Notice” has the meaning set forth in Section 4.3(e).

Total Economic Interest” means, as of any date of determination, the total economic interests of all Voting Securities then outstanding. The percentage of the Total Economic Interest Beneficially Owned by any Person as of any date of determination is the percentage of the Total Economic Interest then Beneficially Owned by such Person, including pursuant to any swaps or any other agreements, transactions or series of transactions, whether any such swap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise.

Total Voting Power” means, as of any date of determination, the total number of votes that may be cast in the election of directors of the Company if all Voting Securities then outstanding were present and voted at a meeting held for such purpose. The percentage of the

 

30


Total Voting Power Beneficially Owned by any Person as of any date of determination is the percentage of the Total Voting Power of the Company that is represented by the total number of votes that may be cast in the election of directors of the Company by Voting Securities then Beneficially Owned by such Person.

Transfer” means (i) any direct or indirect offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), either voluntary or involuntary, or entry into any contract, option or other arrangement or understanding with respect to any offer, sale, lease, assignment, encumbrance, pledge, hypothecation, disposition or other transfer (by operation of law or otherwise), of any capital stock or interest in any capital stock or (ii) in respect of any capital stock or interest in any capital stock, to enter into any swap or any other agreement, transaction or series of transactions that hedges or transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of such capital stock or interest in capital stock, whether any such swap, agreement, transaction or series of transaction is to be settled by delivery of securities, in cash or otherwise. “Transferor” means a Person that Transfers or proposes to Transfer; and “Transferee” means a Person to whom a Transfer is made or is proposed to be made.

Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.

Voting Securities” means shares of Company Common Stock and any other securities of the Company entitled to vote generally in the election of directors of the Company.

5.2. Interpretation. Whenever used: he words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, and the words “hereof” and “herein” and similar words shall be construed as references to this Agreement as a whole and not limited to the particular Article, Section, Annex, Exhibit or Schedule in which the reference appears. Unless the context otherwise requires, references herein: (x) to Articles, Sections, Annexes, Exhibits and Schedules mean the Articles, Sections and Annexes of, and Exhibits and Schedules attached to, this Agreement; (y) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and (z) to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations promulgated thereunder. References to “$” or “dollars” means United States dollars. Any reference in this Agreement to any gender shall include all genders. The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. The Annexes, Exhibits and Schedules referred to herein shall be construed with, and as an integral part of, this Agreement to the same extent as if they were set forth verbatim herein. The headings of the Articles and Sections are for convenience of reference only and do not affect the interpretation of any of the provisions hereof. No rule of construction against the draftsperson shall be applied in connection with the interpretation or enforcement of this Agreement, as this Agreement is the product of negotiation between sophisticated parties advised by counsel.

 

31


ARTICLE VI

MISCELLANEOUS

6.1. Term. This Agreement will be effective as of the Closing Date and shall automatically terminate with respect to each of the Bain Investors and KKR Investors upon the date, respectively, that such Investors, individually as to each such Investor, Beneficially Own less than one percent (1%) of the Total Voting Power, so long as, as of such date, all of the then-remaining Registrable Securities Beneficially Owned by an Investor may be sold in a single transaction without limitation under Rule 144 under the Securities Act and if that is not the case, this Agreement shall terminate with respect to such Investor when the foregoing shall be the case. If this Agreement is terminated pursuant to this Section 6.1, this Agreement shall immediately then be terminated and of no further force and effect, except for the provisions set forth in Section 4.9, Section 5.2 and this Article VI, and except that no termination hereof pursuant to this Section 6.1 shall have the effect of shortening the periods defined by Section 2.1(a), which shall survive in accordance with their terms.

6.2. Notices.

(a) All notices and other communications hereunder shall be in writing and shall be deemed given if they are: (a) delivered in person, (b) transmitted by facsimile (deemed given upon confirmation of receipt), (c) delivered by an express courier (deemed given upon receipt of proof of delivery) or (d) delivered by e-mail to a party at its e-mail address listed below (deemed given upon confirmation of receipt by non-automated reply e-mail from the recipient) (or to such other person or at such other facsimile or address as such party shall deliver to the other party by like notice)::

 

  (i) if to the Company, to:

Greatbatch, Inc.

10000 Wehrle Drive

Clarence, NY 14031

Attention: General Counsel

Email: tmcevoy@greatbatch.com

With a copy (that does not constitute notice) to:

Hodgson Russ LLP

The Guaranty Building

140 Pearl Street

Buffalo, NY 14202

Attention: John J. Zak

Email: jzak@hodgsonruss.com

 

32


  (ii) if to Bain or a Bain Investor, to:

Bain Capital Partners, LLC,

John Hancock Tower

200 Clarendon Street

Boston, MA 02116

Attention: Jeffrey L. Schwartz

Email: jlschwartz@baincapital.com

With a copy (that does not constitute notice) to:

Kirkland & Ellis LLP

300 N. La Salle Street

Chicago, IL 60654

Attention: Matthew E. Steinmetz.

Email: msteinmetz@kirkland.com

 

  (iii) if to KKR or a KKR Investor, to:

Kohlberg Kravis Roberts & Co., L.P.

2800 Sand Hill Road, Suite 200

Menlo Park, CA 94025

Attention: James C. Momtazee

Email: momtj@kkr.com

With a copy (that does not constitute notice) to:

Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, NY 10017

Attention: Marni J. Lerner

Email: mlerner@stblaw.com

6.3. Investor Actions. Any determination, consent or approval of, or notice or request delivered by, or any similar action of the Investors shall be made by, and shall be valid and binding upon, all Investors if made by a majority of the Total Voting Power then Beneficially Owned by all Investors.

6.4. Amendments and Waivers. No provision of this Agreement may be amended or modified unless such amendment or modification is in writing and signed by (i) the Company, (ii) the KKR Investors Beneficially Owning a majority of the Total Voting Power then Beneficially Owned by all KKR Investors and (iii) the Bain Investors Beneficially Owning a majority of the Total Voting Power then Beneficially Owned by all Bain Investors; provided, that any waiver of the restrictions set forth in Section 1.1 or Section 1.2 shall only require the consent of the Company. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.

 

33


6.5. Successors and Assigns. Neither this Agreement nor any of the rights or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties, provided that any proposed assignment by any of the Bain Investors or the KKR Investors of any of their respective rights herein to any party other than to an Affiliate of Bain or KKR, as applicable, may be granted or withheld in the Company’s sole and absolute discretion, it being understood that it is the intention of the parties hereto that the rights afforded to the Bain Investors and the KKR Investors are personal to such Persons and are not transferable except as expressly provided herein. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Any attempted assignment in violation of this Section 6.5 shall be void.

6.6. Severability. It is the intent of the parties that the provisions of this Agreement shall be enforced to the fullest extent permissible under Applicable Law and public policies applied in each jurisdiction in which enforcement is sought. If any particular provision or portion of this Agreement shall be adjudicated to be invalid or unenforceable, such provision or portion thereof shall be deemed amended to the minimum extent necessary to render such provision or portion valid and enforceable, and such amendment will apply only with respect to the operation of such provision or portion in the particular jurisdiction in which such adjudication is made.

6.7. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that each party need not sign the same counterpart. A facsimile signature or electronically scanned copy of a signature shall constitute and shall be deemed to be sufficient evidence of a party’s execution of this Agreement, without necessity of further proof. Each such copy shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

6.8. Entire Agreement. This Agreement (including the documents and the instruments referred to in this Agreement), together with the Merger Agreement, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Agreement.

6.9. Governing Law; Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. IN THE EVENT ANY PARTY TO THIS AGREEMENT COMMENCES ANY LITIGATION, PROCEEDING OR OTHER LEGAL ACTION IN CONNECTION WITH OR RELATING TO NEGOTIATION, EXPLORATION, DUE DILIGENCE WITH RESPECT TO OR ENTERING INTO OF THIS AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN, THE PARTIES TO THIS AGREEMENT HEREBY (A) AGREE THAT ANY SUCH LITIGATION, PROCEEDING OR OTHER LEGAL ACTION SHALL BE INSTITUTED EXCLUSIVELY IN A COURT OF COMPETENT JURISDICTION LOCATED WITHIN THE STATE OF DELAWARE, WHETHER A STATE OR FEDERAL COURT; (B) AGREE THAT

 

34


IN THE EVENT OF ANY SUCH LITIGATION, PROCEEDING OR ACTION, SUCH PARTIES WILL CONSENT AND SUBMIT TO PERSONAL JURISDICTION IN ANY SUCH COURT DESCRIBED IN CLAUSE (A) OF THIS SECTION 6.9 AND TO SERVICE OF PROCESS UPON THEM IN ACCORDANCE WITH THE RULES AND STATUTES GOVERNING SERVICE OF PROCESS; (C) AGREE TO WAIVE TO THE FULL EXTENT PERMITTED BY LAW ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH LITIGATION, PROCEEDING OR ACTION IN ANY SUCH COURT OR THAT ANY SUCH LITIGATION, PROCEEDING OR ACTION WAS BROUGHT IN AN INCONVENIENT FORUM; (D) AGREE AS AN ALTERNATIVE METHOD OF SERVICE TO SERVICE IN ANY LEGAL PROCEEDING BY MAILING OF COPIES THEREOF TO SUCH PARTY AT ITS ADDRESS SET FORTH IN SECTION 6.2 FOR COMMUNICATIONS TO SUCH PARTY; (E) AGREE THAT ANY SERVICE MADE AS PROVIDED HEREIN SHALL BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (F) AGREE THAT NOTHING HEREIN SHALL AFFECT THE RIGHTS OF ANY PARTY TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES OF FACT AND LAW, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY OTHERWISE HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE NEGOTIATION, EXPLORATION, DUE DILIGENCE WITH RESPECT TO OR ENTERING INTO OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) 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, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.9.

6.10. Specific Performance. The parties hereto agree that monetary damages would not be an adequate remedy in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is expressly agreed that the parties hereto shall be entitled to equitable relief, including injunctive relief and specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or in equity.

6.11. No Third Party Beneficiaries. Nothing in this Agreement shall confer any rights upon any Person other than the parties hereto and each such party’s respective heirs, successors and permitted assigns; provided, that the Persons indemnified under Section 4.9 are intended third party beneficiaries of Section 4.9, and Non-Liable Persons are intended third party beneficiaries of Section 6.12.

 

35


6.12. No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that any party hereto may be a partnership or limited liability company, each party hereto, by its acceptance of the benefits of this Agreement, covenants, agrees and acknowledges that no Persons other than the named parties hereto shall have any obligation hereunder and that it has no rights of recovery hereunder against, and no recourse hereunder or in respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any former, current or future director, officer, agent, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative or employee of any Investor (or any of their heirs, successors or permitted assigns), or against any former, current or future director, officer, agent, employee, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative, general or limited partner, stockholder, manager or member of any of the foregoing Persons, but in each case not including the named parties hereto (each, a “Non-Liable Person”), whether by or through attempted piercing of the corporate veil, by or through a claim (whether in tort, contract or otherwise) by or on behalf of such party against any Non-Liable Person, by the enforcement of any assignment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other Applicable Law or otherwise; it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any Non-Liable Person, as such, for any obligations of the applicable party under this Agreement or the transactions contemplated hereby, in respect of any oral representations made or alleged to have been made in connection herewith or therewith or for any claim (whether in tort, contract or otherwise) based on, in respect of or by reason of, such obligations or their creation.

[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]

 

36


IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement by their authorized representatives as of the date first above written.

 

THE COMPANY:     GREATBATCH, INC.
    By:  

/s/ Thomas J. Hook

    Name:   Thomas J. Hook
    Title:   President & Chief Executive Officer
KKR:     KOHLBERG KRAVIS ROBERTS & CO., L.P.
    By:  

/s/ William Janetschek

    Name:   William Janetschek
    Title:   Chief Financial Officer
BAIN:     BAIN CAPITAL PARTNERS, LLC
    By:  

/s/ John Connaughton

    Name:   John Connaughton
    Title:   Managing Director


INVESTORS:     ACCELLENT HOLDINGS LLC
    By:  

/s/ James C. Momtazee

    Name:   James C. Momtazee
    Title:   Vice President
    BAIN CAPITAL INTEGRAL INVESTORS LLC
    By:  

/s/ Christopher Gordon

    Name:   Christopher Gordon
    Title:   Managing Director
    BCIP TCV LLC
    By:  

/s/ Christopher Gordon

    Name:   Christopher Gordon
    Title:   Managing Director


EXHIBIT A

FORM OF JOINDER

The undersigned is executing and delivering this Joinder Agreement pursuant to that certain Stockholders Agreement, dated as of October 27, 2015 (as amended, restated, supplemented or otherwise modified in accordance with the terms thereof, the “Stockholders Agreement”) by and among Greatbatch, Inc., a Delaware corporation, Kohlberg Kravis Roberts & Co. L.P., Bain Capital Partners, LLC, each of the stockholders whose name appears on the signature pages thereto, and any other Persons who become a party thereto in accordance with the terms thereof. Capitalized terms used but not defined in this Joinder Agreement shall have the respective meanings ascribed to such terms in the Stockholders Agreement.

By executing and delivering this Joinder Agreement to the Stockholders Agreement, the undersigned hereby adopts and approves the Stockholders Agreement and agrees, effective commencing on the date hereof and as a condition to the undersigned’s becoming the transferee of Shares, to become a party to, and to be bound by and comply with the provisions of, the Stockholders Agreement applicable to an Investor and a [Bain Investor] [KKR Investor], respectively, in the same manner as if the undersigned were an original signatory to the Stockholders Agreement.

[The undersigned hereby represents and warrants that, pursuant to this Joinder Agreement and the Stockholders Agreement, it is a Permitted Transferee of [●] and will be the lawful record owner of [●] Shares as of the date hereof. The undersigned and the proposed transferor hereby represent and warrant that the proposed transfer of Shares will not result in [Bain] [KKR] exceeding the [Bain Ownership Limit] [KKR Ownership Limit]]

The undersigned acknowledges and agrees that Sections 6.2 through Section 6.12 of the Stockholders Agreement are incorporated herein by reference, mutatis mutandis.

[Remainder of page intentionally left blank]


Accordingly, the undersigned have executed and delivered this Joinder Agreement as of the      day of             ,         .

 

TRANSFEREE

 

Print Name:
Address:
Telephone:
Facsimile:
Email:

 

AGREED AND ACCEPTED
as of the      day of             ,         .
GREATBATCH, INC.
By:  

 

Name:  
Title:  
[TRANSFEROR
By:  

 

Name:  
Title:]  


Exhibit 10.1

EXECUTION VERSION

Published CUSIP Number: 39154EAA9

Revolving Credit CUSIP Number: 39154EAB7

Term A Loan CUSIP Number: 39154EAC5

Term B Loan CUSIP Number: 39154EAD3

 

 

 

CREDIT AGREEMENT

by and among

GREATBATCH LTD.,

as the Borrower,

GREATBATCH, INC.,

as Parent,

THE FINANCIAL INSTITUTIONS identified herein as Lenders,

and

MANUFACTURERS AND TRADERS TRUST COMPANY,

as Administrative Agent

Dated as of October 27, 2015

 

 

 

MANUFACTURERS AND TRADERS TRUST COMPANY,

CREDIT SUISSE SECURITIES (USA) LLC

and

KEYBANC CAPITAL MARKETS INC.,

as Joint Lead Arrangers and Joint Bookrunners, and

MUFG Union Bank, N.A.

Fifth Third Bank, and

Citibank NA,

as Co-Documentation Agents


CREDIT AGREEMENT

This CREDIT AGREEMENT, dated as of October 27, 2015 (as amended, modified or supplemented from time to time, this “Agreement”), is made by and among MANUFACTURERS AND TRADERS TRUST COMPANY (“M&T”), individually, as the Issuing Bank, a Lender, the Swingline Lender and the Administrative Agent, the LENDERS (referred to below), GREATBATCH LTD., a New York corporation (the “Borrower”), and GREATBATCH, INC., a Delaware corporation (“Parent”). M&T, when acting in its capacity as administrative agent for the Lenders and the Issuing Bank, or any successor or assign that assumes that position pursuant to the terms of this Agreement, is hereinafter referred to as the “Administrative Agent.” Certain capitalized terms used in this Agreement are defined in Article 1 (Definitions).

Background of Agreement

Pursuant to the terms of that certain Agreement and Plan of Merger, dated August 27, 2015 (the “Merger Agreement”), among Parent, Provenance Merger Sub Inc., a Delaware corporation and an indirect Subsidiary of Parent and direct Subsidiary of the Borrower (“Merger Sub”), and Lake Region Medical Holdings Inc., a Delaware corporation (the “Company”), Parent will acquire the Company and its Subsidiaries through the merger of Merger Sub with and into the Company with the Company being the survivor of such merger (the “Merger”) and becoming a Subsidiary Guarantor hereunder and assuming (without taking of any further action) all Obligations of Merger Sub under this Agreement and the other Loan Documents.

The Borrower has requested that the Lenders provide the senior secured credit facilities provided for herein, which consist of (a) a revolving credit facility in an initial aggregate principal amount of Two Hundred Million Dollars ($200,000,000) with a letter of credit subfacility in an initial aggregate principal amount equal to Thirty Million Dollars ($30,000,000) and a swingline subfacility in an aggregate principal amount equal to Fifteen Million Dollars ($15,000,000), (b) a Term A Loan facility in an initial aggregate principal amount of Three Hundred Seventy Five Million Dollars ($375,000,000), and (c) a Term B Loan facility in an initial aggregate principal amount of One Billion Twenty Five Million Dollars ($1,025,000,000).

Parent and its direct and indirect Subsidiaries (including Merger Sub) will derive substantial benefits from the Facilities. In addition to providing financing for the Merger transaction referenced above, the Borrower may, among other things, use certain proceeds of the Loans hereunder to repay existing indebtedness of the Borrower, Parent and certain Subsidiaries, to make capital contributions in, and extend credit to, its U.S. Subsidiaries (including Merger Sub) and, to the extent permitted hereby, its Foreign Subsidiaries. Such access to capital provided to the foregoing Subsidiaries through this financing is on terms that are more advantageous to such Subsidiaries than such Subsidiaries could obtain if they accessed capital independently. Accordingly, the Facilities provided for in this Agreement are to be guaranteed by Parent and, subject to the next sentence, Parent’s U.S. Subsidiaries from time to time, and secured by the equity of the Borrower and the other material personal property of the Guarantors comprising the Collateral. Certain Ventures that are U.S. Subsidiaries are not required to become guarantors.

 

-1-


NOW, THEREFORE, it is agreed as follows:

ARTICLE 1

DEFINITIONS

1.1 DEFINED TERMS.

As used in this Agreement, the following terms shall have the meanings specified in this Section 1.1 unless the context otherwise requires.

Accellent: Lake Region Medical, Inc. (formerly known as Accellent Inc.)

Acquisition: (a) any acquisition by Parent or any of its Subsidiaries of an interest in any other Person that shall then become Consolidated with Parent and its Subsidiaries in accordance with GAAP (including, by way of merger into the Borrower or any Subsidiary or otherwise), or (b) any acquisition by Parent or any of its Subsidiaries of all or any substantial part of the assets of any other Person or of a division or line of business of any other Person, in any case, whether by purchase, lease, exchange, issuance of equity or debt securities, merger, reorganization or any other method.

Additional Lender: the meaning specified in clause (d) of Subsection 2.1.11 (Increases in Facility).

Adjusted EBITDA: for each period of four (4) consecutive fiscal quarters: Consolidated Net Income for such period plus to the extent deducted in computing such Consolidated Net Income (except in the case of clause (k)(ii) below), the sum of (without duplication, and in each case of, or incurred by, Parent and its Subsidiaries during such period):

(a) Interest Expense;

(b) income tax expense;

(c) depreciation and amortization expense;

(d) write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness (including the Loans and any convertible securities);

(e) any extraordinary, unusual or non-recurring expenses or losses (including expenses or losses on sales or abandonment of assets outside of the ordinary course of business) determined in accordance with GAAP;

(f) share-based compensation plus any other non-cash charges, including, for the sake of clarity, non-cash impairments of intangible assets;

(g) the absolute value of negative Net Income, if any, attributable to discontinued operations;

 

-2-


(h) non-recurring actual expenses in connection with Permitted Acquisitions;

(i) restructuring charges previously incurred by a Person prior to the date such Person becomes a Subsidiary of Parent in connection with a Permitted Acquisition;

(j) adjustments to Operating Income, including “Consolidation and Optimization,” “IP Litigation,” “Acquisition and Integration,” and/or “Asset Dispositions and Other” used in the determination of Total Adjusted Operating Income (in each case, as such terms are used in the financial statements of Parent and its Subsidiaries required to be delivered under Subsections 6.1.1 and 6.1.2(a));

(k) (i) business optimization expenses (including expenses related to consolidation initiatives), relocation and integration expenses, costs, charges, expenses, accruals and reserves related to cost savings initiatives, strategic initiatives and initiatives aimed at profitability improvements, and other restructuring costs, charges, expenses, accruals and reserves (which, for the avoidance of doubt, shall include the effect of exiting lines of business, operating expense reductions, personnel relocation, restructuring, redundancy, severance, termination, settlement and judgment, one-time compensation charges, modifications to pension and post-retirement employee benefit plans, the amount of any signing, retention and completion bonuses, new systems design and implementation costs, software development costs and curtailment and project startup costs), in each case of Parent and its Subsidiaries, in each case to the extent not included in clause (j) above, and (ii) the amount of net cost savings and “run rate” synergies projected by Parent in good faith to be realized by Parent and its Subsidiaries as a result of, and within twelve (12) Months of, the Transactions or any actions specified in clause (i) of this clause (k) (which cost savings and synergies shall be calculated on a pro forma basis as though such cost savings or synergies had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such amounts; provided, that such cost savings or synergies (A) are reasonably identifiable and factually supportable and (B) shall have been certified in writing to the Lenders by a Financial Officer of Parent (which certification may be included in the relevant Officer’s Compliance Certificate); provided, further, that the aggregate amount added to Consolidated Net Income pursuant to this clause (k) for any such period ending (1) during or on the last day of the 2015 or 2016 fiscal years shall not exceed Thirty-Five Million Dollars ($35,000,000) for such period and (2) after the end of the 2016 fiscal year, for any period, shall not exceed ten percent (10%) of Adjusted EBITDA (prior to giving effect to such addition) for such period;

(l) other than in the event that the Permitted Nuvectra Spinoff shall not have been consummated on or prior to the deadline therefor stated in the definition thereof, the absolute value of the negative Net Income, if any, of Nuvectra;

(m) employee severance costs; and

(n) Transaction Costs,

 

-3-


minus to the extent included in computing Consolidated Net Income for such period, the sum of (without duplication, and in each case of, or received or realized by, Parent and its Subsidiaries during such period):

(i) any extraordinary, unusual or non-recurring income or gains (including gains on sales or abandonment of assets outside of the ordinary course of business) determined in accordance with GAAP;

(ii) any other non-cash income;

(iii) positive Net Income, if any, attributable to discontinued operations;

(iv) any net gain from the collection of proceeds of life insurance policies; and

(v) other than in the event that the Permitted Nuvectra Spinoff shall not have been consummated on or prior to the deadline therefor stated in the definition thereof, the positive Net Income, if any, of Nuvectra.

The aggregate amount of add backs made pursuant to clauses (h), (i), (j) and (m) above for any such period shall not exceed (i) twenty-five percent (25%) of Adjusted EBITDA (prior to giving effect to such add backs) for any such period ending prior to the first anniversary of the Closing Date and (ii) twenty percent (20%) of Adjusted EBITDA (prior to giving effect to such add backs) for any such period ending after the first anniversary of the Closing Date.

Adjusted GAAP: the meaning specified in clause (b)(i) of Subsection 7.3.3 (Changes in GAAP).

Adjusted LIBOR: the rate per annum (rounded upwards if necessary to the nearest one-hundredth of one percent (0.01%)) determined by the Administrative Agent to be equal to the quotient of (a) LIBOR, divided by (b) a number equal to one (1.00) minus, expressed as a decimal, the Reserve Percentage; provided, that with respect to any Term B Loans, Adjusted LIBOR shall not be less than one percent (1.00%) per annum.

Administrative Agent: the meaning specified in the preamble to this Agreement.

Administrative Questionnaire: an Administrative Questionnaire in a form supplied by the Administrative Agent.

Affiliate: 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. For avoidance of doubt, and notwithstanding anything to the contrary contained in this Agreement, following the completion of the transactions contemplated on Schedule 1.1A in connection with the Permitted Nuvectra Spinoff, Nuvectra will not be considered an Affiliate.

 

-4-


Agent Parties: the meaning specified in Subsection 11.1.4 (Platform; MNPI).

Agreement: the meaning specified in the preamble to this Agreement.

All-in Yield: as to any Loans (or other Indebtedness, if applicable), the weighted average yield thereon to Lenders (or other lenders or investors, as applicable) providing such Loans (or other Indebtedness, if applicable), as reasonably determined by the Administrative Agent in consultation with the Borrower, whether in the form of interest rate, margin, original issue discount, up-front fees, rate floors or otherwise; provided, that original issue discount and up-front fees shall be equated to interest rate based on an assumed four (4) year average life (or, if shorter, the remaining life to maturity); provided, further, that “All-in Yield” shall not include arrangement, commitment, underwriting, structuring or similar fees not generally paid to the lenders or investors providing such Loans or other Indebtedness or customary consent fees for an amendment paid generally to consenting lenders; provided, further, that in determining the relative All-in-Yield applicable to different tranches of Indebtedness, any LIBOR or Base Rate floor differential shall be equated to a difference in the All-in Yield.

Alternative Incremental Facility Debt: any Indebtedness incurred by the Borrower in the form of one or more series of senior secured notes, senior unsecured notes (including, without limitation, any additional Senior Notes) or secured or unsecured term loans; provided, that (a) if such Indebtedness is secured, such Indebtedness (i) (x) solely, in the case of any such notes, shall be secured by the Collateral on a pari passu or junior basis relative to the Secured Obligations and (y) in the case of any such term loans, shall be secured by the Collateral on a junior basis relative to the Secured Obligations, (ii) shall not be secured by any property or assets of Parent or any of its Subsidiaries other than the Collateral and (iii) shall be subject to customary intercreditor terms and documentation reasonably acceptable to the Administrative Agent, (b) if such Indebtedness is guaranteed, it shall not be guaranteed by any Person that is not a Guarantor, (c) such Indebtedness shall have (1) a final scheduled maturity date no earlier than the Maturity Date, and (2) a weighted average life to maturity that is equal to or greater than the weighted average life to maturity of the Term B Loans and (d) the other terms and conditions of, and the definitive documentation for, such Indebtedness (excluding pricing, fees and optional prepayment or redemption terms (including call protection)) shall be substantially identical to (with appropriate adjustments for the differing nature of notes and loans, if applicable), or not materially more favorable to the lenders or other investors providing such Indebtedness, as applicable, than those applicable to the RC Loans, the Term A Loans or the Term B Loans (except for covenants or other provisions applicable only to periods after the Maturity Date, in each case existing at the time such Indebtedness is incurred).

Anti-Terrorism Law: any Law relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery (including the FCPA), and any regulation, order or directive promulgated, issued or enforced pursuant to such Law, all as amended, supplemented or replaced from time to time.

Applicable Margin: the meaning specified in Subsection 2.8.2 (Applicable Margin).

 

-5-


Applicable Percentage: with respect to any RC Lender, the percentage of the total RC Commitments represented by such RC Lender’s RC Commitment. If the RC Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the RC Commitments most recently in effect, giving effect to any assignments.

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

Assignment and Assumption: an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.6 (Successors and Assigns)), and accepted by the Administrative Agent, in substantially the form of Exhibit H or any other form approved by the Administrative Agent.

Available RC Commitment: the meaning specified in Subsection 2.1.2 (Available RC Commitment).

Banking Services: each and any of the following bank services provided to any Loan Party by the Administrative Agent, a Lender, the Issuing Bank or an Affiliate of the foregoing: (a) commercial credit cards and purchasing cards, (b) stored value cards and (c) treasury and/or cash management services (including controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services); provided, that the Borrower and any such bank services provider shall have designated such bank services as “Banking Services” in writing to the Administrative Agent, which designation, in the case of any such Affiliate, shall contain an acknowledgement by such Affiliate of the exculpatory and indemnification provisions herein in favor of the Administrative Agent.

Banking Services Obligations: any and all obligations of the Loan Parties, whether absolute or contingent and howsoever and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

Bankruptcy Plan: the meaning specified in Subsection 11.6.8 (Disqualified Institutions).

Base Rate: the highest of (a) the variable per annum rate of interest so designated from time to time by the Administrative Agent as its prime rate (which rate is a reference rate and does not necessarily represent the lowest or best rate being charged to any customer), (b) the Federal Funds Rate plus one-half of one percent (0.50%) per annum and (c) a rate of interest equal to one (1) month LIBOR as in effect on the first Eurodollar Business Day of the then current month plus two percent (2.00%) per annum; provided, that with respect to any Term B Loans, Base Rate shall not be less than two percent (2.00%). Any change in the Base Rate shall be effective on the opening of business on the day specified in the public announcement of such change.

Base Rate Loans: Loans bearing interest at a rate equal to the Base Rate plus the Applicable Margin.

 

-6-


Board of Directors: the board of directors, board of managers or similar group that directs the affairs of a Person.

Borrower: the meaning specified in the preamble to this Agreement.

Borrower Materials: the meaning specified in Subsection 11.1.4 (Platform; MNPI).

Business Day: any day other than a Saturday, Sunday or day which shall be in the State of New York a legal holiday or day on which banking institutions are required or authorized to close; provided, that as it relates to LIBOR Loans, Business Day shall mean a Eurodollar Business Day.

Capital Expenditures: expenditures for fixed or capital assets, including the purchase, construction or rehabilitation of equipment or other physical assets that are required to be capitalized under GAAP.

Capital Lease: a lease with respect to which the lessee is required to recognize the acquisition of an asset and the incurrence of a liability in accordance with GAAP.

Capital Lease Obligation: with respect to any Capital Lease, the amount of the obligation of the lessee thereunder that would in accordance with GAAP appear on a balance sheet of such lessee in respect of such Capital Lease or otherwise be disclosed in a note to such balance sheet.

Capital Stock: any class of preferred, common or other capital stock, share capital or similar equity interest of a Person, including any partnership interest in any partnership or limited partnership and any membership interest in any limited liability company.

Cash Collateralize: to deposit in a controlled account or to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the Issuing Bank or Lenders, as collateral for LC Obligations or obligations of Lenders to fund participations in respect of LC Obligations, cash or deposit account balances or, if the Administrative Agent and each applicable Issuing Bank shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and each applicable Issuing Bank. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

Cash Equivalents: any of the following: (a) full faith and credit obligations of the United States, or fully guaranteed as to interest and principal by the full faith and credit of the United States, maturing in not more than one year from the date such investment is made; (b) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, by any political subdivision or taxing authority of any such state, commonwealth or territory or by any foreign government, the securities of which state, commonwealth, territory, political subdivision, taxing authority or foreign government (as the case may be) are rated at least A2 by S&P or A by Moody’s; (c) time deposits

 

-7-


and certificates of deposit having a final maturity of not more than one year after the date of issuance thereof of any commercial bank or depository institution incorporated under the laws of the United States or any state thereof or the District of Columbia, which (i) in the case of a bank, is a member of the Federal Reserve System and (ii) in the case of either a bank or a depository institution, has a combined capital and surplus of not less than One Billion Dollars ($1,000,000,000) and with a senior unsecured debt credit rating of at least “A” by Moody’s or “A” by S&P; (d) commercial paper of companies, banks, trust companies or national banking associations incorporated or doing business under the laws of the United States or one of the States thereof, in each case having a remaining term until maturity of not more than one hundred eighty (180) days from the date such investment is made and rated at least P-1 by Moody’s or at least A-1 by S&P; (e) repurchase agreements with any financial institution having combined capital and surplus of not less than One Billion Dollars ($1,000,000,000) with a term of not more than seven (7) days for underlying securities of the type referred to in clauses (a) and (b) above; (f) money market funds which invest primarily in the Cash Equivalents set forth in the preceding clauses (a) – (f) and seek to maintain a net asset value of one (1.00) as their primary objective; and (g) in the case of the Foreign Subsidiaries, short-term investments utilized by such Foreign Subsidiaries in accordance with customary investment practices for cash management and of a type substantially equivalent to the foregoing (as determined by the applicable Foreign Subsidiary in good faith).

CERCLA: the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended from time to time, and all rules and regulations promulgated in connection therewith.

Change in Law: the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided, that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) 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, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

Change of Control:

(a) Any person or group of persons (within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended) shall obtain ownership or control in one or more series of transactions of more than thirty percent (30%) of the Capital Stock of Parent entitled to vote in the election of members of the Board of Directors of Parent; or

(b) Parent ceases to be the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended) of one hundred percent (100%) of the Capital Stock of the Borrower, free and clear of all Liens, except for Permitted Liens; or

 

-8-


(c) There shall have occurred under any indenture or other instrument evidencing any Indebtedness in excess of the Threshold Amount or preferred equity of Parent or any of its Subsidiaries any “change of control” or “fundamental change” (or similar term as defined in such indenture or such other evidence of Indebtedness or preferred equity) obligating Parent or any such Subsidiary to repurchase, redeem or repay all or any part of the Indebtedness or Capital Stock provided for therein; or

(d) The Borrower ceases to own all of the Capital Stock of its U.S. Subsidiaries free of all Liens (except in favor of the Administrative Agent) other than such Capital Stock as may be disposed of in accordance with the terms hereof and other than the Ventures; or

(e) The Borrower merges with or into another Person and the Borrower is not the surviving entity or sells or disposes of all or substantially all of its assets or all or substantially all of the equity of its Subsidiaries to any Person.

CIP Regulations: the meaning specified in Section 10.11 (No Reliance on Administrative Agent’s Customer Identification Program).

Class: a reference to Loans in either the Term A Facility or the Term B Facility.

Closing Date: October 27, 2015.

Closing Date GAAP: the meaning specified in clause (a) of Subsection 7.3.3 (Changes in GAAP).

Closing Date Refinancing: the following refinancing transactions: (a) all Indebtedness (other than in respect of the Existing Letters of Credit and any contingent indemnification obligations for which no claim has been asserted in writing) of Parent and its Subsidiaries under the Second Amended and Restated Credit Agreement, dated as of September 20, 2013, as amended, among the Borrower, M&T as administrative agent and the other parties thereto, shall have been repaid in full, together with all accrued but unpaid interest, fees and other amounts owing thereon, (b) all Indebtedness (other than contingent indemnification obligations for which no claim has been asserted in writing) of the Company and its Subsidiaries except for such Indebtedness that is permitted to remain outstanding pursuant to the Merger Agreement and this Agreement shall have been repaid in full, together with all accrued but unpaid interest, fees and other amounts owing thereon, (c) all commitments, security interests and guaranties in connection with the Indebtedness described in clauses (a) and (b) above shall have been terminated and released.

COBRA: the group health plan continuation coverage requirements of Section 4980B of the Code and Part 6 of Subtitle B of Title I of ERISA.

Code: the Internal Revenue Code of 1986, as amended, or its predecessor or successor, as applicable, and any Treasury regulations, revenue rulings or technical information releases issued thereunder.

 

-9-


Collateral: all property of any sort in which any Loan Party has granted, or purported to grant, a security interest or other Lien pursuant to any of the Loan Documents.

Commitment: the RC Commitment, the Term A Loan Commitment, the Term B Loan Commitment or commitments in respect of any Incremental Term Loans, Refinancing RC Indebtedness, Refinancing Term A Indebtedness or Refinancing Term B Refinancing Indebtedness, as the context may require.

Commitment Fee: the meaning specified in Subsection 2.7.1 (Commitment Fees).

Commitment Fee Base: the meaning specified in Subsection 2.7.1 (Commitment Fees).

Commitment Fee Rate: the meaning specified in Subsection 2.7.1 (Commitment Fees).

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

Communications: the meaning specified in Subsection 11.1.4 (Platform; MNPI).

Company: the meaning specified in the Background of Agreement Section.

Company Material Adverse Effect: any change, effect, event, occurrence, state of facts or development that, individually or in the aggregate with all other changes, effects, events, occurrences, state of facts and developments, (a) is or would reasonably be expected to be materially adverse to the business, results of operations or financial condition of the Company and its Subsidiaries, taken as a whole, except to the extent that such change, effect, event, occurrence, state of facts or development results from, arises out of or is attributable to (i) changes in general economic conditions, (ii) general financial or security market fluctuations or changes in conditions thereof, (iii) changes in or events affecting any of the industries in which the Company or any of its Subsidiaries operate, (iv) any effect arising out of a change or proposed change in GAAP (or any authoritative interpretation thereof) or Applicable Law (or any authoritative interpretation thereof), (v) the negotiation, execution, delivery, announcement or pendency of the Merger Agreement and the transactions contemplated hereby, including any (x) litigation resulting therefrom and (y) change in customer, distributor, sales representative, employee, labor union, works council, supplier, financing source, licensor, licensee, sub-licensee, stockholder, Governmental Authority or similar relationships, including as a result of the identity of Parent or its plans or intentions for the Company or any of its Subsidiaries or their respective businesses or operations (or any portion thereof), (vi) any failure by the Company and its Subsidiaries to meet any estimates of revenues, earnings, projections, budgets, plans or forecasts (provided, that unless otherwise excluded from the definition of Company Material Adverse Effect, the underlying cause or causes of such failure may be taken into consideration when determining whether a Company Material Adverse Effect has occurred), (vii) natural disasters or other force majeure events, (viii) changes in local, national, international or other political, social or regulatory conditions, including any engagement in hostilities, whether or not pursuant to the declaration of a national emergency or war, or the occurrence of any military or terrorist attack of any kind, or the worsening thereof, (ix) compliance

 

-10-


by the Company and its Subsidiaries with any of the terms and conditions of the Merger Agreement, (x) any change in the credit rating of the Company or any of its Subsidiaries (provided, that unless otherwise excluded from the definition of Company Material Adverse Effect, the underlying cause or causes of such change in credit rating may be taken into consideration when determining whether a Company Material Adverse Effect has occurred), (xi) any action taken by the Company or any of its Subsidiaries at the request or with the consent of Parent, so long as the Lead Arrangers shall have consented thereto in writing or (xii) any relationship or activity subject to the National Labor Relations Act or similar Applicable Law; provided, that in the cases of the foregoing clauses (i) through (iv), (vii) and (viii), to the extent such changes do not have a materially disproportionate effect on the Company and its Subsidiaries, taken as a whole, as compared to other participants in the same industry or (b) would prevent consummation of the transactions contemplated by the Merger Agreement by the Company. For purposes of this definition of Company Material Adverse Effect only, the foregoing definition, the terms “Applicable Law,” “Subsidiaries,” “GAAP” and “Governmental Authority” shall be used as defined in the Merger Agreement as in effect on August 27, 2015.

Competitor: a bona fide competitor of Parent and any of its Subsidiaries.

Competitor Debt Fund Affiliate: means any Affiliate of a Competitor that is a bona fide debt fund or an investment vehicle that is primarily engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of business and with respect to which no Competitor makes investment decisions or has the power, directly or indirectly, to direct or cause the direction of such investment decisions.

Consenting Lender: the meaning specified in Section 2.18 (Extension of Maturity Date).

Consolidated: with respect to any Person and any specified Subsidiaries of such Person, refers to the consolidation of financial statements of such Person and such Subsidiaries and of particular items in such financial statements in accordance with GAAP.

Consolidated Net Income: for any fiscal period, Net Income of Parent and its Subsidiaries on a Consolidated basis for such fiscal period.

Consolidating: with respect to any Person and any specified Subsidiaries of such Person, refers to the separate presentation of financial statements of each such Person in accordance with GAAP.

Control: the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

Declining Lender: the meaning specified in Section 2.18 (Extension of Maturity Date).

 

-11-


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

Default: any condition or event which, with notice or lapse of time or both, would become an Event of Default.

Default Rate: the meaning specified in Subsection 2.8.6 (Default Rate).

Defaulting Lender: subject to Subsection 2.15.2 (Defaulting Lender Cure), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Bank, any Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two (2) Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or any Issuing Bank or Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided, that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower) or (d) unless the Administrative Agent determines in its sole discretion that a Lender should not be a Defaulting Lender by virtue of the facts and circumstances described in this clause (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided, that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Subsection 2.15.2 (Defaulting Lender Cure)) upon delivery of written notice of such determination to the Borrower, each Issuing Bank, each Swingline Lender and each Lender.

 

-12-


Disqualified Institution: on any date, any Person (together with its Affiliates to the extent clearly identifiable as Affiliates of such Person on the basis of their name, but excluding any Competitor Debt Fund Affiliates) that is a Competitor of Parent and its Subsidiaries, which Person has been designated by the Borrower as a “Disqualified Institution” by written notice to the Administrative Agent and the Lenders (including by posting such notice to the Platform) not less than five (5) Business Days prior to such date; provided, that “Disqualified Institutions” shall exclude any Person that the Borrower has designated as no longer being a “Disqualified Institution” by written notice delivered to the Administrative Agent and the Lenders (including by posting such notice to the Platform) from time to time; provided, further, that no Competitor Debt Fund Affiliate shall be a Disqualified Institution.

Disqualified Stock: with respect to any Person, any Capital Stock which by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable): (a) matures or is mandatorily redeemable for any reason; (b) is convertible or exchangeable for Indebtedness or Disqualified Stock or (c) is or may for any reason be redeemable at the option of the holder thereof, in whole or in part, in each case, on or prior to the first anniversary of the stated maturity of the Notes.

DOL: United States Department of Labor, or any governmental agency or instrumentality succeeding to the functions thereof.

Dollars and $: dollars in lawful currency of the United States.

DQ List: the meaning specified in Subsection 11.6.8 (Disqualified Institutions)

Dutch Auction: the meaning specified in Subsection 11.6.7 (Borrower Buybacks).

Eligible Assignee:

(a) a Lender;

(b) an Affiliate of a Lender;

(c) an Approved Fund; and

(d) any other Person (other than a natural person) subject to such consents, if any, as may be required under clause (c) of Subsection 11.6.2 (Assignments by Lenders); provided, that notwithstanding the foregoing, for the purposes of any Commitment or Loans (other than Term B Loans to the extent provided in Subsection 11.6.7 (Borrower Buybacks)), “Eligible Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or Subsidiaries. For the avoidance of doubt, any Disqualified Institution is subject to Subsection 11.6.8 (Disqualified Institutions).

 

-13-


Environmental Laws: any national, state or local law or regulation (including CERCLA, OSHA and RCRA) enacted in connection with or relating to the protection or regulation of human health or the environment, including those laws, statutes and regulations regulating the disposal, removal, production, storing, refining, handling, transferring, processing or transporting of Hazardous Substances, and any regulations issued or promulgated in connection with such statutes by any Governmental Authority and any orders, decrees or judgments issued by any court of competent jurisdiction in connection with any of the foregoing.

ERISA: the Employee Retirement Income Security Act of 1974, as amended, and any regulations issued thereunder by the DOL or PBGC.

ERISA Affiliate: (a) any corporation included with any Loan Party in a controlled group of corporations within the meaning of Section 414(b) of the Code, (b) any trade or business (whether or not incorporated) which is under common control with any Loan Party within the meaning of Section 414(c) of the Code, (c) any member of an affiliated service group of which any Loan Party is a member within the meaning of Section 414(m) of the Code and (d) any other group that together with any Loan Party that is treated as a single employer within the meaning of Section 414(o) of the Code.

Eurodollar Business Day: a day that the relevant London international financial markets are open for dealings in Dollar deposits and that is also not a Saturday, Sunday or day that is in the State of New York a legal holiday or day on which banking institutions are required or authorized to close.

Eurodollar Deposits: U.S. dollar-denominated deposits at foreign banks or foreign branches of U.S. banks.

Event of Default: the meaning specified in Section 9.1 (Events of Default).

Excess Cash Flow: means, for any fiscal year of Parent and its Subsidiaries, the result (without duplication) of:

(a) Consolidated Net Income for such fiscal year; plus

(b) the amount of depreciation, amortization and other non-cash charges or losses deducted in determining such Consolidated Net Income for such fiscal year but excluding any such non-cash charges representing an accrual or reserve for potential cash items in any future period and excluding amortization of a prepaid cash item that was paid in a prior period; plus

(c) the amount, if any, by which Net Working Capital decreased during such fiscal year (except as a result of the reclassification of items from short-term to long-term or vice-versa); minus

(d) the amount, if any, by which Net Working Capital increased during such fiscal year (except as a result of the reclassification of items from long-term to short-term or vice-versa); minus

 

-14-


(e) the sum (without duplication) of (i) Capital Expenditures of Parent and its Subsidiaries made in cash for such fiscal year (except to the extent attributable to the incurrence of Capital Lease Obligations or otherwise financed from Excluded Sources) and (ii) cash consideration paid during such fiscal year to make Permitted Acquisitions or other investments (other than investments in Subsidiaries and investments in Cash Equivalents) (except to the extent financed from Excluded Sources); minus

(f) scheduled repayments, mandatory prepayments pursuant to clauses (b) or (c) of Subsection 2.1.9 (Mandatory Prepayments) with net cash proceeds that resulted in an increase to Consolidated Net Income (and not in excess of the amount of such increase), and voluntary prepayments or repayments of Indebtedness that constitute a long-term liability of Parent or a Subsidiary so repaid or prepaid by Parent and its Subsidiaries in cash during such fiscal year, excluding (i) Indebtedness in respect of RC Loans and Letters of Credit or other revolving credit facilities (unless there is a corresponding permanent reduction in the RC Commitment or the commitments in respect of such other revolving credit facilities, as applicable), (ii) voluntary prepayments of Term A Loans prepaid pursuant to clause (c) of Subsection 2.1.8 (Voluntary Commitment Reductions and Prepayments), (iii) voluntary prepayments of Term B Loans prepaid pursuant to clause (d) of Subsection 2.1.8 (Voluntary Commitment Reductions and Prepayments) and (iv) repayments or prepayments of Indebtedness financed from Excluded Sources; minus

(g) the sum of Interest Expense and Taxes, in each case for such fiscal year and to the extent paid in cash during such fiscal year;

provided, however, in no event shall the amount of Excess Cash Flow be less than zero.

Excluded Assets: collectively, (a) real property, (b) thirty-four percent (34%) of the voting Capital Stock of the First-Tier Foreign Subsidiaries of the Loan Parties, (c) each application to register a trademark, service mark or other mark prior to the filing under applicable Law of a Statement of Use, Amendment to Allege Use (or the equivalent) for such trademark, service mark or other mark, (d) deposit accounts maintained with financial institutions other than the Administrative Agent for which perfection is dependent on an account control agreement and, in the case of all deposit accounts referenced in this clause (d), the aggregate average monthly balance in all such accounts does not exceed Two Million Dollars ($2,000,000) in any such account and Five Million Dollars ($5,000,000) in all such accounts and (e) such other assets as to which the Administrative Agent shall have determined (in consultation with the Borrower) that the obtaining and perfecting of a security interest therein would require the incurrence by a Loan Party of an aggregate amount of costs that are excessive in relation to the value of such proposed collateral to the Secured Parties.

Excluded Sources: proceeds of any (a) incurrence or issuance of Indebtedness (including Capital Lease Obligations) and (b) issuance or sale of Capital Stock in Parent or any of its Subsidiaries (other than issuances or sales of Capital Stock to Parent or any of its Subsidiaries) or any capital contributions to Parent or any of its Subsidiaries (other than such capital contributions made by Parent or any of its Subsidiaries).

 

-15-


Excluded Swap Obligation: with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guaranty of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guaranty or security interest is or becomes illegal. For purposes of this definition and Section 9.3 (Proceeds of Collateral), “Swap Obligation” means, 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.

Excluded Taxes: with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Subsection 2.14.2 (Replacement of Lenders)), any U.S. federal withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new lending office (other than pursuant to a request by the Borrower under Subsection 2.14.1 (Designation of a Different Lending Office))) or is attributable to such Foreign Lender’s failure (other than as a result of a Change in Law) to comply with Subsection 2.13.5 (Status of Lenders), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Subsection 2.13.1 (Payments Free of Taxes) and (d) any withholding tax imposed pursuant to FATCA.

Executive Order: the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism.

Existing Letters of Credit: those certain letters of credit issued by M&T and set forth on Schedule 1.1B.

Existing Maturity Date: the meaning specified in Section 2.18 (Extension of Maturity Date).

 

-16-


Existing RC Borrowings: the meaning specified in clause (e) of Subsection 2.1.11 (Increases in Facility).

Extension Amendment: the meaning specified in Section 2.18 (Extension of Maturity Date).

Facility: any of the RC Facility, the Term A Facility or the Term B Facility, as applicable.

FATCA: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version of FATCA that is substantively comparable and not materially more onerous to comply with), and any current or future regulations or official interpretations thereof.

FCPA: the meaning specified Subsection 5.7.2 (Laws; FCPA).

Federal Funds Rate: for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next Business Day as so published on the next succeeding Business Day, and (b) if such rate is not so published for any day, the Federal Funds Rate for such day shall be the average rate charged to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

Financial Covenant Event of Default: the meaning specified in clause (b) of Subsection 9.1.5 (Certain Covenant Defaults).

Financial Covenant Indebtedness: collectively, the Term A Facility and the RC Facility.

Financial Officer: as to any Person, the chief financial officer, treasurer or corporate controller of such Person.

First Lien Net Leverage Ratio: the ratio, at any date of determination, of

(a) as at such date of determination, the amount of Total Net Indebtedness that is secured by a first-priority lien (including, for the avoidance of doubt, on a pari passu basis with the Liens securing the Secured Obligations) on any asset of Parent or its Subsidiaries (including indebtedness under the Loan Documents and Capital Lease Obligations) (provided, that for purposes of any ratio test in connection with the incurrence of any Incremental Term Loan, RC Commitment Increase or Alternative Incremental Facility Debt, any Alternative Incremental Facility Debt that is unsecured or secured by a junior-priority lien shall be deemed to be secured by a first-priority lien for purposes of this definition),

divided by

 

-17-


(b) Adjusted EBITDA, as at the last date for which financial statements were delivered pursuant to Subsections 6.1.1 (Delivery of Quarterly Financial Statements) or 6.1.2 (Delivery of Annual Financial Statements; Accountants’ Certification).

First-Tier Foreign Subsidiary: a Foreign Subsidiary that has the majority of its Capital Stock issued to Parent and/or one or more U.S. Subsidiaries of Parent.

Foreign Lender: any Lender that is organized under the Laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

Foreign Plan: any employee benefit plan or program including, for the avoidance of doubt, any pension plan or retirement plan administered, maintained or required to be contributed to by a Foreign Subsidiary or by any other Person for the benefit of any current or former employee, consultant, director or contract labourer of a Foreign Subsidiary or a foreign division, office or facility (including any facilities in France, Mexico or Switzerland) of any Loan Party.

Foreign Subsidiary: (a) any Subsidiary that is not a U.S. Subsidiary and (b) to the extent provided in Section 8.30 (Certain Limitations on Activities of Maquiladora Holding Subsidiaries), any Maquiladora Holding Subsidiary.

Fronting Exposure: at any time there is a Defaulting Lender, (a) with respect to any Issuing Bank, such Defaulting Lender’s Applicable Percentage of the outstanding LC Obligations with respect to Letters of Credit issued by such Issuing Bank other than LC Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to any Swingline Lender, such Defaulting Lender’s Applicable Percentage of outstanding Swingline Loans made by such Swingline Lender other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders.

Fronting Fee: the meaning specified in Subsection 3.1.6 (Fees).

Fund: any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit in the ordinary course of its activities.

GAAP: generally accepted accounting principles in the United States consistently applied, as in effect from time to time; provided, that for purposes of calculating financial covenants, the provisions of Section 7.3 (Additional Provisions Respecting Calculation of Financial Covenants) shall apply to the extent set forth in such section.

GB Ventures: GBV, LLC, a Delaware limited liability company and, as of the Closing Date, a wholly-owned direct Subsidiary of Parent and an Affiliate of the Borrower.

 

-18-


Governmental Authority: the government of the United States or any other nation, or of any political subdivision thereof, whether state 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) and any group or body charged with setting financial accounting or regulatory capital rules or standards (including, without limitation, the Financial Accounting Standards Board, the Bank for International Settlements or the Basel Committee on Banking Supervision or any successor or similar authority to any of the foregoing).

Greatbatch LLC: Greatbatch LLC, a Delaware limited liability company, which on the Closing Date is an indirect wholly-owned Subsidiary of the Borrower and direct Subsidiary of Medical SA.

Greatbatch Mexico: Greatbatch Medical, S. de R.L. de C.V.

Greatbatch MCSO: Greatbatch MCSO, S. de R.L. de C.V.

Guarantor: each of Parent and the Subsidiary Guarantors.

Guaranty: as applied to any Person, any direct or indirect liability, contingent or otherwise, of such Person with respect to any indebtedness, lease, dividend or other obligation of another Person, including any such obligation directly or indirectly guaranteed, endorsed (otherwise than for collection or deposit in the ordinary course of business) or discounted or sold with recourse by such Person, or in respect of which such Person is otherwise directly or indirectly liable, including any such obligation in effect guaranteed by such Person through any agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise), or to maintain the solvency or any balance sheet or other financial condition of the obligor of such obligation, or to make payment for any products, materials or supplies or for any transportation or services regardless of the non-delivery or non-furnishing thereof, in any such case if the purpose or intent of such agreement is to provide assurance that such obligation will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected against loss in respect thereof.

Hazardous Substances: any and all chemicals, pollutants, contaminants, toxic or hazardous wastes or any other substances that might pose a hazard to health, safety or the environment, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any Environmental Law (including petroleum products, asbestos, urea formaldehyde foam insulation, lead based paint and polychlorinated biphenyls and substances defined as Hazardous Substances under CERCLA).

IEEPA: the International Emergency Economic Power Act, 50 U.S.C. § 1701 et. seq.

 

-19-


Incremental Extensions of Credit: the meaning specified in clause (a) of Subsection 2.1.11 (Increases in Facility).

Incremental Facility Amendment: the meaning specified in clause (d) of Subsection 2.1.11 (Increases in Facility).

Incremental Term A Loans: the meaning specified in clause (a) of Subsection 2.1.11 (Increases in Facility).

Incremental Term B Loans: the meaning specified in clause (a) of Subsection 2.1.11 (Increases in Facility).

Incremental Term Loans: the meaning specified in clause (a) of Subsection 2.1.11 (Increases in Facility).

Indebtedness: (of any entity, without duplication) means (a) all indebtedness for borrowed money including seller paper; (b) all obligations for the deferred purchase price of property or services; (c) all obligations evidenced by notes, bonds, debentures or other similar instruments; (d) all indebtedness created or arising under any conditional sale or other title retention agreement; (e) all Capital Lease Obligations; (f) all obligations, contingent or otherwise under acceptance, letter of credit or similar facilities; (g) all obligations to purchase, redeem, retire, defease or otherwise acquire for value any Capital Stock; (h) all obligations under Interest Rate Protection Agreements; (i) all guarantees of items of indebtedness described in the other clauses of this definition; (j) all obligations secured by any lien on the assets of such entity; (k) all payments required by such entity under non-compete agreements; (l) all indebtedness of any partnership in which such entity is a general partner unless such indebtedness is non-recourse to such entity; (m) all obligations under synthetic leases and other off balance sheet financing; and (n) other obligations that are the functional equivalent of the Indebtedness referred to in clauses (a) through (m). Notwithstanding the foregoing, Indebtedness shall not include trade accounts payable, accrued expenses or obligations in respect of usual and customary “earn-out” or similar agreements, in each case, not shown as liabilities on the balance sheet in accordance with GAAP.

Indemnified Taxes: Taxes other than Excluded Taxes.

Indemnitee: the meaning specified in Subsection 11.14.2 (Indemnification by the Borrower).

Information: the meaning specified in Subsection 11.13.2 (Information).

Initial LC Amount: the aggregate face amount of the Existing Letters of Credit, which will be outstanding on the Closing Date pursuant to Subsection 3.1.1.

Initial Term B Loans: (a) the Term B Loans made by the Term B Lenders to the Borrower on the Closing Date pursuant to Subsection 2.1.4 (Commitment to Make Term B Loans) and (b) any Incremental Term B Loans made to the Borrower on or prior to the date that is six months after of the Closing Date pursuant to Subsection 2.1.11 (Increases in Facility).

 

-20-


Intellectual Property: the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including: (a) all copyrights arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office; (b) inventions, discoveries and ideas (whether patentable or unpatentable and whether or not reduced to practice), and all patents, patent rights, applications for patents (including divisions, continuations, continuations-in-part and renewal applications), and any renewals, extensions or reissues thereof, in the United States, any other country or any political subdivision thereof; (c) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, and all common law rights related thereto; (d) all trade secrets arising under the Laws of the United States, any other country or any political subdivision thereof; (e) all rights to obtain any reissues, renewals or extensions of the foregoing; (f) all licenses for any of the foregoing; and (g) all causes of action for infringement of the foregoing.

Intellectual Property Collateral Agreement: the meaning specified in clause (g) of Subsection 4.1.5 (Closing Date Deliverables).

Interest Expense: for any period, interest expense of Parent and its Subsidiaries in accordance with GAAP but excluding non-cash interest expense.

Interest Period: the period commencing on the date of a borrowing and ending on the numerically corresponding day in the calendar Month that is one (1), two (2), three (3) or six (6) Months, or, to the extent available to all Lenders in the relevant Facility, twelve (12) months; provided, that (a) if any Interest Period would end on a day other than a Eurodollar Business Day, such Interest Period shall be extended to the next succeeding Eurodollar Business Day unless such next succeeding Eurodollar Business Day would fall in the next calendar Month, in which case such Interest Period shall end on the next preceding Eurodollar Business Day and (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 Eurodollar Business Day of the last calendar Month of such Interest Period; provided, further, that in the event an Interest Period is extended to the next Eurodollar Business Day in a Month, the succeeding Interest Period will end on the day it would have ended had the preceding Interest Period not been so extended (e.g., if the preceding period is extended to the 16th because the 15th is not a Eurodollar Business Day, the succeeding period will end on the 15th as long as it is a Eurodollar Business Day). For purposes hereof, the date 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.

 

-21-


Interest Rate Protection Agreement: a Swap Agreement entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any Loan Party.

Investment: as applied to any Person (the “investor”) but without duplication: (a) any direct or indirect purchase or other acquisition by such investor of stock or other securities of any other Person, (b) any Guaranty by such investor of obligations of any other Person, (c) any direct or indirect loan, advance or capital contribution by such investor to any other Person, including all Indebtedness and accounts receivable owing to such investor from such other Person that are not current assets or did not arise from sales to such other Person in the ordinary course of business and (d) any Swap Agreement entered into by such Person.

Investor: the meaning specified in Section 8.3 (Investments, Loans, Acquisitions, Etc.).

IRS: the United States Internal Revenue Service, or any governmental agency or instrumentality succeeding to the functions thereof.

Issuing Bank: M&T, in its capacity as issuer of Letters of Credit hereunder, or any successor or assign that assumes that position pursuant to the terms of this Agreement.

Law: all common law and all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

LC Obligations: at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of Unreimbursed Drawings.

Lead Arrangers: M&T, Credit Suisse Securities (USA) LLC and Keybanc Capital Markets Inc., in their capacity as joint lead arrangers and joint bookrunners of the Facilities.

Lender and Lenders: each of the financial institutions and Funds that is listed on Schedule 2.1.1, Schedule 2.1.3 or Schedule 2.1.4 and each other Person that has become a party hereto pursuant to an Assignment and Assumption, an Incremental Facility Amendment, a Refinancing Term Facility Agreement or a Refinancing RC Facility Agreement from time to time in accordance with the provisions of this Agreement. The Lenders shall include the Term A Lenders, the Term B Lenders, the RC Lenders, any Lender with respect to an Incremental Term Loan, any Refinancing Term Loan Indebtedness or Refinancing RC Indebtedness, and, unless the context requires otherwise, the Swingline Lender.

Letters of Credit: any and all letters of credit issued pursuant to this Agreement.

Letter of Credit Fees: the meaning specified in Subsection 3.1.6 (Fees).

 

-22-


Letter of Credit Sublimit: the meaning specified in Subsection 3.1.1 (Commitment to Issue Letters of Credit).

LIBOR: the rate per annum as determined on the basis of the offered rates for deposits in Dollars, for a period of time equal to the relevant Interest Period which appears on Reuters Screen LIBOR01 Page (or any successor page) as of approximately 11:00 a.m. London time on the day that is two Eurodollar Business Days preceding the commencement of such Interest Period; provided, however, if the rate described above is unavailable on any applicable interest determination date, then LIBOR shall be the rate determined by the Administrative Agent from such other recognized service or method as the Administrative Agent may select; provided, further, that if the rate is less than zero, then LIBOR shall be deemed to be zero.

LIBOR Loans: Loans bearing interest at a rate equal to Adjusted LIBOR plus the Applicable Margin.

Lien: with respect to any asset, mortgage, lien, pledge, adverse claim, charge, security interest or other encumbrance, or any other type of preferential arrangement that has the practical effect of creating a security interest, in respect of such asset. For the purposes of this Agreement and the other Loan Documents, Parent or any of its Subsidiaries shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset.

Liquidity: at any time, the sum of the Available RC Commitment at such time and the Unrestricted Cash and Cash Equivalents of Parent and its Subsidiaries.

Loan Documents: this Agreement, any Incremental Facility Amendment, any Refinancing Term Facility Agreement, any Refinancing RC Facility Agreement, the Notes, the Suretyship Agreements, the Pledge Agreement, the Security Agreements and any and all agreements, documents and instruments executed, delivered or filed pursuant to this Agreement, as the same may be amended, modified or supplemented from time to time. For the sake of clarity, Swap Agreements, agreements in respect of Banking Services and Letters of Credit are not Loan Documents, but obligations in respect thereof owing to Swap Parties (in the case of Swap Agreements), providers of Banking Services (in the case of Banking Services Obligations) and the Issuing Bank and the RC Lenders (in the case of Letters of Credit) shall be secured by the Collateral.

Loan Parties: the Borrower and the Guarantors.

Loans: the amounts loaned to the Borrower pursuant to this Agreement, including pursuant to any Incremental Facility Amendment, any Refinancing Term Facility Agreement and any Refinancing RC Facility Agreement. Loans may be Term A Loans, Term B Loans, RC Loans or Swingline Loans.

M&T: the meaning specified in the preamble to this Agreement.

 

-23-


Majority Lenders: at any time, Lenders (excluding Defaulting Lenders) having or holding greater than fifty percent (50%) of the aggregate principal amount of Loans and Commitments under the Total Facility at such time. The interest of any Defaulting Lender in the Total Facility shall be disregarded in determining the Majority Lenders at any time.

Maquiladora Holding Subsidiary: (a) any wholly owned direct or indirect U.S. Subsidiary of Borrower that is not engaged in any business other than (i) owning 99% of the Outstanding Capital Stock of one or more Target Mexican Subsidiaries, and (ii) engaging in activities directly related to the foregoing, and (b) Greatbatch LLC.

Margin Stock: any “margin security” or “margin stock” as defined in Regulation T, U and X of the Board of Governors of the Federal Reserve System.

Material Adverse Change: any material adverse change in

(a) the business, condition (financial or otherwise), operations or properties of (i) Parent and its Subsidiaries taken as a whole or (ii) Parent or any of its Specified Subsidiaries, individually, if such change could result in the insolvency or dissolution (other than pursuant to a merger or dissolution permitted by this Agreement) of such Person or in the loss of control (by the current holder thereof) over such Person’s assets;

(b) the binding nature, validity or enforceability of any of the Loan Documents;

(c) the ability of any Loan Party to perform its obligations under any of the Loan Documents to which it is a party; or

(d) the validity, perfection, priority or enforceability of the Liens granted to the Administrative Agent in respect of the Collateral.

Material Line of Business: as at any date of determination, any line of business of Parent and its Subsidiaries that has generated for the previous four (4) consecutive fiscal quarters of Parent and its Subsidiaries at least fifteen percent (15%) of the Adjusted EBITDA of Parent and its Subsidiaries taken as a whole during such four (4) consecutive fiscal quarters.

Maturity Date: the latest of the RC Maturity Date, the Term A Loan Maturity Date and the Term B Loan Maturity Date.

Maturity Date Extension Request: the meaning specified in Section 2.18 (Extension of Maturity Date).

Medical SA: Greatbatch Medical SA, a Swiss société anonyme, which as of the Closing Date is a wholly-owned direct Subsidiary of Precimed.

Merger: the meaning specified in the Background of Agreement Section.

 

-24-


Merger Agreement: the meaning specified in the Background of Agreement Section.

Merger Sub: the meaning specified in the Background of Agreement Section.

Minimum Collateral Amount: means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to one hundred five percent (105%) of the Fronting Exposure of the Issuing Bank with respect to Letters of Credit issued and outstanding at such time and (b) otherwise, an amount determined by the Administrative Agent and the Issuing Bank.

Minimum Funding Standard: the minimum funding standard within the meaning of Section 302 of ERISA or Sections 412 and 430 of the Code.

MNPI: material non-public information with respect to Parent or any of its Subsidiaries or any of their respective securities for purposes of United States Federal and state securities laws.

Month: a period from and including a given day in a calendar month to the day in the subsequent calendar month numerically corresponding to such given day except that (a) if there is no numerical correspondent in such subsequent calendar month, or (b) if such given day is the last day of a calendar month, such day shall be the last day of such subsequent calendar month.

Moody’s: Moody’s Investors Service, Inc., and any successor to its rating agency business.

Multiemployer Plan: a multiemployer pension plan as defined in Section 3(37) of ERISA to which any Loan Party or any ERISA Affiliate is required to contribute, or otherwise has any liability.

Net Income: of any Person for any period, the aggregate net income (or loss) of such Person for such period determined in accordance with GAAP.

Net Working Capital: at any date, (a) the Consolidated current assets of Parent and its Subsidiaries as of such date (excluding cash and Cash Equivalents) minus (b) the Consolidated current liabilities of Parent and its Subsidiaries as of such date (excluding current liabilities in respect of Indebtedness). Net Working Capital at any date may be a positive or negative number. For the avoidance of doubt, Net Working Capital increases when it becomes more positive or less negative and decreases when it becomes less positive or more negative.

Non-Consenting Lender: the meaning specified in Subsection 2.14.2 (Replacement of Lenders).

Non-Defaulting Lender: means, at any time, each Lender that is not a Defaulting Lender at such time.

 

-25-


Notes: the promissory notes delivered by the Borrower to the Lenders (including any successors or assigns thereof) pursuant to this Agreement (including any amendments, restatements, modifications or supplements which may from time to time be created in respect of such notes), and any replacement promissory notes issued in lieu of the foregoing, including but not limited to, the Term A Notes, the Term B Notes, the RC Notes and the Swingline Note.

Nuvectra: the meaning ascribed to such term on Schedule 1.1A hereto.

Nuvectra Contribution: the meaning ascribed to such term on Schedule 1.1A hereto.

Obligations: any and all indebtedness, obligations and liabilities of any type or nature, direct or indirect, absolute or contingent, related or unrelated, due or not due, liquidated or unliquidated, arising by operation of law or otherwise, now existing or hereafter arising or created of any of the Loan Parties, to any Secured Party, related to the Loans, the LC Obligations or (without duplication) represented by or incurred pursuant or relating to the Loan Documents. Without limiting the generality of the foregoing, the term “Obligations” shall include:

(a) principal of, and interest on, the Loans and the Notes;

(b) any and all other fees, indemnities, costs, obligations and liabilities of any of the Loan Parties from time to time under or in connection with the Loan Documents;

(c) all obligations of the Borrower owing to the Issuing Bank or any Lender under Letters of Credit issued under this Agreement; and

(d) all amounts (including post-petition interest) in respect of the foregoing that would be payable but for the fact that the obligations to pay such amounts are unenforceable or not allowable due to the existence of a proceeding under any Debtor Relief Law involving Parent or any of its Subsidiaries.

For the avoidance of doubt, the “Obligations” do not include any Banking Services Obligations or any obligations under or arising out of any Swap Agreement with any Swap Party.

OFAC: the U.S. Department of Treasury’s Office of Foreign Asset Control.

Officer’s Compliance Certificate: a certificate in the form of Exhibit G.

Organizational Documents: means, with respect to any Person other than a natural person, the documents by which such Person was organized (such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of such Person (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).

OSHA: the Occupational Safety and Health Act, 29 U.S.C. 651 et seq.

 

-26-


Other Senior Debt Document: the Senior Note Documents and any notes, agreements, indentures or other documents relating to or executed in connection with any Alternative Incremental Facility Debt, Refinancing Term Loan Indebtedness or Refinancing RC Indebtedness, or any Permitted Refinancing of the foregoing.

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

Parent: the meaning specified in the Background of Agreement Section.

Parent Suretyship Agreement: the meaning specified in clause (e) of Subsection 4.1.5 (Closing Date Deliverables).

Participant: the meaning specified in clause (a) of Subsection 11.6.4 (Participations).

Participant Register: the meaning specified in clause (b) of Subsection 11.6.4 (Participations).

Patriot Act: the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (The USA PATRIOT Act).

PBGC: Pension Benefit Guaranty Corporation, or any governmental agency or instrumentality succeeding to the functions thereof.

Permitted Acquisitions: Acquisitions, for which the aggregate amount of consideration for all such acquisitions through the Maturity Date does not exceed Four Hundred Million Dollars ($400,000,000), subject to Section 8.29 (Reset Provision), so long as: (a) before and after giving effect to any such Acquisition, Parent and its Subsidiaries are in pro forma compliance with the financial covenants set forth in Article 7 (Financial Covenants) of this Agreement; (b) the target is engaged primarily in a Permitted Business; (c) the Administrative Agent shall have received five (5) Business Days’ prior written notice, and if the Acquisition is for an amount greater than Forty Million Dollars ($40,000,000), a copy of the acquisition agreement, lien searches, a pro forma compliance certificate and such other information, documentation and opinions as the Administrative Agent may reasonably request; (d) the Specified Restricted Use Conditions are satisfied; (e) the Acquisition is approved by the Borrower’s and the target’s respective Board of Directors; and (f) the Acquisition is permitted under the Other Senior Debt Documents, and the Borrower shall have provided such certifications, calculations and additional information as the Administrative Agent may request to establish such compliance.

Permitted Business: the business of developing, manufacturing, distributing and selling medical device technologies for the advanced surgical, cardiac, neurology, vascular and

 

-27-


orthopaedic markets, and developing, manufacturing, distributing and selling battery and wireless sensing technologies for high-end niche applications in the energy, environmental, military, portable medical and other markets, and activities reasonably related to the foregoing.

Permitted Liens: the meaning specified in Subsection 8.2.1 (Liens; Licenses—In General).

Permitted Maquiladora Restructuring: with respect to any Target Mexican Subsidiary, the following transactions, collectively, so long as (a) at the time of, and after giving effect to, each such transaction, no Default or Event of Default shall have then occurred and be continuing or shall be caused thereby and (b) there are identifiable tax savings for the Borrower and/or Parent related to such transactions: the transfer of all of the Capital Stock of a Target Mexican Subsidiary in a series of transactions with the result that the Capital Stock of such Target Mexican Subsidiary will be held (i) 99% by a Maquiladora Holding Subsidiary, and (ii) 1% by a wholly owned direct or indirect Foreign Subsidiary of Parent.

Permitted Nuvectra Spinoff: the occurrence, on or before March 31, 2016, in all material respects, of the series of transactions set forth on Schedule 1.1A (with such changes thereto as shall have been disclosed in writing to the Lenders pursuant to Subsection 6.3.4 (Nuvectra Spinoff) and, if material, approved in writing by Administrative Agent), all of which shall be on a tax-free basis to Parent and its Subsidiaries; provided, that as a condition to the completion of the Permitted Nuvectra Spinoff: (a) at such time and after giving effect to the foregoing transactions, no Event of Default shall have occurred and be continuing, (b) the representations and warranties of the Loan Parties in the Loan Documents shall be true and correct in all material respects, (c) Parent and the Borrower shall be in pro forma compliance with the financial covenants set forth in Article 7 (Financial Covenants), (d) the Borrower shall have given the Lenders at least five (5) Business Days’ prior written notice (or such shorter period as may be agreed to by the Administrative Agent) as to the date of the dividend of the Capital Stock of Nuvectra to Parent’s holders of Common Stock, (e) Parent or the Borrower shall have received a favorable tax opinion from a nationally-recognized tax advisor, (f) the Administrative Agent shall have received a certificate from an authorized officer of Parent or the Borrower stating that (i) each of the transactions set forth on Schedule 1.1A complies with the terms of this Agreement (including those set forth in this proviso) and (ii) all necessary third party and governmental consents and stock exchange approvals shall have been obtained, (g) Parent (or its applicable Subsidiary) shall (x) have filed a Registration Statement on Form 10 with the SEC, and (y) such Registration Statement on Form 10 shall have been declared effective by the SEC, (h) there shall be no litigation, order, law, statute or regulation challenging or threatening to enjoin any of the foregoing transactions and no injunction shall have been issued concerning any of the foregoing transactions, and (i) immediately after giving effect to the foregoing transactions, the GAAP net worth of Parent and its Subsidiaries on a Consolidated basis (as reasonably determined by Parent in good faith) shall not be less than the lesser of (x) $720,000,000 and (y) 80% of the level thereof prior to giving effect to such transactions.

Permitted Perfection Limitations: a limitation on the perfected status (but not, for the avoidance of doubt, on the creation or attachment) of the Administrative Agent’s security interests in any Collateral to the extent that: (a) perfection would require a notation on the records of

 

-28-


the issuer of title (such as motor vehicle titles) and no notation is made; (b) the laws of a jurisdiction outside of the United States governs such perfection; or (c) such Collateral consists of a deposit account or deposit accounts maintained with the Administrative Agent or a Lender and perfection is dependent on an account control agreement; provided, that nothing in this definition shall affect or be deemed to limit any setoff rights that the Administrative Agent or any such Lender shall have with respect to such deposit accounts solely in such Person’s capacity as the depositary bank therefor.

Permitted Refinancing: with respect to any Indebtedness of a Person, any modification, refinancing, refunding, renewal, restructuring, replacement or extension of such Indebtedness of such Person; provided, that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, restructured, refunded, renewed, replaced or extended except by an amount equal to unpaid accrued interest and premium thereon plus other amounts owing or payable related to such Indebtedness, and fees and expenses incurred, in connection with such modification, refinancing, refunding, renewal, restructuring, replacement or extension plus an amount equal to any existing commitments unutilized thereunder, (b) such modification, refinancing, refunding, renewal, replacement or extension has a final maturity date equal to or later than the final maturity date of, and has a weighted average life to maturity equal to or greater than the weighted average life to maturity of, the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended, (c) no Event of Default shall have occurred and be continuing, (d) if such Indebtedness being modified, refinanced, refunded, renewed, replaced or extended is subordinated in right of payment to the Secured Obligations (or any portion thereof), such modification, refinancing, refunding, renewal, replacement or extension is subordinated in right of payment to the Secured Obligations (or such portion thereof) on terms (i) at least as favorable (taken as a whole) to the Lenders as those contained in the documentation governing or evidencing the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended or (ii) as otherwise reasonably acceptable to the Administrative Agent, (e) to the extent such Indebtedness being modified, refinanced, replaced, refunded, renewed or extended is unsecured or secured by Liens that are subordinated to the Liens securing the Secured Obligations (or any portion thereof), such modification, refinancing, replacement, refunding, renewal or extension is unsecured or (solely with respect to such Indebtedness that is secured by Liens that are subordinated to the Liens securing the Secured Obligations (or any portion thereof)) secured by Liens that are subordinated to the Liens securing the Secured Obligations (or such portion thereof), respectively, in each case on terms (x) at least as favorable (taken as a whole) to the Lenders as those contained in the documentation (including any intercreditor or similar agreements) governing the Indebtedness being modified, refinanced, replaced, refunded, renewed or extended or (y) otherwise reasonably acceptable to the Administrative Agent and (f) such modification, refinancing, refunding, renewal, replacement or extension is directly incurred only by the direct borrower or issuer of the Indebtedness being modified, refinanced, replaced, refunded, renewed or extended, and is guaranteed only by one or more Persons who are guarantors of the Indebtedness being modified, refinanced, replaced, refunded, renewed or extended, except as otherwise acceptable to the Administrative Agent. For the avoidance of doubt, if the Indebtedness being modified, refinanced, refunded, renewed, replaced or extended was not subject to an intercreditor agreement, then any new intercreditor agreement must be reasonably acceptable to the Administrative Agent.

 

-29-


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

Plan: an “Employee Pension Benefit Plan” (as defined in Section 3(2) of ERISA) or an “Employee Welfare Benefit Plan” (as defined in Section 3(1) of ERISA) which is maintained, or to which contributions are, or are required to be, made, by any Loan Party or any ERISA Affiliate or with respect to which any Loan Party or an ERISA affiliate has any liability, except a Multiemployer Plan or Foreign Plan.

Platform: the meaning specified in Subsection 11.1.4 (Platform; MNPI).

Pledge Agreement: the meaning specified in clause (f) of Subsection 4.1.5 (Closing Date Deliverables).

Precimed: P Medical Holding SA, a société anonyme organized and existing under the laws of Switzerland, which as of the Closing Date is a wholly-owned direct Subsidiary of the Borrower.

Pre-Increase RC Lenders: the meaning specified in clause (e) of Subsection 2.1.11 (Increases in Facility).

Prohibited Transaction: the meaning given to such term in Section 406 of ERISA, Section 4975(c) of the Code and any Treasury regulations issued thereunder.

Public Lender: the meaning specified in Subsection 11.1.4 (Platform; MNPI).

QIG: QIG Group, LLC, a Delaware limited liability company and, as of the Closing Date, a wholly-owned direct Subsidiary of the Borrower.

Quarterly Payment Date: the last Business Day of each fiscal quarter of Parent and its Subsidiaries and, in the case of any Facility, the Maturity Date of such Facility.

RC Commitment: the meaning specified in Subsection 2.1.1 (Commitment to Make RC Loans).

RC Commitment Increase: the meaning specified in clause (a) of Subsection 2.1.11 (Increases in Facility).

RC Commitment Increase Lender: the meaning specified in clause (e) of Subsection 2.1.11 (Increases in Facility).

RC Facility: the collective reference to (a) the RC Loans contemplated by Subsection 2.1.1 (Commitment to Make RC Loans) including pursuant to any RC Commitment Increase, (b) any Refinancing RC Indebtedness and (c) any commitment for any of the foregoing.

 

-30-


RC Lender: each Lender that signs this Agreement in respect of a RC Commitment and each successor and assign thereof.

RC Loans: the meaning specified in Subsection 2.1.1 (Commitment to Make RC Loans).

RC Maturity Date: initially, October 27, 2020 and as the same may be extended pursuant to the terms of this Agreement, or, as applicable, such earlier date as the RC Commitment shall have been terminated in full.

RC Note: the meaning specified in Section 2.6 (Notes).

RCRA: the Resource Conservation and Recovery Act of 1976, as amended, and any rules and regulations issued in connection therewith.

Recipient: the meaning specified in Section 8.3 (Investments, Loans, Acquisitions, Etc.).

Refinancing RC Effective Date: the meaning specified in Subsection 2.19.2 (Revolver Refinancing).

Refinancing RC Facility Agreement: the meaning specified in Subsection 2.19.2 (Revolver Refinancing).

Refinancing RC Indebtedness: the meaning specified in Subsection 2.19.2 (Revolver Refinancing).

Refinancing Revolver Notice: the meaning specified in Subsection 2.19.2 (Revolver Refinancing).

Refinancing Term A Indebtedness: the meaning specified in Subsection 2.19.1 (Term Facility Refinancing).

Refinancing Term B Indebtedness: the meaning specified in Subsection 2.19.1 (Term Facility Refinancing).

Refinancing Term Effective Date: the meaning specified in Subsection 2.19.1 (Term Facility Refinancing).

Refinancing Term Facility Agreement: the meaning specified in Subsection 2.19.1 (Term Facility Refinancing).

Refinancing Term Loan Indebtedness: the meaning specified in Subsection 2.19.1 (Term Facility Refinancing).

 

-31-


Refinancing Term Notice: the meaning specified in Subsection 2.19.1 (Term Facility Refinancing).

Register: the meaning specified in Subsection 11.6.3 (Register).

Related Parties: with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, other controlling persons, advisors (including accountants and legal counsel) and representatives of such Person and of such Person’s Affiliates.

Release: a release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment or into or out of any property, including the movement of Hazardous Substances through or in the air, soil, surface water, groundwater or property.

Remedial Action: actions necessary to comply with any Environmental Law or otherwise required by any Governmental Authority with respect to (a) the investigation, clean up, removal, treatment or handling of Hazardous Substances in the indoor or outdoor environment; (b) the prevention of Releases or threats of Releases or minimization of further Releases of Hazardous Substances so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment or (c) the performance of pre-remedial studies and investigations and post-remedial monitoring and care.

Reorganization: any reorganization as defined in Section 4241(a) of ERISA.

Reportable Event: with respect to any U.S. Pension Plan, an event described in Section 4043(c) of ERISA.

Repricing Event: either one or both of (a) any prepayment, repayment, refinancing or replacement of Initial Term B Loans with the proceeds of, or conversion of all or any portion of the Initial Term B Loans into, any new or replacement Indebtedness with an All-in Yield less than the All-in Yield applicable to the Initial Term B Loans subject to such event or (b) any amendment, waiver or consent to or under this Agreement which reduces the All-in Yield applicable to the Initial Term B Loans (it being understood that any fee or premium with respect to a Repricing Event shall apply to any required assignment by a Non-Consenting Lender in connection with any such amendment pursuant to Subsection 2.14.2 (Replacement of Lenders)).

Requested Lenders: the meaning specified in Section 2.18 (Extension of Maturity Date).

Required Financial Covenant Lenders: at any time, Lenders (excluding Defaulting Lenders) having or holding greater than fifty percent (50%) of the aggregate principal amount of the Loans and Commitments under the Financial Covenant Indebtedness at such time. The interests of any Defaulting Lender in the Term A Facility and the RC Facility shall be disregarded in determining Required Financial Covenant Lenders at any time.

 

-32-


Reserve Percentage: the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed on member banks of the Federal Reserve System against “Euro-currency Liabilities” as defined in Regulation D of the Board of Governors of the Federal Reserve System (or any successor), as such regulation may be amended from time to time or any successor regulation, as the maximum reserve requirement (including any basic, supplemental, emergency, special or marginal reserves) applicable with respect to Eurocurrency liabilities as that term is defined in Regulation D (or against any other category of liabilities that includes deposits by reference to which the interest rate of Eurodollar Loans is determined), whether or not any Lender has any Eurocurrency liabilities subject to such reserve requirement at that time.

Reset Election Date: the meaning specified in Section 8.29 (Reset Provision).

Responsible Officer: with respect to any Loan Party, any Financial Officer or duly authorized chief executive officer, president, vice president, secretary, assistant secretary or any other officer or similar official responsible for the administration of such Loan Party’s obligations under the Loan Documents, in each case of such Loan Party.

Restricted Cash: cash of any Person (a) identified (or required under GAAP to be identified) on the balance sheet of such Person as “restricted” (unless such identification as restricted is solely related to the Liens created under the Loan Documents, customary Liens of depositary institutions that are Permitted Liens or Liens permitted under clause (h) of Subsection 8.2.1 (Liens; Licenses—In General)) or (b) not immediately available to be applied in repayment or prepayment of any Indebtedness of such Person.

Restricted Payment:

(a) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of Parent or any of its Subsidiaries, as the case may be, now or hereafter outstanding, except a dividend payable solely in shares of Capital Stock (other than Disqualified Stock) of Parent or such Subsidiary, as the case may be;

(b) any redemption, retirement, purchase or other acquisition, direct or indirect, of any shares of any class of Capital Stock of Parent or any of its Subsidiaries, as the case may be, now or hereafter outstanding, or of any warrants, rights or options to acquire any such shares or interests, except to the extent that the consideration therefor consists solely of shares of Capital Stock (other than Disqualified Stock) of Parent or such Subsidiary;

(c) any sinking fund, other prepayment or installment payment on account of any Capital Stock of Parent or any of its Subsidiaries;

(d) any other payment, loan or advance to a shareholder or other equity holder of Parent or any of its Subsidiaries whether in the capacity of such Person as a shareholder or otherwise, except salaries and other compensation, the payment of which is not otherwise restricted under the Loan Documents, paid in the ordinary course of business, consistent with past practice;

 

-33-


(e) any forgiveness or release without adequate consideration by Parent or any of its Subsidiaries of any Indebtedness or other obligation owing to Parent or such Subsidiary by a shareholder or other equity holder of Parent or such Subsidiary; or

(f) any payment of principal, interest, fees or other amounts in respect of subordinated Indebtedness.

Revolving Credit Exposure: means, as to any Lender at any time, the aggregate principal amount at such time of its outstanding Loans and such Lender’s participation in LC Obligations and Swingline Loans at such time.

S&P: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor to its rating agency business.

Sanctioned Country: a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf, or as otherwise published from time to time.

Sanctioned Person: (a) a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf, or as otherwise published from time to time or (b) (i) an agency of the government of a Sanctioned Country; (ii) an organization controlled by a Sanctioned Country or (iii) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

SEC: the U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Secured Obligations: collectively, (a) the Obligations, (b) any Banking Services Obligations and (c) obligations of any Loan Party under or arising out of Swap Agreements with any Swap Party (including the Swap Obligations identified in Schedule 5.26(b)) from time to time but excluding Excluded Swap Obligations.

Secured Party: the Administrative Agent, the Lenders, the Issuing Bank, the Lead Arrangers, the Indemnitees and all other Persons referred to in any of the Loan Documents as a beneficiary of the security interest granted therein, and all other holders of Secured Obligations, including any and all Swap Parties.

Security Agreement: the meaning specified in clause (c) of Subsection 4.1.5 (Closing Date Deliverables).

Senior Notes: collectively, the senior unsecured notes due 2023, issued by the Borrower on or prior to the Closing Date in an original aggregate principal amount of $360,000,000, and any additional senior unsecured notes issued by the Borrower under the Senior Note Documents (including pursuant to any supplement, amendment or other related documentation, and whether part of the same or a different series of notes (and whether or not having the same terms) as the original Senior Notes) after the Closing Date.

 

-34-


Senior Note Documents: the indenture and other definitive documentation for the Senior Notes issued on the Closing Date, together with any supplements thereto and other related documentation for any additional senior unsecured notes of the Borrower issued after the Closing Date, as in effect from time to time.

Solvent: a condition of a Person on a particular date, whereby on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. For purposes of this definition, in computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the amount that, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

Specified Merger Agreement Representations: the representations made by or in respect of the Company and its subsidiaries in the Merger Agreement that are material to the interests of the Lenders, but only to the extent that Parent or Merger Sub (or any of their Affiliates) have the right to terminate their obligations under the Merger Agreement or otherwise have the right to decline to consummate the Acquisition as a result of a breach of such representations and warranties in the Merger Agreement.

Specified Representations: the representations and warranties set forth in Subsection 5.1.1 (Status—Organization and Qualification), Section 5.2 (Power and Authority; Enforceability), clause (c) of Section 5.3 (No Violation of Agreements; Absence of Conflicts), the first sentence of Section 5.4 (Recording, Enforceability and Consent), the first and third sentences of Section 5.6 (Security Interest in Collateral), the second and third sentences of Subsection 5.7.2 (Laws; FCPA), Subsection 5.7.3 (Sanctioned Persons; Patriot Act), Subsection 5.7.4 (Anti-Corruption Policies), Section 5.16 (Federal Reserve Regulations), Section 5.17 (Investment Company Act), Section 5.27 (Designation as Senior Debt) and the representations set forth in Exhibit I.

Specified Restricted Uses: collectively: (a) Permitted Acquisitions; (b) Investments made pursuant to clause (e) of Section 8.3 (Investments, Loans, Acquisitions, Etc.); (c) Investments made pursuant to clause (b) of Section 8.3 (Investments, Loans, Acquisitions, Etc.); and (d) Restricted Payments made pursuant to Subsection 8.4.3 (Permitted Stock Repurchases and Dividends).

Specified Restricted Use Conditions: with respect to any Specified Restricted Use each of the following: (a) no Default or Event of Default shall have occurred and be continuing or

 

-35-


caused thereby; (b) there shall be minimum Liquidity of at least Fifty Million Dollars ($50,000,000) after giving pro forma effect to the proposed Specified Restricted Use; (c) subject to Section 8.29 (Reset Provision), the aggregate amount expended on all Specified Restricted Uses shall not exceed Four Hundred Million Dollars ($400,000,000); (d) the Total Net Leverage Ratio on a pro forma basis after giving effect to the proposed Specified Restricted Use shall be less than 5.20 to 1.00; and (e) Parent and the Borrower shall be in compliance with all covenants set forth in Article 7 (Financial Covenants) on a pro forma basis after giving effect to the proposed Specified Restricted Use.

Specified Subsidiary: at any date of determination, (a) each Subsidiary of Parent (i) whose total assets, as at the last day of the most recent fiscal quarter for which financial statements were delivered hereunder, were equal to or greater than five percent (5.00%) of total assets of Parent and its Subsidiaries on a Consolidated basis as at such date or (ii) whose gross revenues for the four consecutive fiscal quarters ended on such date were equal to or greater than five percent (5.00%) of the total gross revenues of Parent and its Subsidiaries on a Consolidated basis for such period, in each case determined in accordance with GAAP, and (b) each other Subsidiary of Parent that is the subject of an Event of Default under Subsection 9.1.10 (Insolvency) and that, when such Subsidiary’s total assets or gross revenues are aggregated with the total assets or gross revenues, as applicable, of each other such Subsidiary that is the subject of an Event of Default under Subsection 9.1.10 (Insolvency), would constitute a Specified Subsidiary under clause (a) above.

Subsidiary: with respect to any Person (referred to in this definition as the “parent”),

(a) any other Person of which more than fifty percent (50%) of the issued and outstanding equity having ordinary voting power to elect a majority of the Board of Directors or other governing body is directly or indirectly owned or controlled by such parent; or

(b) any other Person of which more than fifty percent (50%) of the voting equity interests are directly or indirectly owned or controlled by such parent.

For the sake of clarity a Subsidiary of a Person shall include any direct or indirect Subsidiary of such Person. Unless otherwise indicated or required by the context in which such term is used, any reference to a “Subsidiary” hereunder or under any other Loan Document shall mean a Subsidiary of Parent after the consummation of the Merger.

Subsidiary Guarantor: each U.S. Subsidiary of Parent excluding the Borrower, any Ventures and, to the extent provided below in this definition, Greatbatch LLC, in each case that has executed and delivered a Suretyship Agreement. As of the Closing Date, the Subsidiary Guarantors are: Precimed, Inc.; Electrochem Solutions, Inc.; Greatbatch-Globe Tool, Inc.; GB Ventures; QIG; Micro Power Electronics, Inc.; NeuroNexus Technologies, Inc.; Provenance Merger Sub Inc.; Lake Region Medical Holdings, Inc.; Accellent Holdings Corp.; Accellent Acquisition Corp.; Accellent; Lake Region Manufacturing, Inc.; Accellent LLC; American Technical Molding, Inc.; G&D, LLC; UTI Holdings, LLC; Machining Technology Group, LLC; UTI Holding Company; MedSource Technologies Holdings, LLC; Micro-Guide, Inc.; Noble-Met LLC; Venusa, Ltd.; CE Huntsville, LLC; Spectrum Manufacturing, Inc.; MedSource Technologies, LLC; Brimfield Acquisition, LLC; Brimfield Precision, LLC; Kelco Acquisition

 

-36-


LLC; MedSource Technologies, Newton Inc.; MedSource Technologies Pittsburgh, Inc.; MedSource Trenton LLC; National Wire & Stamping, Inc.; Portlyn, LLC and Thermat Acquisition, LLC. No Maquiladora Holding Subsidiary shall be a Subsidiary Guarantor if and to the extent that and for so long as such guaranty would cause adverse tax consequences for the Borrower or Parent pursuant to Section 956 of the Code (or any successor section) but it shall be subject to the provisions of Section 8.30 (Certain Limitations on Activities of Maquiladora Holding Subsidiaries) below.

Subsidiary Suretyship Agreement: the meaning specified in clause (d) of Subsection 4.1.5 (Closing Date Deliverables).

Suretyship Agreements: the Parent Suretyship Agreement and the Subsidiary Suretyship Agreement.

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

Swap Party: any party to a Swap Agreement that is a Lender, a Lead Arranger or an Affiliate of a Lender or Lead Arranger (or at the time the applicable Swap Agreement was entered into was a Lender, Lead Arranger or an Affiliate of a Lender or Lead Arranger); provided, that (a) the Borrower and such other party shall have designated such other party as “Swap Party” in writing to the Administrative Agent, which designation, in the case of any such Affiliate, shall contain an acknowledgement by such Affiliate of the exculpatory and indemnification provisions herein in favor of the Administrative Agent.

Swingline Lender: M&T so long as it is a Lender, or if M&T is no longer a Lender, then an RC Lender designated by the Borrower and acceptable to the Administrative Agent and such RC Lender.

Swingline Loans: the meaning specified in Subsection 2.2.1 (Swingline Loan Advances).

Swingline Note: the meaning specified in Section 2.6 (Notes).

 

-37-


Target Mexican Subsidiary: any wholly owned direct or indirect Subsidiary of the Borrower, which (a) was a Subsidiary of the Company prior to the Closing Date, and (b) is organized under the Laws of Mexico.

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

Term A Facility: the collective reference to (a) the Term A Loans made by the Term A Lenders to the Borrower on the Closing Date pursuant to Subsection 2.1.3 (Commitment to Make Term A Loans), (b) any Incremental Term A Loans, (c) Refinancing Term A Indebtedness and (d) all commitments for the foregoing.

Term A Lender: each Lender that signs this Agreement in respect of a Term A Loan Commitment and each successor and assign thereof.

Term A Loan Commitment: the meaning specified in Subsection 2.1.3 (Commitment to Make Term A Loans).

Term A Loan Maturity Date: initially, October 27, 2021, and as the same may be extended pursuant to the terms of this Agreement, or, as applicable, such earlier date as all Term A Loans shall have become due and payable hereunder.

Term A Loans: the meaning specified in Subsection 2.1.3 (Commitment to Make Term A Loans).

Term A Note: the meaning specified in Section 2.6 (Notes).

Term B Facility: the collective reference to (a) the Term B Loans made by the Term B Lenders to the Borrower on the Closing Date pursuant to Subsection 2.1.4 (Commitment to Make Term B Loans), (b) any Incremental Term B Loans, (c) Refinancing Term B Indebtedness and (d) all commitments for the foregoing.

Term B Lender: each Lender that signs this Agreement in respect of a Term B Loan Commitment and each successor and assign thereof.

Term B Loan Commitment: the meaning specified in Subsection 2.1.4 (Commitment to Make Term B Loans).

Term B Loan Maturity Date: initially, October 27, 2022, and as the same may be extended pursuant to the terms of this Agreement, or, as applicable, such earlier date as all Term B Loans shall have become due and payable hereunder.

Term B Loan Standstill Period: the meaning specified in clause (b) of Subsection 9.1.5.

 

-38-


Term B Loans: the meaning specified in Subsection 2.1.4 (Commitment to Make Term B Loans).

Term B Note: the meaning specified in Section 2.6 (Notes).

Term Facility: collectively the Term A Facility and the Term B Facility.

Term Lenders: the Term A Lenders and the Term B Lenders, as applicable.

Term Loans: the Term A Loans and the Term B Loans, as applicable.

Threshold Amount: $100,000,000.

Total Facility: the collective reference to the RC Facility, the Term A Facility and the Term B Facility.

Total Net Indebtedness: the aggregate amount of (x) all Indebtedness of Parent and its Subsidiaries on a Consolidated basis, other than Indebtedness described in clauses (g) and (h) of the definition of “Indebtedness” above to the extent such Indebtedness described in clauses (g) and (h) does not, in accordance with GAAP, appear as a liability on the Consolidated balance sheet of Parent and its Subsidiaries minus (y) Unrestricted Cash and Cash Equivalents of Parent and its Subsidiaries in an aggregate amount not to exceed Fifty Million Dollars ($50,000,000) (and excluding, in any event, the cash proceeds of any Indebtedness incurred in reliance on any provision of the Loan Documents that requires any leverage ratio test to be satisfied (on a pro forma basis or otherwise) in connection with the incurrence of such Indebtedness).

Total Net Leverage Ratio: the ratio of (a) the amount of Total Net Indebtedness to (b) Adjusted EBITDA.

Trade Date: the meaning specified in Subsection 11.6.8 (Disqualified Institutions).

Transaction Costs: all transaction fees, charges, premiums, expenses, tender and consent fees and premiums and other amounts related to clauses (a) through (d) of the definition of “Transactions” (including any financing fees, investment banking fees, merger and acquisition fees, call premiums, legal fees and expenses, due diligence fees or any other fees and expenses in connection therewith), in each case to the extent paid or payable within twelve (12) Months of the Closing Date.

Transactions: collectively, (a) the execution, delivery and performance by Parent and Merger Sub of the Merger Agreement and the consummation of the transactions contemplated thereby, (b) the negotiation, execution and delivery by Parent and its Subsidiaries party thereto of the Senior Note Documents and the issuance of the Senior Notes on or prior to the Closing Date, (c) the negotiation, execution and delivery by the Loan Parties of the Loan Documents to which they are a party and the initial funding of the Facilities on the Closing Date, (d) the Closing Date Refinancing and (e) the payment of the Transaction Costs.

 

-39-


United States and U.S.: the United States of America.

Unreimbursed Drawings: drawings made under Letters of Credit that, for any reason, have not been reimbursed by or on behalf of the Borrower, whether through borrowings of Loans hereunder or otherwise.

Unrestricted Cash: cash of Parent or any of its Subsidiaries other than Restricted Cash of any such Person.

U.S. Pension Plan: any Plan that (a) any Loan Party or any ERISA Affiliate maintains, contributes to, or otherwise has any liability with respect thereto, and (b) is subject to Title IV of ERISA or Sections 412 and 430 of the Code or Section 302 of ERISA.

U.S. Subsidiary: any Subsidiary of Parent that is organized under the Laws of the United States, any State thereof or the District of Columbia.

U.S. Tax Compliance Certificate: the meaning specified in Section 2.13.5 (Status of Lenders).

Venture: a Person in which GB Ventures or, prior to consummation of the Permitted Nuvectra Spinoff, QIG, individually or collectively, owns a majority of or controlling interest in, but in any event less than all of, its outstanding Capital Stock.

Withdrawal Liability: any withdrawal liability as defined in Section 4201 of ERISA.

1.2 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 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 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, unless otherwise specified, refer to such Law or regulation as amended, modified or supplemented from time to time and (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. Unless otherwise indicated or required by the context in which such term is used, any reference to a fiscal period (including, without limitation, a “fiscal year” or “fiscal quarter”) hereunder or under any other Loan Document shall be a reference to such fiscal period of Parent and its Subsidiaries.

 

-40-


ARTICLE 2

THE LOANS

2.1 RC LOANS; TERM A LOANS; TERM B LOANS.

2.1.1 Commitment to Make RC Loans. Subject to, and upon the terms and conditions set forth in this Agreement, the RC Lenders shall make advances to the Borrower until the RC Maturity Date in an aggregate principal amount outstanding at any one time not to exceed Two Hundred Million Dollars ($200,000,000) (as the same may be increased or reduced pursuant to the terms of this Agreement, the “RC Commitment”); provided, however, that (a) the aggregate amount of the RC Commitment available for borrowing at any time shall not exceed the Available RC Commitment at such time; (b) the amount and percentage of the RC Commitment and the Available RC Commitment that each RC Lender is obligated to lend shall not exceed at any time the amount or percentage set forth on Schedule 2.1.1 for such RC Lender (as supplemented and amended by giving effect to the assignments contemplated by this Agreement and any other adjustments contemplated by this Agreement) and (c) notwithstanding anything to the contrary in this Section 2.1, the aggregate amount of the RC Commitment available on the Closing Date shall not exceed the Initial LC Amount.

The RC Commitment of any RC Lender is sometimes referred to herein as such RC Lender’s RC Commitment. Within the limits set forth above, the Borrower may borrow under this Section 2.1, repay or prepay such advances, and reborrow under this Section 2.1. The principal amounts loaned to the Borrower pursuant to the revolving credit facility described in this Section 2.1 are referred to as the “RC Loans.”

2.1.2 Available RC Commitment. “Available RC Commitment” shall mean the initial RC Commitment, as the same is reduced by:

(a) voluntary reductions in the RC Commitment pursuant to Subsection 2.1.8 (Voluntary Commitment Reductions and Prepayments);

(b) the amount of LC Obligations;

(c) the aggregate principal amount of any outstanding Swingline Loans and RC Loans; and as the same is increased by:

(d) RC Commitment Increases pursuant to Subsection 2.1.11 (Increases in Facility).

2.1.3 Commitment to Make Term A Loans. Upon the terms and subject to the conditions of this Agreement, each Term A Lender agrees to make advances (such advances, together with any Incremental Term A Loans, the “Term A Loans”) to the Borrower on the

 

-41-


Closing Date in an aggregate principal amount not to exceed Three Hundred Seventy Five Million Dollars ($375,000,000) (as the same may be increased or reduced pursuant to the terms of this Agreement, the “Term A Loan Commitment”); provided, however, that the amount and percentage of the Term A Loan Commitment that any Lender is obligated to lend shall not exceed the amount or percentage set forth on Schedule 2.1.3 for such Term A Lender (as supplemented and amended by giving effect to the assignments contemplated by this Agreement and any other adjustments contemplated by this Agreement). The Term A Loan Commitment of any Term A Lender is sometimes referred to herein as such Term A Lender’s Term A Loan Commitment. The Borrower shall not be permitted to reborrow any amount of the Term A Loans once repaid.

2.1.4 Commitment to Make Term B Loans. Upon the terms and subject to the conditions of this Agreement, each Term B Lender agrees to make advances (such advances, together with any Incremental Term B Loans, the “Term B Loans”) to the Borrower on the Closing Date in an aggregate principal amount not to exceed One Billion Twenty Five Million Dollars ($1,025,000,000) (as the same may be increased or reduced pursuant to the terms of this Agreement, the “Term B Loan Commitment”); provided, however, that the amount and percentage of the Term B Loan Commitment that any Lender is obligated to lend shall not exceed the amount or percentage set forth on Schedule 2.1.4 for such Term B Lender (as supplemented and amended by giving effect to the assignments contemplated by this Agreement and any other adjustments contemplated by this Agreement). The Term B Loan Commitment of any Term B Lender is sometimes referred to herein as such Term B Lender’s Term B Loan Commitment. The Borrower shall not be permitted to reborrow any amount of the Term B Loans once repaid.

2.1.5 Scheduled Repayment of RC Loans. All amounts of principal, interest and fees relating to RC Loans not due and payable before the RC Maturity Date shall be due and payable on that date.

2.1.6 Scheduled Repayment of Term A Loans. The principal of the Term A Loans shall be due and payable in quarterly installments on each Quarterly Payment Date commencing on April 1, 2016, in each case in an amount equal to the amount specified below, subject to adjustment pursuant to the terms of this Agreement, such that all of the Term A Loans will be repaid in full on or before the Term A Loan Maturity Date:

 

Quarterly Payment Date

   Percentage of Original
Principal Amount (Per
Quarter)
  Amount (Per
Quarter)

Last Business Day of Parent’s 1st, 2nd and 3rd fiscal quarters 2016

   1.250%   $4,687,500

Last Business Day of Parent’s 4th fiscal quarter 2016 and of Parent’s 1st, 2nd and 3rd fiscal quarters 2017

   1.250%   $4,687,500

Last Business Day of Parent’s 4th fiscal quarter 2017 and of Parent’s 1st, 2nd and 3rd fiscal quarters 2018

   1.875%   $7,031,250

Last Business Day of Parent’s 4th fiscal quarter 2018 and each fiscal quarter thereafter until the Term A Loan Maturity Date

   2.500%   $9,375,000

At Term A Loan Maturity Date

     Unpaid Balance

 

-42-


2.1.7 Scheduled Repayment of Term B Loans. The principal of the Term B Loans shall be due and payable in quarterly installments, each equal to one-quarter of one percent (0.250%) of the original principal amount (or Two Million Five Hundred Sixty Two Thousand and Five Hundred Dollars ($2,562,500)), subject to adjustment pursuant to the terms of this Agreement) on each Quarterly Payment Date commencing on April 1, 2016 and continuing through (and including) the last Quarterly Payment Date prior to the Term B Loan Maturity Date. All amounts of principal, interest and fees relating to Term B Loans not due and payable before the Term B Loan Maturity Date are due and payable on the Term B Loan Maturity Date.

2.1.8 Voluntary Commitment Reductions and Prepayments.

(a) The Borrower shall have the right at any time and from time to time upon five (5) Business Days’ prior written notice to the Administrative Agent (or such shorter period as the Administrative Agent in its sole discretion may agree to) to permanently reduce (on a pro rata basis among the RC Lenders) or terminate the RC Commitment; provided, that after giving effect to any such reduction, the Available RC Commitment shall be not less than zero. Any partial reductions shall be in minimum amounts of One Million Dollars ($1,000,000) and in whole multiples of Five Hundred Thousand Dollars ($500,000) in excess of such minimum amount, without penalty or premium except as provided in Subsection 2.8.5 (Breakage).

(b) The Borrower shall have the right at any time and from time to time to prepay the RC Loans at any time without penalty or premium except as otherwise provided in Subsection 2.8.5 (Breakage). In connection with each such voluntary prepayment, the Borrower shall provide the Administrative Agent with notice of its intention to prepay (i) no later than 11:00 a.m. (New York, NY time) on the date of prepayment in the case of Base Rate Loans, and (ii) no later than 11:00 a.m. (New York, NY time) three (3) Business Days prior to the date of prepayment in the case of the LIBOR Loans.

(c) The Borrower may at any time and from time to time prepay the Term A Loans in whole or in part in a minimum amount equal to One Million Dollars ($1,000,000) or in whole multiples of Five Hundred Thousand Dollars ($500,000) in excess of such minimum amount, without penalty or premium except as provided in Subsection 2.8.5 (Breakage). In connection with each such voluntary prepayment, the Borrower shall provide the Administrative Agent with notice of its intention to prepay (i) no later than 11:00 a.m. (New York, NY time) one Business Day prior to the date of prepayment in the case of Base Rate Loans, and (ii) no later than 11:00 a.m. (New York, NY time) three (3) Business Days prior to

 

-43-


the date of prepayment in the case of the LIBOR Loans. At any time that the Borrower makes a prepayment of principal, it shall pay accrued interest on the amount so prepaid if it is a prepayment in full of the Term A Loans.

(d) The Borrower may at any time and from time to time prepay the Term B Loans in whole or in part in a minimum amount equal to Five Million Dollars ($5,000,000) or in whole multiples of Five Hundred Thousand Dollars ($500,000) in excess of such minimum amount, without penalty or premium except as provided in Subsection 2.8.5 (Breakage) and Subsection 2.7.3 (Repricing Event). In connection with each such voluntary prepayment, the Borrower shall provide the Administrative Agent with notice of its intention to prepay (i) no later than 11:00 a.m. (New York, NY time) one (1) Business Day prior to the date of prepayment in the case of Base Rate Loans, and (ii) no later than 11:00 a.m. (New York, NY time) three (3) Business Days prior to the date of prepayment in the case of the LIBOR Loans. At any time that the Borrower makes a prepayment of principal, it shall pay accrued interest on the amount so prepaid if it is a prepayment in full of the Term B Loans.

2.1.9 Mandatory Prepayments. Outstanding principal amounts under the Facilities shall be mandatorily prepaid (allocated across the Facilities as provided in clause (c) of Subsection 2.1.10 (Application of Prepayments)) at the times and in the amounts specified below. Nothing in this Subsection 2.1.9 shall be construed to constitute the Administrative Agent’s or any Lender’s consent to any transaction that is not permitted by other provisions of this Agreement or the other Loan Documents.

(a) Issuance of Debt. At any time that Parent or any of its Subsidiaries shall incur any Indebtedness (exclusive of Indebtedness permitted under Subsection 8.1.1 (Indebtedness—In General), other than Refinancing Term Loan Indebtedness or Refinancing RC Indebtedness), Borrower shall prepay, on the date of such incurrence thereof, such amount of the Loans as is equal to one hundred percent (100%) of the net cash proceeds of such Indebtedness.

(b) Material Recovery Event. In the event Parent or any of its Subsidiaries (or the Administrative Agent as loss payee or assignee) receives property or casualty insurance proceeds and/or a condemnation or similar payment (relating to one event, condition or transaction or a series of related events, conditions or transactions),

(i) Subject to clause (ii) below, in an amount in excess of Ten Million Dollars ($10,000,000) per occurrence (or series of related occurrences) if such Person does not, in fact, use the proceeds to repair or replace the applicable property within one hundred eighty (180) days of receipt of such proceeds, unless the Majority Lenders specifically consent to the use of such proceeds or other payment by Parent or the applicable Subsidiary; or

(ii) at the request of the Majority Lenders, in any amount if there is then an Event of Default that has occurred and is continuing at the time such net cash proceeds are received,

the Borrower shall promptly, and in any event no later than five (5) Business Days from the date of receipt thereof or of such request, as applicable, pay to the Administrative Agent, for the benefit of the Lenders, one hundred percent (100%) of all such insurance proceeds or payments

 

-44-


as a prepayment of the Loans. Notwithstanding the foregoing, the Borrower shall not use the proceeds of property or casualty insurance proceeds and/or a condemnation or similar payment for any purpose other than the prepayment of the Obligations unless such other use is permitted under the Other Senior Debt Documents without creating an obligation to prepay a portion of the Borrowers obligations under the Other Senior Debt Documents.

(c) Certain Asset Dispositions. At any time that Parent or any of its Subsidiaries sells, transfers or otherwise disposes of any of its assets or property (other than dispositions permitted under clauses (a), (b), (c), (d), (f), (g) and (h) of Subsection 8.7.2 (Sales and Other Dispositions) or contemplated by clause (b) above), the Borrower shall promptly prepay such amount of the Loans as is equal to the net cash proceeds of such disposition. If any proceeds are received in a form other than cash and subsequently converted into cash, then such proceeds shall be treated as net cash proceeds for purposes of this clause (c) at such time as they are converted into cash. Notwithstanding the foregoing, so long as no Default or Event of Default is then existing, and the Borrower notifies the Administrative Agent of its intent to do so at the time of receipt thereof, the Borrower (or Parent or such other relevant Subsidiary) may use the net cash proceeds of such dispositions to reinvest in assets useful in the business of the Borrower and its Subsidiaries not prohibited by the terms of this Agreement made within one hundred eighty (180) days after receipt of the net cash proceeds; provided, however, that if the assets disposed of are held by the Borrower or a Subsidiary Guarantor, then replacement assets shall also be held by the Borrower or a Subsidiary Guarantor. If the Borrower does not so notify the Administrative Agent, it shall prepay the Loans within five (5) Business Days of receipt of the proceeds. If the Borrower so notifies the Administrative Agent, but the Borrower or such applicable Subsidiary fails to use the net cash proceeds to reinvest in such replacement assets within said 180-day period, then the Borrower shall prepay the Loans on the date that is one hundred eighty (180) days after the date of receipt of the net cash proceeds. Nothing in this paragraph shall be construed to permit dispositions otherwise prohibited by this Agreement. Notwithstanding the foregoing, the Borrower shall not use the proceeds of any asset disposition for any purpose other than the prepayment of the Obligations unless such other use is permitted under the Other Senior Debt Documents without creating an obligation to prepay a portion of the Borrowers obligations under the Other Senior Debt Documents.

(d) Excess Cash Flow. On or prior to the date on which annual financial statements are required to be delivered pursuant to Subsection 6.1.2 (Delivery of Annual Financial Statements; Accountants’ Certification) for each fiscal year (the “subject fiscal year”) of Parent and its Subsidiaries, commencing with the fiscal year ending closest to December 31, 2016 and until the Loans are repaid in full, the Borrower shall deliver to the Administrative Agent a written statement of a Financial Officer of Parent or the Borrower (which statement may be included in the Officer’s Compliance Certificate for such fiscal year) calculating the Excess Cash Flow for the subject fiscal year, and, if there shall be Excess Cash Flow, then within five (5) Business Days of the delivery of such written statement shall pay to the Administrative Agent, for the ratable account of the applicable Lenders, an amount equal to the (i) Applicable Recapture Rate (as defined below) multiplied by such Excess Cash Flow, minus (ii) the amount of any voluntary prepayments of Term A Loans made during the subject fiscal year pursuant to clause (c) of Subsection 2.1.8 (Voluntary Commitment Reductions and Prepayments), minus (iii) the amount of any voluntary prepayments of Term B Loans made during the subject fiscal year pursuant to clause (d) of Subsection 2.1.8 (Voluntary Commitment

 

-45-


Reductions and Prepayments), and minus (iv) the principal amount of any Term B Loans repurchased for cash by the Borrower pursuant to Subsection 11.6.7 (Borrower Buybacks) during the subject fiscal year; provided, that (1) any voluntary prepayment or repurchase of Term A Loans or Term B Loans shall not be deducted pursuant to clauses (ii), (iii), or (iv) above if (A) such prepayment or repurchase was funded using the proceeds of Indebtedness that constitutes a long-term liability, or (B) such prepayment was a non-cash prepayment deemed to occur upon the cancellation of such Term B Loans pursuant to Subsection 11.6.7 (Borrower Buybacks), and (2) if the Borrower repurchases any Term B Loans pursuant to Subsection 11.6.7 (Borrower Buybacks) for a price less than par, then the amount that the Borrower may deduct pursuant to clause (iv) above for such Term B Loan shall be the cash purchase price (respecting principal) actually paid for such Term B Loan. The term “Applicable Recapture Rate” shall mean the following:

 

If the Total Net Leverage Ratio is, as of the end of such subject fiscal year:    Then the Applicable Recapture Rate is:
Greater than or equal to 3.25 to 1.00    50%

Less than 3.25 to 1.00 and greater than or

equal to 2.75 to 1.00

   25%
Less than 2.75 to 1.00    0%

(e) Repatriation. Notwithstanding any other provisions of this Subsection 2.1.9, to the extent any or all of the net cash proceeds of any event giving rise to a prepayment obligation pursuant to clauses (b) or (c) of this Subsection 2.1.9 by a Foreign Subsidiary or Excess Cash Flow attributable to Foreign Subsidiaries, in either case, are prohibited or delayed by any applicable local Law from being repatriated or passed on to or used for the benefit of the Borrower or any U.S. Subsidiary or if the Borrower has determined in good faith that repatriation of any such amount to the Borrower or any U.S. Subsidiary would have material adverse tax consequences with respect to such amount, the portion of such net cash proceeds or Excess Cash Flow so affected will not be required to be applied to prepay the Loans at the times provided in this Subsection 2.1.9 but may be retained by the applicable Foreign Subsidiary so long, but only so long, as the applicable local Law will not permit repatriation or the passing on to or otherwise using for the benefit of the Borrower or any U.S. Subsidiary, or the Borrower believes in good faith that such material adverse tax consequence would result from such repatriation, and once such repatriation of any of such affected net cash proceeds or Excess Cash Flow is permitted under the applicable local Law or the Borrower determines in good faith such repatriation would no longer have such material adverse tax consequences, such repatriation will be promptly effected and such repatriated net cash proceeds or Excess Cash Flow will be promptly (and in any event not later than five (5) Business Days after such repatriation) applied (net of additional taxes payable or reasonably estimated to be payable as a result thereof) to the prepayment of the Loans pursuant to this Subsection 2.1.9; provided, that

 

-46-


the Borrower shall use commercially reasonable efforts to eliminate any prohibition or delay or material adverse tax consequence that would apply to such repatriation in order to make the foregoing repayment as soon as possible. The Borrower shall include a calculation of, and reasonable documentation for, any net cash proceeds or Excess Cash Flow for which a mandatory prepayment is deferred in reliance on this clause (e) of this Subsection 2.1.9 in the written statement of a Financial Officer delivered pursuant to clause (d) of this Subsection 2.1.9.

(f) Delay in Payment During Interest Period. Notwithstanding any of the other provisions of this Subsection 2.1.9 to the contrary, so long as no Event of Default shall have occurred and be continuing, if any prepayment of LIBOR Loans is required to be made under this this Subsection 2.1.9 other than on the last day of the Interest Period therefor, the Borrower may, in its sole discretion, deposit the amount of any such prepayment otherwise required to be made thereunder into a cash collateral account in the name of and for the benefit of the Administrative Agent and the Lenders until the last day of such Interest Period, at which time the Administrative Agent shall be authorized (without any further action by or notice to or from the Borrower or any other Loan Party) to apply such amount to the prepayment of such Loans in accordance with this this Subsection 2.1.9. Upon the occurrence and during the continuance of any Event of Default, the Administrative Agent shall also be authorized (without any further action by or notice to or from the Borrower or any other Loan Party) to apply such amount to the prepayment of the outstanding Loans in accordance with this this Subsection 2.1.9.

2.1.10 Application of Prepayments.

(a) Any voluntary prepayments of Term A Loans pursuant to clause (c) of Subsection 2.1.8 (Voluntary Commitment Reductions and Prepayments) shall be applied to the remaining scheduled principal payments on the Term A Loans as directed by the Borrower (provided, that if the Borrower fails to make any such direction concurrently with such prepayment, the prepayment will be applied to reduce the applicable remaining payments under Subsection 2.1.6 (Scheduled Repayment of Term A Loans) in direct order of maturity).

(b) Any voluntary prepayments of Term B Loans pursuant to clause (d) of Subsection 2.1.8 (Voluntary Commitment Reductions and Prepayments) shall be applied to the remaining scheduled principal payments on the Term B Loans as directed by the Borrower (provided, that if the Borrower fails to make any such direction concurrently with such prepayment, the prepayment will be applied to reduce the applicable remaining payments under Subsection 2.1.7 (Scheduled Repayment of Term B Loans) in direct order of maturity).

(c) Any mandatory prepayments of Loans pursuant to Subsection 2.1.9 (Mandatory Prepayments) shall be applied first, to outstanding Term Loans pro rata among such Term Loans based on the outstanding principal amount of all Term Loans, and in each case to reduce the applicable remaining payments under Subsection 2.1.6 (Scheduled Repayment of Term A Loans) and Subsection 2.1.7 (Scheduled Repayment of Term B Loans) (in each case, including payments to be made at maturity) pro rata until there are no outstanding Term Loans; and second, to RC Loans without a corresponding permanent reduction of the RC Commitment; provided, however, that proceeds of any Refinancing Term A Indebtedness, Refinancing Term B Indebtedness or Refinancing RC Indebtedness shall be applied as provided in clauses (c) and (d) of Subsection 2.19.1 (Term Facility Refinancing) or clause (b) of Subsection 2.19.2 (Revolver Refinancing), respectively.

 

-47-


2.1.11 Incremental Extensions of Credit.

(a) Subject to the terms and conditions set forth herein, the Borrower may, by notice to the Administrative Agent, request:

(i) solely prior to the Term A Loan Maturity Date to add one or more additional tranches of Term A Loans (the “Incremental Term A Loans”),

(ii) solely prior to the Term B Loan Maturity Date to add one or more additional tranches of Term B Loans (the “Incremental Term B Loans” and together with the Incremental Term A Loans, the “Incremental Term Loans”),

(iii) solely prior to the RC Maturity Date, one or more increases in the aggregate amount of the RC Commitments (each such increase, a “RC Commitment Increase” and, together with the Incremental Term Loans and any Alternative Incremental Facility Debt, the “Incremental Extensions of Credit”), or

(iv) prior to the Maturity Date, Alternative Incremental Facility Debt,

in an unlimited aggregate principal amount so long as, after giving pro forma effect to the incurrence of such Indebtedness and the application of the proceeds thereof (and assuming that the full amount of such Incremental Extensions of Credit has been funded on such date and that any such Incremental Extensions of Credit are secured by a lien on assets of Parent or any of its Subsidiaries on a first-lien basis), the First Lien Net Leverage Ratio does not exceed 4.25 to 1.00; provided, that at the time of each such request and upon the effectiveness of each Incremental Facility Amendment and the incurrence of Alternative Incremental Facility Debt, as applicable,

(1) no Default or Event of Default shall have occurred and be continuing or shall result therefrom,

(2) such Incremental Extension of Credit or Alternative Incremental Facility Debt, as applicable, shall be permitted under the Other Senior Debt Documents

(3) the representations and warranties of the Borrower and each other Loan Party, as applicable, set forth in the Loan Documents shall be true and correct in all material respects (or, in the case of representations and warranties qualified as to materiality, in all respects) on and as of the date of, and immediately after giving effect to, the incurrence of such Incremental Extension of Credit,

(4) the Borrower shall have delivered a certificate of a Financial Officer to the effect set forth in clauses (1), (2) and (3) above, together with reasonably detailed calculations demonstrating compliance with the First Lien Net Leverage Ratio test set forth above and any other calculations as the Administrative Agent may request to evidence compliance with the Other Senior Debt Documents,

 

-48-


(5) each tranche of Incremental Term Loans and each RC Commitment Increase shall be in an integral multiple of Five Million Dollars ($5,000,000) and be in an aggregate principal amount that is not less than Twenty Million Dollars ($20,000,000) (or such lesser amount as the Administrative Agent may agree to),

(6) the Administrative Agent shall have received (A) all documents (including resolutions of the Board of Directors of the Borrower and the other Loan Parties) it may reasonably request relating to the authority for, and the validity of, such increase in the RC Commitments or borrowing of such Incremental Term Loan, and any other matters relevant thereto, all in form and substance reasonably satisfactory to the Administrative Agent and (B) reaffirmation agreements and/or such other supplements to the Loan Documents as may be reasonably requested by the Administrative Agent, and

(7) if the reallocation, if any, of outstanding Loans among the Lenders in connection with such increase results in the prepayment of LIBOR Loans on a day which is not the last day of an Interest Period with respect thereto, the Borrower shall pay to each affected Lender such amounts, if any, as and when required pursuant to Subsection 2.8.5 (Breakage).

(b) If the Incremental Extension of Credit is of an RC Commitment Increase, (i) the Loans under any such incremental facility will mature on the RC Maturity Date, (ii) there shall be no scheduled commitment reduction prior to the RC Maturity Date and (iii) the interest rate and other terms shall be consistent with those for the existing RC Facility.

(c) If the increase is an Incremental Term Loan, (i) such Incremental Term Loans will mature no earlier than the Term B Loan Maturity Date, (ii) the weighted average life to maturity of any Incremental Term Loans shall be no shorter than the weighted average life to maturity of the existing Term B Loans, (iii) the interest rate margins for the Incremental Term Loans shall be determined by the Borrower and the Lenders providing such Incremental Term Loans; provided, that in the event that the All-in Yield for such Incremental Term Loans is greater than the All-in Yield for the existing Term B Loans by more than one-half of one percent (0.50%) per annum, then the interest rate margins for the existing Term B Loans shall be increased to the extent necessary so that the All-in Yield for the existing Term B Loans shall be equal to or greater than the level that is one-half of one percent (0.50%) less than the All-in Yield for such Incremental Term Loans.

(d) The notice from the Borrower pursuant to clause (a) of this Section shall set forth the requested amount and proposed terms of the relevant Incremental Extension of Credit and shall be delivered to the Administrative Agent no later than ten (10) Business Days (or such shorter period as may be agreed to by the Administrative Agent) prior to the proposed date of the increase. The Borrower shall be entitled to offer Incremental Extensions of Credit to existing Lenders or other Persons subject to the following sentence. Any additional bank, financial institution or other Person (other than an existing RC Lender) that elects to extend an RC Commitment Increase shall be reasonably satisfactory to the Administrative Agent, each

 

-49-


applicable Issuing Bank and the Swingline Lender (any such existing Lender or other Person participating in any Incremental Extension of Credit, an “Additional Lender”) and, if not already a Lender, shall become a Lender under this Agreement pursuant to an amendment (an “Incremental Facility Amendment”) to this Agreement and, as appropriate, the other Loan Documents, executed by the Borrower, such Additional Lender and the Administrative Agent and satisfactory to the Administrative Agent (and which shall not require the consent of any other Lender). No Lender shall be obligated to provide any Incremental Extension of Credit unless it so agrees pursuant to an Incremental Facility Amendment. Commitments in respect of any Incremental Extension of Credit shall become Commitments (or in the case of any RC Commitment Increase to be provided by an existing Lender with an RC Commitment, an increase in such Lender’s RC Commitment) under this Agreement upon the effectiveness of the applicable Incremental Facility Amendment. Except as expressly provided herein, terms of any Incremental Extension of Credit shall be consistent with the terms set forth in this Agreement or other terms satisfactory to the Administrative Agent and to the Borrower. An Incremental Facility Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement or to any other Loan Document as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section.

(e) On the date of effectiveness of any RC Commitment Increase, the aggregate principal amount of the RC Loans outstanding (the “Existing RC Borrowings”) immediately prior to the effectiveness of such RC Commitment Increase shall be deemed to be repaid and immediately reborrowed upon the effectiveness of the RC Commitment Increase. In connection therewith, (i) each Lender who is participating in the RC Commitment Increase (a “RC Commitment Increase Lender”) shall deliver to the Administrative Agent funds equal to the excess, if any, of its ratable share of the Existing RC Borrowings immediately after the RC Commitment Increase over the amount of its ratable share, if any, of the Existing RC Borrowings immediately prior to the RC Commitment Increase and (iii) each RC Lender with a RC Commitment immediately prior to the RC Commitment Increase ( a “Pre-Increase RC Lender”) shall receive any excess of the amount of its ratable share of the Existing RC Borrowings immediately prior to the RC Commitment Increase over its ratable share of the Existing RC Borrowings immediately after the RC Commitment Increase. The deemed payments of the Existing RC Borrowings of Pre-Increase RC Lenders made pursuant to this clause (e) shall be subject to compensation by the Borrower pursuant to the provisions of Subsection 2.8.5 (Breakage) if the date of the effectiveness of such RC Commitment Increase occurs other than on the last day of the Interest Period relating thereto. Upon each RC Commitment Increase pursuant to this Subsection 2.1.11, each Pre-Increase RC Lender will automatically and without further act be deemed to have assigned to each RC Commitment Increase Lender, and each such RC Commitment Increase Lender will automatically and without further act be deemed to have assumed, a ratable portion of such Pre-Increase RC Lender’s participations hereunder in outstanding Letters of Credit and participations hereunder in Swingline Loans.

(f) Notwithstanding the foregoing, no RC Commitment Increase shall (i) increase the Letter of Credit Sublimit without the consent of the Issuing Bank or (ii) increase the aggregate outstanding principal amount for Swingline Loans pursuant to Subsection 2.2.1 (Swingline Loan Advances) without the consent of the Swingline Lender.

 

-50-


2.2 SWINGLINE LOANS.

2.2.1 Swingline Loan Advances. Upon the terms and subject to the conditions of this Agreement, the Swingline Lender may (but is not obligated to) make, from time to time, from and including the Closing Date to but excluding the RC Maturity Date, one or more Loans (“Swingline Loans”) to the Borrower, in an aggregate outstanding principal amount not exceeding at any time Fifteen Million Dollars ($15,000,000); provided, however, that no Swingline Loan shall be made at any time in an amount in excess of the Available RC Commitment.

2.2.2 Terms of Swingline Loan Borrowings. The Borrower shall give the Swingline Lender notice (which shall be irrevocable) of a request for a Swingline Loan no later than 12:00 noon (New York, NY time) on the day such Loan is requested; if such notice is received later than 12:00 noon (New York, NY time), then the request shall be deemed to be a request for a Swingline Loan to be made on the next Business Day. Each Swingline Loan shall be in a principal amount equal to or greater than Two Hundred Thousand Dollars ($200,000) and shall bear interest at the Base Rate plus the Applicable Margin. The Borrower shall repay the principal amount of each Swingline Loan (together with all accrued interest) no later than 3:00 p.m. (New York, NY time) on the earliest of (a) the date that is five (5) Business Days after the date that such Loan is made; (b) the date that demand is made therefor by the Swingline Lender and (c) the RC Maturity Date. However, nothing in this Subsection 2.2.2 shall prohibit the Borrower from repaying any Swingline Loan with the proceeds of another Swingline Loan that it may borrow hereunder.

2.2.3 Participation by Lenders. Upon demand made to the RC Lenders by the Swingline Lender, which demand may be made before or after a Default or Event of Default, and before or after the maturity date of the subject Swingline Loans, but subject to the provisions of Subsection 2.2.5 (Certain Limitations), each RC Lender shall promptly, irrevocably and unconditionally purchase from the Swingline Lender, without recourse or warranty, an undivided interest and participation in the Swingline Loans then outstanding. Each RC Lender shall effect such purchase by paying to the Swingline Lender in immediately available funds, without reduction or deduction of any kind, including reductions or deductions for setoff, recoupment or counterclaim, an amount equal to such RC Lender’s pro rata share of the principal amount of all Swingline Loans then outstanding. Each RC Lender’s pro rata share of the Swingline Loans shall be based on the amount of such RC Lender’s pro rata share of the total RC Commitment (or if the RC Commitment is then terminated, based on the amount of such RC Lender’s pro rata share of the total RC Commitment at the time the Swingline Loan immediately prior to termination of the RC Commitment). Thereafter, the RC Lenders’ respective interests in such Swingline Loans, and the remaining interest of the Swingline Lender in such Swingline Loans, shall in all respects be treated as RC Loans under this Agreement, except that such Swingline Loans shall be due and payable by the Borrower on the dates referred to in Subsection 2.2.2 (Terms of Swingline Loan Borrowings).

If any RC Lender does not pay any amount that it is required to pay pursuant to this Subsection 2.2.3 promptly upon the Swingline Lender’s demand therefor, (a) the Swingline Lender shall be entitled to recover such amount on demand from such RC Lender, together with interest thereon, at the Federal Funds Rate for the first three (3) Business Days, and thereafter at

 

-51-


the Base Rate, for each day from the date of such demand, if made prior to 2:00 p.m. (New York, NY time) on any Business Day, or, if made at any later time, from the next Business Day following the date of such demand, until the date such amount is paid in full to the Swingline Lender by such RC Lender and (b) the Swingline Lender shall be entitled to all interest payable by the Borrower on such amount until the date on which such amount is received by the Swingline Lender from such Lender. Moreover, any RC Lender that shall fail to make available the required amount shall be a Defaulting Lender until such amount with interest is paid in full to the Swingline Lender by such RC Lender. Without limiting any obligations of any RC Lender pursuant to this Subsection 2.2.3, if any RC Lender does not pay such corresponding amount promptly upon the Swingline Lender’s demand therefor, the Swingline Lender shall notify the Borrower and the Borrower shall promptly repay such corresponding amount to the Swingline Lender together with accrued interest thereon at the applicable rate on such Swingline Loans.

2.2.4 No Setoff, Etc. Subject only to the limitations set forth in Subsection 2.2.5 (Certain Limitations), the obligations of each RC Lender to make available to the Swingline Lender the amounts set forth in Subsection 2.2.3 (Participation by Lenders) shall be absolute, unconditional and irrevocable under any and all circumstances, shall be without reduction for any setoff or counterclaim of any nature whatsoever, may not be terminated, suspended or delayed for any reason whatsoever, shall not be subject to qualification or exception and shall be made in accordance with the terms of this Agreement.

2.2.5 Certain Limitations. No RC Lender shall be obligated to purchase a participation in any Swingline Loan pursuant to Subsection 2.2.3 (Participation by Lenders), if such Lender proves that (a) the conditions set forth in Subsections 4.2.1 (No Default) or 4.2.3 (Representations and Warranties) were not satisfied at the time such Swingline Loan was made (unless such condition was waived in accordance with the terms of this Agreement) and (b) such RC Lender had notified the Swingline Lender in a writing received by the Swingline Lender at least one (1) Business Day prior to the time that it made such Swingline Loan that the Swingline Lender was not authorized to make such Swingline Loan because such conditions were not satisfied and stating with specificity the reason therefor.

2.2.6 Resignation of Swingline Lender. The Swingline Lender may resign at any time by giving thirty (30) days’ prior notice to the Administrative Agent, the RC Lenders and the Borrower, so long as the Swingline Lender uses commercially reasonable efforts to have a new Swingline Lender designated prior to the expiration of such notice period and such new Swingline Lender agrees to assume the responsibilities of the Swingline Lender upon such expiration. After the resignation of the Swingline Lender hereunder, the retiring Swingline Lender shall remain a party hereto and shall continue to have all the rights and obligations of a Swingline Lender under this Agreement and the other Loan Documents with respect to Swingline Loans made by it prior to such resignation, but shall not be required to make any additional Swingline Loans.

2.3 BORROWING NOTICE.

Each Loan that is a Base Rate Loan shall be in the minimum amount of Two Million Dollars ($2,000,000) and integral multiples of Five Hundred Thousand Dollars ($500,000) in excess of such minimum amount. Each Loan that is a LIBOR Loan shall be in the minimum amount of

 

-52-


One Million Dollars ($1,000,000) and integral multiples of One Hundred Thousand Dollars ($100,000) in excess of such amount. To request a funding, the Borrower shall give the Administrative Agent written notice in the form attached to this Agreement as Exhibit B specifying the type, amount and date of each intended borrowing and the manner in which the same shall be disbursed, which notice:

(a) in the case of Base Rate Loans, shall be given no later than 11:00 a.m. (New York, NY time) at least one (1) Business Day prior to the date of such borrowing;

(b) in the case of LIBOR Loans, shall be given no later than 11:00 a.m. (New York, NY time) at least three (3) Eurodollar Business Days prior to the date of such borrowing and shall specify the Interest Period with respect to such borrowing; and

(c) in the case of Swingline Loans, shall be given no later than 12:00 noon (New York, NY time) on the date of such borrowing.

Notwithstanding the foregoing, the Administrative Agent may (but is not obligated to) act upon telephone notice by the Borrower whether or not written notice is received; provided, that nothing in this sentence shall relieve the Borrower from providing written notice as provided by this Section.

Except in the case of Swingline Loans, the Administrative Agent in turn shall give prompt written or telephonic (promptly confirmed in writing) notice to each applicable Lender of its pro rata share of the borrowing, the interest rate option selected and the scheduled date of the funding. After receipt of such notice, each such Lender shall make such arrangements as are necessary to assure that its share of the funding shall be immediately available (in Dollars) to the Administrative Agent no later than 2:30 p.m. (New York, NY time), on the date on which the funding is to occur. After receipt of the funds, the Administrative Agent, subject to the satisfaction of the conditions precedent set forth in Section 4.2 (Requirements for Each Loan/Letter of Credit), shall disburse the amount of such funding in accordance with instructions in the Borrower’s borrowing notice.

The Lenders shall not be obligated to comply with a borrowing notice if there shall then exist an Event of Default or a Default regardless of whether the Lenders have determined to exercise their remedies arising upon the occurrence of such Default or Event of Default.

2.4 [RESERVED].

2.5 LENDERS’ OBLIGATIONS SEVERAL.

Each Lender is severally bound by this Agreement, but there shall be no joint obligation of the Lenders under this Agreement. The failure of any Lender to make any share of the Loans or fulfill any obligations respecting Letters of Credit to be made or fulfilled by it on the date specified for the Loans or such obligations shall not relieve any other Lender of its obligation to make its share of the Loans or fulfill other obligations on such date, but neither any Lender nor the Administrative Agent shall be responsible for the failure of any other Lender to make a share of the Loans or fulfill other obligations to be made or fulfilled by such other Lender.

 

-53-


2.6 NOTES.

Upon the request of any Lender holding Term A Loans, the aggregate principal amount of such Lender’s share of the Term A Loans shall be evidenced by a note to be issued by the Borrower to such Lender in substantially the form attached to this Agreement as Exhibit A-1 (each, a “Term A Note” and collectively, the “Term A Notes”). Upon the request of any Lender holding Term B Loans, the aggregate principal amount of such Lender’s share of the Term B Loans shall be evidenced by a note to be issued by the Borrower to such Lender in substantially the form attached to this Agreement as Exhibit A-2 (each, a “Term B Note” and collectively, the “Term B Notes”). Upon the request of any RC Lender, the aggregate principal amount of such Lender’s share of the RC Commitment and RC Loans shall be evidenced by a note to be issued by the Borrower to such Lender in substantially the form attached to this Agreement as Exhibit A-3 (each, a “RC Note” and collectively, the “RC Notes”). Upon the request of the Swingline Lender, the Swingline Loans and commitment therefor shall be evidenced by a note to be issued by the Borrower to the Swingline Lender in substantially the form attached to this Agreement as Exhibit A-4 (the “Swingline Note”). Upon receipt of (a) an affidavit of an officer of a Lender as to the loss, theft, destruction or mutilation of any Note, and in the case of any such mutilation, upon cancellation of such Note, and (b) if requested by the Borrower, an appropriate indemnification, the Borrower will issue, in lieu thereof, a replacement Note.

2.7 FEES TO LENDERS.

2.7.1 Commitment Fees.

(a) The Borrower shall pay to the Administrative Agent, for the account of the RC Lenders, quarterly in arrears on each Quarterly Payment Date, a commitment fee (the “Commitment Fee”) (calculated on the basis of a 360-day year for the actual days elapsed) equal to the Commitment Fee Rate multiplied by the Commitment Fee Base determined on an average daily basis.

(b) The term “Commitment Fee Rate” shall mean the following:

The Commitment Fee Rate shall be one-quarter of one percent (0.250%) per annum from the Closing Date until five (5) Business Days after the delivery of the Officer’s Compliance Certificate for the first full fiscal quarter following the Closing Date pursuant to Subsection 6.1.3 (Delivery of Officer’s Compliance Certificates). Thereafter, the Commitment Fee Rate shall be the rate per annum specified below based on the Total Net Leverage Ratio as reflected in the most recently delivered Officer’s Compliance Certificate:

 

Total Net Leverage Ratio

   Commitment Fee Rate

Greater than or equal to 2.50 to 1.00

   0.250%

Less than 2.50 to 1.00

   0.175%

 

-54-


The Commitment Fee Rate shall be adjusted five (5) Business Days after each Officer’s Compliance Certificate is delivered pursuant to Subsection 6.1.3 (Delivery of Officer’s Compliance Certificates); provided, however, at any time that the Borrower shall have not delivered such certificate at the time specified in Subsection 6.1.3 (Delivery of Officer’s Compliance Certificates), until such time as such certificate is so delivered to the Administrative Agent, the Commitment Fee Rate shall be one-quarter of one percent (0.250%) per annum.

(c) “Commitment Fee Base” means an amount at any time equal to (i) the RC Commitment less (ii) the sum of the aggregate principal amount of outstanding RC Loans, the face amount of outstanding Letters of Credit and any Unreimbursed Drawings in respect of Letters of Credit. Outstanding Swingline Loans shall not reduce the Commitment Fee Base.

(d) Notwithstanding the foregoing, if, as a result of any restatement of or other adjustment to the financial statements of the Borrower or for any other reason, the Borrower or the Administrative Agent determines that (i) the Total Net Leverage Ratio as calculated by the Borrower as of any applicable date was inaccurate and (ii) an accurate calculation of the Total Net Leverage Ratio would have resulted in higher pricing for such period, the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under Debtor Relief Laws, automatically and without further action by the Administrative Agent, any Lender or the Issuing Bank), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This clause (d) shall not limit the rights of the Administrative Agent, any Lender or the Issuing Bank, as the case may be, under Article 3 (Letters of Credit), Section 2.8 (Interest) or under Article 9 (Events of Default). The Borrower’s obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

2.7.2 Letter of Credit Fees. The Borrower shall pay to the Administrative Agent for the account of the Issuing Bank and/or Lenders, as applicable, such letter of credit fees as are described in Article 3 (Letters of Credit).

2.7.3 Repricing Event. If any Repricing Event occurs on or prior to the date that is six months after the Closing Date, the Borrower agrees to pay to the Administrative Agent, for the ratable account of each Term B Lender holding Initial Term B Loans that are subject to such Repricing Event (including any Term B Lender that is replaced pursuant to Subsection 2.14.2 (Replacement of Lenders) as a result of its refusal to consent to an amendment giving rise to such Repricing Event), a fee in an amount equal to one percent (1.00%) of the aggregate principal amount of the Initial Term B Loans subject to such Repricing Event. Such fees shall be earned, due and payable upon the date of the occurrence of the respective Repricing Event.

2.7.4 Other Fees. The Borrower shall pay such other fees, if any, as the Borrower has otherwise agreed to pay to the Administrative Agent, the Issuing Bank, and/or the Lenders.

 

-55-


2.8 INTEREST.

2.8.1 Rates. The Loans (other than Swingline Loans) shall bear interest at the Borrower’s option (subject to the limitation and conditions set forth in this Section 2.8) at the Base Rate plus the Applicable Margin or at the Adjusted LIBOR plus the Applicable Margin. Interest on Base Rate Loans shall be payable monthly on the first day of the month, in arrears, commencing with the Month following the Month in which the Closing Date occurs. Interest on LIBOR Loans shall be payable on the last day of each Interest Period; provided, that if the Interest Period is six (6) Months or longer, interest shall be payable on the ninetieth day of the Interest Period, every ninetieth day thereafter until the end of the Interest Period and on the last day of the Interest Period. Swingline Loans shall bear interest at the Base Rate plus the Applicable Margin on RC Loans; accrued interest on Swingline Loans shall be payable at the earlier of (a) the date the principal amount of such Swingline Loans are payable and (b) on the first day of each month, in arrears. All computations of interest shall be made on the basis of a 360-day year (except, in the case of Base Rate Loans calculated with respect to the prime rate, computations of interest shall be made on the basis of a 365-day/366-day year) and the actual number of days elapsed. Changes in the rate of interest resulting from changes in the Base Rate shall take place immediately without notice or demand of any kind.

2.8.2 Applicable Margin. Except as set forth in Subsection 2.8.3 (Adjustments to Applicable Margin), the term “Applicable Margin” when used (a) with respect to the Base Rate shall mean (i) for Term B Loans, three and one-quarter of one percent (3.25%) per annum, and (ii) for Term A Loans and RC Loans, the rate per annum set forth next to the as applicable Total Net Leverage Ratio:

 

Total Net Leverage Ratio

(Calculated on a Trailing Four-Fiscal-Quarter Basis)

   Base Rate Applicable Margin
for Term A Loans and RC Loans

Greater than or equal to 4.50 to 1.00

   2.25%

Less than 4.50 to 1.00 and greater than or equal to 4.00 to 1.00

   1.75%

Less than 4.00 to 1.00 and greater than or equal to 3.00 to 1.00

   1.50%

Less than 3.00 to 1.00 and greater than or equal to 2.50 to 1.00

   1.25%

Less than 2.50 to 1.00 and greater than or equal to 2.00 to 1.00

   1.00%

Less than 2.00 to 1.00

   0.75%

 

-56-


and (b) with respect to Adjusted LIBOR shall mean (i) for Term B Loans, four and one-quarter of one percent (4.25%) per annum, and (ii) for Term A Loans and RC Loans, the rate per annum set forth next to the applicable Total Net Leverage Ratio:

 

Total Net Leverage Ratio

(Calculated on a Trailing Four-Fiscal-Quarter Basis)

   Adjusted LIBOR Applicable Margin
for Term A Loans and RC Loans
Greater than or equal to 4.50 to 1.00    3.25%
Less than 4.50 to 1.00 and greater than or equal to 4.00 to 1.00    2.75%
Less than 4.00 to 1.00 and greater than or equal to 3.00 to 1.00    2.50%
Less than 3.00 to 1.00 and greater than or equal to 2.50 to 1.00    2.25%
Less than 2.50 to 1.00 and greater than or equal to 2.00 to 1.00    2.00%
Less than 2.00 to 1.00    1.75%

2.8.3 Adjustments to Applicable Margin. From the Closing Date until five (5) Business Days after the financial statements and Officer’s Compliance Certificate for the first full fiscal quarter following the Closing Date are delivered to the Administrative Agent pursuant to Subsection 6.1.3 (Delivery of Officer’s Compliance Certificates), the Applicable Margins for RC Loans and Term A Loans shall be two and one-quarter of one percent (2.25%) per annum for Base Rate Loans and three and one-quarter of one percent (3.25%) per annum for LIBOR Loans. Thereafter, the Applicable Margin shall be adjusted five (5) Business Days after the delivery of each Officer’s Compliance Certificate most recently delivered pursuant to Subsection 6.1.3 (Delivery of Officer’s Compliance Certificates); provided, however, at any time that the Borrower shall have not delivered such certificate at the time specified in Subsection 6.1.3 (Delivery of Officer’s Compliance Certificates), until such time as such certificate is so delivered to the Administrative Agent, the Applicable Margin shall be the maximum amount for the applicable type of Loan set forth above; provided, further, if the Borrower incorrectly reports or calculates the Total Net Leverage Ratio, the Administrative Agent or the Majority Lenders, in its or their sole discretion, may charge interest retroactively based on the Applicable Margin that should have been in effect for such period that the Total Net Leverage Ratio was incorrectly reported or calculated. The foregoing shall not limit any rights of the Lenders to receipt of the Default Rate, if applicable.

 

-57-


2.8.4 LIBOR Election.

(a) Unless otherwise elected by the Borrower, all Loans shall be Base Rate Loans. The Borrower may, upon at least three (3) Eurodollar Business Days’ prior written notice to the Administrative Agent in the form attached to this Agreement as Exhibit C, and subject to and upon the terms and conditions set forth in this Agreement, elect to borrow money that will bear interest based on Adjusted LIBOR plus the Applicable Margin or to convert a portion of the Loans to bear interest based on Adjusted LIBOR plus the Applicable Margin. Any such election may be made with respect to a principal amount designated in such notice and equal to at least One Million Dollars ($1,000,000) and integral multiples of One Hundred Thousand Dollars ($100,000) in excess of such minimum, for the Interest Period next ensuing, as designated by the Borrower in its notice.

(b) During the existence of an Event of Default, the Administrative Agent or the Required Lenders may require that the Borrower may not convert any outstanding Loans to LIBOR Loans.

(c) If an Interest Period for any LIBOR Loan would otherwise commence on a day which is not a Eurodollar Business Day, such Interest Period shall commence on the next Eurodollar Business Day.

(d) Each LIBOR Loan shall, on the last day of the applicable Interest Period, automatically convert into a Base Rate Loan unless, at least three (3) Eurodollar Business Days prior thereto, the Administrative Agent has received a notice in the form attached hereto as Exhibit C that the Borrower has elected to continue such Loan as a LIBOR Loan.

(e) The Borrower may not elect an interest rate based on Adjusted LIBOR if such election would require the Administrative Agent to administer concurrently a combination of elective rates of interest based on Adjusted LIBOR and/or a combination of Interest Periods that exceed an aggregate of twenty (20).

(f) No Interest Period may be elected that would end later than the RC Maturity Date, the Term A Loan Maturity Date or the Term B Loan Maturity Date, as the case may be.

2.8.5 Breakage. In the event that the Borrower makes a prepayment (whether voluntary or mandatory) of any LIBOR Loans on a day other than the last day of the applicable Interest Period, including any such prepayment as a result of an assignment required by Subsection 2.14.2 (Replacement of Lenders), or fails to borrow a LIBOR Loan, or fails to convert a Loan to a LIBOR Loan on the date specified in the applicable notice, the Borrower will pay to the Administrative Agent, upon demand, for the account of the affected Lenders, any cost, loss or expense incurred as a result thereof. Each affected Lender shall certify the amount of such cost, loss or expense to the Borrower, which certification and statement shall be conclusive in the absence of manifest error.

2.8.6 Default Rate. Anything in this Agreement to the contrary notwithstanding, upon the occurrence and during the continuance of an Event of Default (whether or not the Administrative Agent has accelerated payment of the Notes), upon notice

 

-58-


from the Administrative Agent, which may be retroactive to the Event of Default, the unpaid principal of the Loans, Letter of Credit Fees and all reimbursement obligations in respect of Letters of Credit shall bear interest at the interest rate or rate otherwise in effect plus two percent (2.00%) per annum (the “Default Rate”).

2.8.7 Source of Funds. Although each Lender may elect to purchase in the London Inter-Bank Eurocurrency Market one or more Eurodollar Deposits in order to fund or maintain its funding of LIBOR Loans hereunder, it is acknowledged that the provisions of this Agreement relating to such funding are included only for the purpose of determining the rate of interest to be paid and any other amounts owing under this Agreement in connection with such election, and each Lender shall be entitled to fund and maintain its funding of all or any part of that portion of the principal amount of the Loans in any manner it sees fit.

2.9 INCREASED COSTS; UNAVAILABILITY.

2.9.1 Increased Costs Generally. If any Change in Law shall:

(a) 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 the Adjusted LIBOR) or the Issuing Bank;

(b) subject any Lender or the Issuing Bank to any tax of any kind whatsoever with respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any LIBOR Loan made by it, or change the basis of taxation of payments to such Lender or the Issuing Bank in respect thereof (except for Indemnified Taxes or Other Taxes covered by Section 2.13 (Taxes) and the imposition of, or any change in the rate of, any Excluded Tax payable by such Lender or the Issuing Bank); or

(c) impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any LIBOR Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the Issuing Bank hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the Issuing Bank, the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

2.9.2 Capital Requirements. If any Lender or the Issuing Bank determines that any Change in Law affecting such Lender or the Issuing Bank or any lending office of such Lender or such Lender’s or the Issuing Bank’s holding company, if any, regarding capital or

 

-59-


liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

2.9.3 Certificates for Reimbursement. A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in Subsections 2.9.1 (Increased Costs Generally) or 2.9.2 (Capital Requirements) and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

2.9.4 Delay in Requests. Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section 2.9 shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided, that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section 2.9 for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender or the Issuing Bank, 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 or the Issuing Bank’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 nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

2.9.5 Inability to Determine LIBOR. In the event that the Administrative Agent or the Majority Lenders shall have determined that for any reason it has become impossible or impracticable to determine the Adjusted LIBOR (or the Adjusted LIBOR for any specified Interest Periods), the Administrative Agent shall promptly give notice of such determination to the Borrower. In that case, no part of the Loans shall thereafter be available at the Adjusted LIBOR (or at the Adjusted LIBOR for the specified Interest Period) until the Administrative Agent determines that the circumstances described above cease to exist.

2.9.6 Laws Affecting LIBOR Availability. If any Lender shall determine that it has become unlawful or impossible for such Lender (or any of its lending offices) to make or maintain LIBOR Loans (or LIBOR Loans of a specified duration) due to (a) the introduction of, or any change in, any Law or any change in the interpretation or administration thereof by any Governmental Authority, or (b) compliance by any Lender (or any of its lending offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, such Lender shall promptly give notice thereof to the Administrative Agent and the

 

-60-


Administrative Agent shall promptly give notice thereof to the Borrower and the other Lenders. Thereafter, until the Administrative Agent notifies the Borrower that such circumstances no longer exist, (i) the obligations of the Lenders to make such LIBOR Loans (or LIBOR Loans of the specified duration) and the right of the Borrower to convert any Loan or continue any Loan as such shall be suspended and thereafter the Borrower may select only Base Rate Loans (or LIBOR Loans of other durations) hereunder, and (ii) if any Lender may not lawfully continue to maintain a Loan as a LIBOR Loan to the end of the then current Interest Period applicable thereto, the applicable Loan shall immediately be converted to a Base Rate Loan.

2.10 PURPOSE.

The proceeds of the Term A Loans and Term B Loans shall be used by the Borrower on the Closing Date (a) to pay, in part, the cash consideration for the Merger, (b) to fund, in part, the Closing Date Refinancing and (c) to pay Transaction Costs. The proceeds of the RC Loans and any Incremental Extension of Credit (unless otherwise provided in the applicable Incremental Facility Amendment) shall be used (i) to refinance existing Indebtedness; (ii) to make Restricted Payments permitted under this Agreement; (iii) to finance acquisitions, investments and Capital Expenditures by the Borrower and the other Subsidiaries, in each case to the extent permitted under this Agreement; and (iv) to provide for working capital needs and general corporate purposes; provided, however, that none of the proceeds of the Loans may be used by any Loan Party to purchase or carry any Margin Stock in violation of applicable Law including, Regulations T, U and X of the Board of Governors of the Federal Reserve System.

2.11 MECHANICS OF PAYMENTS: BORROWER PAYMENTS.

2.11.1 Manner of Making Payments. All payments on account of principal of and interest on the Loans, the Commitment Fee, and all other amounts otherwise payable to the Lenders under this Agreement (other than payments in respect of Swingline Loans that shall be made directly to the Swingline Lender) shall be made to the Administrative Agent. All payments shall be made by the Borrower to the Administrative Agent, in Dollars in immediately available funds, without counterclaim or setoff and free and clear of, and without any deduction or withholding for, any taxes or other payments. Unless otherwise specified, all payments by the Borrower shall be made by 12:00 noon (New York, NY time) on the due date for such payment, (and if by wire transfer, in accordance with the instructions on the signature page to this Agreement) or by the Administrative Agent debiting an account of the Borrower with the Administrative Agent. The failure by the Borrower to make a payment by 12:00 noon (New York, NY time) shall not constitute an Event of Default if such payment is made on the due date; however, any payment made after such time on such due date shall be deemed made on the next Business Day for the purpose of interest and reimbursement calculations.

2.11.2 Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank 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 or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then

 

-61-


each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

2.11.3 Disbursements from Administrative Agent to Lenders. The Administrative Agent shall promptly remit to each Lender its pro rata share of payments received pursuant to Subsection 2.11.1 (Manner of Making Payments) in immediately available funds, except that all reimbursement payments in respect of losses, out-of-pocket expenses, funding losses or like matters shall be retained by the Administrative Agent or remitted to the Lenders according to their respective appropriate entitlement to such reimbursement and except as otherwise provided with respect to Defaulting Lenders. Unless otherwise provided in this Agreement or the other Loan Documents, payments from the Borrower shall be applied first to fees, then to interest (to the extent then payable), then to principal of Base Rate Loans, and then to principal of LIBOR Loans (and among such LIBOR Loans, first to those with the earliest expiring Interest Periods).

2.11.4 Sharing of Payments by Lenders. 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 hereunder resulting in such Lender receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent 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

(a) 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

(b) the provisions of this Subsection 2.11.4 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 (including the application of funds arising from the existence of a Defaulting Lender or a Disqualified Institution), or (y) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Unreimbursed Drawings to any assignee or participant, other than to Parent or any Subsidiary thereof (as to which the provisions of this Subsection 2.11.4 shall apply).

The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower’s rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

 

-62-


2.11.5 Payments or Documentation Due on Non-Business Days. Subject to Subsection 2.8.4 (LIBOR Election) as to payments with respect to Adjusted LIBOR, if any payment under the Loan Documents becomes due on a day that is not a Business Day or any delivery of documents is required on a day that is not a Business Day, the due date of such payment or delivery of such documents shall be extended to the next succeeding Business Day, and, in the case of payments, such extension of time shall be included in computing interest and fees in connection with such payment.

2.12 MECHANICS OF PAYMENTS; LENDER PAYMENTS.

2.12.1 Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Loan that such Lender will not make available to the Administrative Agent such Lender’s share of such Loan, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.3 (Borrowing Notice) and may, in reliance upon such assumption (but shall not be required to), make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Loan available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (a) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, and (b) in the case of a payment to be made by the Borrower, the interest rate applicable to Loans bearing interest at the Base Rate plus the Applicable Margin. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Loan to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in the applicable borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

2.13 TAXES

2.13.1 Payments Free of Taxes. Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be required by applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then (a) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.13) the Administrative Agent, each Lender or the Issuing Bank, as the case may be, receives an amount equal to the sum it would have received had no such deductions been made, (b) the Borrower shall make such deductions and (c) the Borrower shall timely pay the full amount deducted to the relevant Governmental Authority in accordance with applicable Law.

 

-63-


2.13.2 Payment of Other Taxes by the Borrower. Without limiting the provisions of Subsection 2.13.1 (Payments Free of Taxes), the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable Law.

2.13.3 Indemnification.

(a) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.13) paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing Bank (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest error.

(b) Without limiting other indemnities in this Agreement and the other Loan Documents, each Lender shall indemnify the Administrative Agent within ten (10) days after demand therefor, for the full amount of any Excluded Taxes attributable to such Lender that are payable by the Administrative Agent, and reasonable expenses arising therefrom or with respect thereto, whether or not such Excluded Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. 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.

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

2.13.5 Status of Lenders. Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the Law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is

 

-64-


subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in clauses (a), (b), (c) and (d) of this Subsection 2.13.5 below) shall not be required if in the Foreign Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Foreign Lender.

Without limiting the generality of the foregoing, in the event that the Borrower is resident for tax purposes in the United States, any Foreign Lender 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 (and from time to time thereafter upon the request of the Borrower or the Administrative Agent, but only if such Foreign Lender is legally entitled to do so), whichever of the following is applicable:

(a) duly completed copies of IRS Form W-8BEN-E claiming eligibility for benefits of an income tax treaty to which the United States is a party,

(b) duly completed copies of IRS Form W-8ECI,

(c) 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 to the effect that 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 (a “U.S. Tax Compliance Certificate”) and (y) duly completed copies of IRS Form W-8BEN,

(d) to the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-81MY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, a U.S. Tax Compliance Certificate, IRS Form W-9 and/or other certification documents from each beneficial owner, as applicable; provided, that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate on behalf of each such direct and indirect partner; and/or

(e) any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in United States federal withholding tax (including, but not limited to, any documentation required by FATCA) duly completed together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower to determine the withholding or deduction required to be made.

2.13.6 Treatment of Certain Refunds. If the Administrative Agent, a Lender or the Issuing Bank determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.13, it shall pay to the Borrower

 

-65-


an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.13 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or the Issuing Bank, 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 the Administrative Agent, such Lender or the Issuing Bank, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or the Issuing Bank in the event the Administrative Agent, such Lender or the Issuing Bank is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 2.13.6 (Treatment of Certain Refunds), in no event will the Administrative Agent, a Lender or the Issuing Bank be required to pay any amount to the Borrower pursuant to this Section 2.13.6 (Treatment of Certain Refunds) the payment of which would place the Administrative Agent, a Lender or the Issuing Bank in a less favorable net after-Tax position than the Administrative Agent, a Lender or the Issuing Bank would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require the Administrative Agent, any Lender or the Issuing Bank 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.

2.13.7 Survival. Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements and obligations of the Borrower contained in this Section 2.13 shall survive the payment in full of the Obligations and the termination of the Commitments.

2.14 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.

2.14.1 Designation of a Different Lending Office. If any Lender requests compensation under Section 2.9 (Increased Costs; Unavailability), 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 2.13 (Taxes), then such Lender shall (at the request of Borrower) 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 (a) would eliminate or reduce amounts payable pursuant to Section 2.9 (Increased Costs; Unavailability) or Section 2.13 (Taxes), as the case may be, in the future and (b) 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.

2.14.2 Replacement of Lenders. If any Lender requests compensation under Section 2.9 (Increased Costs; Unavailability), 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 2.13 (Taxes), or if any Lender is a Defaulting Lender or a Disqualified Institution, or if any Lender does not approve an amendment of this Agreement or any other Loan Document

 

-66-


which is approved by the Majority Lenders (or, as applicable, the Required Financial Covenant Lenders) and which is required to also be approved by such Lender to be effective pursuant to Section 11.5 (Amendments, Waivers and Consents) (any such Lender, a “Non-Consenting Lender”) then 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 11.6 (Successors and Assigns), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided, that

(a) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.6 (Successors and Assigns) unless waived by the Administrative Agent,

(b) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Unreimbursed Drawings, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Subsection 2.8.5 (Breakage)) 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),

(c) in the case of any such assignment resulting from a claim for compensation under Section 2.9 (Increased Costs; Unavailability) or payments required to be made pursuant to Section 2.13 (Taxes), such assignment will result in a reduction in such compensation or payments thereafter,

(d) such assignment does not conflict with applicable Law, and

(e) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

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.

2.15 DEFAULTING LENDERS.

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

(a) Waivers and Amendments. Such Defaulting Lender shall not have the right to approve or disapprove any amendment, waiver or consent with respect to this Agreement or other Loan Documents except (i) no Commitment of any Lender may be increased or extended without the consent of such Lender, (ii) the principal amount of any Loans outstanding to such Defaulting Lender may not be waived, forgiven or reduced without such

 

-67-


Lender’s consent (unless all Lenders affected thereby are treated similarly) or (iii) the final maturity date(s) of such Defaulting Lender’s Loans may not be extended without such Defaulting Lender’s consent (unless all Lenders affected thereby are treated similarly).

(b) Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article 9 (Events of Default) or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.11 (Right of Setoff) shall be applied at such time or times as may be determined by the Administrative Agent as follows:

first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder;

second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank or Swingline Lender hereunder;

third, to Cash Collateralize the Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender in accordance with clause (e) below (Cash Collateral; Repayment of Swingline Loans);

fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;

fifth, if so determined by the Administrative Agent and (so long as no Default or Event of Default exists) the Borrower, to be held in a deposit account and released in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the Issuing Bank’s future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with clause (e) below (Cash Collateral; Repayment of Swingline Loans);

sixth, to the payment of any amounts owing to the Lenders, the Issuing Bank or Swingline Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Bank or Swingline Lenders against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement;

seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and

eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction;

 

-68-


provided, that if (x) such payment is a payment of the principal amount of any Loans or Unreimbursed Drawings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.2 (Requirements for Each Loan/Letter of Credit) were satisfied or waived, such payment shall be applied solely to pay the Loans of, and Unreimbursed Drawings owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or Unreimbursed Drawings owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in LC Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Commitments under the applicable facility without giving effect to clause (d) below (Reallocation of Participations to Reduce Fronting Exposure). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this clause (b) of Subsection 2.15.1 shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(c) Certain Fees. No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(i) Each Defaulting Lender shall be entitled to receive Letter of Credit Fees otherwise payable to it for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to clause (e) below (Cash Collateral; Repayment of Swingline Loans).

(ii) With respect to any Commitment Fee, any such other fees due hereunder or Letter of Credit not required to be paid to any Defaulting Lender pursuant to this Section 2.15, the Borrower shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in LC Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (d) below, (y) pay to each Issuing Bank and Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Bank’s or Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(d) Reallocation of Participations to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in LC Obligations and Swingline Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that (x) the conditions set forth in Section 4.2 (Requirements for Each Loan/Letter of Credit) are satisfied at the time of such reallocation (and, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s RC Commitment. No reallocation hereunder

 

-69-


shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(e) Cash Collateral; Repayment of Swingline Loans. If the reallocation described in clause (d) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first, prepay Swingline Loans in an amount equal to the Swingline Lender’s Fronting Exposure and (y) second, Cash Collateralize the Issuing Bank’s Fronting Exposure in accordance with the procedures set forth in Section 2.17 (Cash Collateral).

2.15.2 Defaulting Lender Cure. If the Administrative Agent, the Swingline Lender and Issuing Bank and, if no Event of Default shall then have occurred and be continuing, the Borrower, agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments under the applicable facility (without giving effect to clause (d) of Subsection 2.15.1 (Reallocation of Participations to Reduce Fronting Exposure), whereupon such Lender will cease to be a Defaulting Lender; provided, that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

2.15.3 New Swingline Loans/Letters of Credit. So long as any Lender is a Defaulting Lender, (a) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (b) no Issuing Bank shall be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

2.16 TERMINATION OF DEFAULTING LENDER. The Borrower may terminate the unused amount of the RC Commitment of any RC Lender that is a Defaulting Lender upon not less than five (5) Business Days’ prior notice to the Administrative Agent (which shall promptly notify the Lenders thereof), and in such event the provisions of clause (b) of Subsection 2.15.1 (Defaulting Lender Waterfall) will apply to all amounts thereafter paid by the Borrower for the account of such Defaulting Lender under this Agreement (whether on account of principal, interest, fees, indemnity or other amounts); provided, that (a) no Event of Default shall have occurred and be continuing, and (b) such termination shall not be deemed to be a waiver or release of any claim the Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender may have against such Defaulting Lender.

 

-70-


2.17 CASH COLLATERAL.

Without limiting the provisions of Subsection 3.1.9 (Cash Collateral Account), at any time that there shall exist a Defaulting Lender, within one (1) Business Day following the written request of the Administrative Agent or any Issuing Bank (with a copy to the Administrative Agent), if the reallocation described in clause (d) of Subsection 2.15.1 (Reallocation of Participations to Reduce Fronting Exposure) cannot, or can only partially, be effected, the Borrower shall Cash Collateralize the Issuing Bank’s Fronting Exposure with respect to such Defaulting Lender (determined after giving effect to such clause (d) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

(a) Grant of Security Interest. The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of the Issuing Bank, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lenders’ obligation to fund participations in respect of LC Obligations, to be applied pursuant to clause (b) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent and the Issuing Bank as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender). To the extent that such Cash Collateral is also subject to a Lien securing the Secured Obligations, notwithstanding any provision in the Loan Documents to contrary, such Cash Collateral shall be used for the purposes described in this Section.

(b) Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 2.17 or Section 2.15 (Defaulting Lenders) in respect of Letters of Credit shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of LC Obligations (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(c) Termination of Requirement. Cash Collateral (or the appropriate portion thereof) provided to reduce any Issuing Bank’s Fronting Exposure shall no longer be required to be held as Cash Collateral pursuant to this Section 2.17 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent and the Issuing Bank that there exists excess Cash Collateral; provided, that subject to Section 2.15 (Defaulting Lenders) the Person providing Cash Collateral and each Issuing Bank may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations and provided, further, that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

 

-71-


2.18 EXTENSION OF MATURITY DATE.

(a) The Borrower may, from time to time, with the consent of the Administrative Agent, by delivery of a request (a “Maturity Date Extension Request”) to the Administrative Agent (which shall promptly deliver a copy thereof to each of the Lenders) not less than thirty (30) days prior to the then-existing Maturity Date for the applicable Commitments and/or Loans hereunder to be extended (the “Existing Maturity Date”), request that the Lenders holding such Loans and/or Commitments (the “Requested Lenders”) extend the Existing Maturity Date in accordance with this Section 2.18. Each Maturity Date Extension Request relating to Term Loans of a Class shall offer to extend all Term Loans of such Class ratably among the Term Lenders holding Loans of such Class. Each Maturity Date Extension Request relating to RC Commitments shall offer to extend all RC Commitments ratably among the RC Lenders. Each Maturity Date Extension Request shall (i) specify the applicable Commitments and/or Loans hereunder to be extended, (ii) specify the date to which the applicable Maturity Date is sought to be extended, (iii) specify the changes, if any, to the Applicable Margin to be applied in determining the interest payable on the Loans of, and fees payable hereunder to, Consenting Lenders (as defined below) in respect of that portion of their Commitments and/or Loans extended to such new Maturity Date and the time as of which such changes will become effective (which may be prior to the Existing Maturity Date) and (iv) specify any other amendments or modifications to this Agreement to be effected in connection with such Maturity Date Extension Request; provided, that with respect to any Term Loans, (1) except as to interest rates, fees and any other pricing terms, and amortization, final maturity date and participation in prepayments and commitment reductions, the extended Term Loans shall have the same terms as the existing Class of Term Loans from which they are extended or such other terms as shall be reasonably satisfactory to the Administrative Agent, (2) the final maturity date of any extended Term Loans shall be no earlier than the Existing Maturity Date, (3) the weighted average life to maturity of any extended Term Loans shall be no shorter than the remaining weighted average life to maturity of the Class of Term Loans to which such offer relates; provided, further, with respect to any RC Commitment, except as to interest rates, fees, any other pricing terms and final maturity, any extended RC Commitment shall have the same terms as the existing RC Commitments from which they are extended or have such other terms as shall be reasonably satisfactory to the Administrative Agent and, in respect of any other terms that would affect the rights or duties of any Issuing Bank or Swingline Lender, such terms as shall be reasonably satisfactory to such Issuing Bank or Swingline Lender.

(b) In the event a Maturity Date Extension Request shall have been delivered by the Borrower, each Requested Lender shall have the right to agree to the extension of the Existing Maturity Date and other matters contemplated thereby on the terms and subject to the conditions set forth therein (each Requested Lender agreeing to the Maturity Date Extension Request being referred to herein as a “Consenting Lender” and each Lender not agreeing thereto being referred to herein as a “Declining Lender”), which right may be exercised by written notice thereof, specifying the maximum amount of the Commitment and/or Loans of such Requested Lender with respect to which such Requested Lender agrees to the extension of the Maturity Date, delivered to the Borrower (with a copy to the Administrative Agent) not later than a day to be agreed upon by the Borrower and the Administrative Agent following the date on which the Maturity Date Extension Request shall have been delivered by the Borrower (it being understood and agreed that any Requested Lender that shall have failed to exercise such

 

-72-


right as set forth above shall be deemed to be a Declining Lender). If a Requested Lender elects to extend only a portion of its then existing Commitment and/or Loans subject to the Maturity Date Extension Request, it will be deemed for purposes hereof to be a Consenting Lender in respect of such extended portion and a Declining Lender in respect of the remaining portion of such Commitment and/or Loans.

(c) If there shall be Consenting Lenders who have agreed to such Maturity Date Extension Request in respect of Commitments and/or Loans held by them, then the Borrower, the Administrative Agent and the Consenting Lenders shall enter into an amendment to this Agreement (the “Extension Amendment”) to effect such modifications as may be necessary to reflect the terms of any Maturity Date Extension Request.

(d) Solely in respect of a Maturity Date Extension Request that has become effective in respect of RC Commitments, on the Existing Maturity Date, the RC Commitment of each Declining Lender shall terminate, and the Borrower shall repay the RC Loans of the Declining Lenders, in each case together with accrued and unpaid interest and all fees and other amounts owing to such Declining Lender hereunder, it being understood and agreed that, subject to satisfaction of the conditions set forth in Section 4.2 (Requirements for Each Loan/Letter of Credit), such repayments may be funded with the proceeds of new RC Loans from the Consenting Lenders.

(e) Solely in respect of a Maturity Date Extension Request that has become effective in respect of a Class of Term Loans, on the Existing Maturity Date, the Borrower shall repay the Loans of such Class of the Declining Lenders, in each case together with accrued and unpaid interest and all fees and other amounts owing to such Declining Lender hereunder, it being understood and agreed that, subject to satisfaction of the conditions set forth in Section 4.2 (Requirements for Each Loan/Letter of Credit), such repayments may be funded with the proceeds of new RC Loans made simultaneously.

(f) Notwithstanding the foregoing, no Maturity Date Extension Request shall become effective hereunder unless, on the Extension Effective Date, the conditions set forth in Subsections 4.2.1 (No Default) and 4.2.3 (Representations and Warranties) have been satisfied and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Borrower.

(g) No extension of an Existing Maturity Date in accordance with the express terms of this Section 2.18, or any amendment or modification of the terms and conditions of the Commitments and the Loans of the Consenting Lenders or any reallocation of Loans or Commitments or other obligations effected in connection with this Section 2.18, shall be deemed to violate provisions of this Agreement requiring pro rata payments, pro rata borrowings or pro rata Commitment increases or decreases or require consents of any Lenders (except as expressly set forth in this Section 2.18). If provided in any Extension Amendment with respect to any extended RC Commitments, and with the consent of each Swingline Lender and Issuing Bank, participations in Swingline Loans and Letters of Credit shall be reallocated to RC Lenders holding such extended RC Commitments and RC Lenders holding existing RC Commitments in the manner specified in such Extension Amendment.

 

-73-


2.19 REFINANCING FACILITIES.

2.19.1 Term Facility Refinancing. The Borrower may, on one or more occasions, upon giving no less than ten (10) Business Days’ prior written notice (or such shorter period as may be agreed to by the Administrative Agent) (which notice may take the form of a draft of the relevant Refinancing Term Facility Agreement) (the “Refinancing Term Notice”) to the Administrative Agent, refinance some or all of the Term A Loans or Term B Loans with new term loans under this Agreement (such refinancing of Term A Loans, being the “Refinancing Term A Indebtedness”; such refinancing of the Term B Loans being the “Refinancing Term B Indebtedness”; and collectively, the “Refinancing Term Loan Indebtedness”). Each such notice shall specify the date (each, a “Refinancing Term Effective Date”) on which the Borrower proposes that such refinancing shall be consummated. Any such refinancing shall be subject to the following:

(a) No Default or Event of Default shall have occurred and be continuing.

(b) Such Refinancing Term Loan Indebtedness shall be permitted under the Other Senior Debt Documents.

(c) Substantially concurrently with the incurrence of any Refinancing Term A Indebtedness, the Borrower shall repay or prepay then outstanding Term A Loans (together with any accrued but unpaid interest thereon and all fees or premiums, if any, with respect thereto) in an aggregate principal amount equal to the net proceeds of the applicable Refinancing Term A Indebtedness, and any such prepayment shall be applied to reduce the subsequent scheduled repayments of Term A Loans (including those on the Term A Maturity Date) to be made pursuant to Subsection 2.1.6 (Scheduled Repayment of Term A Loans) ratably.

(d) Substantially concurrently with the incurrence of any Refinancing Term B Indebtedness, the Borrower shall repay or prepay then outstanding Term B Loans (together with any accrued but unpaid interest thereon and all fees or premiums, if any, with respect thereto) in an aggregate principal amount equal to the net proceeds of the applicable Refinancing Term B Indebtedness, and any such prepayment shall be applied to reduce the subsequent scheduled repayments of Term B Loans (including those on the Term B Maturity Date) to be made pursuant to Subsection 2.1.7 (Scheduled Repayment of Term B Loans) ratably.

(e) The Borrower shall pay any applicable amounts as and when required pursuant to Subsection 2.8.5 (Breakage) if the applicable Refinancing Term Effective Date is not on the last day of the applicable Interest Period for the Indebtedness being refinanced. In addition, if a Repricing Event shall occur with respect to any Refinancing Term B Indebtedness, then the related repayment shall be subject to Subsection 2.7.3 (Repricing Event).

(f) The Refinancing Term Notice shall set forth, with respect to the Refinancing Term Loan Indebtedness referred to therein the following:

(i) the stated maturity date and amortization applicable thereto; provided, that, in the case of any Refinancing Term A Indebtedness, the maturity date shall not be prior to, nor shall the weighted-average life to maturity be earlier than ninety-one

 

-74-


(91) days after the Term A Maturity Date then in effect and, in the case of any Refinancing Term B Indebtedness, the maturity date shall not be prior to, nor shall the weighted-average life to maturity be earlier than ninety-one (91) days after the Term B Maturity Date then in effect;

(ii) the interest rate or rates applicable to the Refinancing Term Loans of such Class;

(iii) the initial Interest Period or Interest Periods applicable to Refinancing Term Loans;

(iv) any other terms applicable to the Refinancing Term Loans; provided, that such other terms (excluding pricing, fees and optional prepayment or redemption terms) shall be substantially identical to, or not materially more favorable to the Lenders holding such Refinancing Term Loans than, the Lenders holding such Class of existing Term Loans (except for covenants and other provisions only applicable after the Maturity Date of the Loans not so refinanced); and

(v) a certification that the requirements set forth in clauses (a) and (b) above have been satisfied, together with such reasonably detailed calculations as the Administrative Agent may request to evidence compliance with the Other Senior Debt Documents.

(g) Any Lender or any other Eligible Assignee approached by the Borrower to provide all or a portion of the Refinancing Term Loan Indebtedness may elect or decline, in its sole discretion, to provide any Refinancing Term Loan Indebtedness.

(h) Any Refinancing Term Loans shall be established pursuant to an amendment hereto and/or the other Loan Documents (collectively, the “Refinancing Term Facility Agreement”), in form and substance satisfactory to the Administrative Agent, executed and delivered by each Loan Party, each Lender providing such Refinancing Term Loan Indebtedness and the Administrative Agent, which shall be consistent with the provisions set forth above (but which shall not require the consent of any other Lender). Each Refinancing Term Facility Agreement shall be binding on the Lenders, the Loan Parties and the other parties hereto and may effect amendments to the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect provisions of this Subsection 2.19.1, including any amendments necessary to treat such Refinancing Term Loans as a new “Class” of loans hereunder. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Refinancing Term Facility Agreement.

(i) Any Refinancing Term Loan Indebtedness shall rank pari passu or shall be subordinated to the remaining Classes of Term Loans (if any) not refinanced therewith and the other Secured Obligations in right of payment and, if secured, in priority with respect to the Collateral.

2.19.2 Revolver Refinancing. The Borrower may, on one or more occasions, upon giving no less than ten (10) Business Days’ prior written notice (or such shorter period as may be agreed to by the Administrative Agent) (which notice may take the form of a draft of the

 

-75-


relevant Refinancing RC Facility Agreement) (the “Refinancing Revolver Notice”) to the Administrative Agent, refinance some or all of the RC Commitments with a new revolving credit facility under this Agreement (such refinancing of the RC Commitments, being the “Refinancing RC Indebtedness”). Each such notice shall specify the date (each, a “Refinancing RC Effective Date”) on which the Borrower proposes that such refinancing shall be consummated. Any such refinancing shall be subject to the following:

(a) No Event of Default shall have occurred and be continuing.

(b) Such Refinancing RC Indebtedness shall be permitted under the Other Senior Debt Documents.

(c) Substantially concurrently with the incurrence of any Refinancing RC Indebtedness, the Borrower shall reduce the existing RC Commitments and repay or prepay then outstanding RC Loans associated with such terminated RC Commitments (together with any accrued but unpaid interest thereon and any prepayment premium, if any, with respect thereto).

(d) The Borrower shall pay any applicable amounts as and when required pursuant to Subsection 2.8.5 (Breakage) if the applicable Refinancing RC Effective Date is not on the last day of the applicable Interest Period for the Indebtedness being refinanced.

(e) The Refinancing RC Notice shall set forth, with respect to the Refinancing Term Loan Indebtedness referred to therein the following:

(i) the stated maturity date applicable thereto; provided, that the maturity date shall not be prior to the RC Maturity Date then in effect;

(ii) the interest rate or rates and unused commitment fees applicable to the Refinancing RC Indebtedness;

(iii) the initial Interest Period or Interest Periods applicable to Refinancing RC Indebtedness;

(iv) any other terms applicable to the Refinancing RC Indebtedness; provided, that such other terms (excluding pricing, fees and optional prepayment or redemption terms) shall be substantially identical to, or not materially more favorable to the Lenders holding such Refinancing RC Indebtedness than, the Lenders holding the RC Loans (except for covenants and other provisions only applicable after the Maturity Date of the Loans not so refinanced); and

(v) a certification that the requirements set forth in clauses (a) and (b) above have been satisfied, together with such reasonably detailed calculations as the Administrative Agent may request to evidence compliance with the Other Senior Debt Documents.

(f) Any Lender or any other Eligible Assignee approached by the Borrower to provide all or a portion of the Refinancing RC Indebtedness may elect or decline, in its sole discretion, to provide any Refinancing RC Indebtedness.

 

-76-


(g) Solely to the extent that an Issuing Bank or Swingline Lender is not a replacement issuing bank or replacement swingline lender, as the case may be, under a Refinancing RC Facility Agreement, it is understood and agreed that such Issuing Bank or Swingline Lender shall not be required to issue any letters of credit or swingline loan under such Refinancing RC Facility Agreement and, to the extent it is necessary for such Issuing Bank or Swingline Lender to withdraw as an Issuing Bank or Swingline Lender, as the case may be, at the time of the establishment of such Refinancing RC Facility Agreement, such withdrawal shall be on terms and conditions reasonably satisfactory to such Issuing Bank or Swingline Lender, as the case may be, in its sole discretion. The Borrower agrees to reimburse each Issuing Bank or Swingline Lender, as the case may be, in full upon demand, for any reasonable and documented out-of-pocket cost or expense attributable to such withdrawal.

(h) Any Refinancing RC Indebtedness shall be established pursuant to an amendment hereto and/or the other Loan Documents (collectively, the “Refinancing RC Facility Agreement”), in form and substance satisfactory to the Administrative Agent, executed and delivered by each Loan Party, each Lender providing such Refinancing RC Indebtedness and the Administrative Agent, which shall be consistent with the provisions set forth above (but which shall not require the consent of any other Lender). Each Refinancing RC Facility Agreement shall be binding on the Lenders, the Loan Parties and the other parties hereto and may effect amendments to the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect provisions of this Subsection 2.19.2, including any amendments necessary to treat such Refinancing Term Loans as a new class of loans hereunder. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Refinancing RC Facility Agreement.

(i) Any Refinancing RC Indebtedness shall rank pari passu or shall be subordinated to the remaining RC Commitments (if any) not refinanced therewith and the other Secured Obligations in right of payment and, if secured, in priority with respect to the Collateral.

ARTICLE 3

LETTERS OF CREDIT

3.1 LETTERS OF CREDIT.

3.1.1 Commitment to Issue Letters of Credit. Subject to the requirements set forth below, the Borrower may use a portion of the RC Commitment, which portion shall not exceed, in the aggregate, (1) at any time prior to April 27, 2016, Thirty Million Dollars ($30,000,000) and (2) thereafter, Twenty Five Million Dollars ($25,000,000) (the “Letter of Credit Sublimit) for the purpose of causing the Issuing Bank to issue standby Letters of Credit for the account of the Borrower or any of its U.S. Subsidiaries; provided, that (a) the Borrower or the applicable Subsidiary executes and delivers a letter of credit application and reimbursement agreement in a form acceptable to the Issuing Bank and complies with any conditions to the issuance of such Letter of Credit (including the payment of any applicable fees) set forth therein; (b) the Issuing Bank approves the form of such Letter of Credit; (c) except for evergreen Letters of Credit approved by the Issuing Bank in its sole discretion, but which will not be extended for a period past the RC Maturity Date, such Letter of Credit bears an expiration date not later than

 

-77-


the earlier of (i) one (1) year after the date of issuance and (ii) thirty (30) days prior to the RC Maturity Date; (d) the Issuing Bank receives a request for issuance three (3) Business Days prior to the date of issuance (unless the Issuing Bank, in its sole and absolute discretion, agrees to shorter notice in any instance); (e) the purpose of such Letter of Credit shall be acceptable to the Issuing Bank; and (f) the conditions set forth in Section 4.2 (Requirements for Each Loan/Letter of Credit) are fulfilled to the satisfaction of the Issuing Bank as of the date of the issuance of such Letter of Credit. Notwithstanding anything in this Article 3, the Issuing Bank shall be under no obligation to issue any Letter of Credit if there is a Defaulting Lender, unless the Issuing Bank has entered into arrangements satisfactory to the Issuing Bank with the Borrower or such Lender to eliminate the Issuing Bank’s risk with respect to such Defaulting Lender. On and as of the Closing Date, each Existing Letter of Credit shall constitute a Letter of Credit hereunder.

3.1.2 Reimbursement Obligations. The Borrower (or any U.S. Subsidiary that is an account party) is absolutely, unconditionally and irrevocably obligated to reimburse the Issuing Bank for all amounts drawn under each Letter of Credit. If any draft is presented under a Letter of Credit, the payment of which is required to be made at any time on or before the RC Maturity Date, then payment by the Issuing Bank of such draft shall constitute an RC Loan (which is a Base Rate Loan) hereunder, the proceeds of which are used to reimburse the Issuing Bank (without regard to any required notice periods, Available RC Commitment amount or minimum advance requirements, all of which are waived for this purpose) and interest shall accrue from the date the Issuing Bank makes payment on such draft under such Letter of Credit; provided, however, if there is not then an Available RC Commitment in an amount at least equal to the amount of the draw, the Borrower shall repay the excess amount of the Loan within one (1) Business Day after the date that the Issuing Bank notifies the Borrower of such deemed Loan. The Borrower further agrees that the Issuing Bank may reimburse itself for such drawing at any time when there is no Available RC Commitment from the balance in any other account of the Borrower maintained with the Issuing Bank.

3.1.3 Limitation on Amount. The Issuing Bank shall not be obligated or permitted under this Section 3.1 to issue any Letter of Credit for the account of the Borrower to the extent that the sum of (a) the amount that would be available to be drawn under the proposed Letter of Credit plus (b) the sum of all amounts available to be drawn under outstanding Letters of Credit plus (c) any Unreimbursed Drawings would exceed the lesser of (i) the Letter of Credit Sublimit and (ii) the excess of the RC Commitment over the aggregate principal amount of the RC Loans and Swingline Loans then outstanding.

3.1.4 Obligations Absolute. The Borrower’s obligations under this Section 3.1 (including any obligations to repay draws under Letters of Credit issued hereunder) shall be absolute and unconditional under any and all circumstances and irrespective of the occurrence of any Default or Event of Default or any condition precedent whatsoever or any setoff, counterclaim or defense to payment that the Borrower may have or have had against the Issuing Bank, the Administrative Agent, any Lender or any beneficiary of a Letter of Credit. The Borrower further agrees that the Issuing Bank, the Administrative Agent and the Lenders shall not be responsible for, and the Borrower’s reimbursement obligations shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or

 

-78-


forged, or any dispute between or among the Borrower, the beneficiary of any Letter of Credit or any financial institution or other party to which any Letter of Credit may be transferred or any claims or defenses whatsoever of the Borrower against the beneficiary of any Letter of Credit or any such transferee. The Issuing Bank, the Administrative Agent and the Lenders shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit. Any action taken or omitted by the Issuing Bank under or in connection with each Letter of Credit and the related drafts and documents shall be binding upon the Borrower and shall not result in any liability on the part of the Issuing Bank. Notwithstanding anything to the contrary set forth in this Subsection 3.1.4, the Borrower shall not have any obligations to indemnify the Issuing Bank, the Administrative Agent or any Lender in respect of any liability resulting from any such Person’s gross negligence or willful misconduct.

3.1.5 Reliance by Issuing Bank. The Issuing Bank shall be entitled to rely, and shall be fully protected in relying upon, any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, facsimile, statement, order or other document believed by it to be genuine and correct and believed by it to have been signed, sent or made by the proper Person(s) and upon advice and statements of legal counsel, independent accountants and other experts selected by the Issuing Bank and the Administrative Agent.

3.1.6 Fees. The Borrower shall pay to the Administrative Agent for the account of the RC Lenders a fee per annum equal to the product of (a) the Applicable Margin for RC Loans bearing interest at a rate based on Adjusted LIBOR multiplied by (b) the face amount of each outstanding Letter of Credit (to the extent such face amount is undrawn) (the “Letter of Credit Fees”). In addition, the Borrower shall pay to the Issuing Bank, for its own account, a fronting fee equal to one-eighth of one percent (0.125%) per annum of the face amount of all outstanding Letters of Credit (to the extent such face amount is undrawn) (a “Fronting Fee”). All Letter of Credit Fees shall be payable quarterly in arrears on each Quarterly Payment Date based on the number of days that a Letter of Credit is outstanding during such quarter (calculated on the basis of a 360-day year). All Fronting Fees shall be payable quarterly in arrears on each Quarterly Payment Date for Letters of Credit issued during such quarter. The Borrower shall also pay to the Issuing Bank all of the Issuing Bank’s standard fees and charges for the opening, amendment, modification, presentation or cancellation of a Letter of Credit and otherwise in respect of a Letter of Credit and shall execute all of the Issuing Bank’s standard agreements in connection with the issuance of the Letter of Credit. The provisions of Subsection 2.8.6 (Default Rate) shall apply under the circumstances referred to therein.

3.1.7 Participation by Lenders.

(a) Effective immediately upon the issuance of each Letter of Credit and without further action on the part of the Issuing Bank, the Issuing Bank shall be deemed to have granted to each RC Lender, and each RC Lender shall be deemed to have irrevocably purchased and received from the Issuing Bank, without recourse or warranty, an undivided interest and participation in such Letter of Credit to the extent of each RC Lender’s percentage of the RC Commitment. Further, each RC Lender acknowledges and agrees that it shall be absolutely liable, to the extent of its percentage of the RC Commitment, to fund on demand or reimburse the Issuing Bank on demand for the amount of each draft paid by the Issuing Bank under each Letter of Credit to the extent that such amount is not immediately reimbursed by the Borrower.

 

-79-


(b) In furtherance of the provisions of the preceding clause (a), the Issuing Bank shall notify the Administrative Agent promptly upon receipt of notice of an intended draw under a Letter of Credit. The Administrative Agent shall give written, facsimile or telegraphic notice to each of the RC Lenders of its pro rata share of such draw and the scheduled date thereof. After receipt of such notice, and whether or not a Default or Event of Default then exists and whether or not there shall then be any Available RC Commitment, each Lender shall make available to the Administrative Agent such RC Lender’s share of such draw in immediately available funds (in Dollars) to the Administrative Agent no later than 12:00 noon (New York, NY time) on the date specified in the Administrative Agent’s notice. The failure of the Issuing Bank or the Administrative Agent to give timely notice pursuant to this Subsection 3.1.7 shall not affect the right of the Issuing Bank to reimbursement from the RC Lenders. Any amount paid by the Issuing Bank and RC Lenders pursuant to a draw made under a Letter of Credit shall constitute an RC Loan and shall be repaid pursuant to the provisions respecting RC Loans; provided, that if a Default or Event of Default exists at the time of a draw, the Borrower shall immediately reimburse the amount of such draw to the Administrative Agent for the benefit of the RC Lenders.

3.1.8 Standard of Conduct. The Issuing Bank shall be entitled to administer each Letter of Credit in the ordinary course of business and in accordance with its usual practices, modified from time to time as it deems appropriate under the circumstances, and shall be entitled to use its discretion in taking or refraining from taking any action in connection herewith as if it were the sole party involved. Any action taken or omitted to be taken by the Issuing Bank under or in connection with any Letter of Credit shall not create for the Issuing Bank any resulting liability to any other Lender.

3.1.9 Cash Collateral Account. In the event that (a) the excess of (i) the amount of the RC Commitment over (ii) the aggregate principal amount of RC Loans and Swingline Loans then outstanding is less than (b) the amount of any LC Obligations at any time for any reason (whether because the RC Commitment has been reduced or terminated or otherwise), the Borrower shall forthwith pay to the Administrative Agent an amount equal to the excess of the amount described in clause (b) above over the amount described in clause (a) above. Such amount shall be applied first, against any Unreimbursed Drawings and second, against the unpaid principal amount of any Loans then outstanding, and the remainder shall be maintained by the Administrative Agent in an interest bearing cash collateral account in the name of and for the benefit of the Administrative Agent and the Lenders to secure the repayment of Borrower’s obligation to reimburse the Lenders for drafts drawn or that may be drawn under outstanding Letters of Credit until the earlier of (1) such time as all outstanding Letters of Credit have expired or been cancelled and (2) the excess of the amount described in clause (b) above over the amount described in clause (a) above no longer exists.

3.1.10 Obligations Secured. The obligations of the Borrower to the Issuing Bank, the Administrative Agent and the Lenders in respect of Letters of Credit shall be guaranteed pursuant to the Loan Documents and shall be secured by the Collateral.

 

-80-


3.2 RESIGNATION OF ISSUING BANK.

The Issuing Bank may resign at any time by giving thirty (30) days’ prior notice to the Administrative Agent, the Lenders and the Borrower, so long as the Issuing Bank uses commercially reasonable efforts to have a new Issuing Bank designated prior to the expiration of such notice period and such new Issuing Bank agrees to assume the responsibilities of the Issuing Bank upon such expiration. After the resignation of the Issuing Bank hereunder, the retiring issuing bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement and the other Loan Documents with respect to Letters of Credit issued by it prior to such resignation, but shall not be required to issue additional Letters of Credit or to extend, renew or increase any existing Letter of Credit.

ARTICLE 4

CONDITIONS TO FUNDINGS AND ISSUANCE OF LETTERS OF CREDIT

4.1 CONDITIONS TO INITIAL FUNDING.

The obligation of the Lenders to make the initial Loans or the Issuing Bank to issue (or be deemed to have issued) any Letters of Credit on the Closing Date pursuant to this Credit Agreement shall be subject to the fulfillment, to the satisfaction of the Administrative Agent, the Lead Arrangers, the Lenders and Issuing Bank (unless otherwise specified), of the conditions set forth below.

4.1.1 Specified Closing Representations. The Specified Merger Agreement Representations and the Specified Representations shall be true and correct in all material respects (or, with respect to representations and warranties that contain a materiality qualification, true and correct).

4.1.2 Company Material Adverse Effect. Since April 4, 2015, no Company Material Adverse Effect shall have occurred.

4.1.3 Indebtedness. The Closing Date Refinancing shall have occurred (or concurrently with the initial funding of the Facilities hereunder on the Closing Date shall occur) and the Borrower shall have issued Senior Notes in an aggregate principal amount equal to at least Three Hundred Sixty Million Dollars ($360,000,000) (or such other amount as shall be satisfactory to the Lead Arrangers).

4.1.4 Merger; Acquisition of Company. The Merger and the acquisition of the Company and its Subsidiaries shall have been (or concurrently with the initial funding of the Facilities hereunder on the Closing Date shall be) consummated and pursuant to the terms of the Merger Agreement in effect on August 27, 2015 with such amendments thereto that are not materially adverse to the Lenders or are otherwise acceptable to the Lead Arrangers.

 

-81-


4.1.5 Closing Date Deliverables.

(a) This Agreement shall have been duly executed by Parent, the Borrower, each Lender party hereto on the Closing Date, the Issuing Bank and the Administrative Agent.

(b) The Borrower shall have delivered to the Administrative Agent duly executed Notes in favor of each of the Lenders that shall have requested a Note (or Notes) at least ten (10) Business Days (or such shorter period as may be agreed to by the Administrative Agent) prior to the Closing Date.

(c) Each Loan Party shall have executed and delivered to the Administrative Agent a Security Agreement (as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof, the “Security Agreement”) in substantially the form attached to this Agreement as Exhibit D, together with (a) such Uniform Commercial Code financing statements as are necessary to perfect the security interests created by such Security Agreement that can be perfected by the filing of financing statements, and (b) a power of attorney duly executed by each such Loan Party in substantially the form attached as Annex B to the Security Agreement.

(d) Each Subsidiary Guarantor shall have executed and delivered to the Administrative Agent a Guaranty and Suretyship Agreement (as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof, the “Subsidiary Suretyship Agreement”) in substantially the form attached to this Agreement as Exhibit E-1.

(e) Parent shall have executed and delivered to the Administrative Agent a Guaranty and Suretyship Agreement (as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof, the “Parent Suretyship Agreement”) in substantially the form attached to this Agreement as Exhibit E-2.

(f) Each Loan Party shall have executed and delivered to the Administrative Agent a Pledge Agreement (as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof, the “Pledge Agreement”) in substantially the form attached to this Agreement as Exhibit F, together with the stock and other certificates, assignment powers (duly executed in blank and undated) and financing statements required thereunder; provided, however, stock and other certificates of the Company and its Subsidiaries will be required to be delivered on the Closing Date only to the extent received from the Company or its equityholders after the Borrower’s use of commercially reasonable efforts to obtain the same.

(g) Each Loan Party that owns any Intellectual Property registered at the United States Patent and Trademark Office or United States Copyright Office (other than inactive or immaterial Intellectual Property) shall have executed and delivered to the Administrative Agent such additional security agreements with respect to any Intellectual Property against which a filing has not been made in the name of the Administrative Agent in the United States Patent and Trademark Office or the United States Copyright Office, as applicable (in each case as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof, an “Intellectual Property Collateral Agreement”), in form and

 

-82-


substance satisfactory to the Administrative Agent, together with such other notices for recording in the United States Patent and Trademark Office or the United States Copyright Office and such Uniform Commercial Code financing statements as are necessary or advisable to perfect and maintain the security interests reflected therein.

(h) The Administrative Agent shall have received insurance certificates evidencing the insurance required by Section 8.14 (Insurance); provided, that as it relates to the Company and its Subsidiaries, the Borrower shall only be required to deliver such insurance certificates to the extent it can do so after using commercially reasonable efforts; provided, further, that to the extent not delivered on or before the Closing Date, the Borrower shall deliver them as soon as practicable after the Closing Date but in any event no later than is required by Section 4.3 (Post-Closing Requirements).

(i) The Lead Arrangers and the Administrative Agent shall have received GAAP (i) (1) audited Consolidated balance sheets of Parent as at the end of the 2012, 2013 and 2014 fiscal years, and related statements of operations, comprehensive income (loss), stockholders’ equity and cash flows of Parent for each of the 2012, 2013 and 2014 fiscal years, and (2) audited consolidated balance sheets of Accellent as at the end of each of the 2012, 2013 and 2014 fiscal years, and related statements of income, stockholders’ equity and cash flows of Accellent for each of the 2012, 2013 and 2014 fiscal years; and (ii) (1) an unaudited consolidated balance sheet of Parent as at the end of, and related statements of operations, comprehensive income (loss) and cash flows of Parent for, each of the first and second fiscal quarters (and the corresponding quarter in the prior fiscal year) of 2015 and (2) (A) unaudited interim consolidated financial statements for Accellent and its subsidiaries for the six (6) months ended July 4, 2015 (consisting of a balance sheet and a statement of operations, loss and stockholders’ equity) and (B) an unaudited consolidated balance sheet of Accellent as at the end of, and related statements of income and cash flows of Accellent for, each of the first and second fiscal quarters (and, in the case of the statement of income and cash flows, the corresponding quarter in the prior fiscal year) of 2015.

(j) The Lead Arrangers and the Administrative Agent shall have received a pro forma Consolidated balance sheet and related pro forma consolidated statements of income of Parent as of and for the twelve-month period ending on the last date of the most recently completed four-fiscal quarter period for which financial statements have been delivered pursuant to clause (i) above, prepared after giving effect to the transactions contemplated by this Agreement and the Merger Agreement and the Permitted Nuvectra Spinoff as if such transactions and spin-off had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of such other financial statements). The Borrower shall have delivered its most recent projections through the 2020 fiscal year.

(k) The Administrative Agent and the Lead Arrangers shall have received a certificate signed by a Responsible Officer of the Borrower certifying as to the satisfaction of the conditions set forth in Subsections 4.1.1 (Specified Closing Representations), 4.1.2 (Company Material Adverse Effect), 4.1.3 (Indebtedness) and 4.1.4 (Merger; Acquisition of Company) above and such other matters as the Administrative Agent may request.

 

-83-


(l) The Administrative Agent and the Lead Arrangers shall have received a solvency certificate from a Financial Officer of Borrower in the form of Exhibit I to this Agreement.

(m) The Administrative Agent shall have received:

(i) a copy of the certificate or articles of incorporation or organization, including all amendments thereto, of each of the Loan Parties, certified, if applicable, as of a recent date by the Secretary of State of the state or commonwealth of its organization, and a certificate as to the good standing of each of the Loan Parties as of a recent date, from such Secretary of State or similar Governmental Authority; and

(ii) a certificate of a Responsible Officer of each of the Loan Parties dated the Closing Date and certifying (1) to the effect that (w) attached thereto is a true and complete copy of the operating agreement, limited liability company agreement or by-laws, as applicable, of each of the Loan Parties as in effect on the Closing Date, (x) attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of each of the Loan Parties authorizing the execution, delivery and performance of the Loan Documents to which each of the Loan Parties is a party, and that such resolutions have not been modified, rescinded or amended and are in full force and effect and (y) the certificate or articles of incorporation or organization of each of the Loan Parties have not been amended since the date of the last amendment thereto furnished pursuant to clause (i) above, and that such certificate or articles are in full force and effect, and (2) as to the incumbency and specimen signature of each officer executing any Loan Document on behalf of the Borrower and signed by another officer as to the incumbency and specimen signature of the Responsible Officer executing the certificate pursuant to this clause (ii).

(n) The Administrative Agent and the Lenders shall have received a favorable opinion of counsel as to the transactions contemplated hereby addressed to the Administrative Agent, the Issuing Bank and the Lenders and dated as of the Closing Date, in form and content reasonably satisfactory to the Administrative Agent and the Lead Arrangers from (i) Hodgson Russ LLP, counsel to the Borrower and the other Loan Parties, (ii) special Virginia counsel to certain Loan Parties, (iii) special Minnesota counsel to certain Loan Parties, and (iv) special Massachusetts counsel to certain Loan Parties.

4.1.6 Perfection of Security Interests - Commercially Reasonable Efforts. All documents and instruments required to create and perfect the security interests of the Administrative Agent in the Collateral as required under the Loan Documents shall have been executed and delivered and, if applicable, be in proper form for filing, and none of the Collateral shall be subject to any other pledges, security interest or mortgages, except for (a) Permitted Liens or (b) Liens securing Indebtedness to be refinanced in full and to be released concurrently with the initial funding of the Loans. Notwithstanding the foregoing, to the extent any intended Collateral (other than the pledge and perfection of the security interest in the Capital Stock of direct and indirect U.S. Subsidiaries of Parent (other than the Company and its Subsidiaries)) and other assets pursuant to which a Lien may not be perfected by the filing of a financing statement under the UCC is not able to be provided on the Closing Date after the use of commercially

 

-84-


reasonable efforts to do so, the providing of a perfected security interest in such Collateral shall not constitute a condition precedent to the availability of the Loans on the Closing Date but shall instead be delivered and/or perfected no later than is required by Section 4.3 (Post-Closing Requirements).

4.1.7 Payment of Fees and Costs. The Borrower shall have paid all of the fees of the Administrative Agent, each of the Lead Arrangers and the other Lenders, and the expenses (including, without limitation, fees and expenses of counsel) of the Administrative Agent and each of the Lead Arrangers, in each case, on or prior to the Closing Date, in each case to the extent required by any agreement with the Borrower.

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

4.2 REQUIREMENTS FOR EACH LOAN/LETTER OF CREDIT.

The Lenders shall not be required to make any Loans to the Borrower and the Issuing Bank shall not be required to issue any Letters of Credit, in each case after the Closing Date, unless each of the following conditions are satisfied.

4.2.1 No Default. There shall not, either prior to or after giving effect to each such funding or Letter of Credit, exist a Default or Event of Default.

4.2.2 Borrowing Notice/Request for Letter of Credit. The Administrative Agent shall have timely received a borrowing notice pursuant to Section 2.3 (Borrowing Notice) or the Issuing Bank shall have received a timely request for a Letter of Credit pursuant to Subsection 3.1.1 (Commitment to Issue Letters of Credit) and all accompanying documentation required thereby.

4.2.3 Compliance with Other Senior Debt Documents. The incurrence of the Loan or Letter of Credit being requested shall not result in a default under any Other Senior Debt Documents.

4.2.4 Representations and Warranties. Each of the representations and warranties of the Borrower and the other Loan Parties made in the Loan Documents shall be true and correct in all respects (or in all material respects if any such representation or warranty is not by its terms already qualified as to materiality) as of the date of each such Loan or Letter of Credit (both immediately prior to and after giving effect to such Loan or Letter of Credit) as if made on and as of such date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all respects (or in all material respects if any such representation or warranty is not by its terms already qualified as to materiality) as of such earlier date.

 

-85-


4.2.5 Method of Certifying Certain Conditions. The request for, and acceptance of, each Loan and each Letter of Credit by the Borrower shall be deemed a representation and warranty by the Borrower that the conditions specified in Subsections 4.2.1 (No Default), 4.2.3 (Compliance with Other Senior Debt Documents) and 4.24 (Representations and Warranties) have been satisfied.

4.3 POST-CLOSING REQUIREMENTS.

The Borrower shall deliver, or cause to be delivered, the documents and shall take such other actions as is set forth on Schedule 4.3 hereto within the timeframe set forth thereon.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES

In order to induce the Issuing Bank and the Lenders to enter into this Agreement and to make the Loans and other extensions of credit contemplated by this Agreement, each of Parent and the Borrower hereby makes the following representations and warranties (which are unaffected by any investigation of the Administrative Agent, the Issuing Bank or any Lender):

5.1 STATUS.

5.1.1 Organization and Qualification. Each of Parent and its Subsidiaries is a duly organized and validly existing corporation, partnership or limited liability company, as applicable, under the Laws of the respective jurisdictions indicated on Schedule 5.1.1 and each is in good standing under the Laws of its jurisdiction of incorporation or formation, as the case may be. Each such Person has perpetual existence and has the corporate, partnership or limited liability company, as applicable, power and authority to own its property and assets and to transact the business in which it is engaged or presently proposes to engage. None of such Persons has failed to qualify to do business in any state or jurisdiction where the failure to so qualify could reasonably be expected to result in a Material Adverse Change. As of the Closing Date, such Persons are qualified to do business as a foreign corporation, partnership, or limited liability company, as applicable, in the states in the United States, if applicable, listed on Schedule 5.1.1.

5.1.2 Capitalization. All of the issued and outstanding shares of Capital Stock of the Borrower are owned by Parent. Parent does not have any Subsidiaries and does not presently operate all or any portion of its business through any other Persons, other than as disclosed on Schedule 5.1.2. Schedule 5.1.2 also correctly lists, as to Parent (other than with respect to clause (c) below) and each of its Subsidiaries on the Closing Date:

(a) its name;

(b) the classes of Capital Stock issued by Parent and each of its Subsidiaries and the principal characteristics of each such class; and

(c) the names of each of the equity holders and the number and percentage of the issued and outstanding shares or other equity interests of each class (and certificate numbers by which such shares or other equity interests are designated, if applicable) owned by each of such holders.

 

-86-


All the outstanding shares of Capital Stock of the Borrower and each of its and Parent’s respective Subsidiaries are validly issued, fully paid and nonassessable, and all such shares and other equity interests indicated on Schedule 5.1.2 as owned by the Persons indicated on Schedule 5.1.2 are so owned beneficially and of record by such Person, free and clear of any Lien, except for Liens created pursuant to the Loan Documents. Schedule 5.1.2 also correctly lists as to the Borrower and each of its and Parent’s respective Subsidiaries any options, warrants or other securities issued by the Borrower or any Subsidiary of the Borrower or Parent and the identity of each holder of any such option, warrant or other security. Except as set forth on Schedule 5.1.2, there are no preemptive rights, offers, options, rights, agreements or commitments of any kind (contingent or otherwise) relating to the issuance, conversion, registration, voting, sale or transfer of any equity interests or other securities of the Borrower or any of its or Parent’s respective Subsidiaries (including the Capital Stock of the Borrower or any of its or Parent’s respective Subsidiaries) or obligating Parent or any of its Subsidiaries or any other Person to purchase or redeem any such equity interests or other securities pursuant to the Organizational Documents or any agreement or other instrument to which Parent or any of its Subsidiaries is a party or by which any of them may be bound.

5.1.3 Stock Ownership. Schedule 5.1.3 lists all of the Margin Stock owned or held by or on behalf of each of Parent and its Subsidiaries as of the date of this Agreement and the approximate value thereof.

5.2 POWER AND AUTHORITY; ENFORCEABILITY.

Each Loan Party has the corporate, partnership or other similar power to execute, deliver and carry out the terms and provisions of the Loan Documents to which it is a party, and each such Person has taken all necessary corporate, partnership or other similar action (including any consent of stockholders or partners required by Law or by their respective Organizational Documents) to authorize the execution, delivery and performance of the Loan Documents to which it is a party. The Loan Documents have been duly executed and delivered by each Loan Party which is a party thereto and constitute or the authorized, valid and legally binding obligations of such Person enforceable in accordance with their respective terms, except as such enforceability may be limited by applicable Debtor Relief Laws and by general principles of equity.

5.3 NO VIOLATION OF AGREEMENTS; ABSENCE OF CONFLICTS.

The execution and delivery of the Loan Documents, the consummation of the transactions contemplated by the Loan Documents and compliance with the terms and provisions of the Loan Documents, will not:

(a) require any consent or approval, governmental or otherwise, not already obtained;

(b) violate any Law or judgment respecting Parent or any of its Subsidiaries;

 

-87-


(c) conflict with, result in a breach of, or constitute a default under, the Organizational Documents of any Loan Party or Subsidiary thereof, or under any indenture, agreement, license or other instrument to which a Loan Party or any of its Subsidiaries is a party or by which any of them or their respective properties may be bound; or

(d) result in, or require the creation or imposition of, any Lien upon or with respect to any property now owned or hereafter acquired by a Loan Party or any of its Subsidiaries.

5.4 RECORDING, ENFORCEABILITY AND CONSENT.

Assuming the due recording of the UCC-1 financing statements and the Intellectual Property Collateral Agreements delivered in connection herewith, no consent, approval or authorization of any Person, or recording, filing, registration, notice or other similar action with or to any Person, is required in order to insure the legality, validity, binding effect or enforceability of any of the Loan Documents as against all Persons, except such consents, approvals, authorizations and actions as are identified on Schedule 5.4 hereto, all of which have been obtained and remain in effect. No consent, approval or authorization of any Person that has not been obtained is required for the continued conduct by Parent or any of its Subsidiaries of their respective businesses as presently conducted or as presently proposed to be conducted.

5.5 LINES OF BUSINESS.

The Borrower and its Subsidiaries are engaged only in Permitted Businesses. Parent is not engaged in any business activities other than: (a) owning one hundred percent (100%) of the outstanding Capital Stock of the Borrower; (b) as of the Closing Date, owning one hundred percent (100%) of the outstanding Capital Stock of GB Ventures; and (c) activities reasonably related to the foregoing. Greatbatch LLC is not engaged in any business activities other than (i) owning ninety-nine percent (99%) of the outstanding Capital Stock of each of Greatbatch Mexico and Greatbatch MCSO; and (ii) engaging in activities directly related to the foregoing.

5.6 SECURITY INTEREST IN COLLATERAL.

The Borrower has delivered, or caused to be delivered, to the Administrative Agent all UCC-1 financing statements in recordable form that may be necessary to perfect the security interests granted pursuant to the Loan Documents to the extent that such security interests may be perfected by filing. The Borrower has delivered, or caused to be delivered, to the Administrative Agent all instruments, documents, certificates and investment property necessary to perfect the security interests granted pursuant to the Loan Documents, to the extent such security interests may be perfected by delivery. Upon the filing of such UCC-1 financing statements in the offices specified thereon and the recordation of the Intellectual Property Collateral Agreements in the United States Copyright Office, no further action, including, without limitation, any filing or recording of any document or the obtaining of any consent, is necessary in order to establish, perfect and maintain the Administrative Agent’s first priority security interests (subject to Permitted Perfection Limitations) in the equity of the Borrower, the U.S. Subsidiaries of the Borrower, the Ventures owned by GB Ventures or QIG and sixty-six percent (66%) of the voting Capital Stock and 100% of the nonvoting Capital Stock of the First-Tier

 

-88-


Foreign Subsidiaries of the Loan Parties, and, subject to the limitations set forth in the last sentence of Section 2 of the Security Agreement in the personal property (including fixtures and Intellectual Property) of each Loan Party other than Excluded Assets (for the benefit of the Secured Parties), except for the periodic filing of continuation statements with respect to such UCC-1 financing statements. Upon the sale or other disposition by GB Ventures or QIG of any Capital Stock in any Venture to any Person in compliance with this Agreement, the Administrative Agent’s security interest in such Capital Stock will be deemed to be automatically released so long as any cash proceeds or such sale or other disposition are applied in accordance with the terms of this Agreement.

5.7 LITIGATION; COMPLIANCE WITH LAWS; OFAC REQUIREMENTS.

5.7.1 Litigation. There are no claims, actions, suits, protests, reconsiderations or proceedings (collectively, “litigation”) pending, or to the knowledge of Parent or any of its Subsidiaries, threatened, against or affecting Parent, the Borrower, any of its shareholders or any of their Subsidiaries or their respective equity holders before any court or Governmental Agency or arbitral tribunal that could reasonably be expected to result in a Material Adverse Change or which allege the invalidity of or dispute any terms of the Loan Documents and, to the knowledge of Parent and its Subsidiaries, there is no basis for any of the foregoing. Schedule 5.7 lists all litigation as of the Closing Date in which the amount in controversy exceeds Two Million Five Hundred Thousand Dollars ($2,500,000) (except to the extent covered by insurance) or which could reasonably be expected to result in a Material Adverse Change.

5.7.2 Laws; FCPA. Parent and each of its Subsidiaries are in compliance in all respects with all Laws, including all Environmental Laws and all applicable Food and Drug Administration rules and regulations, except for such matters of noncompliance as could not, individually or in the aggregate, result in a Material Adverse Change. Without limiting the generality of the foregoing, none of Parent or any Subsidiary thereof, has, directly or indirectly, made any payments to foreign government officials in violation of the Foreign Corrupt Practices Act of 1977 as amended (15 U.S.C. §§ 78dd-1, et seq.) (the “FCPA”). The Borrower has delivered to the Administrative Agent a copy of its written compliance program regarding the FCPA and is and has been in compliance with the FCPA and other laws relating to foreign investment and has instituted and maintains policies and procedures designed to ensure continued compliance therewith.

5.7.3 Sanctioned Persons; Patriot Act. None of the Borrower, any Guarantor or any Affiliate of the Borrower or any Guarantor (a) is a Sanctioned Person (b) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law, (c) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (d) engages in any dealings or transactions prohibited by any Anti-Terrorism Law. No proceeds of any Loan will be used, and none have been used, to fund any operations in, finance any investment or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country. Neither the making of the Loans hereunder or the use of proceeds thereof will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department or any enabling legislation or executive order relating thereto. Each Loan Party is in compliance, in all material respects, with the Patriot Act.

 

-89-


5.7.4 Anti-Corruption Policies. Each of the Loan Parties have instituted and maintain policies and procedures designed to promote and achieve continued compliance with the FCPA and other applicable anti-corruption law.

5.8 NO BURDENSOME AGREEMENTS; MATERIAL AGREEMENTS.

Neither Parent nor any of its Subsidiaries is a party to any agreement or instrument or subject to any corporate or other restrictions that, assuming compliance by such Persons with the terms of such agreements or instruments, could reasonably be expected to result in a Material Adverse Change. Parent and its Subsidiaries have such good and enforceable agreements with third parties as are necessary to conduct their respective businesses as presently conducted or as contemplated to be conducted.

5.9 CONDITION OF PROPERTY.

The material properties, equipment and systems of Parent and its Subsidiaries are in good repair, working order and operating condition, reasonable wear and tear excepted, and are and will be in compliance in all material respects with all standards or rules imposed by any Governmental Authority. Parent has no tangible assets.

5.10 LICENSES; INTELLECTUAL PROPERTY.

Parent and each of its Subsidiaries owns or is the licensee of all patents, trademarks, service marks, trade names, trade dress, trade secrets, domain names, copyrights, franchises, licenses and authorizations, governmental or otherwise that are individually or in the aggregate material to the business, and all other material rights, priorities or privileges relating to Intellectual Property necessary for the conduct of their respective businesses as presently conducted, without any known material conflict with the rights of any other Person. No settlement agreements, consents, licenses, judgments, orders, forbearance to sue or similar obligations limit or restrict Parent’s or any of its Subsidiaries’ rights in and to such patents, trademarks, service marks, trade names, trade dress, trade secrets, domain names, copyrights, franchises, licenses and authorizations, or such other rights, priorities or privileges relating to Intellectual Property except those that do not relate to such patents, trademarks, service marks, trade names, trade dress, trade secrets, domain names, copyrights, franchises, licenses and authorizations that individually or in the aggregate are material to the business of Parent and its Subsidiaries or involve material amounts of money. No claim or proceeding, or to the knowledge of the Borrower, threat of claim or proceeding, has been asserted by any Person against Parent or any of its Subsidiaries relating to the use, right to use or ownership of any Intellectual Property used or presently proposed to be used in the conduct of their respective businesses, or challenging or questioning the validity or effectiveness of any Intellectual Property used or presently proposed to be used in the conduct of their respective businesses. Parent and its Subsidiaries have taken all commercially reasonable steps to maintain the confidentiality of their material trade secrets and, to Parent’s and the Borrower’s knowledge, there has been no misappropriation of any of such trade secrets by any Person. Schedule 5.10

 

-90-


attached hereto correctly lists, as of the Closing Date, all patents, trademarks and copyrights of the Borrower or any Guarantor registered at the United States Patent and Trademark Office, the United States Copyright Office or any other recording office in the United States for the recording of Intellectual Property (other than inactive or immaterial Intellectual Property) and .other material domestic Intellectual Property. All material copyrights are registered with the United States Copyright Office.

5.11 TITLE TO PROPERTIES; LIENS.

Parent and each of its Subsidiaries has good and marketable title to its properties and assets, including the properties and assets reflected in the financial statements referred to in Subsection 5.13.1 (Financial Statements) (except properties and assets disposed of since the date thereof in accordance with Subsection 8.7.2 (Sales and Other Dispositions)), and none of such properties or assets is subject to any Liens except Permitted Liens. Parent and each of its Subsidiaries enjoys peaceful and undisturbed possession under all leases necessary in any material respect for the operation of such properties and assets, and all such leases are valid and subsisting and in full force and effect. Parent and each of its Subsidiaries has obtained all material easements and material equipment rental or other material agreements necessary for the operation of its business as now conducted or presently proposed to be conducted.

5.12 MANAGEMENT AGREEMENTS.

Neither Parent nor any of its Subsidiaries is a party to any management, employment, consulting or other similar agreement or arrangement (whether oral or written) respecting the management of their respective businesses except for usual and customary employment agreements.

5.13 FINANCIAL STATEMENTS AND PROJECTIONS.

5.13.1 Financial Statements. Each of the financial statements delivered pursuant to clause (i) of Subsection 4.1.5 (Closing Date Deliverables), Subsection 6.1.1 (Delivery of Quarterly Financial Statements), and Subsection 6.1.2 (Delivery of Annual Financial Statements; Accountants’ Certification) has been prepared in accordance with GAAP applied on a consistent basis throughout the period specified and present fairly in all material respects the financial position of Parent and its Subsidiaries as of the date specified and the results of operations and statements of cash flow for the period specified subject, in the case of quarterly financial statements delivered pursuant to clause (i) of Subsection 4.1.5 (Closing Deliverables) or Subsection 6.1.1 (Delivery of Quarterly Financial Statements), to usual year-end adjustments and the absence of footnotes.

5.13.2 Undisclosed Liabilities. Neither Parent nor any of its Subsidiaries has any material liabilities, contingent or otherwise, other than as disclosed in the financial statements referred to in Subsection 5.13.1 (Financial Statements) and there are not now and not anticipated any material unrealized losses of Parent or any of its Subsidiaries.

5.13.3 Absence of Material Adverse Change. Since the date of the financial statements delivered pursuant to clause (i) of Subsection 4.1.5 (Closing Date Deliverables), there has been no event, circumstance, condition or development that has resulted in, or could reasonably be expected to result in, a Material Adverse Change.

 

-91-


5.13.4 Projections. The operating projections submitted on behalf of the Borrower to the Lenders pursuant to clause (j) of Subsection 4.1.5 (Closing Date Deliverables) and Subsection 6.1.6 (Annual Budget) present to the best of the Borrower’s knowledge and belief based on the assumptions set forth in such projections, which assumptions were reasonable at the time presented, the expected results of operations and sources and uses of cash of Parent and its Subsidiaries for the periods covered by such projections, it being understood that actual results may differ.

5.14 TAX RETURNS AND PAYMENTS; OTHER FEES.

(a) All tax returns, reports and statements required by Law to be filed (including extensions) by or in respect of Parent and its Subsidiaries and their assets have been filed. All taxes, assessments and other governmental charges levied upon Parent and its Subsidiaries and any of their respective properties, assets, income or franchises that are due and payable have been paid, other than those presently payable without penalty or interest and other than any charge or claim being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which any reserve or other appropriate provision, if any, as shall be required by GAAP has been made therefor and, if the filing of a bond or other indemnity is necessary to avoid the creation of a Lien against any of the assets of Parent or any of its Subsidiaries, such bond has been filed or indemnity posted.

(b) Parent and each of its Subsidiaries has paid all franchise, license and other fees and charges that have become due pursuant to any franchise or permit in respect of its business and has made appropriate provision as is required by GAAP for any such fees and charges which have accrued.

5.15 FISCAL YEAR.

The fiscal year of Parent and its Subsidiaries ends on the Friday closest to December 31, and the first, second and third fiscal quarters within each such fiscal year end on the Friday closest to the end of March, June and September, respectively.

5.16 FEDERAL RESERVE REGULATIONS.

None of the Loan Parties is engaged principally or as one of its important activities in the business of extending credit for the purpose of purchasing or carrying any Margin Stock in violation of any applicable Laws. None of the proceeds of any of the Loans shall be used to purchase or carry, or to reduce or retire or refinance any credit incurred to purchase or carry any Margin Stock, or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of any applicable Laws. None of the Loan Parties, nor any bank acting on any of its behalf, has taken or will take any action that might cause this Agreement or the Notes to violate Regulation T, U or X or any other regulation of the Board of Governors of the Federal Reserve System, as now or hereafter in effect.

 

-92-


5.17 INVESTMENT COMPANY ACT.

None of the Loan Parties is an “investment company,” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

5.18 [RESERVED]

5.19 COMPLIANCE WITH ERISA AND APPLICABLE FOREIGN LAW.

5.19.1 Plans. No Loan Party nor any ERISA Affiliate maintains or contributes to or has any liability with respect to any U.S. Pension Plan or Multiemployer Plan, except as disclosed on Schedule 5.19 attached hereto. The Borrower has furnished to the Administrative Agent a copy of the most recent actuarial report for each U.S. Pension Plan that is a defined benefit plan as defined in Section 3(35) of ERISA, that is subject to the Minimum Funding Standards, and for any Plan that is a funded employee welfare benefit plan, and each such report is accurate in all material respects.

5.19.2 Favorable Determination Letters. Each Plan, which is intended to be qualified within the meaning of Section 401(a) of the Code, (i) is entitled to rely on a favorable opinion letter issued by the IRS, or (ii) if permitted under rules adopted by the IRS, has received a favorable determination letter from the IRS with respect to all plan document qualification requirements for which the remedial amendment period under Section 401(b) of the Code has closed and any plan document amendments required by such determination letter were made as and when required by such determination letter, and nothing has occurred, whether by action or failure to act, since the date of such letter (whether a favorable opinion or determination letter) which would reasonably be expected to prevent any such plan from remaining so qualified.

5.19.3 Compliance. Each Plan has been operated in all material respects in compliance with the requirements of the Code and ERISA and the terms of each Plan.

5.19.4 Absence of Certain Conditions. Except as specifically disclosed on Schedule 5.19: (a) there has been no transaction in connection with which any Loan Party or an ERISA Affiliate could be subject to either a material civil penalty assessed pursuant to Section 502(i) of ERISA or a material tax penalty imposed pursuant to Section 4975 of the Code; (b) no U.S. Pension Plan is, or is reasonably expected to be, in at-risk status as defined in Section 430(i) of the Code or Section 303 of ERISA, there is no failure to meet the Minimum Funding Standard with respect to any U.S. Pension Plan or to make any required installment under Section 430(j) of the Code by its due date, and there has been no waived funding deficiency within the meaning of Section 302 of ERISA or Section 412 of the Code with respect to any U.S. Pension Plan, and the funding target attainment percentage (FTAP), as applicable, of each U.S. Pension Plan as determined under section 430(i)(4) of the Code (without regard to the assumptions required under Section 430(i)(1)(B) of the Code) is not less than seventy percent (70%); (c) there has been (i) no Reportable Event with respect to any U.S. Pension Plan, and (ii) no event or condition which presents a material risk of termination of any U.S. Pension Plan in a distress termination as described in Section 4041(c) of ERISA or by the PBGC; and no other condition exists or is

 

-93-


reasonably expected to exist which could result in any liability to the PBGC; (d) no Loan Party nor any ERISA Affiliate (i) has any unfulfilled obligation to contribute to any Multiemployer Plan, (ii) has incurred or reasonably expects to incur Withdrawal Liability with respect to any Multiemployer Plan, (iii) has received any notification or knows of or reasonably expects that a Multiemployer Plan intends to terminate, is or is expected to be insolvent within the meaning of Section 4245 of ERISA, in Reorganization or in endangered or critical status within the meaning of Section 304 of ERISA or Section 432 of the Code; (e) there is no material liability, and no circumstances exist pursuant to which any such material liability could reasonably be imposed on any Loan Party or any ERISA Affiliate under Chapter 43 of the Code or Sections 409, 502(c), 502(l) and 4071 of ERISA; (f) there is no Plan (that is an “employee welfare benefit plan,” as defined in Section 3(1) of ERISA) (i) providing material retiree health and/or life insurance or death benefits other than coverage mandated by applicable Law or (ii) having unfunded liabilities other than ordinary and usual claims for benefits by participants or beneficiaries; (g) no Loan Party or any ERISA Affiliate has ceased operations at a facility within the meaning of Section 4062(e) of ERISA or has withdrawn as a substantial employer as described in Section 4063 of ERISA; and (h) no Loan Party or any ERISA Affiliate is subject to the Early Warning Program of the PBGC (as described in PBGC Technical Update 00-3) or has been contacted by the PBGC in connection with the PBGC’s Early Warning Program.

5.19.5 Absence of Certain Liabilities. No liability (whether or not such liability is being litigated) has been asserted against any Loan Party or any ERISA Affiliate in connection with any U.S. Pension Plan or any Multiemployer Plan by the PBGC other than for required premium payments to the PBGC, by a trustee appointed pursuant to Section 4042(b) or (c) of ERISA, or by a sponsor or an agent of a sponsor of a Multiemployer Plan, and no lien has been attached and no Person has threatened to attach a lien on any property of a Loan Party or an ERISA Affiliate as a result of failure to comply with ERISA or as a result of the termination of any Plan. No material claim (other than routine claims for benefits) has been asserted against any Plan or against any Loan Party or an ERISA Affiliate in connection with any Plan and there is no outstanding material liability attributable to any U.S. Pension Plan or any Multiemployer Plan which was previously maintained by or to which contributions were made or required to be made by any Loan Party, any ERISA Affiliate, or any entity that heretofore was an ERISA Affiliate.

5.19.6 Foreign Plans. Each Foreign Plan has been administered in accordance with its terms and is in compliance in all material respects with applicable Law; all contributions have been timely made or accrued on the financial statements of the applicable Loan Party and all contributions required under the terms of each Foreign Plan or under applicable Law have been timely made; there are no legal proceedings, audits, claims or suits pending against any Loan Party or, to the knowledge of any Loan Party, threatened against any Loan Party with respect to such Foreign Plan, the assets of such Foreign Plan, or the fiduciary of such Foreign Plan; any Foreign Plan which would be considered an “employee pension benefit plan” if such plan were maintained in the United States has been maintained in good standing with the applicable regulatory authorities, and if such plan is required or intended to be funded and/or book reserved it has been so funded and/or book reserved, as appropriate based on reasonable actuarial assumptions.

 

-94-


5.20 ACCURACY AND COMPLETENESS OF DISCLOSURE.

Neither this Agreement nor any other document, certificate or instrument delivered to the Lead Arrangers, the Administrative Agent or the Lenders by or on behalf of the Borrower or any other Loan Party in connection with this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in this Agreement and in such other documents, certificates or instruments not misleading in light of the circumstances under which such statements were made.

5.21 ADEQUACY OF CAPITAL; SOLVENCY; STATUS OF PARENT.

The proceeds of the Loans, together with the proceeds of Indebtedness permitted under Section 8.1 (Indebtedness) and the cash flow from the operations of Parent and its Subsidiaries, will be sufficient to enable Parent and its Subsidiaries to operate their respective businesses as presently conducted or as presently proposed to be conducted. The Borrower and Parent, and after giving effect to any savings clauses in the Suretyship Agreements, each of the other Loan Parties, is Solvent and will be Solvent after giving effect to the transactions contemplated by this Agreement. As of the Closing Date, Parent has (i) no assets other than one hundred percent (100%) of the outstanding Capital Stock of each of the Borrower and GB Ventures, and assets directly related thereto, and (ii) no liabilities except for (a) usual and customary obligations related to its existence, (b) usual and customary obligations related to compliance with requirements for public companies and the ownership of the Capital Stock of the Borrower and GB Ventures and (c) obligations under the Loan Documents and the Senior Notes and the Senior Note Documents.

5.22 ABSENCE OF RESTRICTIVE PROVISIONS.

Other than the restrictions contained in this Agreement, any Incremental Facility Amendment, any Refinancing Term Facility Agreement, and any Refinancing RC Facility Agreement, neither Parent nor any of its Subsidiaries is subject or party to any agreement, lien or encumbrance, Organizational Document, regulatory or other provision (except for applicable statutory corporate Law) restricting, directly or indirectly,

(a) the payment of dividends or distributions by a Subsidiary or the making of advances or other cash payments by any Subsidiary, in each case to Parent or any of its Subsidiaries; or

(b) the ability of Parent or any of its Subsidiaries to create, incur, assume or permit to exist any Lien on or with respect to any property or asset of Parent or any of its Subsidiaries.

5.23 ENVIRONMENTAL COMPLIANCE.

(a) Parent and its Subsidiaries currently operate their respective businesses in material compliance with Environmental Laws.

 

-95-


(b) None of the real property currently or previously owned or occupied by Parent or any of its Subsidiaries or their assets has ever been used by previous owners or operators, or has ever been used by Parent or any of its Subsidiaries, to treat, produce, store, handle, transfer, process, transport, dispose or otherwise Release any Hazardous Substances in violation of any Environmental Law except, in the case of previous owners or operators, where such violation could not reasonably be expected to result in any liability to Parent or its Subsidiaries, individually or in the aggregate, in excess of an aggregate of Ten Million Dollars ($10,000,000) over the term of this Agreement.

(c) There is no condition that exists on the real property owned, occupied or otherwise used by Parent or any of its Subsidiaries that requires Remedial Action except where such Remedial Action could not reasonably be expected to result in any cost or liability to Parent or its Subsidiaries, individually or in the aggregate, in excess of an aggregate of Ten Million Dollars ($10,000,000) over the term of this Agreement.

(d) Neither Parent nor any of its Subsidiaries has been notified of, or has actual knowledge of any notification having been filed with regard to, a Release on or about or into or adjacent to any real property now or previously owned, occupied or otherwise used by Parent or any of its Subsidiaries or their assets.

(e) Neither Parent nor any of its Subsidiaries has received a summons, citation, notice of violation, administrative order, directive, letter or other communication, written or oral, from any Governmental Authority concerning any intentional or unintentional action or omission related to the generation, storage, transportation, handling, transfer, disposal or treatment of Hazardous Substances in violation of any Environmental Law.

(f) There are no “friable” (as that term is defined in regulations under the Federal Clean Air Act) asbestos or asbestos-containing materials which have not been encapsulated in accordance with accepted guidelines promulgated by the United States Environmental Protection Agency existing in any real property owned or occupied by Parent or any of its Subsidiaries.

(g) No equipment containing polychlorinated biphenyls, including electrical transformers, is located on any real property owned or occupied by Parent or any of its Subsidiaries in levels that exceed those permitted by any and all Governmental Authorities with jurisdiction over such premises and which are not properly labeled in accordance with requisite standards.

(h) Each of the tanks (if any) on any real property owned or occupied by Parent or any of its Subsidiaries has been registered and tested to the extent required by, and in accordance with, any applicable Environmental Laws, and there is no evidence of leakage from any such tanks. All tanks that have been removed or abandoned have been closed in accordance with applicable standards under Environmental Laws.

5.24 LABOR MATTERS.

Parent and its Subsidiaries has a stable work force in place and neither Parent nor any Subsidiary is, as of the Closing Date, party to any collective bargaining agreement nor has

 

-96-


any labor union been recognized as the representative of its employees except as set forth on Schedule 5.24. There are no strikes or other labor disputes pending or, to Parent’s or the Borrower’s knowledge, threatened against Parent or any of its Subsidiaries. Hours worked and payments made to the employees of Parent and its Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Law dealing with such matters. The working conditions of employees of Parent and its Subsidiaries are in compliance in all material respects with OSHA and any other applicable Law. All payments due from Parent and its Subsidiaries, or for which any claim may be made against any of them, on account of wages and employee and retiree health and welfare insurance and other benefits have been paid or accrued as a liability on their books in accordance with GAAP, as the case may be. The consummation of the transactions contemplated by the Loan Documents will not give rise to a right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which Parent or any of its Subsidiaries is a party or by which Parent or any of its Subsidiaries is bound.

5.25 BROKERS.

No finder or broker acting on behalf of Parent or any of its Subsidiaries has brought about the obtaining, making or closing of the Loans, and neither Parent nor any of its Subsidiaries has or will have any obligation to any Person in respect of any finder’s or brokerage fees in connection therewith.

5.26 EXISTING INDEBTEDNESS.

(a) As of the Closing Date, neither Parent nor any of its Subsidiaries will be in default and no waiver of any such default will be in effect, in the payment of any principal or interest on any Indebtedness and no event or condition will exist as of the Closing Date with respect to any Indebtedness that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its regularly scheduled dates of payment.

(b) As of the Closing Date, the obligations under or arising out of Swap Agreements are as set forth on Schedule 5.26(b).

5.27 DESIGNATION AS SENIOR DEBT.

All Obligations shall be designated as “Senior Indebtedness” and “Designated Senior Indebtedness” or a similar term or designation for purposes of and as defined in, any documentation with respect to any subordinated Indebtedness.

ARTICLE 6

REPORTING REQUIREMENTS AND NOTICES

Each of Parent and the Borrower covenants that from the date of this Agreement, and for so long as any of the Obligations (other than contingent indemnification obligations) remain unpaid, any Letters of Credit remain outstanding (other than those which have been Cash

 

-97-


Collateralized in an amount equal to the Minimum Collateral Amount), the Lenders have an unexpired commitment to lend hereunder or the Issuing Bank has an unexpired commitment to issue Letters of Credit hereunder, it shall comply with each of the reporting and notice requirements set forth in this Article 6.

6.1 FINANCIAL DATA AND REPORTING REQUIREMENTS; NOTICE OF CERTAIN EVENTS.

6.1.1 Delivery of Quarterly Financial Statements. As soon as practicable and in any event within forty five (45) days after the close of each of the first three (3) quarters of each fiscal year of Parent and its Subsidiaries, the Borrower shall deliver to the Lenders a management-prepared Consolidated balance sheet, statement of income and changes in retained earnings, and statement of cash flows of Parent and its Subsidiaries as at the end of and for (a) the period commencing at the end of the previous fiscal year and ending with the end of such quarter and (b) the period commencing at the end of the previous fiscal quarter and ending with the end of such currently reported quarter, setting forth in comparative form the corresponding figures for the appropriate periods of the preceding fiscal year, each certified by a Financial Officer of Parent or the Borrower as (i) having been prepared in accordance with GAAP (with any changes in accounting policies discussed in reasonable detail) and (ii) presenting fairly the financial position and results of operations of Parent and its Subsidiaries as at the date and for the period specified (subject to normal recurring year-end audit adjustments), it being understood that footnotes may be omitted. The Borrower shall also deliver a management-prepared Consolidating balance sheet, statement of income and changes in retained earnings and statement of cash flows, showing separately the results of operations and financial condition of (i) the U.S. Subsidiaries (including the Borrower), taken as a separate group (but excluding any Ventures), (ii) the Foreign Subsidiaries, taken as a separate group, and (iii) the Ventures, if any, taken as a separate group.

6.1.2 Delivery of Annual Financial Statements; Accountants’ Certification. As soon as practicable and in any event within ninety (90) days after the close of each fiscal year of Parent and its Subsidiaries, the Borrower shall deliver to the Lenders:

(a) an audited Consolidated balance sheet, statement of income and changes in retained earnings, and statement of cash flows of Parent and each of its Subsidiaries, as at the end of and for the fiscal year just closed in reasonable detail and certified (without any “going concern” or like qualification or exception and without any qualifications or exceptions as to the scope of such audit) by Deloitte & Touche, LLP or another nationally-recognized independent certified public accountants selected by the Borrower and satisfactory to the Administrative Agent;

(b) an attestation report of such independent certified public accountants as to Parent’s internal controls pursuant to Section 404 of Sarbanes-Oxley expressing no concern that would result in such firm’s inability to issue a financial audit opinion without limitation, qualification or modification;

(c) so long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered

 

-98-


pursuant to the preceding clause (a) shall be accompanied by a written statement of Parent’s independent public accountants that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that Parent or the Borrower has violated any provisions of Article 7 (Financial Covenants) or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation;

(d) a management-prepared Consolidating balance sheet, statement of income and changes in retained earnings and statement of cash flows, showing separately the results of operations and financial condition of each Foreign Subsidiary and the results of operations and financial condition of the U.S. Subsidiaries as a separate group, except that (1) the U.S. Subsidiaries shall include the Borrower and (2) the French and Swiss Subsidiaries may be shown as a combined group, as at the end of and for the fiscal year just closed; and

(e) a management-prepared Consolidating balance sheet, statement of income and changes in retained earnings and statement of cash flows, showing separately the results of operations and financial condition of the Ventures, if any, as a separate group.

6.1.3 Delivery of Officer’s Compliance Certificates. As soon as practicable after the close of each quarter of each fiscal year of Parent and its Subsidiaries and in any event no later than the date on which financial statements are required to be delivered for each such quarter or year, as provided in Subsections 6.1.1 (Delivery of Quarterly Financial Statements) or 6.1.2 (Delivery of Annual Financial Statements; Accountants’ Certification), Parent or the Borrower shall deliver to the Lenders an Officer’s Compliance Certificate certified by a Financial Officer of Parent or the Borrower (a) demonstrating compliance with the financial covenants set forth in Article 7 (Financial Covenants) and (b) certifying that, as at the date of such certificate, there existed no Event of Default and no Default, or, if any such Default or Event of Default existed, specifying the nature thereof, the period of existence thereof and what action Parent and the Borrower propose to take or has taken with respect thereto.

6.1.4 Auditors’ Reports. Promptly upon receipt, Parent or the Borrower shall deliver to the Lenders copies of all management letters, financial reports or written recommendations, if any, submitted to Parent or any of its Subsidiaries by its auditors in connection with each annual or interim audit or examination of its books by such auditors.

6.1.5 SEC Filings, Etc. Promptly upon receipt or transmission thereof by Parent, as applicable, Parent or the Borrower shall deliver to the Lenders:

(a) all letters of comment or material correspondence sent to Parent or any of its Subsidiaries by any securities exchange or the SEC in relation to the affairs of Parent or any of its Subsidiaries;

(b) all regular and periodic reports and all registration statements and prospectuses, if any, filed by Parent or any of its Subsidiaries with any securities exchange or with the SEC;

 

-99-


(c) all financial statements, reports, notices and proxy statements sent or made available generally by Parent or any of its Subsidiaries to other lenders to such Persons (if any) and their other respective bondholders or security holders (or any trustee or other representative of any of the foregoing) and any non-routine notices or other non-routine correspondence from such lenders, bondholders or security holders (or trustee or other representative of such Persons); and

(d) all press releases and other statements made available by Parent or any of its Subsidiaries to the public concerning material developments in their respective businesses;

provided, however, that any information or document described in clauses (a) through (d) of this Subsection 6.1.5 that is filed with the SEC via the EDGAR filing system and publicly available on www.sec.gov/edgar (or equivalent web address) shall be deemed to be delivered to the Administrative Agent and the Lenders upon the Lenders’ receipt of notice (including any notice received via e-mail) from Parent or the Borrower that such information or document has been filed and is publicly available on www.sec.gov/edgar (or equivalent web address); provided, further, that no such notice need be delivered in connection with the regularly filed Annual Reports of Parent on Form 10-K or Quarterly Reports of Parent on Form 10-Q.

6.1.6 Annual Budget. As soon as available, and in any event within ninety (90) days of the commencement of each fiscal year, the Borrower shall deliver to the Lenders management-prepared operating projections and budgets for Parent and its Subsidiaries for such fiscal year, which shall include a balance sheet, income statement and statement of cash flows, together with a statement presenting the assumptions made in preparing such projections and budgets and, as soon as available, significant revisions, if any, of such projections and budgets, in each case (a) in reasonable detail and otherwise in form and substance satisfactory to the Lenders and (b) accompanied by a certificate of Parent or the Borrower, executed on its behalf by a Financial Officer, stating that (i) such projections and budgets (x) have been prepared on the basis of the assumptions stated therein and (y) represent Parent’s and the Borrower’s best and most recent estimate of the future financial performance of Parent and its Subsidiaries and (ii) such assumptions are believed by Parent and the Borrower to be reasonable and fair in light of current business conditions and current facts known to Parent and the Borrower.

6.2 NOTICE OF DEFAULTS.

The Borrower shall promptly give written notice to the Lenders (a) of any Default or Event of Default, (b) if any Lender has given notice to the Borrower or taken any other action with respect to a claimed Default or Event of Default or (c) if any Person has given any notice of or taken any other action with respect to a claimed default or event or condition of the type referred to in Subsection 9.1.3 (Cross Default to Indebtedness), specifying the nature and period of existence of any such Default or Event of Default, or specifying the notice given or action taken by such Lender or Person and the nature of such claimed Default, Event of Default, event or condition, and what action the Borrower has taken, is taking or proposes to take with respect thereto.

 

-100-


6.3 NOTICE OF DISPUTES AND OTHER MATTERS.

Parent or the Borrower shall promptly give written notice to the Administrative Agent of the following matters:

6.3.1 Certain Litigation. Any actions, investigations, disputes, proceedings or claims commenced or asserted against Parent or any of its Subsidiaries in which the amount involved is Two Million Five Hundred Thousand Dollars ($2,500,000) or more and that is not fully covered by insurance (subject to usual and customary deductibles), or which, if not solely a claim for monetary damages, could reasonably be expected to, if adversely determined, result in a Material Adverse Change;

6.3.2 Conditions Affecting Collateral. Any of the following conditions: (a) movement of any material amount of Collateral to a location not identified in the Security Agreement; (b) acquisition of property by the Borrower or any Guarantor not subject to a valid and perfected first priority Lien pursuant to the Loan Documents (subject to Permitted Liens and Permitted Perfection Limitations) other than Excluded Assets (subject to the limitations set forth in the last sentence of Section 2 of the Security Agreement); (c) any change of name, type of business entity or jurisdiction of registration or any change of address of the chief executive office of the Borrower or any Guarantor or (d) any other circumstance that could reasonably be expected to adversely affect the attachment, perfection or enforcement of the Administrative Agent’s security interest in the Collateral;

6.3.3 Material Adverse Change. Any Material Adverse Change or the existence of any facts or circumstances or the occurrence or failure to occur of any event which could reasonably be expected to result in a Material Adverse Change;

6.3.4 Nuvectra Spinoff. Any material changes, as compared to the series of transactions set forth on Schedule 1.1A, with respect to the Permitted Nuvectra Spinoff; and

6.3.5 Change in Rating. Any announcement by Moody’s or S&P of any change in (or termination of) any rating referred to in Section 8.20 (Credit Ratings).

6.4 ERISA NOTICES AND FOREIGN PLAN NOTICES.

Parent or the Borrower shall deliver to the Administrative Agent:

(a) promptly, and in any event within ten (10) Business Days, after the receipt thereof, copies of all reports and notices that any Loan Party or any ERISA Affiliate receives from PBGC, IRS or the DOL that could reasonably be expected to result in a Loan Party or any ERISA Affiliate incurring a material liability and at the request of Lender, copies of all annual reports for U.S. Pension Plans filed with the DOL or IRS;

(b) as soon as possible and in any event within ten (10) Business Days after any Loan Party or any ERISA Affiliate knows or has reason to know that (i) any Reportable Event has occurred or is reasonably expected to occur with respect to any U.S. Pension Plan, (ii) there has been an unpaid “minimum required contribution” as defined in Section 430 of the Code and Section 303 of ERISA or an application has been made to the Secretary of the Treasury for a

 

-101-


waiver or modification of the Minimum Funding Standard or an extension of any amortization period under Section 412 of the Code with respect to an U.S. Pension Plan, (iii) proceedings have been instituted or are reasonably expected to be instituted under Title IV of ERISA to terminate any U.S. Pension Plan, (iv) any U.S. Pension Plan is or is reasonable expected to be in at-risk status under Section 430 of the Code (v) any Withdrawal Liability from a Multiemployer Plan has been or will be incurred by any Loan Party or any ERISA Affiliate, (vi) any Multiemployer Plan is or is reasonably expected to be in Reorganization, in endangered or critical status as defined in Section 432 of the Code and Section 305 of ERISA, terminated, partitioned or declared insolvent, (vii) an action has been instituted pursuant to Section 515 of ERISA, or can reasonably be expected to be instituted, to collect a delinquent contribution to a Multiemployer Plan, (viii) any event, transaction or condition has occurred or will occur that could reasonably be expected to result in the imposition of a lien under Part 3 of Subtitle B of Title I of ERISA or Title IV of ERISA, (ix) any Prohibited Transaction or other transaction, event or condition has occurred or will occur with respect to a Plan that could reasonably be expected to result in a Loan Party or any ERISA Affiliate incurring a material liability or becoming subject to a material penalty or excise tax, or (x) the PBGC has contacted a Loan Party or any ERISA Affiliate with respect to the PBGC’s Early Warning Program, a certificate of a Financial Officer of the Borrower setting forth the details as to such event, transaction or condition and the action the Borrower (or any Loan Party or any ERISA Affiliate) has taken, is taking or proposes to take with respect thereto and with respect to (i), (ii) and (iii) above, with copies of any notices and applications; and

(c) as soon as possible and in any event within ten (10) Business Days after any Loan Party knows or has reason to know that an event or condition has occurred with respect to a Foreign Plan that could reasonably be expected to result in a Loan Party incurring a material liability or becoming subject to a material penalty.

6.5 INTELLECTUAL PROPERTY.

Parent or the Borrower shall notify the Administrative Agent of any of the following conditions no later than the date that the delivery of the Officer’s Compliance Certificate is required, pursuant to Subsection 6.1.3 (Delivery of Officer’s Compliance Certificates) immediately following the occurrence of such event or condition: (a) any changes in and to the ownership of, or rights to use, any material Intellectual Property owned or licensed by Parent or any of its Subsidiaries; (b) the registration of any copyrights at the United States Copyright Office; (c) any material infringement or misappropriation of any material Intellectual Property owned or licensed by Parent or any of its Subsidiaries by any Person of which Parent or any of its Subsidiaries has knowledge; (d) the receipt of any written claim, demand or threat, or the institution of any proceeding, relating to any material Intellectual Property owned or licensed by Parent or any of its Subsidiaries or (e) any other material adverse change affecting or relating in any way to any material Intellectual Property owned or licensed by Parent or any of its Subsidiaries.

 

-102-


6.6 MISCELLANEOUS.

With reasonable promptness, the Borrower shall deliver such other information respecting the business, operations and financial condition of Parent and its Subsidiaries as the Administrative Agent or any Lender may from time to time reasonably request.

6.7 AUTHORIZATION OF THIRD PARTIES TO DELIVER INFORMATION.

Any opinion, report or other information delivered to the Administrative Agent, the Issuing Bank or any Lender pursuant to the Loan Documents is hereby deemed to have been authorized and directed by the Borrower to be delivered for the benefit, and reliance thereupon, of such recipient.

ARTICLE 7

FINANCIAL COVENANTS

Each of Parent and the Borrower covenants that from the date of this Agreement and for so long as the RC Commitment remains in effect, or Letters of Credit are outstanding (other than those which have been Cash Collateralized in an amount equal to the Minimum Collateral Amount) or any of the Obligations in respect of the RC Loans, Swingline Loans or Term A Loans remain unpaid (other than contingent indemnification obligations), the Lenders have an unexpired commitment to lend hereunder or the Issuing Bank has an unexpired commitment to issue Letters of Credit hereunder, it shall comply with each of the financial covenants set forth in this Article 7 for the benefit of the RC Lenders, the Swingline Lender, the Issuing Bank and the Term A Lenders only.

7.1 INTEREST COVERAGE RATIO.

Parent and its Subsidiaries, on a Consolidated basis, shall maintain a ratio of Adjusted EBITDA to Interest Expense (each for the four (4) consecutive preceding fiscal quarters) calculated as of the last day of any fiscal quarter, of at least 3.00 to 1.00.

 

-103-


7.2 TOTAL NET LEVERAGE RATIO.

Parent and its Subsidiaries, on a Consolidated basis, shall maintain a Total Net Leverage Ratio of no more than the ratios specified below:

 

Maximum Total Net

Leverage Ratio

  

Period

6.50 to 1.00

   Through and including the third fiscal quarter of 2016.

6.25 to 1.00

   Fourth fiscal quarter of 2016.

6.00 to 1.00

   First fiscal quarter of 2017 and second fiscal quarter of 2017.

5.75 to 1.00

   Third fiscal quarter of 2017.

5.50 to 1.00

   Fourth fiscal quarter of 2017.

5.00 to 1.00

   First fiscal quarter of 2018 and second fiscal quarter of 2018.

4.75 to 1.00

   Third fiscal quarter of 2018.

4.50 to 1.00

   Fourth fiscal quarter of 2018.

4.25 to 1.00

   First fiscal quarter of 2019.

4.00 to 1.00

   Second fiscal quarter of 2019 and thereafter.

This covenant shall be tested quarterly on the last day of each fiscal quarter.

7.3 ADDITIONAL PROVISIONS RESPECTING CALCULATION OF FINANCIAL COVENANTS.

Except as otherwise provided in this Agreement, the following provisions shall apply:

7.3.1 Source of Information. All the calculations of financial covenants shall be based upon the figures set forth in the Consolidated financial statements of Parent and its Subsidiaries most recently delivered pursuant to this Agreement even where this Agreement may refer to a period ended on, or most recently prior to, a specified date of determination.

7.3.2 Treatment of Acquisitions and Dispositions. Calculations made pursuant to this Article 7 shall give effect, on a pro forma basis, to all Acquisitions and dispositions made during the quarter or year to which the required compliance relates, as if such Acquisition or disposition had been consummated on the first day of the applicable period; provided, that items of revenue and expense shall be based on actual amounts and not adjusted to

 

-104-


give effect to potential savings and similar adjustments. Calculation of financial covenants in connection with Acquisitions and dispositions shall be based on the results of operations and financial position of Parent and its Subsidiaries set forth on the most recently delivered financial statements, adjusted, in the case of an Acquisition, to give effect to any additional Indebtedness incurred in connection therewith and to include the results of operations and financial position of the target during the applicable period, and in the case of a disposition, to give effect to any repayment of Indebtedness in connection therewith and to exclude the results of operations and financial position for the applicable period of the assets so disposed of.

7.3.3 Changes in GAAP.

(a) Notwithstanding the definition of “GAAP” in Section 1.1 (Defined Terms), or any provision to the contrary in this Agreement, the financial covenants set forth in this Article 7 shall be calculated for all purposes in accordance with generally accepted accounting principles as in effect on the date of the delivery of the financial statements referred to in clause (i) of Subsection 4.1.5 (Closing Date Deliverables) (“Closing Date GAAP”) subject to the following provisions of this Subsection 7.3.3.

(b) If, after the date of this Agreement, there are any changes to GAAP that would affect the calculation of the financial covenants, and if the Borrower so requests, the Majority Lenders may:

(i) approve the request of the Borrower to change the basis for calculating the financial covenants from Closing Date GAAP to Closing Date GAAP as modified to incorporate the change or changes in GAAP requested by the Borrower, after which time, Closing Date GAAP shall be deemed to be Closing Date GAAP as so adjusted (“Adjusted GAAP”); and

(ii) in connection with any such change to Adjusted GAAP, if the Majority Lenders deem it to be appropriate, may adjust one or more of the financial covenants set forth in this Article 7 (and, without limiting the generality of the foregoing, the set points for determining Applicable Margin, Commitment Fee or any other amount derived from the ratios referred to in the financial covenants) or the method of calculating such financial covenants for all purposes (including, without limitation, for purposes of determining Applicable Margin) in such manner as is necessary or desirable to carry out the initial intent of the parties with respect to such covenants (and pricing, as applicable) as originally drafted.

(c) At any time that GAAP changes, the Borrower may initiate a request pursuant to the preceding clause (b), it being understood that the right to make such a request is not a one-time right. If Closing Date GAAP has already been adjusted to be Adjusted GAAP at the time of any such request and if the Majority Lenders agree to such further adjustments, then Adjusted GAAP shall thereafter be deemed to incorporate such further adjustments.

7.3.4 Reconciliation. At any time that Closing Date GAAP (or Adjusted GAAP, as applicable) is not the same as GAAP, the Borrower shall deliver, together with the Officer’s Compliance Certificate pursuant to Subsection 6.1.3 (Delivery of Officer’s Compliance

 

-105-


Certificates), a reconciliation of each of the component figures used in determining compliance with the financial covenants (based on Closing Date GAAP or Adjusted GAAP, as applicable) and the corresponding amounts shown on the financial statements delivered pursuant to Section 6.1 (Financial Data and Reporting Requirements; Notice of Certain Events) (based on GAAP). If so requested by the Majority Lenders, the Borrower shall also provide a confirmation of such reconciliation by the Borrower’s independent certified public accountants.

7.3.5 Pro Forma Calculations. Calculations required to be made on a pro forma basis as of a date other than the date financial statements are required to be delivered pursuant to this Agreement, unless otherwise expressly stated, shall be made in the manner provided in this Subsection 7.3.5. In the pro forma calculation of Total Net Leverage Ratio as at any date, (a) the amount of Total Net Indebtedness, cash and Cash Equivalents shall be determined as of such date, after giving effect to the transactions and events proposed on such date and (b) Adjusted EBITDA shall be determined as of the most recent four (4) fiscal quarters ended as to which financial statements shall have been delivered pursuant to this Agreement, after giving effect to the adjustments contemplated by Subsection 7.3.2 above for Acquisitions and dispositions including any Acquisitions or dispositions proposed for such date. In the pro forma calculation of the interest coverage ratio as set forth in Section 7.1 (Interest Coverage Ratio) as at any date, (a) Adjusted EBITDA shall be determined as of the four (4) fiscal quarters ended as to which financial statements shall have been delivered pursuant to this Agreement, after giving effect to the adjustments contemplated by Subsection 7.3.2 above for Acquisitions and dispositions including any Acquisitions or dispositions proposed for such date and (b) Interest Expense shall be determined as of the four (4) fiscal quarters ended as to which financial statements shall have been delivered pursuant to this Agreement, adjusted to give effect to the transactions and events proposed on such date as though such transactions or events had occurred on the first day of the most recent four (4) fiscal quarters as to which the applicable financial statements relate (including any adjustments that would have occurred to debt levels and interest rates if the related Indebtedness had been in place or repaid, as applicable, on such first day).

ARTICLE 8

BUSINESS COVENANTS

Each of Parent and the Borrower covenants that from the date of this Agreement, and for so long as any of the Obligations (other than contingent indemnification obligations) remain unpaid, any Letters of Credit remain outstanding (other than those that have been Cash Collateralized in an amount equal to the Minimum Collateral Amount), the Lenders have an unexpired Commitment to lend hereunder or the Issuing Bank has an unexpired commitment to issue Letters of Credit hereunder, it shall comply with each of the covenants set forth in this Article 8.

8.1 INDEBTEDNESS.

8.1.1 In General. Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, permit to exist or otherwise become or remain directly or indirectly liable with respect to any Indebtedness other than each of the following:

(a) obligations under Swap Agreements consistent with the terms of this Agreement;

 

-106-


(b) obligations under the Loan Documents (including any Refinancing Term Loan Indebtedness and Refinancing RC Indebtedness) and in respect of Letters of Credit and Banking Services Obligations;

(c) obligations in an aggregate principal amount not to exceed Fifteen Million Dollars ($15,000,000) at any time outstanding in respect of Capital Lease Obligations and purchase money security interests;

(d) obligations owing to the Borrower or to any Guarantor by the Borrower or any Guarantor;

(e) other Indebtedness (not otherwise provided for in this Subsection 8.1.1) existing on the Closing Date and listed on Schedule 8.1 hereto, and any amendments or refinancings thereof so long as such amendments and refinancings do not increase the principal amount thereof (except to the extent of any transaction costs related to such refinancing), shorten the maturity or weighted amortization or substantially increase the obligations of the obligors;

(f) unsecured Indebtedness of the Borrower or any Guarantor in an aggregate amount not to exceed Twenty Million Dollars ($20,000,000) at any one time outstanding; provided, that before and after the incurrence of any such Indebtedness, the Borrower shall be in compliance with the financial covenants set forth in Article 7 (Financial Covenants);

(g) Indebtedness in an aggregate amount outstanding at any time not to exceed Thirty Million Dollars ($30,000,000) that is secured by any asset acquired, or by the assets of any Person that becomes a Subsidiary pursuant to an Acquisition, by the Borrower or any Subsidiary at the time of any such acquisition or Acquisition, as applicable; provided, that such Indebtedness (i) existed at the time of the acquisition of such asset (or Acquisition of such Subsidiary) by Borrower or any Subsidiary and (ii) is not incurred in contemplation of such transaction;

(h) Indebtedness permitted under clause (b) of Section 8.3 (Investments, Loans, Acquisitions, Etc.);

(i) Indebtedness permitted by clause (d) of Section 8.3 (Investments, Loans, Acquisition, Etc.);

(j) Indebtedness in an aggregate principal amount not exceeding Four Hundred Ten Million Dollars ($410,000,000) under or in respect of Senior Notes, and any Permitted Refinancings thereof, and Guaranties by the Loan Parties (other than the Borrower) of such Indebtedness and any such Permitted Refinancings;

(k) Indebtedness permitted by clause (e) of Section 8.3 (Investments, Loans, Acquisition, Etc.);

 

-107-


(l) unsecured Indebtedness of one or more Foreign Subsidiaries, the aggregate outstanding principal amount of which Indebtedness is not at any time in excess of Thirty Million Dollars ($30,000,000);

(m) Indebtedness arising from the deferral of payment of a Restricted Payment allowed under Subsection 8.4.2 (Ventures) (whether or not such Indebtedness is subordinated);

(n) Indebtedness permitted by clause (k) of Section 8.3 (Investments, Loans, Acquisitions, Etc.);

(o) Guaranties by Parent, the Borrower or Subsidiaries of the Borrower of Indebtedness permitted by clause (l) above;

(p) Guaranties by the Borrower or any Guarantor of Indebtedness of another Guarantor or the Borrower;

(q) Alternative Incremental Facility Debt; provided, that the aggregate principal amount of such Alternative Incremental Facility Debt shall not exceed the amount permitted under Subsection 2.1.11 (Increases in Facility); and

(r) Guaranties by one or more Foreign Subsidiaries of Indebtedness of one or more of the Foreign Subsidiaries permitted hereunder.

Notwithstanding the foregoing, no Indebtedness shall be permitted pursuant to this Subsection 8.1.1 unless the incurrence and maintenance of such Indebtedness will not result in a default under any Other Senior Debt Documents.

8.1.2 Limitation on Incurrence. In addition to the limitations on the incurrence or existence of Indebtedness referred to above, no additional Indebtedness under clause (c), (f), (g), (h), (k), (p) or (q) and, as it relates to Permitted Refinancings, (j) of Subsection 8.1.1 (Indebtedness—In General) may be incurred by Parent or any of its Subsidiaries unless immediately before and after giving effect to the incurrence of such Indebtedness, no Default or Event of Default shall have occurred and be continuing.

8.2 LIENS; LICENSES.

8.2.1 In General. Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or assets of Parent or any Subsidiary, except each of the following (the items referred to in clauses (a) through (i) are, collectively, the “Permitted Liens”):

(a) Liens created in favor of the Administrative Agent for the benefit of the Secured Parties pursuant to the Loan Documents and Liens, if any, in favor of the Issuing Bank to Cash Collateralize or otherwise secure obligations of a Defaulting Lender to fund risk participations under this Agreement;

 

-108-


(b) Liens for taxes, assessments or other governmental charges the payment of which is not yet due or the payment of which is not at the time required by Section 8.11 (Payment of Taxes and Claims; Tax Returns);

(c) statutory Liens of landlords and statutory Liens of carriers, warehousemen, mechanics and materialmen incurred in the ordinary course of business for sums not yet due or the payment of which is not at the time required by Section 8.11 (Payment of Taxes and Claims; Tax Returns);

(d) leases or subleases granted to others, easements, rights-of-way, restrictions and other similar charges or encumbrances on real property, in each case incidental to, and not interfering with, the ordinary conduct of the business of Parent or any of its Subsidiaries; provided, that Parent shall notify the Administrative Agent of any such lease or subleases and Administrative Agent may in the case of real property leases or subleases, in its discretion, require assignments of the rents thereunder;

(e) Capital Leases and purchase money Liens incurred in compliance with clause (c) of Subsection 8.1.1 (Indebtedness—In General); provided, that no such security interest shall extend to or cover any property other than the leased property or property acquired with such purchase money Indebtedness;

(f) Liens on assets at the time of acquisition of such asset (or at the time of the Acquisition of the Person that owns such assets) by Borrower or any Subsidiary (including any Liens securing Indebtedness incurred in reliance of Subsection 8.1.1(g) above); provided, that (i) such Liens exist at the time of such acquisition and are not created in anticipation of the acquisition of such asset, (ii) any such Lien does not by its terms cover any asset other the asset acquired and (iii) any such Lien does not by its terms secure any Indebtedness other than Indebtedness permitted under Section 8.1 (Indebtedness) of this Agreement;

(g) other Liens existing on the Closing Date and listed on Schedule 8.2 hereto, relating to Indebtedness listed on Schedule 8.1 hereto and any amendments thereto or refinancings thereof permitted by clause (e) of Subsection 8.1.1 (Indebtedness—In General), so long as the Liens do not encumber any property not encumbered by the Liens listed on Schedule 8.2 hereto;

(h) Liens on Collateral securing Alternative Incremental Facility Debt (other than any Senior Notes to the extent constituting Alternative Incremental Facility Debt); provided, that such Liens are subject to customary intercreditor terms and documentation reasonably satisfactory to the Administrative Agent; and

(i) other Liens securing liabilities in an aggregate amount not to exceed Forty Million Dollars ($40,000,000) at any time outstanding.

Notwithstanding the foregoing, no Liens shall be permitted pursuant to this Subsection 8.2.1 unless such Liens will not result in a default under any Other Senior Debt Documents.

 

-109-


8.2.2 Negative Pledge. Except pursuant to the Loan Documents, any Other Senior Debt Documents or any documentation for any other Indebtedness permitted hereunder (except that such documentation for any such other Indebtedness shall not so restrict any Lien securing any of the Secured Obligations), or any Permitted Refinancing thereof, Parent shall not, and shall not permit any of its Subsidiaries to, agree with any Person to restrict or place limitations on the right of Parent or any of its Subsidiaries to create, incur, assume or permit to exist any Lien on or with respect to any property, including real property, or asset of Parent or any of its Subsidiaries.

8.2.3 Licenses. Parent shall not, and shall not permit any of its Subsidiaries to, license or sublicense any of its Intellectual Property or general intangibles if the effect of such license or sublicense is to transfer all or substantially all of the licensor’s or sublicensor’s economic value in the Intellectual Property or general intangible to the licensee or sublicensee except pursuant to a disposition permitted by Subsection 8.7.2 (Sales and Other Dispositions).

8.3 INVESTMENTS, LOANS, ACQUISITIONS, ETC.

Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make or permit to exist any Investment or make any Acquisition, except that the Borrower and the Subsidiaries may permit to exist and, so long as no Default or Event of Default then exists or would be caused thereby, the Borrower and the Subsidiaries may make, any of the following:

(a) Permitted Acquisitions; provided, that after giving pro forma effect to the proposed Investment, the Specified Restricted Use Conditions are satisfied;

(b) Subject to Section 8.29 (Reset Provision), Investments by the Borrower or any Subsidiary Guarantors in Foreign Subsidiaries in an aggregate amount at any time outstanding not to exceed Forty Million Dollars ($40,000,000) for capital expansion or working capital purposes; provided, that to the extent that the Borrower or any Subsidiary provides a Guarantee pursuant to clause (o) of Subsection 8.1.1 (Indebtedness—In General) of Foreign Subsidiary Indebtedness incurred pursuant to clause (l) of Subsection 8.1.1 (Indebtedness—In General), the above dollar amount provided for in this clause (b) shall be reduced dollar-for-dollar by an amount equal to such Guaranteed Indebtedness; provided, further, that after giving pro forma effect to the proposed Investment, the Specified Restricted Use Conditions are satisfied;

(c) Investments by the Borrower or any Subsidiary Guarantors in Subsidiary Guarantors, the creation by the Borrower or any Subsidiary Guarantor of new direct or indirect wholly-owned Subsidiaries that become Subsidiary Guarantors, and loans or advances from any Subsidiary Guarantor to the Borrower;

(d) Investments by Foreign Subsidiaries in other Foreign Subsidiaries or the creation by a Foreign Subsidiary of additional Foreign Subsidiaries;

(e) Subject to Section 8.29 (Reset Provision), any Investment not otherwise permitted pursuant to this Section 8.3 in an aggregate amount at any time outstanding not to exceed Two Hundred Million Dollars ($200,000,000) (excluding operating expenses that are written off in the ordinary course of business), so long as after giving pro forma effect to the proposed Investment the Specified Restricted Use Conditions are satisfied;

 

-110-


(f) Investments in Swap Agreements consistent with the terms of this Agreement or other Swap Agreements entered into in the ordinary course of business for the purpose of minimizing risk and not for speculative purposes;

(g) Investments in Cash Equivalents;

(h) Investments in connection with a Permitted Stock Repurchase under Subsection 8.4.3 (Permitted Stock Repurchases and Dividends);

(i) Investments in Ventures that are contributed to or rolled over into new or additional joint ventures entered into with third parties (which become Ventures); provided, that any additional cash or other contributions by a Loan Party in or to such new or additional joint venture shall be permitted only to the extent otherwise permitted by other applicable clauses of this Section 8.3;

(j) Investments contemplated by clauses (g) and (h) of Subsection 8.7.2 (Sales and Other Dispositions), subject to the requirements specified therein;

(k) other Investments set forth on Schedule 8.3 hereto as such schedule is in effect on the Closing Date; and

(l) the Nuvectra Contribution pursuant to the Permitted Nuvectra Spinoff.

Notwithstanding the foregoing, no Investments shall be permitted pursuant to this Section 8.3 unless such Investments will not result in a default under any Other Senior Debt Documents.

For the purposes of this Section 8.3, the “amount” of any loan, advance, extension of credit or investment made by any Person or Persons (collectively, the “Investor”) in any other Person or Persons (collectively, the “Recipient”) shall be:

(1) with respect to any loans, advances or extensions of credit made by any Investor to or in any Recipient, an amount equal to the principal amount of loans, advances and extensions of credit made to the Recipient, directly or indirectly, by the Investor; and

(2) with respect to any equity investment made by any Investor in any Recipient, the amount of capital contributions made in the Recipient, directly or indirectly, by the Investor or the purchase price paid to the Recipient by any Investor in respect of any Capital Stock of the Recipient issued by the Recipient to the Investor.

 

-111-


Notwithstanding the foregoing, for purposes of clause (e) only, the “amount” of any loan, advance, extension of credit or investment made by any Investor in any Recipient shall be:

(1) with respect to any loan, advance or extension of credit made by any Investor to or in any Recipient, an amount equal to the principal amount of such loan, advance or extensions of credit made to the Recipient, directly or indirectly, by the Investor less the amount of any repayment or prepayment of such principal amount; and

(2) with respect to any equity investment made by any Investor in any Recipient, the amount of any capital contribution made in the Recipient, directly or indirectly, by the Investor or the purchase price paid to the Recipient by any Investor in respect of any Capital Stock of the Recipient issued by the Recipient to the Investor less the amount of any dividend or stock repurchase received on account of any such equity investment.

8.4 RESTRICTED PAYMENTS.

Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart any sum or property for any Restricted Payment, except that:

8.4.1 Intercompany. Restricted Payments may be declared and paid by any Subsidiary of Parent (x) to any Loan Party or (y) that is not a Loan Party to any other Subsidiary of Parent that is not a Loan Party.

8.4.2 Ventures. Restricted Payments for tax distributions and for the redemption of Capital Stock in a Venture (including subsequent payments on Indebtedness arising from the deferral of a payment created in connection with the redemption of Capital Stock in a Venture so long as the deferred payment is not guaranteed by a Loan Party) may be made by the Borrower to a Venture to be distributed to any Person holding a minority interest in the Capital Stock of such Venture so long as no Default or Event of Default exists at the time of the Restricted Payment or would exist immediately after giving effect thereto.

8.4.3 Permitted Stock Repurchases and Dividends. Subject to Section 8.29 (Reset Provision), the Borrower may make one or more Restricted Payments to be distributed to Parent in an aggregate amount for all such Restricted Payments not to exceed, at any date of determination, Two Hundred Fifty Million Dollars ($250,000,000), the proceeds of which may be used by Parent to repurchase outstanding Capital Stock of Parent or paying dividends on its Capital Stock, in each case so long as (a) the Specified Restricted Use Conditions are satisfied, (b) the Borrower provides notice to the Administrative Agent that the Restricted Payment is being made, and (c) the proceeds of the Restricted Payment paid to Parent are promptly used by Parent to make such repurchases or dividends.

8.4.4 Distributions in Connection with the Permitted Nuvectra Spinoff. The dividends and other Restricted Payments with respect to the Capital Stock of Nuvectra and AlgoStim LLC and PelviStim LLC, if applicable, may be made pursuant to the Permitted Nuvectra Spinoff.

8.5 SALE-LEASEBACKS.

Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, sell or otherwise transfer, in one or more related transactions, any property (whether real, personal or mixed) and thereafter rent or lease such transferred property or substantially identical property.

 

-112-


8.6 TRANSACTIONS WITH AFFILIATES.

Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, engage in any transaction with any Affiliate on terms that are less favorable (when taken as a whole) to Parent or any such Subsidiary than those that could reasonably be expected to be obtained at the time from unaffiliated third parties; provided, that the foregoing restrictions shall not apply to (a) transactions exclusively among the Borrower and the Guarantors not prohibited by this Agreement, (b) Restricted Payments, to the extent permitted under Section 8.4 (Restricted Payments), (c) usual and customary indemnification obligations in the Organizational Documents of Parent and its Subsidiaries for acts and omissions of their officers and directors, (d) Investments permitted by Section 8.3 (Investments, Loans, Acquisitions, Etc.), (e) transactions exclusively among the Foreign Subsidiaries, and (f) transactions permitted under clauses (g) and (h) of Subsection 8.7.2 (Sales and Other Dispositions), and (g) transactions under or related to the Permitted Nuvectra Spinoff (to the extent such transactions are approved by a majority of the disinterested members of the Board of Directors of the Parent), subject to the requirements specified therein. If any Affiliate transaction (other than as set forth in the preceding proviso) involves an amount in excess of Twenty Million Dollars ($20,000,000), it shall be approved by a majority of the disinterested members (if any) of the Board of Directors of Parent or the Borrower. If any such transaction with an Affiliate involves an amount in excess of Forty Million Dollars ($40,000,000), it shall be determined by a nationally recognized investment banking or accounting firm to be fair to Parent and its Subsidiaries. Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, engage in any transaction with Nuvectra or its successors on terms that are less favorable (when taken as a whole) to Parent or such Subsidiary than those that could reasonably be expected to be obtained at the time from unaffiliated third parties except for usual and customary agreements (including one or more license agreements to be entered into between Parent or the Borrower, as applicable, and Nuvectra) entered into between the parties in connection with the Permitted Nuvectra Spinoff.

8.7 MERGERS AND DISPOSITIONS.

8.7.1 Consolidations and Mergers. Parent shall not, and shall not permit any of its Subsidiaries to:

(a) directly or indirectly, consolidate with or merge into any Person, except:

(i) a Subsidiary may consolidate with or merge into the Borrower so long as the Borrower is the survivor;

(ii) subject in the case of any consolidation or merger involving Parent to Section 8.32 (Lines of Business), a Subsidiary may consolidate with or merge into a Guarantor so long as the Guarantor is the survivor;

(iii) a Foreign Subsidiary may consolidate with or merge into another Foreign Subsidiary; and

 

-113-


(iv) so long as no Default or Event of Default then exists or would be created thereby, a Subsidiary may consolidate with or merge with another Person to effect a Permitted Acquisition or a disposition permitted by Subsections 8.7.2 (Sales and Other Dispositions), in each case subject to Section 8.33 (Further Assurances); or

(b) enter into any winding-up, liquidation, dissolution, division or similar transaction except:

(i) a Subsidiary may be dissolved following the transfer of all of its assets to the Borrower or one or more Subsidiary Guarantors; and

(ii) a Foreign Subsidiary may be dissolved following the transfer of all of its assets to the Borrower, one or more Subsidiary Guarantors and/or one or more Foreign Subsidiaries.

Notwithstanding the foregoing, no merger, winding-up, liquidation, dissolution, division or similar transaction shall be permitted pursuant to this Subsection 8.7.1 unless the same will not result in a default under any Other Senior Debt Documents.

8.7.2 Sales and Other Dispositions. Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, sell, lease, license, abandon or otherwise transfer or dispose of any of its assets or property of any nature except:

(a) sales of inventory in the ordinary course of its business;

(b) licensing or sublicensing of Intellectual Property of Parent or any of its Subsidiaries in the ordinary course of business consistent with past practice so long as the effect of such license or sublicense shall not transfer all or substantially all of the licensor’s or sublicensor’s economic value in the Intellectual Property to the licensee or sublicensee;

(c) transfers of assets or property to the Borrower or a Subsidiary Guarantor;

(d) transfers of assets or property from a Foreign Subsidiary to another Foreign Subsidiary;

(e) transfers of assets in an amount not to exceed One Hundred Million Dollars ($100,000,000) in any fiscal year, so long (i) as at the time of such disposition no Default or Event of Default exists or would be created thereby and (ii) at least seventy-five percent (75%) of the consideration for each such transfer or sale pursuant to this clause (e) shall be cash or Cash Equivalents;

(f) sales of any assets of, or equity interests in, Ventures, including the transactions contemplated by clause (i) of Section 8.3 (Investments, Loans, Acquisitions, Etc.);

(g) transfers of Capital Stock set forth in, and in conformity with, the definition of Permitted Maquiladora Restructuring;

 

-114-


(h) transfers by the Borrower or a Subsidiary Guarantor to a Foreign Subsidiary of the Borrower’s or such Subsidiary Guarantor’s maquiladora operations (which are operated in conjunction with one or more Target Mexican Subsidiaries), so long as (i) no Default or Event of Default shall then exist or be caused thereby or by any of the transactions in connection with the maquiladora operations, (ii) none of the assets transferred in connection with such operations shall consist of Intellectual Property (other than non-exclusive licenses of Intellectual Property necessary for such operations), (iii) in connection therewith, the Foreign Subsidiary shall enter into a distributorship agreement with the Borrower or another Loan Party and (iv) no more than Fifty Million Dollars ($50,000,000) of assets (based on fair market value) are so transferred; and

(i) transfers pursuant to Investments permitted by Section 8.3 (Investments, Loans, Acquisitions, Etc.) and Restricted Payments permitted by Section 8.4 (Restricted Payments).

Notwithstanding the foregoing, no sale, lease, license, abandonment or other transfer or disposition of property shall be permitted pursuant to this Subsection 8.7.2 unless the same will not result in a default under any Other Senior Debt Documents.

8.8 MANAGEMENT ARRANGEMENTS.

Parent shall not, and shall not permit any of its Subsidiaries to, (a) enter into or remain bound by any management, employment or consulting agreement with any Person that gives such Person the right to manage its business, except for usual and customary employment agreements and consulting agreements consistent with past practice, or (b) directly or indirectly pay or accrue to any Person any sum or property for fees for management or similar services rendered in connection with the operation of a Permitted Business except as set forth above.

8.9 EXISTENCE.

Subject to the provisions of Subsection 8.7.1 (Consolidations and Mergers), each of Parent and the Borrower shall at all times preserve and keep in full force and effect (a) its corporate existence and (b) the corporate, partnership or other existence of each of its Subsidiaries (except as otherwise permitted by this Agreement), and the good standing of such Persons in all states or jurisdictions in which they are formed or required to qualify to do business, except, as to qualification only, where the failure to keep in full force and effect any such good standing could not reasonably be expected to result in a Material Adverse Change.

8.10 COMPLIANCE WITH LAW.

Parent shall, and shall cause each of its Subsidiaries to, comply with all Laws, and obtain or maintain all material permits, franchises and other governmental authorizations and approvals necessary for the ownership, acquisition and disposition of their respective properties and the conduct of their respective businesses including, all applicable Food and Drug Administration rules and regulations, except for such matters of noncompliance as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. Without limiting the generality of the foregoing, Parent and its Subsidiaries shall be in compliance with all orders,

 

-115-


rules, regulations issued by, and recommendations of, the U.S. Department of the Treasury and OFAC pursuant to IEEPA, the Patriot Act, other legal requirements relating to money laundering or terrorism and any executive orders related thereto, which at the time apply to them.

8.11 PAYMENT OF TAXES AND CLAIMS; TAX RETURNS.

Parent shall, and shall cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its franchises, business, income or profits before any penalty or interest accrues thereon, and all claims (including, without limitation, claims for labor, services, materials and supplies) for sums that have become due and payable and that by Law create a Lien upon any of its properties or assets; provided, that no such charge or claim need be paid if being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor and, if the filing of a bond or other indemnity is necessary to avoid the creation of a Lien against any of the assets of Parent or any of its Subsidiaries, such bond shall have been filed or indemnity provided. Parent shall, and shall cause each of its Subsidiaries to, timely file (including extensions) all material tax returns, reports and statements required by Law to be filed by any of Parent or its Subsidiaries.

8.12 TAX CONSOLIDATION.

The Borrower will not file or consent to or permit the filing of any consolidated income tax return on behalf of it or any of its Subsidiaries with any Person (other than a consolidated return of Parent and its Subsidiaries). The Borrower will not, and will not permit any of its Subsidiaries to, enter into any agreement with any Person which would cause the Borrower or any of such Subsidiaries to bear more than the amount of taxes to which it would have been subject had it separately filed (or filed as part of a consolidated return among Parent and its Subsidiaries).

8.13 COMPLIANCE WITH ERISA AND APPLICABLE FOREIGN LAW

(a) Parent shall not, and shall not permit any other Loan Party or any ERISA Affiliate to, take, or fail to take, any of the following actions or permit any of the following events to occur if such action or event individually or together with all other actions or events would subject Borrower, other Loan Party or any ERISA Affiliate to any material (i) tax, (ii) penalty, or (iii) other liabilities:

(i) engage in or knowingly consent to any “party in interest” or any “disqualified person,” as such terms are defined in Section 3(14) of ERISA and Section 4975(e)(2) of the Code respectively, engaging in any Prohibited Transaction in connection with which the Borrower, other Loan Party or any ERISA Affiliate could be subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code;

(ii) withdraw from any Multiemployer Plan, if such withdrawal would result in the imposition of Withdrawal Liability;

 

-116-


(iii) fail to comply in all material respects with the requirements of COBRA regarding continued health coverage, of the Health Insurance Portability and Accountability Act of 1996, and of Section 1862(b) of the Social Security Act, and of the Patient Protection and Affordable Care Act with respect to any Plans subject to the requirements thereof; or

(iv) fail to comply in all other material respects with the provisions of ERISA, the Code and applicable Law with respect to any Plan or any Foreign Plan.

(b) Parent shall not, and shall not permit any other Loan Party or any ERISA Affiliate to take, or fail to take, any of the following actions or permit any of the following events to occur:

(i) terminate any U.S. Pension Plan in a manner, or take any other action, which could result in any liability of a Loan Party or any ERISA Affiliate to the PBGC;

(ii) fail to make full payment when due of all amounts which, under the provisions of any Plan or any Multiemployer Plan, the Borrower, any other Loan Party or any ERISA Affiliate is required to pay as contributions thereto, which failure could result in any material liability to the Borrower, any other Loan Party or any ERISA Affiliate, or cause there to be an unpaid “minimum required contribution” as defined in Section 430 of the Code and Section 303 of ERISA or fail to pay PBGC premiums when due; or

(iii) cause or permit an U.S. Pension Plan to be in at-risk status as defined in Section 430(i) of the Code or Section 303 of ERISA, or cause or permit a Foreign Plan to be in noncompliance with its terms or with applicable Law such that the noncompliance could reasonably be expected to result in the Borrower, other Loan Party or an ERISA Affiliate incurring a material liability or becoming subject to a material tax or penalty; or cause or permit to exist any condition or event that could result in imposition of a Lien on any asset of the Borrower, other Loan Party or any ERISA Affiliate with respect to a U.S. Pension Plan, Foreign Plan or Multiemployer Plan.

(c) The Borrower shall comply with the ERISA reporting requirements set forth in Section 6.4 (ERISA Notices and Foreign Plan Notices).

8.14 INSURANCE.

8.14.1 Liability, Property Damage, Etc. Parent shall maintain, and shall cause each of its Subsidiaries to maintain, with financially sound and reputable insurers, insurance against loss or damage and liability of the kinds customarily insured against by Persons of established reputation engaged in the same or similar businesses and similarly situated and in such amounts as are customarily carried under similar circumstances by other such Persons and otherwise as is prudent for Persons engaged in such business. Parent’s or the Borrower’s, as applicable, general liability and property insurance shall name the Administrative Agent as lender loss payee and additional insured and shall provide for at least thirty (30) days advance notice to the Administrative Agent prior to any non-renewal, cancellation, change in risks (in any material respect) or material amendment of any such Insurance, except for such

 

-117-


limitations as may be consistent with industry standards unless such limitations are not acceptable to the Administrative Agent, in its sole discretion. In addition, Parent shall, and shall cause each of its Subsidiaries to, maintain such other insurance as may be required by the Security Agreements and the other Loan Documents. Annually (and from time to time upon request of the Administrative Agent), the Borrower shall promptly furnish to the Administrative Agent evidence, in form and substance satisfactory to the Administrative Agent, of the maintenance of all insurance, indemnities or bonds required by this Subsection 8.14.1.

8.14.2 PBGC. The Borrower shall maintain or cause to be maintained all insurance available through the PBGC and/or insurers acceptable to the Administrative Agent against its obligations and the obligations of the Subsidiaries to the PBGC.

8.15 MAINTENANCE OF PROPERTIES.

Parent shall, and shall cause each of its Subsidiaries to: (a) maintain its properties in good repair, working order and condition, ordinary wear and tear excepted; and (b) make all appropriate and proper repairs, renewals, replacements, additions and improvements thereto, ordinary wear and tear excepted; and (c) keep all systems and equipment that may now or in the future be subject to compliance with any material standards or rules imposed by any Governmental Authority in compliance in all material respects with such standards or rules. Parent shall, and shall cause each of its Subsidiaries to, take all steps necessary to prosecute, maintain, preserve, defend and protect, and, when necessary, renew: (i) all franchises, licenses, permits, patent applications, patents, trademarks, service marks, trade dress, domain names, trade names, trade secrets, copyrights and other general intangibles and Intellectual Property owned or licensed by any of them, including but not limited to the payment of all necessary maintenance fees and the filing of all statutory declarations, except where such Person has reasonably determined that it is in its best interest to terminate or abandon any such asset and such termination or abandonment could not reasonably be expected to result in a Material Adverse Change and (ii) all agreements to which any of them are parties that are necessary to conduct Parent’s or the applicable Subsidiary’s business.

8.16 MAINTENANCE OF RECORDS; FISCAL YEAR.

Parent shall, and shall cause each of its Subsidiaries to, keep at all times books of record and account in which full, true and correct (in each case in all material respects) entries shall be made of all dealings or transactions in relation to its business and affairs. Parent shall, and shall cause each of its Subsidiaries to, keep its books of account and financial statements in accordance with GAAP and to report on the basis of a fiscal year ending on the Friday closest to December 31 (with the first, second and third fiscal quarters within each such fiscal year ending on the Friday closest to the end of March, June and September, respectively).

8.17 INSPECTION.

Upon reasonable notice (and for this purpose no more than two (2) Business Days’ notice shall be required under any circumstances) if no Default or Event of Default shall exist, or at any time with or without notice after the occurrence of a Default or Event of Default, Parent shall, and shall cause each of its Subsidiaries to, allow any representative of the Administrative Agent, the Issuing Bank or any Lender to visit and inspect any of the properties of Parent and any of its

 

-118-


Subsidiaries, to examine the books of account and other records and files of Parent and any of its Subsidiaries (including the financial statements (audited and unaudited, to the extent prepared) of each Subsidiary and information with respect to each business operated by Parent and any of its Subsidiaries), to make copies thereof and to discuss the affairs, business, finances and accounts of Parent and its Subsidiaries with their personnel and accountants.

8.18 EXCHANGE OF NOTES.

Upon receipt of a written notice of loss, theft, destruction or mutilation of any or all of the Notes and of a letter of indemnity from the affected Lender or its successors or assigns, and upon surrendering for cancellation such Notes if mutilated (in which event no indemnity shall be required), the Borrower shall execute and deliver a new Note or Notes of like tenor in lieu of such lost, stolen, destroyed or mutilated Notes, as the case may be.

8.19 TYPE OF BUSINESS; OTHER ACTIVITIES.

The Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly enter into any business that is not a Permitted Business.

8.20 CREDIT RATINGS.

The Borrower shall use commercially reasonable efforts (a) to cause the Facilities to be continuously publicly rated by S&P and Moody’s and (b) to maintain a public corporate credit rating from S&P and a public corporate family rating from Moody’s, in each case under this clause (b) in respect of the Borrower (it being understood and agreed that “commercially reasonable efforts” shall in any event include the payment by the Borrower of customary rating agency fees and cooperation with information and data requests by Moody’s or S&P in connection with their respective ratings process).

8.21 CHANGE IN DOCUMENTS.

Parent shall not, and shall not permit any of its Subsidiaries to, amend or otherwise modify the respective Organizational Documents of such Person or the Other Senior Debt Documents to which each such Person is a party in any manner inconsistent with this Agreement or in any manner that could reasonably be expected to have an adverse effect on the rights of the Administrative Agent and Lenders.

8.22 PAYMENT OF SUBORDINATED INDEBTEDNESS.

Parent shall not, and shall not permit any of its Subsidiaries to, make any voluntary payment or prepayment, whether in respect of principal, interest, fees, expenses or otherwise, or any redemption, retirement, purchase or other acquisition, direct or indirect, in respect of any subordinated Indebtedness. So long as no Default or Event of Default has occurred and is continuing, Parent and its Subsidiaries may make required payments on subordinated Indebtedness in accordance with its terms when due, but only to the extent in compliance with the subordination provisions applicable thereto.

 

-119-


8.23 COMPLIANCE WITH FEDERAL RESERVE REGULATIONS.

No proceeds of the Loans shall be used, in whole or in part, by the Borrower, any of its Subsidiaries or other Person, directly or indirectly, to purchase or carry, or to reduce or retire or refinance any credit incurred to purchase or carry, any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock in violation of applicable Law. Neither Parent nor any of the Subsidiaries shall, directly or indirectly, otherwise take or permit to be taken any action which would result in the Loans or the carrying out of any of the other transactions contemplated by this Agreement being violative of Regulation T, U or X of the Board of Governors of the Federal Reserve System or any other regulation of the Board of Governors of the Federal Reserve System.

8.24 LIMITATIONS ON CERTAIN RESTRICTIVE PROVISIONS.

Parent shall not, and shall not permit any of its Subsidiaries to, (a) permit or place any restriction, directly or indirectly, on (i) the payment of dividends or distributions by any of such Subsidiaries, or (ii) the transfer by any of such Subsidiaries of any of its properties or assets, in each case, to Parent or its Subsidiaries or (b) agree with any Person that Parent and/or any Subsidiaries shall not amend the Loan Documents except (1) any such agreement set forth in the Loan Documents, (2) any such agreement set forth in Other Senior Debt Documents or any other Indebtedness permitted hereunder, and any Permitted Refinancing thereof, (3) any restrictions regarding licenses or sublicenses by the Intellectual Property of Parent and its Subsidiaries in the ordinary course of business (in which case such restriction shall relate only to such Intellectual Property), (4) customary restrictions contained in any agreement or instrument governing or evidencing any Capital Leases or purchase money Indebtedness permitted under this Agreement so long as such restrictions apply only to the assets so leased or purchased, (5) customary restrictions and conditions contained in any agreement relating to the sale of any property permitted under this Agreement pending the consummation of such sale, and (6) customary provisions in leases and other contracts restricting the assignment thereof.

8.25 ENVIRONMENTAL MATTERS.

Parent shall not, and shall not permit any of its Subsidiaries to,

(a) cause a Release of any Hazardous Substance in violation of any Environmental Law or so as to create a risk of harm to public or occupant health or safety or to the environment, or

(b) permit to exist any Release of any Hazardous Substance on any real property owned or occupied by Parent or any of its Subsidiaries in violation of any Environmental Law or so as to create a risk of harm to public or occupant health or safety or to the environment, or

(c) take any other action (or fail to take any action) in violation of any Environmental Law or take any action (or fail to take any action) so as to create a risk of harm to public or occupant health or safety or to the environment.

 

-120-


8.26 CORPORATE SEPARATENESS.

(a) Parent shall, and shall cause each of its Subsidiaries to, conduct its business and operations separate from that of each Affiliate that is not Parent or one of Parent’s Subsidiaries. Without limiting the generality of the foregoing, the Borrower shall not, and shall not permit any of its Subsidiaries, to commingle funds with any Person that is not the Borrower or a Subsidiary of the Borrower.

(b) Parent shall, and shall cause the Borrower and each of the Subsidiary Guarantors to, conduct its business and operations separate from that of each of their respective Affiliates that is not a Loan Party. Without limiting the generality of the foregoing, Parent shall not, and shall not permit any Loan Party to commingle funds with any Person that is not a Loan Party.

8.27 CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES.

Parent will take such action, and will cause each of its Subsidiaries to take such action, from time to time as shall be necessary to ensure that Parent, and all U.S. Subsidiaries (other than U.S. Subsidiaries that are Ventures) are guarantors of the Secured Obligations and that all of the equity and material assets (other than Excluded Assets) of the Borrower and all Guarantors are subject to a first priority Lien securing the Secured Obligations, subject to no other Lien except Permitted Liens and subject to Permitted Perfection Limitations. Without limiting the generality of the foregoing, in the event that Parent or any of its Subsidiaries shall form or acquire any new Subsidiary (which it shall only do in compliance with the provisions of this Agreement), the applicable Loan Party (if any), contemporaneously with the formation or acquisition of such new Subsidiary: (a) will execute and deliver such documents as shall be necessary to cause (without duplication) all of the Capital Stock of any new Venture owned by GB Ventures or, prior to consummation of the Permitted Nuvectra Spinoff, QIG, and any new U.S. Subsidiary and one hundred percent (100%) of the non-voting Capital stock and sixty-six percent (66%) of the voting Capital Stock of each new First-Tier Foreign Subsidiary of such Loan Party, in each case to be duly pledged (on a first-priority perfected basis to the extent required by the Loan Documents) to secure the Secured Obligations; (b) will cause such new U.S. Subsidiary (other than a U.S. Subsidiary that is a Venture) to execute and deliver a Subsidiary Suretyship Agreement (or a joinder thereto), joinders to the Security Agreements and Pledge Agreements, UCC-1 financing statements, and such other documents as may be necessary to cause such new U.S. Subsidiary (other than a U.S. Subsidiary that is a Venture) to be a guarantor of the Secured Obligations and its material assets (other than Excluded Assets) to be pledged to secure such guaranty; and (c) will cause such new Subsidiary Guarantor to deliver such proof of corporate action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by the Borrower pursuant to Section 4.1 (Conditions to Initial Funding) on the Closing Date or as the Administrative Agent shall have requested, and to take such other action as the Administrative Agent shall reasonably request to perfect the security interest in the Capital Stock and material assets (other than Excluded Assets) of such new Subsidiary Guarantor so created pursuant to the Loan Documents. For the avoidance of doubt, and without limiting the generality of the foregoing, if any Venture shall become a wholly-owned U.S. Subsidiary of Parent (except, in the case of any Venture owned by QIG, only after March 31, 2016 if the Permitted Nuvectra Spinoff has not occurred), Parent shall cause

 

-121-


such wholly-owned U.S. Subsidiary to execute and deliver a Subsidiary Suretyship Agreement (or a joinder thereto), joinders to the Security Agreements and Pledge Agreements, UCC-1 financing statements, and such other documents as may be necessary to cause such wholly-owned Subsidiary to be a guarantor of the Secured Obligations and its material assets (other than Excluded Assets) to be pledged to secure such guaranty.

8.28 CERTAIN LIMITATIONS ON TRANSACTIONS WITH NON-LOAN PARTIES.

Notwithstanding anything to the contrary in this agreement, unless Parent or the Borrower shall have (in their discretion) caused the Foreign Subsidiaries and/or Ventures to Guaranty the Secured Obligations and pledge their material assets to secure such pledge, (x) no Loan Party shall transfer, either by way of Investment or otherwise, assets to any Venture or Foreign Subsidiary in excess of the amounts permitted in clauses (e), (i) and (j) of Subsection 8.3 (Investments, Loans, Acquisitions, Etc.) (with respect to clause (i) of Subsection 8.3, solely to the extent the Investment relates to a Venture that is contributed to, or rolled over into, a new or additional joint venture), and (y) all transactions between the Loan Parties on the one hand, and a Foreign Subsidiary or Venture on the other hand, shall be in the ordinary course of business and, except as provided in clauses (e), (i) and (j) of Subsection 8.3 (Investments, Loans, Acquisitions, Etc.) (with respect to clause (i) of Subsection 8.3, solely to the extent the Investment relates to a Venture that is contributed to, or rolled over into, a new or additional joint venture) on an arm’s length basis.

8.29 RESET PROVISION.

At any time, and from time to time, if the Total Net Leverage Ratio, for the two (2) most recently ended fiscal quarters (as evidenced by financial statements delivered pursuant to Section 6.1.1 (Delivery of Quarterly Financial Statements) or Section 6.1.2 (Delivery of Annual Financial Statements; Accountants’ Certification), as applicable, for such quarters and the delivery of an Officer’s Compliance Certificate pursuant to Subsection 6.1.3 (Delivery of Officer’s Compliance Certificates) is less than 2.75 to 1.00, the Borrower may make an election (the date of any such election being a “Reset Election Date”) by delivering a notice to the Administrative Agent certifying that the conditions to the election have been satisfied and directing the Administrative Agent to reset the amount referenced in clause (c) of the definition of Specified Restricted Use Conditions to be reset at $400,000,000 and the amount permitted for each of the Specified Restricted Uses shall be reset to the amount set forth in this Agreement therefor on the Closing Date. On each Reset Election Date, the amount referenced in clause (c) of the definition of Specified Restricted Use Conditions and in each of the provisions referenced in the definition of Specified Restricted Uses shall be so reset to the full amount available as of the Closing Date, enabling the Borrower to use such provisions after such Reset Election Date as if no Restricted Payments or Investments had been made in reliance on such provisions prior to such Reset Election Date.

 

-122-


8.30 CERTAIN LIMITATIONS ON ACTIVITIES OF MAQUILADORA HOLDING SUBSIDIARIES.

(a) Parent and the Borrower shall ensure that Maquiladora Holding Subsidiaries shall not engage in any activities or own assets other than the ownership of ninety-nine percent (99%) of the Capital Stock of Greatbatch Mexico, Greatbatch MCSO and one or more Target Mexican Subsidiaries, and activities directly related thereto.

(b) Maquiladora Holding Subsidiaries may not rely on the exceptions set forth in clause (d), (f) or (g) of Section 8.1.1 (Indebtedness—In General), clause (a) or (c) of Section 8.3 (Investments, Loans, Acquisitions, Etc.), clause (a) of Section 8.6 (Transactions with Affiliates), clause (a)(ii) or (b) of Subsection 8.7.1 (Consolidations and Mergers), clause (c) of Subsection 8.7.2 (Sales and Other Dispositions), nor may any Loan Party rely on such exceptions in connection with transactions with any Maquiladora Holding Subsidiary. Each Maquiladora Holding Subsidiary shall be treated as a “Foreign Subsidiary” for all purposes of this Agreement (including Section 8.6 (Transactions with Affiliates) and Section 8.27 (Certain Obligations Respecting Subsidiaries)) unless it shall have ceased to be a Subsidiary of a Foreign Subsidiary.

8.31 DESIGNATION AS SENIOR DEBT; GUARANTORS.

(a) The Borrower shall designate all Obligations as “Senior Indebtedness” and “Designated Senior Indebtedness” or as a similar term or designation for purposes of and as defined in, any documentation with respect to any subordinated Indebtedness.

(b) The Borrower shall not permit Parent or any of its Subsidiaries to be a guarantor, issuer, obligor or borrower under any Other Senior Debt Document unless such Person is also a Guarantor or Borrower under the Loan Documents.

8.32 LINES OF BUSINESS.

The Borrower and the other Subsidiaries shall engage only in Permitted Businesses. Parent shall not engage in any business activities other than (a) owning one hundred percent (100%) of the outstanding Capital Stock of the Borrower, (b) owning one hundred percent (100%) of the outstanding Capital Stock of GB Ventures and (c) activities reasonably related to the foregoing. Unless and until any Maquiladora Holding Subsidiary becomes a Subsidiary Guarantor, the Borrower shall ensure that such Maquiladora Holding Subsidiary shall not engage in any business activities other than (i) owning ninety-nine percent (99%) of the outstanding Capital Stock of Greatbatch Mexico, Greatbatch MCSO and one or more Target Mexican Subsidiaries; and (ii) engaging in activities directly related to the foregoing.

8.33 FURTHER ASSURANCES.

At its sole cost and expense, upon the reasonable request of the Administrative Agent, Parent shall, and shall cause each of its Subsidiaries to, execute and deliver to the Administrative Agent and the Lenders such further instruments and do or cause to be done such further acts as may be necessary or proper in the reasonable opinion of the Administrative Agent to carry out more effectively the provisions and purpose of this Agreement and the other Loan Documents

 

-123-


including (a) using commercially reasonable efforts to deliver such landlord waivers and bailee waivers as the Administrative Agent shall request and (b) delivering a control agreement for each such deposit account and brokerage account included in the Collateral as the Administrative Agent shall request.

8.34 PARENT BUSINESS AND ASSETS.

Parent shall not engage in any business activities nor shall it acquire, lease, license or hold any assets other than owning the Capital Stock of Borrower, the Capital Stock of GB Ventures and engaging in activities directly related thereto and to its corporate existence and activities directly related to requirements of public companies.

ARTICLE 9

EVENTS OF DEFAULT

9.1 EVENTS OF DEFAULT.

Event of Default” wherever used herein means any one of the following events (whatever the reason for such Event of Default, whether it shall be voluntary or involuntary or be effected by operation of Law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental instrumentality):

9.1.1 Failure to Pay Principal or Reimbursement Obligations. If the Borrower shall fail to make any payment of (a) the principal of the Loans on the dates when the same shall become due and payable, whether at stated maturity or at a date fixed for any installment or prepayment thereof or otherwise or (b) reimbursement obligations in respect of Letters of Credit on the dates when the same shall become due and payable; or

9.1.2 Failure to Pay Interest, Fees, Etc. If the Borrower shall fail to make any payment of interest on the Loans, the Commitment Fees, or any other amounts owing hereunder (other than principal of the Loans and reimbursement obligations in respect of Letters of Credit) on the dates when such interest, Commitment Fees or other amounts shall become due and payable, and such failure continues for more than five (5) Business Days; or

9.1.3 Cross Default to Indebtedness. (a) If Parent or any of its Specified Subsidiaries shall default (as payor or guarantor or other surety) in the payment of any Indebtedness (other than obligations which are covered in Subsections 9.1.1 (Failure to Pay Principal or Reimbursement Obligations) and 9.1.2 (Failure to Pay Interest, Fees, Etc.)) and the underlying obligation with respect to which a default has occurred aggregates to the Threshold Amount or more or could result in a required payment of the Threshold Amount or more, or (b) if any event shall occur or condition shall exist in respect of any such Indebtedness that would permit, or shall have caused, the acceleration of the payment, time for payment or maturity of any such Indebtedness; or

9.1.4 Misrepresentations. If any representation or warranty made (a) by any Loan Party in this Agreement or in any other Loan Document or (b) by the Borrower or any other Person (other than the Administrative Agent, the Issuing Bank or a Lender) in any

 

-124-


document, certificate or statement furnished pursuant to this Agreement or any other Loan Document, shall be false or misleading in any respect (or in any material respect if such representation or warranty is not by its terms already qualified as to materiality) when made or deemed made; or

9.1.5 Certain Covenant Defaults.

(a) If there shall occur a default in the due performance or observance of any term, covenant or agreement to be performed or observed pursuant to Sections 8.9 (Existence) as it pertains to Subsidiaries (other than the Borrower), 8.10 (Compliance with Law), 8.13 (Compliance with ERISA and Applicable Foreign Law), 8.15 (Maintenance of Properties), 8.16 (Maintenance of Records; Fiscal Year), 8.18 (Exchange of Notes), 8.27 (Certain Obligations Respecting Subsidiaries) or 8.29 (Reset Provision) and, in each case where such default is capable of being cured, to the extent such default shall continue unremedied for a period of ten (10) or more Business Days; or

(b) If there shall occur a default in the due performance or observance of any term, covenant or agreement to be performed or observed pursuant to any of Article 6 (Reporting Requirements and Notices), Article 7 (Financial Covenants), or Article 8 (Business Covenants) other than pursuant to the Sections set forth in clause (a) of Subsection 9.1.5 (Certain Covenant Defaults) above; provided, that a Default by Parent or the Borrower under the covenants in Article 7 (Financial Covenants) (a “Financial Covenant Event of Default”) shall not constitute a Default or Event of Default with respect to the Term B Facility unless and until the Required Financial Covenant Lenders shall have accelerated Financial Covenant Indebtedness and terminated the RC Commitment as a result of such Event of Default (such period commencing with a Default under Article 7 (Financial Covenants) and ending on the date on which the Required Financial Covenant Lenders accelerate the Financial Covenant Indebtedness and terminate the RC Commitment, the “Term B Loan Standstill Period”) and such declaration has not been rescinded on or prior to the date on which the Lenders with respect to the Term B Facility, Term B Loans, Refinancing Term B Indebtedness or Incremental Term B Loans, as applicable, declare an Event of Default in connection therewith.

9.1.6 Other Covenant Defaults. If there shall occur any default in the due performance or observance of any term, covenant or agreement to be performed or observed pursuant to the provisions of this Agreement, other than as provided in Subsections 9.1.1 (Failure to Pay Principal or Reimbursement Obligations), 9.1.2 (Failure to Pay Interest, Fees, Etc.), 9.1.3 (Cross Default to Indebtedness) and 9.1.5 (Certain Covenant Defaults), or any agreement incidental hereto (other than as provided in Subsection 9.1.7 (Other Loan Document Defaults; Security) and, if capable of being remedied, such default shall continue unremedied for thirty (30) days after the commencement of such default; or

9.1.7 Other Loan Document Defaults; Security. If any Loan Party shall fail to perform any of its obligations under any Loan Documents (after taking into account any applicable cure period set forth in such agreements); or if the validity of this Agreement or any of the other Loan Documents shall have been challenged or disaffirmed by or on behalf of any of such parties thereto; or if, other than as a direct result of any action or inaction of the Administrative Agent, the Issuing Bank or the Lenders, the Liens created or intended to be

 

-125-


created by any of the Loan Documents on any material amount of collateral shall at any time cease to be valid and perfected first priority Liens in favor of the Administrative Agent (for the benefit of the Secured Parties), subject to no equal or prior Liens except Permitted Liens and subject to Permitted Perfection Limitations; or if any court or other Governmental Authority shall issue a judgment, order, decree or ruling to the effect that any material covenant, agreement or obligation of any Loan Party under any Loan Document is illegal, invalid or unenforceable; or

9.1.8 Custody or Control of Assets. If custody or control of any substantial part of the property of the Borrower or the Guarantors shall be assumed by any Governmental Authority or any court of competent jurisdiction, or any other Person at the insistence of any Governmental Authority or any court of competent jurisdiction; or

9.1.9 Discontinuance of Business. If the Borrower or any of the Specified Subsidiaries shall suspend for more than ten (10) consecutive Business Days or discontinue their business or any Material Line of Business; or

9.1.10 Insolvency. (a) If Parent, the Borrower or any of the Specified Subsidiaries shall (i) make an assignment for the benefit of creditors or a composition with creditors, (ii) generally not be paying its debts as they mature, (iii) admit its inability to pay its debts as they mature, (iv) file a petition in bankruptcy, (v) become insolvent (howsoever such insolvency may be evidenced), (vi) be adjudicated insolvent or bankrupt, (vii) petition or apply to any tribunal for the appointment of any receiver, custodian, liquidator or trustee of or for it or any substantial part of its property or assets, or (viii) commence any proceeding relating to it under any Debtor Relief Law; or (b) if there shall be commenced against Parent, the Borrower or any of the Specified Subsidiaries any such proceeding and the same shall not be dismissed within thirty (30) days or an order, judgment or decree approving the petition in any such proceeding shall be entered against Parent, the Borrower or any of the Specified Subsidiaries; or (c) if Parent, the Borrower or any of the Specified Subsidiaries shall have concealed, removed, or permitted to be concealed or removed, any part of its property, with intent to hinder, delay or defraud its creditors, or any of them, or shall have made or suffered a transfer of any of its property which may be fraudulent under any Debtor Relief Law including any fraudulent transfer or fraudulent conveyance or similar Law; or (d) if Parent, the Borrower or any of the Specified Subsidiaries shall have made any transfer of its property to or for the benefit of a creditor which constitutes a preferential transfer under any Debtor Relief Law; or (e) if Parent, the Borrower or any of the Specified Subsidiaries shall have suffered or permitted, while insolvent, any creditor to obtain a lien upon any of its property through legal proceedings or distraint; or

9.1.11 Change of Control. If there shall occur a Change of Control; or

9.1.12 Subordination. If the obligations purported to be subject to any subordination agreement in favor of the Administrative Agent and the Lenders in respect of the Obligations cease to be fully subordinated to all of the Obligations; or

9.1.13 Swap Agreements. If Parent or any of its Subsidiaries shall default in any payment when due (after giving effect to any applicable grace or cure periods) of any obligations under any Swap Agreement entered into with any Swap Party, regardless of the amount involved in such default, and any termination event (or equivalent or analogous event or action) shall have resulted therefrom; or

 

-126-


9.1.14 Judgments. If any judgment or judgments or assessment or assessments for the payment of money in excess of the Threshold Amount in the aggregate (except to the extent covered by insurance) shall be rendered against Parent or any of its Subsidiaries and such judgment remains either unstayed or unsatisfied for a period of thirty (30) days or more.

9.2 ACCELERATION; REMEDIES.

9.2.1 Acceleration upon Insolvency. Upon the occurrence of any event described in Subsection 9.1.10 (Insolvency), the entire unpaid principal balance of the Loans, and interest accrued and premium, if any, thereon, and any unpaid accrued Commitment Fees and all other amounts accrued hereunder or under the other Loan Documents, shall be immediately due and payable by the Borrower and the Commitments shall terminate without presentment, demand, protest, notice of protest or other notice of dishonor of any kind, all of which are hereby expressly waived by the Borrower.

9.2.2 Acceleration upon Other Defaults. Upon the occurrence of any Event of Default other than any event described in Subsection 9.1.10 (Insolvency), or at any time thereafter if any Event of Default shall then be continuing, the Administrative Agent shall, if directed by the Majority Lenders (or, if a Financial Covenant Event of Default (and no other Event of Default not resulting from such Financial Covenant Event of Default) shall have occurred and is continuing at a time when the Term B Loan Standstill Period has not expired, then at the request of, or with the consent of, the Required Financial Covenant Lenders only, and in such case only with respect to the Financial Covenant Indebtedness), (a) by written notice to the Borrower, declare the entire unpaid principal balance or any portion of the principal balance of all or any of the Loans, and interest accrued and premium, if any, thereon and any unpaid accrued Commitment Fees and all other amounts accrued hereunder or under the other Loan Documents (or only the Financial Covenant Indebtedness, as applicable), to be immediately due and payable by the Borrower, and/or (b) terminate the Commitment.

9.2.3 Remedies in General. In the event of acceleration pursuant to Subsection 9.2.1 (Acceleration upon Insolvency) or Subsection 9.2.2 (Acceleration upon Other Defaults), all principal and interest, premium, fees, and other amounts (or just the Financial Covenant Indebtedness, as applicable) shall thereupon become and be immediately due and payable, without presentation, demand, protest, notice of protest or other notice of dishonor of any kind, all of which are hereby expressly waived by the Borrower; and the Administrative Agent (acting directly or through appointment of one or more trustees of the Administrative Agent’s choosing) may proceed to protect and enforce its rights and those of the Issuing Bank and the Lenders under the Loan Documents in any manner or order it deems expedient without regard to any equitable principles of marshalling or otherwise. In addition to all other rights hereunder or under Law, the Administrative Agent shall have the right to institute proceedings in equity or other appropriate proceedings for the specific performance of any covenant or agreement made in any of the Loan Documents or for an injunction against the violation of any of the terms of any of the Loan Documents or in aid of the exercise of any power granted in any

 

-127-


of the Loan Documents or by Law or otherwise. Further, the Administrative Agent shall be entitled to the appointment of a trustee or receiver for all or any part of the businesses of Parent or any of its Subsidiaries, which trustee or receiver shall have such powers as may be conferred by the appointing authority. All rights and remedies given by this Agreement, the Notes and the other Loan Documents are cumulative and not exclusive of any of such rights or remedies or of any other rights or remedies available to the Administrative Agent, the Issuing Bank or any Lender, and no course of dealing between Parent or any of its Subsidiaries, on one hand, and the Administrative Agent, the Issuing Bank or any Lender, on the other hand, or any delay or omission in exercising any right or remedy shall operate as a waiver of any right or remedy, and every right and remedy may be exercised from time to time and as often as shall be deemed appropriate by the Administrative Agent.

9.3 PROCEEDS OF COLLATERAL.

Following an Event of Default and acceleration of the Obligations, the Administrative Agent shall apply proceeds of Collateral as follows:

First, to payment of that portion of the Secured Obligations constituting fees, expenses (including expenses relating to attorneys’ fees and other professionals’ fees), indemnities and other amounts due to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Secured Obligations constituting accrued and unpaid interest and accrued and unpaid Commitment Fees or other fees, ratably amongst the Secured Parties in proportion to the respective amounts described in this clause “Second” due to them;

Third, to payment of that portion of the Secured Obligations constituting unpaid principal of the Loans, reimbursement obligations under Letters of Credit and obligations arising out of Swap Agreements entered into with Swap Parties, ratably amongst the Secured Parties in proportion to the respective amounts described in this clause “Third” due to them;

Fourth, to payment of all other Secured Obligations, ratably amongst the Secured Parties in proportion to the respective amounts described in this clause “Fourth” due to them; and

Finally, the balance, if any, after all of the Secured Obligations have been satisfied, to the Borrower or its applicable Subsidiary or as otherwise required by Law.

Notwithstanding the foregoing, (a) Cash Collateral provided to specifically secure LC Obligations shall first be applied against any outstanding LC Obligations and (b) proceeds of Guaranties provided by Loan Parties who are not “eligible contract participants” within the meaning of the Commodity Exchange Act and proceeds of Collateral securing those Guaranties shall not be applied to any Swap Obligations.

 

-128-


ARTICLE 10

AGENCY

10.1 APPOINTMENT AND AUTHORITY.

Each of the Lenders and the Issuing Bank hereby irrevocably appoints M&T to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Bank, and neither the Borrower nor any other Loan Party shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative 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 is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

Without limiting the generality of the foregoing, the Lenders and the Issuing Bank hereby authorize the Administrative Agent (in its sole discretion):

(a) in connection with the sale or other disposition of any asset included in the Collateral or all of the Capital Stock of any Guarantor, to the extent undertaken in accordance with the terms of this Agreement, to release a Lien granted to it (for the benefit of the Secured Parties) on such asset or Capital Stock and/or to release such Guarantor from its obligations hereunder;

(b) to determine that the cost to the Borrower is disproportionate to the benefit to be realized by the Administrative Agent, the Lenders and the other Secured Parties by perfecting a Lien in a given asset or group of assets included in the Collateral and that the Borrower should not be required to perfect such Lien in favor of the Administrative Agent (for the benefit of the Secured Parties);

(c) to appoint subagents to be the holder of record of a Lien to be granted to the Administrative Agent (for the benefit of the Secured Parties) or to hold on behalf of the Administrative Agent the Collateral or instruments relating thereto;

(d) to enter into and perform its obligations under the other Loan Documents; and

(e) to execute and deliver the agreements contemplated by Section 11.5 (Amendments, Waivers and Consents).

In addition to any other rights and remedies hereunder or under the other Loan Documents or applicable Law, upon the occurrence and during the continuance of an Event of Default, each of the Secured Parties hereby authorizes the Administrative Agent to take such

 

-129-


actions on behalf of the Secured Parties and to exercise such powers as are delegated to the Administrative Agent by the terms hereof and the other Loan Documents together with such actions and powers as are reasonably incidental thereto and exercise any other rights and remedies under applicable law, in the name of the Secured Parties or otherwise, including sell, assign, lease, license (on an exclusive or nonexclusive basis) or otherwise dispose of the Collateral or any part thereof in one or more parcels at public or private sale, at any of the Administrative Agent’s offices or elsewhere, for cash, on credit or for future delivery, at such time or times and at such price or prices and upon such other terms as the Administrative Agent may deem commercially reasonable and to credit bid any or all of the Secured Obligations on behalf of the Secured Parties in connection with any sale or other disposition of any or all assets or equity of any or all Loan Parties.

10.2 RIGHTS AS A LENDER.

The Person serving as the Administrative Agent hereunder 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 the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for, and generally engage in any kind of business with Parent or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

10.3 EXCULPATORY PROVISIONS.

10.3.1 Limited Duties. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or an Event of Default has occurred and is continuing,

(b) shall not 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 the Administrative Agent is required to exercise as directed in writing by the Majority 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 the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law and shall be entitled to confirmation by the Lenders of their indemnification of the Administrative Agent for any such actions, and

 

-130-


(c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not 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 the Administrative Agent or any of its Affiliates in any capacity.

10.3.2 Further Limitations on Liability.

(a) The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Majority Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.5 (Amendments, Waivers and Consents) and 9.2 (Acceleration; Remedies) or (ii) in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Event of Default unless and until notice describing such Event of Default is given to the Administrative Agent by the Borrower, a Lender or the Issuing Bank which notice states that it is a “Notice of Default” or a “Notice of an Event of Default.”

(b) The Administrative Agent shall not 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 including any Liens provided for herein or therein, or (v) the satisfaction of any condition set forth in Article 4 (Conditions to Fundings and Issuances of Letters of Credit) or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

(c) The Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified Institutions. Without limiting the generality of the foregoing, the Administrative Agent shall not (x) be obligated to ascertain, monitor or inquire as to whether any Lender or Participant or prospective Lender or Participant is a Disqualified Institution or (y) have any liability with respect to or arising out of any assignment or participation of Loans, or disclosure of confidential information, to any Disqualified Institution.

10.4 RELIANCE BY ADMINISTRATIVE AGENT.

The Administrative Agent 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 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. The Administrative Agent 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, or the issuance, extension, renewal or increase of a Letter of

 

-131-


Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the Issuing Bank, the Administrative Agent may presume that such condition is satisfactory to such Lender or the Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or the Issuing Bank prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. As of the date of this Agreement, counsel to the Administrative Agent is Drinker Biddle & Reath LLP and the Lenders acknowledge that said counsel is only representing the Administrative Agent in connection with the matters herein; each Lender acknowledges that it has or may consult with separate legal counsel to the extent it deems appropriate at its sole cost and expense; provided, that nothing in this Section 10.4 shall expand or limit the Lenders’ rights pursuant to Subsection 11.14.1 (Costs and Expenses).

10.5 DELEGATION OF DUTIES.

The Administrative 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 any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent 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 and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents. Should any instrument in writing from the Borrower or any other Loan Party be required by any sub-agent so appointed by the Administrative Agent for more fully and certainly vesting in and confirming to it such rights, powers, privileges and duties, the Borrower shall, or shall cause such Loan Party to, execute, acknowledge and deliver any and all such instruments promptly upon reasonable request by the Administrative Agent or such sub-agent.

10.6 RESIGNATION OF ADMINISTRATIVE AGENT.

The Administrative Agent may at any time give notice of its resignation to the Lenders, the Issuing Bank and the Borrower. Upon receipt of any such notice of resignation, the Majority Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a Lender, or an Affiliate of a Lender. If no such successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent meeting the qualifications set forth above; provided, that if the Administrative Agent shall notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in accordance with such notice and (1) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents

 

-132-


(except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the Issuing Bank under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the Issuing Bank directly, until such time as the Majority Lenders appoint a successor Administrative Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring (or retired) Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article 10 and Section 11.14 (Expenses; Indemnity; Damage Waiver) shall continue in effect for the benefit of such retiring Administrative 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 Administrative Agent was acting as Administrative Agent.

10.7 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.

Each Lender and the Issuing Bank acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties 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 and the Issuing Bank also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties 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.

10.8 LEAD ARRANGERS; CO-DOCUMENTATION AGENTS.

(a) Anything herein to the contrary notwithstanding, no Lead Arranger, in its capacity as such, or any other Person acting as an arranger or bookrunner or in a similar capacity with respect to any Incremental Extension of Credit, Refinancing Term Loan Indebtedness, Refinancing RC Indebtedness, Repricing Event or other transaction relating to the Loan Documents or the Facilities shall have any duties or responsibilities hereunder or under any other Loan Documents. Without limiting the foregoing, no Lead Arranger or such other Person shall be liable to any party hereto for any actions such Person may take or fail to take in such capacity.

(b) Anything herein to the contrary notwithstanding, no co-documentation agent, in its capacity as such, or any other Person acting as a documentation agent or in a similar capacity with respect to any Incremental Extension of Credit, Refinancing Term

 

-133-


Loan Indebtedness, Refinancing RC Indebtedness, Repricing Event or other transaction relating to the Loan Documents or the Facilities shall have any powers, duties or responsibilities hereunder or under any other Loan Documents. Without limiting the foregoing, no co-documentation agent or such other Person shall be liable to any party hereto for any actions such Person may take or fail to take in such capacity.

10.9 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.

In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or LC Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Obligations and all other Secured 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 the Lenders, the Issuing Bank and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Bank and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Bank and the Administrative Agent constituting Secured Obligations allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and Issuing Bank to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Bank, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent hereunder or under any other Loan Document.

10.10 COLLATERAL AND GUARANTY MATTERS.

The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion:

(a) to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (x) upon termination of all Commitments and payment in full of all Obligations (other than contingent indemnification obligations) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Administrative Agent and the applicable Issuing Bank shall have been made) as more fully set forth in Section 11.16 (Termination of Security; Partial Release of Security), (y) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part

 

-134-


of or in connection with any sale or other disposition permitted under the Loan Documents as more fully set forth in Section 11.16 (Termination of Security; Partial Release of Security), or (z) subject to Section 11.5 (Amendments, Waivers and Consents), if approved, authorized or ratified in writing by the Majority Lenders;

(b) to release any Subsidiary Guarantor from its obligations under the Suretyship Agreements if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents; and

(c) to release from the Collateral the Capital Stock of one or more Target Mexican Subsidiaries owned by any Subsidiary Guarantor as of the Closing Date at such time as it is transferred in accordance with a Permitted Maquiladora Restructuring and to release the Maquiladora Holding Subsidiary as a Guarantor and to release from Collateral the assets (including, specifically, the shares of such Target Mexican Subsidiary) and/or Capital Stock of the Maquiladora Holding Subsidiary, in each case, in connection with such Permitted Maquiladora Restructuring.

Except as otherwise expressly set forth herein or in any Loan Document that specifically references such Person, no provider of Banking Services and no Swap Party or any other Secured Party that obtains the benefits of any Collateral by virtue of the provisions hereof or of any other Loan Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents.

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

10.11 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 assignees, may rely on the Administrative Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the 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 or in connection with the Borrower, its Affiliates or its agents, this Agreement, the other documents or the transactions hereunder or contemplated hereby: (a) any identity verification procedures, (b) any record-keeping, (c) comparisons with government lists, (d) customer notices or (e) other procedures required under the CIP Regulations or such other laws.

 

-135-


10.12 NO ADVISORY OR FIDUCIARY RESPONSIBILITY.

In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower acknowledges and agrees that: (a) (i) the arranging and other services regarding this Agreement provided by the Administrative Agent and the Lenders are arm’s-length commercial transactions between the Borrower and its Affiliates, on the one hand, and the Administrative Agent and the Lenders, on the other hand, (ii) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (b) (i) each of the Lenders is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for the Borrower or any of its Affiliates, or any other Person and (ii) no Lender has any obligation to the Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (c) each of the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower and its Affiliates, and no Lender has any obligation to disclose any of such interests to the Borrower or its Affiliates. To the fullest extent permitted by law, the Borrower hereby waives and releases any claims that it may have against each of the Administrative Agent and the Lenders with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

ARTICLE 11

MISCELLANEOUS

11.1 NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.

11.1.1 Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in Subsection 11.1.2 (Electronic Communications)), 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 facsimile as follows:

(a) if to Parent, the Borrower or any other Loan Party, to it at 10000 Wehrle Drive, Clarence New York 14031, Attention of Michael Dinkins (Facsimile No. (214) 618- 5246; Telephone No. (214) 618-5242) and Timothy G. McEvoy (Facsimile No. (716) 759-5028); Telephone No. (716) 759-5623 and a copy to Hodgson Russ LLP, 140 Pearl Street, Suite 100, Buffalo, NY 14202-4040 (Facsimile No. (716) 819-4714; Telephone No. (716) 848-1757), Attention of Christofer C. Fattey (which copy shall not constitute notice);

(b) if to the Administrative Agent, to it at One Fountain Plaza, Buffalo, New York, 14203, Attention: Michael Prendergast (Facsimile No. (716) 848-7318; Telephone No. (716) 848-7304) and a copy to 25 South Charles Street, 12th Floor, Baltimore, Maryland 21201, Attention of Hugh Giorgio (Facsimile No. (410) 244-4477; Telephone No. (410) 244-3849)

 

-136-


and a copy to Drinker Biddle & Reath LLP, One Logan Square, Suite 2000, Philadelphia, Pennsylvania 19103 (Facsimile No. (215) 988-2757; Telephone No. (215) 988-2665), Attention of Jill Bronson (which copy shall not constitute notice);

(c) if to the Issuing Bank, to it at One Fountain Plaza, Buffalo, New York, 14203, Attention: Michael Prendergast (Facsimile No. (716) 848-7318; Telephone No. (716) 848-7304) and a copy to 25 South Charles Street, 12th Floor, Baltimore, Maryland 21201, Attention of Hugh Giorgio (Facsimile No. (410) 244-4477; Telephone No. (410) 244-3849) and a copy to Drinker Biddle & Reath LLP, One Logan Square, Suite 2000, Philadelphia, Pennsylvania 19103 (Facsimile No. (215) 988-2757; Telephone No. (215) 988-2665), Attention of Jill Bronson (which copy shall not constitute notice); and

(d) if to a Lender, to it at its address (or facsimile 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 facsimile 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 Subsection 11.1.2 (Electronic Communications), shall be effective as provided in Subsection 11.1.2 (Electronic Communications). In the event of a discrepancy between any telephonic and any written notice, the written notice shall control. Any Lender giving any notice to the Borrower shall send simultaneously a copy of such notice to the Administrative Agent.

11.1.2 Electronic Communications. Notices and other communications to the Lenders and the Issuing Bank hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided, that the foregoing shall not apply to notices to any Lender or Issuing Bank pursuant to Section 2.12 (Mechanics of Payments; Lender Payments) or Subsection 3.1.7 (Participation by Lenders). If such Lender or Issuing Bank, as applicable, has notified the Administrative Agent that is incapable of receiving notices under such Sections by electronic communication, the Administrative Agent 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; provided, that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (a) 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 (b) 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 (a) of notification that such notice or communication is available and identifying the website address therefor.

 

-137-


11.1.3 Change of Address, Etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

11.1.4 Platform; MNPI.

(a) The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make the Communications (as defined below) available to the Issuing Bank and the other Lenders by posting the Communications on Debt Domain, Intralinks, Syndtrak or a substantially similar electronic transmission system (the “Platform”).

(b) The Borrower hereby acknowledges that (i) the Administrative Agent will make available to the Lenders and the Issuing Bank materials and/or information provided by, or on behalf of, Parent and its Subsidiaries hereunder or in connection herewith (collectively, the “Borrower Materials”) by posting the Borrower Materials on the Platform and (ii) certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive MNPI) (each, a “Public Lender”). The Borrower hereby agrees that: (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, the Lead Arrangers and the Lenders to treat such Borrower Materials as not containing any MNPI (provided that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.13); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Investor” (or equivalent); and (z) the Administrative Agent shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not marked as “Public Investor” (or equivalent). Notwithstanding the foregoing, the following Borrower Materials shall be deemed to be marked “PUBLIC” (unless the Borrower notifies the Administrative Agent promptly prior to the distribution thereof that any such document contains MNPI, in which case the Borrower agrees that it shall (or shall cause Parent to) promptly publicly disclose such document such that it no longer contains MNPI): (i) the Loan Documents (including all exhibits and schedules thereto), (ii) notification of changes in the terms of the Facilities, (iii) all information, reports, documents and certificates delivered pursuant to Subsections 6.1.1, 6.1.2 and 6.1.3 and (iv) the DQ List.

(c) Each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable law, including United States Federal and state securities laws, to make reference to Communications that are not made available through the “Public Side Information” portion of the Platform and that may contain MNPI.

(d) The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the adequacy of the Platform and expressly disclaim liability for errors or omissions in the Communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a

 

-138-


particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Communications or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower or the other Loan Parties, any Lender or any other Person or entity for damages of any kind, including, without limitation, direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of the Borrower’s, any Loan Party’s or the Administrative Agent’s transmission of communications through the Platform. “Communications” means, collectively, any notice, demand, communication, information, document or other material that the Borrower or any Loan Party provides to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein which is distributed to the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through the Platform.

11.2 SURVIVAL OF REPRESENTATIONS.

All representations and warranties contained in the Loan Documents shall survive the making of the Loans and the issuance of the Letters of Credit and shall not be waived by the execution and delivery of this Agreement or any investigation by the Administrative Agent, the Issuing Bank or the Lenders.

11.3 NO IMPLIED WAIVERS.

No failure or delay on the part of the Administrative Agent, the Issuing Bank or any Lender in exercising any right, power or privilege under the Loan Documents and no course of dealing between Parent or any of its Subsidiaries, on the one hand, and the Administrative Agent, the Issuing Bank or any Lender, on the other hand, shall operate as a waiver of any such right, power or privilege. No single or partial exercise of any right, power or privilege under the Loan Documents precludes any other or further exercise of any such right, power or privilege or the exercise of any other right, power or privilege. The rights and remedies expressly provided in the Loan Documents are cumulative and not exclusive of any rights or remedies that the Administrative Agent, the Issuing Bank or any Lender would otherwise have. No notice to or demand on Parent or the Borrower in any case shall entitle Parent or the Borrower to any other or further notice or demand in similar or other circumstances or shall constitute a waiver of the right of the Administrative Agent, the Issuing Bank or any Lender to take any other or further action in any circumstances without notice or demand. Any waiver that is given shall be effective only if in writing and only for the limited purposes expressly stated in the applicable waiver.

11.4 SEVERABILITY.

Every provision of the Loan Documents is intended to be severable. If any term or provision of the Loan Documents shall be invalid, illegal or unenforceable for any reason, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired thereby. Any invalidity, illegality or unenforceability of any term or provision of the Loan Documents in any jurisdiction shall not affect the validity, legality or enforceability of any such term or provision in any other jurisdiction.

 

-139-


11.5 AMENDMENTS, WAIVERS AND CONSENTS.

11.5.1 In General. This Agreement and the other Loan Documents may not be amended or modified except by a written instrument describing such amendment or modification executed by the Borrower and the Administrative Agent with the consent of the necessary Lenders, as applicable, as provided in this Subsection 11.5.1. With the written consent of the Majority Lenders (other than with respect to any amendment or waiver contemplated in clause (l) below, which shall only require the consent of the Required Financial Covenant Lenders), the Administrative Agent may, on behalf of the Lenders, enter into agreements that modify, amend or supplement this Agreement or any other Loan Document, and with such consent, the Administrative Agent may waive compliance with any provision of any of the Loan Documents, all as referred to in this Subsection 11.5.1. However, no such modification, amendment, supplement or waiver shall:

(a) increase the maximum amount of the RC Commitment, the Term A Commitment or the Term B Commitment of any Lender without such Lender’s written consent;

(b) extend the Maturity Date or any scheduled amortization or date for payment of principal or interest on the Loans or fee under Subsection 2.7.1 (Commitment Fees), Subsection 3.1.6 (Fees) or other fees payable hereunder of any Lender without such Lender’s written consent (it being understood that the extension contemplated by Section 2.18 (Extension of Maturity Date) shall not be deemed an amendment subject to this clause (b));

(c) amend the interest rate provisions hereof to decrease the rate of interest or fees payable to any Lender without such Lender’s written consent; provided, that the written consent of the Majority Lenders, rather than the consent of all Lenders, shall be sufficient to waive imposition of the Default Rate pursuant to Subsection 2.8.6 (Default Rate); and provided, further, that any amendment to the financial covenant definitions in this Agreement shall not constitute a reduction in the rate of interest for purposes of this clause (c);

(d) reduce the principal amount of Loans due to any Lender without such Lender’s written consent;

(e) reduce the amount of the fees payable under Subsection 2.7.1 (Commitment Fees), Subsection 3.1.6 (Fees) or other fees, payable to any Lender without such Lender’s written consent;

(f) amend Subsections 2.11.3 (Disbursements from Administrative Agent to Lenders) or 2.11.4 (Sharing of payments by Lenders) in a manner that would alter the pro rata sharing of payments required thereby without the consent of the each Lender directly and adversely affected thereby (it being understood that transactions contemplated by Sections 2.18 (Extension of Maturity Date) and 2.19 (Refinancing Facilities) and Subsections 2.1.11 (Incremental Extensions of Credit), 2.7.3 (Repricing Event) and 11.6.7 (Borrower Buybacks) shall not be deemed to alter such pro rata sharing of payments);

(g) amend Section 9.3 (Proceeds of Collateral) without the consent of each Lender directly and adversely affected thereby;

 

-140-


(h) amend, modify or waive the provisions of this Section 11.5 without each Lender’s written consent;

(i) amend or modify the definition of (i) “Majority Lenders” without each Lender’s written consent; provided, however, if this Agreement is amended to provide for additional tranches of revolver or term Indebtedness hereunder, the definition of “Majority Lenders” may be amended to accommodate such new tranches in a manner similar to the existing Loans and Commitments with the consent of the Lenders constituting the Majority Lenders (determined without giving effect to such amendment), or (ii) “Required Financial Covenant Lenders” without the consent of each Lender holding Loans or Commitments under the Financial Covenant Indebtedness;

(j) release all or substantially all of the guaranties (or value thereof) or all or substantially all of the Collateral (or value thereof) that secures the Obligations without each Lender’s written consent; provided, however, the Administrative Agent may without the consent of any Person release any Guarantor or any Collateral granted pursuant to the Loan Documents and file UCC-3 termination statements or statements of amendment or take other appropriate action (i) as a court of competent jurisdiction may direct, (ii) in connection with a disposition (other than to Parent or any of its Subsidiaries) permitted under Subsection 8.7.2 (Sales and Other Dispositions) or as otherwise provided under the Loan Documents, (iii) if, in accordance with and to the extent required by this Agreement, cash proceeds from any sale or transfer of the Collateral are used to prepay outstanding sums due under this Agreement or are reinvested in Parent and its Subsidiaries or (iv) as otherwise provided in the Loan Documents;

(k) waive an Event of Default under Subsection 9.1.1 (Failure to Pay Principal or Reimbursement Obligations) or 9.1.2 (Failure to Pay Interest, Fees, Etc.) (other than in respect of the imposition of the Default Rate and other than as a result of an acceleration of only Financial Covenant Indebtedness resulting from a Financial Covenant Event of Default) after such Event of Default shall have occurred without each Lender’s written consent (but the Majority Lenders may direct the Administrative Agent to forbear under such circumstances and the Majority Lenders may rescind any acceleration of the Obligations (or in the case of Obligations in respect of Financial Covenant Indebtedness only accelerated upon a Financial Covenant Event of Default, such acceleration may be rescinded by the Required Financial Covenant Lenders));

(l) (i) amend, waive or otherwise modify Article 7 (Financial Covenants) or the defined terms used in Article 7 (Financial Covenants), or (ii) waive any Financial Covenant Event of Default, in each case, without the consent of the Required Financial Covenant Lenders (and, for the avoidance of doubt, without the need for any consent by any other Lenders or the Majority Lenders);

(m) waive an Event of Default under Subsection 9.1.1 (Failure to Pay Principal or Reimbursement Obligations) or 9.1.2 (Failure to Pay Interest, Fees, Etc.) as it relates only to Financial Covenant Indebtedness that has been accelerated in connection with a Financial Covenant Event of Default without the written consent of each Lender (other than Defaulting Lenders) holding any Financial Covenant Indebtedness (but the Required Financial Covenant Lenders may direct the Administrative Agent to forbear under such circumstances);

 

-141-


(n) amend or modify the definition of “Required Financial Covenant Lenders” without the consent of each Lender directly affected thereby; or

(o) amend Subsection 2.7.3 (Repricing Event) without the consent of each of the Term B Lenders holding Initial Term B Loans or Commitments in respect thereof.

In addition to the foregoing, no amendment, modification or waiver shall affect the rights or obligations of (i) the Administrative Agent without the written consent of the Administrative Agent, (ii) the Issuing Bank without the written consent of the Issuing Bank, or (iii) the Swingline Lender without the written consent of the Swingline Lender.

Notwithstanding any of the foregoing, (1) any provision of this Agreement or any other Loan Document may be amended by an agreement in writing entered into by the Borrower and the Administrative Agent to cure any ambiguity, omission, mistake, defect or inconsistency so long as, in each case, the Lenders shall have received at least five (5) Business Days’ prior written notice thereof and the Administrative Agent shall not have received, within five (5) Business Days of the date of such notice to the Lenders, a written notice from (x) the Majority Lenders stating that the Majority Lenders object to such amendment or (y) if affected by such amendment, the Swingline Lender or any Issuing Bank stating that it objects to such amendment, (2) this Agreement may be amended to provide for Incremental Extensions of Credit in the manner contemplated by Subsection 2.1.11 (Increases in Facility), the extension of the Maturity Date as provided in Section 2.18 (Extension of Maturity Date) and the incurrence of Refinancing Term Loan Indebtedness and Refinancing RC Indebtedness as provided in Section 2.19 (Refinancing Facilities), in each case without any additional consents, (3) any fee letters in connection herewith may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (4) subject to clause (c) of Subsection 11.6.8 (Disqualified Institution), each Lender is entitled to vote as such Lender sees fit on any Bankruptcy Plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein, (5) the Majority Lenders shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders, (6) only the written consent of the Borrower, Required Financial Covenant Lenders and the Administrative Agent shall be required to amend, waive or otherwise modify any term or provision of Article 7 (Financial Covenants) (in each case, including any definitions used therein) or Section 9.1.5 (Certain Covenant Defaults) (solely as it relates to Article 7 (Financial Covenants)).

11.5.2 Other Amendments. No modification, amendment, supplement or waiver of any provision of this Agreement shall be made that would reduce or extend the date of payment for reimbursement obligations in respect of Letters of Credit without the consent of the Issuing Bank and all Lenders having a participation interest therein.

11.5.3 Exception. Notwithstanding the foregoing provisions of this Section 11.5 or anything to the contrary contained in this Agreement, any Lender that has requested that it not receive material, non-public information concerning the Borrower, and that is therefore unable or unwilling to vote with respect to an issue arising under this Agreement, will agree to vote, and will be deemed to have voted, its Commitment and Loans under this Agreement pro rata in accordance with the percentage of Commitments and Loans voted in favor of, and the percentage of Commitments and Loans voted against, any such issue under this Agreement.

 

-142-


11.6 SUCCESSORS AND ASSIGNS.

11.6.1 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 Loan Parties may not assign or otherwise transfer any of their rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (a) to an Eligible Assignee in accordance with the provisions of Subsection 11.6.2 (Assignments by Lenders), (b) by way of participation in accordance with the provisions of Subsection 11.6.4 (Participations) or (c) by way of pledge or assignment of a security interest subject to the restrictions of Subsection 11.6.6 (Certain Pledges), and any other attempted assignment or transfer by any party hereto shall be null and void. 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 Subsection 11.6.4 (Participations) and, to the extent expressly contemplated hereby, the Lead Arrangers and the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

11.6.2 Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided, that (in each case with respect to any Facility) any such assignment shall be subject to the following conditions:

(a) Minimum Amounts.

(i) In the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it (in each case with respect to any Facility) or contemporaneous assignments to related Approved Funds (determined after giving effect to such assignments) that equal at least the amount specified in clause (a)(ii) below or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(ii) in any case not described in the preceding clause (i), the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than Two Million Dollars ($2,000,000), in the case of any assignment in respect of any RC Commitment, or One Million Dollars ($1,000,000), in the case of any assignment in respect of any Term Facility, unless each of the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing, the Borrower otherwise consent (each such consent not to be unreasonably withheld or delayed).

 

-143-


(b) Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or Commitment assigned, except that this clause (b) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate Facilities on a non-pro rata basis.

(c) Required Consents. No consent shall be required for any assignment except to the extent required by Subsection 11.6.1 (Successors and Assigns Generally) and, in addition:

(i) the consent of the Borrower (such consent not to be unreasonably withheld, conditioned or delayed) shall be required unless (x) a Default or Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided, that the Borrower shall be deemed to have consented to any such assignment of an interest in a Term Facility unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice of such assignment; provided, further, that the consent of the Borrower shall not be required for any assignments of Loans or Commitments during the primary syndication of the Facilities to any assignee separately approved by the Borrower to the Lead Arrangers; and

(ii) the consent of the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed) shall be required for assignments in respect of (1) the RC Facility or any unfunded Commitments with respect to a Term Facility if such assignment is to a Person that is not a Lender with a Commitment in respect of such Facility, an Affiliate of such Lender or an Approved Fund with respect to such Lender, or (2) any Term Loans to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund; provided, that the consent of the Administrative Agent shall not be required for any assignments of Term B Loans during the primary syndication of the Term B Facility to any assignee approved by the Lead Arrangers; and

(iii) the consent of the Issuing Bank and Swingline Lender (each such consent not to be unreasonably withheld, conditioned or delayed) shall be required for any assignment in respect of the RC Facility.

(d) Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of Three Thousand Five Hundred Dollars ($3,500); provided, that (i) the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment, (ii) only a single processing and recordation fee (if any) of any Lender shall be payable in respect of multiple contemporaneous assignments by such Lender pursuant to a single Assignment and Assumption and (iii) only a single processing and recordation fee (if any) of any Lender shall be payable in respect of multiple contemporaneous assignments between or to Approved Funds of such Lender. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

 

-144-


(e) No Assignment to Certain Persons. No such assignment shall be made to (i) except, solely with respect to Term B Loans, as permitted by Subsection 11.6.7 (Borrower Buybacks), the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (ii) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (ii), or (iii) any Disqualified Institution (to the extent the DQ List has been made available to the Lenders).

(f) No Assignment to Natural Persons. No such assignment shall be made to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural Person).

(g) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, each Issuing Bank, each Swingline Lender and each other Lender hereunder (and interest accrued thereon), and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swingline Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to Subsection 11.6.3 (Register), from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Subsection 2.8.5 (Breakage), Section 2.9 (Increased Costs; Unavailability) and Section 11.14 (Expenses; Indemnity; Damage Waiver) with respect to the facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

-145-


Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Subsection 11.6.4 (Participations).

11.6.3 Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in the United States a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount (and stated interest) 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 may 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 and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

11.6.4 Participations.

(a) Any Lender may at any time, without the consent of, or notice to, the Administrative Agent, the Swingline Lender, the Issuing Bank or the Borrower, sell participations to 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, or the Borrower or any of the Borrower’s Affiliates or Subsidiaries) (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 Lenders and the Issuing Bank shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any Lender may furnish any information concerning the Borrower in its possession from time to time to prospective Participants; provided, that such Lender shall require any such prospective Participants to agree in writing to maintain the confidentiality of such information as provided in Section 11.13 (Treatment of Certain Information; Confidentiality; Advertisement). For the avoidance of doubt, each Lender shall be responsible for the indemnity under clause (b) of Subsection 2.13.3 (Indemnification) with respect to any payments made by such Lender to its Participant(s).

(b) 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 this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; 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 with respect to the matters specifically referred to in clauses (a), (b), (c) and (i) of Section 11.5.1 (Amendments, Waivers and Consents—In General). Subject to clause (b) of this Subsection 11.6.4 (Participations), the Borrower agrees that each Participant shall be entitled to the benefits of Subsection 2.8.5 (Breakage) and, subject to Subsection 11.6.5 (Limitations Upon Participants Rights), Section 2.9 (Increased Costs; Unavailability) to the same extent as if it were a Lender

 

-146-


and had acquired its interest by assignment pursuant to Subsection 11.6.2 (Assignments by Lenders). To the extent permitted by Law, each Participant also shall be entitled to the benefits of Section 11.11 (Right of Setoff) as though it were a Lender; provided, that such Participant (A) agrees to be subject to Subsection 2.11.4 (Sharing of Payments by Lenders) as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided, that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, 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 this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

11.6.5 Limitations upon Participant Rights. A Participant shall not be entitled to receive any greater payment under Section 2.9 (Increased Costs; Unavailability) than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.13 (Taxes) unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Subsection 2.13.5 (Status of Lenders) as though it were a Lender.

11.6.6 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 or any central bank; provided, that no such pledge or assignment shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

11.6.7 Borrower Buybacks. Notwithstanding anything in this Agreement to the contrary, any Term B Lender may, at any time, assign all or a portion of its Term B Loans on a non-pro rata basis to Parent or a Subsidiary of Parent in accordance with the procedures set forth on Exhibit J, pursuant to an offer made available by Parent or such Subsidiary of Parent to all Term B Lenders on a pro rata basis (a “Dutch Auction”), subject to the following conditions and limitations:

(a) Parent (or its Subsidiary, as applicable) shall represent and warrant, as of the date of the launch of the Dutch Auction and on the date of any such assignment, that neither it, its Affiliates nor any of its respective directors or officers has any MNPI that has not been disclosed to the Term B Lenders generally (other than to the extent any such Term B Lender does not wish to receive MNPI) prior to such date;

 

-147-


(b) immediately and automatically, without any further action on the part of the Borrower, any Lender, the Administrative Agent or any other Person, upon the effectiveness of such assignment of Term B Loans from a Term B Lender to the Borrower, such Term B Loans and all rights and obligations as a Term B Lender related thereto shall, for all purposes under this Agreement, the other Loan Documents and otherwise, be deemed to be irrevocably prepaid, terminated, extinguished, cancelled and of no further force and effect and the Borrower shall neither obtain nor have any rights as a Term B Lender hereunder or under the other Loan Documents by virtue of such assignment;

(c) Parent and its Subsidiaries, collectively, shall have a minimum Liquidity of at least Fifty Million Dollars ($50,000,000) after giving pro forma effect to the proposed assignment;

(d) the Borrower shall be in compliance with the covenants set forth in Article 7 (Financial Covenants) on a pro forma basis after giving effect to the proposed assignment;

(e) no proceeds of any RC Loans shall be used to fund any such purchase by assignment; and

(f) no Default or Event of Default shall have occurred and be continuing before or immediately after giving effect to such assignment.

11.6.8 Disqualified Institutions.

(a) No assignment or participation shall be made to any Person that was a Disqualified Institution as of the date (the “Trade Date”) on which the assigning Lender entered into a binding agreement to sell and assign all or a portion of its rights and obligations under this Agreement to such Person (unless the Borrower has consented to such assignment in writing in its sole and absolute discretion, in which case such Person will not be considered a Disqualified Institution for the purpose of such assignment or participation). For the avoidance of doubt, with respect to any assignee that becomes a Disqualified Institution after the applicable Trade Date (including as a result of the delivery of a notice pursuant to, and/or the expiration of the notice period referred to in, the definition of “Disqualified Institution”), (x) such assignee shall not retroactively be disqualified from becoming a Lender and (y) the execution by the Borrower of an Assignment and Assumption with respect to such assignee will not by itself result in such assignee no longer being considered a Disqualified Institution. Any assignment in violation of this clause (a) shall not be void, but the other provisions of this Subsection 11.6.8 shall apply.

(b) If any assignment or participation is made to any Disqualified Institution without the Borrower’s prior written consent in violation of clause (a) above, or if any Person becomes a Disqualified Institution after the applicable Trade Date, the Borrower may, at its sole expense and effort, upon notice to the applicable Disqualified Institution and the Administrative Agent, (i) terminate any RC Commitment of such Disqualified Institution and

 

-148-


repay all obligations of the Borrower owing to such Disqualified Institution in connection with such RC Commitment, (ii) in the case of outstanding Term Loans held by Disqualified Institutions, purchase or prepay such Term Loan by paying the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Institution paid to acquire such Term Loans, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (iii) require such Disqualified Institution to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 11.6 and Subsection 2.14.2 (Replacement of Lenders), all of its interest, rights and obligations under this Agreement to one or more Eligible Assignees at the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Institution paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder.

(c) Notwithstanding anything to the contrary contained in this Agreement, Disqualified Institutions (i) will not (x) have the right to receive information, reports or other materials provided to Lenders by the Borrower, the Administrative Agent or any other Lender, (y) attend or participate in meetings attended by the Lenders and the Administrative Agent, or (z) access any electronic site established for the Lenders or confidential communications from counsel to or financial advisors of the Administrative Agent or the Lenders and (ii) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Loan Document, each Disqualified Institution will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Institutions consented to such matter, and (y) for purposes of voting on any for purposes of voting on any plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws (each, a “Bankruptcy Plan”), each Disqualified Institution party hereto hereby agrees (1) not to vote on such Plan, (2) if such Disqualified Institution does vote on such Bankruptcy Plan notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws), and such vote shall not be counted in determining whether the applicable class has accepted or rejected such Plan in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws) and (3) not to contest any request by any party for a determination by the Bankruptcy Court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).

(d) The Administrative Agent shall have the right, and the Borrower hereby expressly authorizes the Administrative Agent, to (i) post the list of Disqualified Institutions provided by the Borrower and any updates thereto from time to time (collectively, the “DQ List”) on the Platform, including that portion of the Platform that is designated for “public side” Lenders and/or (ii) provide the DQ List to each Lender requesting the same.

11.7 CALCULATIONS AND FINANCIAL DATA.

Except as otherwise provided in this Agreement, calculations under this Agreement shall be made and financial data and terms referred to in this Agreement shall be prepared and interpreted both as to classification of items and as to amounts in accordance with GAAP.

 

-149-


11.8 DESCRIPTIVE HEADINGS.

The descriptive headings of the several sections of this Agreement are inserted for convenience only and shall not affect the meaning or construction of any of the provisions of this Agreement.

11.9 GOVERNING LAW; JURISDICTION; ETC.

11.9.1 Governing Law. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the Law of the State of New York (excluding the Laws applicable to conflicts or choice of law); provided, however, that solely for purposes of Subsection 4.1.2 (Company Material Adverse Effect) the interpretation of the term “Company Material Adverse Effect” and terms used for purposes of such definition shall be governed by and interpreted in accordance with the law of the State of Delaware (excluding the Laws applicable to conflicts or choice of law).

11.9.2 Submission to Jurisdiction. Each of Parent and the Borrower irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, any Lender, any Issuing Bank, or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York and of the United States District Court of the Southern District of New York, in each case located in New York County, New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined exclusively in such New York state court or, to the fullest extent permitted by applicable Law, in such federal court. Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Notwithstanding the foregoing, nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, any Lender or the Issuing Bank may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any of the Loan Parties or their respective properties in the courts of any jurisdiction.

11.9.3 Waiver of Venue. Each of Parent and the Borrower irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in Subsection 11.9.2 (Submission to Jurisdiction). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

 

-150-


11.9.4 Service of Process. Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 11.1 (Notices; Effectiveness; Electronic Communication). Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable Law.

11.10 MAXIMUM LAWFUL INTEREST RATE.

If, at any time, the rate of interest, together with all amounts that constitute interest and that are reserved, charged or taken hereunder as compensation for fees, services or expenses incidental to the making, negotiating or collecting of the Loans, shall be deemed by a court of law with competent jurisdiction, a governmental agency or a tribunal to exceed the maximum rate of interest permitted to be charged by the Lenders to the Borrower under applicable Law, if such interest, fees and expenses are in excess of the maximum amount permitted by applicable Law, then, during such time as such rate of interest would be deemed excessive, that portion of each sum paid attributable to that portion of such interest rate that exceeds the maximum rate of interest so permitted shall be deemed a voluntary prepayment of the unpaid principal amount due pursuant to this Agreement and the Notes. As used in this Section 11.10, the term “applicable Law” shall mean the Law in effect as of the date hereof; provided, however, that in the event there is a change in the Law that results in a higher permissible rate of interest, then this Agreement shall be governed by such new Law as of its effective date.

11.11 RIGHT OF SETOFF.

If an Event of Default shall have occurred and be continuing, each Lender, the Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the Issuing Bank or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or any other Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or the Issuing Bank, irrespective of whether or not such Lender or the Issuing Bank shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or any other Loan Party may be contingent or unmatured or are owed to a branch or office of such Lender or the Issuing Bank different from the branch or office holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.15 (Defaulting Lenders) and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Bank, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the Issuing Bank or their respective Affiliates may have. Each Lender and the Issuing Bank agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided, that the failure to give such notice shall not affect the validity of such setoff

 

-151-


and application. ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL THAT SECURES THE LOANS, PRIOR TO EXERCISING ITS RIGHT TO SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

11.12 COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION.

11.12.1 Counterparts; Integration; Effectiveness. This Agreement 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 Agreement, the other Loan Documents and any separate fee letters or other letter agreements with respect to fees payable to the Administrative Agent or the Lead Arrangers 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. Except as provided in Article 4 (Conditions to Fundings and Issuance of Letters of Credit), this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

11.12.2 Electronic Execution of Assignments. The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state Laws based on the Uniform Electronic Transactions Act.

11.13 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY; ADVERTISEMENT.

11.13.1 Confidentiality. Each of the Administrative Agent, the Lenders and the Issuing Bank agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in

 

-152-


connection with the exercise of any remedies hereunder or under any other Loan Document or any Swap Agreement with any Lender, Swap Party or any of their respective Affiliates or any action or proceeding relating to this Agreement or any other Loan Document or any Swap Agreement with any Lender, any Swap Party or any of their respective Affiliates or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (ii) any actual or prospective counterparty (or its Related Parties) to any swap or derivative transaction relating to the Borrower and its obligations or (iii) a Federal Reserve Bank or central bank in connection with a pledge or assignment under Subsection 11.6.6 (Certain Pledges); (g) this Agreement or payments hereunder (it being understood that the DQ List may be disclosed to any assignee or Participant, or prospective assignee or Participant, in reliance on this clause (g)) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the Facilities or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Facilities; (h) with the consent of the Borrower; or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the Issuing Bank or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower. Notwithstanding the foregoing, any Lender may disclose Information, without notice to Borrower, to governmental regulatory authorities in connection with any regulatory examination of such Lender or in accordance with such Lender’s regulatory compliance policy.

11.13.2 Information. For purposes of this Section 11.13, “Information” means all information received from Parent or any of its Subsidiaries relating to Parent or any of its Subsidiaries or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the Issuing Bank on a nonconfidential basis prior to disclosure by Parent or any of its Subsidiaries; provided, that in the case of information received from Parent or any of its Subsidiaries after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

11.13.3 Advertisement. Each of Parent and the Borrower hereby authorizes each Lead Arranger and the Administrative Agent to publish the name of Parent and the Borrower and the amount of the financing evidenced hereby in any “tombstone” or comparable advertisement which such Lead Arranger or the Administrative Agent elects to publish. In addition, each of Parent and the Borrower agrees that any Lead Arranger and the Administrative Agent may provide lending industry trade organizations with information necessary and customary (including the amount and type of facilities, the rates and counsel’s name) for inclusion in league table measurements after the Closing Date. Without limiting the generality of the foregoing, each of Parent and the Borrower acknowledges and agrees to the disclosure by any Lead Arranger or the Administrative Agent after the Closing Date of information relating to the Loans to Gold Sheets, and other similar bank trade publications, with such information to consist of deal terms consisting of (a) the Borrower’s name (or Parent’s name, if applicable), (b)

 

-153-


principal loan amounts, (c) interest rates, (d) term length and (e) commitment fees and other fees to the Lenders in the syndicate, the identity of their respective attorneys and other information customarily found in (or reported to) such publications.

11.14 EXPENSES; INDEMNITY; DAMAGE WAIVER.

11.14.1 Costs and Expenses. The Borrower shall pay (a) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, the Lead Arrangers, the Swingline Lender and the Issuing Bank including the fees, charges and disbursements of any counsel for the Administrative Agent, the Lead Arrangers, the Swingline Lender and the Issuing Bank (and fees and time charges for attorneys who may be employees of the Administrative Agent, the Lead Arrangers, any Lender, the Swingline Lender or the Issuing Bank) in connection with the syndication of the Facility, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents and any documents contemplated thereby or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (b) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder, and (c) all out-of-pocket expenses incurred by the Administrative Agent, the Lead Arrangers, any Lender, the Swingline Lender and the Issuing Bank including the fees, charges and disbursements of any counsel for the Administrative Agent, the Lead Arrangers, any Lender, the Swingline Lender or the Issuing Bank (and fees and time charges for attorneys who may be employees of the Administrative Agent, the Lead Arrangers, any Lender, the Swingline Lender or the Issuing Bank), in connection with the enforcement or protection of its rights in connection with this Agreement and the other Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including, all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

11.14.2 Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), the Lead Arrangers, each Lender, and the Issuing Bank, 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 fees, charges and disbursements of any counsel for any Indemnitee and fees and time charges and disbursements for attorneys who may be employees of any Indemnitee), incurred by 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 (a) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or the consummation of the transactions contemplated hereby or thereby, (b) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (c) any actual or alleged presence or Release of Hazardous Substances on or from any property owned or operated by Parent or any of its Subsidiaries, or any environmental liability related in any way to Parent or any of its Subsidiaries or (d) any actual or prospective claim, litigation, investigation or proceeding relating to any of

 

-154-


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 nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document if the Borrower or such Loan Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

11.14.3 Reimbursement by Lenders. To the extent that the Borrower fails to pay any amount required under Subsections 11.14.1 (Costs and Expenses) and 11.14.2 (Indemnification by the Borrower) to be paid by it to the Administrative Agent (or any sub-agent thereof), the Issuing Bank, the Swingline Lender 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 Issuing Bank or any 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 based on each Lender’s share of the Total Facility at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided, that with respect to such unpaid amounts owed to any Issuing Bank or Swingline Lender solely in its capacity as such, only the RC Lenders shall be required to pay such unpaid amounts, such payment to be made severally among them based on such RC Lenders’ Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought); provided, further, 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 Swingline Lender or the Issuing Bank 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 Swingline Lender or Issuing Bank in connection with such capacity. The obligations of the Lenders under this Subsection 11.14.3 are subject to the provisions of Section 2.5 (Lenders’ Obligations Several).

11.14.4 Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, Parent shall not assert, and hereby waives, any claim against any Indemnitee, 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 Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in Subsection 11.14.2 (Indemnification by the Borrower) 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.

11.14.5 Payments. All amounts due under this Section 11.14 shall be payable promptly after demand therefor.

 

-155-


11.14.6 Survival. Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.

11.15 CERTIFICATION OF AMOUNTS; RESPONSIBLE OFFICERS.

11.15.1 Certification of Amounts. The certification by the Administrative Agent, the Issuing Bank, the Swingline Lender or a Lender of the amount of liabilities, losses, costs, expenses, claims and/or charges pursuant to Section 11.14 (Expenses; Indemnity; Damage Waiver) shall be conclusive if such amounts have been computed or reached in a reasonable manner.

11.15.2 Responsible Officers. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

11.16 TERMINATION OF SECURITY; PARTIAL RELEASE OF SECURITY.

11.16.1 Termination of Security. At such time as no Secured Party has any commitment to make financial accommodations to the Borrower pursuant to the terms hereof and all the Obligations (other than contingent indemnification obligations) have been paid in full, then the security interests and other Liens provided for in the Loan Documents shall terminate; provided, however, that all indemnities of the Borrower and each other Loan Party contained in this Agreement or any other Loan Document shall survive and remain operative and in full force and effect regardless of the termination of such security; provided, further, that all such security interests and other Liens shall continue to be effective or be reinstated, as the case may be, if at any time all or part of any payment of any Obligation is rescinded or must otherwise be returned by any Secured Party or any other Person upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise.

11.16.2 Banking Services Obligations and Swap Obligations. Any Banking Services Obligations or obligations of any Loan Party under or arising out of Swap Agreements with any Swap Party (including the Swap Obligations identified in Schedule 5.26(b)) shall be secured and guaranteed pursuant to the Loan Documents only to the extent that, and for so long as, the Obligations are so secured and guaranteed. No Person shall have any voting rights under any Loan Document solely as a result of the existence of obligations owed to it under any such Banking Services agreement or Swap Agreement. For the avoidance of doubt, no release of Collateral or Guarantors effected in the manner permitted by this Agreement or the other Loan Documents shall require the consent of or notice to any holder of obligations under Banking Services agreements or Swap Agreements.

11.16.3 Partial Release of Security. Effective upon the closing of a disposition of any Collateral to any Person (other than to another Loan Party) and the application of proceeds thereof, in each case in compliance with the provisions of this Agreement and the other Loan Documents, the Liens of the Administrative Agent (and the Secured Parties) under the Loan Documents on the assets subject to such disposition shall terminate and effective upon

 

-156-


the transfer of the Capital Stock of a Maquiladora Holding Subsidiary in accordance with a Permitted Maquiladora Restructuring, the Lien of the Administrative Agent on such Capital Stock and on the assets of such Maquiladora Holding Subsidiary shall terminate and, in each case, upon receipt by the Administrative Agent of a certification to such effect from a Financial Officer of the Borrower, the Administrative Agent shall deliver such releases as may be appropriate; provided, however, the Liens granted under the Loan Documents in all remaining Collateral shall remain in full force and effect.

11.17 WAIVER OF JURY TRIAL.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE 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 AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON 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 AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

11.18 PATRIOT ACT NOTICE.

To help fight the funding of terrorism and money laundering activities, federal Law requires all financial institutions to obtain, verify and record information that identifies each Person who opens an account. For purposes of this Section 11.18, account shall be understood to include loan accounts.

[Signature Page Follows]

 

-157-


IN WITNESS WHEREOF, Parent, the Borrower, the Administrative Agent, the Issuing Bank and the Lenders have caused this Agreement to be duly executed by their respective duly authorized officers as of the date first above written.

 

GREATBATCH LTD.
By:  

/s/ Thomas J. Hook

Name:   Thomas J. Hook
Title:   President
GREATBATCH, INC.
By:  

/s/ Thomas J. Hook

Name:   Thomas J. Hook
Title:   President

 

Signature Page to Credit Agreement


MANUFACTURERS AND TRADERS TRUST COMPANY, in its capacity as the Administrative Agent, the Issuing Bank, the Swingline Lender and a Lender
By:  

/s/ Michael J. Prendergast

Name:   Michael J. Prendergast
Title:   Vice President

 

Signature Page to Credit Agreement


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as a Lender
By:  

/s/ Christopher Day

Name:   Christopher Day
Title:   Authorized Signatory
By:  

/s/ Max Wallins

Name:   Max Wallins
Title:   Authorized Signatory

 

Signature Page to Credit Agreement


KEYBANK NATIONAL ASSOCIATION, as a Lender
By:  

/s/ Stacy Moritz

Name:   Stacy Mortiz
Title:   Managing Director

 

Signature Page to Credit Agreement


EVANS BANK, N.A., as a Lender
By:  

/s/ Stephen L. Bojdak

Name:   Stephen L. Bojdak
Title:   Vice President

 

Signature Page to Credit Agreement


BANK LEUMI USA, as a Lender
By:  

/s/ Douglas J. Meyer

Name:   Douglas J. Meyer
Title:   First Vice President
By:  

/s/ Peter J. Dawson

Name:   Peter J. Dawson
Title:   First Senior Vice President

 

Signature Page to Credit Agreement


FRANKLIN SYNERGY BANK, as a Lender
By:  

/s/ Lisa Fletcher

Name:   Lisa Fletcher
Title:   Senior Vice President

 

Signature Page to Credit Agreement


FIRST NIAGARA BANK N.A., as a Lender
By:  

/s/ Joseph R. Murphy

Name:   Joseph R. Murphy
Title:   Vice President

 

Signature Page to Credit Agreement


SIEMENS FINANCIAL SERVICES, INC., as a Lender
By:  

/s/ Maria Levy

Name:   Maria Levy
Title:   Vice President
By:  

/s/ Melissa J. Brown

Name:   Melissa J. Brown
Title:   Sr. Loan Closer

 

Signature Page to Credit Agreement


CTBC BANK CO., LTD., NEW YORK BRANCH, as a Lender
By:  

/s/ Ralph Wu

Name:   Ralph Wu
Title:   SVP & Branch General Manager

 

Signature Page to Credit Agreement


FIFTH THIRD BANK, as a Lender
By:  

/s/ Joshua N. Livingston

Name:   Joshua N. Livingston
Title:   Duly Authorized Signatory

 

Signature Page to Credit Agreement


CITIBANK N.A., as a Lender
By:  

/s/ Christine Keating

Name:   Christine Keating
Title:   Senior Vice President

 

Signature Page to Credit Agreement


HEALTHCARE FINANCIAL SOLUTIONS, LLC, as a Lender
By:  

/s/ Elizabeth Dove

Name:   Elizabeth Dove
Title:   Duly Authorized Signatory

 

Signature Page to Credit Agreement


MUFG UNION BANK, N.A., as a Lender
By:  

/s/ Michael Gardner

Name:   Michael Gardner
Title:   Director

 

Signature Page to Credit Agreement


SUMITOMO MITSUI BANKING CORP., as a Lender
By:  

/s/ David W. Kee

Name:   David W. Kee
Title:   Managing Director

 

Signature Page to Credit Agreement


List of Addenda (Exhibits and Schedules)

EXHIBITS

Exhibit A-1

  

Form of Term A Note (§ 2.6)

Exhibit A-2

  

Form of Term B Note (§ 2.6)

Exhibit A-3

  

Form of RC Note (§ 2.6)

Exhibit A-4

  

Form of Swingline Note (§ 2.6)

Exhibit B

  

Form of Request for Advance (§ 2.3)

Exhibit C

  

Form of LIBOR Election (§ 2.8.4)

Exhibit D

  

Form of Security Agreement (§ 4.1.5(c))

Exhibit E-1

  

Form of Subsidiary Guaranty and Suretyship Agreement (§ 4.1.5(d))

Exhibit E-2

  

Form of Parent Guaranty and Suretyship Agreement (§ 4.1.5(e))

Exhibit F

  

Form of Pledge Agreement (§ 4.1.5(f))

Exhibit G

  

Form of Officer’s Compliance Certificate (§ 1.1)

Exhibit H

  

Form of Assignment and Assumption (§ 11.6.2(d))

Exhibit I

  

Form of Closing Date Solvency Certificate (§ 4.1.5(l))

Exhibit J

  

Dutch Auction Procedures (§ 11.6.7)

SCHEDULES   

Schedule 1.1A

  

Nuvectra Spinoff

Schedule 1.1B

  

Existing Letters of Credit

Schedule 2.1.1

  

RC Commitment

Schedule 2.1.3

  

Term A Loan Commitment

Schedule 2.1.4

  

Term B Loan Commitment

Schedule 4.3

  

Post-Closing Obligations

Schedule 5.1.1

  

Organization and Qualification

Schedule 5.1.2

  

Capitalization

Schedule 5.1.3

  

Equity Ownership

Schedule 5.4

  

Consents

Schedule 5.7

  

Litigation

Schedule 5.10

  

Intellectual Property

Schedule 5.19

  

ERISA

Schedule 5.24

  

Labor

Schedule 5.26(b)

  

Swap Obligations

Schedule 8.1

  

Other Indebtedness

Schedule 8.2

  

Other Liens

Schedule 8.3

  

Other Investments


ARTICLE 1

 

DEFINITIONS

     2   

1.1

 

Defined Terms

     2   

1.2

 

Terms Generally

     40   

ARTICLE 2

 

THE LOANS

     41   

2.1

 

RC Loans; Term A Loans; Term B Loans

     41   
 

2.1.1

  

Commitment to Make RC Loans

     41   
 

2.1.2

  

Available RC Commitment

     41   
 

2.1.3

  

Commitment to Make Term A Loans

     41   
 

2.1.4

  

Commitment to Make Term B Loans

     42   
 

2.1.5

  

Scheduled Repayment of RC Loans

     42   
 

2.1.6

  

Scheduled Repayment of Term A Loans

     42   
 

2.1.7

  

Scheduled Repayment of Term B Loans

     43   
 

2.1.8

  

Voluntary Commitment Reductions and Prepayments

     43   
 

2.1.9

  

Mandatory Prepayments

     44   
 

2.1.10

  

Application of Prepayments

     47   
 

2.1.11

  

Incremental Extensions of Credit

     48   

2.2

 

Swingline Loans

     51   
 

2.2.1

  

Swingline Loan Advances

     51   
 

2.2.2

  

Terms of Swingline Loan Borrowings

     51   
 

2.2.3

  

Participation by Lenders

     51   
 

2.2.4

  

No Setoff, Etc.

     52   
 

2.2.5

  

Certain Limitations

     52   
 

2.2.6

  

Resignation of Swingline Lender

     52   

2.3

 

Borrowing Notice

     52   

2.4

 

[Reserved]

     53   

2.5

 

Lenders’ Obligations Several

     53   

2.6

 

Notes

     54   

2.7

 

Fees to Lenders

     54   
 

2.7.1

  

Commitment Fees

     54   
 

2.7.2

  

Letter of Credit Fees

     55   
 

2.7.3

  

Repricing Event

     55   
 

2.7.4

  

Other Fees

     55   


2.8

 

Interest

     56   
    2.8.1    Rates    56  
 

2.8.2

  

Applicable Margin

     56   
 

2.8.3

  

Adjustments to Applicable Margin

     57   
 

2.8.4

  

LIBOR Election

     58   
 

2.8.5

  

Breakage

     58   
 

2.8.6

  

Default Rate

     58   
 

2.8.7

  

Source of Funds

     59   

2.9

 

Increased Costs; Unavailability

     59   
 

2.9.1

  

Increased Costs Generally

     59   
 

2.9.2

  

Capital Requirements

     59   
 

2.9.3

  

Certificates for Reimbursement

     60   
 

2.9.4

  

Delay in Requests

     60   
 

2.9.5

  

Inability to Determine LIBOR

     60   
 

2.9.6

  

Laws Affecting LIBOR Availability

     60   

2.10

 

Purpose

     61   

2.11

 

Mechanics of Payments: Borrower Payments

     61   
 

2.11.1

  

Manner of Making Payments

     61   
 

2.11.2

  

Payments by Borrower; Presumptions by Administrative Agent

     61   
 

2.11.3

  

Disbursements from Administrative Agent to Lenders

     62   
 

2.11.4

  

Sharing of Payments by Lenders

     62   
 

2.11.5

  

Payments or Documentation Due on Non-Business Days

     63   

2.12

 

Mechanics of Payments; Lender Payments

     63   
 

2.12.1

  

Funding by Lenders; Presumption by Administrative Agent

     63   

2.13

 

Taxes

     63   
 

2.13.1

  

Payments Free of Taxes

     63   
 

2.13.2

  

Payment of Other Taxes by the Borrower

     64   
 

2.13.3

  

Indemnification

     64   
 

2.13.4

  

Evidence of Payments

     64   
 

2.13.5

  

Status of Lenders

     64   
 

2.13.6

  

Treatment of Certain Refunds

     65   
 

2.13.7

  

Survival

     66   

2.14

 

Mitigation Obligations; Replacement of Lenders

     66   
 

2.14.1

  

Designation of a Different Lending Office

     66   


    2.14.2    Replacement of Lenders    66  

2.15

 

Defaulting Lenders.

     67   
 

2.15.1

  

Defaulting Lender Adjustments.

     67   
 

2.15.2

  

Defaulting Lender Cure.

     70   
 

2.15.3

  

New Swingline Loans/Letters of Credit

     70   

2.16

 

Termination of Defaulting Lender.

     70   

2.17

 

Cash Collateral.

     71   

2.18

 

Extension of Maturity Date

     72   

2.19

 

Refinancing Facilities

     74   
 

2.19.1

  

Term Facility Refinancing

     74   
 

2.19.2

  

Revolver Refinancing

     75   

ARTICLE 3

 

LETTERS OF CREDIT

     77   

3.1

 

Letters of Credit

     77   
 

3.1.1

  

Commitment to Issue Letters of Credit.

     77   
 

3.1.2

  

Reimbursement Obligations

     78   
 

3.1.3

  

Limitation on Amount.

     78   
 

3.1.4

  

Obligations Absolute

     78   
 

3.1.5

  

Reliance by Issuing Bank

     79   
 

3.1.6

  

Fees

     79   
 

3.1.7

  

Participation by Lenders

     79   
 

3.1.8

  

Standard of Conduct

     80   
 

3.1.9

  

Cash Collateral Account.

     80   
 

3.1.10

  

Obligations Secured

     80   

3.2

 

Resignation of Issuing Bank.

     81   

ARTICLE 4

 

CONDITIONS TO FUNDINGS AND ISSUANCE OF LETTERS OF CREDIT

     81   

4.1

 

Conditions to Initial Funding

     81   
 

4.1.1

  

Specified Closing Representations

     81   
 

4.1.2

  

Company Material Adverse Effect

     81   
 

4.1.3

  

Indebtedness

     81   
 

4.1.4

  

Merger; Acquisition of Company

     81   
 

4.1.5

  

Closing Date Deliverables

     82   
 

4.1.6

  

Perfection of Security Interests - Commercially Reasonable Efforts

     84   


    4.1.7    Payment of Fees and Costs    85  
 

4.1.8

  

Patriot Act

     85   

4.2

 

Requirements for Each Loan/Letter of Credit

     85   
 

4.2.1

  

No Default.

     85   
 

4.2.2

  

Borrowing Notice/Request for Letter of Credit

     85   
 

4.2.3

  

Compliance with Other Senior Debt Documents

     85   
 

4.2.4

  

Representations and Warranties.

     85   
 

4.2.5

  

Method of Certifying Certain Conditions

     86   

4.3

 

Post-Closing Requirements

     86   

ARTICLE 5

 

REPRESENTATIONS AND WARRANTIES

     86   

5.1

 

Status

     86   
 

5.1.1

  

Organization and Qualification

     86   
 

5.1.2

  

Capitalization

     86   
 

5.1.3

  

Stock Ownership

     87   

5.2

 

Power and Authority; Enforceability

     87   

5.3

 

No Violation of Agreements; Absence of Conflicts

     87   

5.4

 

Recording, Enforceability and Consent

     88   

5.5

 

Lines of Business

     88   

5.6

 

Security Interest in Collateral

     88   

5.7

 

Litigation; Compliance with Laws; OFAC Requirements

     89   
 

5.7.1

  

Litigation

     89   
 

5.7.2

  

Laws; FCPA

     89   
 

5.7.3

  

Sanctioned Persons; Patriot Act

     89   
 

5.7.4

  

Anti-Corruption Policies

     90   

5.8

 

No Burdensome Agreements; Material Agreements.

     90   

5.9

 

Condition of Property.

     90   

5.10

 

Licenses; Intellectual Property

     90   

5.11

 

Title to Properties; Liens

     91   

5.12

 

Management Agreements

     91   

5.13

 

Financial Statements and Projections

     91   
 

5.13.1

  

Financial Statements

     91   
 

5.13.2

  

Undisclosed Liabilities

     91   
 

5.13.3

  

Absence of Material Adverse Change

     91   
    5.13.4    Projections    92  


5.14

 

Tax Returns and Payments; Other Fees

     92   

5.15

 

Fiscal Year

     92   

5.16

 

Federal Reserve Regulations

     92   

5.17

 

Investment Company Act.

     93   

5.18

 

[Reserved]

     93   

5.19

 

Compliance with ERISA and Applicable Foreign Law

     93   
 

5.19.1

  

Plans

     93   
 

5.19.2

  

Favorable Determination Letters

     93   
 

5.19.3

  

Compliance

     93   
 

5.19.4

  

Absence of Certain Conditions

     93   
 

5.19.5

  

Absence of Certain Liabilities

     94   
 

5.19.6

  

Foreign Plans

     94   

5.20

 

Accuracy and Completeness of Disclosure.

     95   

5.21

 

Adequacy of Capital; Solvency; Status of Parent

     95   

5.22

 

Absence of Restrictive Provisions

     95   

5.23

 

Environmental Compliance

     95   

5.24

 

Labor Matters

     96   

5.25

 

Brokers

     97   

5.26

 

Existing Indebtedness

     97   

5.27

 

Designation as Senior Debt

     97   

ARTICLE 6

 

REPORTING REQUIREMENTS AND NOTICES

     97   

6.1

 

Financial Data and Reporting Requirements; Notice of Certain Events.

     98   
 

6.1.1

  

Delivery of Quarterly Financial Statements

     98   
 

6.1.2

  

Delivery of Annual Financial Statements; Accountants’ Certification

     98   
 

6.1.3

  

Delivery of Officer’s Compliance Certificates

     99   
 

6.1.4

  

Auditors’ Reports

     99   
 

6.1.5

  

SEC Filings, Etc.

     99   
 

6.1.6

  

Annual Budget.

     100   

6.2

 

Notice of Defaults.

     100   

6.3

 

Notice of Disputes and Other Matters

     101   
 

6.3.1

  

Certain Litigation

     101   


    6.3.2    Conditions Affecting Collateral    101  
 

6.3.3

  

Material Adverse Change

     101   
 

6.3.4

  

Nuvectra Spinoff

     101   
 

6.3.5

  

Change in Rating

     101   

6.4

 

ERISA Notices and Foreign Plan Notices.

     101   

6.5

 

Intellectual Property

     102   

6.6

 

Miscellaneous

     103   

6.7

 

Authorization of Third Parties to Deliver Information

     103   

ARTICLE 7

 

FINANCIAL COVENANTS

     103   

7.1

 

Interest Coverage Ratio

     103   

7.2

 

Total Net Leverage Ratio

     104   

7.3

 

Additional Provisions Respecting Calculation of Financial Covenants

     104   
 

7.3.1

  

Source of Information

     104   
 

7.3.2

  

Treatment of Acquisitions and Dispositions

     104   
 

7.3.3

  

Changes in GAAP

     105   
 

7.3.4

  

Reconciliation

     105   
 

7.3.5

  

Pro Forma Calculations

     106   

ARTICLE 8

 

BUSINESS COVENANTS

     106   

8.1

 

Indebtedness

     106   
 

8.1.1

  

In General

     106   
 

8.1.2

  

Limitation on Incurrence

     108   

8.2

 

Liens; Licenses

     108   
 

8.2.1

  

In General

     108   
 

8.2.2

  

Negative Pledge

     110   
 

8.2.3

  

Licenses

     110   

8.3

 

Investments, Loans, Acquisitions, Etc.

     110   

8.4

 

Restricted Payments

     112   
 

8.4.1

  

Intercompany

     112   
 

8.4.2

  

Ventures

     112   
 

8.4.3

  

Permitted Stock Repurchases and Dividends

     112   
 

8.4.4

  

Distributions in Connection with the Permitted Nuvectra Spinoff.

     112   

8.5

 

Sale-Leasebacks

     112   


8.6

 

Transactions with Affiliates.

     113   

8.7

 

Mergers and Dispositions.

     113   
 

8.7.1

  

Consolidations and Mergers

     113   
 

8.7.2

  

Sales and Other Dispositions

     114   

8.8

 

Management Arrangements

     115   

8.9

 

Existence

     115   

8.10

 

Compliance with Law

     115   

8.11

 

Payment of Taxes and Claims; Tax Returns

     116   

8.12

 

Tax Consolidation

     116   

8.13

 

Compliance with ERISA and applicable foreign law

     116   

8.14

 

Insurance

     117   
 

8.14.1

  

Liability, Property Damage, Etc.

     117   
 

8.14.2

  

PBGC

     118   

8.15

 

Maintenance of Properties

     118   

8.16

 

Maintenance of Records; Fiscal Year

     118   

8.17

 

Inspection

     118   

8.18

 

Exchange of Notes

     119   

8.19

 

Type of Business; Other Activities

     119   

8.20

 

Credit Ratings

     119   

8.21

 

Change in Documents

     119   

8.22

 

Payment of Subordinated Indebtedness

     119   

8.23

 

Compliance with Federal Reserve Regulations

     120   

8.24

 

Limitations on Certain Restrictive Provisions

     120   

8.25

 

Environmental Matters.

     120   

8.26

 

Corporate Separateness

     121   

8.27

 

Certain Obligations Respecting Subsidiaries

     121   

8.28

 

Certain Limitations on transactions with non-loan parties

     122   

8.29

 

Reset Provision

     122   

8.30

 

Certain Limitations on Activities of MAQUILADORA HOLDING SUBSIDIARIES

     123   

8.31

 

Designation as Senior Debt; GUARANTORS

     123   

8.32

 

Lines of Business

     123   

8.33

 

Further Assurances

     123   

8.34

 

Parent Business and Assets

     124   


ARTICLE 9

 

EVENTS OF DEFAULT

     124   

9.1

 

Events of Default

     124   
 

9.1.1

  

Failure to Pay Principal or Reimbursement Obligations

     124   
 

9.1.2

  

Failure to Pay Interest, Fees, Etc.

     124   
 

9.1.3

  

Cross Default to Indebtedness

     124   
 

9.1.4

  

Misrepresentations

     124   
 

9.1.5

  

Certain Covenant Defaults

     125   
 

9.1.6

  

Other Covenant Defaults

     125   
 

9.1.7

  

Other Loan Document Defaults; Security

     125   
 

9.1.8

  

Custody or Control of Assets

     126   
 

9.1.9

  

Discontinuance of Business

     126   
 

9.1.10

  

Insolvency

     126   
 

9.1.11

  

Change of Control

     126   
 

9.1.12

  

Subordination

     126   
 

9.1.13

  

Swap Agreements

     126   
 

9.1.14

  

Judgments.

     127   

9.2

 

Acceleration; Remedies

     127   
 

9.2.1

  

Acceleration upon Insolvency

     127   
 

9.2.2

  

Acceleration upon Other Defaults

     127   
 

9.2.3

  

Remedies in General

     127   

9.3

 

Proceeds of Collateral

     128   

ARTICLE 10

 

AGENCY

     129   

10.1

 

Appointment and Authority.

     129   

10.2

 

Rights as a Lender

     130   

10.3

 

Exculpatory Provisions

     130   
 

10.3.1

  

Limited Duties

     130   
 

10.3.2

  

Further Limitations on Liability

     131   

10.4

 

Reliance by Administrative Agent

     131   

10.5

 

Delegation of Duties

     132   

10.6

 

Resignation of Administrative Agent

     132   

10.7

 

Non-Reliance on Administrative Agent and Other Lenders

     133   

10.8

 

Lead Arrangers; Co-Documentation Agents

     133   


10.9

 

Administrative Agent May File Proofs of Claim

     134   

10.10

 

Collateral and Guaranty Matters

     134   

10.11

 

No Reliance on Administrative Agent’s Customer Identification Program

     135   

10.12

 

No Advisory or Fiduciary Responsibility

     136   

ARTICLE 11

 

MISCELLANEOUS

     136   

11.1

 

Notices; Effectiveness; Electronic Communication.

     136   
 

11.1.1

  

Notices Generally

     136   
 

11.1.2

  

Electronic Communications

     137   
 

11.1.3

  

Change of Address, Etc.

     138   
 

11.1.4

  

Platform; MNPI

     138   

11.2

 

Survival of Representations

     139   

11.3

 

No Implied Waivers.

     139   

11.4

 

Severability

     139   

11.5

 

Amendments, Waivers and Consents

     140   
 

11.5.1

  

In General

     140   
 

11.5.2

  

Other Amendments

     142   
 

11.5.3

  

Exception

     142   

11.6

 

Successors and Assigns

     143   
 

11.6.1

  

Successors and Assigns Generally

     143   
 

11.6.2

  

Assignments by Lenders

     143   
 

11.6.3

  

Register

     146   
 

11.6.4

  

Participations

     146   
 

11.6.5

  

Limitations upon Participant Rights

     147   
 

11.6.6

  

Certain Pledges

     147   
 

11.6.7

  

Borrower Buybacks

     147   
 

11.6.8

  

Disqualified Institutions

     148   

11.7

 

Calculations and Financial Data

     149   

11.8

 

Descriptive Headings.

     150   

11.9

 

Governing Law; Jurisdiction; Etc.

     150   
 

11.9.1

  

Governing Law

     150   
 

11.9.2

  

Submission to Jurisdiction

     150   
 

11.9.3

  

Waiver of Venue

     150   
 

11.9.4

  

Service of Process

     151   


11.10

 

Maximum Lawful Interest Rate

     151   

11.11

 

Right of Setoff.

     151   

11.12

 

Counterparts; Integration; Effectiveness; Electronic Execution

     152   
 

11.12.1

  

Counterparts; Integration; Effectiveness.

     152   
 

11.12.2

  

Electronic Execution of Assignments

     152   

11.13

 

Treatment of Certain Information; Confidentiality; Advertisement

     152   
 

11.13.1

  

Confidentiality

     152   
 

11.13.2

  

Information

     153   
 

11.13.3

  

Advertisement

     153   

11.14

 

Expenses; Indemnity; Damage Waiver

     154   
 

11.14.1

  

Costs and Expenses

     154   
 

11.14.2

  

Indemnification by the Borrower

     154   
 

11.14.3

  

Reimbursement by Lenders

     155   
 

11.14.4

  

Waiver of Consequential Damages, Etc.

     155   
 

11.14.5

  

Payments.

     155   
 

11.14.6

  

Survival.

     156   

11.15

 

Certification of Amounts; Responsible Officers

     156   
 

11.15.1

  

Certification of Amounts

     156   
 

11.15.2

  

Responsible Officers

     156   

11.16

 

Termination of Security; Partial Release of Security

     156   
 

11.16.1

  

Termination of Security.

     156   
 

11.16.2

  

Banking Services Obligations and Swap Obligations

     156   
 

11.16.3

  

Partial Release of Security.

     156   

11.17

 

Waiver of Jury Trial

     157   

11.18

 

Patriot Act Notice

     157   


Exhibit 99.1

 

LOGO   

Investor Relations Contact:

Elizabeth Cowell

ecowell@greatbatch.com

tel 214-618-4982

 

Media Contact:

Christopher Knospe

cknospe@greatbatch.com

tel 716-759-5727

LOGO

 October 27, 2015

  

Greatbatch, Inc. Completes Acquisition of Lake Region Medical

Combined Company to be Renamed Integer Holdings Corporation

$1.73 Billion Deal Creates One of the World’s Largest Medical Device Outsource (MDO) Manufacturers

FRISCO, Texas – Greatbatch, Inc. (NYSE:GB) today announced it has completed the acquisition of Lake Region Medical. With combined revenues of approximately $1.5 billion and more than 9,000 Associates globally, Greatbatch becomes one of the largest medical device outsource (MDO) manufacturers in the world serving the cardiac, neuromodulation, orthopaedics, vascular, advanced surgical and portable medical markets.

Greatbatch is now able to offer a substantially more comprehensive portfolio for customers through the Greatbatch Medical, Lake Region Medical and Electrochem brands. The company is at the forefront of innovating technologies and products that help change the face of healthcare, providing customers with a distinct advantage as they bring complete systems and solutions to market. In turn, customers will be able to accelerate patient access to life enhancing therapies.

“Through this transformative deal, Greatbatch has added scale and diversification to enhance customer access and experience,” said Thomas J. Hook, president and chief executive officer, Greatbatch. “We will continue to execute our strategy to provide customers with a comprehensive portfolio of technologies and services while maintaining a strong financial profile to drive shareholder return.”

In connection with the Lake Region Medical acquisition, Greatbatch secured a $1.96 billion financing package led by M&T Bank Corporation, Credit Suisse, and KeyBanc Capital Markets. The financing comprises $1.6 billion of senior secured credit facilities, and $360 million of 9.125% senior notes due 2023.

Greatbatch also announced its intention to rename the combined entity Integer Holdings Corporation. Integer is defined as complete, whole, and comprehensive, and represents the joining of Greatbatch and Lake Region Medical as well as the combined company’s product and service offerings provided to customers. The new name is subject to Greatbatch shareholder approval at the May 2016 annual meeting.

“Combining talents from both organizations will allow us to benefit from the best possible knowledge and insights to ensure we successfully integrate both companies. We’re committed to doing it right, with purposeful execution to maintain a rapid pace for the benefit of our customers, investors and Associates,” concluded Hook.


# # #

About Greatbatch, Inc.

Greatbatch, Inc. (NYSE: GB) is one of the largest medical device outsource (MDO) manufacturers in the world serving the cardiac, neuromodulation, orthopaedics, vascular, advanced surgical and portable medical markets. The company provides innovative, high quality medical technologies that enhance the lives of patients worldwide. In addition, it develops batteries for high-end niche applications in energy, military, and environmental markets. The company’s brands include Greatbatch Medical, Lake Region Medical and Electrochem. Additional information is available at www.greatbatch.com.

Integer (NYSE:ITGR)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more Integer Charts.
Integer (NYSE:ITGR)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more Integer Charts.